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  • Collapse of the Petrodollar Looming

    In his annual State of the Nation address to both houses of parliament on 10 May 2006, Novosti reports President Putin said that work on making the Rouble an internationally convertible currency would be completed by 1 July 2006, six months ahead of schedule. To promote the currency, he announced that an oil and gas stock exchange will be created in Russia, that would trade in Roubles.

    "The rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in roubles." – Putin

    Russia’s oil exports represent 15.2% of the world’s export trade in oil, making it a much more significant player than Iran, with 5.8% of export volumes. Russia also produces 25.8% of the world’s gas exports, while Iran is still only entering this market as an exporter.

    GlobeAndMail.com is reporting that President Chavez of Venezuela is considering following Iran’s move towards pricing oil in Euros. Venezuela has 5.4% of the export market, although since the bulk of his country’s exports are of heavy oil to the US, where it needs special facilities to process it, it would be a very brave or foolhardy President that told the US to buy its oil in Euros, or else … Nevertheless, you can see the attraction for any country wanting to apply some pressure on the world’s superpower. And where Venezuela leads, Bolivia may not be far behind. You can see how this could quickly get out of control.

    While the Iranians have been suffering numerous delays in implementing their bourse, Russia could have their oil market up and running almost as soon as their currency market is ready to take on the work load, which might only be a few months away.

    Some commentators on the Iranian proposal have suggested that the impact on the US Dollar would not be so great because the greenback is used for all sorts of trade, not just oil, so 5.8% of the international oil trade is really only a small part of the bigger picture. This argument looks a bit weak if both Russia and Iran will be lowering the demand for Dollars to buy oil and gas.

    In order to counter the reduced demand for US Dollars, the standard control lever available to the Federal Reserve is to increase interest rates, over and above what it was going to be doing. This has the usual unwelcome consequences of dampening the US economy, and squeezing people with mortgages, which in turn leads to rising wages, falling house prices and a slump in the construction industry.

    At the same time, lower demand for Dollars will weaken its conversion rate, making imports more expensive. With rising wages, fuel bills and debt-servicing feeding through into prices for home-produced goods, the stage is set for either an inflationary spiral or a recession. In the short term, the inflationary route always looks to be the less painful, but it can only lead eventually to a crisis of confidence in US Dollars, when traders abandon the paper and rush for the exit.

    US-Russian relations slide

    It cannot have escaped the notice of the Russians that this announcement is a poke in the eye for the US. So its timing can hardly be an accident, coming less than a week after US Vice President Dick Cheney’s address to a conference in Vilnius, Lithuania, where he attacked Russian energy policy, in front of an audience of European heads of state.

    "No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation, or attempts to monopolise transportation", Cheney said, referring to the Ukrainian gas cut-back (that Ukraine provocatively passed on to the downstream customers in western Europe). The next day Russian Foreign Minister Sergei Lavrov fired back "[the] U.S. vice president should be informed that for the last 40 years neither the U.S.S.R. nor the Russian Federation has ever broken a single contract for oil and gas supplies abroad."

    The antagonism continued to verberate when Lavrov met US Sectretary of State Condoleezza Rice at a foreign ministers’ summit in New York on Iran’s nuclear programme. As well as criticising Cheney’s comments, Lavrov also attacked Rice’s number three, Nicholas Burns, for his criticism of Russia’s assistance with Iran’s Bushehr nuclear facility. "This meeting isn’t going anywhere", snarled Rice, perhaps angry that the rebuke of Burns reflected badly on her.

    Burns himself was probably a bit cranky after his trip to Moscow in April, when he publicly asked Russia not to go ahead with the sale of Tor-M1 mobile anti-missile missiles to Iran, only to be bluntly rebuffed by Russian Chief of Staff, General Yury Baluyevsky.

    Meanwhile the world looks on, hoping that the great powers really know what they are doing, and that World War 3 won’t start because of a subtle miscalculation in brinkmanship.

