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  • Plug pulled on Howard’s water plan

    Matthew Warren, The Australian

    JOHN Howard’s $10 billion national water plan will be scrapped and replaced with a more aggressive redistribution of the resource, under a radical reform blueprint released yesterday.

    Under the plan to drought-proof the Murray-Darling basin by leading water economist Mike Young, the 10-year Howard plan to hand out nearly $6 billion to irrigators for efficiency improvements would be scrapped.

    Instead, $5 billion of this would be spent during the first term of the Rudd Government to compensate the 15,500 irrigators in the basin for the permanent restructuring, and in most cases cutting of their permanent water entitlements.

    About $1 billion would be spent on efficiency upgrades but only after the reallocation of water to deliver equal property rights to irrigators, the environment and all other direct and indirect users of water in the system.

    The new plan includes the water being diverted from the system for managed investment scheme (MIS) forests and other related activities, and will formalise trading in the resource between different states and catchments.

    Professor Young and his co-author, Jim McColl from the CSIRO, have been working on the plan since the election lastyear.

  • Tide power makes waves

    "I want to extend our company’s thanks for this proposal," Kevin Bannister, Vice President for Business Development, Finavera Renewables told FERC when it proposed expedited pilot licenses in October.

    "We think this is really a very good first step towards creating the kind of environment that our technologies need in order to get our devices into the water [for testing]."

    FERC defines hydrokinetics as energy from flowing waters, not involving a dam. Tidal, wave, current and river energy plans have all emerged as categories in FERC’s hydrokinetic efforts and in some circles, hydrokinetics is being considered the wave of the future, even for places without waves.

    An Idaho study for the U.S. Department of Energy estimated there may be 150,000 sites for wave energy development in the United States. Harnessing natural water motion energy could be a key piece of America’s future energy puzzle.

    "We believe a reliable and robust electricity system will be the result of a balanced and diversified portfolio," said Roger Bedard of the Electric Power Research Institute (EPRI). "Our studies show that hydrokinetics has the long-term potential of providing about 10 percent of our current U.S. electricity consumption," Bedard said.

    As of February 4, 2008, 47 permits had been issued for ocean, wave and tidal projects and 41 were pending. The process has gone on largely under the radar, with some communities expressing surprise at discovering that their waters have been claimed under preliminary permits. A FERC preliminary permit acts like a mining claim, giving the first application exclusive rights to study the area for three years. The permits also give preference to the applicant for FERC conventional hydro licenses, which typically last 30-50 years.

    In 2008, the focus of hydrokinetics has shifted from the ocean to rivers, especially the Mississippi River, where tens of thousands of generating devices are proposed under preliminary permits. There have been 40 in-river permits issued and 55 more pending. Half the preliminary issuances have come in early 2008.

    Proposals include harnessing the Niagara River, the channels between the Florida Keys and a plan to give a European-developed technology for harnessing currents its first U.S. test. That plan claims more than 1000 square miles of the open ocean off Florida’s Atlantic Coast to try to generate power from the flow of the Gulf Stream.

    Alaska has been a hot spot for river preliminary permit proposals, with preliminary permits filed on the Yukon, Kobuk, Tanana, and Kuskok Rivers. Recently the Alaska Power & Telephone Company announced that it intends to file for a pilot license on the Yukon River that would bring power to the city of Eagle, located halfway between the Pacific Ocean and the Arctic Circle, near the Canadian border. While the preliminary permits anticipate generating plants with thousands of in-river devices, this plan is much more modest.

    "During the pilot phase of the Project a single turbine with two side-by-side shrouded runners producing 100 kilowatts of electrical power operating in a river velocity of 5.3 knots while being moored to an anchor on the river bottom will be installed," the application states. A pilot license allows a developer to hook up to the grid for a period of five years, and is restricted to small, experimental proposals. A FERC conventional license has no size restrictions. The Alaskan plans calls for a conventional FERC license at the end of the five-year pilot project period.

    The issuance of large numbers of preliminary permits, however, has irked some environmental regulators.

    A filing by the National Oceanic and Atmospheric Administration (NOAA) challenges FERC’s standing to issue pilot licenses before applicants have complied with federal laws such as the National Environmental Policy Act (NEPA) and the Endangered Species Act

    "Issuing licenses in incremental stages is inconsistent with FERC’s obligations under these and other statutes, and could confuse and frustrate license applicants. Incrementally building the conditions in a license is also antithetical to FERC’s goals of shortening the overall regulatory process and providing certainty to potential hydrokinetic licensees and clarity to the public," the NOAA filing states.

