EcoRadio

Category: Energy Matters

  • One quarter of US grain crops fed to cars- not people. new figures show

     

    “The grain grown to produce fuel in the US [in 2009] was enough to feed 330 million people for one year at average world consumption levels,” said Lester Brown, the director of the Earth Policy Institute, a Washington thinktank ithat conducted the analysis.

    Last year 107m tonnes of grain, mostly corn, was grown by US farmers to be blended with petrol. This was nearly twice as much as in 2007, when Bush challenged farmers to increase production by 500% by 2017 to save cut oil imports and reduce carbon emissions.

    Graph - US grain used to make ethanol

    More than 80 new ethanol plants have been built since then, with more expected by 2015, by which time the US will need to produce a further 5bn gallons of ethanol if it is to meet its renewable fuel standard.

    According to Brown, the growing demand for US ethanol derived from grains helped to push world grain prices to record highs between late 2006 and 2008. In 2008, the Guardian revealed a secret World Bank report that concluded that the drive for biofuels by American and European governments had pushed up food prices by 75%, in stark contrast to US claims that prices had risen only 2-3% as a result.

    Since then, the number of hungry people in the world has increased to over 1 billion people, according to the UN’s World Food programme.

    “Continuing to divert more food to fuel, as is now mandated by the US federal government in its renewable fuel standard, will likely only reinforce the disturbing rise in world hunger. By subsidising the production of ethanol to the tune of some $6bn each year, US taxpayers are in effect subsidising rising food bills at home and around the world,” said Brown.

    “The worst economic crisis since the great depression has recently brought food prices down from their peak, but they still remain well above their long-term average levels.”

    The US is by far the world’s leading grain exporter, exporting more than Argentina, Australia, Canada, and Russia combined. In 2008, the UN called for a comprehensive review of biofuel production from food crops.

    “There is a direct link between biofuels and food prices. The needs of the hungry must come before the needs of cars,” said Meredith Alexander, biofuels campaigner at ActionAid in London. As well as the effect on food, campaigners also argue that many scientists question whether biofuels made from food crops actually save any greenhouse gas emissions.

    But ethanol producers deny that their record production means less food. “Continued innovation in ethanol production and agricultural technology means that we don’t have to make a false choice between food and fuel. We can more than meet the demand for food and livestock feed while reducing our dependence on foreign oil through the production of homegrown renewable ethanol,” said Tom Buis, the chief executive of industry group Growth Energy.

  • Kevin Rudd’s speech in full

     

    I understand also that down in Glenelg, hundreds of South Australians will be participating in the Havaiana Australia Day Thong Challenge, an event that, I am advised, will see a large number of South Australians floating on massive, mutant versions of Australias national footwear. The challenge, I understand, is to beat the record from Bondi Beach last year, where 908 people were afloat. It should be a memorable Australia Day in Glenelg.

    Exactly one year ago, in the lead-up to Australia Day 2009, I came to Adelaide and spoke about the enormous challenge we faced with the worst global recession in 75 years. Since then, the global recession has taken unemployment into double digit figures in many countries across the world, but in Australia, we are weathering the global storm.

    As a nation, Australia now has the fastest growth, lowest debt, lowest deficit and the second lowest unemployment rate when compared with the major advanced economies. The strong consumer confidence index numbers released today, showing a 5.6 per cent increase in January, give us further reason to be optimistic about the year ahead.

    South Australias unemployment rate actually fell last year – from 5.7 per cent at the beginning of the year, to 5.3 per cent at the end. Thats an extraordinary achievement.

    2009 was a tough year, but Australia rose to the challenge of the global financial crisis. It shows what can be done when we all join together and work together, governments of all persuasions state, territory and local; businesses large and small; unions and local communities right across the nation.

    On Australia Day 2010, as we enter this second decade of the 21st century, Australians can be optimistic about our future, but we cannot afford to mistake optimism for complacency.

    This week I am travelling across the nation ahead of Australia Day in a series of addresses on our need as a nation to prepare for our long-term future challenges. Today, I want to discuss the role of investment in advanced 21st century infrastructure, in lifting productivity growth and responding to the challenge of an ageing population.

    The Government will shortly release the third Intergenerational Report, entitled Australia to 2050: Future Challenges. The Australia to 2050 report analyses the key long-term challenges facing Australia over the next 40 years three key facts.

