fossil fuel

fossil fuel

Energy Efficiency Simply Makes Sense

What simple tool offers the entire world an extended energy supply, increased energy security, lower carbon emissions, cleaner air and extra time to mitigate climate change? Energy efficiency. What’s more, higher efficiency can avoid infrastructure investment, cut energy bills, improve health, increase competitiveness and enhance consumer welfare — all while more than paying for itself.

Maria van der Hoeven - IEA

The challenge is getting governments, industry and citizens to take the first steps towards making these savings in energy and money.

The International Energy Agency (IEA) has long spearheaded a global move toward improved energy efficiency policy and technology in buildings, appliances, transport and industry, as well as end-use applications such as lighting. That’s because the core of our mandate is energy security — the uninterrupted availability of energy at an affordable price. Greater efficiency is a principal way to strengthen that security: it reduces reliance on energy supply, especially imports, for economic growth; mitigates threats to energy security from climate change; and lessens the global economy’s exposure to disruptions in fossil fuel supply.

In short, energy efficiency makes sense.

In 2006, the IEA presented to the Group of Eight leading industrialized nations its 25 energy efficiency recommendations, which identify best practice and policy approaches to realize the full potential of energy efficiency for our member countries. Every two years, the Agency reports on the gains made by member countries, and today we are working with a growing number of international organizations, including the European Bank for Reconstruction and Development, the Asian Development Bank and the German sustainable development cooperation services provider GIZ.

The opportunities of this “invisible fuel” are many and rich. More than half of the potential savings in industry and a whopping 80 percent of opportunities in the buildings sector worldwide remain untouched. The 25 recommendations, if adopted fully by all 28 IEA members, would save $1 trillion in annual energy costs as well as deliver incalculable security benefits in terms of energy supply and environmental protection.

Achieving even a small fraction of those gains does not require new technological breakthroughs or ruinous capital outlays: the know-how exists, and the investments generate positive returns in fuel savings and increased economic growth. What is required is foresight, patience, changed habits and the removal of the barriers to implementation of measures that are economically viable. For instance, as the World Energy Outlook 2012 demonstrates, investing less than $12 trillion in more energy-efficient technologies would not only quickly pay for itself through reduced energy costs, it would also increase cumulative economic output to 2035 by $18 trillion worldwide.

While current efforts come nowhere close to realizing the full benefits that efficiency offers, some countries are taking big steps forward. Members of the European Union have pledged to cut energy demand by 20 percent by 2020, while Japan plans to trim its electricity consumption 10 percent by 2030. China is committed to reducing the amount of energy needed for each unit of gross domestic product by 16 percent in the next two years. The United States has leaped to the forefront in transportation efficiency standards with new fuel economy rules that could more than double vehicle fuel consumption.

Such transitions entail challenges for policy, and experience shows that government and the private sector must work together to achieve the sustainability goals that societies demand, learning what works and what does not, and following the right path to optimal deployment of technology. Looking forward, energy efficiency will play a vital role in the transition to the secure and sustainable energy future that we all seek. The most secure energy is the barrel or megawatt we never have to use.

Maria van der Hoeven is the Executive Director of the International Energy Agency, an autonomous organization which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. This commentary appeared first this month in IEA Energy, the Agency’s journal.

 

The Sunswift eVe solar-powered car broke a 26-year-old land speed record for electric vehicles

The Sunswift eVe solar-powered car broke a 26-year-old land speed record for electric vehicles on Wednesday at the Australian Automotive Research Center in Victoria. While the record still has to be ratified by the Fédération Internationale de l’Automobile, it would make eVe the fastest electric car to ever compete a 500 km set distance course by a significant margin, Gizmodo reported. The previous record, set in 1988, was an average speed of 73 kilometers per hour; the Sunswift eVe reached 100 km per hour average over the 500 km course.

Sunswift eVe, designed and built by students at the University of New South Wales, seeks to overcome the traditional obstacles that have impeded solar-powered cars, namely, offering both speed and range in the same vehicle.

“There are many solar cars out there with a long range, and many other solar cars capable of even higher speeds,” Rob Ireland, business team leader at Sunswift, told International Business Times. “However, we’re trying to do something ground-breaking and overcome both.”

The zero-emission solar and battery storage electric vehicle is capable of covering 800 km on a single charge and has a top speed of 140 km per hour (87 miles per hour). The car’s solar panels have an 800-watt output and when the sun isn’t shining, eVe relies on its battery pack, reducing drivers’ range anxiety. The car’s motor, “supplied by Australian national science agency CSIRO, operates at 97 percent efficiency, meaning eVe consumes as much power as a kitchen toaster,” according to IB Times.

For Wednesday’s record attempt, the solar panels on the roof and hood were used to charge the battery, but were covered for the actual run, as the attempt had to be completed on a single charge.