    At this point, much of the Oregon Coast has been claimed. Off Fort Bragg, and Eureka California, a competition is to be held for different experimental devices by the Pacific Gas and Electric Company.

    Multiple FERC hydrokinetic permits are being issued daily for what can be thousands of devices in each river application.

    On Febriary 13, 2008, FERC issued a preliminary permit to a limited partnership for study of the Mississippi River in Mississippi County, Missouri, and Alexander County, Illinois, despite objections to the process from those states. That project would consist of 4,100 proposed 20-kilowatt in-river Free Flow generating units having a total installed capacity of 82 megawatts.

    "Hydrokinetic technologies, with their great promise and potential to harness abundant supplies of renewable power by using ocean waves, tides and currents and in-river flows, fit that bill. I am pleased to be a member of a Commission that has adopted a proactive approach to encourage the development of hydrokinetic technologies," Moeller said.

  • US warns of food vs fuel wars

    Larry Pope, chief executive of Smithfield Foods, the largest US pork processor, warned delegates of a wave of “real food inflation” just at the time central banks were under pressure to cut interest rates.

    “I think we need to tell the American consumer that [prices] are going up,” he said. “We’re seeing cost increases that we’ve never seen in our business.”

    The comments highlighted one of the conference’s main concerns – that rising agricultural prices have reached a stage at which the impact will be felt not only on fresh food but will also filter through the supply chain and raise the cost of processed food.

    Tom Knutzen, chief executive of Danisco, one of the world’s largest ingredients companies, said rising vegetable oil costs made it more expensive to produce preservatives, colourings and flavourings.

    “Our products are based on vegetable oil. “Our input cost has gone up so we are increasing prices,” he said in an interview in Brussels. He added that preservatives, colourings and flavourings made up only 1-2 per cent of the cost of food but there would be a ripple effect as they were present in almost all the food sold worldwide.

    US agriculture officials forecast that food inflation will rise this year at an annual rate of 3-4 per cent, warning that the risks were skewed to the upside. Last year, food inflation rose 4 per cent, the highest annual rate since 1990.

    Joseph Glauber, the USDA’s chief economist, said in an interview that until now some companies had absorbed the rise in commodities prices, but that trend was about to change.

    He said that wheat prices had previously moved from $3 to $5 a bushel without significant pain for consumers. “But now the wheat price has jumped to nearly $20 a bushel. These large increases will show up [in consumer prices].”

    Some people hope a slowdown in the US or global economy would push down agricultural commodities prices. But Mr Glauber said that would have a limited impact on agriculture commodities prices. “I am more concerned about higher prices than lower prices.”

    However, Simon Johnson, chief economist at the International Monetary Fund, said in an interview that for most agricultural commodities and metal markets the global slowdown would push prices down.

    “The commodities market believes in the decoupling of developing countries’ growth,” Mr Johnson said. “The IMF does not believe in decoupling to that extent.”

    But even if commodities prices do slow down, other forces could still push consumer prices higher, food industry executives said.

    Companies until now have moderated consumer price increases thanks to large inventories and financial hedges in the commodities market futures. But during the course of this year those mitigating factors would vanish, executives said.

    “The final result will be higher prices,” Mr Lapp said. The global economy is “at the beginning of a period in which consumer will face higher food prices”.

    Additional reporting by Andy Bounds in Brussels

  • UN rations food aid

    WFP officials hope the cuts can be avoided, but warned that the agency’s budget requirements were rising by several million dollars a week because of climbing food prices.

    The WFP crisis talks come as the body sees the emergence of a “new area of hunger” in developing countries where even middle-class, urban people are being “priced out of the food market” because of rising food prices.

    The warning suggests that the price jump in agricultural commodities – such as wheat, corn, rice and soyabeans – is having a wider impact than thought, hitting countries that have previously largely escaped hunger.

    “We are seeing a new face of hunger in which people are being priced out of the food market,” said Ms Sheeran.

    Hunger is now “affecting a wide range of countries”, she said, pointing to Indonesia, Yemen and Mexico. “Situations that were previously not urgent – they are now.”

    The main focus of the WFP to date has been to provide aid in areas where food was unavailable. But the programme now faces having to help countries where the price of food, rather than shortages, is the problem.

    Ms Sheeran said that in response to rising food costs, families in developing countries were moving in some cases from three meals a day to just one, or dropping a diverse diet to rely on one staple food.

    In response to increasing food prices, Egypt has widened its food rationing system for the first time in two decades while Pakistan has reintroduced a ration card system that was abandoned in the mid-1980s.

