Major Shakeout in Iraq

This piece by Guy Chazan, part of a retrospective at the Financial Times on Iraq ten years after the American invasion, offers a fascinating look at the dashed expectations attending the Iraqi oil industry. By contrast with the heady expectations of Cheney and company in 2003, “American companies are now almost absent from the Iraqi upstream scene.” Forced to choose between Iraq and Kurdistan, Exxon seems to have thrown in with the Kurds. China, led by its state oil companies, has a big and growing presence in Iraq, forming a new trade axis between Baghdad and Beijing. The Iraqis have brought down estimates of future production from 12 to 9 mbd by 2017-2020, still quite optimistic in a country that presents “the toughest environment” in the world for oil companies.    

When Iraq held its first postwar oil licensing round in June 2009, groups like ExxonMobil, Royal Dutch Shell and BP flocked to Baghdad for what was one of the most eagerly anticipated events in the oil industry calendar. At the fourth round last May, none of them bid. The poor attendance epitomises a general disenchantment with Iraq’s oil sector. The country was once the hottest ticket in global energy. But the widely predicted bonanza for western oil companies in postwar Iraq has failed to materialise.

Political instability, poor contractual terms and infrastructure bottlenecks have sharply reduced the country’s appeal to Big Oil. Many companies have shifted their attention from the south to the semi-autonomous Kurdistan region, angering Baghdad. “Iraq is the toughest environment we operate in,” says the chief executive of a big western oil company. “And it will be tough for many years to come.”

It is an ironic outcome. When US troops invaded Iraq 10 years ago, conspiracy theorists predicted that American oil companies would immediately seize control of the country’s vast oilfields. “People say that the Iraq war was fought over oil,” says Robin Mills of Dubai-based Manaar Energy Consulting. “But American companies are now almost absent from the Iraqi upstream scene.”

With the fifth-largest proven oil reserves in the world, easy geology and low production costs, Iraq was expected to become a hotspot of global oil investment. The victorious Americans set out a blueprint for rehabilitating vast oilfields and raising production from about 1.5m b/d in 2003. Investment poured in. In August, Iraq overtook Iran to become Opec’s second-largest oil producer, for the first time since the late 1980s, pumping more than 3m barrels a day – the highest level since the US-led invasion.

But the business climate has soured. Political volatility, fears about security and problems with infrastructure, including a lack of pipelines, pumping stations and oil storage facilities, have slowed the oil sector’s recovery. Iraq is now talking about increasing production capacity to around 9m barrels a day by 2017-20, sharply down from an earlier target of 12m b/d.

“Iraq is still nowhere near achieving its potential, considering the resources that it has,” says Raad Alkadiri of PFC Energy, a consultancy. “The Iraqi oil industry has always been bedevilled by politics.” The country has yet to pass a hydrocarbon law, first mooted in 2007, which would resolve who controls its oil and gas resources.

One part of Iraq that has retained – and even increased – its appeal for western energy groups however is Iraqi Kurdistan, a semi-autonomous region that has run its own affairs for about 20 years. The Kurdish regional government (KRG) has signed 50 deals with foreign oil companies, including Exxon, Chevron, Total SA and Russia’s Gazprom Neft. Officials there want to raise production from about 200,000 barrels a day now to 1m b/d by 2015.

The production-sharing contracts offered by Kurdistan are more generous to the majors than the technical service contracts on offer in southern Iraq, where oil companies earn a flat fee per barrel of oil produced and the lion’s share of earnings goes to the government.

But Baghdad considers the Kurdish deals illegal and refuses to pay oil companies operating in Kurdistan their share of export revenues. In retaliation, the KRG has stopped oil exports through Iraq’s main pipeline. Baghdad has told oil companies they can work either in the south or in Kurdistan, but not in both. Faced with that choice, Exxon decided last year to sell its stake in the $50bn West Qurna-1 oil project.

People close to the two sides say Baghdad might be open to sweetening the terms of Exxon’s contract in order to keep the company in Iraq. In January, Rex Tillerson, Exxon’s chief executive, met Nouri al-Maliki, the Iraqi prime minister, in Baghdad. But there are still no signs of a breakthrough.

