|
|
|
|
|
|
|
Energy Ministers Split on Subsidies
|
|
Oil prices rocketed more than $10 to a new high above $139 a barrel on Friday, taking this yearŐs gains to 44 percent.
|
Energy officials from five top consumer nations urged producers to step up investment on Saturday, a day after crude’s biggest surge ever, but they offered no new ideas on how to deal with record prices and remained divided on fuel subsidies.
According to Reuters, Japan, the United States, China, India and South Korea--who together guzzle nearly half the world’s oil--said that they had agreed on the need for greater transparency in energy markets and more investment by consumers and producers both, while stopping short of calling on OPEC to pump more crude today.
But a call from the United States for an end to heavy price subsidies that protect many Asian drivers from soaring costs fell on deaf ears, as China and India said they could only raise domestic rates gradually in view of their fragile economies.
On June 8 the full Group of Eight energy ministers met amid unprecedented volatility in the oil market and growing public discontent over governments’ failure to soften the blow, which worsened with Friday’s more-than-$10 surge to a record $139.
Energy Secretary Sam Bodman pointed part of the blame at cheap fuel in Asia, where fast-growing economies and low prices have helped drive oil’s explosive six-year rally.
“We know demand is increasing because a lot of nations are still subsidizing oil, which ought to stop,“ Bodman said.
But India’s ambassador later told Reuters it was unrealistic to abandon controls that help protect its 1.1 billion people.
“We as a developing nation are not in a position to completely do away with ... subsidies,“ said Hemant Krishnan Singh, who is standing in for the oil minister at the meetings.
India followed Taiwan, Indonesia and Sri Lanka in raising domestic fuel prices this week with only its second increase in two years, but analysts said the 10 percent hike was unlikely to have an impact unless rates were allowed to rise faster.
China, the world’s second-largest oil consumer, has raised pump rates only once since mid-2006, increasing them by 10 percent in November, and analysts see few signs of action soon with policymakers focused on taming inflation.
“We still have some weak industries such as agriculture, the taxi industry and the public transportation sector,“ said Zhang Guobao, chief of China’s State Energy Bureau. China has long said it aims to allow resource prices to rise, but is now even more loath to do so as it fights inflation at a near 12-year high.
China spends around $25 billion a year to subsidize such things as oil products, natural gas, electricity and gas, while India spends around $20 billion a year, a Japan trade official said, citing International Energy Agency (IEA) figures.
Oil prices rocketed more than $10 to a new high above $139 a barrel on Friday, taking this year’s gains to 44 percent and continuing a rally that has seen prices rise sevenfold since 2001 as investors see output struggling to keep pace with demand. Bodman warned the world to brace for worse to come, conceding there were no immediate answers.
“It’s a shock, but if you look at the rate of oil production globally, it has been 85 million barrels a day for three years in a row“ while demand is rising, Bodman told a news conference.
“There are few things we can do short term.“
He also said that increased regulation was not the answer to bringing prices down, despite mounting pressure from US lawmakers to step up oversight of energy markets in the hopes of deterring the flood of new investors and speculators that some blame for inflating food and fuel prices.
The United States, Japan and South Korea--all members of the IEA--also urged China and India to work more closely with the IEA as they develop their strategic oil reserves, which Western nations fear they may use to try to influence prices.
Record oil prices have triggered protests across Europe, pushed airlines into the red and forced five Asian countries to cut fuel subsidies, intensifying price pressures.
|
|
|
|
Electricity Outages Anger Pakistanis
Pakistan is experiencing its worst electricity shortages in years, and the signs are everywhere.
Traffic lights have been switched off, making already treacherous roads even more so. Dinner parties often take place by candlelight. And air conditioners and fans are idle as temperatures rise, AP reported.
“Our lives have been made miserable,“ said 40-year-old Zubaida Bibi.
The rising demand and inadequate energy infrastructure in this South Asian nation of 160 million people has precipitated the nationwide electricity outages, fueling protests that have turned violent and helping to sink the economy.
The outages threaten to increase public frustration with Pakistan’s young government, which is mired in political disputes.
Officials at the Ministry of Water and Power estimate that Pakistan is between one quarter and a third short of the power it needs.
Prime Minister Yousuf Raza Gilani has said the government is committed to resolving the electricity crisis and is aware of people’s hardships. He also urged the population to conserve electricity.
To save energy, the government ordered the country to observe daylight savings time, shifting clocks forward an hour. It is supposed to save energy because people have more daylight in the evening and do not have to turn on lights.
Daylight savings was tried about six years ago, but quickly abandoned as many people, especially in rural areas, ignored it.
The government says it will also ask many shops and businesses to close by 9 p.m., though it is unclear whether the rule will be enforced. Government offices are supposed to reduce air conditioner use, and even billboard lights face restrictions.
Notions such as daylight savings are viewed as Band-Aid solutions in a place where many mark time by calls to prayer from mosques.
Getting compliance, however, may prove difficult in a country with low literacy rates and a lack of information on conservation, said Sultan Hasan, spokesman for the Karachi Electric Supply Company.
In April in Multan, a textile hub where many operate looms out of their homes and routinely go 10 hours a day without power, people attacked the office of the state electricity company, torching a bank and leaving at least 13 people injured.
