Wind energy output is trumping targets, and competition between operators is fierce, but coal still reigns supreme
Jonathan Watts in Dabancheng
The Guardian,
Friday July 25 2008
In the vast natural wind tunnel that is Dabancheng, the gales that roar between the snow-capped mountain ridges get so strong that trains have been gusted off railway tracks and lorries overturned.
Such is the ferocity of the elements that police sometimes have to stop the traffic that passes through this arid, six-mile-wide plain on what was once part of the Silk Road. That used to be bad for business in Xinjiang, the most westerly region of China, which formerly depended on the trade route between central Asia and the densely populated cities in the far east.
Today, however, the gales themselves have become big business in Dabancheng. The area is home to one of Asia's biggest wind farms and a pioneer in a Chinese industry that is forecast to lead the world by the end of next year.
From the road, 118 giant turbines are visible miles before you reach them. Tourists stop for pictures, hair blowing as they pose near the whirring towers.
It is a spectacular sight: fields of spinning blades harvesting energy and transforming it into electricity for the nearby city of Urumqi. A few years ago, this was the only wind farm of such a size in China. But now, bigger facilities have been built or are under construction in Gansu, Inner Mongolia and Jiangsu. Since 2005, the country's wind generation capacity has increased by more than 100% a year. The government's renewable energy policy aims to procure 15% of the country's energy from non-carbon sources by 2020, twice the proportion of 2005.
Wind power has taken off faster than the government planned. This year, policymakers had to double their wind power prediction for 2010, having reached the old goal of 5 gigawatts three years ahead of schedule. On current trends, it will almost definitely have to be doubled again.
Turning point
"China is witnessing the start of a golden age of wind power development, and the magnitude of growth has caught even policymakers off guard," wrote Junfeng Li, secretary general of the China Renewable Energy Industries Association, in a paper last month. "It is widely believed that wind power will be able to compete with coal generation by as early as 2015. That will be the turning point in China, which by then will be the world's largest energy consumer."
China's environmental woes are well documented. Less understood is how the country is attempting to deal with those problems, particularly through the recent, spectacular growth of the renewable energy market.
Strong state policies, rising coal prices and improved technology have prompted a surge of investment into green energy, particularly wind power.
"China's wind energy market is unrecognisable from two years ago, It is huge, huge huge. But it is not realised yet in the outside world," said Steve Sawyer, secretary general of the Global Wind Energy Council. He said China might have already overtaken the US as the planet's biggest turbine manufacturer. Given the ambitious plans for wind farms, it could also install the most new generating capacity by 2010.
"A few years ago wind energy was boutique, something to show off to foreigners to prove how green they are but now it is a very serious part of their energy policy," Sawyer said.
"They can make things happen so quickly in China compared to the west. When they make up their minds, it is incredible how fast things happen."
At the end of last year, China had 6 gigawatts of installed wind power generating capacity, covering 202 projects. Another 445 sites have been targeted for development in the near future - according to data from Azure International, a consultancy in Beijing.
The signs of expansion are everywhere. At Dabancheng, new towers are being erected. One of the main operators - Xijiang Tianfang Wind Power - already produces 110,000 kilowatt-hours of electricity and managers say they plan to add 50,000 more by November.
This has already been overtaken by Huitengxile Huadian Wind Farm in Inner Mongolia, which supplies electricity to Beijing. Cows and camels roam between the towers of what started in 1996 as an experimental site, but has now been ramped up to the biggest wind farm in China.
"We call it the Three Gorges of the sky. The hydroelectric dam there taps the water, here we tap the wind," said Li Yanjun, the duty operator "I've been here since the beginning. The turbines are like my children. It took 10 years to reach 64,000 kilowatt/hours because that period was the research phase, but now the government is committed to wind energy so we can grow quickly."
We went inside one of the taller towers to a small room with computers controlling the direction of the 68-metre-high turbine. The sound of the whirring blades vibrated through the enclosed chamber as Li pointed to the readings: Wind speed 10.4km per hour (6.4mph), power generation 1,000 kilowatts.
"This is the future in China," said Li. "Everyone is opting for big turbines. It is more economic to have one 1,500 kw turbine than two 750kw turbines and the maintenance costs are lower."
But even this will soon be trumped. At Jiuquan in Gansu province, the ground has been broken for what could one day be the world's biggest wind farm.
Even the first phase - to be completed by 2010 - will add 3.8 gigawatts, more than the wind generating capacity of the entire country at the end of 2006. When the project is finished, it will be almost three times bigger and linked up to a "wind energy corridor" through Gansu which will be connected to an expanded national grid.
As in India and Brazil, investment in the industry is surging. These three countries' share of new wind financing in the world rose from 12% to 22% between 2004 and 2007.
But the growth is from a tiny base. The industry remains minuscule compared with coal. China's wind industry is still dominated by five state-owned power generation utilities and a handful of other energy-related state-owned enterprises. It was these giant companies that snapped up the first set of "national concession project" government tenders for large wind power generation projects.
Competition is heating up. The turbine industry used to be dominated by foreign manufacturers, such as Vestas of Denmark, Gamesa of Spain and GE of the US. But last year for the first time, domestic manufacturers grabbed more than 50% of the market.
The biggest player by market share is Goldwind, which is based in Urumqi and piloted much of its technology in nearby Dabancheng. The firm says it has grown by more than 100% for each of the past eight years. Now it produces its own big 1.5 megawatts turbines and is developing a model with twice the capacity that it aims to start testing by 2009.
"There is still a gap between Chinese companies and western companies in terms of research and development because we started later," said a Goldwind executive, who asked to remain nameless. "Most of our technology comes from Germany. But in the first half of this year, we bought the company that taught us how to do things. That has solved the problem of research and development. Now we want to start selling overseas."
Goldwind recently made its first sale of turbines to Cuba and it and other domestic manufacturers have been in talks with potential buyers in Pakistan, the Philippines and South Korea. The government already promotes coal technology in energy deals with countries in Africa and the Middle East. "In this context it is reasonable to expect Chinese wind turbines to find receptive export markets in the near term despite the financing and insurance related challenges stemming from limited track-record for many products," said Sebastian Meyer, director of research and advisory at Azure International. The biggest growth, however, is likely to be in the domestic market. In addition to the current 6 gigawatts of generating capacity, Azure estimates that a staggering 130 gigawatts is in the pipeline in China.
Established turbine manufacturers continue to ramp up production even as new entrants try to squeeze their way into the market. If all of their plans are added together, China's new production capacity could surge to 11 gigawatts this year - almost three times the amount installed last year.
This supply considerably exceeds current demand, which means the waiting times for turbines should decrease.
"It is probably going to be the most competitive turbine market in the world very quickly. Elsewhere, it is a seller's market. Now in China, we are on the tipping point of it becoming a buyers' market," according to Meyer. "In 2008 it is likely to grow 1.5 times so growth is actually decelerating, but in terms of volume, size and scale this has become a respectable market globally."
Competition
Rising demand for electricity and tighter safety regulations in mines have driven up the price of domestic coal, which supplies 70% of China's energy needs. Domestic prices are now so high that many power plants in Guangdong and elsewhere in southern China import coal from Australia.
This year, the big five utilities are bleeding money because coal costs have been steadily rising. They cannot pass costs on to their customers because of government regulation of power prices.
Even so, wind energy produces a kilowatt-hour of electricity at about twice the cost of a Chinese coal-fired power plant. Even with the recent price rises, coal remains king in China. To meet the demands of the fast growing economy, power plants and factories burn 2bn tonnes of coal each year, about a third of the world's total.
This is why China has overtaken the US as the biggest emitter of greenhouse gases and it is unlikely to fall back to second place for decades.
Wind is also far less favoured than hydro-electricity. Take the dams out of the energy mix and renewables will barely manage 1% of all power generation by 2010 and only 3% by 2020 even in regions with well-developed grids. That is a low proportion compared with the world leader Denmark, which gets about 20% of its electricity from wind.
Long term, the future of wind power is secured by government commitments to renewable energy. The authorities are increasingly alarmed by global warming, which is melting glaciers in Tibet and Xinjiang that provide drinking water to tens of millions of people.