Other western companies have found Iraq tough going. Statoil, the Norwegian company, quit the country last year in frustration.

But state oil companies have flourished. Of these, the Chinese are the most prominent: CNPC is a partner in the BP-led consortium developing Rumaila, one of the largest Iraqi oilfields, and also operates the Ahdab field. PetroChina operates Halfaya and Cnooc the Missan group of fields.

According to the International Energy Agency, a quarter of Iraqi oil, about 2m barrels a day, will be heading for China by 2035. “A new trade axis is being formed between Baghdad and Beijing,” said Fatih Birol, the IEA’s chief economist.

Analysts say state companies are much less likely than the oil majors to be deterred by low fees and low returns: for them, the key is access to Iraq’s hydrocarbon resources, and the off-take deals that allow them to export crude.

But ultimately, the winner of the past decade has been the Iraqi state. The IEA predicts Baghdad stands to gain almost $5tn in revenues from oil exports to 2035 – offering a “transformative opportunity” for the economy.

“It has secured a tremendous amount of investment and international help to develop its energy sector while giving away very little,” says PFC Energy’s Mr Alkadiri. “The Iraqis are well and truly in control of their own oil industry.” 

Guy Chazan, “Iraq’s appeal wanes for oil majors,” Financial Times, March 17, 2013

See also on the shifting estimates for Iraq's production my earlier posts of May 14, 2011 and March 2, 2011.  

Ethanol Takes a Hit

From the New York Times:

Backed by government subsidies and mandates, hundreds of ethanol plants rose among the golden fields of the Corn Belt, bringing jobs and business to small towns, providing farmers with a new market for their crops and generating billions of dollars in revenue for the producers of this corn-based fuel blend. Those days of promise and prosperity are vanishing.  

Nearly 10 percent of the nation’s ethanol plants have stopped production over the past year, in part because the drought that has ravaged much of the nation’s crops pushed commodity prices so high that ethanol has become too expensive to produce.  

A dip in gasoline consumption has compounded the industry’s problem by reducing the demand for ethanol.  

The situation has left the fate of dozens of ethanol plants hanging in the balance and has unsettled communities that once prospered from this biofuel. . . . 

Thousands of barrels of ethanol now sit in storage because there is not enough gasoline in the market to blend it with — and blends calling for a higher percentage of ethanol have yet to catch on widely in the marketplace. Advanced biofuels from waste like corn stalks and wood chips have also yet to reach commercial-level production as some had predicted they would by now. . .  

Congress set out to create an ethanol industry that would produce enough to make up 10 percent of every gallon of gas pumped into a car, but the lawmakers assumed that demand for fuel would grow. Instead, it has shrunk to 8.7 million barrels a day from 9.7 million in 2007, said Larry Goldstein, an economist and a director of the Energy Policy Research Foundation. And with corporate average fuel economy rules now in place to double the number of miles that the average car gets per gallon by 2025, “you know we’re on a trend,” he added.  

As the gasoline market got smaller, so did the amount of ethanol it could absorb, because most service stations are set up to sell fuel with an ethanol content of only up to 10 percent. Owners’ manuals of most cars call for fuel blends of no more than 10 percent ethanol. The industry calls this the “blend wall,” and it has won Environmental Protection Agency approval for some cars to run on blends of up to 15 percent, but thus far that fuel has not caught on with consumers. Millions of cars are “flex-fuel vehicles” and can run on blends of up to 85 percent, known as e85, but that fuel is not popular and is not even widely offered outside a few corn-producing states.

But the ethanol producers were encouraged to build because the federal government had mandated that refiners use their product, and it established a tax credit of 45 cents per gallon of ethanol. The tax credit was allowed to expire on Dec. 31, 2011, but not before it had stimulated construction of ethanol plants.

The value of ethanol has also sagged. Its price is created in part by the price of the gasoline it displaces, and gasoline prices have been relatively modest for the past few months. . . .

The drought was particularly brutal here last year, leaving farmers with little to no corn. Don Mutter, who farms in nearby Cairo, said he produced about 25,000 bushels of corn last year, just 5.5 percent of his usual yield. Without corn nearby to purchase, the plant had to spend extra to haul it in from elsewhere. For several months it was operating at a loss. It ceased operations at the end of January. “We are going to start back up, this year most likely,” said Steve Burnett, who has been the manager since the plant opened in 2000. . . .

