November 10, 2012

Major polluting countries won't be constrained by "Kyoto 2"

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Next Kyoto round is at Doha, Qatar. Qatar needs to make amends, because oil money has made it the highest per capita carbon emitter in the world.
 

"Australia pledges to renew Kyoto Protocol in Doha:

But New Zealand refuses to follow suit and will instead sign a non-binding pledge

09 Nov 2012
 
Australia is set to renew its commitment to the Kyoto Protocol [with the renewed Protocol from 2015 on dubbed "Kyoto 2"] and sign up to binding emission reductions through to 2020, in a move that has been hailed as a major breakthrough for the long-running international climate change negotiations.
However, New Zealand today confirmed it will not join its neighbour in signing up for a second phase of the Kyoto agreement, instead opting for a non-binding emissions reduction pledge.            
United Nations climate change negotiators and world leaders will meet in Doha from 26 November [2012] in an attempt to reach a series of agreements designed to extend the legally binding Kyoto agreement before it expires at the end of this year, as well as setting out a roadmap for a new treaty to be finalised by 2015.

The 36 EU countries have already pledged to take Kyoto into a second commitment period that would see them face binding emission reduction targets for the period from 2013 to 2020. However, there had been fears that only the EU and those emerging and developing countries that do not face binding emission targets [significantly that includes major pollutes India and China] under Kyoto would sign up to the agreement, leaving all other industrialised countries outside the agreement.
However, Greg Combet, Australia's climate change and energy efficiency minister, today confirmed the country was ready to sign up to a second phase of Kyoto in Doha.

Ed Davey, UK energy and climate change secretary, said the news was "extremely welcome" and would for the first time expand the international commitment beyond Europe.

"Having Australia on board will really help to push the second Kyoto Protocol period, which is vital to maintaining agreed rules to cut global emissions as we make the transition to a new, global, legally binding deal," he said.

"Australia's work to reduce emissions is bold and promising, I'll be working hard with Greg Combet and our global counterparts to make even more progress in Doha."

However, New Zealand refused to follow its neighbour into Kyoto phase two, and said it would instead make a non-binding emissions pledge under the United Nations Framework Agreement on Climate Change from 1 January 2013.

In signing a non-binding pledge, New Zealand will align itself with a group of countries that are refusing to sign up to a second Kyoto commitment period, including the US, Japan, Canada and Russia.

New Zealand climate change minister Tim Groser said the country was "fully committed" to its current Kyoto commitment. "We are on track to achieving our target, indeed we are forecasting a projected surplus of 23.1 million tonnes," he said. "Furthermore, we will remain full members of the Kyoto Protocol. There is no question of withdrawing. The issue was always different: where would we take our next commitment under the Kyoto Protocol or under the Convention with the large majority of economies? We have decided that it is in New Zealand's best interests to do the latter." "

November 9, 2012

Oil-gas ventures in Western countries more risky than Sudan?


Andrew McCarthy, CEO of Emperor Oil
 
From Oilprice.com an interview with businessman Andrew McCarthy who alleges a contradiction to what is normally assumed. That is he believes oil and gas ventures in Western countries are more risky than ventures in Sudan.  Iraq and Yemen are also mentioned by Oilprice.com.

"High Risk Investing - The New Trend in Energy: Interview with Andrew McCarthy" November 8, 2012

