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The Generator news service publishes articles on sustainable development, agriculture and energy as well as observations on current affairs. The news service is used on the weekly radio show, The Generator, as well as by a number of monthly and quarterly magazines. A podcast of the Generator news is also available.
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  • US plans oil pipeline to Israel

    The United States has asked Israel to check the possibility of pumping oil from Iraq to the oil refineries in Haifa. The request came in a telegram last week from a senior Pentagon official to a top Foreign Ministry official in Jerusalem.

    The Prime Minister’s Office, which views the pipeline to Haifa as a "bonus" the U.S. could give to Israel in return for its unequivocal support for the American-led campaign in Iraq, had asked the Americans for the official telegram.

    The new pipeline would take oil from the Kirkuk area, where some 40 percent of Iraqi oil is produced, and transport it via Mosul, and then across Jordan to Israel. The U.S. telegram included a request for a cost estimate for repairing the Mosul-Haifa pipeline that was in use prior to 1948. During the War of Independence, the Iraqis stopped the flow of oil to Haifa and the pipeline fell into disrepair over the years.

    The National Infrastructure Ministry has recently conducted research indicating that construction of a 42-inch diameter pipeline between Kirkuk and Haifa would cost about $400,000 per kilometer. The old Mosul-Haifa pipeline was only 8 inches in diameter.

    National Infrastructure Minister Yosef Paritzky said yesterday that the port of Haifa is an attractive destination for Iraqi oil and that he plans to discuss this matter with the U.S. secretary of energy during his planned visit to Washington next month. Paritzky added that the plan depends on Jordan’s consent and that Jordan would receive a transit fee for allowing the oil to piped through its territory. The minister noted, however, that "due to pan-Arab concerns, it will be hard for the Jordanians to agree to the flow of Iraqi oil via Jordan and Israel."

    Sources in Jerusalem confirmed yesterday that the Americans are looking into the possibility of laying a new pipeline via Jordan and Israel. (There is also a pipeline running via Syria that has not been used in some three decades.)

    Iraqi oil is now being transported via Turkey to a small Mediterranean port near the Syrian border. The transit fee collected by Turkey is an important source of revenue for the country. This line has been damaged by sabotage twice in recent weeks and is presently out of service.

    In response to rumors about the possible Kirkuk-Mosul-Haifa pipeline, Turkey has warned Israel that it would regard this development as a serious blow to Turkish-Israeli relations.

    Sources in Jerusalem suggest that the American hints about the alternative pipeline are part of an attempt to apply pressure on Turkey.

    Iraq is one of the world’s largest oil producers, with the potential of reaching about 2.5 million barrels a day. Oil exports were halted after the Gulf War in 1991 and then were allowed again on a limited basis (1.5 million barrels per day) to finance the import of food and medicines. Iraq is currently exporting several hundred thousand barrels of oil per day.

    During his visit to Washington in about two weeks, Paritzky also plans to discuss the possibility of U.S. and international assistance for joint Israeli-Palestinian projects in the areas of energy and infrastructure, natural gas, desalination and electricity.  

    © Copyright 2003 Ha’aretz

  • Aussies desert the bush

    The atlas found Australia’s big towns and cities are getting bigger, while small rural communities are getting smaller.
    The rural population is declining by just under 1pc a year, with a 2pc annual decline in the number of children.
    Rural communities are ageing faster, and have a higher average age, than the rest of the country.
    "The social circumstances of many people, communities and towns have changed as the movement of young people and families to regional and major urban centres for better employment and education opportunities has accelerated," the atlas found.
    Major cities grew by 8pc in the five years to 2006, and coastal towns and cities boomed too.
    Queensland was the epicentre of coastal growth, particularly the Gold Coast, Maroochydore and Cairns. Interstate, Geelong in Victoria and Newcastle in NSW grew strongly.
    Almost two-thirds of Australians live in capital cities.

    Agriculture Minister Tony Burke said the report confirmed that people, especially young families, were leaving smaller rural communities.

    However, he focussed on the positives as he launched the report in Melbourne Thursday, pointing to high labour participation rates, vocational training take-up and home ownership in rural areas.
    "These figures reinforce what we already know about people living in the bush – they’re resilient, highly skilled and passionate about their communities," Mr Burke said.
    The report found a relatively high proportion of young people in rural areas are in school, and the number of people without qualifications had fallen sharply.
    People in rural areas are more likely to have a vocational degree or certificate than the national average.
    The atlas is also interesting news for single women in the bush – there are 25pc more young males than females in rural areas.
    Cities and regional centres had more women than men.
    The atlas, called "Country Matters, a Social Atlas of Rural and Regional Australia", is prepared every five years for the Department of Agriculture, Fisheries and Forestry. It is used by the government to develop policies and programs.

