Saturday, 29 December 2012

A new low for Foreign Policy Magazine

The once venerable Foreign Policy Magazine has reached a new low by publishing an article on shale gas exploration in Poland, written by a Bulgarian poet by the name of Dimiter Kenarov. The blog article, which could have been written by Vladimir Putin's or Gazprom's PR department, dismisses Poland's hopes to find shale gas and the US support for exploration with this kind of language:

Despite the project's importance, shale gas in Poland seems to be headed the way of the missile shield, which the Obama administration scrapped because of Russian objections in 2009. Difficult geology, an uncompetitive service sector, poor infrastructure, and lack of rigs have hampered development. Poland has a venerable oil and gas sector, but most of the transmission pipelines are based in the southwest, while major shale gas areas are in the northeast. Strict EU environmental laws, as well as unclear regulatory and tax frameworks have further eroded prospects. And while exploration has been going on for a few years now, only 33 wells have been drilled, with just eight of them fracked (at least 200 would have to be drilled in the exploratory stage, just to assess the actual size of reserves).
But the shift in Polish foreign policy -- and the focus on shale gas -- has come not only as a response to Russia, but also to prompting by the United States. In April 2010, the U.S. State Department launched the Global Shale Gas Initiative (since renamed Unconventional Gas Technical Engagement Program) to "achieve greater energy security, meet environmental objectives and further U.S. economic and commercial interests." The program, which aims to provide technical and regulatory assistance to selected countries, has become an administrative tool of U.S. foreign policy in the global battle over energy resources and the recalibration of political alliances. Despite the lack of a scientific consensus on the benefits and drawbacks of shale gas in the United States, the State Department has nonetheless initiated engagement programs all over the world, from Jordan to India to China; cooperation with Poland has been especially close.

Hoping to emulate the U.S. "energy revolution," Poland has come to rely on the United States to show the way. President Barack Obama, on his visit to Poland in May last year, made a special point of endorsing shale gas. After the failure of the Bush-era missile defense, a proposed antiballistic missile shield to be based in Eastern Europe, shale gas has become perhaps the most significant project in U.S.-Polish relations. And though much smaller in scale than the missile shield, both symbolize the same idea: a U.S. deterrent of Russian foreign-policy interests in Central and Eastern Europe.

Despite the economic and environmental realities, both politicians and the public in Poland continue to believe in the potential of the country's unconfirmed, unconventional resources. Whether the Polish government and private companies will manage to start production, or whether shale gas is just a foreign policy tool to needle Russia, boost U.S. presence in the region, and increase Polish visibility within the EU, remains unclear. The Flame of Hope, in the meantime, has begun to sputter out. 

Foreign Policy adds that freelance journalist Kenarov's "trip is supported by the Pulitzer Center on Crisis Reporting". It is difficult to understand why a trip to Poland should be paid by a center for "Crisis Reporting". And one wonders whether Kenarov actually ever went to Poland. The impression one gets from his article is that he visited Moscow instead.

Friday, 28 December 2012

Corruption in Putin's Russia will not end before Putin himself ends up on trial

John Lloyd, Director of Journalism at the Reuters Institute for the Study of Jornalism at Oxford University, has written an interesting article on corruption in Putin's Russia, one of the most corrupt countries in the world:

The INDEM think tank in Moscow, run by Georgy Satarov, a former aide to President Boris Yeltsin, estimates that corruption costs the country $300 billion to 500 billion a year. With a gross domestic product of some $1.5 trillion, that is up to one-third of the economy. Meanwhile, capital flight last year came in at $84 billion, double that in 2010 and is still, it seems, increasing.

Putin is not thought to be far from the trough. There are allegations from the political analyst Stanislav Belkovsky that the president's personal pile is more than $30 billion, though these estimates are unsourced and seem politically biased. (Belkovsky is an associate of the exiled oligarch Boris Berezovsky, an enemy of the president.) More to the point, perhaps, was a report by the opposition leader Boris Nemtsov that the official trappings of the president included private, expensively tailored aircraft, 20 residences, four yachts and almost $700,000 worth of watches - the lifestyle of a billionaire. On these allegations, the Kremlin responds with silence, or a curt denial. --
Putin, in his state-of-the-nation speech last week, sought not only to pledge to fight corruption and end the impression of the elite being "an isolated caste" but also to laud Russia's "state civilization, unified by the Russian people, Russian language and Russian culture which  unites us, does not allow us to dissolve." Yet the "dissolving" of Russia will not come, as he claims, from the imperialist designs of a hypocritical West but from the challenges - in shrinking population, polluted cities, groaning infrastructure, gross inequalities  and vast corruption. To deal with those, the Russian leader needs to be part of a global solution. For the moment, though, he isolates himself in the very problem he needs to fix.
However, Lloyd thoroughly disappoints his readers when he thinks that Putin could deal with corruption and the other problems by becoming "part of a global solution" (whatever that is). The distinguished journalist must know that Putin's campaign against corruption is nothing but a sham. The former second rate KGB agent, one of the most corrupt world leaders, can be part of the solution only when he himself ends up on trial. The time for that trial will come, but not quite yet. 

