By Sarah ArnottThursday, 11 September 2008
Why are we asking this now?
Because the price has been bouncing around so much recently, although the general trend is firmly down. This week the value of oil dropped below the psychologically significant $100 per barrel mark for the first time since February, but it rebounded back up again yesterday following a surprise announcement from the Organisation of Petroleum Exporting Countries (Opec) that its 13 member countries are to cut production by more than half a million barrels per day (bpd). Apparently they're a little concerned about the rapid fall in price since its eye-watering peak of $147 in early July.
Why did the price go so high in the first place?
At $100 or so, it is 50 per cent higher than last year and 10 times its level of a decade ago. There are three main reasons it climbed so high. The most significant is simply demand. Not only are mature economies heavily reliant on oil – the US consumes nearly 25 million bpd, out of total global production of 86 million – but demand from developing countries is also ballooning. Although Chinese demand is currently a seemingly modest 8 million bpd, it is forecast to nearly double by 2015.
The second factor was the weak dollar, driving investors out of the Greenback and into fast-rising oil as a sure fire winner. Third, the absence of Iraqi supplies, for obvious reasons, and geopolitical concerns about US policy towards major producers such as Russia and Iran have pushed the price up.
Why has it since been coming down?
Since July, the dollar has strengthened thanks to better than expected growth figures. The fall-out from the credit crunch – threats of recession in a number of developed economies, and slower growth in China – is pushing down demand for oil. Yesterday, the International Energy Agency (IEA) cut its global demand forecasts for both this year and next, blaming a shift in consumer behaviour brought on by gloomy economic prospects. In the US in particular, the love affair with the Sports Utility Vehicle may finally be ending as drivers switch to greener alternatives and cut down on journeys.
Why does Opec matter?
Opec was established as a permanent intergovernmental organisation in 1960 to coordinate oil production policies, help producers ensure a reasonable rate of return, and ensure the stability of supply. In other words, it is a cartel. Discoveries of reserves in the North Sea and the Gulf of Mexico, along with the end of the Cold War and Russia's entrance into global markets, have diminished Opec's share since it first flexed its muscles with the quadrupling of the e price of oil in the first oil shock in 1973. But it is still overwhelmingly dominant and its members control around 40 per cent of all production.
The effects are real. Tuesday's oil price dip below $100 was on the strength of intimations that Opec was going to hold production steady. The announcement of a production cut late on Tuesday night sent prices up by around two per cent first thing the following morning.
What about the Russians?
The only really big non-Opec producer is Russia. Of the 86 million barrels produced globally every day, some 10 million come from Saudi Arabia, the world leader. But Russia's 8 million bpd is hard on Saudi heels, and dwarfs smaller Opec members like Nigeria. Over the decades, Russia and other non-Opec nations, including Norway and the UK, have sometimes provided a counterweight to the cartel's power by pumping more oil when Opec wanted to see production fall. But UK oil is running down, and Russian production has struggled in the last year – mainly because a lot of its reserves are in difficult places, like the Arctic, and politics has slowed talks with Western multinationals to bring in much-needed expertise.
There are also growing signs that Russia may want to cooperate more closely with Opec, largely because of their shared interest in keeping prices relatively high and a shared hostility to the US (Venezuela and Iran are Opec members). But Russia has its own self-interests overwhelmingly at heart, and geopolitical issues over what it considers its sphere of influence may stop the two collaborating too closely.
Why should this affect the UK when we have North Sea oil?
We used to be broadly self-sufficient, but not any more. For the past five years, North Sea production has been diminishing and the UK's oil imports have been steadily rising. In fact, numbers from the Office of National Statistics yesterday showed that the UK's trade deficit in oil hit its highest level ever in July. While the overall goods trade deficit shrank in July, the oil trade deficit almost doubled to £1.3bn.
Shouldn't falling oil prices mean lower petrol prices?
Yes and no. The good news is that petrol prices have already come down. The average price of a litre of unleaded has fallen from a peak of 124p in July to around 119p now. But today's prices are still considerably higher than the 104p per litre average petrol price when oil was last at $100 per barrel. One issue is lag It takes between four and six weeks for the cost of a barrel of oil to feed through to drivers. Another factor is tax. At current rates, a massive 68 pence worth of the pump price is duty, so even a big drop in the fundamental cost has only a proportionately small effect. And the fall of sterling counteracts the drop in the oil price, which is calculated in dollars.
What does it mean for the economy as a whole?
The widespread expectation is that, barring an unpredictable geopolitical event, prices will not return to July's levels. The latest Treasury forecasts are even for average oil prices next year to be around $93 – and if commodity prices come down, then so does inflation. Earlier this week, the latest factory gate inflation figures showed the pace slowing at last, with manufacturers reporting that their input costs actually fell in July, by 0.6 per cent.
If inflation comes down, the Bank of England has more scope to cut interest rates, in the hope of easing the worst excesses of the credit crunch and the related slow down in consumer spending. Although inflation is still expected to hit five per cent this autumn, David Blanchflower, a member of the Bank's Monetary Policy Committee, says it will soon afterwards "plummet like a stone", enabling the bank to cut rates repeatedly next year. Whether it is enough to save us from recession is the $60,000 question, with no immediate answer.
Will oil go back up to $150 a barrel?
Yes...
* Demand is booming, particularly in the East, and will continue to do so
* Volatile geopolitics, such as the recent conflict in Georgia, add to uncertainty
* Speculators who smell a quick buck may push the price back up again
No...
