Thursday, 17 July 2008

Windmills coming around again in the Netherlands

By John Tagliabue
Published: July 16, 2008

AMSTERDAM: The Dutch are building windmills again. Up and down the coast, out from port cities like this one, you can see them: white and tall and slender as pencils, their three slim blades turning lazily in the North Sea breeze.
These ones generate electricity, of course, rather than grinding grain. The government has already built one enormous farm of mills far off the coast, where they are inoffensive to tourists, and plans a second. Yet it is also building, and rebuilding, mills like the squat, homely ones that have seemingly always dotted the Dutch countryside and reflect as much the nature of the country as do tulips or Gouda cheese.
"Revival might be a bit strong," said Leo Endedijk, director of The Dutch Mills, a group that supports mill restoration. Yet last year, the government, concerned that one of the foremost symbols of the Netherlands was about to disappear out of neglect, approved an $80 million program to build or restore 120 mills, of roughly 1,040 still standing. That has created a backlog of work for the country's previously strapped mill restorers.
"We have special companies, very specialized mill makers and restorers," said Endedijk, in an office in the shadow of De Gooyer, a soaring 18th century mill now housing a popular brewery. "They would not have the capacity to restore 120 mills."
The need to find renewable sources of energy is driving the Dutch to build the modern mills, which Endedijk insists be called turbines, not mills.

"We as an organization don't work with modern wind turbines," he sniffed, adding, as if to underscore the gap between the traditional and the contemporary, that while the four blades of traditional windmills turn counterclockwise, the three of modern wind turbines go clockwise.
But the fast pace of change in is reviving interest in the old mills. As immigration changes the face of Dutch cities and globalization spreads its veil of uniformity over life in the Netherlands, many among the Dutch are looking for their roots. "It's a little bit of national pride," said Lukas Verbij, whose company, Verbij Hoogmade, is a leading mill builder and restorer.
Some of the renewed interest in mills is driven by the search for traditional food and drink. Patrick Langkruis, whose bakeshop, Het Bammetje, features 28 kinds of bread and 35 different rolls, uses only flour ground by a traditional mill. "The taste is fuller, there's more flavor," he said. "It's also because the grains are ground slowly."
His supplier is Karel Streumer, who has been grinding ordinary and exotic grains for the past eight years at his mill, De Distilleerketel, or distillery pot, in Delfshaven on the edge of Rotterdam. He uses technology - huge mill stones and enormous wooden gears that make visitors feel they're inside an immense and ancient clock - that has not changed since the mill was built in 1727.
Streumer, 54, his shock of curly white hair perpetually dusted with flour, is one of a growing number of millers who are taking over restored or rebuilt mills. In addition to wheat, he said, counting off his products on a dusty hand, he grinds familiar grains like corn, rye and oats, and some unfamiliar ones, like grain sorghum, or milo, and spelt, a kind of wheat. One customer arrives once a month from Frankfurt to pick up 25 kilograms, or 55 pounds, of mashela, or pearl millet, which is widely used in African cooking.
Curiously, though the revival of the mills is a back-to-the-roots thing, many customers are natives of a wide range of countries, Streumer said, including Ethiopia, Morocco and Turkey. "Eighty percent of my customers are not natives of the Netherlands," he said.
One of them is Samson Tesfai, whose restaurant, The Taste of Africa, specializes in dishes of his native Eritrea, which he fled in 1986 because of the fighting between his homeland and Ethiopia.
Each week, he said, he buys mashela, sorghum, ground corn and wheat flour from Streumer to use in the ethnic dishes he prepares. "We can find it elsewhere," said Tesfai, 43. "But this is a good address, with a good product, so why go somewhere else?"
Neither the spread of ethnic restaurants, with increased immigration, nor the return to traditional tastes among the Dutch, is enough to keep millers like Streumer in business. Without a crew of volunteers who help out on weekends, he said, the mill would not be profitable.
"It's hard to make the money to keep the mill in good shape and to pay employees, too," he said. "We are not professionals." So the mills remain a matter of the heart, rather than the pocketbook. Except, of course, for builders like Verbij. Now 48, he represents the fourth generation of his family to run his company, which was founded in 1868 and employs about 20 master wood and metal workers.
"A wave of building is coming" when the government releases its latest round of subsidies, he said. "Every owner could apply. It's a kind of lottery."
He just finished a €1.2 million, or $1.9 million, project to rebuild with traditional technology a mill in the town of Soest that was destroyed in 1930. So attached were the townspeople to their mill, he said, that one woman donated money from the sale of her home.
Not only the Dutch but all the world seems to love a windmill. Verbij has built four in Japan, beginning with one in Osaka in 1989. And despite the crush of work in the Netherlands, he now finds time to work on three mills in the United States, including restoration of the giant Murphy Windmill in Golden Gate Park, San Francisco, one of the world's largest, which was built in 1905 and is badly dilapidated.
"It's our biggest project," Verbij said. "It's nice to see all those people happy at the sight of a windmill."