  • Business wakes up to peak water

    Peter Brabeck-Letmathe, chief executive of Nestle, the foods group, says businesses must wake up to the value of water. He warns of an impending crisis over supply, in the developed as well as the developing world, because of climate change and problems of over-use.

    He says businesses may struggle in the future to find the water they need and will be forced to pay much higher prices for it, if more is not done to conserve the resource and distribute it more rationally.

    These problems are not confined to poor countries, warns Mark Lane, partner at the law firm Pinsent Masons: "[While] it is true that in the developed world most people have access to toilets and a sewerage system … the problem that the developed world now faces is to adapt its waste-water systems to the changing circumstances brought about by climate change, and sudden much more extreme bouts of rainfall."

    Mr Lane points out that in much of the developed world, the wastewater infrastructure has been constructed on the assumption of a temperate climate.

    With global warming, which will bring more storms and floods and intense bouts of rainfall interspersed with periods of drought, that assumption no longer holds good.

    As a result, in many countries the wastewater infrastructure will need to be expanded and upgraded to cope with much greater volumes of storm water. "This will cost huge sums of money," says Mr Lane, "and one key issue, for example in England and Wales, is how such infrastructure improvements are to be paid for."

    Businesses can prepare by using water more efficiently. Some companies have started to take action, and a growing number of technologies are becoming available for businesses to make their use of water more efficient.

    Pepsi Bottling Group (NYSE:PBG) , the drinks company, has managed to conserve 1m gallons of water per year at each of its plants, using new processes for cleaning equipment. The company can save 13,000 gallons a day on certain high-speed lines by using air instead of water to clean packaging. The company also uses 10 per cent less water through its upgraded reverse osmosis purification systems.

    B&Q, the retail chain, has been actively monitoring water consumption since 2003. The company set a target to reduce mains use across UK outlets by 10 per cent by the end of 2008, but found that by the end of 2007 it was saving 20 per cent.

    This has been achieved using methods such as harvesting rainfall for toilet flushing and using "smart water metering", allowing store managers to see in real-time how much water they are using. Monitoring use in this way lets the company quickly identify and deal with leaks, and helps prevent excessive usage.

    Other techniques include recycling water. For instance, Dow Chemical (NYSE:DOW) at its Terneuzen site in the Netherlands has been re-using about 70 per cent of the 2.6m gallons of the municipal waste water produced daily in the area.

    Cutting water use can also help to cut energy use – Dow found its efforts at Terneuzen reduced its carbon dioxide emissions by 60,000 tonnes per year.

    But companies and consumers may be unaware of the amount of water they use, and the amount that goes into products.

    Embedded water, also known as virtual or hidden water, is the water used in the production of goods that is invisible to the end user.

    Examining the amount of embedded water in common products can give startling results. It takes 2,400 litres to produce a hamburger, and 11,000 litres to make a pair of jeans, including the water needed to grow the cotton.

    Tim Jones, principal at Innovaro, says companies could attach "water labels", just as some are using carbon labels showing how much greenhouse gas was emitted during production. This would enable purchasers to make decisions based on environmental principles.

  • Indonesia faces power crisis

    Fabby Tumiwa, of the Institute for Essential Services Reform, says the situation right now is stable as long as PLN maintains its operations reliably.

    "[But] if you look towards the horizon, you’ll see more crises appearing," he says.

    "Even this year or next year, if PLN fails to optimise its maintenance and operations, there’s a big possibility of power shortages in Java and Bali."

    Government guarantees?

    According to analysts, maintenance of the state electricity network is not good.

    Many power stations are running at 75% capacity – just under half the country is still without power, and there is already very little room to cope with extra demand from the half that is.

    PLN’s spokesman, Ario Subijoko, says the company is struggling against financial constraints.

    "The cost of primary energy sources has increased time and time again, and the state budget gave us less subsidy than we needed, so we’ve had to lower the output."

     

    The country’s energy minister does not dispute the rate at which demand is growing, or the need to build capacity to meet it. But he says the situation is not serious.

    "There is now a 30% reserve in Java and Bali," he explains. "We lease generators during a crisis, and we have a long-term plan to build 5000MW every year to meet the growth in demand."

    He says Indonesia is in the process of building plants that will produce another 10,000 MW.

    Power lines in Jakarta, April 2008

    The economy is growing, but demand for power is growing faster

    Private companies are meant to be building 10,000 more – which will almost double the country’s current capacity. They are due for completion in 2009.

    But these plans have been on the table since the financial crisis hit here in 1997, and having been renegotiated in the years that followed, they’re now falling behind schedule again.

    Part of the reason for the delay is that investors have been asking for government guarantees in case their investment goes sour.