Chevron CEO: Governments everywhere find high energy prices much scarier than the threat of global warming

Greenpeace and the rest of the greenies will probably not like Chevron CEO John Watson's message, but who cares - Watson is only telling the truth:
Chevron CEO John Watson notices something important as he visits his company's operations around the globe: Governments everywhere find high energy prices much scarier than the threat of global warming.
And that means the world will need a lot more oil and gas in the years to come.
Here are a couple of extracts from the AP interview
 The day-to-day decisions being made (show) that concern about climate change is less than other concerns that they have. China is racing by the U.S. in greenhouse gas emissions. Germany is shutting down their nuclear power, the only energy source with zero carbon emissions that can be produced at scale. Japan, much the same way. Governments around the world are making the choice that the benefits of lifting people out of squalor are very important. And affordable energy is the way to get there. And that currently comes through oil, gas and coal.
That doesn't mean there's nothing we can do. First, we can do a lot more on energy efficiency in this country. There are a number of promising technologies to deliver lower carbon fuels. I would support (government funding) of pre-commercial activity to try to advance some of these breakthrough technologies, rather than putting big subsidies on technologies that we know are more expensive and won't necessarily solve the issue.
AP: Will fracking be curtailed in this country?
WATSON: I see very little obstacle to it, notwithstanding all the rhetoric. Now it's being done in some different areas. People aren't used to it, and there have been legitimate concerns expressed, like truck traffic at a simple level, but also concerns about water supplies. They're understandable anxieties. And so we have to work through those with the governments. I think in due course we'll do that because they'll see the advantages to it.
AP: Will natural gas become a bigger part of the energy mix?
WATSON: Natural gas will displace coal in power generation. Getting natural gas into the transportation fleet is harder. It works best for vehicles that work from centralized fueling facilities like trucking fleets or buses and cabs. That is happening. Before it can make big inroads beyond that, infrastructure is going to need to be developed. It will take some time.

The EU December "summit": The real success story

Angela Merkel's lack for "leadership" could be a blessing in disguise

German Der Spiegel has published a reconstruction of what happened behind the scenes at the latest EU "summit" in Brussels. There are are many juicy details in the report, but it is this conclusion of what happened at the summit that is of real importance: 

The December summit was historic, in the sense that it stifled Barroso's and Van Rompuy's attempt to build a political union. Both men returned home without having achieved their goals.

The Spiegel journalists complain that "Chancellor Merkel isn't leading, even though she ought to be." "Instead, she both accepts and is responsible for the fact that Europe currently has no vision."

But what the journalists deplore could in reality be the best thing that has happened to Europe in a long time; Europe does not need a political union, and it is a blessing that "no one fights for bold reforms". The only reforms that are really needed are the ones leading to transfer of Brussels powers back to the member countries and their citizens. 

A summit after which Messrs Barroso and Van Rompuy return home without ever coming back, would be the ultimate European success! In order for that to happen, Europe needs a new kind of strong German and northern European leadership. Frau Merkel's lack of "leadership" is a promising beginning .....


Among the "juicy" stuff in the Spiegel report, this piece of information is not without a certain interest:
Monday, Dec. 17. Berlin, the headquarters of Merkel's Christian Democratic Union party, a meeting of the CDU steering committee, 10 a.m.

Merkel reports on the summit in Brussels. She is under the impression, she says, that Hollande is trying to obstruct everything she proposes between now and the German parliamentary election. Hollande currently has more allies than she does, she says, which is why cooperation isn't quite working yet. But she's doing her best to gather more allies for Germany, she adds.

