The Elephant in the Room

The Elephant in the Room | 10/03/13
by John Brian Shannon John Brian Shannon

For seven decades, petroleum provided North Americans with a comparatively cheap, plentiful, and reliable source of energy. And it happened to be a kind of energy that was particularly suited to our growing transportation needs.

Transportation CO2 emissions.
knowledge.allianz.com Image courtesy of: Bettina Fachinger

Back in Henry Ford’s day, all of the government subsidies directed towards the exploitation of oil and gas were easily absorbed by a large and upwardly mobile population, and the few gigatons of transportation CO2 and other gases that were added to the atmosphere then, were easily absorbed by the Earth’s natural systems.

In Henry’s day, agriculture was by far the biggest polluter, followed by industry, construction, and electricity production, transportation was far down the list.

Today of course, transportation is directly responsible for one-third of all airborne emissions, and added to that, are the emissions created in the manufacture of the parts necessary to build those millions of cars, trucks, trains, ships and airplanes. In 2013, it adds up to be a very large number indeed. The U.S. alone produces 7 billion tons of CO2 per year.

In an era of unaffordable U.S. budget deficits, direct subsidies to the petroleum industry are in excess of $4.86 billion dollars per year (on average) and when added to the various indirect government subsidies, have become dangerous to the overall economy.

For just one example of other subsidies supporting North America’s addiction to oil; Whose Army, Navy, Air Force, and Marines have protected all that Middle East oil since 1932, and what is the grand total cost of that protection? Meanwhile, the environment subsidy in the U.S. is one that is far past the point of being able to absorb the total amount CO2 added to the atmosphere by the U.S.

U.S. Energy Subsidies Chart by DBL Investors.
U.S. Energy Subsidies Chart by DBL Investors.

Someone has to say it. The oil and gas industry, which once lifted the North American economy to unimaginable heights, has now become an unbearable burden to the economy and the environment, and the situation continues to worsen every year. Petroleum, is the 7 gigaton elephant in the room.

At least we only have one elephant in our room. By 2040, China will have four.

China is racing toward developed nation status. China produced 7.2 billion tons of CO2 in 2010, making it the world’s single biggest polluter. It estimated in 2008 that 410,000 people die from air pollution in China every year. It’s land area is similar in size to the U.S. although the U.S. has 311 million citizens (most households own at least one car) while China has 1.35 billion citizens, (where a majority of households will soon become car owners for the first time).

Huge tracts of forested land and grassland in both countries could conceivably capture and make use of, all the CO2 we produce, storing it for decades or even permanently — but only when forested areas and grasslands are not replaced with shopping malls and factories. Which is what has been happening at an accelerating pace since the beginning of the Industrial Revolution.

India, with less than half of the land area of China, but with a rapidly growing demographic, will be in even worse shape than the U.S. or China. By 2022, India will have 2 billion citizens, but with only half the available land area to absorb all that CO2. In addition, vast areas of land in India are unsuitable for the plant life which removes CO2 from the atmosphere.

At present only 1 billion people in the world have one car or more per household, have home electronics and washing machines, and are connected to an electrical grid (developed nation status). Six billion don’t. But six billion people are expected in the developed nations club by 2050.

For now, the undeveloped and emerging nations are carbon-neutral or better — while one billion live in developed nations which are (huge) net contributors to global pollution levels.

Oil and gas has lifted one billion people into developed nation status, and for that we should be grateful. But, with six billion more people joining the club, we won’t have breathable air in some cities unless we change our transportation fuel — and soon.

All else being equal, if we lower our airborne emissions by one-third by switching from petroleum to electricity for our transportation needs, we will be in acceptable shape. What damage has been done, has already been done — no use in crying over spilt milk. And even if we do successfully switch to electric vehicles, the plant life on the planet will still be working overtime to capture and sequester all CO2 produced by the agriculture and manufacturing sectors as they will continue to add unimaginable amounts of CO2 to the atmosphere.

The important point is to stop adding more carbon dioxide to the atmosphere than the Earth systems can handle. A simple but profound switch away from oil and gas to electricity in our transportation sector can accomplish this goal.

