Thursday, 20 August 2009

Gas Industry Girds to Fight in the Senate Over Climate

By BEN CASSELMAN
The U.S. natural-gas industry, disappointed by the climate-change bill passed by the House of Representatives in June, is counting on new Democratic allies and a stepped-up lobbying campaign to push measures through the Senate that will favor gas over coal and oil.
The climate-change debate in the Senate, which is expected to involve several committees after Labor Day, comes at a critical time for the gas industry. It faces a glut that has driven natural-gas prices below $3.20 per million British thermal units, their lowest level since 2002. In addition, huge new gas discoveries in Texas, Louisiana, Pennsylvania and elsewhere have produced a surge in supply.
The House bill, known as the American Clean Energy and Security Act, focuses on "clean coal" research rather than encouraging natural-gas use. Many in the gas industry concede they were caught off guard by both the coal industry's intensive lobbying campaign and the speed with which the House acted.
"We were not prepared for the pace at which the House legislation proceeded," says Jim Hackett, chairman and chief executive of gas producer Anadarko Petroleum Corp.
But Mr. Hackett says the industry won't repeat its mistake with the Senate. He and other CEOs have formed a new lobbying group, America's Natural Gas Alliance, and pledged about $80 million to the effort, which will include a national media campaign in the fall.
The alliance's members include more than two dozen of the top natural-gas producers in the U.S., including Chesapeake Energy Corp., XTO Energy Inc. and Devon Energy Corp.
David Trice, who is chairman of both the Alliance and gas producer Newfield Exploration Co., stepped down as Newfield's CEO in May in part to focus on the lobbying effort. He says he has met with 20 senators since the group was formed in March.
The gas-industry's goals in the Senate include incentives that will encourage power companies to switch to natural gas from coal and lead truck fleets to convert to natural gas from diesel. Lobbyists will also seek to limit companies' ability to atone for their pollution via carbon "offsets," such as planting trees overseas, which reduce the incentive to switch to cleaner fuels like gas.
At a recent conference on clean energy in Las Vegas, former Vice President Al Gore, Senate Majority Leader Harry Reid and Energy Secretary Steven Chu all spoke positively about using more natural gas.
Following the conference, John Podesta, who co-led President Barack Obama's transition team last winter and who heads the liberal Center for American Progress, co-wrote a paper with former Colorado Sen. Tim Wirth advocating greater use of natural gas.
Environmental groups are also pushing the Senate to embrace natural gas as a "bridge fuel," which would allow the U.S. to move away from coal and oil faster than it could using renewable fuels alone.
"I think people are realizing that instead of gas being an afterthought, gas is a balance wheel of the new market," says Carl Pope, executive director of the Sierra Club, an environmental group.
But the gas industry must overcome major hurdles. Other energy producers are also mobilizing. A major theme of the coal industry has been the relatively stable price of coal compared with volatile natural-gas prices. Meanwhile, major natural-gas consumers, including chemical companies and many utilities, oppose increased use of natural gas because it could drive up costs.
Mr. Trice concedes that the industry was slow to recognize the need to persuade lawmakers that the U.S. can burn more gas without causing price spikes because of the new gas discoveries.
"We weren't up there telling them how things have changed over the last couple years," Mr. Trice says.
"It would've been nice if this organization existed a year ago," he adds. "But we're part of the debate today."
Write to Ben Casselman at ben.casselman@wsj.com