John Eligon and Matthew L. Wald, "Days of Promise Fade for Ethanol," New York Times, March 16, 2013

Mega Defense Contractor Saves Planet

The eco-optimists and techno-salvationists are all over this news item from Reuters, announcing a new breakthrough in water desalination techniques:

The process, officials and engineers at Lockheed Martin Corp say, would enable filter manufacturers to produce thin carbon membranes with regular holes about a nanometer in size that are large enough to allow water to pass through but small enough to block the molecules of salt in seawater. A nanometer is a billionth of a meter.  

Because the sheets of pure carbon known as graphene are so thin - just one atom in thickness - it takes much less energy to push the seawater through the filter with the force required to separate the salt from the water, they said. 

The development could spare underdeveloped countries from having to build exotic, expensive pumping stations needed in plants that use a desalination process called reverse osmosis. 

"It's 500 times thinner than the best filter on the market today and a thousand times stronger," said John Stetson, the engineer who has been working on the idea. "The energy that's required and the pressure that's required to filter salt is approximately 100 times less." 

Access to clean drinking water is increasingly seen as a major global security issue. Competition for water is likely to lead to instability and potential state failure in countries important to the United States, according to a U.S. intelligence community report last year. . . 

Lockheed still faces a number of challenges in moving to production of filters made of graphene, a substance similar to the lead in pencils. Working with the thin material without tearing it is difficult, as is ramping up production to the size and scale needed. Engineers are still refining the process for making the holes. . . . 

Stetson, who began working on the issue in 2007, said if the new filter material, known as Perforene, was compared to the thickness of a piece of paper, the nearest comparable filter for extracting salt from seawater would be the thickness of three reams of paper - more than half a foot thick. "It looks like chicken wire under a microscope, if you could get an electron microscope picture of it," he said. "It's all little carbon atoms tied together in a diaphanous, smooth film that's beautiful and continuous. But it's one atom thick and it's a thousand time stronger than steel." 

Thickness is one of the main factors that determines how much energy has to be used to force saltwater through a filter in the reverse osmosis process used for desalination today. "The amount of work it takes to squeeze that water through the torturous path of today's best membranes is gone for Perforene," Stetson said. "It just literally pops right through because the membrane is thinner than the atoms it's filtering." 

Notaro said Lockheed expects to have a prototype by the end of the year for a filter that could be used as a drop-in replacement for filters now used in reverse osmosis plants. The company is looking for partners in the filter manufacturing arena to help it commercialize Perforene as a filter in the 2014-2015 time frame, he said.

 

Lockheed officials see other applications for Perforene as well, from dialysis in healthcare to cleaning chemicals from the water used in hydraulic fracturing, or "fracking," of oil and gas wells.

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David Alexander, "Pentagon weapons-maker finds method for cheap, clean water," Reuters, March 13, 2013.

At Via Meadia, Walter Russell Mead sees Lockheed Martin as throwing dirt on Malthus's grave:

Human life is always threatened by challenges, upheavals, and limitations, and there will always pessimists who claim that human race is doomed to defeat at the hands of these forces. Famously, in the 19th century, Thomas Malthus sounded dire warnings about the widespread suffering and chaos that will follow from our imminent overpopulation and two centuries later his contemporary followers are still singing the same tune. 

 

But over and over again throughout the course of human history our ingenuity has been able to meet and overcome the challenges nature puts in our path. We have continually found new ways to make human life richer and more prosperous for more people in more places. The Lockheed filter still faces some obstacles in moving to mass production. It could wind up taking several years to reach the market, or could even totally fiz out. But either way, it represents the kind of creative ideas that are the real wealth of the human race.

