• Idea put forward by 50 least developed countries• Move could be matched by shipping fuel surcharge
John Vidal, environment editor
guardian.co.uk, Sunday 7 June 2009 19.42 BST
Britain and other rich countries will be asked to accept a compulsory levy on international flight tickets and shipping fuel to raise billions of dollars to help the world's poorest countries adapt to combat climate change.
The suggestions come at the start of the second week in the latest round of UN climate talks in Bonn, where 192 countries are starting to negotiate a global agreement to limit and then reduce greenhouse gas emissions. The issue of funding for adaptation is critical to success but the hardest to agree.
The aviation levy, which is expected to increase the price of long-haul fares by less than 1%, would raise $10bn (£6.25bn) a year, it is said.
It has been proposed by the world's 50 least developed countries. It could be matched by a compulsory surcharge on all international shipping fuel, said Connie Hedegaard, the Danish environment and energy minister who will host the final UN climate summit in December.
"People are beginning to understand that innovative ideas could generate a lot of money. The Danish shipping industry, which is one of the world's largest, has said a that truly global system would work well. Denmark would endorse it," said Hedegaard.
In Bonn last week, a separate Mexican proposal to raise billions of dollars was gaining ground. The idea, known as the "green fund" plan, would oblige all countries to pay amounts according to a formula reflecting the size of their economy, their greenhouse gas emissions and the country's population. That could ensure that rich countries, which have the longest history of using of fossil fuels, pay the most to the fund.
Recently, the proposal won praise from 17 major-economy countries meeting in Paris as a possible mechanism to help finance a UN pact. The US special envoy for climate change, Todd Stern, called it "highly constructive".
The Bonn meeting is the first climate meeting at which countries are discussing texts. These cover greenhouse gas reduction and financing developing countries' efforts to combat climate change.
Analysts said last night that the talks were most likely to stall over money. Developing countries, backed by the UN, argue that they will need hundreds of billions of dollars a year to adapt themselves to climate-related disasters, loss of crops and water supplies, which they are already experiencing as temperatures around the world rise. Yet so far, as a Guardian investigation revealed back in February, rich countries have pledged only a few billion dollars and have provided only a few hundred million.
"Developing countries will no longer let themselves be sidelined. In the past, they have been brought on board [climate negotiations] by promises of financial support. But all they got was the creation of a couple of funds that stayed empty. Developing countries will not settle for more 'placebo funds'," said Benito Müller, director of Oxford University's institute for energy studies.
Saleemul Huq, of the International Institute for Environment and Development, said that until rich countries made serious pledges, the rest of the negotiations would suffer because it would be impossible to agree actions without knowing how they would be funded.
Last week, a US negotiator, Jonathan Pershing, said that the US had budgeted $400m to help poor countries adapt to climate change as an interim measure. But that amount was dismissed as inadequate by Bernarditas Muller of the Philippines, who is the co-ordinator of the G77 and China group of countries.
Monday 8 June 2009
Mitsubishi Launches Electric Car
By JOHN MURPHY
Looking to gain an early lead in the emission-free vehicle market, Mitsubishi Motors Corp. Friday launched a compact, four-door electric car that it will market in Japan to corporate customers starting in late July.
The lithium-ion battery-powered i-MiEV, which can travel 100 miles on a single charge, is the first step into the eco-friendly car market by the small Tokyo-based auto maker better known for its brawny SUVs like the Pajero.
By bringing its electric car to market this year, Mitsubishi is hoping to gain a lead over Nissan Motor Co., Japan's third-largest auto maker by sales units, which plans to sell its own electric vehicle starting in 2010.
Mitsubishi launched its i-MiEV electric car in Tokyo on Friday, hoping to get a head start against Nissan Motor's planned electric vehicle.
But sales volume will be small. Mitsubishi expects to sell 1,400 vehicles in Japan in the fiscal year ending March 2010, raising sales to 5,000 vehicles next fiscal year when it starts individual sales in Japan.
Mitsubishi is testing the car in the U.S. but hasn't announced when it might go on sale there. World-wide, Mitsubishi plans to ship the i-MiEV in limited quantities to the U.K., New Zealand, Hong Kong and Singapore starting this year. It has also agreed to supply i-MiEVs to French auto maker PSA Peugeot-Citroën SA in late 2010 or early 2011.
By 2020, Mitsubishi says it expects electric vehicles will make up 20% of its overall production volume.
For now, Mitsubishi's ambitions are constrained by its production capacity and by the high cost of the vehicles. Mitsubishi plans to produce about 2,000 electric cars in the fiscal year ending March 2010, ramping up to 30,000 vehicles by 2013, as its lithium-ion battery production operations are expanded at Lithium Energy Japan, a joint venture run by Mitsubishi Motors, sister company Mitsubishi Corp. and GS Yuasa Corp.
Nissan is putting the finishing touches on its own lithium-ion battery plant outside Tokyo and plans to roll out 50,000 electric cars in the first year of production.
With a 4.59 million yen ($46,500) price tag, the i-MiEV may also struggle to find buyers during the worst recession to hit Japan since World War II. Mitsubishi is counting on generous government incentives to stimulate the market for the vehicles. The national government is currently offering subsidies of up to 1.39 million yen on "clean energy" vehicles like the i-MiEV. Some local governments are also offering additional subsidies that could bring the price of the i-MiEV down to as low as 2.2 million yen.
In addition to Nissan's electric car, the i-MiEV will likely compete with gas-electric hybrids like Toyota Motor Corp.'s Prius and Honda Motor Co.'s Insight, which each sell in Japan for about two million yen. Nissan hasn't announced the price for its electric car.