US Congress inquiry reveals fake letters from 'voters' opposed to climate bill

Bonner & Associates, lobbyists hired to campaign against climate change bill, admit letters sent by sacked employee
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Wednesday 19 August 2009 17.52 BST
Don't blame it on granny. A US congressional inquiry has found more than a dozen forged letters to members of Congress purportedly from voters opposed to a climate change bill – including a number from old people's homes.
The house select committee on energy independence and global warming now says it has confirmed 13 fake letters to members of Congress apparently from old people's centres and Latino and African-American groups opposing climate change legislation.
The committee is still investigating 45 other letters sent by the lobbying firm Bonner & Associates, which was hired to campaign against the climate change bill. The fake letters unearthed so far were sent to three junior Democrats who represent conservative, coal-mining districts. At least nine bogus letters were sent to Tom Perriello of Virginia in the run-up to the vote in the house on climate change in late June purportedly from Latino organisations, a local chapter of the National Association for the Advancement of Coloured People, and a senior citizens' centre in Charlottesville. Two other Democrats - Kathy Dahlkemper of Ohio and Chris Carney of Pennsylvania - also received letters from old people's homes."We are concerned about our electricity bills. Many of our seniors, as you know, are on low fixed incomes," said a letter to Democratic Congresswoman Kathy Dahlkemper that claimed to be from the Erie Centre on Health and Ageing. "Please don't vote to force cost increases on seniors."
The committee released three different fake letters to Dahlkemper claiming to be from old people's homes. They used almost identical language.
Ed Markey, one of the authors of the bill, said the use of faked letters marked a new low. "We've seen fear-mongering with our nation's senior citizens with healthcare, and now we're seeing fraud-mongering with senior citizens on clean energy," the congressman said. "Lately, democratic debate has been deceptively debased by fake facts and harsh rhetoric. We must return to an honest discussion of the issues."
The prospect of Congress passing climate change legislation this year has led to a lobbying boom in Washington with industry groups – as well as environmental organisations, on a more modest scale – seeking to influence energy reform. More than 460 new organisations paid for lobbying on global warming in the run-up to the house vote on climate change in June, a report from the Centre for Public Integrity said this month.
There are growing signs that the campaign against climate change legislation is finding traction, with Barack Obama slipping in approval ratings and focused on the struggle to preserve his healthcare reform plans.
This month, a group of 10 Democratic Senators from midwestern states wrote to Obama demanding protections for American workers in the legislation.
"Any climate change legislation must prevent the export of jobs and related greenhouse gas emissions to countries that fail to take actions to combat the threat of global warming comparable to those taken by the United States," they said.
This week saw the launch in the oil capital of Houston of a series of "energy citizen" rallies against climate change reform. More than 3,000 people attended the lunchtime rally – many employees bussed in by Chevron and other oil companies.
Greenpeace, which obtained a memo last week from the American Petroleum Institute laying out a plan for the supposed grassroots uprising against climate change legislation, has called such rallies "astroturf" events.
The inquiry has yet to establish the full extent of involvement of major coal firms in the scandal. Bonner had been hired by a PR firm, the Hawthorn Group, to lobby against the bill by the American Coalition for Clean Coal Electricity.
The lobbying firm acknowledged sending out the fake letters before the House of Representatives voted on the bill. However, its founder, Jack Bonner, said all 13 forgeries were the work of one employee who has since been sacked.

Fog-catching nets offer hope for parched villages

Parched communities around the world are turning to fog-catching nets to harvest hundreds of gallons of water a day.

By Tom Leonard in New York Published: 6:21PM BST 19 Aug 2009

Experts say the devices, which resemble volleyball nets and are made of a porous, agricultural plastic mesh which traps the water droplets in the fog, can be an effective solution to the widespread problems of meagre or unclean supplies.
A single 13ft long by 33ft high net alone can collect 66 gallons of water a day, sufficient for a family's needs. The water, which is pure and does not need to be filtered, runs down into troughs and then via pipes into a holding tank.
FogQuest, a Canadian charity that promotes fog net technology, has been involved in dozens of projects across South America as well as Israel, Nepal, Haiti and even in the deserts of Namibia.
In Peru a string of nets have recently been erected on the slopes above Lima. Rain rarely falls on the Peruvian capital or the surrounding hills where many of its poorest citizens live, forcing the population to get water from Andes glaciers many miles away.
But the glaciers are shrinking, prompting fears of serious water shortages.
As in other parts of the world where unscrupulous water suppliers are squeezing supply, local people in Lima are being forced to pay up to six times the usual price for unclean water brought in by lorry.
However, two German scientists have harnessed the dense fogs that sweeps in from the Pacific every winter and last for eight months a year.
Kai Tiedemann and Anne Lummerich, have also developed a more advanced fog catcher with multiple layers of nettings that can catch a shifting wind.
Robert Schemenauer, FogQuest's executive director, said desert dwellers may have started harvesting fog from trees as long as 2,000 years ago.
"We're getting an awful lot of requests now from all over the world. Last week alone, we had interest from East Timor and Kenya," he said.