The government says it has tried to limit the impact on industry. Many large factories, for instance, are not subject to daytime power cuts, though they must close one day a week.
But the central bank recently said the impact of the power crisis on key industries such as metals, textiles and chemicals was contributing to a slowdown in the economy.
Zubaida Bibi has seen her wages shrink due to the electricity cuts at the thread manufacturer where she works in Multan.
“Now we earn half of what we would earn before,“ she said.
At the Islamabad-area factory of Shaheen Pipe Industry, which must now close on Mondays, officials said they recently had to lay off 20 workers and are losing money.
|
|
|
|
|
Gas Price Liberalization
Russian President Dmitry Medvedev said full gas price liberalization in Russia was inevitable, despite warnings from some officials of delays caused by high global energy prices.
|
|
|
|
|
|
|
Growing Biofuel Crops at Sea
The environmental and social costs of producing biofuels on land can be avoided by farming seaweed, says Ricardo Radulovich, director of the Sea Gardens Project at the University of Costa Rica, which is funded by the World Bank.
The dream of tackling climate change with biofuels has been tarnished by the rush to produce them on land. Not only are there serious environmental costs, including deforestation, water use, production of greenhouse gases, and energy-efficiency limitations, but there are rising concerns about the effects on the world’s poor, ENN said.
Already the price of food is being driven up as land is taken away from food production, increasing the cost of food and nutrition for those who can least afford it.
It is curious then that, bar a brief mention in a recent paper on sustainable biofuels by the UK-based Royal Society, the potential for biomass production at sea is largely ignored.
The oceans are the largest active carbon sink on the planet, covering more than 70 per cent of its surface area, and are predicted to grow as sea levels rise. Our seas also receive a larger proportion of the world’s sunshine than land does, particularly in the tropical and subtropical belt where land is more scarce. To agriculturalists, the oceans are vast and grossly underused fields well-provided with sunlight and water.
Blue Revolution
The full potential for sea cultivation (mariculture) has only recently been recognized. The ’blue revolution’ of freshwater aquaculture and mariculture is growing exponentially.
Statistics from the UN Food and Agriculture Organization show mariculture is strongest in Asia and the Pacific. While aquaculture production has risen sixty-fold since the early 1950s (to 59.4 million tons in 2004) and is worth around US$70 billion, 91.5 per cent of this was produced in Asia and the Pacific.
Similarly, 99.8 per cent of the eight million or so tons of seaweed produced each year, with a market of nearly US$6 billion, come from Asia and the Pacific, primarily China, Japan and Korea.
Until now, seaweed has been valued mainly as food, but also as fertilizer, animal feed, and recently for a growing phycocolloid industry producing algin, agar and carrageenan. But it could also be a major fuel.
Macro-algae (seaweeds) are cultivated at sea, mainly by simply tying them to anchored floating lines. Seaweeds do not require soil, and are already provided with all the water they need, a major advantage over land production of biofuels since water is the most limiting factor for most agricultural expansion, especially with climate change.
One concern is that harvesting massive amounts of naturally occurring seaweed for bioenergy could have comparable effects on atmospheric carbon dioxide and habitat loss or fragmentation as large-scale deforestation. But cultivation is a different matter. In Costa Rica and Japan, seaweed farming has been re-established to produce energy. It can quickly yield large amounts of carbon-neutral biomass, which can be burnt to generate electricity. High-value compounds--including some for other biofuels--can be extracted beforehand.
Small Fraction
Radulovich said less than three percent of the world’s oceans--that’s about 20 percent of the land area currently used in agriculture--would be needed to fully substitute for fossil fuels. A small fraction of that sea area would be enough to fully substitute for biofuel production on land.
As with land-produced biofuels, the contribution to carbon dioxide reduction would come from cutting net carbon dioxide additions via equivalent decreases in fossil fuel combustion. This happens because biofuels--fuels derived from recent photosynthesis--are basically carbon neutral because all carbon released by burning has recently been taken from the atmosphere.
In contrast, fossil fuels come from ancient photosynthesis, thus the carbon released by burning had been stored for ages and thus represents a net addition into the atmosphere.
The main input needed for the large-scale farming this would require is nutrients--because large quantities of them will be removed at harvest. Common agricultural fertilization--costly and energy consuming--could add large amounts of nutrients to the oceans, with unknown results.
But there is a great and grossly misused nutritional source on hand: domestic wastewaters or the product after their treatment. Growing large seaweed fields for energy using nutrients from wastewater could be an economically-sound use for the millions of tons of untreated wastewater dumped daily into our seas worldwide--and the seaweed helps clean it up in the process.
This idea has been tested successfully using human wastewater in experiments at US institutions, including the Woods Hole Oceanographic Institution and the Harbor Branch Oceanographic Institution. As with agriculture, considering that seaweed production is economical for food and other products, it follows that at least some of the options should also be economical for biofuels and bioenergy. However, the analogy with agriculture does not stop there, and a careless farming of the seas could be as damaging as careless agriculture.
But the greatest spin-off from switching biofuels production to the oceans would be the return of land to food production, making food and nutrition more easily available to the world’s poor.
|
|
|
|
|
|
|