* Looming recession is putting the brakes on economies across the world
* Developed economies are working hard to become more energy-efficient
* Investors who were pushing up the price of oil are returning to the strengthening dollar
Thursday, 11 September 2008
Europe to reaffirm biofuels targets
David Gow in Brussels
guardian.co.uk,
Wednesday September 10 2008 10:21 BST
The European parliament will tomorrow reaffirm binding targets for biofuels in transport and for renewables in energy use in the face of growing political resistance.
MEPs on the parliament's key industry committee will set a mandatory target of 5% of biofuels in transport by 2015, rising to 10% by 2020.
They will also defy objections from several governments, including Britain, and approve in principle a system of penalties for countries which fail to meet interim targets for renewable energy.
Claude Turmes, Green MEP and rapporteur on the renewables directive, said after exhaustive talks with political groups to consider up to 2000 amendments said he was now optimistic the new law could be approved before the end of the year. He said he had won support across the political spectrum for his compromises.
Biofuels have increasingly come under attack for allegedly causing land used for food and animal feed to be switched to fuel crops and for being a prime cause of soaring food and commodity prices.
A protagonist of scrapping the controversial biofuels target, Turmes said the agreed compromise would see second-generation biofuels - from non-food, non-feed crops - gradually play a greater role.
In the interim stage, he said, second-generation biofuels would provide 1% of the overall 5% target and, in the second stage, 4% of the 10% target. The original scheme was for biofuels to provide 5.75% of transport fuel by 2010.
Electric and hydrogen-fuelled cars would play a substantial role in meeting these targets despite scepticism that manufacturers can either produce enough or sell them. But they would only count if the electricity or hydrogen came from verifiably "green" sources.
Other biofuels will only be counted towards the overall targets if they meet tougher sustainability criteria than proposed by the European commission or many governments. Turmes said the agreed compromise would mean that fuels saving 45% of carbon emissions would count - rather than the 35% proposed earlier. In time this could rise to 60%.
The targets and standards will provoke a row with European biofuel producers who claim they are being forced out of their home markets by subsidised imports. The European Biodiesel Board (EBB) said biofuel production was not the cause of commodity price rises and the fuels involved met higher sustainability criteria than allowed by the EC.
Much of European biofuels come from rapeseed oil which, the EC says, saves 36% of carbon emissions - just meeting the standard. But the EBB's secretary-general, Raffaello Garofalo, said the savings were much higher.
Tomorrow's vote at the European parliament, meanwhile, is also expected to provoke disputes with governments as MEPs should approve plans to give priority access to power grids for electricity produced from renewables, potentially shutting down coal-fired and nuclear plants. Britain is a leading opponent of the scheme, arguing that it interferes with market forces.
guardian.co.uk,
Wednesday September 10 2008 10:21 BST
The European parliament will tomorrow reaffirm binding targets for biofuels in transport and for renewables in energy use in the face of growing political resistance.
MEPs on the parliament's key industry committee will set a mandatory target of 5% of biofuels in transport by 2015, rising to 10% by 2020.
They will also defy objections from several governments, including Britain, and approve in principle a system of penalties for countries which fail to meet interim targets for renewable energy.
Claude Turmes, Green MEP and rapporteur on the renewables directive, said after exhaustive talks with political groups to consider up to 2000 amendments said he was now optimistic the new law could be approved before the end of the year. He said he had won support across the political spectrum for his compromises.
Biofuels have increasingly come under attack for allegedly causing land used for food and animal feed to be switched to fuel crops and for being a prime cause of soaring food and commodity prices.
A protagonist of scrapping the controversial biofuels target, Turmes said the agreed compromise would see second-generation biofuels - from non-food, non-feed crops - gradually play a greater role.
In the interim stage, he said, second-generation biofuels would provide 1% of the overall 5% target and, in the second stage, 4% of the 10% target. The original scheme was for biofuels to provide 5.75% of transport fuel by 2010.
Electric and hydrogen-fuelled cars would play a substantial role in meeting these targets despite scepticism that manufacturers can either produce enough or sell them. But they would only count if the electricity or hydrogen came from verifiably "green" sources.
Other biofuels will only be counted towards the overall targets if they meet tougher sustainability criteria than proposed by the European commission or many governments. Turmes said the agreed compromise would mean that fuels saving 45% of carbon emissions would count - rather than the 35% proposed earlier. In time this could rise to 60%.
The targets and standards will provoke a row with European biofuel producers who claim they are being forced out of their home markets by subsidised imports. The European Biodiesel Board (EBB) said biofuel production was not the cause of commodity price rises and the fuels involved met higher sustainability criteria than allowed by the EC.
Much of European biofuels come from rapeseed oil which, the EC says, saves 36% of carbon emissions - just meeting the standard. But the EBB's secretary-general, Raffaello Garofalo, said the savings were much higher.
Tomorrow's vote at the European parliament, meanwhile, is also expected to provoke disputes with governments as MEPs should approve plans to give priority access to power grids for electricity produced from renewables, potentially shutting down coal-fired and nuclear plants. Britain is a leading opponent of the scheme, arguing that it interferes with market forces.
Alternative oil sources fall short
By Javier Blas in London
Published: September 10 2008 19:50
The oil market is not only facing reduced supplies from Opec in the near future, following the cartel’s decision to cut “immediately” its output by about 500,000 barrels a day, but also lower non-Opec supplies than previously estimated.
On Wednesday, the International Energy Agency, the western nations’ oil watchdog, lowered its forecast of non-Opec supply growth to 270,000 b/d to the end of this year, less than a third of the 1m b/d it predicted at the start of the year.
In its monthly oil report the watchdog also cut the forecast for global oil demand growth this year and next because of the impact of high prices and weaker economic environments, particularly in the US and Europe. But it signalled that consumption growth in emerging countries, particularly China, remained strong.