Extreme weather conditions have also led some regions to suffer the worst snowstorms and droughts in decades. Last week, officials in Sichuan province warned that summer flooding was likely to start earlier and be the biggest in a decade because of abnormally high rainfall in May.
On the global stage, China has refused to set binding targets to reduce carbon emissions. But the official rhetoric has shifted. At the end of last month, President Hu Jintao called a politburo study session on the subject of climate change, which energy industry insiders described as an unprecedented level of attention to the problem.
"Our task is tough, and our time is limited. Party organisations and governments at all levels must give priority to emission reduction and bring the idea deep into people's hearts," the president was quoted as saying by the state-run Xinhua news agency.
Environmental groups say the country needs to set more ambitious goals for wind power. With the right government policy, Greenpeace predicts that China's installed wind power capacity could reach 122 GW by 2020, equivalent to the capacity of five Three Gorges Dams, or 10% of the total installed capacity of the country.
In the near future, more and bigger turbines will be spread over a wider area of China. As well as manufacturing more wind power equipment than any other country, analysts predict that China may soon be the world leader in installation.
"China is catching up fast," said Meyer. "The market is ripe for China not replicating what Europe and US did in the past, but doing it better."
Friday 25 July 2008
New biofuels lobbying group formed by some of the biggest players in agribusiness
The Associated Press
Published: July 25, 2008
ST. LOUIS: The argument over using crops to make biofuels is about to get a little louder, courtesy of a new group formed by some of the biggest agribusiness companies in the world.
The new group — formed by Monsanto Co., Archer Daniels Midland, Deere & Co. and DuPont Co. — announced Thursday it will use national advertisements and lobbyists on Capitol Hill to build the case that new technologies can make it feasible to produce crop-based fuels like ethanol and biodiesel, even as grain prices climb worldwide.
Just a niche market three years ago, the biofuels industry has blossomed because of federal mandates requiring the United States to use 9 billion gallons (34 billion liters) of alternative fuel annually by 2009.
The mandates are under attack from a wide variety of groups that blame the new industry for rising food prices that have sparked riots and hoarding everywhere from Haiti to southeast Asia.
Organizers of the newly formed Alliance for Abundant Food and Energy said Thursday they want to change the debate about biofuels. Their plan is to convince consumers and politicians that both goals can be met at once by increasing agricultural productivity.
"I think the only path forward is one that meets both food and energy security demands," said Monsanto's Chief Technology Officer Robert Fraley. "I think we can add a component of science and technological perspective to the discussion."
Monsanto hopes to double the yield-per-acre (yield-per-hectare) of crops like corn and soybeans by 2030, he said. Pioneer Hi-Bred, a division of DuPont, plans to boost yields of its seeds by 40 percent within a decade.
The alliance plans to lobby federal lawmakers to keep current ethanol mandates while increasing funding for agricultural research and development that could increase crop yields. It also plans to try to sway consumers by telling them new technologies will make it possible to grow enough food to affordably fill gas tanks and grocery carts.
Companies behind the alliance stand to benefit from any increase in farming and grain consumption, whether it be increased use of Archer Daniels Midland's new ethanol plants, Monsanto's seeds or Deere & Cos. farming equipment.
The alliance didn't say how much it will spend on the campaign, beyond saying the project has a budget worth several million dollars. But even that kind of cash doesn't guarantee Congress won't revisit the wisdom of biofuels mandates.
The alliance faces opposition from well-funded agricultural interests that are suffering under rising in food costs, including the American Meat Institute and the Grocery Manufacturers Association.
The GMA is already funding a campaign to highlight the negative effect of rising grain costs for average consumers, and it wants Congress to reconsider the federal ethanol mandates.
The GMA isn't swayed by the idea of waiting for agricultural productivity to improve, GMA Vice President for federal affairs Scott Faber said in a statement.
"While improvements in global agriculture are vital, this work must not distract us from the fact that while we wait, millions of people will be pushed deeper into hunger and poverty because we are diverting more and more food and feed supplies to producing ethanol," Faber said in a statement. "Congress and the administration can take immediate action to curb hunger by revisiting these flawed policies."
About 22 percent of the U.S. corn crop went to produce biofuels this year, which is virtually the same as last year, according to the National Corn Growers Association. A full 33 percent of this year's harvest, or 3.9 billion bushels, is expected to go toward ethanol production.
While virtually all experts agree that using crops for biofuels drives up the price of grain, opinions vary greatly as to how much.
White House economic advisers said the ethanol industry accounts for just 2 percent to 3 percent of the recent jump in grain prices, which are up more than 40 percent this year over last year. Estimates cited by the International Food Policy Research Institute and others say biofuels account for more than 30 percent of the increase.
Cutting back U.S. ethanol mandates would badly damage a booming U.S. biofuels industry that is just now starting to deliver domestically produced fuel to consumers, said Archer Daniels Midland Vice President Todd Werpy.
The newly built infrastructure could be used in future years to blend and deliver biofuels that are not crop based, such as ethanol made from grass or wood chips, he said.
"We will lose valuable ground that will take years to make up," Werpy said.
Published: July 25, 2008
ST. LOUIS: The argument over using crops to make biofuels is about to get a little louder, courtesy of a new group formed by some of the biggest agribusiness companies in the world.
The new group — formed by Monsanto Co., Archer Daniels Midland, Deere & Co. and DuPont Co. — announced Thursday it will use national advertisements and lobbyists on Capitol Hill to build the case that new technologies can make it feasible to produce crop-based fuels like ethanol and biodiesel, even as grain prices climb worldwide.
Just a niche market three years ago, the biofuels industry has blossomed because of federal mandates requiring the United States to use 9 billion gallons (34 billion liters) of alternative fuel annually by 2009.
The mandates are under attack from a wide variety of groups that blame the new industry for rising food prices that have sparked riots and hoarding everywhere from Haiti to southeast Asia.
Organizers of the newly formed Alliance for Abundant Food and Energy said Thursday they want to change the debate about biofuels. Their plan is to convince consumers and politicians that both goals can be met at once by increasing agricultural productivity.
"I think the only path forward is one that meets both food and energy security demands," said Monsanto's Chief Technology Officer Robert Fraley. "I think we can add a component of science and technological perspective to the discussion."
Monsanto hopes to double the yield-per-acre (yield-per-hectare) of crops like corn and soybeans by 2030, he said. Pioneer Hi-Bred, a division of DuPont, plans to boost yields of its seeds by 40 percent within a decade.
The alliance plans to lobby federal lawmakers to keep current ethanol mandates while increasing funding for agricultural research and development that could increase crop yields. It also plans to try to sway consumers by telling them new technologies will make it possible to grow enough food to affordably fill gas tanks and grocery carts.
Companies behind the alliance stand to benefit from any increase in farming and grain consumption, whether it be increased use of Archer Daniels Midland's new ethanol plants, Monsanto's seeds or Deere & Cos. farming equipment.
The alliance didn't say how much it will spend on the campaign, beyond saying the project has a budget worth several million dollars. But even that kind of cash doesn't guarantee Congress won't revisit the wisdom of biofuels mandates.
The alliance faces opposition from well-funded agricultural interests that are suffering under rising in food costs, including the American Meat Institute and the Grocery Manufacturers Association.
The GMA is already funding a campaign to highlight the negative effect of rising grain costs for average consumers, and it wants Congress to reconsider the federal ethanol mandates.
The GMA isn't swayed by the idea of waiting for agricultural productivity to improve, GMA Vice President for federal affairs Scott Faber said in a statement.
"While improvements in global agriculture are vital, this work must not distract us from the fact that while we wait, millions of people will be pushed deeper into hunger and poverty because we are diverting more and more food and feed supplies to producing ethanol," Faber said in a statement. "Congress and the administration can take immediate action to curb hunger by revisiting these flawed policies."
About 22 percent of the U.S. corn crop went to produce biofuels this year, which is virtually the same as last year, according to the National Corn Growers Association. A full 33 percent of this year's harvest, or 3.9 billion bushels, is expected to go toward ethanol production.
While virtually all experts agree that using crops for biofuels drives up the price of grain, opinions vary greatly as to how much.
White House economic advisers said the ethanol industry accounts for just 2 percent to 3 percent of the recent jump in grain prices, which are up more than 40 percent this year over last year. Estimates cited by the International Food Policy Research Institute and others say biofuels account for more than 30 percent of the increase.