Phoenix Descending

The four horsemen of Phoenix’s Apocalypse, writes William deBuys at TomDispatch, are heat, drought, windstorms, and fire. DeBuys, who is the author of A Great Aridness: Climate Change and the Future of the American Southwest (Oxford, 2011) actually adds a fifth horseman—the political disorganization and social fragmentation that will make for an incoherent and divisive response to these travails. Phoenix is a sort of Ground Zero for such inter-locking vulnerabilities, but the entire American Southwest is implicated in the scary future projected by DeBuys:  

. . . Phoenix’s multiple vulnerabilities, which are plenty daunting taken one by one, have the capacity to magnify one another, like compounding illnesses. In this regard, it’s a quintessentially modern city, a pyramid of complexities requiring large energy inputs to keep the whole apparatus humming. The urban disasters of our time -- New Orleans hit by Katrina, New York City swamped by Sandy -- may arise from single storms, but the damage they do is the result of a chain reaction of failures -- grids going down, levees failing, back-up systems not backing up. As you might expect, academics have come up with a name for such breakdowns: infrastructure failure interdependencies. You wouldn’t want to use it in a poem, but it does catch an emerging theme of our time. 

Phoenix’s pyramid of complexities looks shakier than most because it stands squarely in the crosshairs of climate change. The area, like much of the rest of the American Southwest, is already hot and dry; it’s getting ever hotter and drier, and is increasingly battered by powerful storms. Sandy and Katrina previewed how coastal cities can expect to fare as seas rise and storms strengthen. Phoenix pulls back the curtain on the future of inland empires. . . . 

[I]n Phoenix there are all too many “reasons” primed to collaborate and produce big problems, with climate change foremost among them, juicing up the heat, the drought, and the wind to ever greater extremes, like so many sluggers on steroids. Notably, each of these nemeses, in its own way, has the potential to undermine the sine qua non of modern urban life, the electrical grid, which in Phoenix merits special attention. . . . 

It goes without saying that Phoenix’s desert setting is hot by nature, but we’ve made it hotter. The city is a masonry world, with asphalt and concrete everywhere. The hard, heavy materials of its buildings and roads absorb heat efficiently and give it back more slowly than the naked land. In a sense, the whole city is really a thermal battery, soaking up energy by day and releasing it at night. The result is an “urban heat island,” which, in turn, prevents the cool of the desert night from providing much relief. 

Sixty years ago, when Phoenix was just embarking on its career of manic growth, nighttime lows never crept above 90°F. Today such temperatures are a commonplace, and the vigil has begun for the first night that doesn’t dip below 100°F. Studies indicate that Phoenix’s urban-heat-island effect may boost nighttime temperatures by as much as 10°F. It’s as though the city has doubled down on climate change, finding a way to magnify its most unwanted effects even before it hits the rest of us full blast. . . . 

Heat . . . is a tricky adversary. It stresses everything, including electrical equipment. Transformers, when they get too hot, can fail. Likewise, thermoelectric generating stations, whether fired by coal, gas, or neutrons, become less efficient as the mercury soars.  And the great hydroelectric dams of the Colorado River, including Glen Canyon, which serves greater Phoenix, won’t be able to supply the “peaking power” they do now if the reservoirs behind them are fatally shrunken by drought, as multiple studies forecast they will be. Much of this can be mitigated with upgraded equipment, smart grid technologies, and redundant systems.  But then along comes the haboob. 

A haboob is a dust/sand/windstorm, usually caused by the collapse of a thunderstorm cell. The plunging air hits the ground and roils outward, picking up debris across the open desert. As the Arabic name suggests, such storms are native to arid regions, but -- although Phoenix is no stranger to storm-driven dust -- the term haboob has only lately entered the local lexicon. It seems to have been imported to describe a new class of storms, spectacular in their vehemence, which bring visibility to zero and life to a standstill. They sandblast cars, close the airport, and occasionally cause the lights -- and AC -- to go out. Not to worry, say the two major utilities serving the Phoenix metroplex, Arizona Public Service and the Salt River Project. And the outages have indeed been brief.  So far. 

Before Katrina hit, the Army Corps of Engineers was similarly reassuring to the people of New Orleans. And until Superstorm Sandy landed, almost no one worried about storm surges filling the subway tunnels of New York. 