Floating wind turbines poised to harness ocean winds

David Adam,
Wednesday July 16, 2008

Wind power: the floating wind turbine prototype in Brindisi harbour in December 2007
A British company is poised to construct the world's first floating wind turbine, in a move that could herald a new generation of cheaper, less problematic wind energy.
Blue H, a firm registered in the UK but based in Holland, aims to anchor its prototype device 12 miles off the coast of southern Italy later this month.
The company is one of several racing to build commercial-scale floating wind turbines that sit in deep water far from land. These turbines benefit from more powerful winds and avoid many of the issues that afflict existing wind farms.
Neal Bastick, head of Blue H, said the Italian prototype would be "virtually invisible" from the shore, and that the company plans to build a full scale floating 90 megawatt wind farm in the region. Blue H also wants to build them off Scotland and the northeast US.
Bastick said the floating windmills would be more economic to install than existing offshore turbines, which sit on fixed foundations in the seabed. They could minimise problems with planning, as well as having less impact on shipping, military radar and coastal seabird populations. Electricity would be sent ashore using undersea cables.
The Blue H prototype will float a turbine platform on the sea surface and fix it in position using strong chains linked to heavy weights on the sea bed. Changing the length of the chains could allow the turbine to operate in water depths between 50m and 300m, enough to take it far out into the deep ocean.
The Blue H prototype turbine platform was launched in December 2007 and needs to be towed out to sea and connected to its seabed counterweight. Bastick said: "Within a few years I would very much like to be placing these off Britain." (Watch the company's film of the launch here.)
Britain is seen as a key market for such technology because of the consistent winds around its coast. In June, the UK government said that it would need to build up to 7,000 wind turbines at sea to help meet EU renewable energy targets.
The Norwegian companies Statoil and Statkraft are also developing floating windmills.
Carl Erik Hillesund, vice president for offshore wind development for Statkraft, said: "We need some new industrial thinking on the technology. Up to now, people have just focused on taking onshore wind turbines and putting them offshore. That has caused a lot of hassle and mistakes."
He said the floating technology could be sited more than 200 miles from the coast. "You could put them between the UK and Norway. That would be no problem. They would be out of sight and much more flexible."
Statkraft is also bidding to build new wind farms in British waters, but Hillesund said it was too early to say if the floating wind turbines would be used. The company aims to build its first full scale prototype by 2011.
As part of a consortium called Windsea, it is developing a floating triangular platform, with a three to four-megawatt turbine mounted at each corner. The platform would be anchored to the sea bed, but by a single chain so it could rotate as the wind changed direction.
Statoil takes a different approach: fixing a conventional turbine to a concrete buoy, anchored to the sea bed with three cables. Called Hywind, the company aims to switch on a 2.3 megawatt prototype device in autumn 2009.
Perhaps the most elegant design is being worked on by another Norwegian company called Sway. It mounts its turbine on an elongated floating mast, the bulk of which sits below the water. Connected to the seabed by a metal tube, the turbine mast is designed to sway with the wind and waves, and can lean at an angle of up to 15 degrees. It could launch a prototype in 2010.

Carbon Copies Down Under


The global warming craze officially landed in Canberra yesterday, as the Labor government released a sketch of what it calls "one of the highest priorities of the Australian government": its carbon trading scheme. That should signal the beginning of an important debate about the costs of this grand plan. But can the opposition Liberal Party muster a coherent argument?
Yesterday's 516-page report calls for a huge bureaucratic expansion and undefined costs to industry. Canberra has pledged to reduce emissions to 60% of 2000 levels by 2050, and it wants to set emissions caps this year. The government hasn't yet said how much companies will have to pay for all this. But they did say electricity prices could rise 16%, and fuel, 9%, when emissions trading begins in 2010.
You'd expect the Liberals to be howling. Instead, they're as green as Al Gore. Part of this is a legacy issue. Former Liberal Prime Minister John Howard embraced the idea of an emissions trading scheme by 2012 when he saw then-opposition leader Kevin Rudd gaining support by fearmongering about global warming. Mr. Howard said he'd implement carbon trading only if costs to the Australian economy were capped. His commitment has, for now, left the Liberals mostly on the same page as Labor.
Current Liberal leader Brendan Nelson hasn't tried very hard to distance himself from Mr. Howard's platform. He hasn't questioned the science underlining global warming. (Yesterday's report takes as truth the United Nations' discredited Intergovernmental Panel on Climate Change estimates.) He's repeatedly said that he supports an emissions trading scheme without seriously exploring other, more transparent, forms of taxation on industry – or opposing the tax altogether. He hasn't questioned the wisdom of the schemes Australia already has in place to pick winners among clean energy industries, such as mandatory renewable energy targets.
Mr. Nelson's only attempt to rejig the Liberals' position was a feeble try last week to step back from that 2012 implementation date and to ask that Australia – which emits only 1.5% of global greenhouse gas emissions – not act until big emitters like China lead the way. But as soon as he floated these common-sense ideas, his deputy Julie Bishop, shadow treasurer Malcolm Turnbull and shadow environment minister Greg Hunt all publicly cried foul. Mr. Nelson fell back into line. So much for leadership.
Labor is taking full advantage of the Liberals' disarray. Yesterday's report blithely asserts that an emissions trading scheme will touch "around 1,000 Australian companies in total," or "less than 1%" of Australian businesses. In reality, forcing companies to buy pollution permits would raise the cost of energy production and hit every corner of the world's 15th-largest economy.
Labor's report admits as much, noting there will be "adjustment costs" and pledging to offset energy price hikes by temporarily cutting excise taxes on gasoline. But Climate Change Minister Penny Wong played down any change of making such cuts permanent, suggesting yesterday that the Labor government would instead buffer the immediate impact on low-income families through cash handouts.
As for the economic havoc Labor's global warming plan would wreak, you know it's bad when even the labor unions – the Labor Party's core constituency – cry foul. The 130,000-member Australia's Workers' Union, the country's largest blue-collar union, and a local think tank estimate that the cost to the aluminum industry alone in job losses could range "from A$285 million to A$1.124 billion."
Given rising fuel costs, now is the perfect time for the Liberals to point out the economic cost of Labor's global warming scheme. But they can't do so effectively if they are carbon-copies of Labor. The public may not understand carbon trading schemes, but they understand hits to their pocketbook. It's time for the Liberals to start pounding that message home, in unison.

Australia proposes plan to curb greenhouse gas


CANBERRA, Australia -- Australia's Labor government Wednesday proposed a cap-and-trade emissions system to be introduced in 2010, which is designed to curb the country's greenhouse-gas emissions.
Australia contributes only around 1.5% of global emissions, but tops the U.S. on a per-person basis because of its heavy reliance on hydrocarbons for power generation.
Equity analysts have warned that any emissions-trading plan may derail the country's resource-based economic boom by pulling the plug on the supply of cheap fossil-fuel-based energy that has allowed industry to prosper in recent years.
Government forecasts issued Wednesday suggest electricity prices will rise 16% in 2010-2011, the year that carbon trading begins, while gas and other household fuels will rise 9%.
The forecasts, based on a hypothetical carbon price of 20 Australian dollars (US$19.57) a metric ton, would also add 0.9% to inflation, as measured by the consumer-price index, in the first year. Still, any CPI impact "will be largely one-off," the government added.
The discussion paper didn't recommend specific targets or trajectories for emissions reductions in Australia or speculate on a likely carbon price.
However, the government extended an olive branch to industry by proposing transitional measures such as free permits for the worst-affected industries and cuts to fuel taxes to cushion the transport sector from the initial price impact of carbon trading.
The center-left Labor government called for public comment on a proposal that will see Australia cap the amount of carbon dioxide that companies can produce. If they exceed this cap, they must buy so-called "carbon permits," either at auction, or on a secondary trading market from companies that have surplus permits.
The theory is that this so-called cap-and-trade system gives companies a financial incentive to clean up.
The government said the plan, if implemented, would cover around 75% of Australia's greenhouse-gas emissions, including those produced by electricity generation, transport, industrial processes and fugitive emissions from oil and gas production.
"As one of the hottest and driest continents on earth, Australia's economy and environment will be one of the hardest and fastest hit by climate change if we don't act now," Climate Change Minister Penny Wong said.
The government also proposed cent-for-cent cuts to fuel taxes to offset the likely impact of carbon trading on gasoline prices.
Australia faces a tougher balancing act than Europe, which has had market-based emissions trading in place since 2005, because Australia's recent rapid economic growth has been driven by demand for its iron ore, coal and other natural resources.
The heaviest emitters include the electricity sector, which generates 90% of its power from fossil-fuel-based generation.
Many of Australia's biggest exporters are indirectly emitters through their heavy use of energy to extract natural resources for export.
The government is committed to carbon-emissions cuts of 60% based on year 2000 levels by 2050.
Write to Rachel Pannett at