Cutting back U.S. ethanol mandates would badly damage a booming U.S. biofuels industry that is just now starting to deliver domestically produced fuel to consumers, said Archer Daniels Midland Vice President Todd Werpy.
The newly built infrastructure could be used in future years to blend and deliver biofuels that are not crop based, such as ethanol made from grass or wood chips, he said.
"We will lose valuable ground that will take years to make up," Werpy said.
Redress sought as Egypt halts new plant
By Heba Saleh in Cairo
Published: July 25 2008 03:00
Egypt is being pressed by a Canadian company for compensation after construction of a $1.4bn fertiliser plant on the country's Mediterranean coast was halted in a case closely followed by foreign investors.
Agrium, a fertiliser manufacturer, says that along with its partners and international banks it has already invested $500m (€317m, £250m) in the project and that it would "aggressively" pursue full recovery of its costs, equity contribution and lost profits.
Parliament recommended in June that the plant be moved to another location in response to local protests triggered by concerns about potential damage to health and the environment.
But the government's decision to abandon the venture, of which it owns a third through state companies, surprised the business community especially as the current cabinet prides itself on its record in attracting foreign investment.
Ahmed Nazif, prime minister, cited Agrium's inability to forge a local consensus on the safety of its project as the main reason for halting it.
"The important thing if you are a foreign investor is how amicably and quickly a settlement is reached," said Simon Kitchen, economist at EFG-Hermes, the Cairo-based private investment bank.
"Any investment in an emerging market can face hiccups, but the question is how helpful is the government in resolving the dispute. It's not just foreign companies that are watching this, but also banks which provide finance because Agrium had to borrow for this project."
Agrium has not revealed any details of its discussions with the authorities except to say they are focusing on giving it a stake in a government-owned fertiliser plant in the industrial zone at the port of Damietta, a site adjacent to that of the aborted project.
Yet in a country where environmental considerations are often overlooked and where public opinion holds little sway, observers remain uncertain whether the demise of the project is a victory for civil society or whether the public has been used by hidden and more powerful interests.
Certainly feelings in Damietta have been running high with many people fearing the plant would be environmentally damaging.
"We have no statistics, but we have many cases here of renal failure," said Gamal El Beltagi, a trade unionist and one of the activists opposing the project. "The furniture industry is concentrated here and it creates pollution at every stage. We don't need Agrium here [as well]."
Unusually for Egypt, the local government authorities supported the anti-Agrium protests. They say they have earmarked for tourism the land on which the project was to be built.
But Agrium says it ob-tained all the necessary permits from a long list of official bodies, including the environment ministry.
Some speculate the uproar may have been instigated by property developers. The site of the project is bordered by both the sea and the Nile and it is only a few kilometres away from the popular beach resort of Ras el Barr.
Copyright The Financial Times Limited 2008
Published: July 25 2008 03:00
Egypt is being pressed by a Canadian company for compensation after construction of a $1.4bn fertiliser plant on the country's Mediterranean coast was halted in a case closely followed by foreign investors.
Agrium, a fertiliser manufacturer, says that along with its partners and international banks it has already invested $500m (€317m, £250m) in the project and that it would "aggressively" pursue full recovery of its costs, equity contribution and lost profits.
Parliament recommended in June that the plant be moved to another location in response to local protests triggered by concerns about potential damage to health and the environment.
But the government's decision to abandon the venture, of which it owns a third through state companies, surprised the business community especially as the current cabinet prides itself on its record in attracting foreign investment.
Ahmed Nazif, prime minister, cited Agrium's inability to forge a local consensus on the safety of its project as the main reason for halting it.
"The important thing if you are a foreign investor is how amicably and quickly a settlement is reached," said Simon Kitchen, economist at EFG-Hermes, the Cairo-based private investment bank.
"Any investment in an emerging market can face hiccups, but the question is how helpful is the government in resolving the dispute. It's not just foreign companies that are watching this, but also banks which provide finance because Agrium had to borrow for this project."
Agrium has not revealed any details of its discussions with the authorities except to say they are focusing on giving it a stake in a government-owned fertiliser plant in the industrial zone at the port of Damietta, a site adjacent to that of the aborted project.
Yet in a country where environmental considerations are often overlooked and where public opinion holds little sway, observers remain uncertain whether the demise of the project is a victory for civil society or whether the public has been used by hidden and more powerful interests.
Certainly feelings in Damietta have been running high with many people fearing the plant would be environmentally damaging.
"We have no statistics, but we have many cases here of renal failure," said Gamal El Beltagi, a trade unionist and one of the activists opposing the project. "The furniture industry is concentrated here and it creates pollution at every stage. We don't need Agrium here [as well]."
Unusually for Egypt, the local government authorities supported the anti-Agrium protests. They say they have earmarked for tourism the land on which the project was to be built.
But Agrium says it ob-tained all the necessary permits from a long list of official bodies, including the environment ministry.
Some speculate the uproar may have been instigated by property developers. The site of the project is bordered by both the sea and the Nile and it is only a few kilometres away from the popular beach resort of Ras el Barr.
Copyright The Financial Times Limited 2008
Agribusiness Group Forms To Protect Ethanol Subsidies
By DOUG CAMERONJuly 25, 2008;
A group of U.S. agribusiness companies including Archer Daniels Midland Co. are uniting in the intensifying food-versus-fuel debate, forming an alliance to promote the idea that technology can ease global supply shortages.
The Alliance for Abundant Food and Energy -- which includes seed makers Monsanto Co. and DuPont Co., as well as farm-gear maker Deere & Co. -- wants to spread its belief that renewable fuels won't cut into food supplies if new technologies, such as genetically modified crops, are used to their fullest. The group is also working hard to protect government subsidies for ethanol production.
ADM, Monsanto and others have seen their own profits soar in recent years, as booming demand for agricultural products in emerging markets has pushed up commodity prices and spurred additional production.
The alliance faces tough opposition, notably from the food producers in the U.S. that are lobbying to get ethanol subsidies scrapped or reduced.
Tyson Food Inc. Chief Executive Dick Bond attributes rising inflation in U.S. food prices to competition for corn from ethanol producers, as well as the rising global demand for protein that pushed corn and soybean prices to record levels in recent weeks. Tyson says its profits have been eroded by higher feed costs for its poultry, pork and beef processing business.
"Diverting corn to make ethanol doesn't make sense," Mr. Bond said in April. Tyson is expected to say more about the issue when it releases quarterly earnings Monday.
Echoing Mr. Bond's objections to the ethanol movement, the Grocery Manufacturers' Association says: "While improvements in global agriculture are vital, this work must not distract us from the fact that while we wait, millions of people will be pushed deeper into hunger and poverty because we are diverting more and more food and feed supplies to producing ethanol."
Prices of corn, soybeans and other crops have reached record levels in recent weeks, and global stocks are at historic lows. However, one alliance member said there wasn't a supply problem. "From a production perspective, we have abundance," said Rob Fraley, Monsanto's chief technology officer. The issue is muddled by politics and "sensational headlines," Mr. Fraley said. "What's missing is an understanding of the science and the technology."
Mr. Fraley also dismissed concerns among critics of U.S. agricultural policy that productivity is slowing. "The rate of growth is positive," he said.
"[We want to] make the same sort of gains in processing efficiency as in agricultural productivity," added Todd Werpy, vice president of research at ADM.
Current U.S. renewable-fuel policy includes a 51-cent-a-gallon subsidy on corn-produced ethanol and a tariff on imports, mainly sugar-based ethanol from Brazil.
"My fear is that if the body politic and the general public turn their back on the first generation [of ethanol], we won't have a second generation," said J.B. Penn, chief economist at John Deere.
Write to Doug Cameron at doug.cameron@dowjones.com
A group of U.S. agribusiness companies including Archer Daniels Midland Co. are uniting in the intensifying food-versus-fuel debate, forming an alliance to promote the idea that technology can ease global supply shortages.
The Alliance for Abundant Food and Energy -- which includes seed makers Monsanto Co. and DuPont Co., as well as farm-gear maker Deere & Co. -- wants to spread its belief that renewable fuels won't cut into food supplies if new technologies, such as genetically modified crops, are used to their fullest. The group is also working hard to protect government subsidies for ethanol production.
