General Motors seems to have understood its predicament and is now getting with the program, looking to reduce oil consumption and carbon dioxide emissions. They even want the government to impose limits on these. It seems I’m going to end up out on some strange right wing fringe on this issue - demanding a hands off approach with carbon taxes being the only market signal applied while the corporate world and most of the left demand active government intervention. Still - at least opposition to doing something about global warming seems to be crumbling rapidly…
General Motors has become the first automaker to join a business coalition dedicated to reducing greenhouse gas emissions that are tied to global warming. The nation’s biggest automaker joined the United States Climate Action Partnership along with 13 other newcomers including Dow Chemical and PepsiCo Inc.
The partnership is an alliance of big business and environmental groups that in January told President George W Bush that mandatory emissions caps are needed to reduce the flow of carbon dioxide and other heat-trapping gases into the atmosphere. …
In testimony before Congress in March, Wagoner said the time had arrived for automakers to develop a “comprehensive and forward-looking national strategy” aimed at reducing oil consumption and carbon dioxide emissions.
Companies that already had joined the partnership include Royal Dutch Shell PLC’s US arm, London-based oil company BP PLC and Houston-based ConocoPhillips. Other members include General Electric, Alcoa Inc, DuPont Co., Caterpillar Inc and Duke Energy Corp. In January, the CEOs of 10 members said in a letter to Bush that the cornerstone of climate policy should be an economy-wide emissions cap-and-trade system.
The CEOs have said mandatory reductions of heat-trapping emissions can be imposed without economic harm and would lead to economic opportunities if done across the economy and with provisions to mitigate costs. Many of the corporate members already have voluntarily moved to curb greenhouse emissions, but some corporate executives have noted they don’t believe voluntary efforts will be enough.
GM sees vehicles powered by numerous energy sources as key way to reduce greenhouse emissions. “A central element as we see it is energy diversity, being able to offer consumers vehicles that can be powered by many different energy sources and advanced propulsion systems to help displace petroleum and reduce greenhouse gas emissions,” Wagoner said in the statement.
The combination of drought and frost have reduced Australian wine production by a third.
LOW rainfall, low allocations of irrigation water and frost have slashed 2006-07 wine grape production by a third compared with the previous vintage. The Australian Bureau of Agriculture and Resource Economics puts the recent harvest at 1.26 million tonnes, with premium red grapes down 40 per cent and premium whites down 28 per cent.
Production in warm climate areas is estimated to have fallen by 26 per cent. Cool climate production is down an estimated 45 per cent, with production declining most in South Australia, due largely to frost damage.
“The impact of frosts and lower water allocations in 2007 will also be felt in 2008. Even with average seasonal conditions, wine grape production is projected to only recover to 1.5 million tonnes, still 400,000 tonnes below record harvest,” the bureau’s executive director, Phillip Glyde, said.
If seasonal conditions remain drier than average this year and water allocations are reduced further, the bureau predicts production in 2007-08 could be around 930,000 tonnes.
The SMH has a report that concerns about water are posing another obstacle to the development of the Anvil Hill coal mine.
THE controversial proposed Anvil Hill coalmine would face serious problems if the chronically dry Upper Hunter region is subjected to zero water allocations - expected sometime in July. The water shortage will put pressure on the Minister for Planning, Frank Sartor, to reject the open-cut mine.
Centennial Coal, which is behind the planned mine near Muswellbrook, says the water shortage is hitting not only winegrowers and horse studs but also coalmining.
Even the state’s main power supplier, Macquarie Generation, is making contingency plans to ensure it can retrieve the Hunter River water that it says is “essential to the security of its operation”. Macquarie Generation has a higher guarantee of access to Hunter Water than other industries. But, in a reflection of the water shortage across the Hunter, the Liddell power station, which supplies 40 per cent of NSW power, is trying to increase its pumping capacity to extract water when it can from the river. …
A Greenpeace energy campaigner, Ben Pearson, said Mr Sartor should not approve the mine. “The Anvil Hill coalmine would spell climate change disaster,” he said. “Allowing it to go ahead shows this Government is not serious about climate change. Any positive steps to tackle climate change made by Iemma’s Government will be negated by this mine.”
While water allocations was an issue for the Minister for Water, Phil Koperberg, Mr Sartor’s spokeswoman said: “The issue of access to water is certainly one of the matters considered by the Department of Planning in its assessment of these proposals”. State Water has estimated that Glenbawn and Glennies Creek dams need 120,000 megalitres, or the amount of water that flowed through the Hunter River during the massive 1955 flood, to supply Upper Hunter irrigators and coalmines with their current water needs.