Non-Opec supplies have faltered following big production falls in mature areas such as the North Sea, Mexico and Alaska and lower than expected Russian output. Without a large increase in biofuel production, non-Opec supplies could have dropped this year. The IEA estimates biofuel output growth at about 300,000 b/d this year.
Last year non-Opec production grew by 425,000 b/d and the IEA said it expected a rebound in growth in 2009 to about 760,000 b/d. But it warned the risk for its 2009 forecast was skewed to the downside.
Biofuels – mostly corn-based ethanol in the US and sugar cane-based ethanol in Brazil – represent only a fraction of global oil production but have been the largest source of non-Opec output growth in the past two years. The IEA forecast that biofuel output would grow next year by 340,000 b/d.
Copyright The Financial Times Limited 2008
Published: September 10 2008 19:50
The oil market is not only facing reduced supplies from Opec in the near future, following the cartel’s decision to cut “immediately” its output by about 500,000 barrels a day, but also lower non-Opec supplies than previously estimated.
On Wednesday, the International Energy Agency, the western nations’ oil watchdog, lowered its forecast of non-Opec supply growth to 270,000 b/d to the end of this year, less than a third of the 1m b/d it predicted at the start of the year.
In its monthly oil report the watchdog also cut the forecast for global oil demand growth this year and next because of the impact of high prices and weaker economic environments, particularly in the US and Europe. But it signalled that consumption growth in emerging countries, particularly China, remained strong.
Non-Opec supplies have faltered following big production falls in mature areas such as the North Sea, Mexico and Alaska and lower than expected Russian output. Without a large increase in biofuel production, non-Opec supplies could have dropped this year. The IEA estimates biofuel output growth at about 300,000 b/d this year.
Last year non-Opec production grew by 425,000 b/d and the IEA said it expected a rebound in growth in 2009 to about 760,000 b/d. But it warned the risk for its 2009 forecast was skewed to the downside.
Biofuels – mostly corn-based ethanol in the US and sugar cane-based ethanol in Brazil – represent only a fraction of global oil production but have been the largest source of non-Opec output growth in the past two years. The IEA forecast that biofuel output would grow next year by 340,000 b/d.
Copyright The Financial Times Limited 2008
Coal down a hole
Published: September 10 2008 14:22
Christmas, it seemed, had come early for shareholders in US coal companies. By mid-summer, the price of some varieties of coal had tripled. Meanwhile, the shares of the four major producers – both the red-hot eastern region miners Consol Energy and Massey Energy, and those digging up lower value, higher volume western grades, Arch Coal and Peabody Energy – had rallied by between 44 and 168 per cent. However, the enthusiasm did not last. This week the shares of these companies fell as much as a quarter.
The rout was caused by more than the broader slump in energy and mining stocks. Investors were spooked by a worrisome rise in stockpiles at power generators. They are at a fairly robust 7.7 per cent above their 10 year average, according to analysts at Stifel Nicolaus. This is thanks to an unusually mild August, which damped power demand, and a rail network that, unusually, kept supplies running smoothly. As a result, spot prices fell.
The stock market sell-off looks like an overreaction to these weaker spot prices – which represent only a small proportion of company sales. Take Peabody, the world’s largest producer. It has already agreed delivery prices for all its coal this year. That is why its revenues did not rise as fast as spot prices earlier this year. But it also bodes well for 2009 when 80 per cent of its coal is already spoken for at higher prices, with a smaller proportion the next two years. Cheaper natural gas should not be a major concern either, given that it only competes at the margin as a generation fuel.
The recent rout leaves US coal shares looking cheap at between 5.5 and 7.6 times next year’s earnings. Meanwhile, fundamentals are robust. The largest expansion in new coal plants since 1980 is underway at home, while an even bigger Chinese plant-building boom is buoying exports abroad.
Christmas, it seemed, had come early for shareholders in US coal companies. By mid-summer, the price of some varieties of coal had tripled. Meanwhile, the shares of the four major producers – both the red-hot eastern region miners Consol Energy and Massey Energy, and those digging up lower value, higher volume western grades, Arch Coal and Peabody Energy – had rallied by between 44 and 168 per cent. However, the enthusiasm did not last. This week the shares of these companies fell as much as a quarter.
The rout was caused by more than the broader slump in energy and mining stocks. Investors were spooked by a worrisome rise in stockpiles at power generators. They are at a fairly robust 7.7 per cent above their 10 year average, according to analysts at Stifel Nicolaus. This is thanks to an unusually mild August, which damped power demand, and a rail network that, unusually, kept supplies running smoothly. As a result, spot prices fell.
The stock market sell-off looks like an overreaction to these weaker spot prices – which represent only a small proportion of company sales. Take Peabody, the world’s largest producer. It has already agreed delivery prices for all its coal this year. That is why its revenues did not rise as fast as spot prices earlier this year. But it also bodes well for 2009 when 80 per cent of its coal is already spoken for at higher prices, with a smaller proportion the next two years. Cheaper natural gas should not be a major concern either, given that it only competes at the margin as a generation fuel.
The recent rout leaves US coal shares looking cheap at between 5.5 and 7.6 times next year’s earnings. Meanwhile, fundamentals are robust. The largest expansion in new coal plants since 1980 is underway at home, while an even bigger Chinese plant-building boom is buoying exports abroad.
Britain to give Bangladesh £75m to help adapt to climate change
Louise Gray
Last Updated: 12:01am BST 10/09/2008
Britain is to give Bangladesh £75m as part of a flagship fund to help millions of people adapt to climate change.
The money will go towards projects that help people survive the worst affects of climate change, such as building new embankments or helping farmers move from rice to crab farming.