Still, many auto makers and analysts remain skeptical of the potential for large-scale sales of electric cars because of their limited range and the need to build more recharging stations to support them.
Mitsubishi is selling its electric car to corporate customers in Japan first to allow more time for local governments and businesses to set up recharging stations around the country.
Write to John Murphy at john.murphy@wsj.com
Looking to gain an early lead in the emission-free vehicle market, Mitsubishi Motors Corp. Friday launched a compact, four-door electric car that it will market in Japan to corporate customers starting in late July.
The lithium-ion battery-powered i-MiEV, which can travel 100 miles on a single charge, is the first step into the eco-friendly car market by the small Tokyo-based auto maker better known for its brawny SUVs like the Pajero.
By bringing its electric car to market this year, Mitsubishi is hoping to gain a lead over Nissan Motor Co., Japan's third-largest auto maker by sales units, which plans to sell its own electric vehicle starting in 2010.
Mitsubishi launched its i-MiEV electric car in Tokyo on Friday, hoping to get a head start against Nissan Motor's planned electric vehicle.
But sales volume will be small. Mitsubishi expects to sell 1,400 vehicles in Japan in the fiscal year ending March 2010, raising sales to 5,000 vehicles next fiscal year when it starts individual sales in Japan.
Mitsubishi is testing the car in the U.S. but hasn't announced when it might go on sale there. World-wide, Mitsubishi plans to ship the i-MiEV in limited quantities to the U.K., New Zealand, Hong Kong and Singapore starting this year. It has also agreed to supply i-MiEVs to French auto maker PSA Peugeot-Citroën SA in late 2010 or early 2011.
By 2020, Mitsubishi says it expects electric vehicles will make up 20% of its overall production volume.
For now, Mitsubishi's ambitions are constrained by its production capacity and by the high cost of the vehicles. Mitsubishi plans to produce about 2,000 electric cars in the fiscal year ending March 2010, ramping up to 30,000 vehicles by 2013, as its lithium-ion battery production operations are expanded at Lithium Energy Japan, a joint venture run by Mitsubishi Motors, sister company Mitsubishi Corp. and GS Yuasa Corp.
Nissan is putting the finishing touches on its own lithium-ion battery plant outside Tokyo and plans to roll out 50,000 electric cars in the first year of production.
With a 4.59 million yen ($46,500) price tag, the i-MiEV may also struggle to find buyers during the worst recession to hit Japan since World War II. Mitsubishi is counting on generous government incentives to stimulate the market for the vehicles. The national government is currently offering subsidies of up to 1.39 million yen on "clean energy" vehicles like the i-MiEV. Some local governments are also offering additional subsidies that could bring the price of the i-MiEV down to as low as 2.2 million yen.
In addition to Nissan's electric car, the i-MiEV will likely compete with gas-electric hybrids like Toyota Motor Corp.'s Prius and Honda Motor Co.'s Insight, which each sell in Japan for about two million yen. Nissan hasn't announced the price for its electric car.
Still, many auto makers and analysts remain skeptical of the potential for large-scale sales of electric cars because of their limited range and the need to build more recharging stations to support them.
Mitsubishi is selling its electric car to corporate customers in Japan first to allow more time for local governments and businesses to set up recharging stations around the country.
Write to John Murphy at john.murphy@wsj.com
Closed Loop opens new M&S route for recycling
The Times
June 8, 2009
Marks & Spencer, which wants to use more recycled content, is to sell food packaged with plastic recycled in Britain
Sarah Butler
For the first time, Marks & Spencer will this week sell food packaged with plastic recycled in Britain.
The salad boxes are the final step in a project to create a “closed loop” for plastic food packaging in the UK, in which used bottles are recycled into new food containers.
Britain uses an estimated 2.5 million tonnes of plastic packaging every year and is required by the European Union to recycle at least 22.5 per cent of it. Finding local uses for tonnes of recycled plastic waste is the key factor in cutting down the amount of plastic that goes into landfill.
M&S is working with Closed Loop Recycling, based in Dagenham, Essex, which says that its recycling facility is the first in the world to take milk bottles and clear drinks bottles and turn them back into plastic that is clean and safe enough to package food.
The plant will also be supplying food-grade recycled plastic to Coca-Cola and Solo Cup Europe, which makes cups for companies including Starbucks and Pret A Manger.
Closed Loop plans to open a second plant in Deeside this year, which will boost the amount of plastic bottles recycled in Britain by 50,000 tonnes a year.
Chris Dow, the managing director, said: “We are really keen to make recycling as easy as possible and also prove that consumers’ hard work recycling ends up in tangible products they can buy in store.”
The number of bottles collected by local authorities rose by 70 per cent last year, giving processing businesses increased security of supply and making recycled plastic a more attractive material for manufacturers.
M&S’s Food to Go salad boxes will be produced using up to 40 per cent recycled PET from old plastic bottles and more than 50 per cent recycled content in total.
The retailer hopes to increase the percentage of recycled content and extend the use of British recycled PET to other products in its food range as soon as more can be produced. It has also reduced the total amount of packaging used on its food by 12 per cent in the past two years.
The government-backed Waste & Resources Action Programme said that if the 13 billion plastic bottles used every year in Britain were recycled, it would save a total of about 785,000 tonnes of CO2 equivalent, the same as taking 250,000 cars off the road.
June 8, 2009
Marks & Spencer, which wants to use more recycled content, is to sell food packaged with plastic recycled in Britain
Sarah Butler
For the first time, Marks & Spencer will this week sell food packaged with plastic recycled in Britain.
The salad boxes are the final step in a project to create a “closed loop” for plastic food packaging in the UK, in which used bottles are recycled into new food containers.