ADM, Monsanto and others have seen their own profits soar in recent years, as booming demand for agricultural products in emerging markets has pushed up commodity prices and spurred additional production.
The alliance faces tough opposition, notably from the food producers in the U.S. that are lobbying to get ethanol subsidies scrapped or reduced.
Tyson Food Inc. Chief Executive Dick Bond attributes rising inflation in U.S. food prices to competition for corn from ethanol producers, as well as the rising global demand for protein that pushed corn and soybean prices to record levels in recent weeks. Tyson says its profits have been eroded by higher feed costs for its poultry, pork and beef processing business.
"Diverting corn to make ethanol doesn't make sense," Mr. Bond said in April. Tyson is expected to say more about the issue when it releases quarterly earnings Monday.
Echoing Mr. Bond's objections to the ethanol movement, the Grocery Manufacturers' Association says: "While improvements in global agriculture are vital, this work must not distract us from the fact that while we wait, millions of people will be pushed deeper into hunger and poverty because we are diverting more and more food and feed supplies to producing ethanol."
Prices of corn, soybeans and other crops have reached record levels in recent weeks, and global stocks are at historic lows. However, one alliance member said there wasn't a supply problem. "From a production perspective, we have abundance," said Rob Fraley, Monsanto's chief technology officer. The issue is muddled by politics and "sensational headlines," Mr. Fraley said. "What's missing is an understanding of the science and the technology."
Mr. Fraley also dismissed concerns among critics of U.S. agricultural policy that productivity is slowing. "The rate of growth is positive," he said.
"[We want to] make the same sort of gains in processing efficiency as in agricultural productivity," added Todd Werpy, vice president of research at ADM.
Current U.S. renewable-fuel policy includes a 51-cent-a-gallon subsidy on corn-produced ethanol and a tariff on imports, mainly sugar-based ethanol from Brazil.
"My fear is that if the body politic and the general public turn their back on the first generation [of ethanol], we won't have a second generation," said J.B. Penn, chief economist at John Deere.
Write to Doug Cameron at doug.cameron@dowjones.com
Gassing up with garbage
By Matthew L. Wald
Published: July 24, 2008
After years of false starts, a new industry selling motor fuel made from waste is getting a big push in the United States, with the first commercial sales possible within months.
Many companies have announced plans to build plants that would take in material like wood chips, garbage or crop waste and turn out motor fuels. About 28 small plants are in advanced planning, under construction or, in a handful of cases, already up and running in test mode.
For decades scientists have known it was possible to convert waste to fuel, but in an era of cheap oil, it made little sense. With oil now trading around $125 a barrel and gasoline above $4 a gallon, the potential economics of a waste-to-fuel industry have shifted radically, setting off a frenzy to be first to market.
"I think American innovation is going to come up with the solution," said Prabhakar Nair, research chief for UOP, a company working on the problem.
Success is far from assured, however. Some of the latest announcements come from small companies whose dreams may be bigger than their bank accounts. They are counting on billions in taxpayer subsidies. Big technological hurdles remain, and even if they can be solved, no one is sure what unintended consequences will emerge or what it will really cost to produce this type of fuel.
"We desperately need it, and I personally think it's not there yet," said Steven Chu, director of the Lawrence Berkeley National Laboratory and a Nobel Prize-winning physicist. "You have to look at starts with a grain of salt, especially starts where they say, 'It's around the corner, and by the way, can you pay half the bill?' "
Still, the incentive to make fuel from something, anything, besides oil and food is greater than ever. Moreover, the U.S. government is offering grants to help plants get off the ground and subsidies for one type of fuel of $1.01 a gallon, twice the subsidy it historically offered to ethanol made from corn.
Potential controls on global warming gases would heighten the appeal of these fuels, since many of them would add little new carbon dioxide to the atmosphere.
Tellingly, the type of companies placing bets on the field has started to expand. The earliest were small start-ups founded by people with more technological vision than business experience. Now some of the giants of global business, including Honeywell, Dupont, General Motors, Shell and BP, are taking stakes in the nascent industry.
The dream of making fuel from plants is almost as old as the internal combustion engine. Henry Ford himself was fascinated by the idea, and it re-emerges in periods of fuel scarcity and high prices. These days, advancing technology has made the notion more plausible.
Virtually any material containing hydrogen, carbon and oxygen could potentially be turned into motor fuel. That includes plastics, construction debris, forest and lawn trimmings, wood chips, wheat straw and many other types of agricultural waste.
The potential fuels include ethanol, which can be blended with gasoline, or other liquids that could displace gasoline or diesel entirely. Government studies suggest the country could potentially replace half its gasoline supply in this way — even more if cars became more efficient.
The government is pushing to get the industry off the ground. Legislation passed last year mandates the use of 36 billion gallons of biofuels a year by 2022, less than half of it from corn ethanol. Almost all the rest is supposed to come from nonfood sources, though the requirement could be waived if the industry faltered.
"One has to say upfront that what Congress has done is remarkable in its bravery," said David Morris, vice president of the Institute for Local Self Reliance, a group in Minneapolis that advocates biofuels.
Much of the new money flowing into the field is coming from Silicon Valley, where the venture capitalists who gave the world the Internet revolution see an opportunity to do something similar with the fuel supply.
At Solazyme, a start-up in South San Francisco that hopes to commercialize a process for making fuel from algae, President Harrison Dillon said, "When we founded the company in 2003, we couldn't find a venture capital firm that had heard of the concept of a biofuel." Now he is backed by two such firms.
Venture capital investment in the first half of this year hit $612 million, up from $375 million in all of 2007, according to a survey by Thomson Reuters. Every few days brings another announcement. PFC Energy, a Washington consulting firm, counts projects worth perhaps $1.5 billion that will total more than 300 million gallons of capacity by 2011, if they all get built.
That is small in the scheme of American fuel demand, but it would presumably set the stage for substantial growth if those first projects prove that the economics can work.
One of the first companies to bring a plant online is KL Process Design Group, in Wyoming. With experience making corn ethanol plants, it has built a small plant meant to use pine wastes from a nearby national forest. The company is still testing its production line but hopes to begin commercial sales of ethanol late this year.
"We're still learning and tweaking, and hoping for a little bit of capital infusion," said Tom Slunecka, a vice president of the company.
Range Fuels, of Denver, is building a commercial-scale plant in Soperton, Georgia, with help from the Energy Department. That plant will take pine chips and turn them into ethanol, with commercial sales expected by late 2009 or 2010.
Some companies want to use garbage. On Friday, a company called Fulcrum BioEnergy said it would start construction later this year on a $120 million plant at the Tahoe-Reno Industrial Center, in Storey County, Nevada, to make 10.5 million gallons of ethanol a year from 90,000 tons of garbage. Operation would begin in early 2010.
In Montreal, another firm, Enerkem, plans to use arsenic-contaminated utility poles from the provincial electric company. On Wednesday, the Los Angeles County Regional Planning Commission approved a plan by BlueFire Ethanol to build a $30 million garbage-to-ethanol plant on 10 acres next to a landfill in Lancaster, California; construction will start soon, the company said.
A handful of small companies has long made a diesel replacement from waste oil, or sold kits to individuals to do the same. One company in Carthage, Missouri, even turns turkey guts into fuel. The goal of the emerging waste-to-fuel industry is more elaborate, however: to take bulky, solid feedstocks and transform them into high-grade motor fuel.
History provides plenty of warning that it will not be easy. A company called Verenium in Lafayette, Louisiana, has cut ribbons three times in one locale since 1998 on plants that would supposedly make fuel from sugar cane waste, and has yet to sell a drop because of problems converting laboratory success into smooth, commercial-scale operation.
A bigger operation, Iogen, has been running a demonstration plant in Ottawa since 2004 that can turn wheat straw into ethanol. It was expected to build a plant in Idaho but has suspended work to focus attention on a plant in Saskatchewan. "It would be our view that there are substantial challenges in scaling up a big new biochemical process," said Brian Foody, the president.
The Energy Department early last year picked six projects as most likely to succeed, and offered each of them tens of millions of dollars. Iogen's Idaho project was among them; so was a plant in Kansas proposed by a Florida company, Alico, that has also been abandoned. Still, increasing interest from big companies — ones with a track record of solving technical problems — suggests that a waste-to-fuel industry may not remain out of reach forever.