    The first key fact: our population will grow substantially over the next forty years. By 2050, the Australian population is expected to grow from 22 million to 36 million. That increase alone will put huge pressure on our towns and our cities. We will need more homes, more roads, more rail lines, more hospitals, more schools just to accommodate so many Australians.

    Then take into account that the population is ageing. Today, the proportion of Australians who are aged 65 and over, and are therefore most likely out of the workforce, is 14 per cent. By 2050, that figure will almost double to 23 per cent.

    Thats almost one in four Australians, compared to just one in seven Australians in 2010. 

    The second key fact is that this will significantly affect our economy and working families around the nation. Building the infrastructure we will need for a population of 36 million will require significant investment. On top of that, it will simply cost more to look after older Australians in health, aged care and age pensions.

    At the same time, a smaller proportion of Australians will be working, so tax revenues wont keep pace with those rising costs. In 1970, there were 7.5 people of working age to support every person over 65. Today, there are five. By 2050, that number is projected to drop to 2.7.

    So we will face higher costs yet slower economic growth, and that is the heart of the economic challenge of an ageing population.

    The third key fact is that we will need a sustained, strong and long-term national effort to respond to this challenge with a focus on raising productivity and removing barriers to people participating in the workforce. The Government has already acted to lift workforce participation by removing barriers to work for women and young people, but even with these measures, workforce participation will fall over the next 40 years from its peak of around 65 per cent now to around 60 per cent by 2050, so our long-term response to the ageing of our population must centre on a sustained effort to increase annual productivity growth.

    We need to lift average productivity growth back towards the 1990s mark of 2 per cent per year, up from the 1.4 per cent that it declined to in the first decade of this century. Achieving that goal would produce enormous benefits for the nation and for Australian families. On average, every Australian man, woman and child would be $16,000 better off a year in 2050 if productivity returns to the levels under the Hawke and Keating Governments.

    But there is a long time lag between implementing the policies that can lift long-term productivity, and experiencing their payoffs. That is why building Australias future must start now.

    Yesterday in Hobart I discussed another dimension of the challenge posed by the ageing population, the challenge to the sustainability of government budgets. As I noted earlier, the ageing of our population will result in higher costs for health, aged care and the age pension. It will also result in a smaller proportion of the population being in work, thus slowing the rate of growth of government revenues.

    The task of meeting the challenge of the ageing population has also been made more difficult by the aftermath of higher budget expenditure during the late 1990s and in the 2000s, which has locked in a permanently higher spending base. During the growth period of the 2000s, the average real growth in government spending actually increased to 3.8 per cent, compared to 2.5 per cent during the growth period of the 1990s.

    In response to this challenge, the Government has committed to a fiscal strategy that will help us manage the challenge of an ageing population by delivering a permanent structural improvement in Australias public finances. The long-term consequence of the Governments medium-term fiscal strategy is that by 2049-50, the Budget outcome will be around 3.5 per cent of GDP better off, or $130 billion in todays dollar terms. The Governments commitment to fiscal discipline builds sustainability into the Budget.

    The ageing of our population demands two strategies: first, that we lift our workforce participation and our productivity in order to lift economic growth, and second, that we pursue a disciplined fiscal strategy to deal with the additional needs of our ageing population.

    Building productivity is the key for Australias long-term economic future. I describe the new decade that we have just begun as Australias Building Decade, putting in place the building blocks of long-term productivity growth. It is our Building Decade because now is the time when we must implement the big policy changes to drive higher productivity growth.

    Advanced infrastructure will play a central role in putting Australia back on track to higher productivity growth. Its productivity impact will be complemented by the productivity benefits of the education revolution and the comprehensive microeconomic reform agenda that the Government has underway.

    The Australia to 2050 report highlights something that is well understood by South Australians, that infrastructure plays a key role in long-term economic expansion.

    The key points I want to make this afternoon about the role of infrastructure in building Australias future are these:

    • First, economic evidence, including that cited in the Australia to 2050 report, shows that infrastructure investment contributes directly to a more productive, growing economy.
    • Second, despite this fact, measures of Australias infrastructure investment in recent decades show a trend decline in our infrastructure investment. That has contributed to a growing backlog of infrastructure projects and an increasing number of choke points that have held back our economic growth.
    • Third, in response to the infrastructure backlog, the Australian Government has for the first time made infrastructure a national priority.