Britain uses an estimated 2.5 million tonnes of plastic packaging every year and is required by the European Union to recycle at least 22.5 per cent of it. Finding local uses for tonnes of recycled plastic waste is the key factor in cutting down the amount of plastic that goes into landfill.
M&S is working with Closed Loop Recycling, based in Dagenham, Essex, which says that its recycling facility is the first in the world to take milk bottles and clear drinks bottles and turn them back into plastic that is clean and safe enough to package food.
The plant will also be supplying food-grade recycled plastic to Coca-Cola and Solo Cup Europe, which makes cups for companies including Starbucks and Pret A Manger.
Closed Loop plans to open a second plant in Deeside this year, which will boost the amount of plastic bottles recycled in Britain by 50,000 tonnes a year.
Chris Dow, the managing director, said: “We are really keen to make recycling as easy as possible and also prove that consumers’ hard work recycling ends up in tangible products they can buy in store.”
The number of bottles collected by local authorities rose by 70 per cent last year, giving processing businesses increased security of supply and making recycled plastic a more attractive material for manufacturers.
M&S’s Food to Go salad boxes will be produced using up to 40 per cent recycled PET from old plastic bottles and more than 50 per cent recycled content in total.
The retailer hopes to increase the percentage of recycled content and extend the use of British recycled PET to other products in its food range as soon as more can be produced. It has also reduced the total amount of packaging used on its food by 12 per cent in the past two years.
The government-backed Waste & Resources Action Programme said that if the 13 billion plastic bottles used every year in Britain were recycled, it would save a total of about 785,000 tonnes of CO2 equivalent, the same as taking 250,000 cars off the road.
Gocycle: an electric commuter bike fit for James Bond
With a threatened tube strike set to paralyse London for two days this week many people will be looking for alternative ways to get to work. I've stumbled across Richard Thorpe's British-made GoCycle, which could well do for bicycles what Sir James Dyson has done for washing machines.
By Richard Tyler Published: 5:51PM BST 07 Jun 2009
The result is a stunningly attractive set of wheels, that is portable, assembles easily will motor along at up to 15mph
Thorpe, a former McLaren design engineer with a specialist knowledge of carbon-fibre composite components, has taken what he learnt making supercars and applied them to – a bike for commuters. The result is a stunningly attractive set of wheels, that is portable, assembles easily and, at the press of a James Bond-like button, will motor along at up to 15mph.
Carbon fibre is too expensive for the mass market, so Thorpe used a new technique of injection moulding magnesium called Thixomoulding, more commonly used for mobile phone and laptop casings.
The innovation cut the GoCycle cost to a fifth of the carbon-fibre equivalent but meant he had to invest in bespoke robotic tooling and conduct a global search for investors (successful), strategic partners (fruitless so far) and suppliers (successful).
The first few thousand bikes have now been produced by two companies in Britain and the initial reception has been positive – the GoCycle ranked in the top five new products in April's Gadget Show.
The price is steep at £1,158 online, but Thorpe's company, Karbon Kinetics Limited, has set up a government-approved tax-free "cycle to work scheme", which lowers the price to £599 – if you can get your employer to sign up.
http://www.gocycle.com/
Todd Stern to press China on climate change in run-up to Copenhagen
The Times
June 8, 2009
Tim Reid in Washington
America’s leading climate change negotiator will urge China to make a commitment to cutting greenhouse gas emissions during meetings in Beijing this week, as the US seeks to avoid the collapse of the next global warming treaty.
Todd Stern and a number of the Obama Administration’s senior climate experts travelling with him are intent on boosting co-operation between the US and China to convince developing countries to back a new global climate treaty due to be approved in Copenhagen in December. More than 180 nations are working to endorse a successor to the Kyoto Protocol, which expires in 2012.
Mr Stern travelled to Beijing with the White House science adviser John Holdren and David Sandalow, the Assistant Energy Secretary. Last week Mr Stern said that he did not expect a written agreement from the trip, but he wanted the visit to help to set the tone with the developing world.
Together, China and the US are responsible for 40 per cent of the world’s greenhouse gas emissions. China’s contribution has skyrocketed in the past two decades and is expected to be twice that of the US by 2030.
During a visit to China last month, John Kerry, the chairman of the Senate Foreign Relations Committee, said that “Copenhagen will be defined by what the US and China agree on in the next few weeks”.
China has avoided setting targets or timetables for limiting emissions, but it has some of the most stringent vehicle emission standards in the world and is investing heavily in alternative and renewable energy sources. In the past decade, it has become the world’s largest generator of wind energy. The US Congress is looking at legislation to cut emissions by 17 per cent, from 2005 levels, by 2020 — but Mr Stern said that such action by the US would be futile without firm commitments from China.
June 8, 2009
Tim Reid in Washington
America’s leading climate change negotiator will urge China to make a commitment to cutting greenhouse gas emissions during meetings in Beijing this week, as the US seeks to avoid the collapse of the next global warming treaty.
Todd Stern and a number of the Obama Administration’s senior climate experts travelling with him are intent on boosting co-operation between the US and China to convince developing countries to back a new global climate treaty due to be approved in Copenhagen in December. More than 180 nations are working to endorse a successor to the Kyoto Protocol, which expires in 2012.
Mr Stern travelled to Beijing with the White House science adviser John Holdren and David Sandalow, the Assistant Energy Secretary. Last week Mr Stern said that he did not expect a written agreement from the trip, but he wanted the visit to help to set the tone with the developing world.
Together, China and the US are responsible for 40 per cent of the world’s greenhouse gas emissions. China’s contribution has skyrocketed in the past two decades and is expected to be twice that of the US by 2030.