People affected by flooding queue to receive food aid in Bangladesh
Bangladesh is one of the most vulnerable countries in the world to climate change, with 70 million people at risk of flooding by 2050.
In a conference at the Royal Geographical Society, Douglas Alexander, the International Development Secretary, said development is not just about social and economic issues but tacking huge changes in the environment.
It signals a new direction for international development for Britain towards helping poorer countries deal with global warming.
"Climate change is today's crisis, not tomorrow's risk, and is already affecting millions of people in Bangladesh," Mr Alexander said.
"But Bangladesh is resilient and is setting an example to other vulnerable countries with its innovative approach to adapting to the changing climate."
Mr Alexander also signed a joint declaration with Bangladesh calling for the international community to sign up to a new deal to replace the Kyoto Protocol in Copenhagen in 2009.
He said: "UK and Bangladesh are announcing a new partnership calling for a comprehensive deal in Copenhagen, leading to the stabilisation of greenhouse gases at a level that avoids dangerous climate change - and benefits some of the world's poorest people."
The £75m, which is in addition to development aid, includes £60m for helping people adapt to climate change and £12m for the disaster management programme.
It also includes £3m for research which will help bolster Bangladesh's arguments in international negotiations.
Bangladesh has set up a fund to help fight tackle climate change that will include the money from Britain as well as other donors and £25m per year from the country's own government.
Other global funds to help poor countries deal with climate change are expected to be set up in the run up to the new Kyoto agreement.
Dr Mirza Islam, Bangladesh's finance adviser, said countries like Bangladesh need help from the international community to adapt to climate change.
"Least Developed Countries (LDCs), including Bangladesh, need immediate international support to build their resilience to global warming and climate change," he said.
"The resources currently available for adaptation are grossly inadequate to meet the needs of the LDCs who bear the brunt of increased climate variability and unpredictability resulting from climate change.
"The effects of climate change will severely constrain our ability to attain the high rates of economic growth needed to sustain development gains. We want a new sense of urgency to support Bangladesh in our search for a better tomorrow.
"This is why today, we are presenting our Climate Change Action Plan and calling upon the international community to assist Bangladesh by providing predictable, long-term financing for this plan and also by pushing for a meaningful agreement at Copenhagen."
Last Updated: 12:01am BST 10/09/2008
Britain is to give Bangladesh £75m as part of a flagship fund to help millions of people adapt to climate change.
The money will go towards projects that help people survive the worst affects of climate change, such as building new embankments or helping farmers move from rice to crab farming.
People affected by flooding queue to receive food aid in Bangladesh
Bangladesh is one of the most vulnerable countries in the world to climate change, with 70 million people at risk of flooding by 2050.
In a conference at the Royal Geographical Society, Douglas Alexander, the International Development Secretary, said development is not just about social and economic issues but tacking huge changes in the environment.
It signals a new direction for international development for Britain towards helping poorer countries deal with global warming.
"Climate change is today's crisis, not tomorrow's risk, and is already affecting millions of people in Bangladesh," Mr Alexander said.
"But Bangladesh is resilient and is setting an example to other vulnerable countries with its innovative approach to adapting to the changing climate."
Mr Alexander also signed a joint declaration with Bangladesh calling for the international community to sign up to a new deal to replace the Kyoto Protocol in Copenhagen in 2009.
He said: "UK and Bangladesh are announcing a new partnership calling for a comprehensive deal in Copenhagen, leading to the stabilisation of greenhouse gases at a level that avoids dangerous climate change - and benefits some of the world's poorest people."
The £75m, which is in addition to development aid, includes £60m for helping people adapt to climate change and £12m for the disaster management programme.
It also includes £3m for research which will help bolster Bangladesh's arguments in international negotiations.
Bangladesh has set up a fund to help fight tackle climate change that will include the money from Britain as well as other donors and £25m per year from the country's own government.
Other global funds to help poor countries deal with climate change are expected to be set up in the run up to the new Kyoto agreement.
Dr Mirza Islam, Bangladesh's finance adviser, said countries like Bangladesh need help from the international community to adapt to climate change.
"Least Developed Countries (LDCs), including Bangladesh, need immediate international support to build their resilience to global warming and climate change," he said.
"The resources currently available for adaptation are grossly inadequate to meet the needs of the LDCs who bear the brunt of increased climate variability and unpredictability resulting from climate change.
"The effects of climate change will severely constrain our ability to attain the high rates of economic growth needed to sustain development gains. We want a new sense of urgency to support Bangladesh in our search for a better tomorrow.
"This is why today, we are presenting our Climate Change Action Plan and calling upon the international community to assist Bangladesh by providing predictable, long-term financing for this plan and also by pushing for a meaningful agreement at Copenhagen."
Prince Charles: wartime urgency needed for rainforests
Louise Gray, Environment Correspondent
Last Updated: 12:01am BST 11/09/2008
Prince Charles last night urged business leaders to act with "wartime urgency" to save the rainforests.
Prince Charles said finanical institutions must act now to make a change
In a sumptuous dinner for some of the highest ranking figures in the City the Prince warned a football pitch size of rainforest is destroyed every every four seconds.
But instead of the usual arguments of philanthropy, the Prince used cold hard cash to persuade business leaders to act.
He suggested setting up a new "eco-systems market" to save the rainforests.
Like the financial markets that already exist, the new system would put a value on rainforests in order to protect the benefits they bring such as absorbing carbon emissions, generating fresh water and preserving wildlife.
Traders could then make a healthy profit from buying and selling rainforest as a new asset class.
The idea is already on the agenda for talks in Copenhagen next year that will decide the world's approach to climate change through a new Kyoto Protocol.