While the Sunswift eVe is not fully road legal, the team believes that isn’t far out of reach, telling Renew Economy they hope to have the vehicle on Australian roads within the year as “a symbol for a new era of sustainable driving.” And Ireland said the practicality of the two-seat, four-wheel car is unmatched among solar-powered vehicles.

In the run-up to their attempt at the land speed record, project director and third-year engineering student Hayden Smith explained to Renew Economy why it was so significant. “Five hundred kilometers is pretty much as far as a normal person would want to drive in a single day,” Smith said. “It’s another demonstration that one day you could be driving our car.” More

 

Climate Criminality’: Australia OKs Biggest Coal Mine

In a decision criticized as “climate criminality,” Australia's federal government announced Monday that it has given the OK to the country's biggest coal mine.

The announcement comes less than three months after the state of Queensland gave its approval to the project.

“With this decision,” wrote Ben Pearson, head of programs for Greenpeace Australia Pacific, “the political system failed to protect the Great Barrier Reef, the global climate and our national interest.”

“Off the back of repealing effective action on climate change,” stated Australian Greens environment spokesperson Senator Larissa Waters, referring to the scrapping of the carbon tax, “the Abbott Government has ticked off on a proposal for Australia’s biggest coal mine to cook the planet and turn our Reef into a super highway for coal ships.”

Adani Mining expects its Carmichael Coal Mine and Rail Project in Queensland's Galilee Basin to produce up to 60 million tonnes of coal a year, most of which will be sent to India. A rail line will be created from the mine to a new coal port terminal, an expansion which means up to 3 million meters of dredging waste will be dumped in the area of the World Heritage-listed Reef.

UNESCO “noted with concern” (pdf) in April the prospect of additional dredging that would negatively impact the Reef and warned that the site could be added to the List of World Heritage in Danger.

The approval for the Carmichael project came from Federal Environment Minister Greg Hunt with “36 strict conditions”—conditions that did nothing to allay the environmental fears raised by critics.

Felicity Wishart, Great Barrier Reef Campaign Manager for the Australian Marine Conservation Society, stated that the conditions would be “laughable, if they weren’t so serious.”

Wishart also accused the Queensland and federal government of “watering down environmental protections and fast-tracking approvals for new ports and LNG plants on the Great Barrier Reef.”

“The Federal government has fast-tracked industrialization along the Reef because it is too close to the mining industry,” she stated.

Pearson also admonished the close ties, saying in a statement, “The Federal Environment Minister has laid out the red carpet for a coal company with a shocking track record to dig up the outback, dump on the Great Barrier Reef and fuel climate change.”

Amongst Greenpeace's list of why the project shouldn't go ahead is that

[t]he mine would steal precious water. The mine requires 12 gigaliters (12 billion liters) of water each year from local rivers and underground aquifers. That’s enough drinking water for every Queenslander for three years. Even ten kilometers away, water tables are expected to drop by over one meter.

In addition to the dangers of dredging up the sea-bed, the list adds:

The burning of coal from Carmichael mine would produce four times the fossil fuel emissions of New Zealand. It is a catastrophe for the climate.

“History will look back on the Abbott Government’s decision today as an act of climate criminality,” Waters stated. More

 

Greenpeace Australia Pacific created this infographic to highlight what the group sees as risks the Carmichael mine poses:

 

 

How Saudi Arabia Helped Isis Take Over the North of Iraq

How far is Saudi Arabia complicit in the Isis takeover of much of northern Iraq, and is it stoking an escalating Sunni-Shia conflict across the Islamic world?

Some time before 9/11, Prince Bandar bin Sultan, once the powerful Saudi ambassador in Washington and head of Saudi intelligence until a few months ago, had a revealing and ominous conversation with the head of the British Secret Intelligence Service, MI6, Sir Richard Dearlove. Prince Bandar told him: “The time is not far off in the Middle East, Richard, when it will be literally ‘God help the Shia’. More than a billion Sunnis have simply had enough of them.”

The fatal moment predicted by Prince Bandar may now have come for many Shia, with Saudi Arabia playing an important role in bringing it about by supporting the anti-Shia jihad in Iraq and Syria. Since the capture of Mosul by the Islamic State of Iraq and the Levant (Isis) on 10 June, Shia women and children have been killed in villages south of Kirkuk, and Shia air force cadets machine-gunned and buried in mass graves near Tikrit.

In Mosul, Shia shrines and mosques have been blown up, and in the nearby Shia Turkoman city of Tal Afar 4,000 houses have been taken over by Isis fighters as “spoils of war”. Simply to be identified as Shia or a related sect, such as the Alawites, in Sunni rebel-held parts of Iraq and Syria today, has become as dangerous as being a Jew was in Nazi-controlled parts of Europe in 1940.