During a visit to China last month, John Kerry, the chairman of the Senate Foreign Relations Committee, said that “Copenhagen will be defined by what the US and China agree on in the next few weeks”.
China has avoided setting targets or timetables for limiting emissions, but it has some of the most stringent vehicle emission standards in the world and is investing heavily in alternative and renewable energy sources. In the past decade, it has become the world’s largest generator of wind energy. The US Congress is looking at legislation to cut emissions by 17 per cent, from 2005 levels, by 2020 — but Mr Stern said that such action by the US would be futile without firm commitments from China.
U.S. Foresees a Thinner Cushion of Coal
Every year, federal employee George Warholic calculates America's vast coal reserves the same way his predecessors have for decades: He looks up the prior year's coal-reserve estimate, subtracts the year's nationwide production and arrives at a new official tally.
Coal provides nearly one-quarter of the total energy consumed in the U.S., and by Mr. Warholic's estimate, the country has enough in the ground to last about 240 years. A belief in this nearly boundless supply has led officials to dub the U.S. the "Saudi Arabia of Coal."
But the estimate, recent findings show, may be wildly overconfident.
New Outlook for Coal Production?
As coal extraction becomes more difficult and expensive, recent studies are questioning government estimates of the U.S. supply of coal.
While there is almost certainly as much coal in the ground as Mr. Warholic's Energy Information Administration believes, relatively little of it can be profitably extracted. Last year, the U.S. Geological Survey completed an extensive analysis of Wyoming's Gillette coal field, the nation's largest and most productive, and determined that less than 6% of the coal in its biggest beds could be mined profitably, even at prices higher than today's.
"We really can't say we're the Saudi Arabia of coal anymore," says Brenda Pierce, head of the USGS team that conducted the study.
No one says the U.S. is facing a coal shortage. But the emerging ranks of "peak coal" theorists argue that current production levels may be unsustainable and, if anything, create a false sense of security. David Rutledge, an electrical-engineering professor at the California Institute of Technology who has studied global coal production, figures the U.S. has about half as much recoverable reserves as the government says, which would work out to about 120 years' worth.
The Energy Information Administration, part of the Department of Energy, says it is reassessing its coal tally in light of the new Geological Survey data. It intends to create a new coal baseline from which it will begin its annual subtraction "as soon as we can," says William Watson, a member of the energy analysis team at EIA in Washington, D.C.
In the field, challenges are becoming more apparent. Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. American Electric Power Co., the nation's biggest coal buyer, says it has stepped up its due diligence to make sure its suppliers can make deliveries after some firms missed shipments last fall. It even bought a mine to lock down supplies.
"We are very much concerned, and it's getting worse," said Tim Light, senior vice president for AEP.
Coal mines began appearing in America in the early 1740s in Virginia. A century later, as the nation's railroads branched out, coal provided fuel for steamships on the Mississippi and blast furnaces that made steel. The U.S. came to rely on abundant coal to generate electricity, too. About half of the electric power in the U.S. still is produced by coal combustion, more than in most other industrialized nations.
The country's coal supplies have been seen as a bulwark of energy security. In 1979, as the U.S. was reeling from an oil shock, President Jimmy Carter pushed for projects to create liquefied gas from America's vast coal reserves. Today the U.S. produces 1.1 billion tons of coal annually, more than any nation but China.
Concerns about supplies are out of the spotlight now, masked by what could be a short-term lull in the appetite for coal.
Recession has reduced demand from the two biggest users of coal, electricity producers and steelmakers. A proposed law capping greenhouse-gas emissions could make coal-generated electricity -- currently one of the cheapest power sources -- significantly more expensive. At the same time, the country has found itself awash in cleaner-burning natural gas after recent big discoveries, prompting some power companies to pull the plug on proposed coal plants and shift toward gas-fueled power generation.
Experts expect coal production to drop this year by 5% to 10%, or as much as 100 million tons. Prices for coal from Wyoming's Powder River Basin are down nearly 30% from a year ago, to about $8.50 a ton. (Prices of Eastern coal, which burns hotter and typically doesn't have to be transported as far to customers, have also fallen.)
Coal is down but hardly out. It remains the electric-power industry's dominant fuel. Emerging "clean coal" technology could help improve coal's environmental profile. And coal remains an energy ace in the hole, available to substitute for other fuels if shipments are disrupted.
Some in the coal industry believe concerns about future supplies are overblown. Coal advocates argue that improved technology could increase the amount of coal that can be extracted profitably. Coal "is certain to remain an enormously competitive energy resource by virtually any conceivable measure," says Kim Link, spokeswoman for Arch Coal Inc., which produced about 12% of the nation's coal last year.
The U.S. isn't the only nation employing improved drilling data and computer modeling to reassess its supplies. Germany cut its proven hard-coal reserve estimates by more than 99% in 2004 as it explored reducing mining subsidies, which would make coal more expensive to extract. Overall, assessments of total world reserves dropped by half from 1980 to 2005, according to a study by Energy Watch Group, an independent group based in Germany.
The U.S. Geological Survey, the Department of the Interior's science agency, attempted to get a clearer picture of the nation's coal supplies beginning in 2004. Its full study of the Powder River Basin in Wyoming and Montana will be completed next year.
The agency began with the Powder River's rich Gillette coal field, an 80-mile-long strip in northeastern Wyoming that contains the nation's 10 top-producing mines. About one-third of all coal in the country is produced there. Some 1.2 million short tons leave the field daily, a river of coal filling more than 75 trains of 125 to 150 cars each.
For the Gillette study, USGS engineers, geologists and economists spent three years analyzing data from 10,200 drill holes, the most comprehensive study ever attempted of the region. The team concluded there are 201 billion short tons of coal in the Gillette field. Environmental rules and physical challenges put much of that out of reach, leaving what they figured were 77 billion short tons of recoverable coal.