But the Prince said finanical institutions must act now to make a change - despite hard times in the City.
He argued trees are worth more dead than alive because they can absorb some of carbon emissions causing climate change.
"I know that we are meeting at time when short term economic problems have become acute. And you might think it extremely odd, let alone mildly eccentric, to be asking the private sector to focus on what may appear to be tomorrow's problem.
"But cost effectiveness is even more important during financial hard times and the whole point about halting deforestation is that, along with improved energy efficiency, it is the most cost effective, and immediate, way to fight climate change."
Bosses from 16 of the world's largest companies attended the dinner for 250 people as well as the chairman of the London Stock Exchange and Sir David Attenborough.
The Prince said it could take more than ten years for the new Kyoto protocol to put in place systems to protect the rain forest.
In contrast, he said the City of London had the ability to set up the markets and provide the necessary funding as soon as possible.
"I often use the analogy of war becaue I fear we are engaged in a battle of survival," he added. "We must mobilise ourselves - indeed the whole world - with that real sense of wartime urgency and resolve to act together."
Greenpeace welcomed the idea but said the the new system must be audited to ensure indigenous peoples are protected and run alongside a "rainforest fund" that pays developing countries to protect forests.
Friends of the Earth said the ability to invest in rainforest should not take away from cutting carbon emissions.
Last Updated: 12:01am BST 11/09/2008
Prince Charles last night urged business leaders to act with "wartime urgency" to save the rainforests.
Prince Charles said finanical institutions must act now to make a change
In a sumptuous dinner for some of the highest ranking figures in the City the Prince warned a football pitch size of rainforest is destroyed every every four seconds.
But instead of the usual arguments of philanthropy, the Prince used cold hard cash to persuade business leaders to act.
He suggested setting up a new "eco-systems market" to save the rainforests.
Like the financial markets that already exist, the new system would put a value on rainforests in order to protect the benefits they bring such as absorbing carbon emissions, generating fresh water and preserving wildlife.
Traders could then make a healthy profit from buying and selling rainforest as a new asset class.
The idea is already on the agenda for talks in Copenhagen next year that will decide the world's approach to climate change through a new Kyoto Protocol.
But the Prince said finanical institutions must act now to make a change - despite hard times in the City.
He argued trees are worth more dead than alive because they can absorb some of carbon emissions causing climate change.
"I know that we are meeting at time when short term economic problems have become acute. And you might think it extremely odd, let alone mildly eccentric, to be asking the private sector to focus on what may appear to be tomorrow's problem.
"But cost effectiveness is even more important during financial hard times and the whole point about halting deforestation is that, along with improved energy efficiency, it is the most cost effective, and immediate, way to fight climate change."
Bosses from 16 of the world's largest companies attended the dinner for 250 people as well as the chairman of the London Stock Exchange and Sir David Attenborough.
The Prince said it could take more than ten years for the new Kyoto protocol to put in place systems to protect the rain forest.
In contrast, he said the City of London had the ability to set up the markets and provide the necessary funding as soon as possible.
"I often use the analogy of war becaue I fear we are engaged in a battle of survival," he added. "We must mobilise ourselves - indeed the whole world - with that real sense of wartime urgency and resolve to act together."
Greenpeace welcomed the idea but said the the new system must be audited to ensure indigenous peoples are protected and run alongside a "rainforest fund" that pays developing countries to protect forests.
Friends of the Earth said the ability to invest in rainforest should not take away from cutting carbon emissions.
Driving test to measure eco-friendly motoring
New motorists are to be marked on eco-friendliness during their practical driving test.
By Jon Swaine Last Updated: 4:04PM BST 10 Sep 2008
In addition to logging their faults in parking, mirror use and clutch control, examiners will now also measure candidates' fuel efficiency.
The new test has been introduced by the Driving Standards Agency in order to comply with European Union legislation.
While no one will be failed for not being green enough, would-be drivers will be given a detailed environmental assessment of their performance and receive instructions on how they should improve. Among other orders, drivers will be told they must not move down through the gears when preparing to stop, and that they should memorise the mantra "gears are for going - brakes are for slowing".
Smoother acceleration, keener appreciation of gaps in traffic at roundabouts and avoiding sudden braking are also advised.
The Government said it hoped that skills learned during the new test would see the average motorist preserve a whole month's worth of fuel over the course of a year - saving about £150 during the economic downturn and reducing carbon dioxide emissions.
Combining their new techniques with a more fuel efficient car could see the average driver save up to 3 month's worth of fuel, it added.
Jim Fitzpatrick, a Transport minister, said: "To help the next generation of motorists drive in a way that is better for their wallets and the environment, the driving test will now assess how successfully they follow fuel efficient and eco-safe driving advice.
"Common-sense changes can make for major improvements. Drivers can save around a month's worth of fuel each year by taking simple steps, like ensuring their tyres are correctly pumped up, changing gear earlier to keep revs low and avoiding carrying unnecessary clutter in the boot.
"Smarter driving tips have already proved highly successful and will help even more motorists to save money."
By Jon Swaine Last Updated: 4:04PM BST 10 Sep 2008
In addition to logging their faults in parking, mirror use and clutch control, examiners will now also measure candidates' fuel efficiency.
The new test has been introduced by the Driving Standards Agency in order to comply with European Union legislation.
While no one will be failed for not being green enough, would-be drivers will be given a detailed environmental assessment of their performance and receive instructions on how they should improve. Among other orders, drivers will be told they must not move down through the gears when preparing to stop, and that they should memorise the mantra "gears are for going - brakes are for slowing".
Smoother acceleration, keener appreciation of gaps in traffic at roundabouts and avoiding sudden braking are also advised.