Electric vehicles are presently making huge strides and in September 2013, the all-electric Tesla S was the best selling car in Norway. And really, why not? The Tesla S is a great drivers car, it features almost zero maintenance and it runs on electricity which is provided by a network of (renewable energy powered and conveniently located) Supercharger stations placed all over the country which are free to use for the life of the car. Not to mention the always-available Tesla buyback scheme, where Tesla will repurchase your used Tesla for a previously agreed-upon price.

Free electricity for Tesla cars, no airborne emissions from Tesla cars, and a guaranteed Tesla buyback program. This is the future of transportation!

Who Are The Big 5 In The Carbon Trade?

Originally published on Shrink That Footprint by Lindsay Wilson

When we talk about a country’s carbon emissions we generally only consider those that occur within its borders. But where does the fuel for those emissions come from? And where do the products a country makes go?

In this second part of our series The Carbon Trade we look at who the big traders of carbon are. We’ll analyze the major importers and exporters of fuels and products and in doing so explain much of how carbon moves around the world, both before and after its combustion.

Image courtesy of Shrink That Footprint.
Image courtesy of Shrink That Footprint.

The Regions Fueling the World

In the first piece of this series, The Globalization of Carbon, we noted that in 2007 traded carbon totaled 17.6 Gt CO2, or 60% of total carbon emissions. More than half of this traded carbon was in the form of fuels, in particular oil and gas.

The big exporters of fuel carbon are those regions and countries that produce more fossil fuels than they use at home.

Image courtesy of Shrink That Footprint.
Image courtesy of Shrink That Footprint.

The big five fuel exporters are the Middle East, Russia, Sub-Saharan Africa, North Africa and Australia. Together these five regions export 63% of carbon in traded fuels.

Indeed they are each so rich in fossil fuels in the form of oil, natural gas and coal that each of them export more carbon in fuels than they create through combusting fuels within their borders.

Each tonne of oil, natural gas or coal that is exported by these regions is imported somewhere else. So let’s see where they go.

Living On Foreign Fuel

It is widely known that the US is dependent on foreign oil, so much so they banned crude exports back in the seventies oil shocks. But the US isn’t the only region living off fossil fuels from other regions.

This fact is plain to see when we look at who the big importers of carbon in fuels are.

Image courtesy of Shrink That Footprint.
Image courtesy of Shrink That Footprint.

When taken together the countries that make up Europe (EU27) import more carbon in the form of fuels than the US. These two regions are the big fuel importers followed by Japan, China and South Korea, based on 2007 data.

Together these five regions import a staggering 71% of all carbon traded as fuels.

China is the World’s Factory

Now that we have seen how carbon is traded before it’s combusted, it is worth looking a how it is embodied in the trade of products after its combustion. For clarity’s sake products in this case means both goods and services though the former dominates.

In the last two decades exports of Chinese made products have exploded, driven on by cheap labour, capital controls and government subsidies. This phenomenon is plain to see in the data for carbon in exported products.’

Image courtesy of Shrink That Footprint.
Image courtesy of Shrink That Footprint.

In 2007 the carbon embodied in China’s exports of goods and services totalled 1,556 Mt CO2. About the same as the exports of the United States, Europe and Russia combined.

Although these five regions accounted for a healthy 58% of the trade of carbon embodied in products it is as a general rule less centralized than is the case for fuels.

Europe and the US Buy the World’s Stuff

If China is the big exporter of carbon embodied in products it will surprise few that the US and Europe are the big buyers.

Image courtesy of Shrink That Footprint.
Image courtesy of Shrink That Footprint.

In 2007 there was 1,514 Mt of carbon dioxide emissions embodied in European imports of goods and services, a quarter of which came from China. The US was the other major importer, followed by Japan, China and the Middle East.

The fact that so much European and American consumption is supported by emissions that occur in other parts of the world highlights the perils of focusing solely on terrestrial emissions for climate policy. The increased outsourcing of carbon intensive production to regions with weaker climate regulation risks undermining the effectiveness of national climate policies.

Such risks also exist regarding carbon in fuels. If factors reducing terrestrial emissions result in increased exports of fuels this can undermine the effectiveness of national action. The more than doubling of US coal exports since 2006 in reaction to the shale boom is a good example of this.

Join us for the final post in the series tomorrow when we Mind the Carbon Gap between country’s extraction, production and consumption totals.