Wednesday, 26 December 2012

The EU's senseless renewable energy and climate change policies are seriously weakening manufacturing industries

The crisis-ridden European Union's senseless renewable energy and climate change policies are seriously weakening the competitiveness of European companies, which increasingly are moving their production facilities to countries with cheaper energy costs:

High energy costs are emerging as an issue in Europe that is prompting debate, including questioning of the Continent’s clean energy initiatives. Over the past few years, Europe has spent tens of billions of euros in an effort to reduce carbon dioxide emissions. The bulk of the spending has gone into low-carbon energy sources like wind and solar power that have needed special tariffs or other subsidies to be commercially viable.
“We embarked on a big transition to a low-carbon economy without taking into account the cost and without factoring in the competitive impact,” says Fabien Roques, head of European power and carbon at the energy consulting firm IHS CERA in Paris. “I think there will be a critical review of some of these policies in the next few years.”
Both consumers and the industry are upset about high energy costs. Energy-intensive industries like chemicals and steel are, if not closing European plants outright, looking toward places like the United States that have lower energy costs as they pursue new investments.
BASF, the German chemical giant, has been outspoken about the consequences of energy costs for competitiveness and is building a new plant in Louisiana.
“We Europeans are currently paying up to four or five times more for natural gas than the Americans,” Harald Schwager, a member of the executive board at BASF, said last month. “Energy efficiency alone will not allow us to compensate for this. Of course, that means increased competition for all the European manufacturing sites.”
Current European energy policies were mostly shaped when the European economy was booming. In the grim economic climate of today, spending big money on renewables can seem like a luxury. Spain — once a strong supporter of renewables — has sharply cut funding.
The British government, another big backer of clean energy, recently struck a compromise. It promised to soak consumers for billions of pounds of subsidies for renewables like wind power and even new nuclear power plants, but it also gave a cautious green light to shale gas drilling in hopes of finding a cheaper source of natural gas.
A British consumer advocacy group called Which? recently pegged the costs to British consumers of decarbonization and new energy infrastructure at more than £100 billion, or $161 billion, and said that “persistently rising energy prices” were putting “intense financial pressures” on the public. In Germany, renewables subsidies are already adding 10 percent to 15 percent to bills, according to IHS.
Europeans cannot help noticing that the United States has managed, through the shale gas boom, not only to slash natural gas prices but also to cut carbon dioxide emissions to a 20-year low as utilities have shifted from coal to natural gas, which produces much less carbon dioxide.
Read the entire article here

Monday, 24 December 2012

Brave Poland continues its fight against the European Unions's senseless global warming "flagship" policy

Poland is to be congratulated for continuing its brave fight against the European Union's senseless carbon-trading system and global warming policy.This and the fact that Poland also intends to replace old coal plants with massive new ones (a wise policy) appears particularly to anger the "green" Germans. Der Spiegel has published a critical article on the Polish energy and global warming policy:

On Monday, coal-dependent Poland continued its virtually solitary opposition to a widely-supported -- and badly needed -- short-term fix for Europe's carbon-trading system, the continent's flagship policy in the fight against global warming. Such obstreperousness, however, has not led to Poland's being internationally ostracized. On the contrary, even as the country helped block Europe's ability to present a unified front at the recent climate change conference in Doha, Poland was chosen to host the next conference in 2013.
It is a decision which seems destined to make next year's conference, aimed at fashioning a global pact to reduce greenhouse gas emissions, just as unsuccessful as in years past.
The pessimism is born of Poland's ongoing addiction to coal -- and of the government's own interest in the status quo. Recently, Tusk told a press conference that "energy is the key to politics." And in Poland, there is little difference between the two. Despite communism having crumbled almost two-and-a-half decades ago, much of the energy industry in Poland remains under government control. Though many of the largest energy companies have been ostensibly privatized, the Polish treasury often retains a significant stake.
"There is a vested interest in maintaining the current power system, so the renewable energy system is too dispersed to benefit the right players in the system," said Michael LaBelle, a professor at Central European University in Budapest who teaches energy policy. "They are coal-aholics, that's the best term to use, it's horrible but it's true."
Poland is the 10th largest consumer of coal in the world and produces 92 percent of its electricity from coal, according to the World Coal Association. And despite EU targets for curbing greenhouse gas emissions, Poland is pressing forward with plans replace old coal plants with massive new ones.
That doesn't mesh well with Europe's CO2 emissions reduction plans. As Europe's emissions trading system grows and becomes more comprehensive, carbon should get more expensive. But Poland has responded by both fighting against making fixes to the European Emissions Trading System (ETS) -- which has been crippled by chronically low prices for emissions certificates -- and against more ambitious goals for reducing carbon emissions. Warsaw has also pushed to get extra pollution allowances for new and existing plants.