Every system, like every city, has its vulnerabilities. Climate change, in almost every instance, will worsen them. The beefed-up, juiced-up, greenhouse-gassed, overheated weather of the future will give us haboobs of a sort we can’t yet imagine, packed with ever greater amounts of energy. In all likelihood, the emergence of such storms as a feature of Phoenix life results from an overheating environment, abetted by the loose sand and dust of abandoned farmland (which dried up when water was diverted to the city’s growing subdivisions). 

In dystopic portraits of Phoenix’s unsustainable future, water -- or rather the lack of it -- is usually painted as the agent of collapse. Indeed, the metropolitan area, a jumble of jurisdictions that includes Scottsdale, Glendale, Tempe, Mesa, Sun City, Chandler, and 15 other municipalities, long ago made full use of such local rivers as the Salt, Verde, and Gila. Next, people sank wells and mined enough groundwater to lower the water table by 400 feet. . . . 

Longer term, the Colorado River poses issues that no amount of tribal water can resolve. Beset by climate change, overuse, and drought, the river and its reservoirs, according to various researchers, may decline to the point that water fails to pass Hoover Dam. In that case, the CAP [Central Arizona Project] would dry up, but so would the Colorado Aqueduct which serves greater Los Angeles and San Diego, as well as the All-American Canal, on which the factory farms of California’s Imperial and Coachella valleys depend. Irrigators and municipalities downstream in Mexico would also go dry. If nothing changes in the current order of things, it is expected that the possibility of such a debacle could loom in little more than a decade. . . . 

Phoenicians who want to escape water worries, heat waves, and haboobs have traditionally sought refuge in the cool green forests of Arizona’s uplands, or at least they did until recently. In 2002, the Rodeo-Chediski fire consumed 469,000 acres of pine and mixed conifer on the Mogollon Rim, not far from Phoenix. It was an ecological holocaust that no one expected to see surpassed. Only nine years later, in 2011, the Wallow fire picked up the torch, so to speak, and burned across the Rim all the way to the New Mexico border and beyond, topping out at 538,000 charred acres. 

Now, nobody thinks such fires are one-off flukes. Diligent modeling of forest response to rising temperatures and increased moisture stress suggests, in fact, that these two fires were harbingers of worse to come. By mid-century, according to a paper by an A-team of Southwestern forest ecologists, the “normal” stress on trees will equal that of the worst megadroughts in the region’s distant paleo-history, when most of the trees in the area simply died. 

Compared to Phoenix’s other heat and water woes, the demise of Arizona’s forests may seem like a side issue, whose effects would be noticeable mainly in the siltation of reservoirs and the destabilization of the watersheds on which the city depends. But it could well prove a regional disaster.  Consider, then, heat, drought, windstorms, and fire as the four horsemen of Phoenix’s Apocalypse. As it happens, though, this potential apocalypse has a fifth horseman as well. 

Rebecca Solnit has written eloquently of the way a sudden catastrophe -- an earthquake, hurricane, or tornado -- can dissolve social divisions and cause a community to cohere, bringing out the best in its citizenry. Drought and heat waves are different. You don’t know that they have taken hold until you are already in them, and you never know when they will end. The unpleasantness eats away at you.  It corrodes your state of mind. You have lots of time to meditate on the deficiencies of your neighbors, which loom larger the longer the crisis goes on. . . . 

It is a truism that communities that do not pull together fail to surmount their challenges. Phoenix’s are as daunting as any faced by an American city in the new age of climate change, but its winner-take-all politics (out of which has come Arizona’s flagrantly repressive anti-immigration law), combined with the fragmentation of the metro-area into nearly two dozen competing jurisdictions, essentially guarantee that, when the worst of times hit, common action and shared sacrifice will remain as insubstantial as a desert mirage. . . .

* * *

William deBuys, "Exodus from Phoenix," TomDispatch, March 14, 2013

See here for images of the haboob that descended on Phoenix in 2011.