All the data used in this series is based on the recent, and freely downloadable, paper ‘Climate policy and dependence on traded carbon‘ by Robbie Andrew, Steven Davis and Glen Peters. Many thanks to Robbie in particular for providing the data.

This article, Who Are The Big 5 In The Carbon Trade?, is syndicated from Clean Technica and is posted here with permission.

US Uses 11 Times More Energy Than UK

Short term pain, Long term gain for EMEA wind power

by Joshua S Hill — Special to JBS News

MAKE Consulting are predicting short term pain but long term gain for the Europe, Middle East and Africa (EMEA) grid-connected wind market, according to the inaugural EMEA Wind Power Outlook Report published earlier this month. They note that 7 of the top 10 global emerging markets are located in the EMEA region, which highlights the importance of the region in terms of the industry’s growth globally.

The general feeling of the MAKE report is that the EMEA region is set to see a contraction of demand for wind power over the next 18 months, due in large part to “policy uncertainty” across the European Union. Despite moderating regulatory uncertainty and “predominantly positive” regulatory momentum, MAKE are still predicting market contraction across the region to deepen into 2014, despite an overall global recovery of the wind industry and continued growth in the EMEA offshore and Emerging Markets.

We have seen recently various countries (most notably China) make inroads into the Africa solar PV market, redirecting manufacturing and investment to the largest emerging market continent left. Following tariffs levied against them in Europe, China began to make it known it was planning on expanding its panel manufacturing into Africa. While Google made its first African renewable energy investment of $12 million into the $260 million Jasper Power Project, a 96-megawatt (MW) solar photovoltaic (PV) facility to be built near Kimberley in South Africa’s Northern Cape Province.

African wind industry

The African wind industry, however, has seen steady growth over the past few years, as seen in the chart above (courtesy of The Wind Power).

Following MAKE’s assertion that offshore wind will be a predominant driver of growth over the next 18 months, it makes sense to take a look at some of the offshore projects in Africa. The country of Cape Verde on the north-west coast of Africa recently installed 5 offshore wind farms, although its capacity is currently hovering under 40 MW. However, further north in the country of Tunisia, it’s a different matter, with over 100 MW of wind capacity thanks to a 50 MW growth in 2012.

Meanwhile, according to the European Wind Energy Association, the annual installed offshore wind capacity in Europe has already moved above 1000 MW for 2013, falling just short of 2012′s full year total.

EWEA02

According to the stats, 277 wind turbines were connected to the grid to total 1,045 MW. Two of the big operations connected to the grid so far this year were the London Array wind farm and the Anholt Offshore Wind Farm, together adding up to 750 MW connected to the grid.

EWEA01

The EWEA were also critical earlier this year of 2012′s growth in the industry, noting that the 2012 figures do not reflect the “significantly negative impact” of economic, regulatory, and political uncertainty that has existed in Europe since 2011. We covered the relevant EWEA report in February of this year, which included the EWEA’s own warnings that 2013 and 2014 were going to be tough years for the European wind industry.

Only days before, however, the EWEA had announced that they believed there were significant opportunities for growth in emerging markets, such as Romania, Poland, and Turkey.

“These emerging markets are not only important in their own right, but they have increased perceived importance given the state of wind energy markets elsewhere in Europe,” Pierre Tardieu from EWEA said on launching the report.

Furthermore,

Emerging markets “are experiencing teething problems very similar to what we’ve experienced in the rest of the world,” said Inigio Sabater Eizaguirre from Vestas, who was in attendance at the annual meeting. He added that the European markets are attractive to companies like Vestas and that the ongoing recovery from the economic crisis is “big incentive” to look for new markets outside of the well-established markets already in existence throughout Europe.

MAKE believe that the European Union will meet their 2020 renewable electricity production targets with only 93% of its National Renewable Energy Action Plans (NREAP) targets met. They believe that the Southern European and Offshore targets will not be met, due primarily to “weaker-than-expected electricity demand growth.” Nevertheless, the EU Offshore market is still expected to be one of the brighter spots in a mediocre period of growth.

About the Author

I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium.   I love words with a passion, both creating them and reading them.
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It’s Time for a Canadian Strategic Oil Reserve System!

by John Brian Shannon

The United States of America keeps a 90-day supply of low-refine oil (also known as bunker fuel) in vast underground reservoirs located all over the U.S. as part of their Strategic Oil Reserves program, so that in the case of any interruption of oil imports (presumably originating in the Middle East) the U.S.A. could continue to function for the duration of that interruption.