"Risk perception isn’t what it used to be. Ask the swelling ranks of Canadian junior oil and gas companies braving high-risk venues like Sudan, Iraq and even Yemen.
Technological advances and the shale revolution are making risk easier to digest. And political risk is no longer limited to developing countries. Plus, risk is increasingly relative: Ask anyone who’s been caught up in the politics of the Keystone pipeline.
Sudan is a case in point. While instability and a very fragile peace with South Sudan remains a threat, there is also growing optimism. The philosophy is this: Sudan and South Sudan will come to terms for the sake of economic growth, and oil will get them there. The prize: An estimated 5 billion barrels of oil.
In an exclusive interview with Oilprice.com publisher James Stafford, Emperor Oil CEO Andrew McCarthy reveals:
• Why investors are hitting up high-risk regions
• Why Africa is more opportunity than risk
• How political risk is no longer limited to developing countries
• Why Shale WILL live up to the hype
• Why conventional oil is still a great investment
• And why human ingenuity will prevail
Emperor Oil (TSXV: EM.V) is an international oil and gas company with a focus on the Middle East and North Africa. Most recently, the company has renegotiated the terms of a joint venture gas deal in Turkey and introduced a significant conventional oil project in Sudan.
James Stafford: Oil and gas juniors are now setting up shop in high-risk countries like Sudan, Iraq and even Yemen. What’s behind this new era of risk, and are we likely to see more of this?
Andrew McCarthy: This question creates an opportunity for risk comparison – is it less risky to drill a mile below the ocean surface and create the kind of disaster we saw BP (NYSE: BP) deal with in the Gulf, or do we continue to look for work in regions that have accessible resources and are anxious to advance their economic position along with the health and welfare of their community?
James Stafford: So you are saying that on a comparative level even North America has become a political risk? And that in this balancing act, volatile places like Sudan do not necessarily pose any greater political risk?
Andrew McCarthy: Yes, there are always risks associated with any investment. The US halted all exploration in the Gulf of Mexico for extended periods following the BP disaster. This is a risk that few would have foreseen when exploration and development began in a country whose level of political risk is considered to be negligible.
James Stafford: Furthering your point, there have been a number of other unforeseen political risks, both in the US and Europe…
Andrew McCarthy: Certainly. The US banned all exploration and production in the Marcellus Shales in the State of New York. The US has also stalled the construction of Keystone XL pipeline that would link the US to Canada’s oil sands. In Canada, we have seen the province of British Columbia place a moratorium on offshore drilling. Across the Atlantic, we have also seen Europe place a moratorium on all shale exploration and development.
James Stafford: What is your message to investors who still view Africa and the Middle East as too risky?
Andrew McCarthy: Based on all of these North American and European developments, is it any less risky than operating in developing countries?
James Stafford: Which brings us to Emperor’s operations in Sudan. When South Sudan declared independence in July 2011 it took with it some 75% of the known oil resources. Since then, the situation between Juba (the capital of South Sudan) and Khartoum (the capital of Sudan) has been tense and even bloody. How will this affect exploration and extraction?
Andrew McCarthy: Well, now we have healthy competition due to the secession of the south and the need for both countries to maximize their economic opportunity. The skirmishes fought in the spring were quickly squelched when both countries realized the impact it was having on their economy and their people. Rather than fight over existing production they have chosen to expand their resource development so that there is a larger pie to share...

...Andrew McCarthy: I think we have seen a bottom in North America but Europe’s moratorium on shale exploration and China’s environmental concerns and air quality issues create a huge demand for natural gas, which in turn creates a long-term, sustainable model for natural gas exploration, development and export.
James Stafford: Will the shale revolution live up to the hype?
Andrew McCarthy: I really don’t believe the hype has even started yet. Unfortunately, the uninitiated are still focusing on the concept of ‘fracking’, while this is in fact one of the oldest technologies. We’ve been ‘fracking’ oil and gas wells since the 1930s. What has changed and continues to change is the technology applied – do you know they actually use CAT scan equipment to check shale porosity? It’s truly a fascinating region of science. The shale oil developers refer to 2010 like its ancient history and there is no reason to expect this rapid pace of development and advancement to slow...." WHOLE ARTICLE
 

November 8, 2012

Geopolitical comments on Chinese, Indian and US energy security



A widely held US perception of US energy security risks - click to expand - so its more readable. See Brown's Global Outlook for a considered explanation. This link http://www.energyxxi.org/energy-security-risk-index is also interesting.

These are some of my developing thoughts. Another work in progress:

There is an element of national competition of the US and India towards China which partially explains why each of the three are not as focused as Europe concerning reduction or at least slowing of growth in greenhouse gas output.

Carbon in carbon dioxide form is the most politically prominent greenhouse gas partly due to it being the unit of measure for other greenhouse gases, which include: water vapourmethane, nitrous oxide, and ozone.

US, Indian and Chinese industrial growth policies, which coincide with greater carbon emissions, are partly boosted by longterm attitudes to economic competition and also military competition between all three. Militaries secure, defend and in the case of the US and other NATO militaries advance and invade for energy security reasons. Iraq and more recently Libya are obvious examples.

Militaries themselves are major energy consumers/beneficiaries and can be incapacitated by other militaries if their energy supplies are strangled. The German and Japanese militaries suffered this fate in World War Two by aerial bombing of both countries and also submarine warfare against the latter. China would be very conscious of the US military's capability to rupture overland gas and oil pipelines and to intercept and destroy China's energy merchant marine, shipping the four main energy commodities: oil, gas, coal and uranium.

Short of military action US political and economic power over the Middle East, Africa and Australia may be sufficient to block in the short to medium term (perhaps buy off in the longer term ) oil, gas, coal and uranium supplies that would have been destined for China.