The Government said it hoped that skills learned during the new test would see the average motorist preserve a whole month's worth of fuel over the course of a year - saving about £150 during the economic downturn and reducing carbon dioxide emissions.
Combining their new techniques with a more fuel efficient car could see the average driver save up to 3 month's worth of fuel, it added.
Jim Fitzpatrick, a Transport minister, said: "To help the next generation of motorists drive in a way that is better for their wallets and the environment, the driving test will now assess how successfully they follow fuel efficient and eco-safe driving advice.
"Common-sense changes can make for major improvements. Drivers can save around a month's worth of fuel each year by taking simple steps, like ensuring their tyres are correctly pumped up, changing gear earlier to keep revs low and avoiding carrying unnecessary clutter in the boot.
"Smarter driving tips have already proved highly successful and will help even more motorists to save money."
A mad scramble for the shrinking Arctic
Published: September 10, 2008
Climate change is changing all the rules in the Arctic. The polar ice cap is smaller by some 700,000 square miles than it was in the two decades before 2000. The annual melting of northern ice this year may well surpass last year's - the furthest retreat of Arctic ice in a single year since it was first measured.
The Northwest Passage - the route through the Arctic Ocean at the northern edge of the American continent - is likely to be open and navigable again before summer's end for the second time in two years.
And, according to new satellite images, the eastern sea ice blocking a northeastern passage above Siberia has melted too, turning the Arctic into an island surrounded by open water for the first time ever.
What was once solidly frozen is now, increasingly, accessible, leading to fierce disputes over territory and natural resources.
Perhaps the biggest of these disputes is whom do the waters in the Northwest Passage belong to: Canada, or are they international?
Canada has already staked its claim, requiring foreign ships to report when entering waters within 200 miles of its northern shores.
The previous limit was 100 miles. Canada is also backing a new search to find the Erebus and Terror - Sir John Franklin's ships, which were lost during a 19th-century British expedition to the Arctic - in order to "take ownership of the history of this place," as one historian put it.
Meanwhile, the United States, Canada and Russia are all busily mapping the underwater continental shelf in order to bolster claims to what are believed to be vast mineral deposits, including oil and gas.
The two poles of this planet could hardly be more different. In the Antarctic, a scientific truce of sorts remains in effect. But the Arctic is increasingly a scene of commercial and territorial conflict.
The only tolerable way to shape the future of the Arctic is through international cooperation, not a sovereignty battle.
There is more to protect than access to valuable resources and shortened shipping routes. There is a desperately endangered and fragile ecosystem as well, which is threatened both by global warming and by the commercial development warming allows.
Climate change is changing all the rules in the Arctic. The polar ice cap is smaller by some 700,000 square miles than it was in the two decades before 2000. The annual melting of northern ice this year may well surpass last year's - the furthest retreat of Arctic ice in a single year since it was first measured.
The Northwest Passage - the route through the Arctic Ocean at the northern edge of the American continent - is likely to be open and navigable again before summer's end for the second time in two years.
And, according to new satellite images, the eastern sea ice blocking a northeastern passage above Siberia has melted too, turning the Arctic into an island surrounded by open water for the first time ever.
What was once solidly frozen is now, increasingly, accessible, leading to fierce disputes over territory and natural resources.
Perhaps the biggest of these disputes is whom do the waters in the Northwest Passage belong to: Canada, or are they international?
Canada has already staked its claim, requiring foreign ships to report when entering waters within 200 miles of its northern shores.
The previous limit was 100 miles. Canada is also backing a new search to find the Erebus and Terror - Sir John Franklin's ships, which were lost during a 19th-century British expedition to the Arctic - in order to "take ownership of the history of this place," as one historian put it.
Meanwhile, the United States, Canada and Russia are all busily mapping the underwater continental shelf in order to bolster claims to what are believed to be vast mineral deposits, including oil and gas.
The two poles of this planet could hardly be more different. In the Antarctic, a scientific truce of sorts remains in effect. But the Arctic is increasingly a scene of commercial and territorial conflict.
The only tolerable way to shape the future of the Arctic is through international cooperation, not a sovereignty battle.
There is more to protect than access to valuable resources and shortened shipping routes. There is a desperately endangered and fragile ecosystem as well, which is threatened both by global warming and by the commercial development warming allows.
Eon signals nuclear intent for Oldbury
By Ed Crooks, Energy Editor
Published: September 10 2008 23:14
Eon UK, the German-owned energy company, is looking at building a large nuclear power station at Oldbury in Gloucestershire, it emerged on Wednesday, in a sign that the drive for new nuclear investment is gathering pace.
Eon has signed an agreement with National Grid to connect up to the electricity network a 1,600 megawatt nuclear power station at Oldbury, the site of an old reactor that is to be shut this year.
The news emerged as the Nuclear Decommissioning Authority, the government body that runs the clean-up of old nuclear sites, announced plans to sell land at three of its most attractive locations for building new reactors, including Oldbury.
Eon is the first company to sign a grid connection agreement for a new reactor apart from British Energy, the nuclear generator.
An industry source said that while Eon’s move did not necessarily mean it would build a reactor at Oldbury, the agreement was a “signal of intent”.
Eon has said it wants to build two new nuclear power stations in Britain, but the confirmation that it is making progress with its plans will be welcomed by the government, which wants to avoid any single company dominating the construction of new reactors.
Electricité de France is in talks with British Energy over a possible takeover deal.
While strongly backed by the government, it would give EDF the majority of Britain’s reactors and first call on most of the best sites for building new ones.
Ministers are consequently keen for other companies to make use of NDA sites and British Energy sites that EDF might be forced to sell if the deal goes through.