Resource Scarcity and Economic Growth

Gregor McDonald dissects two recent forecasts, deeply conflicting, on the relation of resource constraints and economic growth, “A Tale of Two Forecasts,” Gregor.us, December 20, 2012: 

Despite declaring in 2008 that the age of cheap oil was over, the International Energy Agency (IEA) surprisingly announced last week that the United States would become the largest oil producer in the world by 2020. Hooray! This superlative declaration titillated U.S. media organizations, who understand quite well that Americans love to secure a #1 ranking in just about any category (save for prison incarceration, divorce rates, and obesity) . . . . However, the IEA has done little more than produce an attention grabbing headline here. Simply ranking the ‘top oil producer’ in 2020 may mean much less than the public currently understands. 

This announcement has since led to the magical thinking that we can somehow take ownership of this future “extra oil” not 8 years from now, but rather…. today. In other words, the additional 3 mbpd (million barrels per day) of crude oil and the 1 mbpd of NGL (natural gas liquids) that the IEA forecasts for 2020 have suddenly been booked into the “readily-available” column and are already being factored into U.S. growth projections. That is premature, to say the very least. 

In contrast to the IEA’s report was the grim outlook recently offered up by legendary investor Jeremy Grantham, of GMO in Boston. Mr. Grantham has been increasingly sounding the alarm on a future of significantly lower growth rates for some years now. It is rather obvious, as well, that Grantham has been methodically making his way through the reading list of resource scarcity scholarship over the past five years, taking in the views of everyone from Joseph Tainter to Jared Diamond. Combined with the available data, Mr. Grantham has come up with the rather unsurprising conclusion that the rate of future growth is set to be much lower than most anticipate. In Grantham’s view, there will be no return to normal growth as was enjoyed in the U.S. in the post-war period (after 1945). 

Reactions to Grantham were predictable. Has he lost his mind? And of course: Grantham goes Malthusian was another common refrain. . . . .

It’s clear that very few understood what Grantham was really saying.

Moreover, many were mistaken that Grantham has adopted an ethos of negativity or that he has become ideological in his views. Quite the contrary. He is working with the same data observed by many hedge funds, international organizations, and academic research that shows that, as we entered the past decade, the extraction and production rates of many critical resources began to slow – and slow significantly. 

Just to kick off this discussion, let’s start with the master commodity, oil: 

In the ten years leading up to 2004, global crude oil supply grew at a compound annual growth rate (CAGR) of 1.71%. This rate of supply growth started during the strong economic phase during the 1990s, and only strengthened after the recession of 2000-2002 when countries like Russia came online with fresh oil supply. 

However, in the years since 2004, the rate (CAGR) of supply growth has dropped sharply to just 0.53%. This deceleration in the extraction rate — which is also seen in many other resources, such as copper — is the secular change that has drawn Grantham’s attention. This is empiricism, not ideology. 

Just when the world needed oil and copper the most — as China’s and India’s industrialization kicked into high gear — world supply growth flattened. Hence, the upward price revolution in commodities. What Grantham is saying – observing, really – is: the price revolution in critical resources will not be reversed. Accordingly, economy-wide input costs are now structurally higher, which will lead to structurally lower growth. I mean, really; it’s not that complicated. . . .

 

300 Years of Fossil Fuels (in 5 minutes)

This nice little ditty, put together by Richard Heinberg and the Post-Carbon in December 2010, lays out the peak-everything view. Click on the picture for the video.

A Case for Fossil Fuels

This eighteen minute lecture by Matt Ridley, author of The Rational Optimist, advances a number of arresting points. Ridley argues that fossil fuels, so often maligned, have lots of environmental advantages. Greens should pay attention. Ridley offers a cornucopian counterpoint to Richard Heinberg's Malthusian pessimism. (Click picture for video)

For more Ridley, listen to his October 2011 lecture on "Scientific Heresy." Ridley asks: 

How do you know whether you are taking the rational or the irrational side of an argument, the scientific or the pseudoscientific position? Or to put it a slightly different way, when are the heretics right and when are they nutcases? This question is not as easy to answer as it seems.

Many scientific truths began as heresies and fought long battles for acceptance against entrenched establishment wisdom that now appears irrational: the germ theory, continental drift, the use of antibiotics to treat stomach cancer, low-carbohydrate diets, even the idea that crop circles are man-made. Many environmentalists think the scientific conventional wisdom is right about climate change, and explicitly demand obedience to the consensus or even argue that dissent is illegitimate, but at the same time many of the same people once argued that scientific conventional wisdom is wrong about the safety of genetically modified food and that dissent is legitimate.