Mr Koperberg has increased the allocations for both general and high security water users in the Hunter, but warned that zero allocations remained a threat. “Unless combined storage levels [of Glennies and Glenbawn] recover to greater than 37 per cent prior to next July, there is a possibility of a zero allocation for general security users,” he said.
I don’t think the comment about Liddell generating 40% of NSW power is accurate - if my memory serves me correctly it is about the same size as the Bayswater and Eraring plants, and the Vales Point and Mt Piper plants combined (which between them account for most production) - so it may generate up to 20% of state production.
The problems posed by lack of water are real though, with the inland power stations frequently running on reduced capacity while the coastal stations take most of the load as the inland plants are running short of water for cooling. This could become problematic on hot days in summer if the trend continues as (1) everything will need to run flat out, and (2) limits are placed on coastal plants that use water from lakes for cooling, as there are environmental restrictions on releasing hot water back into the lakes once they go over a certain temperature (the same problem that has affected European nuclear plants in recent summers).
The Rodent is slowly caving on on global warming policy and now seems to be angling for an emissions trading scheme. Whats the bet it follows the European example and hands out far too many pollution credits ?
Prime Minister John Howard has given his clearest signal yet that he will back a trading scheme for greenhouse gas emissions. Under fire for the budget’s perceived lack of major global warming initiatives, Mr Howard said he was awaiting a report on emissions trading at the end of this month.
“Everybody agrees that you have to have some price on carbon to effectively deal with the emissions problem,” he told the Seven Network. “And the best way of delivering a price on carbon is through a market mechanism, namely an emissions trading system. That … is the centrepiece of any long-term strategy and I’ll be saying quite a bit about this whole issue a few weeks after we’ve received the report.” …
Other climate change measures in the budget included a $126 million national research centre and $197 million towards protecting forests globally.
Labor said the government’s $741 million in climate change measures over five years were neither substantial nor new. “The climate change budget is less than 0.1 per cent of GDP and declining over the forecast period,” opposition environment spokesman Peter Garrett said. “The budget will not stop Australia’s greenhouse pollution from soaring by 27 per cent by 2020, and clearly shows the government lacks the political will to try and prevent dangerous climate change.”
The Australian Greens expressed disappointment at the budget response to climate change. “Climate change is the biggest threat for the economy, for lifestyle, for the environment of this great nation of ours, and the government just left it out in the cold,” Greens Leader Bob Brown said.
Greenpeace chief executive Steve Shallhorn said the government’s failure to adequately address global warming would result in extreme economic pressures. “What the treasurer does not seem to understand is that what is bad for the environment, is bad for the economy,” Mr Shallhorn told reporters. “Failing to prevent dangerous climate change will cost 20 per cent of the global economy in the future.”
Errr - the best market based scheme is one which doesn’t involve handing out large quotas to existing players, but instead offers a level playing field - a carbon tax.
Crikey wonders if the budget is carbon neutral. Some of the figures would indicate its time for local brewers to adopt green brewing practices…
With solar energy rebates, is the 2007-08 Budget green? A long way off, says the Australian Conservation Foundation. Just take a look at the stats we’ve put together.
Spending on climate change 2007-08
* Budget surplus: $10.6 billion
* Total climate change spending in 2007-08*: $500 million
* Total climate change spending as a % of the 2007-08 surplus: 5%
* New climate change funding for 2007-08: $148 million
* Draught beer concessional rate of excise for 2007-2008**: $170 million
The photovoltaic rebate program (solar panels) announced in Budget 2007-08:
* $150 million over five years (or an average of $30million per year)
* Consumption tax exemptions for privately produced beer 2007-2008, $40 million†
* After five years, the program will reduce emissions by 32,100 tonnes per annum.††
* This is 0.01% of our 1990 emissions
* Around 10,000 programs of this size are needed to avoid dangerous climate change†††
* The program will reach around 14,000 (or 0.2%) of Australia’s seven million households
Comparison of spending on polluting subsidies vs climate-change spending
For every dollar spent on climate change, we spend another 12 on dirty subsidies.
Energy Bulletin points to a Newsweek article lining up Venezuela in particular and national oil companies in general as the culprits for future post-peak oil shortages. Bart comments : “Two things are worrying about an analysis of this sort. First, there is no mention of geological limits to oil production. Second, a scapegoat is being prepared for coming oil shortages - in this case, national oil companies. Arguments such as this prepare the way for intervention in the affairs of oil producing countries “for the greater good.”".