It could be the US is conscious of its national need to maintain an economy larger than China's. China and India are sensitive to the needs of their developing economies with consumers experiencing power shortages and slower growth in many rural areas - growth that could be accelerated by more readily available electricity and at low prices.


See India's Economic Times, June 21, 2012, regarding power shortages in that country (even in the capital Delhi) in part caused by coal shortages for power stations http://articles.economictimes.indiatimes.com/2012-06-21/news/32352381_1_power-cuts-power-producers-coal-india


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China's shortages map from http://oilprice.com/Metals/Commodities/Chinas-Weather-Could-Support-Metal-Prices-In-Q3.html May 30, 2011. In the China case snow and drought sharply reducing hydropower production may be a major cause of power shortages. However an alternative or additional explanation http://www.chinadaily.com.cn/bizchina/2011-05/06/content_12458873.htm for China's power shortages has been high coal prices causing reduced output or closure of some Chinese coal fired power stations. Further graphs and explanations http://www.chinadaily.com.cn/bizchina/2011-05/27/content_12594070.htm .

Low prices generally means coal fired power stations - where domestically available coal means greater national self-sufficiency. Oil is also important for the Indian and Chinese military to function. Uranium, even that intended for peaceful uses, frees up Indian and Chinese mined uranium for nuclear weapons. National security demands safe internal supplies and production of weapons grade uranium and its byproduct plutonium.

Australia Launching Into Carbon Pricing Unknowns



Have we created a Monster?

It is the quest of this Blog to illuminate international relations issues relevant to Australia's green-carbon trading-environmental policies. To that end an essay written by | of Australian (super) blog Crikey is most revealing:

"Euro vision: Australia’s new carbon regime explained


Australia has hitched itself to Europe’s climate change wagon in a move that will have far-reaching — and uncertain — consequences for the domestic carbon scheme.
Yesterday’s decision to link Australia’s carbon scheme with Europe’s (and dump the floor price on permits) is a game-changer. Until then we were the southern hemisphere’s mouse that roared on climate change. Now we’ll effectively be part of a large, entrenched and relatively stable carbon price mechanism, which covers half a billion people." WHOLE ARTICLE

COMMENT
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A major issue for Australia's Federal Government, Australian industries that generate large amounts of greenhouse gases and ultimately Australian consumers is the pegging from 2015 of Australia's carbon trading price to the European carbon market price. This European system enjoys a market of 500 million people. Australia's alignment with Europe more strenuous (serious?) greenhouse gas reduction regime will put Australia out of sync with the more growth dependent Chinese, Indian and US carbon policies. 
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Pete

November 5, 2012

Japan Resuming Nuclear Reactor Reliance


Two Japanese reactors currently under construction. 

Contrary to Japanese public and international expectations Japanese politicians, regulators and industry are returning to nuclear reliance and completing more reactors. As the article below indicates Japanese pro-nuclear business groups appear to more strongly influence Japanese leadership decisions than the Japanese public:

http://truth-out.org/news/item/12523-power-politics-japan%E2%80%99s-resilient-nuclear-village , November 4, 2012. The article in part concludes:

"Why has Fukushima not been a game changing event? The institutions of Japan’s nuclear village (principally the utilities, bureaucracy and Diet) enjoy considerable advantages in terms of energy policymaking. They have enormous investments at stake and matching financial resources to sway recalcitrant lawmakers and the public. The nuclear village has openly lobbied the government and actively promoted its case in the media while also working the corridors of power and backrooms where energy policy is decided. (For a less pessimistic assessment, see Johnston 2012) Here the nuclear village enjoys tremendous advantages that explain why it has prevailed over public opinion concerning national energy policy. Its relatively successful damage control is an object lesson in power politics. To some extent the lessons of Fukushima are not being ignored as the utilities are belatedly enacting safety measures that should already have been in place, but a nuclear-free Japan by the 2030s increasingly seems unlikely.

Another reason why nuclear energy remains in play is because the renewable options that are being ramped up will not offset the loss of 29% of Japan’s electricity generating capacity for another two decades....

...Japan’s power network promoting nuclear energy is not planning to go out of business at home or overseas. Indeed, promotion of reactor exports by the Japanese government continues while in 2012 Toshiba increased its stake to 87% in Westinghouse, a major player in the global nuclear industry, along with Hitachi/ GE and Areva/Mitsubishi...."

COMMENT
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Meanwhile Germany, untouched by Fukushima, plans to close its nuclear reactors by 2022. Yet, if safety is the issue, most power reactors in the countries around Germany will continue to represent a safety threat to Germany.
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Pete