There is a consensus that the earth is round and natural selection explains evolution, but there is also a consensus that ghosts and gods exist. So the consensus cannot always be trusted, but nor can it always be dismissed. This lecture will explore the problem of how to decide when to question the scientific wisdom and when to accept it.

Carbon Taxes, Please

Juslin Gillis of the New York Times plans a monthly column on climate change, answering charges that the Times had downgraded its environmental coverage; his first entry, “In Search of Energy Miracles,” explores the ideas of Lockheed Martin, Bill Gates, and Chinese scientists for new forms of nuclear power. Go to the piece for details on that; here I want to draw attention to his overall framework:  

Beyond the question of whether they will work, these ambitious schemes pose a larger issue: How much faith should we, as a society, put in the idea of a big technological fix to save the world from climate change?  

A lot of smart people are coming to see the energy problem as the defining challenge of the 21st century. We have to supply power and transportation to an eventual population of 10 billion people who deserve decent lives, and we have to do it while limiting the emissions that threaten our collective future. 

Yet we have already poured so much carbon dioxide, the main greenhouse gas, into the atmosphere that huge, threatening changes to the world’s climate appear to be inevitable. And instead of slowing down, emissions are speeding up as billions of once-destitute people claw their way out of poverty, powered by fossil fuels.  

Many environmentalists believe that wind and solar power can be scaled to meet the rising demand, especially if coupled with aggressive efforts to cut waste. But a lot of energy analysts have crunched the numbers and concluded that today’s renewables, important as they are, cannot get us even halfway there.  

Gillis goes on to describe and assess the various efforts to improve nuclear power, giving a not especially hopeful verdict, but offering sage counsel with regard to the parameters of energy policy and climate change:  

Two approaches to the issue — spending money on the technologies we have now, or investing in future breakthroughs — are sometimes portrayed as conflicting. In reality, that is a false dichotomy. The smartest experts say we have to pursue both tracks at once, and much more aggressively than we have been doing.  

An ambitious national climate policy, anchored by a stiff price on carbon dioxide emissions, would serve both goals at once. In the short run, it would hasten a trend of supplanting coal-burning power plants with natural gas plants, which emit less carbon dioxide. It would drive investment into current low-carbon technologies like wind and solar power that, while not efficient enough, are steadily improving.  

And it would also raise the economic rewards for developing new technologies that could disrupt and displace the ones of today. These might be new-age nuclear reactors, vastly improved solar cells, or something entirely unforeseen.  

In effect, our national policy now is to sit on our hands hoping for energy miracles, without doing much to call them forth. . . .

Amen.

New Poll: Climate Change Not a Priority

A new poll bears grim tidings for climate hawks: the level of public concern is tepid, at best. From the University of Chicago:

A newly released international study reveals that the issue of climate change is not a priority for people in the United States and around the world.

The surveys showed that when asked to rank priority worries, people were five times more likely to point to the economy over the environment. Additionally, when asked about climate change, people identified the issue as more of a national problem than a personal concern. . . .

In the surveys, respondents were asked the relative importance of eight issues: health care, education, crime, the environment, immigration, the economy, terrorism and poverty.

The economy ranked highest in concern in 15 countries, followed by health care in eight, education in six, poverty in two, and terrorism and crime in one country each. Immigration and the environment did not make the top of the list in any country over the 17-year period. In the United States, concern for the environment ranked sixth while the economy was No. 1.

In terms of national averages, the order of concern was the economy (25 percent); health care (22.2) education (15.6); poverty (11.6); crime (8.6) environment (4.7), immigration (4.1) and terrorism (2.6), the surveys showed. Terrorism’s low ranking was notable in light of the widespread attention the issue has received since 2001, though it topped the list of concerns in Turkey.

The paper, “Public Attitudes towards Climate Change and Other Global Environmental Issues across Time and Countries, 1993-2010,” was presented recently at the “Policy Workshop: Public Attitudes and Environmental Policy in Canada and Europe, Canada-European Transatlantic Dialogue,” at Carleton University in Ottawa, Canada. . . .