     
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  • Global warming risk ‘much higher’

    Heightened sensitivity

    The latest evidence comes in two papers to be published in the scientific journal Geophysical Research Letters.

    They challenge the consensus view of the Intergovernmental Panel on Climate Change (IPCC), the global body charged with collating and analysing climate science.

    The evidence for a warming Earth is stronger and the impacts of climate change are becoming observable in some cases

    Australian Greenhouse Office

    It predicts that the global average temperature would rise by between 1.5C and 4.5C if human activities were to double the amount of carbon dioxide (CO2) in the atmosphere.

    That figure, known as the climate sensitivity, results from a combination of two factors:

    • the direct impact of rising CO2 on the greenhouse effect
    • various "feedback" mechanisms which amplify the rate of warming, such as changes in the Earth’s reflection of sunlight as ice melts

    The new research adds a third component, by calculating the likely contribution of carbon dioxide released from natural ecosystems such as soil as temperatures rise.

    This would add to the CO2 produced through human activities, raising temperatures still further.

    Soil cycle

    To calculate this extra warming, both research groups have looked back into the Earth’s history.

    Regularly, spells of relatively high temperatures have produced rises in atmospheric carbon dioxide concentrations, which have fallen again as colder conditions took over.

    The theory is that in warm spells, ecosystems such as soils, forests and oceans retain less carbon.

    As the Earth’s surface is now warming again, the process might be expected to repeat itself, with higher temperatures again causing the biological world to release CO2 into the atmosphere, complementing the gas coming from homes, factories and vehicles.

    To calculate the relationship between temperature rise and carbon release, the US study examined a period of about 400,000 years using data from the Vostok ice core of Antarctica.

    The European group worked on a much shorter period, looking back to the "Little Ice Age", a period in the middle of the last millennium when the northern hemisphere experienced relatively low temperatures.

    "Our group used long time periods, over entire glacial and interglacial cycles, to get this relationship between climate and carbon," explained John Harte from the University of California, Berkeley.

    "The European team looked at a much more modern period, and also used a different analytical method," he told the BBC News website.

    Several studies looking at climate sensitivity tend to show higher figures than we have been used to

    Martin Wild

    The European group calculates that temperature rises in the future have been underestimated by between 15% and 78%; the US team expresses its results in a different way, giving a climate sensitivity of between 1.6 and 6.0C.

    "We don’t get very different answers," observed Professor Harte.

    "And using different periods is very helpful, because we know the results are more robust."

    Supporting evidence

    These are not the only recent studies to suggest that climate sensitivity may have been underestimated.

    The Australian Greenhouse Office report cites research showing that some forests which were net absorbers of carbon may be turning into net producers, an effect anticipated as temperatures rise.

    Microscope picture of gas bubbles in ice.  Image: W. Berner/University of Bern

    Data came from gas bubbles trapped in the Vostok ice core

    Martin Wild from the Institute for Atmospheric and Climate Science (IACETH) in Zurich, a specialist on climate feedback, believes there are other reasons to revisit the current picture.

    "The point is that there are several studies coming from several directions looking at climate sensitivity, and they tend to show higher figures than we have been used to," he told the BBC News website.

    "There is some evidence on the uptake of heat in the deep ocean, for example, which could make it higher."

    On the current carbon studies, he concluded: "If this additional carbon feedback is proven to be realistic, than that would raise the climate sensitivity up by a certain amount."

    Future reflections

    Both scientific teams admit their work is not as precise as they would like, and that uncertainties remain.

    One particular issue is whether the past accurately reflects the future. Do forests and soils behave now, in an era of vast deforestation and widespread fertiliser use, just as they did 100,000 or even 1,000 years ago?

    We have, in fact, been conservative on several points

    Marten Scheffer

    That remains unproven; and climate "sceptics" will undoubtedly seize on this as evidence that the new research is flawed, though they will have to admit that it is substantially grounded in data and not computer models, often the target of their ire.