There is no doubt about the accuracy of the quote by Prince Bandar, secretary-general of the Saudi National Security Council from 2005 and head of General Intelligence between 2012 and 2014, the crucial two years when al-Qa’ida-type jihadis took over the Sunni-armed opposition in Iraq and Syria. Speaking at the Royal United Services Institute last week, Dearlove, who headed MI6 from 1999 to 2004, emphasised the significance of Prince Bandar’s words, saying that they constituted “a chilling comment that I remember very well indeed”.

He does not doubt that substantial and sustained funding from private donors in Saudi Arabia and Qatar, to which the authorities may have turned a blind eye, has played a central role in the Isis surge into Sunni areas of Iraq. He said: “Such things simply do not happen spontaneously.” This sounds realistic since the tribal and communal leadership in Sunni majority provinces is much beholden to Saudi and Gulf paymasters, and would be unlikely to cooperate with Isis without their consent.

Dearlove’s explosive revelation about the prediction of a day of reckoning for the Shia by Prince Bandar, and the former head of MI6′s view that Saudi Arabia is involved in the Isis-led Sunni rebellion, has attracted surprisingly little attention. Coverage of Dearlove’s speech focused instead on his main theme that the threat from Isis to the West is being exaggerated because, unlike Bin Laden’s al-Qa’ida, it is absorbed in a new conflict that “is essentially Muslim on Muslim”. Unfortunately, Christians in areas captured by Isis are finding this is not true, as their churches are desecrated and they are forced to flee. A difference between al-Qa’ida and Isis is that the latter is much better organised; if it does attack Western targets the results are likely to be devastating.

The forecast by Prince Bandar, who was at the heart of Saudi security policy for more than three decades, that the 100 million Shia in the Middle East face disaster at the hands of the Sunni majority, will convince many Shia that they are the victims of a Saudi-led campaign to crush them. “The Shia in general are getting very frightened after what happened in northern Iraq,” said an Iraqi commentator, who did not want his name published. Shia see the threat as not only military but stemming from the expanded influence over mainstream Sunni Islam of Wahhabism, the puritanical and intolerant version of Islam espoused by Saudi Arabia that condemns Shia and other Islamic sects as non-Muslim apostates and polytheists.

Dearlove says that he has no inside knowledge obtained since he retired as head of MI6 10 years ago to become Master of Pembroke College in Cambridge. But, drawing on past experience, he sees Saudi strategic thinking as being shaped by two deep-seated beliefs or attitudes. First, they are convinced that there “can be no legitimate or admissible challenge to the Islamic purity of their Wahhabi credentials as guardians of Islam’s holiest shrines”. But, perhaps more significantly given the deepening Sunni-Shia confrontation, the Saudi belief that they possess a monopoly of Islamic truth leads them to be “deeply attracted towards any militancy which can effectively challenge Shia-dom”.

Western governments traditionally play down the connection between Saudi Arabia and its Wahhabist faith, on the one hand, and jihadism, whether of the variety espoused by Osama bin Laden and al-Qa’ida or by Abu Bakr al-Baghdadi’s Isis. There is nothing conspiratorial or secret about these links: 15 out of 19 of the 9/11 hijackers were Saudis, as was Bin Laden and most of the private donors who funded the operation.

The difference between al-Qa’ida and Isis can be overstated: when Bin Laden was killed by United States forces in 2011, al-Baghdadi released a statement eulogising him, and Isis pledged to launch 100 attacks in revenge for his death.

But there has always been a second theme to Saudi policy towards al-Qa’ida type jihadis, contradicting Prince Bandar’s approach and seeing jihadis as a mortal threat to the Kingdom. Dearlove illustrates this attitude by relating how, soon after 9/11, he visited the Saudi capital Riyadh with Tony Blair.

He remembers the then head of Saudi General Intelligence “literally shouting at me across his office: ’9/11 is a mere pinprick on the West. In the medium term, it is nothing more than a series of personal tragedies. What these terrorists want is to destroy the House of Saud and remake the Middle East.’” In the event, Saudi Arabia adopted both policies, encouraging the jihadis as a useful tool of Saudi anti-Shia influence abroad but suppressing them at home as a threat to the status quo. It is this dual policy that has fallen apart over the last year.

Saudi sympathy for anti-Shia “militancy” is identified in leaked US official documents. The then US Secretary of State Hillary Clinton wrote in December 2009 in a cable released by Wikileaks that “Saudi Arabia remains a critical financial support base for al-Qa’ida, the Taliban, LeT [Lashkar-e-Taiba in Pakistan] and other terrorist groups.” She said that, in so far as Saudi Arabia did act against al-Qa’ida, it was as a domestic threat and not because of its activities abroad. This policy may now be changing with the dismissal of Prince Bandar as head of intelligence this year. But the change is very recent, still ambivalent and may be too late: it was only last week that a Saudi prince said he would no longer fund a satellite television station notorious for its anti-Shia bias based in Egypt.