    Countries such as China and Russia are imposing price controls while others, such as Argentina and Vietnam, are enforcing foreign sales taxes or export bans. Importing countries are lowering their tariffs.

    Food prices are rising on a mix of strong demand from developing countries; a rising global population; more frequent floods and droughts caused by climate change; and the biofuel industry’s appetite for grains, analysts say. Soyabean prices on Friday hit an all-time high of $14.22 a bushel while corn prices jumped to a fresh 12-year high of $5.25 a bushel.

    The price of rice and wheat has doubled in the past year while freight costs have also increased sharply on the back of rising fuel prices.

    The world’s poor countries will have to pay 35 per cent more for their cereals imports, taking the total cost to a record $33.1bn (in the year to July 2008, even as their food purchases fall 2 per cent, according to the UN’s Food and Agriculture Organisation.

    The US Department of Agriculture warned this week that high agricultural commodities prices would continue for at least the next two to three years.

  • Australia rates cars on energy use

    Modernised energy ratings will appear on all new cars from October, the federal government has announced.

    The ratings will show fuel consumption of a new vehicle in city and country driving, along with its rate of greenhouse emission.

    "The new label is about helping motorists make informed choices about the environmental impact of their new car and the cost of running their vehicle on the family budget," Transport Minister Anthony Albanese said in a statement.

    "While the numbers on a fuel consumption label do not replicate all driving conditions, additional information on the new fuel consumption label will help consumers to better understand the fuel consumption of vehicles under different traffic conditions."

    Mr Albanese will sign off on the new labelling system next week and it will be mandatory on new model cars from October.

    The announcement came as the nation’s peak motoring body, the Australian Automobile Association (AAA), announced a string of climate change initiatives.

    Association executive director Mike Harris announced a nationwide audit of all motoring clubs in a bid to lower the emissions of the five million emergency calls responded to annually by organisations like the NRMA and RACQ.

    The AAA will also convene an international summit in June to study how to further reduce the dangerous gases emitted by cars.

    "We will encourage sustainable motoring," Mr Harris said at the joint government-AAA launch.

    But he promised there would be no attempt to demonise motorists.

    "The AAA clubs are acutely aware of the importance of the car to people from all walks of life."

  • Texas wind power tops 3%

    Texans are even turning tapped-out oil fields into wind farms, and no less an oilman than Boone Pickens is getting into alternative energy.

    “I have the same feelings about wind,” Mr. Pickens said in an interview, “as I had about the best oil field I ever found.” He is planning to build the biggest wind farm in the world, a $10 billion behemoth that could power a small city by itself.

    Wind turbines were once a marginal form of electrical generation. But amid rising concern about greenhouse gases from coal-burning power plants, wind power is booming. Installed wind capacity in the United States grew 45 percent last year, albeit from a small base, and a comparable increase is expected this year.

    At growth rates like that, experts said, wind power could eventually make an important contribution to the nation’s electrical supply. It already supplies about 1 percent of American electricity, powering the equivalent of 4.5 million homes. Environmental advocates contend it could eventually hit 20 percent, as has already happened in Denmark. Energy consultants say that 5 to 7 percent is a more realistic goal in this country.

    The United States recently overtook Spain as the world’s second-largest wind power market, after Germany, with $9 billion invested last year. A recent study by Emerging Energy Research, a consulting firm in Cambridge, Mass., projected $65 billion in investment from 2007 to 2015.

    Despite the attraction of wind as a nearly pollution-free power source, it does have limitations. Though the gap is closing, electricity from wind remains costlier than that generated from fossil fuels. Moreover, wind power is intermittent and unpredictable, and the hottest days, when electricity is needed most, are usually not windy.

    The turbines are getting bigger and their blades can kill birds and bats. Aesthetic and wildlife issues have led to opposition emerging around the country, particularly in coastal areas like Cape Cod. Some opposition in Texas has cropped up as well, including lawsuits to halt wind farms that were thought to be eyesores or harmful to wetlands.

    But the opposition has been limited, and has done little to slow the rapid growth of wind power in Texas. Some Texans see the sleek new turbines as a welcome change in the landscape.

    “Texas has been looking at oil and gas rigs for 100 years, and frankly, wind turbines look a little nicer,” said Jerry Patterson, the Texas land commissioner, whose responsibilities include leasing state lands for wind energy development. “We’re No. 1 in wind in the United States, and that will never change.”

    Texas surpassed California as the top wind farm state in 2006. In January alone, new wind farms representing $700 million of investment went into operation in Texas, supplying power sufficient for 100,000 homes.