The reasoning behind this is that once people can’t drive back and forth to work, buses can’t run, and other transportation is affected (jets, trains, ships) effectively the economy just stops! The U.S. can’t risk that – and neither can other countries. Most of them keep their own economies going by selling America resources and manufactured goods in huge volumes.

That is why the U.S.A. maintains a 90-day supply of low-refine oil – a type of oil which is easily and quickly refined into either diesel or gasoline and other products when required.

For decades, a significant benefit for the United States has been that the Strategic Oil Reserve has been used to ‘even out’ the worst oil price spikes as they occur in the marketplace – almost in real-time!

Don’t think of the strategic reserve as a static 180 – 225 million barrels – or any other amount of oil. That amount changes hourly, daily and weekly.

The many underground reservoirs located all over the country continuously move oil IN and OUT of their reservoirs, to (1) to ensure refineries have sufficient feedstock to allow continuous refining 24/7/365 and (2) to act as a shock absorber to market price spikes by adding supply – thereby slightly lowering the price at the gas pump. It’s all about ‘even-ing out’ the price, so that prices don’t jump up and down by 20% or more, many times per month.

The American government, which operates the U.S. Strategic Oil Reserve system have, from time to time, quite rightly punished some predatory-type oil speculators by suddenly dumping millions of barrels of oil into the market via the Strategic Oil Reserve system – lowering prices dramatically and costing speculators billions of dollars of losses in the mercantile market system.

Finally, in any sudden military attack against America, the U.S. military would need to tap that oil and have it refined quickly in order to fuel it’s jets, ships, tanks and almost all other military vehicles, etc… The public might not see gasoline or diesel for a while in that scenario, but protecting the country from invasion or attack takes precedence over and above keeping the economy going.

Maintaining a strategic oil reserve of low-refine oil in any country is always a good idea, but especially for Canada – an oil exporting country.

What? Yes, in case of terrorist attack, military attack or other delivery problems, if Canada had a large enough strategic reserve system it could quickly substitute the reserve oil to our Asian or American customers -and the government-run strategic reserve system could be simply ‘topped up’ once the supply problem or delivery system is repaired.

Many oil-exporting nations have this arrangement, including the U.S.A. and the world’s largest oil exporter, Saudi Arabia.

Think of the benefits of Canadian government involvement here;
1) A large pool of easily available and easily refine-able oil to supply our Canadian Forces during the first 90 days of any surprise military attack.
2) In case of any supply problem – low-refine can be substituted and the SOR oil tanks can be ‘topped up’ later.
3) The ability to ‘even out’ the worst supply shocks in regards to gasoline and diesel prices at the pumps.
4) The ability to punish predatory oil speculators who could virtually hold a country hostage and who also set the dates imported oil arrives at any North American oil refinery. (Remember an oil refinery is just an expensive collection of pipes and burners, when it is sitting idle waiting for a supertanker running behind schedule)
5) Aside from SUPPLY problems, a strategic reserve can ALSO assist during periods of high DEMAND such as the summer months and also in the dead of winter when home heating oil usage peaks.
6) We buy insurance for our cars. Sometimes we are actually glad we have insurance, when an accident or theft occurs, for example. The same applies here.
7) SOR countries are able to maintain exports and keep their customers happy and not lose them to other oil producing nations – when a pipeline breaks or a well-head is damaged, for example. When those or other problems occur, they instantly solve the problem with strategic reserve oil – and the affected oil company replaces that oil once the pipeline or well-head problem is repaired.

**Countries which rely on oil can be a fickle lot, if you can’t supply them – even once, they just phone someone more reliable and you lose them as a customer – permanently.**

Canada needs a strategic oil reserve system similar to the United States, scaled to our much smaller population to ensure Canada’s military could function for at least 90 days in the event of an imported oil collapse, so that Canadians have sufficient protection from unforeseen disruptions in the oil supply and demand equation and a realistic cushion from price spikes caused by market fluctuations and predatory speculators, while maintaining the ability to cover supply problems with regards to oil exports to our American and Asian oil customers.

Follow John Brian Shannon on Twitter: https://twitter.com/#!/JBSCanada