    The researchers counter that they have not found reasons why carbon feedback mechanisms should be different in the future. And even if differences do arise, they say, future feedback could be stronger as easily as it could be weaker.

    "We have, in fact, been conservative on several points," said Marten Scheffer from Wageningen University in the Netherlands, leader of the European group.

    "For instance, we do not account for the greenhouse effect of methane, which is also known to increase in warm periods."

    Currently the IPCC is reviewing its latest major study, the Fourth Assessment Report, which will be released next year.

    The first draft, of which BBC News has seen a leaked copy, suggests it has not radically changed its projections for temperature rise since its last report in 2001.

    A climate sensitivity of up to 4.5C translates to a maximum likely temperature rise of about 5.8C by the end of this century; whereas in these two studies, the US team calculates up to 7.7C, with the European group’s maximum value even higher.

    "In view of our findings," observes Marten Scheffer, "estimates of future warming that ignore these [carbon feedback] effects may have to be raised by about 50%."

    Richard.Black-INTERNET@bbc.co.uk

  • Broadleaf herbicides set to be banned

    Non-target damage to cotton and so on: There have been incidents of 2, 4-D esters causing non-target damage to cotton, grape and horticulture crops. APVMA principal scientist, Dr David Loschke, said a report into the proposed deregistration of the chemicals had been released for public comment with submissions closing on 31 May.

    The best chemicals replacement: "We will do what we can to make things work for the industry," he said. "The best replacement (chemicals) will be the low-volatile ester forms which have all the same uses growers are accustomed to using the short-chain esters for."

    The Land, 18/5/2006, p. 9

    Source: Erisk Net  

  • Indian Ocean coral reefs suffer worst die-off on record

    Heavy losses from bleaching: The study focused on reefs near Africa’s Seychelles islands, north of Madagascar, which sustained heavy losses from bleaching in 1998.

    Outlook “quite bleak”: "The outlook for recovery is quite bleak for the Seychelles," said lead study author Nicholas Graham, a tropical marine biologist at England’s University of Newcastle Upon Tyne. The study, in the Proceedings of the National Academy of Sciences, predicted that isolated reef ecosystems like that around the Seychelles would suffer the most from global warming-caused bleaching events.

    Temperature rises cause algae to be expelled: Small but prolonged rises in sea temperature forced coral colonies to expel their symbiotic, food-producing algae, a process known as bleaching. While the dying reefs, which turn ghostly white, could recover from such events, many did not.

    Over 16 per cent of coral reefs lost in one year: In 1998 an El Nino weather pattern sparked the worst coral-bleaching event observed. "Over 16 per cent of the world’s reefs … were lost in that one year," said Graham.

    Study in 2005: In the western Indian Ocean, regional currents compounded the heat effect, bleaching 90 per cent of the coral reefs there. With data from a 1994 survey in hand, researchers returned to the Seychelles in 2005 to study the bleaching event’s long-term impact on coral reefs and fish communities.

    50,000 square metres surveyed: Surveying 50,000 square metres of coral reef across 21 sites, researchers found that fish diversity declined the most on reefs that had sustained physical and biological erosion.

    Reference: Digest of latest news reported on website of Climate Change Secretariat of United Nations Framework on Climate Change Control (UNFCCC). 17 May 2006. Address: PO Box 260 124, D-53153 Bonn. Germany. Phone: : (49-228) 815-1005, Fax: (49-228) 815-1999. Email: press@unfccc.int
    http://www.unfccc.int

    Erisk Net, 22/5/2006

  • Oil price hits car sales

    Australian car sales have dropped in response to rising oil prices reports the Sydney Morning Herald.

    SMH Story  

  • Manhattan tests underwater turbines

    Resembling and working much like stout underwater windmills, the six 15-foot-tall turbines will draw energy from tidal currents to power a nearby supermarket and parking garage.