Heatwave attracts an unwelcome visitor

Algae chokes estuaries on south coast as England enjoys hottest day of year
By Steve Connor, Science Editor
Thursday, 20 August 2009

A combination of calm, sunny weather and high concentrations of nitrate pollutants running into the sea from local farms and sewage works has caused thick mats of green algae to form at a dozen sites on the south coast.
The Environment Agency said yesterday that it was concerned that the seaweed could cause long-term damage to the unique wildlife of some of the most important coastal mudflats which are being slowly starved of oxygen by the algae as it spreads over wide areas of the southern shoreline.
The development came as Britain suffered a north-south divide in the weather, with the south-east experiencing one of the warmest days of the year with clear skies and brilliant sunshine, while Scotland and Northern Ireland were covered in clouds with outbreaks of rain.
Sunny weather has helped the algae to grow. Near the Isle of Wight, the seaweed has formed layers up to a foot deep and the mud underneath has turned black because of lack of oxygen, said Dave Lothian, a marine scientist at the Environment Agency who is tracking the extent of the problem. "It's hard to gauge how bad it is this year but we know of several sites in and around the Solent that are affected. The point is, this is an unnatural state because there shouldn't be so much seaweed," Mr Lothian said.
"When you pull back the seaweed layer, the sediment underneath looks black because it has been depleted of oxygen. Some of the worms, which are vital for this ecosystem, disappear and others grow abundantly," he said.
Algae grows rapidly in the presence of nitrates from agricultural fertilisers and the effluent from sewage-treatment plants. There are two forms of marine algae that are affected by nutrient run-off from the land. One is the microscopic plants or phytoplankton that can result in toxic "red tides", and the other is the larger algal seaweeds that grow near estuaries and have no roots to anchor themselves to the seabed.
The algal seaweed affecting the south coast does not affect open beaches as much as enclosed estuaries. The Environment Agency said it is concerned about Portsmouth Harbour, Langstone Harbour, Chichester Harbour, Pagham Harbour, Newtown Harbour, Bembridge Harbour, Medina estuary, the Hamble estuary, Poole Harbour and Holes Bay.
"This is an issue because migratory birds are less able to physically access invertebrates in the sediment and when the seaweed breaks down and decays, it uses up the oxygen in the mud producing toxic hydrogen sulphide that can kill invertebrates. This in turn impacts on other marine species such as fish stocks," an agency spokesman said.
"Although this is not a UK-wide problem at present – apart from in enclosed waters such as harbours – in future we could see this problem growing due to increased rainfall events, leading to increased run-off of nitrates from farmers' fields, along with hotter summers – and sunshine provides the catalyst for the algae to grow. So we are working to tackle this issue now," he said.

Seven arrests in suspected £38m carbon credit fraud

Seven people have been arrested and 27 addresses raided over an suspected £38m fraud involving the trade of carbon credits to avoid paying value-added tax (VAT).

By Rowena MasonPublished: 7:36PM BST 19 Aug 2009
Officers from HM Revenue & Customs searched both residential properties and offices in both Gravesend and London targeting an alleged network of organised crime.
Members are believed to have been trading large volumes of high-value carbon credits from overseas sources free of VAT.
Tax investigators believe these may then have been sold on to businesses in the UK charging VAT that is never paid to the authorities.
Officers said further arrests are likely, adding that the proceeds of this alleged crime have been "used to finance lavish lifestyles and the purchase of prestige vehicles".
The Treasury removed VAT from carbon credits on July 31 as a temporary measure until the European Union works out a common policy to tackle fraudsters.
The tax dodge appears to be a variation of "carousel" VAT fraud. Carousel fraud, also known as "missing trader" fraud, typically involves goods such as mobile phones and computer chips imported VAT-free from EU member states. These are then sold in the UK, including a VAT charge, but the trader then going missing without paying the taxman.
Companies now need permits to emit carbon dioxide as part of the global fight against climate change and polluters are granted a certain number of emissions allowances that can be traded.
"The Government took decisive action to prevent this type of fraud recurring by zero rating carbon credits for VAT," said Les Beaumont, deputy director of criminal investigation for HMRC.