In the United States, only 3.6 percent of the people surveyed selected the environment as the nation’s most pressing issue, as opposed to 15 percent of the people in Norway, which had the highest level of environmental concern.

The surveys also asked questions about worries concerning particular kinds of environmental problems, including global climate change. One asked which problem among nine was most important for their country as a whole as opposed to the individual.

Air pollution ranked first in 13 countries, followed by climate change, which was the top concern in 10 countries. In another question, the surveys asked people which environmental problem they considered most personally dangerous and found that in only three countries was climate change listed as the most dangerous environmental problem, trailing nuclear power plants and industrial air pollution.

“One reason for the relatively low ranking of climate change is that people often believed it did not directly affect them. Climate change is seen more as a country-level problem than as a personal problem,” Smith said. “While 14.6 percent cited it as the most important environmental issue for their country, only 9 percent rated it first for themselves.”

The latest surveys were completed in 2010. Similar surveys have been conducted since 1993, and little change has been noted on people’s concern for climate change. Differences exist among the countries, however, suggesting that widespread public support for current action on the issue will represent a major shift in attitude.

The surveys indicate some expectation for greater future concern about climate change. “The greater mentioning of climate change as a problem by those under 30 versus those 70 and older probably reflects generational effects and if so, should tend to increase levels of concern in the future,” Smith said.

Environmental issues are of greatest concern in Scandinavian nations, Switzerland and Canada. They were followed by France, Austria, Finland, the former West Germany, Taiwan, Korea and New Zealand. Toward the bottom of the list are Croatia, Latvia, Chile, Turkey, Lithuania and Argentina.

Climate change was listed as the top environmental concern in Japan, West Germany, Canada, Britain and Scandinavia, where between 19 and 26 percent of the population indicated it was their top environmental issue.

 

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William Harms, "Global Surveys Show Environment Ranks Low on Public Concerns," UChicago News, February 25, 2013.

The decision by the New York Times to terminate its Green Blog, together with the Washington Post's reassignment of its main environmental writer, suggest that these media giants have gotten the message. See Slate's amusing recounting of the Times' priorities, "The Times Kills Its Environmental Blog To Focus on Horse Racing and Awards Shows."

Gas Rising, Coal Falling, in Electricity Generation

The Breakthrough Institute comments:  

Coal electricity declined by 12.5 percent in 2012, mostly driven by the switch to natural gas, which increased by almost the exact same amount (217 terrawatt-hours) as coal declined (216 TWh), according to new annual numbers released by the US Energy Information Administration. 

Wind electricity increased as well — by about one-tenth (20.5 TWh) as much as gas. Solar increased a little more than one-hundredth as much as gas (2.5 TWh). 

The figures come at a time when renewable energy advocates have claimed that wind and solar have been responsible for the big declines in coal — claims that do not stand up to scrutiny, according to a new Breakthrough Institute analysis. 

Indeed, the new numbers highlight the key difference between gas and solar and wind. Where taxpayers subsidized unconventional gas exploration from 1980 to 2002 to the tune of $10 billion, natural gas in recent years has been replacing coal without subsidies.

Wind and solar, by contrast, remain almost wholly dependent on public support. Uncertainty last year over whether Congress would renew the key wind subsidy meant that less than half as much new wind will be installed in 2013 as was installed in 2012.

Where the problem for wind has been its high cost, the problem for gas is that it has become too cheap. Natural gas production slowed last year in the face of unprofitably low prices caused by overproduction. . . . 

Michael Shellenberger & Ted Nordhaus, “Gas Crushes Coal,” February 28, 2013 

On the subsequent comment thread, a pungent expression of doubt from Wilmot McCutchen:  

Pundits who are now dancing on the grave of coal need to look at the steep depletion of fracked gas wells and the growing public awareness of the danger they pose to the water supply.  What else can replace coal?  Nuclear is paralyzed by radiation fears and a history of cost overruns.  Hydro is maxed out.  Boutique solutions like wind, solar, and biofuels are not scalable to utility scale baseload generation.  So does anyone have a plan for reviving coal and mitigating its pollution?

 As against the "new abolitionism," this represents a new realism.