General Motors has invested an undisclosed sum in two companies, Coskata, of Warrenville, Illinois, and Macoma, of Lebanon, New Hampshire, that aim to turn crop wastes into ethanol.
DuPont, one of the world's largest chemical companies, has joined forces with a company called Genencor, announcing plans to commercialize a process for making ethanol from the nonedible parts of corn and sugar cane. They plan to invest $140 million over three years.
In making their announcement, the companies estimated the worldwide market for fuels made by methods like theirs would eventually reach $75 billion, dwarfing the scale of today's biofuels produced from food crops like corn and sugar cane.
Published: July 24, 2008
After years of false starts, a new industry selling motor fuel made from waste is getting a big push in the United States, with the first commercial sales possible within months.
Many companies have announced plans to build plants that would take in material like wood chips, garbage or crop waste and turn out motor fuels. About 28 small plants are in advanced planning, under construction or, in a handful of cases, already up and running in test mode.
For decades scientists have known it was possible to convert waste to fuel, but in an era of cheap oil, it made little sense. With oil now trading around $125 a barrel and gasoline above $4 a gallon, the potential economics of a waste-to-fuel industry have shifted radically, setting off a frenzy to be first to market.
"I think American innovation is going to come up with the solution," said Prabhakar Nair, research chief for UOP, a company working on the problem.
Success is far from assured, however. Some of the latest announcements come from small companies whose dreams may be bigger than their bank accounts. They are counting on billions in taxpayer subsidies. Big technological hurdles remain, and even if they can be solved, no one is sure what unintended consequences will emerge or what it will really cost to produce this type of fuel.
"We desperately need it, and I personally think it's not there yet," said Steven Chu, director of the Lawrence Berkeley National Laboratory and a Nobel Prize-winning physicist. "You have to look at starts with a grain of salt, especially starts where they say, 'It's around the corner, and by the way, can you pay half the bill?' "
Still, the incentive to make fuel from something, anything, besides oil and food is greater than ever. Moreover, the U.S. government is offering grants to help plants get off the ground and subsidies for one type of fuel of $1.01 a gallon, twice the subsidy it historically offered to ethanol made from corn.
Potential controls on global warming gases would heighten the appeal of these fuels, since many of them would add little new carbon dioxide to the atmosphere.
Tellingly, the type of companies placing bets on the field has started to expand. The earliest were small start-ups founded by people with more technological vision than business experience. Now some of the giants of global business, including Honeywell, Dupont, General Motors, Shell and BP, are taking stakes in the nascent industry.
The dream of making fuel from plants is almost as old as the internal combustion engine. Henry Ford himself was fascinated by the idea, and it re-emerges in periods of fuel scarcity and high prices. These days, advancing technology has made the notion more plausible.
Virtually any material containing hydrogen, carbon and oxygen could potentially be turned into motor fuel. That includes plastics, construction debris, forest and lawn trimmings, wood chips, wheat straw and many other types of agricultural waste.
The potential fuels include ethanol, which can be blended with gasoline, or other liquids that could displace gasoline or diesel entirely. Government studies suggest the country could potentially replace half its gasoline supply in this way — even more if cars became more efficient.
The government is pushing to get the industry off the ground. Legislation passed last year mandates the use of 36 billion gallons of biofuels a year by 2022, less than half of it from corn ethanol. Almost all the rest is supposed to come from nonfood sources, though the requirement could be waived if the industry faltered.
"One has to say upfront that what Congress has done is remarkable in its bravery," said David Morris, vice president of the Institute for Local Self Reliance, a group in Minneapolis that advocates biofuels.
Much of the new money flowing into the field is coming from Silicon Valley, where the venture capitalists who gave the world the Internet revolution see an opportunity to do something similar with the fuel supply.
At Solazyme, a start-up in South San Francisco that hopes to commercialize a process for making fuel from algae, President Harrison Dillon said, "When we founded the company in 2003, we couldn't find a venture capital firm that had heard of the concept of a biofuel." Now he is backed by two such firms.
Venture capital investment in the first half of this year hit $612 million, up from $375 million in all of 2007, according to a survey by Thomson Reuters. Every few days brings another announcement. PFC Energy, a Washington consulting firm, counts projects worth perhaps $1.5 billion that will total more than 300 million gallons of capacity by 2011, if they all get built.
That is small in the scheme of American fuel demand, but it would presumably set the stage for substantial growth if those first projects prove that the economics can work.
One of the first companies to bring a plant online is KL Process Design Group, in Wyoming. With experience making corn ethanol plants, it has built a small plant meant to use pine wastes from a nearby national forest. The company is still testing its production line but hopes to begin commercial sales of ethanol late this year.
"We're still learning and tweaking, and hoping for a little bit of capital infusion," said Tom Slunecka, a vice president of the company.
Range Fuels, of Denver, is building a commercial-scale plant in Soperton, Georgia, with help from the Energy Department. That plant will take pine chips and turn them into ethanol, with commercial sales expected by late 2009 or 2010.
Some companies want to use garbage. On Friday, a company called Fulcrum BioEnergy said it would start construction later this year on a $120 million plant at the Tahoe-Reno Industrial Center, in Storey County, Nevada, to make 10.5 million gallons of ethanol a year from 90,000 tons of garbage. Operation would begin in early 2010.
In Montreal, another firm, Enerkem, plans to use arsenic-contaminated utility poles from the provincial electric company. On Wednesday, the Los Angeles County Regional Planning Commission approved a plan by BlueFire Ethanol to build a $30 million garbage-to-ethanol plant on 10 acres next to a landfill in Lancaster, California; construction will start soon, the company said.
A handful of small companies has long made a diesel replacement from waste oil, or sold kits to individuals to do the same. One company in Carthage, Missouri, even turns turkey guts into fuel. The goal of the emerging waste-to-fuel industry is more elaborate, however: to take bulky, solid feedstocks and transform them into high-grade motor fuel.
History provides plenty of warning that it will not be easy. A company called Verenium in Lafayette, Louisiana, has cut ribbons three times in one locale since 1998 on plants that would supposedly make fuel from sugar cane waste, and has yet to sell a drop because of problems converting laboratory success into smooth, commercial-scale operation.
A bigger operation, Iogen, has been running a demonstration plant in Ottawa since 2004 that can turn wheat straw into ethanol. It was expected to build a plant in Idaho but has suspended work to focus attention on a plant in Saskatchewan. "It would be our view that there are substantial challenges in scaling up a big new biochemical process," said Brian Foody, the president.
The Energy Department early last year picked six projects as most likely to succeed, and offered each of them tens of millions of dollars. Iogen's Idaho project was among them; so was a plant in Kansas proposed by a Florida company, Alico, that has also been abandoned. Still, increasing interest from big companies — ones with a track record of solving technical problems — suggests that a waste-to-fuel industry may not remain out of reach forever.
General Motors has invested an undisclosed sum in two companies, Coskata, of Warrenville, Illinois, and Macoma, of Lebanon, New Hampshire, that aim to turn crop wastes into ethanol.
DuPont, one of the world's largest chemical companies, has joined forces with a company called Genencor, announcing plans to commercialize a process for making ethanol from the nonedible parts of corn and sugar cane. They plan to invest $140 million over three years.
In making their announcement, the companies estimated the worldwide market for fuels made by methods like theirs would eventually reach $75 billion, dwarfing the scale of today's biofuels produced from food crops like corn and sugar cane.
UK accused of blocking EU green energy laws
By Laura Clout
Last Updated: 12:01am BST 24/07/2008
Gordon Brown has been accused of trying water down a European Union directive designed to give renewable energy sources like wind, wave and solar power easier access to national electricity grids.
The British Government has been pushing to amend a key passage in the directive, so that instead of saying that EU member-states "shall" give priority access to renewables, it would say only that they "may" do so if they wish, The Guardian has reported.
Luxembourg MEP Claude Turmes, architect of the renewables directive, accused the Prime Minister of backing green energy in public but behind the scenes blocking efforts to help it replace oil, coal and gas, which are blamed for global warming.
However, the Department for Business rejected the allegation, insisting that Britain was already taking action to help renewable energy suppliers link up to the National Grid.