Little is presently worth mining. Analyzing coal beds that contained 82% of the Gillette deposits, the team determined that with coal selling for $10.50 a ton, the prevailing price two years ago, less than 6% of the coal could be extracted profitably enough to leave mining companies an 8% rate of return.
If Powder River prices were to hit $60 a ton in current dollars, as much as 47% could be extracted. But at that price, coal would have a tough time competing with other fuels and technologies.
By adding an economic component, the study broke ground. Jim Luppens, an industry veteran who is now chief of the coal-assessment project for USGS, says policy makers often confuse the total coal resource -- which he describes as the "blood, guts and feathers" number -- with coal reserves, which he likens to the edible meat. "They mix up the R-words," he says.
The findings are percolating through the coal and power industries. "USGS made a leap forward with this study," says Vic Svec, spokesman for Peabody Energy Resources, the U.S.'s biggest coal company. He adds that when his company plugs in prices as the USGS study did, it reaches similar conclusions.
Modern estimates of the U.S. coal resource began in 1907, with field geologists reporting on outcroppings -- places where coal stuck out of the ground -- and mines. Based on consumption at the time, the USGS concluded there were three trillion tons of coal, enough to last 5,000 years. By the 1950s, armed with more mining data, the USGS and the now-defunct U.S. Bureau of Mines reduced their estimate of the total resource to 500 billion tons.
The federal method for calculating U.S. coal reserves has changed little in 35 years. In 1974, the Bureau of Mines established a baseline reserve level, considered good for its era. Each year since, the government -- currently, the DOE's Energy Information Administration -- has subtracted each coal region's production and mine waste to get a new estimate of what's left in the ground.
In 2007, the EIA said the U.S. had a "demonstrated reserve base" of nearly 500 billion tons of coal. It regarded 267 million tons of that as "economically recoverable," enough for 240 years.
Even Mr. Warholic, the EIA analyst, says he's skeptical about the results. "It's kind of crazy" to postulate how long U.S. reserves will last, he says. "It could be 110 years or 225 years or something completely different. It all depends on your assumptions."
After many decades of mining, some of the country's coal fields are showing their age. "What's left to mine is not as easy as what we mined even 10 or 20 years ago," says Janine Orf, spokeswoman for Patriot Coal Corp. in St. Louis. "The seams are getting thinner and there are more limestone intrusions."
Even at the Gillette field, where surface mining started around 1924 and production still is buoyant, obstacles are emerging.
Coal at its Gillette's eastern edge lies mostly close to the surface but the seams generally slope downward in a westerly direction, forcing miners to dig progressively deeper to extract it. At Arch Coal's Black Thunder mine, five pits are moving westward and will intersect the main Burlington Northern-Santa Fe railroad line at some point. Arch then will have to move heavy equipment to the other side of the tracks and dig a new pit down several hundred feet, which it says could cost $100 million or more.
Coal's big buyer, the power industry, has grown increasingly nervous about securing reliable suppliers for power plants that often have a useful life of 50 or 60 years. Plants fine-tune their equipment to burn the coal they expect to receive and to remove its particular pollutants from the waste stream. That makes it problematic to switch suppliers.
Last fall, production problems caused some coal producers in the East to struggle to fulfill contracts. Utility executives say the delays were a wake-up call.
American Electric Power has 9,100 railroad cars and 2,480 river barges dedicated to keeping its power plants furnished with coal. In May, AEP, together with a partner, Cleco Corp., bought a coal mine in Louisiana after a coal source faltered that had been furnishing fuel to a power plant they own together.
Buying the mine outright, says AEP's Mr. Light, was the best way to understand -- and control -- how much coal the power company could expect to receive. "We don't know what the future holds," he said.
Write to Rebecca Smith at rebecca.smith@wsj.com
"We really can't say we're the Saudi Arabia of coal anymore," says Brenda Pierce, head of the USGS team that conducted the study.
No one says the U.S. is facing a coal shortage. But the emerging ranks of "peak coal" theorists argue that current production levels may be unsustainable and, if anything, create a false sense of security. David Rutledge, an electrical-engineering professor at the California Institute of Technology who has studied global coal production, figures the U.S. has about half as much recoverable reserves as the government says, which would work out to about 120 years' worth.
The Energy Information Administration, part of the Department of Energy, says it is reassessing its coal tally in light of the new Geological Survey data. It intends to create a new coal baseline from which it will begin its annual subtraction "as soon as we can," says William Watson, a member of the energy analysis team at EIA in Washington, D.C.
In the field, challenges are becoming more apparent. Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. American Electric Power Co., the nation's biggest coal buyer, says it has stepped up its due diligence to make sure its suppliers can make deliveries after some firms missed shipments last fall. It even bought a mine to lock down supplies.
"We are very much concerned, and it's getting worse," said Tim Light, senior vice president for AEP.
Coal mines began appearing in America in the early 1740s in Virginia. A century later, as the nation's railroads branched out, coal provided fuel for steamships on the Mississippi and blast furnaces that made steel. The U.S. came to rely on abundant coal to generate electricity, too. About half of the electric power in the U.S. still is produced by coal combustion, more than in most other industrialized nations.
The country's coal supplies have been seen as a bulwark of energy security. In 1979, as the U.S. was reeling from an oil shock, President Jimmy Carter pushed for projects to create liquefied gas from America's vast coal reserves. Today the U.S. produces 1.1 billion tons of coal annually, more than any nation but China.
Concerns about supplies are out of the spotlight now, masked by what could be a short-term lull in the appetite for coal.