    And that really goes to the heart of the problem.

    Indonesia’s power sector is in many ways an unattractive one for investors.

    It is inefficient and unprofitable. Prices for the consumer are heavily subsidised by the government; subsidies which make up half PLN’s revenue.

    Political risk

    James Booker is a coal-buyer for independent energy company Paiton Energy. He says Indonesia’s electricity sector is far more financially challenged than its counterparts elsewhere in Asia.

    And tight purse strings do not help build a strong supply of fuel.

    In today’s energy marketplace, where a ton of coal can fetch more than $75 (£37) on the global market, PLN is paying only about $35-40.

    And that is a problem, when high oil prices mean higher mining and transportation costs for producers.

    The solution, according to James Booker and others, is to do away with huge government subsidies on electricity and make the consumer pay the market rate for switching on a light, watching TV or powering a factory.

    This would free up some $650m from the government coffers to invest in renovating the national grid, making it more efficient, a better investment, and better able to pay coal and gas producers a competitive price.

    Jakarta street

    Almost 50% of the country is not connected to the national grid

    But doing away with subsidies is a politically risky move. A straw poll on the streets of Jakarta suggested that about 90% of people would not vote for a party that put up the price of power – and national elections are due next year.

    A similar scheme in 2006 that raised the price of oil by more than 100% caused widespread protests.

    So for now, Indonesia’s growing economy is likely to keep putting pressure on a crumbling power system. But what effect does a crumbling power system have on the economy?

    Most major companies have their own power supply to turn to in emergencies. But even if business does not stop, the unpredictability and expense weigh against the benefits of investing or expanding here.

    James Castle has been working as a consultant to businesses in Indonesia for 30 years. He believes power insecurity is a "huge drag on the economy" and a significant obstacle to economic growth.

    "It affects not only investment decisions," he says. "It also raises operating costs, impedes the efficient operation of manufacturing businesses and causes excessive consumption of expensive, less environmentally friendly diesel."

    He estimates that an efficient power sector could probably add 0.5% to 1.0% to annual GDP growth.

    PLN’s spokesman Ario Subijoko does not dispute that the country’s electricity problems are holding up growth.

    "I think it’s a logical consequence – energy affects economic growth," he says.

    "We’ll try to speed things up but if the situation is difficult, there’s not much we can do. If we were one of the rich countries it might not be a problem, but Indonesia?"

  • Melting mountains ‘time bomb’ for water shortages

    From Reuters via the NZ Herald 
     
    People in mountainous areas such as Nepal rely on melt-water for most of their needs. Photo / Reuters

    People in mountainous areas such as Nepal rely on melt-water for most of their needs. Photo / Reuters

    Glaciers and mountain snow are melting earlier in the year than usual, meaning the water has already gone when millions of people need it during the summer when rainfall is lower, scientists warn .

    "This is just a time bomb," said hydrologist Wouter Buytaert at a meeting of geoscientists in Vienna.

    Those areas most at risk from a lack of water for drinking and agriculture include parts of the Middle East, southern Africa, the US, South America and the Mediterranean.

    Rising global temperatures mean the melt-water is occurring earlier and faster in the year and the mountains may no longer be able to provide a vital stop-gap.

    "In some areas where the glaciers are small they could be gone in 30 or 50 years time and a very reliable source of water, especially for the summer months, may be gone."

    Ms Buytaert, from Britain’s Bristol University, was referring to parts of the Mediterranean where her research is focused, but she said this threat also applies to the entire Alps region and other global mountain sources.

    Daniel Viviroli, from the University of Berne, believes nearly 40 per cent of mountainous regions could be at risk, as they provide water to populations which cannot get it elsewhere.

    He says the earth’s sub-tropic zones, which are home to 70 per cent of the world’s population, are the most vulnerable. And with the global population expected to expand rapidly, there may not always be enough water to drink.

    In Afghanistan, home to some 3,500 of the world’s glaciers, the effects of global warming are already being felt in the Hindu Kush, said US Geological Survey researcher Bruce Molnia.

    In some valleys snow has completely disappeared during months when it usually blankets the mountains and many basins have drained, Mr Molnia said.

    "And what I am talking about here is adaptable to almost every one of the Himalayan countries that’s dependent on glacier-melted water," he said.

    – REUTERS

  • Solar power cheaper than expected

    by Isabelle Christensen, PhD at Renewable Energy  

    A number of recent articles including Dr. Boreinstein’s study from UC Berkeley and a feature in the Economist questioning the cost effectiveness of solar, have sparked some serious debate amongst solar enthusiasts and have served to propagate false impressions about solar in the public arena.

    Due to the complexity of the product and misconceptions surrounding solar energy, the solar industry could greatly benefit from a collective advertising and branding campaign in order to achieve consistent messaging and dispel widespread myths about solar.