The problem for the Saudis is that their attempts since Bandar lost his job to create an anti-Maliki and anti-Assad Sunni constituency which is simultaneously against al-Qa’ida and its clones have failed.

By seeking to weaken Maliki and Assad in the interest of a more moderate Sunni faction, Saudi Arabia and its allies are in practice playing into the hands of Isis which is swiftly gaining full control of the Sunni opposition in Syria and Iraq. In Mosul, as happened previously in its Syrian capital Raqqa, potential critics and opponents are disarmed, forced to swear allegiance to the new caliphate and killed if they resist.

The West may have to pay a price for its alliance with Saudi Arabia and the Gulf monarchies, which have always found Sunni jihadism more attractive than democracy. A striking example of double standards by the western powers was the Saudi-backed suppression of peaceful democratic protests by the Shia majority in Bahrain in March 2011. Some 1,500 Saudi troops were sent across the causeway to the island kingdom as the demonstrations were ended with great brutality and Shia mosques and shrines were destroyed.

An alibi used by the US and Britain is that the Sunni al-Khalifa royal family in Bahrain is pursuing dialogue and reform. But this excuse looked thin last week as Bahrain expelled a top US diplomat, the assistant secretary of state for human rights Tom Malinowksi, for meeting leaders of the main Shia opposition party al-Wifaq. Mr Malinowski tweeted that the Bahrain government’s action was “not about me but about undermining dialogue”.

Western powers and their regional allies have largely escaped criticism for their role in reigniting the war in Iraq. Publicly and privately, they have blamed the Iraqi Prime Minister Nouri al-Maliki for persecuting and marginalising the Sunni minority, so provoking them into supporting the Isis-led revolt. There is much truth in this, but it is by no means the whole story. Maliki did enough to enrage the Sunni, partly because he wanted to frighten Shia voters into supporting him in the 30 April election by claiming to be the Shia community’s protector against Sunni counter-revolution.

But for all his gargantuan mistakes, Maliki’s failings are not the reason why the Iraqi state is disintegrating. What destabilised Iraq from 2011 on was the revolt of the Sunni in Syria and the takeover of that revolt by jihadis, who were often sponsored by donors in Saudi Arabia, Qatar, Kuwait and United Arab Emirates. Again and again Iraqi politicians warned that by not seeking to close down the civil war in Syria, Western leaders were making it inevitable that the conflict in Iraq would restart. “I guess they just didn’t believe us and were fixated on getting rid of [President Bashar al-] Assad,” said an Iraqi leader in Baghdad last week.

Of course, US and British politicians and diplomats would argue that they were in no position to bring an end to the Syrian conflict. But this is misleading. By insisting that peace negotiations must be about the departure of Assad from power, something that was never going to happen since Assad held most of the cities in the country and his troops were advancing, the US and Britain made sure the war would continue.

The chief beneficiary is Isis which over the last two weeks has been mopping up the last opposition to its rule in eastern Syria. The Kurds in the north and the official al-Qa’ida representative, Jabhat al-Nusra, are faltering under the impact of Isis forces high in morale and using tanks and artillery captured from the Iraqi army. It is also, without the rest of the world taking notice, taking over many of the Syrian oil wells that it did not already control.

Saudi Arabia has created a Frankenstein’s monster over which it is rapidly losing control. The same is true of its allies such as Turkey which has been a vital back-base for Isis and Jabhat al-Nusra by keeping the 510-mile-long Turkish-Syrian border open. As Kurdish-held border crossings fall to Isis, Turkey will find it has a new neighbour of extraordinary violence, and one deeply ungrateful for past favours from the Turkish intelligence service.

As for Saudi Arabia, it may come to regret its support for the Sunni revolts in Syria and Iraq as jihadi social media begins to speak of the House of Saud as its next target. It is the unnamed head of Saudi General Intelligence quoted by Dearlove after 9/11 who is turning out to have analysed the potential threat to Saudi Arabia correctly and not Prince Bandar, which may explain why the latter was sacked earlier this year.

Nor is this the only point on which Prince Bandar was dangerously mistaken. The rise of Isis is bad news for the Shia of Iraq but it is worse news for the Sunni whose leadership has been ceded to a pathologically bloodthirsty and intolerant movement, a sort of Islamic Khmer Rouge, which has no aim but war without end.

The Sunni caliphate rules a large, impoverished and isolated area from which people are fleeing. Several million Sunni in and around Baghdad are vulnerable to attack and 255 Sunni prisoners have already been massacred. In the long term, Isis cannot win, but its mix of fanaticism and good organisation makes it difficult to dislodge.