Whitehall to become carbon neutral with aid of smart PCs

Allegra Stratton, political correspondent
The Guardian,
Thursday July 17, 2008

The government plans to become the first in the world to make all of its computers carbon neutral.
In a speech at the Science Museum today, Cabinet Office minister Tom Watson is to announce 18 measures that will change the habits of civil servants throughout Whitehall.
The proposals, including desktop computers that switch themselves off if they are inactive for too long, are aimed at making energy consumption from all of Whitehall's information and communication technology carbon neutral by 2012.
Watson hopes that by 2020 government technology will be carbon neutral throughout its lifetime, including manufacture and disposal. "We won't just do this by offsetting but by making serious changes to the way we do business," Watson will say.
The government is the largest buyer of information and communications technology in the UK and its IT equipment is responsible for up to a fifth of the government's carbon emissions - 460,000 tonnes a year. Watson will say: "Worldwide, computers are responsible for the same quantity of carbon emissions as the airline industry."
His proposals follow claims that the government has been falling short of its declarations that it will lead by example by reducing its carbon emissions.
This month a cross-party group of MPs said the government was "lagging far behind" in this area. In March the annual report of the government's independent watchdog, the Sustainable Development Commission, said more than half of Whitehall departments were failing to reduce their carbon emissions by enough to meet their targets.
"Turning off every desktop PC in central government for the 16 hours that fall outside the standard working day could save up to 117,500 tonnes of CO2 per year," a Cabinet Office briefing document says.
A government source told the Guardian that a centralised system would switch off computers detected as inactive.
Watson will also ask departments to remove active screensavers, which use the same amount of energy as a screen in full use. Civil servants will also be urged to ensure re-use of PCs which are discarded but are still serviceable.
John Higgins, director general of technology sector organisation Intellect, welcomed Watson's initiative. He said: "These 'quick wins' - rationalising servers and data centres - are a credible series of first steps."
The Sustainable Development Commission's report said that apart from the Ministry of Defence, which significantly reduced its emissions in 2005-06, government departments emit 22% more CO2 than they did in 1999.

EU proposes limited ecological-design rules

By James Kanter
Published: July 16, 2008

PARIS: The European Commission on Wednesday backed away from plans to introduce new ecological-design requirements on goods like shoes and furniture, and instead said new measures should be limited to energy-related products.
The European Union environment commissioner, Stavros Dimas, had favored setting minimum requirements for the environmental impacts of all manufactured products, in a package of measures introduced Wednesday.
Those rules could have stipulated, for example, the maximum amount of water used to make a sneaker, or the percentage of a table that should be recyclable. Although the proposals were far more limited in the end, Dimas still called the package a breakthrough.
"Our actions as consumers and producers worldwide are major forces behind climate change and the destruction of nature," said Dimas. The proposals, he said, would "encourage a switch to energy-efficient and environmentally friendly products and production."
The proposals expand on existing legislation for the ecological design of such energy-using goods as major appliances, by mandating minimum standards for products like window frames and water faucets that have an effect, albeit indirect, on energy consumption.

Some of those products already are regulated nationally, but the new rules would create Europe-wide standards.
If the proposals become law, consumers also could see more color-coded labels on a wider range of goods - from shower heads to electric toothbrushes - to help them choose items that consume less energy. Such labels could identify those products that achieve higher, but voluntary, standards for consumption or conservation of energy, water or other criteria.
Given the vast size of the European market, such regulation could end up impacting the way consumer products are sold around the world, as global manufacturers adapt their products to higher standards in the EU.
But the precise list of products to be included under the new rules is likely to be the subject of fierce lobbying in coming months. The proposals still must be approved by the European Parliament and by EU member governments.
The design rules in force since 2005 already govern the way certain products must operate. Computers and televisions, for example, must include a standby function so that they consume less energy when they go unused. Big electricity consumers like water heaters and industrial fans, also are covered by the current rules.
Industry groups warn that applying consumption and conservation standards to broad new categories of products may prove to be difficult, and that those efforts risk duplicating or conflicting with such existing standards as those that apply to buildings.
"Industry insists that impact assessments on the specific proposals for regulation be carried out to the highest standards," Philippe de Buck, the secretary general of BusinessEurope, a European business confederation, said. "European companies must be fully involved in the design of these instruments because they will have to implement them."
EU officials emphasized that developing environmental industries was important to Europe's future, saying the global market was estimated to be €1 trillion, or $1.58 trillion at current exchange rates, in 2005 and could reach €2.2 trillion in 2020.
G√ľnter Verheugen, the vice president of the European Commission, sought to encourage industry to maintain a long-term perspective about the benefits of more regulation.
"The reality is that European industry will maintain competitiveness only if their products are, in terms of the environment, the most sustainable and the most efficient," he said.
Consumer groups said the measures fell far short of what was needed to help shoppers and householders make genuinely green choices.
Monique Goyens, the director general of the European Consumers' Organization, said items like mattresses should have been included, and that more measures should have been taken to address issues like the potential for recycling a product.