    There is a common misconception that solar is not cost effective because most people compare the cost of distributed solar to wholesale electricity prices. This is an inaccurate comparison since homeowners are actually paying retail electricity prices and not wholesale electricity prices. One can argue that solar is cost effective now if we compare apples to apples.

    The cost of RETAIL electricity in California can run upwards of $.30 to $0.41 cents per kWh for a household with high electricity consumption (a home with an air conditioner, swimming pool, refrigerator, TV, and a few electronic toys). A typical 3kW residential system costs $25,000 without incentives, and will produce 4,500 kWh per year virtually maintenance-free for 25 years. That works out to be 25 cents per kWh for solar — on a residential or commercial customer’s rooftop. With the state rebate and federal tax credit the cost for solar is 18 cents per kWh.

    Despite solar being an obvious smart financial and environmental decision for many home and business owners, daily articles from misinformed journalists claim that solar does not make financial sense. In order to create the drastic shift in the public’s mind a pervasive and cooperative advertising effort on the behalf of all solar players is perhaps necessary.

    In fact, the solar industry could learn a thing or two from the beef, milk, and cell phone industries, who all managed to successfully brand their products into mainstream acceptance via collective advertising and branding campaigns.

    A commodity is a good with very little differentiation. Beef, milk, cell phones and PV are all examples of commodities. When it comes to marketing a commodity, an individual company’s marketing expenditures tend to have a poor return. However, by financing a branding campaign by spreading the cost across the entire industry, every actor in the marketplace pays for and benefits from the increased effectiveness. This strategy minimizes some players’ free-riding on other players’ marketing efforts.

    The 1985 Beef Act, passed by Congress, was designed to promote the beef industry. The Texas Beef Council spearheaded a branding campaign that included the now-famous slogan, "Beef: It’s What’s For Dinner" and financed it with a $1 fee per head of beef cattle. This campaign’s goal was to address the slump during the 1980’s within the beef industry.

    The branding campaign utilized by the beef industry had more than the catchy "Beef: It’s What’s For Dinner," tagline. It also effectively utilized music within the branding campaign. Aaron Copland, an American composer, had originally written "Hoe Down" for the ballet Rodeo in 1942. Now, many people associate the distinctive melody with "Beef: It’s What’s For Dinner." The ads for beef displayed everyday Americans enjoying beef and focused on ease of preparation and the nutritional benefits. The ads typically displayed a family preparing or sitting down to a meal and featured recipes with estimated prep and cooking times that were typically quite short. Through these ads, the beef industry was able to greatly increase its sales and profits by dispelling the unhealthy and difficult-to-prepare reputation that beef had acquired in the early 80s.

    The milk industry has also undergone several branding and re-branding campaigns as it sought to carve its own brand identity. In the past, milk ads used the tag line, "It Does a Body Good," to emphasize the health benefits of milk.

    The next generation of milk ads started with the "got milk?" campaign. The first "got milk?" ad was a television spot in which a fellow with a shrine to the Alexander Hamilton – Aaron Burr duel hears a radio promotion asking, "Who killed Alexander Hamilton?" He phones into the contest, gets through, and tries to answer "Aaron Burr," but his mouth is full of sticky peanut butter. Because he is out of milk and cannot wash down the peanut butter, his answer is completely intelligible. As he screams in frustration from losing out on the large monetary prize, the words: "got milk?" flash on the screen.

    Milk print ads briefly went to the "where’s your mustache?" tagline, but that was dropped in favor of the more memorable "got milk?" tagline. These ads combined the memorable phrase with milk mustached celebrities, athletes, and other notables.

    The branding of milk emphasizes the health benefits that result from milk consumption. Among the many benefits milk provides are the multiple essential nutrients to promote strong bones and shiny, healthy hair. Awareness of the "got milk?" branding campaign rates over 90% nationally, making it a highly successful brand.

    It is not just the milk and beef industries that have been transformed through branding campaigns. The high tech industry has also successfully used this approach with cell phones. It wasn’t until 1984 that cellular phones were first mass marketed to the general public. It was a technical marvel by which people could reach into their pockets and simply make a call to someone — anywhere in the world. This new wireless gadget was bulky, expensive to operate (compared to nowadays) and back then seemed like just another toy on the wish list of those who had money. The aggressive branding campaigns from the cellular companies successfully branded the expensive cell phones into must-haves for mass consumers.

    All three industries have effectively used branding to increase awareness of their product as well as the industry as a whole. Instead of putting so much emphasis into nickel and diming the cost effectiveness of solar, perhaps the solar industry would be best served by utilizing a collective branding effort in order to bring solar to the mainstream.