    We are providing national leadership in infrastructure investment through Infrastructure Australia evaluating and for the first time prioritising nationally important infrastructure projects, and through increasing the Commonwealths infrastructure investment.

    We are also undertaking regulatory reforms to remove roadblocks to infrastructure investment.

    This strategy is a key part of how we intend to make the decade ahead Australias building decade.

    The Australia to 2050 report cites the International Monetary Fund showing that theres a direct link between investing more in public infrastructure and increasing economic growth. According to the IMF research, in developed countries like Australia an increase in the public infrastructure stock by 1 per cent leads to an increase in output by around 0.2 per cent.

    It also cites Productivity Commission research showing that improving the efficiency of Australias energy and transport infrastructure could, after a period of adjustment, increase GDP by nearly 2 per cent.

    This research is not surprising. What is surprising is Australias track record in infrastructure investment.

    The long-term trend for that investment is that it has not been increasing, but falling. A 2009 OECD report shows that Australias investment in transport, storage and communications infrastructure as a percentage of GDP fell between the 1980s and 1990s, and fell again in the first decade of this century. In contrast, across the OECD group of developed nations, infrastructure investment for these sectors has been rising.

    If this trend continues, Australia will fall further behind other nations on productivity and in the long term, on future growth and living standards. Australias shortfall on infrastructure investment has generated a yawning gap between the infrastructure weve got and the infrastructure we need. We see this in ports, in freight, in rail, on our roads and in broadband.

    A few years ago the Business Council of Australia estimated the infrastructure deficit at $90 billion. Addressing the infrastructure gap will involve large scale investment and take a long period of time. One measure of the scale of the task from Citigroup estimates that Australia is set to spend $770 billion on infrastructure in the decade to 2018 underscoring the extent to which this must be the Building Decade.

    Given the infrastructure backlog, it must be a national economic priority to facilitate and support investment in advanced infrastructure. The Government is committed to providing that leadership, and investing in the infrastructure of tomorrow, from transport and freight networks to the high-speed National Broadband Network.

    First, we have established an overall policy framework for infrastructure investment.

    In 2008, shortly after coming to office, the Government established Infrastructure Australia. For the first time in our nations history, with Infrastructure Australia we have a central body to advise on the long-term planning of our infrastructure needs.

    Second, we have increased the national investment in infrastructure. That includes a record $36 billion national investment in transport infrastructure in roads, railways and ports.

    Third, we are acting on the regulatory reforms needs to foster increased infrastructure investment. We are undertaking significant policy reforms including creating single national regulators for heavy vehicles, rail safety and maritime safety.

    Finally today, I want to address just one part of the task ahead in the Building Decade that is crucial to the productivity of Australian businesses, both large and small. That is freight transport our ability to move commodities, food, all kinds of products from one place to another in markets across the nation and across the world.

    According to work conducted by IBIS World for a 2009 report by Infrastructure Partnerships Australia, Australias freight task will triple by 2050 from 503 billion tonne kilometres to 1,540 billion tonne kilometres. Meeting this task will require a massive effort companies will have to improve transport and logistics strategies and efficiencies, and governments will have to undertake substantial new investment and policy reform.

     According to IBIS World, transport infrastructure investment should be increased by 2050 to $62.5 billion, almost four times the spending levels of 2008. A 2008 Interim Priority List compiled by Infrastructure Australia, identified as priorities 40 road projects worth $69 billion, eight freight rail projects worth $16 billion and six port and airport projects worth $6 billion.

    The needs are truly staggering, but meeting the freight task isnt only about Commonwealth investment. Its also about policy coordination and reform to provide the right incentives for private sector investment as well. Thats why in 2010, the transport priority for the Council of Australian Governments will be freight transport.

    Infrastructure Australia is currently focusing its work on two new strategies: a National Ports Strategy and a Freight Network Plan. Initial work by Infrastructure Australia in these areas already suggests some important principles for these strategic plans:

    • coordination along the supply chain is a major field for productivity improvement for business;
    • the freight network is not simply about individual road and rail projects, but a set of nodes that are interconnected by road, rail, sea and air links, and
    • the case for dedicated road and rail freight infrastructure has become stronger to minimise conflict with passenger transport and economic losses.