US coal industry won't give up easily on using atmosphere as a dumping ground

Fossil fuel lobbyists are fiercely fighting US attempts to make the world's dirtiest power sector pay for its carbon emissions
The US recently passed a bill in the house of representatives called the American Clean Energy and Security Act of 2009. Unsurprisingly, the bill has raised the ire of fossil fuel lobbyists on Capitol Hill who have been fighting such a thing since the Kyoto protocol was first proposed more than a decade ago.
One of the biggest lobby groups in the fight to water down the bill is the coal industry, who stands to lose big time if this bill is passed. A price on carbon in the US will cost the coal industry dearly, as they will be forced to pay for using our atmosphere as a dumping ground for their harmful by products.
Within the coal lobby itself, the biggest player is a multi-million dollar powerhouse called the "American Coalition for Clean Coal Electricity" (ACCCE), an organisation receiving big bucks from major coal companies like Peabody Energy.
A glance at ACCCE's website and its slick advertising would have you believe that the US can continue to burn "clean" green coal while at the same time deal with the issue of climate change. Its website asks: "can we use coal and meet the commitment of reducing greenhouse gas emissions in response to climate change concerns? In a word — yes!" The reality is that the answer is actually an emphatic "no." Coal continues to be the largest contributor to climate change in the world, and emits around 1.7 times more carbon per unit of energy when burned than natural gas and 1.25 times as much as oil. The US coal lobby is pushing the idea that all this greenhouse gas will be buried under our feet using carbon capture and storage (CCS) technology. However, this technology remains at least a decade away according to the most optimistic reports - too late to offer a solid solution for significantly reducing emissions in time to avoid the runaway effects of climate change.
Fossil fuel lobbyists are fiercely fighting US attempts to make the world's dirtiest power sector pay for its carbon emissions
As you might have guessed, the notion that ACCCE cares about climate change is a far cry from the message the people behind the organisation were touting only a few years earlier.
The President of Communications for ACCCE is a gentleman named Joe Lucas and he's been involved in the US energy lobby for much of his career. Prior to working for ACCCE, Lucas was the vice president for another coal-industry lobby group calling itself the Center for Energy and Economic Development (CEED). The President of CEED, a gentleman named Steve Miller, is now the President of ACCCE. These two, Joe and Steve, have been partners in coal for a long time.
Under the CEED flag, Lucas and Miller played a central role in the campaign to confuse the public and politicians about the realities of climate change and the state of climate science. In 1998 CEED produced a video called "Broken Promises Shattered Dreams" arguing that the Kyoto protocol is "just plain wrong: wrong in its science, wrong in its approach, wrong to surrender, wrong for America."
Up until 2006 you could still find messages on the CEED website denying and downplaying the realities of climate change, like this one: "We've all heard of climate change or global warming. Many of us even have our own opinion about whether this is a serious problem or an exaggerated concern." And this: "Some scientists believe that the one degree of warming that has taken place over the past 100 years is evidence that potential catastrophic climate change is an imminent threat. However, other equally-qualified experts are not so sure."
Fast forward to the early days of the 2009 presidential race where you had the front-runners in both parties stating that something needed to be done about the threat of climate change. No serious contender for President questioned the realities of climate change and it's no coincidence that it was at this same time that Miller and Lucas dropped their climate-denying ways.
Miller and Lucas were savvy enough to realise that delay through denial was not going to work with any incoming President, regardless of the party he or she represented. So in late 2008, ACCCE was born out of a reported sum of $40 million from the coal industry. Gone now are the politically incorrect statements downplaying the certainty of climate science and in its place is an ardent
commitment to "slow, stop and then reverse the growth of man-made greenhouse gases." ACCCE has been running this message all over the United States with CNN and Superbowl commercials, event sponsorship, billboards and road shows popping up all over the country.
Miller, Lucas and the coal lobby's message might now be politically correct, but unfortunately for all of us their tactic of delay remains the same.
• Kevin Grandia is the project manager of DeSmogBlog