The other sites put up for sale by the NDA on Wednesday were at Wylfa in Anglesey and Bradwell in Essex.
EDF has bought land around Wylfa, which along with the NDA land would create a site big enough for one of the 1,600 megawatt European pressurised reactor designed by Areva of France.
It is likely that if EDF succeeds in its bid for British Energy, it will sell that land, and industry sources suggested that RWE of Germany would be interested in buying it.
John Hutton, the business secretary, said: “Recent developments at home and abroad underline the urgent need for new nuclear to secure clean low carbon energy supplies for the future.
“Nuclear should be a key part of our future energy mix.”
He added: “The government will do all it can to open up opportunities for investors in the UK.”
Vincent de Rivaz, chief executive of EDF in the UK, said his company was continuing to talk to the NDA as well as British Energy.
“We agree fully with the secretary of state that there is an urgent need for new nuclear as part of a low carbon future and we now need to move ahead to deliver it,” he added.”
Copyright The Financial Times Limited 2008
Published: September 10 2008 23:14
Eon UK, the German-owned energy company, is looking at building a large nuclear power station at Oldbury in Gloucestershire, it emerged on Wednesday, in a sign that the drive for new nuclear investment is gathering pace.
Eon has signed an agreement with National Grid to connect up to the electricity network a 1,600 megawatt nuclear power station at Oldbury, the site of an old reactor that is to be shut this year.
The news emerged as the Nuclear Decommissioning Authority, the government body that runs the clean-up of old nuclear sites, announced plans to sell land at three of its most attractive locations for building new reactors, including Oldbury.
Eon is the first company to sign a grid connection agreement for a new reactor apart from British Energy, the nuclear generator.
An industry source said that while Eon’s move did not necessarily mean it would build a reactor at Oldbury, the agreement was a “signal of intent”.
Eon has said it wants to build two new nuclear power stations in Britain, but the confirmation that it is making progress with its plans will be welcomed by the government, which wants to avoid any single company dominating the construction of new reactors.
Electricité de France is in talks with British Energy over a possible takeover deal.
While strongly backed by the government, it would give EDF the majority of Britain’s reactors and first call on most of the best sites for building new ones.
Ministers are consequently keen for other companies to make use of NDA sites and British Energy sites that EDF might be forced to sell if the deal goes through.
The other sites put up for sale by the NDA on Wednesday were at Wylfa in Anglesey and Bradwell in Essex.
EDF has bought land around Wylfa, which along with the NDA land would create a site big enough for one of the 1,600 megawatt European pressurised reactor designed by Areva of France.
It is likely that if EDF succeeds in its bid for British Energy, it will sell that land, and industry sources suggested that RWE of Germany would be interested in buying it.
John Hutton, the business secretary, said: “Recent developments at home and abroad underline the urgent need for new nuclear to secure clean low carbon energy supplies for the future.
“Nuclear should be a key part of our future energy mix.”
He added: “The government will do all it can to open up opportunities for investors in the UK.”
Vincent de Rivaz, chief executive of EDF in the UK, said his company was continuing to talk to the NDA as well as British Energy.
“We agree fully with the secretary of state that there is an urgent need for new nuclear as part of a low carbon future and we now need to move ahead to deliver it,” he added.”
Copyright The Financial Times Limited 2008
Deal Is Set With E.OnTo Build Wind Turbines
September 10, 2008;
Industrial conglomerate Siemens AG said it struck a deal with German utility E.On AG to build 500 wind turbines for projects in Europe and the U.S. The deal is valued at more than €1 billion ($1.4 billion), said Siemens Energy's renewable energy division chief executive, René Umlauft. Siemens will provide the wind turbines with a total capacity of 1,150 megawatts. The turbines will be delivered and installed in 2010 and 2011. In July, Siemens cited increased demand for wind turbines as a contributor to its 10% rise in first-half revenue from the year before.
Industrial conglomerate Siemens AG said it struck a deal with German utility E.On AG to build 500 wind turbines for projects in Europe and the U.S. The deal is valued at more than €1 billion ($1.4 billion), said Siemens Energy's renewable energy division chief executive, René Umlauft. Siemens will provide the wind turbines with a total capacity of 1,150 megawatts. The turbines will be delivered and installed in 2010 and 2011. In July, Siemens cited increased demand for wind turbines as a contributor to its 10% rise in first-half revenue from the year before.
Toyota and EDF power up for plug-in cars
By John Reed
Published: September 11 2008 01:35
Toyota on Wednesday launched the UK’s first trial of a plug-in hybrid car in a tie-up with EDF Energy, which will build a network of charging points where drivers top up their batteries.
The car, seen as a successor to the Prius petrol-electric hybrid, will be tested in EDF’s company fleet as Toyota works through the practical issues surrounding plug-in cars, including the availability of recharging infrastructure.
EDF will set up 40 charging posts, dubbed “juice points”, in the UK, mostly in London. The car will be equipped with an on-board charging and invoicing system allowing consumers to pay for the power.
The launch will make Britain Europe’s second country where Toyota and Electricité de France are testing plug-in cars. Last autumn the power group began working with Toyota on recharging points for cars in France and the companies say they want to branch out further.
However, Peter Hofman, sustainable future director at EDF Energy, said the group was working with “a number of vehicle manufacturers” on recharging points, not just Toyota.
The UK is Toyota’s biggest market in Europe for its Prius model, accounting for 27 per cent of the hybrid’s total sales on the Continent.
John Hutton, secretary of state for business, who attended the launch in London’s Hyde Park, hoped the vehicle would “lead us one step closer to making our ambition of becoming a number one location for low-carbon vehicles”.