    I look forward to considering this work in detail later in the year.

    Building a better future for Australia requires leadership at the national level on key areas of economic policy, but equally, it relies on the efforts of individual Australians in every walk of life, Australians who demonstrate courage, persistence, ingenuity and compassion.

    One of the ways we recognise such individual achievement at this time of year is through the Australian of the Year Awards. South Australias finalist for 2010, Julian Burton, is a man who has shown great strength of character and dedication to helping others. Julian sustained life-threatening third degree burns in the 2002 Bali bombings, but he has turned that terrible experience to good in service of the community. Through the Julian Burton Burns Trust, he is working to improve the prevention of, care for and research into burn injury.

    I know South Australians will be proud of him as he stands alongside his fellow finalists in Canberra next week when the Australian of the Year is announced.

    So for each of you this afternoon, I wish you all a very happy Australia Day for next week and I hope you take a moment to enjoy the sense of pride in being part of a great state and a great country. So its with great pleasure I ask you to raise your glasses filled with the finest South Australian wine as I propose a toast to Australia.

  • Shell faces shareholder revolt over Canadian tar sands project

     

    Shell, which will hold its AGM in May, has been one of the lead companies in moves to develop oil reserves that are either mined or sucked out of the ground using expensive and energy-intensive techniques. BP and Total of France are also engaged in the sector.

    Shell has insisted that “unconventional” hydrocarbon sources such as tar sands are all justified to ensure that the world does not run out of oil too soon.

    But environmentalists have ­condemned their exploitation as “the biggest environmental crime in history” and said it must be stopped before it tips the planet over into runaway climate change.

    Al Gore, former US vice-president and Naomi Klein, the author and campaigner, urged the Canadian government to abandon its support for tar sands at the climate change talks in Copenhagen.

    Shell disputes the scale of the pollution but also says it will use carbon, capture and storage techniques to mitigate any negative impact. This argument has not stopped environmentalists – or shareholders – from opposing the plans.

    “Given Shell’s level of commitment to oil sands there is a greater obligation to shareholders to reassure how it would cope under a number of scenarios,” said Niall O’Shea, head of responsible investing at Co-operative Asset Management.

    “What if carbon capture and storage proves too costly in the oil sands? What if sustained high oil prices and carbon regulation lead to switching away from marginal, high-cost, high-carbon sources? And then there’s the cost of cleaning up the locality. Companies must be more rigorous and transparent with their investors,” he added.

    John Sauven, executive director of Greenpeace UK said he was pleased that the Co-op and other investors were putting the oil company on the spot.

    “The exploitation of the tar sands is an environmental scandal on a massive scale, and is set to become a campaign battleground for years to come,” he said.

    But Shell played down the significance of the shareholder rebellion over tar sands and pointed out this unconventional source represented less than 2.5% of total oil and gas production.

    “The resolution is basically a request for further information around the economics and other aspects of our oil sands operations. The resolution is submitted by shareholders representing some 0.15% of our total outstanding shares,” it said in a formal response.

    But Catherine Howarth, chief executive of FairPensions, which has ­coordinated shareholder opposition to the tar sands investments, described the move as ­historic. “All (shareholders) are united in ­registering concern with the risks involved in Canadian oil sands. We expect that Shell’s 2010 AGM could prove a ­watershed in the history of corporate accountability,” she said.

  • We need new energy guidance

     

    Only recently has it become clear that these seemingly disparate issues are a collective manifestation of a dysfunctional energy system. Globally and at the national level, energy is still conceptualised and managed in terms of energy sources, not in terms of the energy services these sources provide. Yet consumers have no particular interest in what sources of energy fuel their production, transportation, lighting, heating, air conditioning, or appliances. The existing paradigm serves to rigidify decision-making at a time when extraordinary flexibility and rapid change are essential.

    At the global level, a host of intergovernmental organisations is tasked with addressing various pieces of the energy puzzle. Among these, the most conspicuous is the International Energy Agency (IEA). Created by oil consumers in the 1970s in response to the Opec price shocks and embargoes by Arab oil exporters, the IEA has succeeded in establishing and supervising a system of national oil stockpiles, which has helped to prevent a recurrence. With a small but highly competent professional staff, the IEA has also become the primary source for the world’s energy statistics and is playing a key role in the climate debate.