“God help the Shia,” said Prince Bandar, but, partly thanks to him, the shattered Sunni communities of Iraq and Syria may need divine help even more than the Shia. More

 

The Peak Oil Crisis: Iraq on the Precipice

The daily newspapers are now full of stories predicting that Iraq, as we know it, will soon disintegrate into three or more warring states.

Tom Whipple

In the last two weeks Sunni insurgents led by the extremist ISIS have routed a good part of the Iraqi army, taken over much of northern Iraq not controlled by the Kurds, and now are moving close to Baghdad. Despite the dispatch of American and Iranian military advisors to at least assess the situation, most observers say government forces are too weak to drive back the insurgents and retake the lost territory. Washington is refusing to get involved unless the Shiite-dominated Iraqi government makes radical changes in its relations with the Sunnis and Kurds.

Our concern here, however, is what all this has to do with the world’s oil supply and, closer to home, our gasoline prices. In recent days we have been told innumerable times that most of Iraq’s oil is way south of Baghdad where it is relatively immune from the turmoil in the north – so there is little chance that Iraq's 2.5 million barrels a day (b/d) of exports will be affected. While this may true for the next few weeks or even months, the Sunni resurgence in the north is not a short-term problem and in the past week the ISIS has captured some formidable assets which could bring heavy pressure on, if not strangle, Baghdad.

ISIS now has control of one of three major refineries in Iraq which supplies the motor fuel and oil for power stations for the northern part of the country. Lines are already forming at gas stations. The ISIS controls the Euphrates and will likely gain control of the Haditha power dam, which supplies 360 MW to the national power grid. With control of the river dams, reduced flows of water could make life very difficult in southern Iraq before the summer is over. It is doubtful if the thousands of foreign oil workers that are expanding and overseeing Iraq’s oil production would stick around too long. Some non-essential-to-production foreigner oil workers are already leaving the country or moving to safer areas.

Another facet of last week’s developments is that the insurgent forces in Anbar province are getting very close to Baghdad’s airport. All it would take would be a few of the howitzers they captured from the Iraqi army and air travel into Baghdad could be restricted.

While it may be impossible for insurgent forces even of the fanatical variety to fight their way through thousands of Shiite militiamen to the southern Shiite shrines and oil fields, in a prolonged standoff (and this one has been going on for 1,400 years) serious harm is likely to be done to Iraq’s current and prospective oil production. Some observers are already saying that large increases in Iraqi oil production in the immediate future are unlikely, but as yet few are writing off the current 3.3 million barrels of daily oil production.

Let’s assume, however, that before this year or next is out, Iraqi oil exports drop substantially as it has in several other oil-exporting states undergoing similar political trauma. Just what does this mean for the world’s oil supply?

With 2.5 million additional barrels of oil disappearing from the market added to the 3.5 million that have already been lost due to lower production in Libya, Iran, Sudan, and Nigeria, the world markets would clearly be stressed.

The Saudis could probably come up with an extra million b/d for a while, but that is about it. Iran could sign a nuclear treaty this summer and be out from under sanctions, but it will take a while to develop significant increases in production. Libya, Sudan, Syria, Nigeria and Yemen show no signs of settling their internal political problems and start exporting significantly larger amounts of crude in the foreseeable future.

Keep in mind that global demand for oil has recently been increasing at a rate of about 1.2 million b/d or so every year, while depletion of existing oilfields requires that another 3-4 million b/d be brought into production each year just to keep even.

Many people, including government forecasters, are looking to increasing U.S. shale oil production and more deepwater oil from the Gulf of Mexico to keep the world’s supply and demand in balance without sharp price increases. Somewhere down the line there may be more oil produced from the Arctic; from Kazakhstan; from off the coast of Brazil; from East Africa; and even significant shale oil production from other than in the U.S. But it will be many years before these new sources can start producing significant amounts of crude, and none of these are likely to make up for any shortages that develop in the next few years.

Deepwater oil production from the Gulf of Mexico has been flat recently, and we are starting to get indications that the rapid increases in U.S. shale oil production, which have kept prices under control for several years, may be drawing to a close. The geology of shale oil production dictates that once it stops growing, a rapid decline in production is likely.

In sum, it looks as if there will be higher and possibly much higher oil and gas prices coming soon. If ISIS decides that the way to finish off the Shiite “infidels” is by cutting their oil revenues, then a bombing and terror campaign against southern Iraqi oil installations and oil workers would be a likely result. It would not take much to send the foreigners running. The Chinese are already moving out some of the 10,000 oil workers they have in southern Iraq, and others are likely to follow as we have seen in so many other places.