Recession has reduced demand from the two biggest users of coal, electricity producers and steelmakers. A proposed law capping greenhouse-gas emissions could make coal-generated electricity -- currently one of the cheapest power sources -- significantly more expensive. At the same time, the country has found itself awash in cleaner-burning natural gas after recent big discoveries, prompting some power companies to pull the plug on proposed coal plants and shift toward gas-fueled power generation.
Experts expect coal production to drop this year by 5% to 10%, or as much as 100 million tons. Prices for coal from Wyoming's Powder River Basin are down nearly 30% from a year ago, to about $8.50 a ton. (Prices of Eastern coal, which burns hotter and typically doesn't have to be transported as far to customers, have also fallen.)
Coal is down but hardly out. It remains the electric-power industry's dominant fuel. Emerging "clean coal" technology could help improve coal's environmental profile. And coal remains an energy ace in the hole, available to substitute for other fuels if shipments are disrupted.
Some in the coal industry believe concerns about future supplies are overblown. Coal advocates argue that improved technology could increase the amount of coal that can be extracted profitably. Coal "is certain to remain an enormously competitive energy resource by virtually any conceivable measure," says Kim Link, spokeswoman for Arch Coal Inc., which produced about 12% of the nation's coal last year.
The U.S. isn't the only nation employing improved drilling data and computer modeling to reassess its supplies. Germany cut its proven hard-coal reserve estimates by more than 99% in 2004 as it explored reducing mining subsidies, which would make coal more expensive to extract. Overall, assessments of total world reserves dropped by half from 1980 to 2005, according to a study by Energy Watch Group, an independent group based in Germany.
The U.S. Geological Survey, the Department of the Interior's science agency, attempted to get a clearer picture of the nation's coal supplies beginning in 2004. Its full study of the Powder River Basin in Wyoming and Montana will be completed next year.
The agency began with the Powder River's rich Gillette coal field, an 80-mile-long strip in northeastern Wyoming that contains the nation's 10 top-producing mines. About one-third of all coal in the country is produced there. Some 1.2 million short tons leave the field daily, a river of coal filling more than 75 trains of 125 to 150 cars each.
For the Gillette study, USGS engineers, geologists and economists spent three years analyzing data from 10,200 drill holes, the most comprehensive study ever attempted of the region. The team concluded there are 201 billion short tons of coal in the Gillette field. Environmental rules and physical challenges put much of that out of reach, leaving what they figured were 77 billion short tons of recoverable coal.
Little is presently worth mining. Analyzing coal beds that contained 82% of the Gillette deposits, the team determined that with coal selling for $10.50 a ton, the prevailing price two years ago, less than 6% of the coal could be extracted profitably enough to leave mining companies an 8% rate of return.
If Powder River prices were to hit $60 a ton in current dollars, as much as 47% could be extracted. But at that price, coal would have a tough time competing with other fuels and technologies.
By adding an economic component, the study broke ground. Jim Luppens, an industry veteran who is now chief of the coal-assessment project for USGS, says policy makers often confuse the total coal resource -- which he describes as the "blood, guts and feathers" number -- with coal reserves, which he likens to the edible meat. "They mix up the R-words," he says.
The findings are percolating through the coal and power industries. "USGS made a leap forward with this study," says Vic Svec, spokesman for Peabody Energy Resources, the U.S.'s biggest coal company. He adds that when his company plugs in prices as the USGS study did, it reaches similar conclusions.
Modern estimates of the U.S. coal resource began in 1907, with field geologists reporting on outcroppings -- places where coal stuck out of the ground -- and mines. Based on consumption at the time, the USGS concluded there were three trillion tons of coal, enough to last 5,000 years. By the 1950s, armed with more mining data, the USGS and the now-defunct U.S. Bureau of Mines reduced their estimate of the total resource to 500 billion tons.
The federal method for calculating U.S. coal reserves has changed little in 35 years. In 1974, the Bureau of Mines established a baseline reserve level, considered good for its era. Each year since, the government -- currently, the DOE's Energy Information Administration -- has subtracted each coal region's production and mine waste to get a new estimate of what's left in the ground.
In 2007, the EIA said the U.S. had a "demonstrated reserve base" of nearly 500 billion tons of coal. It regarded 267 million tons of that as "economically recoverable," enough for 240 years.
Even Mr. Warholic, the EIA analyst, says he's skeptical about the results. "It's kind of crazy" to postulate how long U.S. reserves will last, he says. "It could be 110 years or 225 years or something completely different. It all depends on your assumptions."
After many decades of mining, some of the country's coal fields are showing their age. "What's left to mine is not as easy as what we mined even 10 or 20 years ago," says Janine Orf, spokeswoman for Patriot Coal Corp. in St. Louis. "The seams are getting thinner and there are more limestone intrusions."
Even at the Gillette field, where surface mining started around 1924 and production still is buoyant, obstacles are emerging.
Coal at its Gillette's eastern edge lies mostly close to the surface but the seams generally slope downward in a westerly direction, forcing miners to dig progressively deeper to extract it. At Arch Coal's Black Thunder mine, five pits are moving westward and will intersect the main Burlington Northern-Santa Fe railroad line at some point. Arch then will have to move heavy equipment to the other side of the tracks and dig a new pit down several hundred feet, which it says could cost $100 million or more.
Coal's big buyer, the power industry, has grown increasingly nervous about securing reliable suppliers for power plants that often have a useful life of 50 or 60 years. Plants fine-tune their equipment to burn the coal they expect to receive and to remove its particular pollutants from the waste stream. That makes it problematic to switch suppliers.
Last fall, production problems caused some coal producers in the East to struggle to fulfill contracts. Utility executives say the delays were a wake-up call.