New environmental finance can feed green shoots we need

Published Date: 20 August 2009
By Michael Groves
EVERYONE is familiar with the received wisdom of a corporate downturn. Marketing and advertising go first, closely followed by other "soft" functions. In this we can include environment and sustainability, of course.
But this is the perfect time for corporate animals to embrace climate change, waste management, water quality, water availability, noise, air emissions and all of the other themes that regularly appear in sustainability reports.The climate change sceptics would argue that when the share price is tanking, it is specious to debate paper recycling versus incineration with heat recovery. But it is time to devise fresh business models and unleash the innovation department, unfettered by risk modellers and rating agencies.Let's brush toxic debt aside and work on the basis that we have a blank sheet of paper on to which we can write new commercial models. Enter the environment, stage right. The commercial drivers are strong, despite the doom. Continental and regional initiatives are springing up, such as emissions trading schemes. Global energy prices are still on the up. Solid European and UK regulations on waste and recycling remain. The UK is introducing a carbon reduction commitment. Major retailers are applying supply chain pressure. The consumer is more enviro-literate. Investors have woken up to environmental stewardship as a measure of corporate governance. Technologies continue to make all sorts of things possible. And bright young job candidates are asking awkward questions about their prospective employers' approaches to these issues.While improving the environment is a universal challenge, the banking sector in Scotland is worth a particular look for three main reasons. First, the sector is hugely important to Scotland's economy. Second, entrepreneurs should put their "bank stories" aside and stand up for fellow carriers of the commercial flame. Finally, opportunities abound to create financial companies, products and services that are built on an innovative approach to environment and climate change.What can a finance provider hope to gain from the environment? Some do very well in this regard. The Co-operative Bank and Triodos spring to mind, organisations that have built successful businesses by innovating and linking financial products to improved environmental management. So here's a thing. Scotland's environment is hugely important commercially, societally and spiritually. Scotland is an acknowledged cradle of innovation, from engineering to medicine, economics, geology, philosophy, design and, of course, banking. And while I accept that Scotland's landscape is not perfectly natural, has been knocked around and provided gruesome playgrounds for Victorian industrialists, it still seems a good meeting place for finance and the environment.While parts of Scotland's banking sector have embraced the opportunity, this is small beer compared with the innovation efforts focused elsewhere … and look where we ended up. This latent innovation resource should be thrown at carbon and environmental management. At the very least, given that clean technology stocks have taken a beating over the past six months, there are some excellent investment bargains to be had.The other reason for such a focus, over and above an acceleration of climate change effects, is that international pricing mechanisms for carbon emissions and savings are affecting all manner of business models. This presents commercial opportunities for those with technical solutions for reducing carbon and environmental risk. It also offers fertile ground for banks and other financial companies to create products and services that help homeowners and businesses reduce energy and environmental costs, innovate and improve environmental performance.As a consequence, I believe new financial institutions can – and will – emerge in Scotland that are built on the commercial opportunities offered by improved environmental stewardship. These companies will be at the heart of a new paradigm in financial services, driving innovation in relation to the price of carbon and improving our standard of living and that of our offspring. These new companies may be start-ups or they may emerge from existing institutions. They may be banks, fund managers and investment houses, venture capitalists or related technology and service providers. In all cases, they will have the vision to realise that effective stewardship of the environment is not a pain in the corporate backside, but one of the key commercial themes of the 21st century.• Michael Groves is an environmental professional and entrepreneur

Greenness is next to Godliness, says Kirk


Published Date: 20 August 2009
By craig brown
THE Kirk has urged worshippers to find more environmentally friendly ways to get to services, to reduce congestion and their carbon footprint.
A report by the Energy Savings Trust, commissioned by the Church of Scotland, has said cycling, walking, bus and car-sharing should be considered as travelling to Sunday worship "generates significant volumes of traffic".The report says that, in addition to helping the environment, "reducing car travel to church could result in less congestion, improved health and wellbeing for members, reduced transport costs".It aims to encourage congregations to formulate their own eco-friendly travel plans and make the most of the green options open to them.Adrian Shaw, climate change officer for the Church of Scotland, said that the move was part of a wider attempt to help congregations understand the challenge of climate change."What we have been trying to do is help congregations to move from being concerned to actively making a difference. Most are aware that it is a serious issue, but few know what to do – very few know what the size of the carbon footprint created by the church is." The report accepts that the elderly and parents with young children may have mobility issues, especially in the Highlands, and that travel plans should take into account public safety, time pressures and availability and reliability of public transport.A recent pilot project at Gilcomston South Church in Aberdeen found that, in a year, travel to church was responsible for more than 40 tonnes of carbon dioxide emissions, mainly from the congregation's cars. Mike Thornton, Scottish director of the Energy Savings Trust, said such reports were increasingly popular with businesses and organisations keen to boost their green credentials. "Each travel plan is tailored specifically to the organisation. In the case of the Kirk, we had to look at the general level because there are so many congregations, each with their specific issues." The report was funded by the Scottish Government.Louis Kinsey, minister of St Columba's Church, Aberdeen, said: "Whilst some folk do need to travel to church on Sundays, as well as at other times, I know I could use my own car far less than I do in connection with my ministry and work."