Launching last month's government renewables strategy, setting out how Britain can meet its share of the EU's target of supplying 20 per cent of energy from clean sources by 2020, Mr Brown said that barriers to grid access should be removed "without delay".
Supporters of the requirement to prioritise renewables say that it is necessary because a lack of connections to a network which was not designed to link up scattered and remote locations has stood in the way of wind farms delivering electricity to consumers.
National Grid is under no legal obligation to connect renewable installations to the network.
In a recent report, the House of Commons Innovation, Universities, Science and Skills Committee voiced "frustration" at the existence of a backlog of wind power projects totalling 9.3 gigawatts which were waiting for connection to the Grid.
Discussing the British attempt to amend the EU directive, Mr Turmes told The Guardian: "This would take us backwards and would weaken the possibilities of connecting renewable energy to the grid. A Government that says it wants to promote renewables cannot go for other policies behind the scenes."
But a Department for Business spokesman said: "Priority access for renewables is not necessary for us to meet our fair share of the renewables target.
"What renewables operators want is quicker access to the grid, not priority access. The UK is already taking significant steps to remove grid access barriers for renewables.
"It is, however, important that all forms of generation have faster access to the grid network to secure a balanced and secure energy supply.
"We are fully committed to meeting our fair share of the EU target, as demonstrated by our ambitious renewables strategy, published last month."
Last Updated: 12:01am BST 24/07/2008
Gordon Brown has been accused of trying water down a European Union directive designed to give renewable energy sources like wind, wave and solar power easier access to national electricity grids.
The British Government has been pushing to amend a key passage in the directive, so that instead of saying that EU member-states "shall" give priority access to renewables, it would say only that they "may" do so if they wish, The Guardian has reported.
Luxembourg MEP Claude Turmes, architect of the renewables directive, accused the Prime Minister of backing green energy in public but behind the scenes blocking efforts to help it replace oil, coal and gas, which are blamed for global warming.
However, the Department for Business rejected the allegation, insisting that Britain was already taking action to help renewable energy suppliers link up to the National Grid.
Launching last month's government renewables strategy, setting out how Britain can meet its share of the EU's target of supplying 20 per cent of energy from clean sources by 2020, Mr Brown said that barriers to grid access should be removed "without delay".
Supporters of the requirement to prioritise renewables say that it is necessary because a lack of connections to a network which was not designed to link up scattered and remote locations has stood in the way of wind farms delivering electricity to consumers.
National Grid is under no legal obligation to connect renewable installations to the network.
In a recent report, the House of Commons Innovation, Universities, Science and Skills Committee voiced "frustration" at the existence of a backlog of wind power projects totalling 9.3 gigawatts which were waiting for connection to the Grid.
Discussing the British attempt to amend the EU directive, Mr Turmes told The Guardian: "This would take us backwards and would weaken the possibilities of connecting renewable energy to the grid. A Government that says it wants to promote renewables cannot go for other policies behind the scenes."
But a Department for Business spokesman said: "Priority access for renewables is not necessary for us to meet our fair share of the renewables target.
"What renewables operators want is quicker access to the grid, not priority access. The UK is already taking significant steps to remove grid access barriers for renewables.
"It is, however, important that all forms of generation have faster access to the grid network to secure a balanced and secure energy supply.
"We are fully committed to meeting our fair share of the EU target, as demonstrated by our ambitious renewables strategy, published last month."
Move towards carbon fibre car parts
By Jonathan Soble in Tokyo
Published: July 24 2008 17:35
Japanese manufacturers plan to make cars lighter and more fuel-efficient by replacing steel doors and frames with carbon fibre, starting in less than ten years.
A group of advanced-materials companies has teamed up with the government in a five-year research project, which, if successful, could result in cars that are 20 per cent lighter and consume 15 per cent less fuel. The group includes Toray, which supplies the carbon fibre used in Boeing’s new 787 Dreamliner passenger aircraft.
The effort reflects the impact of soaring fuel costs and stricter emissions standards on carmakers and their suppliers. Lighter frames would complement other green innovations such as petrol-electric hybrid motors.
Rising steel prices have given carmakers an additional incentive to develop alternative materials.
Nissan, Japan’s third-biggest automaker, was involved in an earlier government-backed project to promote basic carbon-fibre research. Carmakers could join the current effort in its later stages, a person familiar with the project said.
A number of obstacles need to be overcome before a “carbon fibre car” becomes commercially viable, however.
Carbon fibre parts are typically about half the weight of their steel equivalents and several times stronger. But they are also about 10 times as expensive.
The largest use of carbon fibre in commercial car production has been in the high-end BMW M3 CSL, which uses the material in its roof. Nissan uses small amounts in its GT-R and 350Z sports cars and the Infiniti G35/G37 coupe.
The Japanese research project, which will receive about Y2bn ($18.6m) in government support, will aim to reduce manufacturing costs by devising ways to recycle more carbon fibre scrap – large amounts of which are produced in the parts-making process.
Another challenge will be to cut manufacturing time. Steel parts can be punched out of rolls of the metal in minutes or even seconds, but carbon fibre must be mixed with resin and baked for hours in an autoclave.
Copyright The Financial Times Limited 2008
Published: July 24 2008 17:35
Japanese manufacturers plan to make cars lighter and more fuel-efficient by replacing steel doors and frames with carbon fibre, starting in less than ten years.
A group of advanced-materials companies has teamed up with the government in a five-year research project, which, if successful, could result in cars that are 20 per cent lighter and consume 15 per cent less fuel. The group includes Toray, which supplies the carbon fibre used in Boeing’s new 787 Dreamliner passenger aircraft.
The effort reflects the impact of soaring fuel costs and stricter emissions standards on carmakers and their suppliers. Lighter frames would complement other green innovations such as petrol-electric hybrid motors.
Rising steel prices have given carmakers an additional incentive to develop alternative materials.
Nissan, Japan’s third-biggest automaker, was involved in an earlier government-backed project to promote basic carbon-fibre research. Carmakers could join the current effort in its later stages, a person familiar with the project said.
A number of obstacles need to be overcome before a “carbon fibre car” becomes commercially viable, however.
Carbon fibre parts are typically about half the weight of their steel equivalents and several times stronger. But they are also about 10 times as expensive.
The largest use of carbon fibre in commercial car production has been in the high-end BMW M3 CSL, which uses the material in its roof. Nissan uses small amounts in its GT-R and 350Z sports cars and the Infiniti G35/G37 coupe.
The Japanese research project, which will receive about Y2bn ($18.6m) in government support, will aim to reduce manufacturing costs by devising ways to recycle more carbon fibre scrap – large amounts of which are produced in the parts-making process.
Another challenge will be to cut manufacturing time. Steel parts can be punched out of rolls of the metal in minutes or even seconds, but carbon fibre must be mixed with resin and baked for hours in an autoclave.
Copyright The Financial Times Limited 2008
Call to dub climate change 'a catastrophe'
Published Date: 25 July 2008
By Emily Beament
THE government should stop talking about global warming and start using the term "climate catastrophe", a leading scientist said yesterday.
Dr Richard Pike, chief executive of the Royal Society of Chemistry, also called for a commitment to deliver a large-scale use of renewables and nuclear power, rather than encouraging "trivial solutions" such as washing clothes at low temperatures.
Dr Pike said global warming conjured up a gradual, gentle process in which the real problems would be dealt with decades into the future. He said teenagers need to be taught that, without action on climate change, there would be food and water shortages, floods, mass migration and possibly a billion deaths within their lifetime.He added: "We live in a country where much of the population regards the sun and heat as welcome, so why should predictions of global warming immediately strike people as nasty and something to be avoided?"Dr Pike said to bring about change, there needed to be dissatisfaction with the current situation, a vision for the future and clarity on short-term steps to achieve that vision – and the government had failed on all counts.And he said tough decisions were needed on carbon capture and storage, massive deployment of renewables and prioritisation of science and funding to halve the global dependence on fossil fuels.He added: "There has to be a picture where hydrocarbon use is globally constrained and energy provision draws massively on sustainable renewables and nuclear power stations
Published Date: 25 July 2008
By Emily Beament
THE government should stop talking about global warming and start using the term "climate catastrophe", a leading scientist said yesterday.
