EuroNews: November 15, 2006

Protesters stop gas pipeline work
National Park fears pipeline plan
Protesters who have occupied a section of a huge natural gas pipeline being laid from Milford Haven [LNG import terminal] to England say they aim to stay "for the long haul".

The whole project is forecast to cost £750m ($1.4bn) and National Grid is contractually obliged to start delivering gas in October 2007. It aims to start building the second section - 115 miles long - in early 2007. If it fails to meet the timetable, it could incur up to £36m in fines by September 2008, imposed by energy regulator Ofgem. The penalty would start at £2m for the first month and increase incrementally. In addition, National Grid would have to compensate the energy firms - Exxon, Qatar Petroleum, BP and Petronas - for their inability to import LNG.

So import agreements may not be met, potentially leading to the bizarre situation where not only is the UK paying through the nose for imported gas from other sources but the country is also paying (posibley, even some of the same people) compensation for not being able to import gas.
Tony Blair delivers a major speech on foreign policy, focusing obviously on Iraq and the Middle East. Energy is mentioned twice:
Provided it eschews grand institutional visions and concentrates on grand practical visions - for prosperity, in energy, fighting crime, in developing defence capability - it has a huge, even exciting future. Enlargement has been remarkable.
//
All of us too can see how Russia has emerged under President Putin as a stronger, more confident nation. But it also knows it is a major power and we rely on its energy resources. India is making extraordinary strides in every way.
...oil receives a single mention, at the back end of the turmoil Iran are accused of creating.
That way, they [Iran] put obstacles in the path to peace, paint us, as they did over the Israel/Lebanon conflict, as the aggressors, inflame the Arab street and create political turmoil in our democratic politics.
Glad to see oil is high on the foreign policy agenda.


Russian oil fund chief shot dead
The director general of a Russian oil consultancy company has been killed in an apparent contract killing in Moscow, officials say. Ms Magomedov was the head of the National Oil Institute Fund, which seeks to develop small and medium-sized oil and gas producers.


Poles veto EU talks with Russia
Poland vetoed the launch of talks between the European Union (EU) and Russia on a new pact covering energy, trade and human rights yesterday, less than two weeks before an EU-Russia summit, effectively blocking the start of talks. Warsaw insisted at an EU foreign ministers' meeting that Russia should first commit to opening up its oil and gas pipeline network.

Russian President Vladimir Putin has consistently refused to sign the protocol, which would require Moscow to open its gas pipelines to third parties, or ratify the treaty. Entering the treaty would force Putin to end the supply monopoly of state-controlled gas company Gazprom.

Russia supplies more than 25% of the EU's energy.



Spain requires new buildings use solar power
Solar panels are now compulsory on all new and renovated buildings in Spain as part of the country’s efforts to bring its building rules up to date and curb growing demand for energy, ministers said on Monday.

This means new homes have to be equipped with solar panels to provide between 30 and 70 percent of their hot water, depending on where the building is located and on its expected water usage.

New non-residential buildings, such as shopping centers and hospitals, now have to have photovoltaic panels to generate a proportion of their electricity.



Nato fears Russian plans for 'gas Opec'
Nato advisers have warned the military alliance that it needs to guard against any attempt by Russia to set up an "Opec for gas" that would strengthen Moscow's leverage over Europe.


French PM calls for European carbon levy
Countries that refuse to join international efforts to cut greenhouse emissions – such as the US and China – should face a European carbon tax on their imports, Dominique de Villepin, the French prime minister, proposed on Monday.

The controversial proposal is likely to heighten suspicions that Europeans are using environmental arguments to justify protectionist restrictions on trade. It would require full European Union support to become reality.

“It’s not right that Europe should make considerable efforts while other major players do not,” one of Mr de Villepin’s officials told Le Monde. “China is fast catching up Europe in high technology; it must also make an effort on environmental issues.”



Edinburgh waives planning for domestic wind and solar
Edinburgh City Council has announced that it is to waive planning permission for such attachments [wind turbines], in an attempt to meet government targets for cutting pollution.

It is a move which could see the city become one of the greenest in the UK. With the effects of global warming becoming ever more evident (soon summer holidays in Spain will be a thing of the past as the hordes return to Porty on hot summer's days) it's not before time.



London: Polluting cars face charge rise
Vehicles causing the most pollution in central London are to face huge increases in the congestion charge, mayor Ken Livingstone has announced.

The daily charge for vehicles in carbon emissions band G, which includes some 4x4s, is to rise to £25 from 2009. In 2008, the charge will be removed for cars in Bands A and B which produce the lowest emissions, Mr Livingstone said.



Russia faces gas shortfall, leaked report claims
Russia's future as an energy superpower has been called into question by claims that it will not produce enough gas next year to satisfy both foreign and domestic demand due to years of under-investment.

Russia boasts 26.6 per cent of the world's gas reserves and Gazprom, the state-controlled energy giant, is the world's largest producer of gas.

But a leaked report from Russia's Energy Ministry says gas is not being extracted as quickly or efficiently as it should be and next year, for the first time, there will be a small shortfall.

On the Polish veto:

This is a situation that fully illustrates the failure of the Confederation-like political system of the EU. We need to move on either towards a true Federation or to something else (less integration?). Confederations are historically short lived and can turn eventually play sates against each other.