Last week’s announcement from Caracas that the operations of Western energy companies including BP, Chevron, Conoco, Exxon, Total and Statoil were being reduced due to continuing nationalization of oil reserves, and that the Chinese state oil giant CNPC would play a much bigger future role in exploration and production, poses a serious threat to the global oil market.
About 80 percent of the world’s oil is controlled by national oil companies. Some of these state-owned enterprises operate at world-class standards, notably Petrobras of Brazil, Petronas of Malaysia and Aramco of Saudi Arabia. In those places, production is increasing.
But most of the large state firms (including CNPC) have much lower operating standards than multinationals, such as the ones leaving Venezuela. This is due largely to political interference. The inefficient bureaucracies of state-run firms are too slow and incompetent to reinvest record industry profits in the modernization of their aging oilfields. Both national oil-company executives and politicians may be corrupted by the surge in cash from high prices.
The result is a number of countries with huge oil reserves and falling production, including Iran, Iraq and Mexico. Russia and Kuwait will also stagnate unless practices change. These countries represent more than one third of the world’s oil reserves.
…The situation in Venezuela is symbolic of a growing trend. High prices have spurred unprecedented resource nationalism, and it is no surprise that the Chinese are capitalizing on this. Politicians detest the demands of transparency and accountability that often come with multinationals.
…The implications for the world economy are potentially catastrophic. The world is not running out of oil, but it will run out of production capacity if the national companies, the new rule makers in this business, don’t invest.
UPI reports that uranium prices are soaring as US government stockpile sales slow - apparently partly because they want to be “good neighbours” with miners (BHP and RIO say thanks) and partly because of strategic concerns about energy security, with the idea of a uranium reserve being floated…
As the price of uranium surged another $7 over the past week, the U.S. Energy Department may scale back its inventory sale and open a strategic reserve. Uranium prices hit $120 per pound Monday, the weekly pricing date, on the heels of expected growing demand and a new futures trading product offered by the New York Mercantile Exchange and uranium analyst Ux Consulting. The price has jumped from $56 per pound last October. It was around $20 at the start of 2005.
Governments like the United States, intent on addressing proliferation, controlled uranium programs. The inventory was also increased after the Cold War when weapons-grade uranium from the former Soviet Union was blended down to energy stock. The United States still sells from its inventory, which competes against suppliers. When the price was low, there was little incentive to invest in exploring, mining and producing uranium.
Ed Rutkowski of the U.S. Energy Department’s Nuclear Fuel Supply Security group told StockInterview.com this year’s sale will likely be a small amount. “We don’t plan to dump uranium,” he said. “We have a lot of inventory, but uranium miners are worried that DOE would affect the market. We want to be good neighbors with them.”
With an enhanced demand for uranium to fuel a nuclear-power boom worldwide, supplies are quickly dwindling. While that is incentive to build the uranium industry, it worries the Energy Department and U.S. nuclear plants, which need a constant and affordable supply. Like the Strategic Petroleum Reserve, which stockpiles oil in case of emergency, the department is looking into a uranium reserve.
The WSJ’s energy roundup reports that Citigroup’s greenish plans haven’t been entirely enthusiastically received, while reconstruction of oil infrastructure in the Gulf of Mexico continues in the hope of weathering future hurricanes better than the last round.
Environmentalists gave a lukewarm response to Citigroup Inc.’s plan to spend $50 billion on climate-change issues over the next 10 years, saying the financial-services institution should do more to curb its involvement with businesses that contribute to global warming.
Above the waves, oil and gas production in the Gulf of Mexico has almost returned to normal, nearly two years after the devastating 2005 hurricane season. But deep below the surface, teams of divers are still working around the clock to steel aging infrastructure against the next storm.
The WSJ also ponders the “Pros and Cons of Biofuels”, along with the rising cost of petrol.
The United Nations warned that biofuels such as ethanol pose serious environmental problems and could raise global food prices, potentially offsetting any of their benefits. President Bush and other political leaders in the U.S. and Europe have touted biofuels — made from corn, palm oil, switch grass or other plant products — as a way to reduce reliance on expensive foreign oil and cut greenhouse-gas emissions.
But as Energy Roundup has pointed out, critics on the right and left of the political spectrum argue it is unethical to use food to produce biofuels, while environmentalists warn that biofuel production can create still more greenhouse gases and say burning biofuels can cause other pollution problems.
In its report, the U.N. warned that “rapid growth in liquid biofuel production will make substantial demands on the world’s land and water resources at a time when demand for both food and forest products is also rising rapidly. Use of large-scale monocropping could lead to significant biodiversity loss, soil erosion and nutrient leaching,