Dr Richard Pike, chief executive of the Royal Society of Chemistry, also called for a commitment to deliver a large-scale use of renewables and nuclear power, rather than encouraging "trivial solutions" such as washing clothes at low temperatures.
Dr Pike said global warming conjured up a gradual, gentle process in which the real problems would be dealt with decades into the future. He said teenagers need to be taught that, without action on climate change, there would be food and water shortages, floods, mass migration and possibly a billion deaths within their lifetime.He added: "We live in a country where much of the population regards the sun and heat as welcome, so why should predictions of global warming immediately strike people as nasty and something to be avoided?"Dr Pike said to bring about change, there needed to be dissatisfaction with the current situation, a vision for the future and clarity on short-term steps to achieve that vision – and the government had failed on all counts.And he said tough decisions were needed on carbon capture and storage, massive deployment of renewables and prioritisation of science and funding to halve the global dependence on fossil fuels.He added: "There has to be a picture where hydrocarbon use is globally constrained and energy provision draws massively on sustainable renewables and nuclear power stations
China: Melting glacier leaves world's worst polluter with no room for doubt
Jonathan Watts
The Guardian,
Friday July 25 2008
Up close, the sound of global warming at the face of the Urumqi No1 Glacier is a simple, steady drip, drip, drip. Just 30 metres from the main wall, the flood of meltwater becomes so powerful that it cuts a tunnel under the floor of grey ice, leaving only a blotchy, wafer-thin crust on the surface.
Compared with the collapse of ice shelves in the Antarctic, the melting of the mountains in China's far west is one of the less spectacular phenomena of global warming, but it is a more immediate cause of concern and hope.
There is concern because this glacier - more than almost any other in China - is a natural water regulator for millions of people downstream in the far western region of Xinjiang. In winter, it stores up snow and ice. In summer, it releases meltwater to provide drinking and irrigation supplies to one of the country's most arid regions. It brings hope because its rapid shrinkage is helping to set off climate-change alarm bells in a country that emits more greenhouse gases than any other.
The Urumqi No1 Glacier is so named because it was the first icefield to be measured in China. Since 1953, scientists have been monitoring its thickness and length, analysing traces of pollution and tracking changes in temperature at this 3,800-metre altitude. The results leave no room for doubt that this part of the Tian (Heaven) mountain range is melting.
According to the Cold and Arid Regions Environmental and Engineering Research Institute, the glacier has lost more than 20% of its volume since 1962 as the temperature has increased by almost 1C. And the rate of shrinkage is accelerating. For the first time last year, it was so warm in the summer that rain rather than snow fell on the glacier. A lake formed on the top of the icefield, which is retreating at the rate of nine metres a year.
Locals have noticed the ice diminish. Ashengbieke is a guide who takes tourists up the rocky path to the icefield by motorbike. Since his childhood, the 18-year-old says, the glacier has split in half.
"While I was growing up, it used to be very cold here. It used to snow in summer, but now it rains instead. Because of the air pollution, the glacier turned black. It used to be pure white and the two snow fields were joined as one."
Bahabieke, a nomad from the Kazakh ethnic group, is erecting his yurt a week earlier than last year. "It has become warmer, especially these last two years," he says.
"It's very frightening," said the meteorologist Zhang Enzi. "That is because it is related to the issue of water supply. It will have an impact on people in the future."
There are few places in the world where the cause and effect of global warming are so closely juxtaposed. An hour's drive from the glacier, the road passes coal-fired power plants and factories that belch carbon and sulphur into the sky. They were built during the Cultural Revolution, when Mao Zedong ordered industry to be shifted into remote areas of the countryside so that it would be harder to target in the event of a war with the Soviet Union.
This "Third Front" policy is now viewed as an environmental disaster. A senior engineer at the Houxia concrete plant says the factory will close within three years because the government recognises the need to reduce emissions and pollution.
He says China is ready to play a part in solving a global problem. "We realise the problems of industrialisation and we don't want to grow at the expense of human health and an unsustainable use of natural resources," said the engineer.
The Guardian,
Friday July 25 2008
Up close, the sound of global warming at the face of the Urumqi No1 Glacier is a simple, steady drip, drip, drip. Just 30 metres from the main wall, the flood of meltwater becomes so powerful that it cuts a tunnel under the floor of grey ice, leaving only a blotchy, wafer-thin crust on the surface.
Compared with the collapse of ice shelves in the Antarctic, the melting of the mountains in China's far west is one of the less spectacular phenomena of global warming, but it is a more immediate cause of concern and hope.
There is concern because this glacier - more than almost any other in China - is a natural water regulator for millions of people downstream in the far western region of Xinjiang. In winter, it stores up snow and ice. In summer, it releases meltwater to provide drinking and irrigation supplies to one of the country's most arid regions. It brings hope because its rapid shrinkage is helping to set off climate-change alarm bells in a country that emits more greenhouse gases than any other.
The Urumqi No1 Glacier is so named because it was the first icefield to be measured in China. Since 1953, scientists have been monitoring its thickness and length, analysing traces of pollution and tracking changes in temperature at this 3,800-metre altitude. The results leave no room for doubt that this part of the Tian (Heaven) mountain range is melting.
According to the Cold and Arid Regions Environmental and Engineering Research Institute, the glacier has lost more than 20% of its volume since 1962 as the temperature has increased by almost 1C. And the rate of shrinkage is accelerating. For the first time last year, it was so warm in the summer that rain rather than snow fell on the glacier. A lake formed on the top of the icefield, which is retreating at the rate of nine metres a year.
Locals have noticed the ice diminish. Ashengbieke is a guide who takes tourists up the rocky path to the icefield by motorbike. Since his childhood, the 18-year-old says, the glacier has split in half.
"While I was growing up, it used to be very cold here. It used to snow in summer, but now it rains instead. Because of the air pollution, the glacier turned black. It used to be pure white and the two snow fields were joined as one."
Bahabieke, a nomad from the Kazakh ethnic group, is erecting his yurt a week earlier than last year. "It has become warmer, especially these last two years," he says.
"It's very frightening," said the meteorologist Zhang Enzi. "That is because it is related to the issue of water supply. It will have an impact on people in the future."
There are few places in the world where the cause and effect of global warming are so closely juxtaposed. An hour's drive from the glacier, the road passes coal-fired power plants and factories that belch carbon and sulphur into the sky. They were built during the Cultural Revolution, when Mao Zedong ordered industry to be shifted into remote areas of the countryside so that it would be harder to target in the event of a war with the Soviet Union.
This "Third Front" policy is now viewed as an environmental disaster. A senior engineer at the Houxia concrete plant says the factory will close within three years because the government recognises the need to reduce emissions and pollution.
He says China is ready to play a part in solving a global problem. "We realise the problems of industrialisation and we don't want to grow at the expense of human health and an unsustainable use of natural resources," said the engineer.
Rolls-Royce scores on efficiency and emissions
From The Times
July 25, 2008
David Robertson
Soaring fuel prices and concern over CO2 emissions have forced the global shipping fleet to start buying more efficient engines, which has led to a surge in orders for Rolls-Royce.
The British engine manufacturer said yesterday that its marine division had seen a significant jump in sales as some ship operators had adopted alternative propulsion systems. Rolls is using cutting-edge technology developed for power stations and the aerospace industry to build a new generation of ship engines.
Its Bergen engine for tugs and ferries has been developed from a unit used in more than 300 power stations, while the MT30 engine for larger ships is based on the Trent engine used on commercial jets.
Sir John Rose, the chief executive, said that the rising cost of diesel and environmental pressure to cut emissions had encouraged ship owners to step up efforts to overhaul their fleets.
The global shipping industry is estimated to produce about 1.2 billion tonnes of carbon dioxide a year - equivalent to 4.5 per cent of the world's total and twice as much as that produced by the aviation sector.
The European Union is so concerned by the impact shipping has on the environment that it is considering including the industry within its carbon trading scheme, which penalises companies that produce excessive quantities of CO2. Ship owners are also eager to improve their operating efficiency as the price of fuel has rocketed in the past year. A mid-sized cargo ship will burn about 50 tonnes of fuel a day, while the very largest tankers and container ships can use more than 300 tonnes a day.