Instead of criticizing Poland for its decision to invest in new coal energy technology, Germans should look at what is happening in their own "green dreamworld":

EON SE, the worst-performing stock in Germany’s benchmark DAX index (DAX) for the first year since the company was formed in 2000, has ripped up earnings forecasts as a surfeit of electricity from wind turbines and solar panels makes its fleet of gas-fired plants unprofitable. In contrast, RWE AG (RWE) has gained 16 percent because EON’s closest rival has more cheap-to-run coal stations better able to compete with renewables.
RWE, Europe’s biggest air polluter, started to operate a new 2,200-megawatt coal-fired power plant near Cologne in August. One of EON’s newest gas-fired power plants, Irsching 5 in Bavaria, has operated for less than 1,600 hours so far this year, compared with 4,000 hours a year earlier, according to EON, and may be temporarily closed. Irsching’s older unit 3 has only operated for 87 hours.
That has consequences not only for Germany’s two biggest utilities but also for the environment.
“Germany is currently switching from nuclear to coal, and from gas to coal -- about the worst thing that could be done from a climate change perspective,” Dieter Helm, an energy policy professor at the University of Oxford, said by e-mail. “Its current energy policy is not going to reduce its real emissions.”
The news article by Bloomberg cited aboce is full of nonsense - like calling energy company RWE "Europe's biggest air polluter" - but the warmist Oxford professor is right when he says that Germany's energy policy is not going to reduce its "emissions". Instead it seems to be leading to more investment in coal-fired energy production - which is not at all a bad thing, but it is a pity that the senseless subsidies to wind turbines and solar panels are destroying well functioning gas-fired plants. At the same time these subsidies are leading to a steep rise in energy costs for ordinary consumers.
And all this madness will not reduce any "real emissions"! And when it comes to use of coal energy, Germans should be the last ones to criticize Poland !

Sunday, 23 December 2012

New US study: Natural gas-fired energy generation three times cheaper than wind energy

On January 1, US consumers/taxpayers have a big reason to celebrate - the federal production tax credit on wind investment expires: 

For the past 20 years the credit has offset about 30% of the cost of building wind turbines. Add to that the “renewable portfolio standards” for green energy mandated by 29 states, and as a result we’ve seen wind farms spring up across the country. Since 2007 nearly 40% of all the new electricity capacity built in this country has been wind. Wind now generates roughly 3.5% of U.S. electricity.
Don’t expect wind’s share to climb beyond that level any time soon. The end of the tax credit could very well mean the end of the wind industry.

Read the entire article here

The greenies and the wind energy lobby are of course whining, but an end of an industry, which is totally dependent on government (taxpayer) subsidies would be more than welcome in a country, where there is an abundance of clean and cheap natural gas (mainly shale gas) for energy production - and increasingly also as fuel for trucks and cars. 

The real productions costs for wind energy are about three times higher than the costs for natural gas-fired energy, according to a new report by the American Tradition Institute:

new report by the American Tradition Institute (ATI) finds that the full cost of wind electricity is nearly twice what has typically been reported, once hidden costs and subsidies are taken into account. The report, “The Hidden Costs of Wind Electricity,” provides an analysis of three major costs that past estimates have ignored.
“The costs that have been left out of previous reports are the costs of paying for the fossil-fired plants that must balance wind’s variations, the inefficiencies that wind imposes on those plants, and the cost of longer-distance transmission,” said George Taylor, Senior Fellow in Energy Policy at ATI and lead author of the study.  “Once these hidden costs are included and subsidies are excluded, wind generation is not close to being competitive with conventional generation sources such as natural gas, coal or nuclear.”
Using conservative estimates for these real but hidden costs and adding them to the Energy Information Administration (EIA)’s and the Office of Energy Efficiency and Renewable Energy’s most recent generation-cost reports nearly doubles wind’s projected cost – from 8 cents per kilowatt-hour without them to 15 cents per kWh with them.
That 15 cents/kWh is triple the current cost of natural gas-fired generation and 40 to 50% higher than EIA’s estimates for the cost of new nuclear or coal-fired generation.
“Because wind is an intermittent source of electricity, it needs appropriate amounts of fossil-fueled capacity ready at all times to balance its large and rapid variations,” said Tom Tanton, Director of Science & Technology Assessment at ATI and a co-author of the report. “Those primary fossil plants then operate less efficiently than if they were running full-time without wind, meaning that any savings of gas and coal or any reductions in emissions are much less than simple calculations would indicate.”