In U.S., rule drafted for carbon trapping

By Matthew L. Wald
Published: July 16, 2008

WASHINGTON: The Environmental Protection Agency announced on Tuesday a first draft of a rule that will govern injecting carbon dioxide into underground storage.
Development of such a rule is essential before companies can build power plants that will capture and store their carbon dioxide to limit the buildup of global warming gases.
The agency acted under the Clean Water Act because injecting carbon dioxide might push pollutants into underground drinking water supplies, according to Benjamin Grumbles, assistant administrator for water.
"This rule paves the way for technologies that would protect public health and help reduce the effects of climate change," he said.
But before companies begin such operations on a wide scale, Congress will have to work out the liability issues and establish a price or other limits on carbon emissions, he said. Experts say that more work is also needed to cut the cost of capturing carbon dioxide from smokestacks.

The rule, which would apply to well owners and operators, would require monitoring to trace the chemical, squeezed down into liquid form. "A cornerstone of this rule is that the carbon dioxide stays where it is put, and not leak or be released to the surface," Grumbles said.
If the carbon dioxide did not behave as predicted, he said, injection would be promptly stopped.
Kurt Waltzer, an expert on sequestration of carbon at the Clean Air Task Force, a nonprofit group, said the proposal was "an important step but we're going to need much more to move carbon capture and storage forward."
Among other steps needed, he said, was a national climate policy.

Carbon emitters’ free ride is about to end

By Kevin Parker
Published: July 16 2008 19:02

While rising commodity prices have attracted the glare of public attention, carbon has remained in the shadows. The price of European carbon allowances (known as European unit allowances, or EUAs) has risen only modestly this year, to about €27 ($43, £21) a tonne. But market pressures are building that could take the price to €100 a tonne or higher.
EUAs permit companies to emit a specified amount of carbon. These allowances are traded: companies have fixed emissions limits imposed on them by the European Commission but can offset their excesses by buying allowances in the market. However, the levels of demand and supply are severely out of balance. This may lead to a radical repricing of carbon that will fundamentally change the political, business and financial landscape forever.
The astonishing truth about the carbon market is that nearly everyone is short carbon: companies will breach their emissions limits and do not own allowances to make up the difference. When I ask market participants: “who has surplus allowances to sell?” I get back blank stares. It cannot be long before the market recognises this fundamental supply/demand imbalance.
The carbon market, in addition to allowing offsets, should also encourage the switching away from pollution-intensive fossil fuels such as coal to less carbon-intensive gas and renew­ables. Carbon pricing should be correlated with oil and natural gas prices, which are soaring. A recent report by my colleague Mark Lewis at Deutsche Bank (“It takes CO2 to contango”, May 30 2008) argues that carbon’s market clearing price with oil at $85 (€55) a barrel and coal at $90 (€58) a tonne is about €40 a tonne. However, with the actual oil price at about $135 (€87) and coal at $200 (€127), the market clearing price for carbon is €75 to €80 a tonne – nearly three times its current level.
The markets have an uncanny ability to find the weak hand. Those emitters with too few allowances to cover their carbon output are going to get squeezed by the lack of supply, and a rise to at least €100 looks inevitable.
Another trigger for a rise to more realistic levels is the €100-per-tonne fine that comes into force this year with phase two of the European Union’s Emissions Trading Scheme. It will be imposed on companies breaching their emissions limits, who will also have to purchase enough allowances to bring them back into line. The EU is right that enforcement is essential to ensure industry takes the carbon policy seriously. However, a possible short-term effect will be a scramble to cover EUAs, triggering the squeeze.
The effects of a repricing of carbon will be profound. Carbon will take its place alongside oil, coal and gas as one of the most closely followed commodities in the world. This will mark the beginning of externalities at last being priced into the cost of production. It will signal that carbon emitters have had a free ride for long enough. Governments – the US’s in particular – will have to join Europe to create a global market for pricing carbon and businesses around the world will have to accept the price the market sets.
A higher carbon price will force companies to make radical changes to their business models (this has already begun in the European utility sector). Early movers are likely to be winners. It will be an economic imperative for corporate boards and managements to take into account carbon pricing in their business and strategic planning.
This adjustment will allow for a more efficient allocation of capital. Landmark decisions are already being taken in the US, where coal-fired power projects have been abandoned owing to the future cost of emissions. Citibank, JPMorgan, Morgan Stanley and Bank of America this year signed up to a set of “carbon principles” that include a refusal to lend to high carbon emitters whose financial statements do not account for the future cost of their pollution. The US government reached the same conclusion. Insurers are reconsidering insurance for big polluters and moving to price the risk accordingly.
The rising cost of carbon will also drive the need for, and the viability of, alternative technologies. Capital will start to flow to new areas of investment: existing technologies to conserve power and mitigate carbon emissions, developing technologies for carbon capture and alternative energy. Like many turning points, the carbon price rise will be fraught with risk. However, that is worth the enormous opportunities and benefits it will create.
The writer is global head of Deutsche Asset Management