American Electric Power has 9,100 railroad cars and 2,480 river barges dedicated to keeping its power plants furnished with coal. In May, AEP, together with a partner, Cleco Corp., bought a coal mine in Louisiana after a coal source faltered that had been furnishing fuel to a power plant they own together.
Buying the mine outright, says AEP's Mr. Light, was the best way to understand -- and control -- how much coal the power company could expect to receive. "We don't know what the future holds," he said.
Write to Rebecca Smith at rebecca.smith@wsj.com
Energy Audits Vex Austin's Home Sellers
By TOM BENNING
The city of Austin, Texas, has begun requiring homeowners to conduct energy-efficiency audits before they can sell their house, a move it says provides a model for cities and states seeking ways to push energy conservation.
With its new law effective last week, Austin joined at least two other U.S. cities -- San Francisco and Berkeley, Calif. -- that require the audits, which can include a review of a home's air-conditioning and heating systems, insulation and air-tightness, and generally cost owners from $200 to $300.
Municipalities across the country are forging policies to encourage more energy-efficient buildings, particularly in new construction. Voluntary energy audits are increasing, too, often as part of government-subsidized "green" renovation programs that are expected to grab a chunk of a $3.2 billion federal stimulus grant devoted to energy conservation.
Austin Mayor Will Wynn expects the audit program to be a hot topic at the U.S. Conference of Mayors next week. The Canadian province of Ontario passed a law in May requiring home sellers to obtain an energy audit, but regulations have yet to be written. City leaders in San Antonio are closely following Austin's experience with its new law and plan to consider a policy on energy audits.
The Austin ordinance requires residents selling single-family homes more than 10 years old to obtain an audit and provide the information to potential buyers. While San Francisco and Berkeley, where audits became mandatory in the 1980s, require owners to make recommended upgrades, Austin doesn't. The Austin Board of Realtors agreed to support the audits after that provision was removed.
Critics of the measure, including homeowners and real-estate professionals, worry that listing all a home's energy-related flaws could drive down prices and even sabotage some sales. The number of homes sold in April was down 18% from the same month last year, according to the Austin Board of Realtors.
Sellers who refuse the audit are subject to being charged with a misdemeanor, a penalty some home sellers and real-estate agents call excessive. Austin city councilman Mike Martinez said the criminal tag shows the city is serious.
Angela Whitaker-Williams, a designer for an architecture firm, plans to list her 2,400-square-foot, 47-year-old home for $319,000 later this month. Her audit recommended doubling the amount of attic insulation, recaulking around plumbing pipes and fixtures and resealing the duct system to reduce a 19% air leakage -- improvements that could cost as much as $1,800 before rebates, experts said.
Ms. Whitaker-Williams is dismayed by the thought that a buyer might use the audit to try to negotiate a lower price, especially because the new law doesn't require buyers to follow through with improvements.
"If a buyer wants $20,000 knocked off the price for energy upgrades, would I do it? In this market, I might have to," she said.
Nate Kredich, who runs the U.S. Green Building Council's residential development program, said the Austin audits will be a trial run for other municipalities evaluating energy-efficiency policies.
The National Association of Realtors said it opposes government-mandated energy efficiency for homeowners and supports an incentive-based approach. Austin Energy, the city-owned utility, offers rebates and low-interest loans to homeowners who make energy-efficient upgrades.
City leaders say the required audits would help keep Austin from having to build a 700-megawatt power plant by 2020 by alerting residents to energy- and money-saving options.
In more than 300 audits already completed, Austin Energy found that, on average, homes had duct systems that leaked more than double what was recommended and attic insulation that was six inches thinner than ideal, said spokesman Ed Clark.
Bill Lanfer, chief executive of Avalar Austin Real Estate, said some sellers are confused about the differences between a home inspection and an energy audit. With a pre-inspection of her home already in hand, Austin art dealer Susan Sklar was surprised to learn she needed an energy audit to sell her 2,500-square foot home after June 1. Listed at $290,000, it was already receiving little interest from buyers. Ms. Sklar complied but not happily.
"Could they do anything else to make it harder to sell a house?" she said.
Write to Tom Benning at tom.benning@wsj.com
The city of Austin, Texas, has begun requiring homeowners to conduct energy-efficiency audits before they can sell their house, a move it says provides a model for cities and states seeking ways to push energy conservation.
With its new law effective last week, Austin joined at least two other U.S. cities -- San Francisco and Berkeley, Calif. -- that require the audits, which can include a review of a home's air-conditioning and heating systems, insulation and air-tightness, and generally cost owners from $200 to $300.
Municipalities across the country are forging policies to encourage more energy-efficient buildings, particularly in new construction. Voluntary energy audits are increasing, too, often as part of government-subsidized "green" renovation programs that are expected to grab a chunk of a $3.2 billion federal stimulus grant devoted to energy conservation.
Austin Mayor Will Wynn expects the audit program to be a hot topic at the U.S. Conference of Mayors next week. The Canadian province of Ontario passed a law in May requiring home sellers to obtain an energy audit, but regulations have yet to be written. City leaders in San Antonio are closely following Austin's experience with its new law and plan to consider a policy on energy audits.
The Austin ordinance requires residents selling single-family homes more than 10 years old to obtain an audit and provide the information to potential buyers. While San Francisco and Berkeley, where audits became mandatory in the 1980s, require owners to make recommended upgrades, Austin doesn't. The Austin Board of Realtors agreed to support the audits after that provision was removed.
Critics of the measure, including homeowners and real-estate professionals, worry that listing all a home's energy-related flaws could drive down prices and even sabotage some sales. The number of homes sold in April was down 18% from the same month last year, according to the Austin Board of Realtors.