    But it is nowhere near the truly international organisation that its name implies. The IEA was established by and for a small number of wealthy oil-importing countries, under the aegis of the OECD. Its membership remains restricted to OECD countries, even though surging demand from non-member countries like China and India is rapidly undermining the IEA’s ability to speak for, and co-ordinate responses among, oil importers as a group. Although the IEA’s mandate has expanded beyond oil since the early 1990s to include broader energy policy, several of its own member governments, led by Germany, found its record on renewables so unsatisfactory that they recently established the International Renewable Energy Agency, whose membership is open to all.

    Other key intergovernmental organisations face their own limits. The International Energy Forum, which grew out of a series of meetings of energy ministers, is intended to provide a common forum for fossil-fuel producers and consumers. It has taken some useful steps that may help to stabilise markets, such as the Joint Oil Data Initiative, but it plays a relatively minor role. The Energy Charter treaty has failed to bring Russia into a rule-based framework for international transit via oil and gas pipelines. The World Bank’s energy financing remains overwhelmingly dedicated to fossil fuels, despite limited efforts to establish funding for low-carbon energy.

    Numerous networks and partnerships have emerged in response to the gaps in global energy governance. For example, the Renewable Energy and Energy Efficiency Partnership, founded in the UK, has grown into a multi-stakeholder body supporting renewables and efficiency in numerous countries. So far, however, such initiatives remain quite small. They will not, in the foreseeable future, operate on a scale that can foster a rapid transition away from fossil fuels or provide energy services to billions of new consumers.

    As is true of other global problems, a lot depends on the capacity and willingness of the most powerful national governments to act collectively. Yet these countries’ deeply flawed systems of national energy governance will make such action all the more challenging.

    Indeed, in many ways, the situation has been getting worse. Over the past two decades, advocates of privatisation have promised greater efficiencies and lower energy prices, but the failure to accompany privatisation with appropriate regulation and enforcement has left many countries with poorly governed and often deeply corrupt energy sectors.

    Moreover, given the vast profits available under the current system, the struggle to bring about a significant energy transition faces stiff resistance from deeply entrenched vested interests. Market forces alone are unable to cope with major externalities such as greenhouse gas emissions, with overwhelming government control over major energy sources such as oil, and with huge numbers of people too poor to constitute a market.

    Our fractured landscape for energy governance was not planned. It has evolved piecemeal, with little co-ordination among its various parts. If we are to avoid paying a high economic, strategic, and environmental price for its shortcomings, a better system of developing and enforcing internationally agreed energy rules is essential.

  • Qatar to use biofuel? What about the country’s energy consumption?

     

    But the airline is doing an analysis to see if it might one day start burning biofuels. Perhaps the biofuels will be grown on the huge chunk of farmland the state controversially wants to buy in Kenya.

    Qataris have the highest carbon footprint on the planet. The country’s per-capita emissions from burning fossil fuels are way ahead of any other nation, and almost three times those of everybody’s poster bad boy, the US. This is all the more extraordinary since Qatar’s electricity is mostly generated from burning natural gas, which has half the emissions of coal.

    Those emissions have also risen almost fourfold since 1990. But, thanks to the vagaries of the Kyoto Protocol, the country is not penalised for this. Qatar is by some measures the second richest country in the world, but for the purposes of climate law, it is classified as a developing nation. And so it has no emissions targets.

    How come Qatar’s emissions are so high? The main reason is its soaring use of energy. By the end of next year Qatar will have six times the electricity-generating capacity it had as recently as 1995. One outlet for all this power is industry, based round its huge natural gas reserves. Just this week, the national gas company announced a deal with ExxonMobil for a new $6bn (£3.69bn) petrochemicals plant.

    A lot of Qatar’s gas is exported as liquefied natural gas – the country is the world’s largest producer of the stuff. It’s a fairly clean fuel at our end, but takes a lot of energy to liquefy in Qatar. So to that extent Qatar is taking a hit to allow Europe and North America to cut their emissions – handy for helping us meet the Kyoto Protocol, but not much good for the planet.

    The Qatari government recently used this argument to downplay its emissions. In its recent Human Development Report, it called them “relatively modest”.