In July Boris Johnson, London’s mayor, said he wanted to almost treble the capital’s number of charging points to 100.
Toyota dominates the small but fast-growing global market for hybrids, cars with internal combustion engines that manage short trips via a battery recharged from power released by the car. Plug-in cars, such as Toyota’s test vehicle, promise longer electric-only driving ranges than current-generation hybrids.
Early plug-in cars produced by Toyota, General Motors and other manufacturers in the 1990s flopped commercially because of their short driving ranges, long charging times and the dearth of recharging points. Carmakers are now co-operating to build this infrastructure with utility companies, which see demand from plug-in hybrid and electric vehicles as a source of future revenue.
Last week Daimler, which makes the Mercedes-Benz and Smart marques, announced plans to work with Germany’s RWE on launching 500 charging points for electric vehicles in Berlin by the end of 2009. Daimler is road-testing about 100 plug-in Smarts in London, which unlike Toyota’s car will be purely electric with no back-up from a conventional petrol engine.
Toyota’s plug-in, equipped with a nickel metal hydride battery like that in the current Prius, will have an electric-only driving range of about 10km, or 6.2 miles.
The Japanese company, like other carmakers including GM, Renault/Nissan, and Mitsubishi, is developing next-generation lithium-ion batteries that promise longer electric driving ranges.
GM says its Chevrolet Volt, which is due to launch in late 2010 equipped with lithium-ion batteries, will have a 40-mile electric-only driving range, enough to get most commuters to and from work.
The Toyota plug-in car will be driven by about 50 EDF Energy employees to determine how the vehicle performs in different urban environments and under various driving patterns.
The trial will cover Greater London for at least one year.
Copyright The Financial Times Limited 2008
Published: September 11 2008 01:35
Toyota on Wednesday launched the UK’s first trial of a plug-in hybrid car in a tie-up with EDF Energy, which will build a network of charging points where drivers top up their batteries.
The car, seen as a successor to the Prius petrol-electric hybrid, will be tested in EDF’s company fleet as Toyota works through the practical issues surrounding plug-in cars, including the availability of recharging infrastructure.
EDF will set up 40 charging posts, dubbed “juice points”, in the UK, mostly in London. The car will be equipped with an on-board charging and invoicing system allowing consumers to pay for the power.
The launch will make Britain Europe’s second country where Toyota and Electricité de France are testing plug-in cars. Last autumn the power group began working with Toyota on recharging points for cars in France and the companies say they want to branch out further.
However, Peter Hofman, sustainable future director at EDF Energy, said the group was working with “a number of vehicle manufacturers” on recharging points, not just Toyota.
The UK is Toyota’s biggest market in Europe for its Prius model, accounting for 27 per cent of the hybrid’s total sales on the Continent.
John Hutton, secretary of state for business, who attended the launch in London’s Hyde Park, hoped the vehicle would “lead us one step closer to making our ambition of becoming a number one location for low-carbon vehicles”.
In July Boris Johnson, London’s mayor, said he wanted to almost treble the capital’s number of charging points to 100.
Toyota dominates the small but fast-growing global market for hybrids, cars with internal combustion engines that manage short trips via a battery recharged from power released by the car. Plug-in cars, such as Toyota’s test vehicle, promise longer electric-only driving ranges than current-generation hybrids.
Early plug-in cars produced by Toyota, General Motors and other manufacturers in the 1990s flopped commercially because of their short driving ranges, long charging times and the dearth of recharging points. Carmakers are now co-operating to build this infrastructure with utility companies, which see demand from plug-in hybrid and electric vehicles as a source of future revenue.
Last week Daimler, which makes the Mercedes-Benz and Smart marques, announced plans to work with Germany’s RWE on launching 500 charging points for electric vehicles in Berlin by the end of 2009. Daimler is road-testing about 100 plug-in Smarts in London, which unlike Toyota’s car will be purely electric with no back-up from a conventional petrol engine.
Toyota’s plug-in, equipped with a nickel metal hydride battery like that in the current Prius, will have an electric-only driving range of about 10km, or 6.2 miles.
The Japanese company, like other carmakers including GM, Renault/Nissan, and Mitsubishi, is developing next-generation lithium-ion batteries that promise longer electric driving ranges.
GM says its Chevrolet Volt, which is due to launch in late 2010 equipped with lithium-ion batteries, will have a 40-mile electric-only driving range, enough to get most commuters to and from work.
The Toyota plug-in car will be driven by about 50 EDF Energy employees to determine how the vehicle performs in different urban environments and under various driving patterns.
The trial will cover Greater London for at least one year.
Copyright The Financial Times Limited 2008
Plug-in-and-go Prius hits British roads for testing
The Times
September 11, 2008
A hybrid car that can be plugged into a standard mains socket in the home to charge was released in Britain for initial testing yesterday.
The Toyota Plug-In Hybrid Vehicle (PHV) is powered by a combination of a battery and a petrol engine. On short journeys, it uses electricity to reduce emissions.
Other hybrid vehicles, such as the Toyota Prius, are charged as the car moves and not from the grid. The PHV can be charged in two hours from either a household electrical point or at special charging posts, right, 40 of which have already been installed in the UK by EDF Energy.
September 11, 2008
A hybrid car that can be plugged into a standard mains socket in the home to charge was released in Britain for initial testing yesterday.
The Toyota Plug-In Hybrid Vehicle (PHV) is powered by a combination of a battery and a petrol engine. On short journeys, it uses electricity to reduce emissions.
Other hybrid vehicles, such as the Toyota Prius, are charged as the car moves and not from the grid. The PHV can be charged in two hours from either a household electrical point or at special charging posts, right, 40 of which have already been installed in the UK by EDF Energy.
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