Emissions Hijacking


The mood at this week's air show in Farnborough, England, is less optimistic than in years past. Aerospace companies are still making deals, but the credit crunch, high fuel prices and the ever-weaker U.S. dollar loom as concerns.
All of which means the European Union's stubborn push to add airlines to its CO2 emissions-trading scheme couldn't come at a worse time. The European Parliament voted last week to require emissions permits starting in 2012 for all flights that land or take off in the EU -- regardless of the airline's nationality or how much of the trip takes place in European airspace. Member-state governments are expected to approve the measure soon.
There would never be a good time for Europe's unilateral move to regulate other nations' airlines, which comes over the objections of nearly every other country on the planet as well as the U.N. body for civil aviation. So much for Europe's commitment to multilateralism.
But this cowboy environmentalism isn't even necessary. Carbon trading is supposed to encourage airlines to reduce their emissions by putting a price on CO2. How would they reduce their emissions? Well, besides better air-traffic management -- which could reduce emissions by more than 10% but, inconveniently for politicians, would require actions by government -- they would need to buy newer, more fuel-efficient airplanes.
Airlines had an incentive to do that well before oil prices started spiking. From 2000 to 2004, when crude cost less than $40 a barrel, fuel made up about one-sixth of carriers' expenses, according to the International Air Transport Association. The industry lost money in four of those five years as it recovered from the travel slump that followed the 9/11 terrorist attacks. So cutting costs by any means, including fuel efficiency, was already on its radar. That much is borne out by the thousands of commercial-aircraft orders that Boeing and Airbus recorded over the past few years, many of them for new kinds of jets that guzzle less gas.
Now oil prices are closer to $135 a barrel. If they stay that high, IATA estimates that airlines' fuel costs could skyrocket to $190 billion this year and $250 billion in 2009, up from around $40 billion earlier this decade. The industry would be back in the red this year and next after having finally returned to profitability in 2007.
To put those numbers in perspective, consider that Boeing values its 3,600-airplane order backlog at $271 billion. Experts say the order books at both Boeing and Airbus could shrink by about one-third in coming months as airlines try to conserve cash or even go bust. That means more older planes would still be in service.
All of this would be true even if carbon trading weren't in the picture. But now that it's on the way, upgrading fleets with more fuel-efficient planes will be even more difficult. IATA estimates that EU emissions trading could cost airlines $3.5 billion in the first year and as much as $13 billion by 2020, depending on how the permits are allocated and priced.
An additional $13 billion in expenses would have turned each of the industry's last four profitable years into losers. Even at $3.5 billion carriers would be hard-pressed to find the funds to upgrade their fleets with more fuel-efficient aircraft. As Cathay Pacific CEO Tony Tyler noted yesterday at Farnborough, "The more governments make it difficult for airlines to make money, the more difficult it is for them to invest in new technologies."
Making matters worse, the single-aisle Airbus A320s and Boeing 737s that make up the bulk of airlines' short-haul fleets are about a decade away from being updated. Both companies say they want to wait for a big step forward in engine technology.
Engine makers are racing to meet their request, but they aren't expected to reach the needed breakthrough until at least 2016. So airlines will be stuck with a carbon-trading bill for at least five years before they can even improve their fleets -- which of course will only reduce their ability to purchase the new planes once they do become available.
The alternative, and the green utopians' real dream, is to sharply reduce the amount of air travel. That would only add another anchor to an already dragging global economy, all to curtail a sector that accounts for only 2% of global CO2 emissions.
The U.S. and other countries have threatened to sue the EU at the International Court of Justice over its airline-emissions hijacking. That may be the only way to keep the eurocrats from bringing the industry down.

Rolls-Royce seeks role in UK's nuclear power revival

Terry Macalister
The Guardian,
Thursday July 17, 2008

Rolls-Royce, one of the most prestigious names in manufacturing, has thrown its weight behind the nuclear power renaissance by unveiling plans for a division it believes could become one of its biggest.
The company, best known for its aircraft engines, said it was already working for companies with nuclear businesses such as EDF of France and wanted to act as a supplier in the construction and operation of new plants in both Britain and emerging markets such as China.
Sir John Rose, chief executive, said: "Our experience is directly applicable to all phases of new-build programmes that are planned in the UK and globally, and also to the upgrade of existing plants. Our capability is unique in the UK and matched by only a handful of companies worldwide."
Rolls-Royce stressed that while nuclear power stations could overtake its highly successful marine operation, which has 7,000 staff and annual revenues of £1.5bn, this could take many years.
The company is carrying out peer-review work on two nuclear power station design assessments for EDF and Westinghouse in the US. They are being put forward to the British government as part of an expected nuclear building programme in this country, which could see as many as eight plants built with the first ready to start in 2018 if all goes well.
Rolls-Royce has appointed a new president of civil nuclear and is set to establish a team of managers and staff to build up the business, which will be based in Derby, where it already has 1,200 staff.
The company claims to have been involved in the atomic business for half a century, largely through providing design, safety justification, nuclear manufacture and in-service support for the Royal Navy's nuclear reactors and operates atomic sites at Devonport and Dounreay.
Rolls-Royce also has some civil nuclear experience, having supplied components to Sizewell B in Suffolk. It also provides safety critical instrumentation to EDF's 58 nuclear plants in France and through the Data Systems & Solutions business it established in 1999.
The decision by Rolls-Royce to enter the nuclear arena will be welcomed by the government as it brings a credible British manufacturing name to a local market that could be dominated by the French through EDF and Areva.

Rolls-Royce plans civil nuclear expansion

By Rebecca Bream in London
Published: July 16 2008 23:16

Rolls-Royce, the UK aircraft engine maker, plans to expand its nuclear business to take advantage of the building of more reactors around the world.
The company has been involved in the military nuclear industry in the UK for 50 years, making reactors to power Royal Navy submarines. Now, it sees great growth potential in the civil industry and will on Thursday launch a nuclear power division focused on winning orders for reactor components such as pumps and control systems.

Jonathan Hale, director of business development, said concerns about global warming, energy security and the high cost of fossil fuels meant that nuclear power was growing in popularity and could be worth £50bn ($100bn) in 15 years.
The group’s new civil nuclear division aims to take advantage of this and “in time” could grow to be as big as the group’s marine division, which makes power and propulsion systems for ships and submarines. Rolls-Royce has one business, Data Solutions & Systems, that makes control and instrumentation systems for nuclear reactors, which is worth £50m in annual sales.
The company was also involved in the construction of the Sizewell B nuclear power station in the early 1990s, the last reactor to be built in the UK. Mr Hale said his group’s experience gave it a head start over competitors, particularly at a time when nuclear skills were thin on the ground. “We have more nuclear capability than any UK company by far,” he said, pointing to the group’s supply chain of companies employing a total of 20,000 people.
George Lowe, head of the civil nuclear division, said the group would be able to supply components for several reactor designs and had been in talks with energy companies and reactor manufacturers “for a number of months”.
Mr Lowe said Rolls-Royce was working both for Areva of France and Westinghouse of the US, the two manufacturers that are expected to supply most of the reactors for the next wave of nuclear power plants in the UK. He believed the UK had the chance to be at the forefront of the nuclear renaissance and develop skills and businesses that could be exported worldwide.
“But it all depends on the pace with which the government selects the sites for new reactors and that the planning approvals process goes forward in accordance with recent changes,” he said. If the nuclear industry in the UK grew at a slower pace than hoped, “there are other opportunities for us on a ­global stage,” Mr Lowe said.
Four nuclear plants are being built in the US, with several more in the planning stages. About 20 reactors are being built in Asia, mostly in China. In Europe, reactors are under construction in Finland and France, with another set to start soon in Bulgaria.
Copyright The Financial Times Limited 2008

All aboard the nuclear power superjet

Just don't ask about the landing strip
Climate change and the oil crisis are being used to project atomic energy as a green panacea. In fact it is a reckless gamble