Yingli Green Posts Loss But Sees Pickup in Demand

By TESS STYNES
Yingli Green Energy Holdings Co. swung to a second-quarter loss amid a steep drop in revenue; losses on derivative liabilities and debt extinguishment; and slumping prices for its solar-energy products.
But Chairman and Chief Executive Liansheng Miao said shipments soared sequentially amid improved project financing and a pickup in demand in its markets, especially Germany. The company also is optimistic about rapidly growing demand for solar energy in China.
The Chinese maker of photovoltaic products said previously it believed this year's first quarter marked a low for the solar industry, which struggled late last year and early this year on the drop in demand and tight credit. The sector is poised to benefit from favorable U.S. and Chinese government policies, but that isn't expected to solve the near-term issue of oversupply.
Yingli Green reported a loss of 393.7 million yuan ($57.6 million), or 3.03 yuan an American depositary share, compared with a prior-year profit of 203.9 million yuan, or 1.57 yuan an ADS.
The latest period included a 204.2 million yuan loss on derivative liabilities and a 244.8 million yuan loss on debt extinguishment. Excluding items, earnings per ADS were down at 0.91 yuan from 1.81 yuan.
Revenue decreased 25% to 1.49 billion yuan from a year earlier, though Yingli reported sequential growth of 50% as shipments soared 72% from the prior quarter.
Gross margin tumbled to 18.3% from 25.8% a year earlier, though it improved from 15.3% in the prior quarter amid lower polysilicon prices and usage.
Yingli Green affirmed its May forecast for 2009 shipments of 450 megawatts to 500 megawatts.
Write to Tess Stynes at tess.stynes@dowjones.com

Conservatives Question Clean-Energy Bank Plan

By SIOBHAN HUGHES
WASHINGTON -- Is it Fannie Mae all over again?
That is the question circulating among fiscal conservatives as the U.S. Congress seeks to create an agency to finance as much as $500 billion of clean-energy projects. With last fall's government takeover of housing financiers Fannie Mae and Freddie Mac fresh on their minds, conservatives are worried that a "clean energy bank" will repeat past mistakes.
"There is no way to determine whether such a program will be a little mistake or a big mistake," said Dan Mitchell, a fellow at the Cato Institute, a libertarian think tank. "But it will be bad news for the economy."
The Clean Energy Deployment Administration, a proposed program tucked into legislation that has advanced in both chambers of Congress, would operate within the U.S. Energy Department. The goal would be to guarantee loans or lend money directly to energy-project developers. Though it would start with as much as $10 billion in its first year, the goal would be to provide enough money -- $50 billion -- to support $500 billion worth of loans.
Large companies see the need for such a program given the damaged credit markets.
"Whether it's renewable energy projects like wind, solar or geothermal, these are capital-intensive projects that really need long-term, low-cost financing," said Kevin Walsh, the leader of power and renewable energy at GE Energy Financial Services, a unit of General Electric Co. He said that banks are reluctant to provide such loans, and that a clean-energy bank would ease such reluctance.
On one level, the proposed clean-energy bank and Fannie Mae couldn't be more different. Fannie Mae and sibling Freddie Mac have operated off budget for decades, something that the White House may end now that the U.S. has pumped more than $80 billion into the companies to keep them afloat. In contrast, loans guaranteed or offered by the clean-energy bank would be included in the federal budget, meaning that Congress would have to focus on whether borrowers were in arrears.
"In that way it is better than Fannie Mae and Freddie Mac because Congress really would have to keep track of what they are doing," said Peter Wallison, a fellow at the American Enterprise Institute, a conservative-leaning think tank.
In another sense, the clean-energy bank and the housing financiers are of a piece. Each has a public mission, whether it be spurring homeownership or encouraging alternative energy. Each can trace its origins to periods of government intervention in the U.S. economy, with Fannie Mae created in the 1930s after the depression. And each raises fears about distortions in the markets.
"Government specifically does not have the skills to allocate capital," said Mike Eckhart, the president of the American Council on Renewable Energy. He says that a market-based system works because "skilled people" compete for resources "hour by hour." He says "that function cannot be replaced by a few dozen people in a building in Washington." He favors a limited government role in financing energy projects.
John Podesta, the Center for American Progress head who led President Barack Obama's transition team, says that a clean-energy bank is "well within the limit of the economy to absorb" and wouldn't crowd out private capital. "It's not an open-ended investment."
He also says that a clean-energy bank is "critical" if companies are to invest in a next generation of energy projects. In economic theory, government intervention is necessary to deal with negative externalities -- costs that markets don't factor in. Emissions from power plants and cars are among such problems, as the damage to the environment isn't fully reflected in the costs of producing electricity or transportation.
AEI's Wallison sees parallels to the Energy Independence Authority, launched under the Carter administration to offer as much as $100 million for new energy projects.
The money was supposed to gasify and liquefy coal for transportation and electricity, said Wallison. But by the time a coal-gasification project was built in North Dakota, the gas to be produced from coal was much more expensive than natural gas, he said.
"That is going to happen to any of these plans that the administration or any people in Congress have," Wallison said. "The government will just end up eating the costs because these things very seldom wind up being economically viable."
Write to Siobhan Hughes at siobhan.hughes@dowjones.com