    Supporters say Texas is ideal for wind-power development, not just because it is windy. It also has sparsely populated land for wind farms, fast-growing cities and a friendly regulatory environment for developers.

    “Texas could be a model for the entire nation,” said Patrick Woodson, a senior development executive with E.On, a German utility operating here.

    The quaint windmills of old have been replaced by turbines that stand as high as 20-story buildings, with blades longer than a football field and each capable of generating electricity for small communities. powerful turbines are able to capture power even when the wind is relatively weak, and they help to lower the cost per kilowatt hour.

    Much of the boom in the United States is being driven by foreign power companies with experience developing wind projects, including Iberdrola of Spain, Energias de Portugal and Windkraft Nord of Germany. Foreign companies own two-thirds of the wind projects under construction in Texas.

    A short-term threat to the growth of wind power is the looming expiration of federal clean-energy tax credits, which Congress has allowed to lapse several times over the years. Advocates have called for extending those credits and eventually enacting a national renewable-power standard that would oblige states to expand their use of clean power sources.

    A longer-term problem is potential bottlenecks in getting wind power from the places best equipped to produce it to the populous areas that need electricity. The part of the United States with the highest wind potential is a corridor stretching north from Texas through the middle of the country, including sparsely populated states like Montana and the Dakotas. Power is needed most in the dense cities of the coasts, but building new transmission lines over such long distances is certain to be expensive and controversial.

    “We need a national vision for transmission like we have with the national highway system,” said Robert Gramlich, policy director for the American Wind Energy Association. “We have to get over the hump of having a patchwork of electric utility fiefdoms.”

    Texas is better equipped to deal with the transmission problems that snarl wind energy in other states because a single agency operates the electrical grid and manages the deregulated utility market in most of the state.

    Last July, the Texas Public Utility Commission approved transmission lines across the state capable of delivering as much as 25,000 megawatts of wind energy by 2012, presuming the boom continues. That would be five times the wind power generated in the state today, and it would drive future national growth.

    Shell and the TXU Corporation are planning to build a 3,000-megawatt wind farm north of here in the Texas Panhandle, leapfrogging two FPL Energy Texas wind farms to become the biggest in the world.

    Not to be outdone, Mr. Pickens is planning his own 150,000-acre Panhandle wind farm of 4,000 megawatts that would be even larger and cost him $10 billion.

    “I like wind because it’s renewable and it’s clean and you know you are not going to be dealing with a production decline curve,” Mr. Pickens said. “Decline curves finally wore me out in the oil business.”

    At the end of 2007, Texas ranked No. 1 in the nation with installed wind power of 4,356 megawatts (and 1,238 under construction), far outdistancing California’s 2,439 megawatts (and 165 under construction). Minnesota and Iowa came in third and fourth with almost 1,300 megawatts each (and 46 and 116 under construction, respectively).

    Iowa, Minnesota, Colorado and Oregon, states with smaller populations than Texas, all get 5 to 8 percent of their power from wind farms, according to estimates by the American Wind Energy Association.

    It has dawned on many Texans in recent years that wind power, whatever its other pros and cons, represents a potent new strategy for rural economic development.

    Since the wind boom began a few years ago, the total value of property here in Nolan County has doubled, and the county judge, Tim Fambrough, estimated it would increase an additional 25 percent this year. County property taxes are going down, home values are going up and the county has extra funds to remodel the courthouse and improve road maintenance.

    “Wind reminds us of the old oil and gas booms,” Mr. Fambrough said.

    Teenagers who used to flee small towns like Sweetwater after high school are sticking around to take technical courses in local junior colleges and then work on wind farms. Marginal ranches and cotton farms are worth more with wind turbines on them.

    “I mean, even the worst days for wind don’t compare to the busts in the oil business,” said Bobby Clark, a General Electric wind technician who gave up hauling chemicals in the oil fields southwest of here to live and work in Sweetwater. “I saw my daddy go from rags to riches and back in the oil business, and I sleep better.”

    Wind companies are remodeling abandoned buildings, and new stores, hotels and restaurants have opened around this old railroad town.

    Dandy’s Western Wear, the local cowboy attire shop, cannot keep enough python skin and cowhide boots in stock because of all the Danes and Germans who have come to town to invest and work in the wind fields, then take home Texas souvenirs.

    “Wind has invigorated our business like you wouldn’t believe,” said Marty Foust, Dandy’s owner, who recently put in new carpeting and air-conditioning. “When you watch the news you can get depressed about the economy, but we don’t get depressed. We’re now in our own bubble.”