Villepin obviously is trying to pander to the antiglobalization and xenophobic voters while covering the environmentalists and unions all at the same time. It is the perfect ploy while seeming reasonable and justified. I mean why should the Chinese  and Indians build huge numbers of coal burning dirty power plants to power their factories for their millions  of poor 1 USD/ day worker who take our jobs away, while at the same time destroying the environment we are trying to protect. Of course the French will never get such a proposal through the  EU and they know it but  it certainly helps in the upcoming elections. Big business and profits are the main concern of such politicians anyway and not the  environemnt or the  workers rights, in Europe or in Asia.

The Poles are of course correct in demanding more from the Russians than just vague promises for the future. Otherwise we have no security at all. Exclusive supply contracts with a supplier is not necessary, Europe does not expect that but a long-term planning certainty is important. Getting caught in a Russian  bear hug, a massive blackmail, as in Georgia, is very dangerous for the EU economies, especially as the North Sea will be producing less every year. This  blackmail could be an implicit rejection of NATO/EU dominance in a few years in exchange for energy and in its place make an EU-Russia European security and trade zone. The USA and their  British cousins has justification for fearing total isolation and of ocurse Eastern Europeans who just  gained theri freeedom have  a right to wonder if the last ten years was just a short walk around the prison yard before having to go back into their cell.

I mean why should the Chinese and Indians build huge numbers of coal burning dirty power plants to power their factories for their millions of poor 1 USD/ day worker who take our jobs away, while at the same time destroying the environment we are trying to protect.
A subject that I don't think gets nearly enough attention is that of imported pollution, the embedded CO2 etc in imported goods. Whilst Europe may have reduced CO2 emissions from within its boarders, I suspect Europe's global CO2 contributions haven't. Unfortunately the kind of international CO2 accounting that would be required to make progress in this area doesn't seem to exist.

It is counterproductive to export energy intensive industry from a country in Europe with relatively strict environmental legislation to somewhere like China with lax legislation. European consumers should be exposed to the costs of the marginal environmental damage caused by the Chinese factory over the European factory (including transport) and pollution based import tariffs seem a reasonable approach... if there was robust international pollution accounting.

It is worse than that. By off-shoring energy intensive manufacturign processes from Europe to India, China or elsewhere, European companies can not only reduce labour costs but also profit from selling the CO2 emissions permits they will create through reduction of allowed emissions within the EU. At around €9/mt for 2007 and €16/mt for 2008 forward, this means these companies are actually being paid to export their pollution to lower cost manufacturing bases.
Good point, so European carbon trading legislation is actively driving, incentivising even increasing global CO2 emissions? Crazy but it seems to be true.

If we accept that manufacturing a widget in China (or similar country) emits more CO2 than manufacturing that same widget in Europe (to quantify this, comparing the average CO2 per kWh of Chinese vs European electricity might be a good proxy to start with) then anything that encourages such off-shoring of widget manufacturing drives global CO2 emission.

Putting a price on European CO2 emissions of, as you say around €9/mt for 2007 and €16/mt for 2008 forward creates addition incentive on top of all the others for this CO2 increasing off-shoring. Import tariffs in excess of the local emission costs would negate this effect, at least for European consumption.

To be fair though carbon trading must also be lowering the carbon intensity of CO2 emitting activities that remain in Europe so it can't be all bad news!

I am not sure about the efficacy of carbon trading. It seems to act more as a determinant of the import/export of pollution than signifincantly to reduce it (though I do accept that there are reductions as a result of crabon pricing).

Many European companies also seek to offset their emissions through the purchase of Certified Emissions Reductions (CERs) in other parts of the world, which obviously also goes to offset to a certain degree the exported pollution of off-shored manufacturing.

There is some anecdotal evidence that not all CER schemes are actively welcomed by their host communities (small hydro schemes in India flooding valleys and forcing population relocation, for example). Furthermore, I am not convinced that saving rainforests from slash/burn agriculture or palm plantations is ACTVIE reduction of emissions, in that carbon would be sequestered in any case. That is not to say that I am not in favour of saving the rainforests, I am, hugely so.

On another note, I believe the growing need for liquid bio-fuels as petroleum replacement represents the biggest single threat to the rain-forests. Both Malaysia and Indonesia are accelerating the destruction of Borneo's forests to plant palm oil plantations, and I believe that Brazil will increasingly encroach on the Amazon when it becomes clear that US corn is both too expensive (in comparison to Brazilain sugar cane) and also increasingly required to feed both humans and farm animals.

We need to look to crops that can be grown on marginal land rather than compete for either arable or forest land. In this respect Jatropha appears to be a perfect biodiesel source plant (http://www.biodieseltoday.com/whyjatropha.htm). I calculated that we could produce 1 million barrels/day of biodiesel with "only" 24 million hectares of Jatropha plantation or approximately 0.35% of the land mass of the African and Asian continents. Clearly not a "silver bullet" solution, but surely grist to the mill and also a provider of signifincant employment and revenue in the world's poorest regions.

I would like to contrast the Spanish initiative (compulsory solar) with the UK approach (let the market build gas pipelines). It does not give me any hope that the UK government has a handle on the security of future energy supplies. Even if gas were not due to peak too, it is obviously politically risky and the wrong route to be going.