    The company calls the project the first to use multiple underwater turbines to create usable power. Backers say the technology could ultimately provide a reliable, environmentally friendly and largely invisible solution to many global energy needs.

    "It’s very, very green energy," said Dean Corren, the company’s director of technology development. "There’s a lot of energy in that flowing water. Our goal is to capture a small amount of that."

    Traditional hydropower from dams, where water is trapped at a high level and released, provides about 7 percent of the nation’s electricity, but worries over damaging river environments and harming migrating fish have hindered new development.

    The "hydro-kinetic" or "in-stream" technology works by submerging turbines into the natural path of moving water, such as a river, canal or deep ocean current.

    "Fish and marine mammals can easily swim around," said George Hagerman, a Virginia Tech researcher who co-authored a study on in-stream energy issued this month. "It doesn’t have anywhere near the impact of a dam."

    Learning lessons from the wind industry, where large windmill blades have killed birds, projects such as the East River experiment include extensive monitoring to ensure fish are not harmed.

    The blunt rotor blades, spanning more than 16 feet tip to tip, will turn at a slow 32 rpm. Each turbine, anchored to bedrock and widely spaced in 30 feet of water, will work in both directions to accommodate reversing tidal currents.The technology is part of a growing effort to harness new forms of water energy, including using the motion of wind-driven ocean waves and "lunar power," the moon’s gravitational effect on tides, Hagerman said.

    While firms in the United Kingdom are often leading the way, advocates of the technology see vast untapped potential in the U.S., with its extensive coastal waters and numerous rivers and waterways.

    With rising fossil fuel prices, alternative energy has lately become big business. Wind power will likely produce enough electricity in the U.S. to run 2.3 million homes this year, according to the American Wind Energy Association.

    Texas officials announced plans on May 12 to build the nation’s largest offshore wind farm in the Gulf of Mexico, with up to 170 windmills generating 500 megawatts of electricity – power for 125,000 homes.

    In comparison, new forms of hydropower are just getting started.

    Verdant’s 18-month test starting this summer should produce up to 200 kilowatts at peak capacity. If the test succeeds, the next stage in 2010 would use up to 300 improved turbines generating enough power for 8,000 New York homes.

    With a commercial deployment three times larger than that, New York could earn the title of the city powered by the most locally produced renewable energy, said Trey Taylor, president of Verdant Power, which launched in 2000.

    He said that while river turbines will likely never serve more than a tiny fraction of the city’s energy needs, the technology has advantages over other renewable sources.

    "The wind doesn’t always blow and the sun doesn’t always shine," Taylor said, but the new forms of hydropower are very reliable, running day and night.

    He said the submarine turbines also are out of sight, avoiding conflicts like the one in Cape Cod, Massachusetts, where residents oppose a proposed wind farm, saying it would spoil scenic views.

    The river power also is produced locally, adding security and savings by replacing electricity transmitted from distant power plants, Taylor said.

    With interest from the Brazilian government, the company has a team scouting locations in the Amazon basin, where river turbines could replace diesel generators used in about 1,000 villages. The company has another project in Canada and plans to deploy turbines in man-made canals and aqueducts in California.

    For now the more modest action is on Roosevelt Island, where Verdant Power’s control room by the East River is a metal cargo container stuffed with electronics. It is about 20 feet from the Gristedes supermarket’s deli section, soon to be chilled for free with river power.

    The company had to overcome a series of delays and federal and local government hurdles. Taylor said his company chose New York in part because its tough regulatory environment would be a "learning process."

    Corren predicted new hydropower will grow like wind power, while avoiding that industry’s mistakes.

    "There’s no such thing as a 100 percent clean source of energy," he said, "but this is as close as you can get."

    On the Web:

    Web video: www.coxwashington.com/reporters/content/reporters/stories/BC —RIVER—TURBINES—ADV21—COX.html