Sellers who refuse the audit are subject to being charged with a misdemeanor, a penalty some home sellers and real-estate agents call excessive. Austin city councilman Mike Martinez said the criminal tag shows the city is serious.
Angela Whitaker-Williams, a designer for an architecture firm, plans to list her 2,400-square-foot, 47-year-old home for $319,000 later this month. Her audit recommended doubling the amount of attic insulation, recaulking around plumbing pipes and fixtures and resealing the duct system to reduce a 19% air leakage -- improvements that could cost as much as $1,800 before rebates, experts said.
Ms. Whitaker-Williams is dismayed by the thought that a buyer might use the audit to try to negotiate a lower price, especially because the new law doesn't require buyers to follow through with improvements.
"If a buyer wants $20,000 knocked off the price for energy upgrades, would I do it? In this market, I might have to," she said.
Nate Kredich, who runs the U.S. Green Building Council's residential development program, said the Austin audits will be a trial run for other municipalities evaluating energy-efficiency policies.
The National Association of Realtors said it opposes government-mandated energy efficiency for homeowners and supports an incentive-based approach. Austin Energy, the city-owned utility, offers rebates and low-interest loans to homeowners who make energy-efficient upgrades.
City leaders say the required audits would help keep Austin from having to build a 700-megawatt power plant by 2020 by alerting residents to energy- and money-saving options.
In more than 300 audits already completed, Austin Energy found that, on average, homes had duct systems that leaked more than double what was recommended and attic insulation that was six inches thinner than ideal, said spokesman Ed Clark.
Bill Lanfer, chief executive of Avalar Austin Real Estate, said some sellers are confused about the differences between a home inspection and an energy audit. With a pre-inspection of her home already in hand, Austin art dealer Susan Sklar was surprised to learn she needed an energy audit to sell her 2,500-square foot home after June 1. Listed at $290,000, it was already receiving little interest from buyers. Ms. Sklar complied but not happily.
"Could they do anything else to make it harder to sell a house?" she said.
Write to Tom Benning at tom.benning@wsj.com
Film about overfishing launched
Conservationists have urged consumers to watch the first major film about overfishing.
Published: 12:01AM BST 08 Jun 2009
The End of the Line will be premiered at cinemas across the country in time for World Ocean Day today (Monday June 8th).
The film depicts the plight of species such as bluefin tuna, which is in danger of dying out. Already it has prompted celebrities including model Elle Macpherson and actor Stephen Fry to condemn restaurants like Nobu for continuing to serve the fish.
Closer to home, the film claims 88 per cent of EU stocks are overfished.
The Marine Conservation Society (MCS) said individuals can help reverse the decline by only eating fish that is sourced from sustainable fisheries. The charity have a pocketbook guide that people can easily carry in their wallets or information online.
Dr Simon Brockington, MCS Director, said consumers must take responsibility for the future of the oceans.
“In the UK the fisheries industry has taken big steps towards improving sustainability. However there is still more to be done, and everyone has a part to play – especially the seafood consumer,” he said.
Dr Brockington is also calling for a network or marine reserves to help recover “exhausted seas” as part of the Marine Bill that is currently going through Parliament.
“We now urgently need to safeguard our special places – protection of our seas and the wonderful life they support does go hand in hand with better stewardship of its resources. Our seas have taken a battering over the last century, but they may be amazingly forgiving,” he said. “By offering much needed protection to important areas of our seas now, we could still ensure a diverse and productive future”.
However Seafish, that represents the fishing industry in the UK, said consumers believe fishing is a vital part fo the economy.
John Rutherford, Seafish Chief Executive, said a recent survey showed many people are concerned about food security and believe fishing is key.
“The British public are rightly concerned that this nation must retain the ability to catch, process and distribute seafood products – not just for the economic benefits, but also to ensure that we can provide food for ourselves as the world’s population rises and demand for all foodstuffs, including seafood, grows higher.”
Published: 12:01AM BST 08 Jun 2009
The End of the Line will be premiered at cinemas across the country in time for World Ocean Day today (Monday June 8th).
The film depicts the plight of species such as bluefin tuna, which is in danger of dying out. Already it has prompted celebrities including model Elle Macpherson and actor Stephen Fry to condemn restaurants like Nobu for continuing to serve the fish.
Closer to home, the film claims 88 per cent of EU stocks are overfished.
The Marine Conservation Society (MCS) said individuals can help reverse the decline by only eating fish that is sourced from sustainable fisheries. The charity have a pocketbook guide that people can easily carry in their wallets or information online.
Dr Simon Brockington, MCS Director, said consumers must take responsibility for the future of the oceans.
“In the UK the fisheries industry has taken big steps towards improving sustainability. However there is still more to be done, and everyone has a part to play – especially the seafood consumer,” he said.
Dr Brockington is also calling for a network or marine reserves to help recover “exhausted seas” as part of the Marine Bill that is currently going through Parliament.
“We now urgently need to safeguard our special places – protection of our seas and the wonderful life they support does go hand in hand with better stewardship of its resources. Our seas have taken a battering over the last century, but they may be amazingly forgiving,” he said. “By offering much needed protection to important areas of our seas now, we could still ensure a diverse and productive future”.
However Seafish, that represents the fishing industry in the UK, said consumers believe fishing is a vital part fo the economy.
John Rutherford, Seafish Chief Executive, said a recent survey showed many people are concerned about food security and believe fishing is key.
“The British public are rightly concerned that this nation must retain the ability to catch, process and distribute seafood products – not just for the economic benefits, but also to ensure that we can provide food for ourselves as the world’s population rises and demand for all foodstuffs, including seafood, grows higher.”
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