Ulrich Beck
The Guardian,
Thursday July 17, 2008

Are we witnessing the beginning of a real-life satire, at once amusing and terrifying? Its theme is the smothering of the nuclear power risk by catastrophic climate change and the oil crisis. At the G8 meeting in Hokkaido last week the US president, George Bush, reiterated his plea for the construction of new nuclear energy plants. At the start of this week, Gordon Brown, announced the fast-tracking of eight new reactors and called for "a renaissance of nuclear power" in a "post-oil economy". It is as if a world that wishes to save the climate must learn to appreciate the beauty of nuclear energy - or "green energy", as Germany's Christian Democratic Union general secretary Ronald Pofalla has rechristened it. Given this new turn in the politics of language, we should remind ourselves of the following.
A couple of years ago the US Congress established an expert commission to develop a language or symbolism capable of warning against the threats posed by American nuclear waste dumps 10,000 years from now. The problem to be solved was: how must concepts and symbols be designed in order to convey a message to future generations, millennia from now? The commission included physicists, anthropologists, linguists, neuroscientists, psychologists, molecular biologists, classical scholars, artists, and so on.
The experts looked for models among the oldest symbols of humanity. They studied the construction of Stonehenge and the pyramids and examined the historical reception of Homer and the Bible. But these reached back at most a couple of thousand years, not 10,000. The anthropologists recommended the symbol of the skull and crossbones. However, a historian reminded the commission that the skull and crossbones symbolised resurrection for the alchemists, and a psychologist conducted an experiment with three-year-olds: if the symbol was affixed to a bottle they anxiously shouted "poison!", but if it was placed on a wall they enthusiastically yelled "pirates!".
Even our language fails, then, when faced with the challenge of alerting future generations to the dangers we have introduced into the world through the use of nuclear power. Seen in this light, the actors who are supposed to be the guarantors of security and rationality - the state, science and industry - are engaged in a highly ambivalent game. They are no longer trustees but suspects, no longer managers of risks but also sources of risks. For they are urging the population to climb into an aircraft for which a landing strip has not yet been built.
The "existential concern" being awakened across the world by global risks has led to a contest to suppress large-scale risks in political discussion. The incalculable dangers to which climate change is giving rise are supposed to be "combated" with the incalculable dangers associated with nuclear power plants. Many decisions over large-scale risks are not a matter of choosing between safe and risky alternatives, but between different risky alternatives, and often between alternatives whose risks are too qualitatively different to easily compare. Existing forms of scientific and public discourse are no match for such considerations. Here governments adopt the strategy of deliberate simplification. They present each specific decision as one between safe and risky alternatives, while playing down the uncertainties of nuclear energy and focusing attention on the oil crisis and climate change.
The striking fact is that the lines of conflict within world-risk society are cultural ones. The more global risks escape the usual methods of scientific calculation and turn out to be a domain of relative non-knowledge, the more important becomes the cultural perception of specific global risks - that is, the belief in their reality or unreality. In the case of nuclear power, we are witnessing a clash of risk cultures. Thus the Chernobyl experience is perceived differently in Germany and France, Britain, Spain or Ukraine and Russia. For many Europeans the threats posed by climate change now loom much more largely than nuclear power or terrorism.
Now that climate change is regarded as man-made, and its catastrophic impacts viewed as inevitable, the cards are being reshuffled in society and politics. But it is completely mistaken to represent climate change as an unavoidable path to human destruction. For climate change opens up unexpected opportunities to rewrite the priorities and rules of politics. Although the rise in the price of oil benefits the climate, it comes with the threat of mass decline. The explosion in energy costs is gnawing away at the standard of living and is giving rise to a risk of poverty at the heart of society. As a consequence, the priority which was still accorded energy security 20 years after Chernobyl is being undermined by the question of how long consumers can maintain their standards of living in the face of the steady increase in energy prices.
Yet to disregard the "vestigial risk" of nuclear energy is to misunderstand the cultural and political dynamic of the "residual-risk-society". The most tenacious, convincing and effective critics of nuclear energy are not the greens - the most influential opponent of the nuclear industry is the nuclear industry itself.
Even if politicians were successful in the semantic reinvention of nuclear power as green electricity, and even if the opposing social movements were to dissipate their energy through fragmentation, this is all nullified by the real opposing force of the threat. It is constant, permanent and remains present even when exhausted demonstrators have long since given up. The probability of improbable accidents increases with the number of "green" nuclear plants; each "occurrence" awakens memories of all the others, across the world.
For risk is not synonymous with catastrophe. Risk means the anticipation of catastrophe, not just in a specific place but everywhere. It doesn't even have to come to a mini-Chernobyl in Europe. The global public need only get wind of negligence and "human error" somewhere in the world and suddenly the governments advocating "green" nuclear energy will find themselves accused of gambling recklessly and against their better judgment with the security interests of the population.
What will become of "responsible citizens" who cannot sense these threats produced by civilisation, and hence are robbed of their sovereign judgment? Consider the following thought experiment. What would happen if radioactivity caused itchiness? Realists, also known as cynics, will answer: people would invent something, for example an ointment, to "suppress" the itching. A profitable business with a good future. Of course, persuasive explanations would immediately be offered explaining that the itching was unimportant, that it could be traced back to other factors. Presumably such attempts to explain things away would have a poor chance of survival if everyone ran around with skin rashes scratching themselves and fashion shoots and business meetings were accompanied by incessant scratching. Then the social and political ways of dealing with modern large-scale hazards would face a completely different situation because the issue under dispute and negotiation would be culturally visible.
· Ulrich Beck is author of World Risk Society and professor of sociology at Munich's Ludwig-Maximilians University and the London School of Economics

Japanese rivals seek car engine of the future

By Jonathan Soble in Tokyo
Published: July 16 2008 23:13

Japanese carmakers are lining up behind competing green technologies as they race to develop even lower emission successors to petrol-electric hybrid cars.
A string of recent launches and announcements has clarified the shape of the battle lines being drawn by Toyota – maker of the Prius hybrid and the reigning champion of environmentally friendly vehicles – and rivals such as Honda, Nissan and Mitsubishi Motors.