Where do oil and gas prices go? The official forecasters are only talking about another couple of dollars a barrel this year, but this is clearly too low if significant shortages develop.

By Tom Whipple of Post Carbon Institute


 

IEA says ‘peak oil demand’ could hit as early as 2020

Little more that a year after the International Energy Agency added its voice to the chorus chiming that peak oil was dead, a new report from the uconservative adviser to industrialised nations suggests it has changed its tune. Only this time it is not peak supply that is on its radar, but peak demand.

The IEA’s Medium-Term Oil Market Report 2014 has predicted that global growth in oil demand may start to slow down as soon as the end of this decade, due to environmental concerns and cheaper alternatives, and despite boosting its 2014 forecast of global demand by 960,000 barrels per day.

While supply is forecast to remain strong – thanks largely to the unconventional, or “tight” oil revolution currently underway in north America – the IEA says it expects the global market to hit an “inflexion point”, by the end of 2019, “after which demand growth may start to decelerate due to high oil prices, environmental concerns and cheaper fuel alternatives.”

These factors, says the report, will lead to fuel-switching away from oil, as well as overall fuel savings. In short, it says, “while ‘peak demand’ for oil – other than in mature economies – may still be years away, and while there are regional differences, peak oil demand growth for the market as a whole is already in sight.”

It’s worrying news for the over-invested and under-prepared; not least of all oil importing nations, to which, as Samuel Alexander noted in this article last September, the economic costs of peak oil are especially significant.

“When oil gets expensive, everything dependent on oil gets more expensive: transport, mechanised labour, industrial food production, plastics, etc,” he wrote. “This pricing dynamic sucks discretionary expenditure and investment away from the rest of the economy, causing debt defaults, economic stagnation, recessions, or even longer-term depressions. That seems to be what we are seeing around the world today, with the risk of worse things to come.”

This then adds to the peak oil cycle, increasing governments’ motivation to decarbonise their economies – better late than never – “not only because oil has become painfully expensive, but also because the oil we are burning is environmentally unaffordable.”

This view has been echoed in numerous recent reports. US investment banks Sanford Bernstein raised the prospect of “energy price deflation”, caused by the plunging cost of solar and the taking up of market share by that technology as it displaced diesel, gas and oil in various economies. It predicted that could trigger a massive shift in capital.

Analyst Mark Fulton last month also questioned the wisdom of the private-sector investing over $1 trillion to develop new sources of high-cost oil production. While Mark Lewis, of French broking firm, suggested that $US19 trillion in revenuescould be lost from the oil industry if the world takes action to address climate change, cleans up pollution and moves to decarbonise the global energy system.

The IEA report also includes an updated forecast of product supply, which draws out the consequences of the shifts in demand, feedstock supply and refining capacity.

“Given planned refinery construction and the growth in supply that bypasses the refining sector, such as NGLs and biofuels, the refining industry faces a new cycle of weak margins and a glut of light distillates like gasoline and naphtha as a by-product of needed diesel and jet fuel,” it says.

It also predicts that “the unconventional supply revolution that has redrawn the global oil map” will expand beyond North America before the end of the decade, just as OPEC supplies face headwinds, and regional imbalances in gasoline and diesel markets broaden.

The report projects that by 2019, tight oil supply outside the United States could reach 650 000 barrels per day (650 kb/d), including 390 kb/d from Canada, 100 kb/d from Russia and 90 kb/d from Argentina. US LTO output is forecast to roughly double from 2013 levels to 5.0 million barrels per day (mb/d) by 2019.

“We are continuing to see unprecedented production growth from North America, and the United States in particular. By the end of the decade, North America will have the capacity to become a net exporter of oil liquids,” IEA Executive Director Maria van der Hoeven said as she launched the report in Paris. “At the same time, while OPEC remains a vital supplier to the market, it faces significant headwinds in expanding capacity.”

Beyond ageing fields, the major hurdle facing OPEC producers is the escalation in “above-ground woes,” as security concerns become a growing issue in producers like Iraq, and investment risks deter investment and exploration.

The report notes that as much as three-fifths of OPEC’s expected growth in capacity by 2019 is set to come from Iraq. The projected addition of 1.28 mb/d to Iraqi production by 2019, a conservative forecast made before the launch last week of a military campaign by insurgents that subsequently claimed several key cities in northern and central Iraq, faces considerable downside risk. More

 

Summer is Coming

“Studies such as these help us gaze into the uncertain future and ask if that is what we want for our children. Most of us don’t. A few of us actually try to do something to change it. For the rest, the lag time is comforting. The complexity of non-linear feedback systems gives us an excuse to procrastinate.“

Why are zombies so ubiquitous in contemporary popular culture? The HBO mini-series, Game of Thrones, supplies one theory. Unlike in the AMC series, Walking Dead, or in the film, World War Z, the undead are not coming on like a Blitzkrieg hoard. Rather, the White Walkers are building slowly, as a rumor, sometimes killing the messenger and leaving the message undelivered. “Winter is coming” is an expression that hangs in the air, deepening the sense of foreboding.