    But that is not the real story. Those Qatari emissions are so extraordinarily high for another reason. Qataris just don’t seem to care.

    Sure, there is the biofuels initiative from the state airline. Sure, a year ago Qatar held a conference to discuss how to cut its emissions without damaging the economy.

    But if its rulers were serious about cutting emissions they might charge for their energy supplies. Yes, you read that right. Qatari households get their electricity free. So why would they cut down on how much they burn?

    Oh, and they get their water free as well. And in Qatar, even more than most places in the Middle East, water is liquid electricity. Almost every drop coming out of the taps is produced from desalinating seawater. This is extremely expensive in energy – and therefore expensive in carbon emissions.

    But because the water is free, Qataris waste it like, well, water. Despite being a desert state with virtually no rainfall, the country has among the highest per-capita water uses in the world. Use averages around 400 litres per head per day. According to Hassan Al-Mohannadi, a geographer at the University of Qatar, people in “big, often palatial houses” consume up to 35,000 litres per day.

    Even here, they have a way of blaming foreigners. According to Hassan Al-Mohannadi, one reason water use is so high is that “the large number of foreign domestic servants, who come from water-rich countries, are not educated in water conservation”.

    Water consumption continues to rise, so Qatar is building more desalination plants. If Qatar was serious about cutting its carbon footprint it would do something about water demand. At the least, it might charge for the stuff.

    Will Qatar’s emissions carry on up? Looks Likely. Electricity demand is currently rising by about 7% a year. That is not as fast as the national economy, which is growing by 11% annually – the fastest boom on the planet.

    But stopping this out-of-control carbon-emitting juggernaut will take more than an Airbus full of biofuels.

  • Report Limks Vehicle Exhaust to Health Problems

     

    It said there was “strong evidence” that exposure to traffic helped cause variations in heart rate and other heart ailments that result in deaths. But among the many studies that evaluated death from heart problems, some did not separate stress and noise from air pollution as a cause, it said.

    The institute, based in Boston, is jointly financed by the Environmental Protection Agency and the auto industry to help assure its independence. Its reports are peer-reviewed but are not published in a scientific journal.

    The researchers noted that proving that air pollution from vehicles caused illness was difficult. The pollutants studied often come from sources like industry in addition to cars and trucks, they said, and many of the studies failed to rule out factors like income levels that could contribute to the illnesses studied.

    Many people who live near major roads fall into lower-income categories. Vibration and noise rather than air pollution could also cause some health damage, the report said.

    Nonetheless, “we see a strong signal that says traffic exposure seems to be causing effects,” said Dan Greenbaum, the president of the institute.

    The study found that the biggest effects occurred among people who lived within 300 to 500 meters — about two-tenths to three-tenths of a mile — from highways and major roads. That applies to 30 percent to 45 percent of the population of North America, the authors said.

    The pollutants studied in the report do not include ozone, the chemical for which the Environmental Protection Agency proposed new regulations last week. Ozone is more prevalent in places distant from highways.

    For many categories of health effects, the authors concluded that the studies completed so far suggested that air pollution from vehicles was the cause, without establishing that as fact.

    Contacted for comment, the environmental agency said it welcomed the study. The agency added that it was taking steps to cut toxic materials in gasoline and that the federal recovery act included $300 million for cleaning up diesel engines.

    Outside experts briefed on the study had mixed reactions.

    “Like the issue of second-hand smoke, it’s very difficult to understand the exact mechanisms that make it bad — but it’s easy to understand that it is in fact bad,” said Rich Kassel, an expert on diesel engines at the Natural Resources Defense Council, an environmental group. “This study underscores that difficulty.”

    “Despite 40 years of building ever-cleaner vehicles, we still have a vehicle pollution problem in this country,” Mr. Kassel said.

    Howard J. Feldman, the director of regulatory and scientific affairs at the American Petroleum Institute, noted that the evidence of a causal factor was inconclusive for some ailments.

    “The only conclusive thing that was found was with the asthma,” Mr. Feldman said. “Nothing else was found to be conclusive, which to me was interesting in itself.”

    “These are epidemiological studies, which by definition reflect past exposures with past fuels,” he added.

    As emissions from traffic decline, Mr. Feldman predicted, exposures from other sources will become more important.