At stake is the chance to set standards for the next generation of green cars in the same way that Toyota has put its stamp on hybrids – an increasingly urgent goal as expensive oil and concerns about global warming stoke demand for alternatives to petrol.
Big carmakers are only just beginning to produce vehicles that do away with petrol altogether – mostly on an experimental basis, although some versions will be avail­able for sale as early as next year.
At the centre of the technology battle is a debate over two competing power sources: plug-in rechargeable batteries and fuel cells that generate electric power using hydrogen.
Honda’s chief executive Takeo Fukui – a leading proponent of fuel cells – has dismissed batteries as an insufficiently brawny “golf cart” technology.
Honda last month became the first carmaker to offer a hydrogen-powered car to paying customers, leasing its FCX Clarity – whose only exhaust pipe emission is water – to a handful of customers in California.
The company is expanding its range of hybrids but Mr Fukui says that it will be limited to smaller cars and that Honda has no plans to build a battery-only electric vehicle.
Its engineers believe even the latest lithium-ion batteries are subject to fundamental limits that make them suitable only for small cars that make journeys of less than 100km.
According to Mr Fukui, to power a mid-size Accord sedan to its current refuelling range of about 600km, “two thirds of the car would have to be a battery”.
On the other side of the divide, Nissan and Mitsubishi believe the scope for battery improvements is far greater, so all-electric cars will be commercially viable in the near future. Nissan plans to launch an electric car powered by a lithium-ion battery in Japan and the US in 2010. Mitsubishi will be even quicker to market, offering its MiEV ultra-compact in Japan next year.
According to Nissan, the batteries it is developing with NEC, the Japanese electronics group, will give its car a range of 160km and be 80 per cent rechargeable in 20 minutes. “We think a range of 300km or so could be possible in a few years,” Nissan says.
For battery advocates, hydrogen looks like an unnecessarily complex and expensive answer to the industry’s carbon problem.
Honda’s FCX Clarity costs Y100m ($950,000) a vehicle to produce, boosting the case made by critics. Honda admits it will take a decade to bring the cost down to a still pricey Y10m.
Standing above the debate so far has been Toyota, which is busy enjoying the benefits of the hybrid boom. Unsurprisingly for a cautious and cash-rich incumbent, it is covering all the bases in new technology – pushing battery improvements through its joint venture with Panasonic while also developing fuel cell prototypes.
Yet there are signs Toyota is leaning more towards batteries than fuel cells. Its chief executive, Katsuaki Watanabe, has said fuel cells are at least a decade away from becoming a viable technology.
The company is working on a plug-in version of the Prius that will depend more on the electric side of its power sources and has promised hybrid versions of all its cars by the 2020s.
Still, according to Koji Endo of Credit Suisse, Toyota has not committed itself just yet and remains in a position to be kingmaker in the next technology round.
“Toyota has enough money to hedge its bets and move into whichever technology starts to emerge as the winner,” he says.
Copyright The Financial Times Limited 2008

China Uses Games to Showcase Gains in Energy Efficiency

By DAVID WINNING: July 17, 2008

BEIJING -- The Olympic Games in Beijing next month won't be just about showcasing athletic prowess. China is also promoting the strides it is making in energy efficiency.
Solar panels help power the National Indoor Stadium; advanced insulation ensures low heat transfer at other venues; and a near-zero-energy building produces almost all of its own heating and energy in Olympic Village.
But the jury is out on whether this technology can be transferred anytime soon to other parts of China, particularly the poorest cities in provinces like Guizhou, Qinghai or Gansu.
Part of the problem is cost.
In a country where concrete is the dominant building material and two-thirds of energy comes from coal, much of the technology on display is relatively unproven or too expensive to gain traction quickly.
"The Olympics may be a good venue to unveil some of the technologies that China has been developing, but I'm skeptical that it will precipitate a flowering of green technologies nationwide," said Damien Ma, a China analyst at Eurasia Group.
"Some of the technologies will take years to be viable nationwide and would require significant financial backing from the private sector and the state," he said, noting that China spends just a fraction of what developed countries do on research and development.
China, the second-largest energy consumer after the U.S., has embraced the need to boost energy efficiency and cut pollution as it worries about the environment and its reliance on foreign oil.
In 2005, it introduced the Renewable Energy Law as it set about diversifying its energy mix away from coal to promote clean technology.
Under the 11th Five-Year Plan, which covers 2006-10, China aims to cut energy consumption per unit of gross domestic product by 20% and to lower pollution -- specifically sulfur dioxide -- by 10%.
But progress has been slow and the energy-efficiency target is in danger of slipping out of reach. In the first quarter, China's energy use per GDP unit fell 2.62% from a year earlier.
"I think at this point the central government is fully aware of the crippling effect [that] environmental degradation could have on China's economic growth over the next several decades, and top leaders are serious about remedying what they view as an unsustainable growth model," Mr. Ma said. "But implementation at the local level is key."
While the Olympics isn't the catalyst for China's push to become energy efficient, it has cast a spotlight on promising technologies.
China's National Indoor Stadium has a hidden system of 1,124 solar panels capable of producing 100 kilowatts of electricity a day. Even athletes showering in Olympic Village have reason to cheer solar power.
"The hot water in the rooms is provided by photothermo technology," said Ding Jianming, deputy chief engineer of Beijing 2008 Project Construction Headquarters Office.
In total, solar-power systems and networks to Game venues will have a capacity of more than 480 kilowatts.
But it isn't just solar power.
The National Indoor Stadium also has 19,000 square meters of glass that reduces heat loss and acts as a filter for ultraviolet rays.
According to the Beijing Organizing Committee of the Olympic Games, the new buildings incorporating energy-efficient techniques will save 75,000 tons of coal a year.
This is giving foreign companies, as well as Chinese competitors, a chance to demonstrate their energy-saving products and technology. German engineering conglomerate Siemens AG, for example, has supplied its Integrated Stadium Solution system for managing electric installations in the Water Cube, where swimming will be held.
Mark Ginsberg, a member of the board of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, said Olympic Village could provide lasting lessons for China on energy efficiency.
The U.S. has provided technical assistance for the 42 six-story buildings in the village to make them about 50% more efficient. These buildings, which will house 17,000 athletes, will be sold as luxury apartments after the Games.
At the heart of Olympic Village is a near-zero-energy building, a building that is so energy efficient it produces almost all of its own heating and energy. It does this by using photovoltaic cells, roof windmills and efficient lighting, heating and cooling systems.
"We are optimistic that as the techniques get into the marketplace, as people become more familiar with how we built these kinds of buildings, then the price will come down" and these buildings will increasingly be rolled out in China and elsewhere, Mr. Ginsberg said.
Write to David Winning at