One reviewer (for The New York Times) observed that “bringing in the White Walkers might be a way to ultimately point up the pettiness of politics — which is to say, no one cares who sits on what throne once zombies start eating people.”Thrones’ first four seasons of “people slicing, stabbing, axing, poisoning, eating, crushing and moon-dooring one another in every possible context,” underscore the point — that the pettiness of politics still rules the day.

Game of Thrones resonates because outside the window is the drama of NATO expansion bumping up against retired Red Army vets in the Ukraine, the unmasking of shadow banks in the U.K. by the Financial Times and shadowing governments by Edward Snowden, or the sniper battle on the U.S. Republican right that is so entertaining to MSNBC and CNN. It is all much ado about nothing. Just North of our popular culture Wall is a climate juggernaut, building momentum.

Both scenarios — business as usual and drastic curtailment — produce a temperature and climate regime that would likely be lethal for modern civilization, if not the human race. In the Cancun round of the Committee of Parties in 2010, United Nations high level negotiators produced a general agreement — over the opposition of the USA, Canada, Saudi Arabia, Australia, Israel and other obstructionists — that “recognizing that climate change represents an urgent and potentially irreversible threat to human societies and the planet,” 2°C was the “line in the sand” beyond which global temperatures should not be allowed to climb. In the latest three rounds— Durban, Doha and Warsaw — there has been a strong push from the science and civil sectors to reduce the target to 1.5°C to avert potentially unmanageable risks of tipping points from which no recovery would be possible. Since Warsaw last December some of these points — the inexorable slippage of ice in Antarctica and the release of methane from permafrost to name two — have tipped.

The NCA3 study is saying, essentially, we are in dangerous territory whether we stop emissions tomorrow or not. Summer temperatures in the U.S. have been rising on average 0.4 degrees F per decade since 1970, or about 0.2 C. Average summertime temperature increase has been 1°C overall, but the Southwest and West regions have borne the brunt of those increases, and temperatures have risen an average of 0.4°C, with a few localized areas warming as much as 0.6°C per decade. This is 5 times faster than the Earth as a whole warmed in the 20thcentury. North America, which lags other parts of the planet, is now in an exponential curve of accelerating change

“There are a number of findings in this report that sound an alarm bell signaling the need for action to combat the threats from climate change. For instance, the amount of rain coming down in heavy downpours and deluges across the U.S. is increasing; there’s an increase that’s already occurring in heat waves across the middle of the U.S.; and there are serious observed impacts of sea-level rise occurring in low-lying cities such as Miami, where, during high tides, certain parts of the city flood and seawater seeps up through storm drains. These are phenomena that are already having direct adverse impacts on human well-being in different parts of this country.”

Studies such as these help us gaze into the uncertain future and ask if it is really what we want for our children. Most of us don’t. A few of us actually try to do something to change it. For the rest, the lag time is comforting. The complexity of non-linear feedback systems gives us an excuse to procrastinate. More

Lebanon, Hezbollah Cut off from Iran

Juan Cole writes ‘With the alleged fall to the Islamic State of Iraq, and [in] Syria of Qa’im on Saturday, and of Talafar a few days ago, the border between Iraq and Syria has now been effectively erased.

A new country exists, stretching from the outskirts of Baghdad all the way to Aleppo.

The first thing that occurred to me on the fall of Qa’im is that Iran no longer has its land bridge to Lebanon. I suppose it could get much of the way there through Kurdish territory, but ISIS could ambush the convoys when they came into Arab Syria. Since Iran has expended a good deal of treasure and blood to keep Bashar al-Assad in power so as to maintain that land bridge, it surely will not easily accept being blocked by ISIS. Without Iranian shipments of rockets and other munitions, Lebanon’s Hizbullah would rapidly decline in importance, and south Lebanon would be open again to potential Israeli occupation. I’d say, we can expect a Shiite counter-strike to maintain the truck routes to Damascus.

He goes on to say ‘Syrian jets bombed eastern positions of ISIS near the Iraqi border, perhaps signalling a likely alliance of Damascus and Baghdad to put the Sunni radical genie back in the bottle’.

From a petro-political perspective I find myself asking the following questions;

  • What will be the reaction of Saudi Arabia with the Sunni forces in Iraq having both Damascus and Baghdad allied against them?
  • What will Iran now do to support Bashar al-Assad?
  • What will Iran do to keep their supply route to Hezbollah open?