Some ship operators have started to replace older engines while the estimated 3,000 ships that will be built in the next decade will be equipped with propulsion systems developed by companies such as Rolls.
The Derby-based manufacturer said yesterday that sales in its marine division increased by 45 per cent to £1 billion for the first six months of the year and its order book grew 17 per cent to £5.5 billion.
Sir John said that the division had benefited from a boom in demand from the offshore oil and gas industry, as well as growing environmental and cost pressures in the shipping fleet. He said: “The same level of technological focus on efficiency has not gone into the marine sector as has been seen in aviation.”
The Bergen marine engine uses liquefied natural gas rather than traditional diesel fuel and emits 20 per cent less CO2 and 90 per cent less nitrous oxide. It has been installed on five Norwegian ferries and Rolls said that it was in discussions to sell the engine to other tug and ferry operators.
The MT30 is a gas turbine that is 80 per cent based on the Trent aircraft engine. The powerful MT30 will be used by the US Navy for its next generation of destroyers and Rolls has also identified supertankers as a possible market. Rolls describes this technology-sharing strategy as “invent once, use many times”.
The company's marine division was one of several parts of the business to post strong first-half results yesterday.
There has been concern about Rolls' exposure to the civilian aerospace market, which is under pressure from the worsening economic environment and high fuel bills. Sir John said that there would be some softness in the civil market, but Rolls would not be badly affected because of its strong maintenance and servicing operations.
He said: “It is inevitable in this environment that there is going to be some softness in aircraft orders and that is a fact of life. But we think we will be resilient because 63 per cent of our revenue in the civil sector is from after-market servicing.”
On a rolls
First-half results
Group order book up 17 per cent to £53.5 billion Group underlying sales up 12 per cent to £4.21 billion. Group pre-tax profit up 3 per cent to £389 million Civil aerospace sales up 5 per cent to £2.10 billion Defence aerospace sales down 5 per cent to £769 million Marine sales up 45 per cent to £1.02 billion
July 25, 2008
David Robertson
Soaring fuel prices and concern over CO2 emissions have forced the global shipping fleet to start buying more efficient engines, which has led to a surge in orders for Rolls-Royce.
The British engine manufacturer said yesterday that its marine division had seen a significant jump in sales as some ship operators had adopted alternative propulsion systems. Rolls is using cutting-edge technology developed for power stations and the aerospace industry to build a new generation of ship engines.
Its Bergen engine for tugs and ferries has been developed from a unit used in more than 300 power stations, while the MT30 engine for larger ships is based on the Trent engine used on commercial jets.
Sir John Rose, the chief executive, said that the rising cost of diesel and environmental pressure to cut emissions had encouraged ship owners to step up efforts to overhaul their fleets.
The global shipping industry is estimated to produce about 1.2 billion tonnes of carbon dioxide a year - equivalent to 4.5 per cent of the world's total and twice as much as that produced by the aviation sector.
The European Union is so concerned by the impact shipping has on the environment that it is considering including the industry within its carbon trading scheme, which penalises companies that produce excessive quantities of CO2. Ship owners are also eager to improve their operating efficiency as the price of fuel has rocketed in the past year. A mid-sized cargo ship will burn about 50 tonnes of fuel a day, while the very largest tankers and container ships can use more than 300 tonnes a day.
Some ship operators have started to replace older engines while the estimated 3,000 ships that will be built in the next decade will be equipped with propulsion systems developed by companies such as Rolls.
The Derby-based manufacturer said yesterday that sales in its marine division increased by 45 per cent to £1 billion for the first six months of the year and its order book grew 17 per cent to £5.5 billion.
Sir John said that the division had benefited from a boom in demand from the offshore oil and gas industry, as well as growing environmental and cost pressures in the shipping fleet. He said: “The same level of technological focus on efficiency has not gone into the marine sector as has been seen in aviation.”
The Bergen marine engine uses liquefied natural gas rather than traditional diesel fuel and emits 20 per cent less CO2 and 90 per cent less nitrous oxide. It has been installed on five Norwegian ferries and Rolls said that it was in discussions to sell the engine to other tug and ferry operators.
The MT30 is a gas turbine that is 80 per cent based on the Trent aircraft engine. The powerful MT30 will be used by the US Navy for its next generation of destroyers and Rolls has also identified supertankers as a possible market. Rolls describes this technology-sharing strategy as “invent once, use many times”.
The company's marine division was one of several parts of the business to post strong first-half results yesterday.
There has been concern about Rolls' exposure to the civilian aerospace market, which is under pressure from the worsening economic environment and high fuel bills. Sir John said that there would be some softness in the civil market, but Rolls would not be badly affected because of its strong maintenance and servicing operations.
He said: “It is inevitable in this environment that there is going to be some softness in aircraft orders and that is a fact of life. But we think we will be resilient because 63 per cent of our revenue in the civil sector is from after-market servicing.”
On a rolls
First-half results
Group order book up 17 per cent to £53.5 billion Group underlying sales up 12 per cent to £4.21 billion. Group pre-tax profit up 3 per cent to £389 million Civil aerospace sales up 5 per cent to £2.10 billion Defence aerospace sales down 5 per cent to £769 million Marine sales up 45 per cent to £1.02 billion
Ministers push higher standards for eco-towns
By Jim Pickard
Published: July 25 2008 01:36
Ministers sought to head off the chorus of criticism over their proposed eco-towns by putting forward new standards that would ensure high levels of green space, affordable housing and transport links.
Caroline Flint, housing minister, said that at least one worker per household in the new schemes should be able to get to work by walking, cycling or using public transport.
Whether this is genuinely radical is open to question, given that developers could place a scheme 15 miles from the nearest town and still claim it is “cycleable”. Nor is it possible to compel residents to get out of their cars – even if alternative, greener methods of transport are available.
But Ms Flint believes she can ensure that half of all journeys from the 10 new eco-towns can be made sustainably. She wants the average home on the developments, each of which will have thousands of houses, to be within a 10-minute walk of public transport and neighbourhood services.
The government is on the back foot after lawyers for the Local Government Association suggested its eco-towns could be “unlawful” in bypassing local authorities. It insists all 10 projects, to be picked from a shortlist of 15 drawn up in April, will have to go through councils’ planning departments.
Cynics have also pointed out that the green standards, which all housing will have to meet, are not very stringent, given that by 2016 all new homes in Britain will have to be “zero-carbon”.
Few of the schemes are likely to be built before then, with developers staring at the worst housing crash for decades.
Developers of eco-towns will have to provide a minimum of 30 per cent affordable housing and 40 per cent green space – neither of which is much higher than a typical development.
The Royal Town Planning Institute said the standards announced on Thursday should be the “minimum” that should be demanded of any new development.
Copyright The Financial Times Limited 2008
Published: July 25 2008 01:36
Ministers sought to head off the chorus of criticism over their proposed eco-towns by putting forward new standards that would ensure high levels of green space, affordable housing and transport links.
Caroline Flint, housing minister, said that at least one worker per household in the new schemes should be able to get to work by walking, cycling or using public transport.
Whether this is genuinely radical is open to question, given that developers could place a scheme 15 miles from the nearest town and still claim it is “cycleable”. Nor is it possible to compel residents to get out of their cars – even if alternative, greener methods of transport are available.
But Ms Flint believes she can ensure that half of all journeys from the 10 new eco-towns can be made sustainably. She wants the average home on the developments, each of which will have thousands of houses, to be within a 10-minute walk of public transport and neighbourhood services.
The government is on the back foot after lawyers for the Local Government Association suggested its eco-towns could be “unlawful” in bypassing local authorities. It insists all 10 projects, to be picked from a shortlist of 15 drawn up in April, will have to go through councils’ planning departments.
Cynics have also pointed out that the green standards, which all housing will have to meet, are not very stringent, given that by 2016 all new homes in Britain will have to be “zero-carbon”.
Few of the schemes are likely to be built before then, with developers staring at the worst housing crash for decades.
Developers of eco-towns will have to provide a minimum of 30 per cent affordable housing and 40 per cent green space – neither of which is much higher than a typical development.
The Royal Town Planning Institute said the standards announced on Thursday should be the “minimum” that should be demanded of any new development.
Copyright The Financial Times Limited 2008
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