Fuel for thought

Published: July 16, 2008

European officials have the foresight and flexibility to admit that the world's romance with biofuels is going sour. Why can't the United States do the same?
Evidence is mounting that farming to meet the demand for biofuel feedstocks - mostly corn, soybeans, and sugar cane - is contributing to rising world food prices and deforestation. And the energy needed to produce fuel from food can cause a net increase in carbon emissions.
Faced with the facts, the Europeans didn't flinch. British and German energy ministers have recommended that their own ambitious production targets be scaled back. The European Parliament is considering new requirements that 20 percent of its biofuels come from algae or other non-farm sources.
By contrast, the U.S. Congress refuses to reconsider the mandates set out in the 2007 energy bill, which requires that 36 billion gallons of biofuels be produced each year by 2022. Already, a quarter of the U.S. corn crop goes to biofuels. The farm bill that passed last month does make a nod to less damaging alternative feedstocks, such as switchgrass, but there is no legislative vehicle on the horizon to revisit the overall mandates. America needs more thoughtful ways to encourage alternative fuels.

OECD report says massive biofuel subsidies not helping to cut greenhouse gases

The Associated Press
Published: July 16, 2008

BRUSSELS, Belgium: Massive government subsidies for biofuels are not helping to reduce greenhouse gas emissions, according to an OECD report released Wednesday.
The U.S., EU and Canada spent €11 billion (US$17.6 billion) in public money to support energy crops in 2006 — and will more than double that over the next 10 years, according to estimates by the Paris-based Organization for Economic Cooperation and Development.
But this failed to reduce greenhouse gas emissions from transport by more than 1 percent, the OECD said — recommending that governments would see more savings from a lower-cost push toward cutting energy use overall.
"Biofuels produced from wheat, sugar beet or vegetable oils rarely provide greenhouse gas emission savings of more than 30 percent to 60 percent, while corn — maize — based ethanol generally allows for savings of less than 30 percent," the report said.
"Generally the costs of reducing greenhouse gas emissions by saving energy are lower than by switching to alternative energy sources, in particular biofuels," it said.

Biofuels can generate large amounts of greenhouse gas as land is cleared and fertilizer, used to help the crops grow, triggers soil bacteria to release some global warming gases.
Bioethanol or biodiesel made from these crops are usually blended into fuel to cut down the overall amount of oil burned in vehicles.
The OECD says efforts to substitute fossil fuels have not been very successful — fossil fuel use in transport is down less than 1 percent and by 2 percent to 3 percent for EU diesel.
"These relatively modest effects come at a projected cost equivalent to about US$960 (€600) to US$1,700 (€1,063) per metric ton (1.1 ton) of carbon dioxide equivalent saved, or of roughly US$0.80 (€0.50) to US$7 (€4.38) per liter (a quarter of a gallon) of fossil fuel not used," it said.
Ethanol from sugarcane grown in Brazil tends to be far more effective at reducing climate change emissions, it said.
The OECD called for governments to put the priority on reducing energy consumption by shifting to more energy efficient forms of transport and improving fuel efficiency for all vehicles.
It said governments could also more easily make cheaper emission reductions by insulating buildings better to save on heating costs.

Ethanol Backers, Critics Ratchet Up the Rhetoric

By LAUREN ETTERJuly 17, 2008;

The battle over biofuels heated up Wednesday as a Paris-based intergovernmental group criticized crop-based fuels for driving up food prices and ethanol supporters counterpunched.
The Organization for Economic Cooperation and Development said continued growth in biofuels production would push food prices higher and contribute to "food insecurity for the most vulnerable populations in developing countries," while having a "limited impact on reducing greenhouse gases and improving energy security."
The group's report also said policy makers seeking to reduce dependence on foreign oil and to lower energy prices should redirect their focus toward encouraging less energy consumption.
Separately, U.S. Federal Reserve Chairman Ben Bernanke said he believed that removing a tariff on imported ethanol "would be a good step to take." The U.S. imposes a 54-cent-a-gallon tariff on most imported ethanol. The U.S. government has required the oil industry to blend nine billion gallons of ethanol into the nation's gasoline supply this year and to increase that to 15 billion gallons by 2015.
Policy makers around the globe have been under mounting pressure to roll back incentives for biofuels production as food-price inflation cuts deeper into consumers' pockets amid higher oil prices and the U.S. credit crisis.
The U.S. Agriculture Department said it expects food prices to increase by up to 5.5% this year, the largest annual increase in 18 years. Last year, food prices rose 4%. Increases in many other countries, particularly developing ones, have been much higher, sparking riots in some places.
Ethanol producers say biofuels are being used as a scapegoat and that high oil prices are the bigger contributor to food-price inflation. On Wednesday a coalition of ethanol trade groups ran a one-page ad in the Financial Times newspaper slamming the president of the Organization of the Petroleum Exporting Countries for saying that "the intrusion of bioethanol on the market" is jacking up oil prices.
The trade groups, including the U.S.-based Renewable Fuels Association, said that ethanol is helping to keep gasoline prices lower at the pump and that "efforts to obfuscate and mislead the public about biofuels will do nothing to alleviate the energy crisis gripping the globe."
Grain prices have soared in response to a variety of factors, including increased demand for grain in China, India and other developing countries, and diversion of cropland to grow fuel.
The U.S. government says that biofuels accounted for up to 5% of the overall 4.8% rise in the consumer price index for all food for the first four months of 2008. Globally, biofuels have contributed up to 10% of the overall rise in food prices as measured by the International Monetary Fund's food-commodity price index, according to the U.S. government.
Corn prices softened a bit early this week, but Wednesday they crept back up amid concerns that hot, dry weather could hurt the U.S. corn crop. On the Chicago Board of Trade, the corn contract for September delivery closed at $6.58 a bushel.
The Agriculture Department is under pressure to allow farmers to plant crops on millions of acres set aside under the Conservation Reserve Program to protect sensitive habitats. An agency spokeswoman said an announcement on the CRP is expected "in the coming days."
Texas Gov. Rick Perry, at the urging of food companies and livestock producers, has asked the Environmental Protection Agency to temporarily waive the mandate that requires the oil industry to use nine billion gallons of ethanol. An EPA spokesman said the agency hopes to issue a decision by July 24.
Write to Lauren Etter at