The answer to these three questions will inform the price of oil going forward. According to Reuters Libya’s oil output has sunk back to a current 1.16 million barrels per day of oil due to disruption at fields and terminals, a senior industry source told stated on Tuesday. Iran put OPEC on notice of its plans to raise output swiftly with the help of foreign investors immediately after any lifting of sanctions imposed over its nuclear programme. Oil Minister Bijan Zanganeh said Iran could increase oil exports by 500,000 barrels per day immediately after any lifting of sanctions. “Very quickly we can increase by half a million and after a couple of months we can increase it to 700,000 barrels per day,” he told reporters ahead of OPEC’s Wednesday meeting. He said Iran could pump 4 million bpd in less than three months after any lifting of restrictions. When sanctions may be lifted is the unknown factor.


For those of us living on Small Island Dveloping States (SIDS) and other states dependant on fossil fuel, the path towards alternative energy, i.e. solar, wind, OTEC and ocean current technologies looks more attractive with every passing day. Editor

Climate change will ‘cost world far more than estimated’

Lord Stern, the world’s most authoritative climate economist, has issued a stark warning that the financial damage caused by global warming will be considerably greater than current models predict.

This makes it more important than ever to take urgent and drastic action to curb climate change by reducing carbon emissions, he argues.

Lord Stern, who wrote a hugely influential review on the financial implications of climate change in 2006, says the economic models that have been used to calculate the fiscal fallout from climate change are woefully inadequate and severely underestimate the scale of the threat.

As a result, even the recent and hugely authoritative series of reports from the UN Intergovernmental Panel on Climate Change (IPCC) are significantly flawed, he said.

“It is extremely important to understand the severe limitations of standard economic models, such as those cited in the IPCC report, which have made assumptions that simply do not reflect current knowledge about climate change and its … impacts on the economy,” said Lord Stern, a professor at the Grantham Institute, a research centre at the London School of Economics.

Professor Stern and his colleague Dr Simon Dietz will today publish the peer-reviewed findings of their research into climate change economic modelling in the The Economic Journal.

Their review is highly critical of established economic models which, among other things, fail to acknowledge the full breadth of climate change’s likely impact on the economy and are predicated on assumptions about global warming’s effect on output that are “without scientific foundation”.

Professor Stern, whose earlier research said it is far cheaper to tackle climate change now than in the future, added: “I hope our paper will prompt … economists to strive for much better models [and] … help policy-makers and the public recognise the immensity of the potential risks of unmanaged climate change.”

“Models that assume catastrophic damages are not possible fail to take account of the magnitude of the issues and the implications of the science,” he said.

Professor Stern and Dr Dietz say their findings strengthen the case for strong cuts in greenhouse gas emissions and imply that, unless this happens, living standards could even start to decline later this century.

For the study, they modified key features of the “dynamic integrated climate-economy” (Dice) model, initially devised by William Nordhaus in the 1990s. The changes take into account the latest scientific findings and some of the uncertainties about the major risks of climate change that are usually omitted.

The standard Dice model has been used in a wide range of economic studies of the potential impacts of climate change, some of which have been cited in the most recent IPCC report which has been released in three parts over the past nine months.

Dr Dietz said: “While this standard economic model has been useful for economists who estimate the potential impacts of climate change, our paper shows some major improvements are needed before it can reflect the extent of the risks indicated by the science.”

Dr Dietz said his aim was to show how a new version of the model could produce a range of results that are much more representative of the science and economics of climate change, taking into account the uncertainties.

“The new version of this standard economic model, for instance, suggests that the risks from climate change are bigger than portrayed by previous economic models and therefore strengthens the case for strong cuts in emissions of greenhouse gases,” he said.

The new model differs in that it considers a wider temperature range when estimating the impact of doubling the atmospheric concentration of greenhouse gases – a measure of “climate sensitivity”.

Whereas the standard model usually assumes a single temperature for climate sensitivity of about 3C, the new model uses a range of 1.5C to 6C, which the authors say more accurately reflects the scientific consensus.

The standard model also “implausibly” suggests a loss of global output of 50 per cent would only result after a rise in global average temperature of 18C, even though such warming would likely render the Earth uninhabitable for most species, including humans, Dr Dietz contends.

The new model includes the possibility that such damage could occur at much lower levels of global warming. Standard economic models rule out the possibility that global warming of 5-6C above pre-industrial levels could cause catastrophic damages, even though such temperatures have not occurred on Earth for tens of millions of years. Such an assertion, he says, is without scientific foundation and embodies a false assumption that the risks are known, with great confidence, to be small.

The new model also takes into account that climate change can damage not just economic output, but productivity. The standard model assumes that rising levels of greenhouse gases in the atmosphere only affect economic growth in a very limited way, according to Dr Dietz. More