Australian politicians commit to 20% renewable target by 2020

Law would double production of electricity from sun and wind
Associated Press, Canberra
guardian.co.uk, Wednesday 19 August 2009 11.06 BST
Australia's main political parties struck an agreement today on a new law requiring that 20% of the country's electricity comes from renewable sources such as the sun and wind by 2020, more than twice the current level.
The law would quadruple the renewable energy target set by the previous government in 2001 and provide enough clean electricity to power the households of all 21 million Australians.
The target matches one set in 2007 by the European Union, which leads the world in green power technology. Many US states also have set renewable energy targets although there is no national goal.
But critics argue the Australian target will make electricity more expensive in coal-rich Australia without curbing the amount of climate-warming carbon gases that the nation emits, as overall electricity consumption rises.
Currently, 8% of Australia's electricity comes from renewable sources, including hydroelectric generators built late last century, according to the private Clean Energy Council.
The main opposition Liberal partytoday promised its support for an amended version of the government-proposed legislation in the Senate, where the ruling Labor party needs the votes of at least seven opposition senators to pass laws.
The Liberals' deputy leader in the Senate, Eric Abetz, said his party had achieved "about 80% of what we wanted" in changes to the government's plan.
The amendments increase government assistance to industries that are heavy users of electricity and create safeguards for existing investment in the coal mining industry.
Junior climate change minister Greg Combet said the Liberals' decision to support the bill in a vote either Wednesday or Thursday is "a welcome development which is respected by the government."
But climate change Minister Penny Wong told the Senate that even with one-fifth of Australia's electricity coming from renewable sources by 2020, the nation's carbon gas emissions are projected to be 20% higher than 2000 levels.
"The only way we're going to be able to turn around the growth in our carbon pollution … is to put a firm legislated limit on the amount of carbon that we produce and make those who create the pollution pay for it," Wong said.
Last week the Senate rejected a government-proposed bill that would have taxed industries' carbon emissions starting in 2011 and slashed the country's emissions by up to 25% below 2000 levels by 2020.

A new generation of turbines

Faced with the need to cut fuel costs, an Oxford professor has invented a cheap wind turbine that uses an induction motor
Michael Pollitt
guardian.co.uk, Wednesday 19 August 2009 19.30 BST
Professor John Gregg at the University of Oxford is an international expert in the fields of spin electronics, spintronics and magnetic instrumentation. But he has designed and built something for homeowners facing high energy costs: a new-generation wind turbine. He is testing the turbine, which features a standard induction motor as a generator, in his mother's garden in Ireland.
It all started thanks to rising energy prices. "About five years ago, the prices got so bad that we agreed we needed a wind turbine to heat the water for the shower," says Gregg. He was "knocked sideways" to find he would have to pay ¤38,000 (£33,000), giving an unrealistic 50-year payback time.
One problem, of course, is the wind. Velocities drop dramatically as you come down in height, and planning laws – though thanks to Irish MP Dick Roche, Ireland has good exemptions for domestic wind turbines – make it difficult to erect tall wind turbines in gardens. The high costs are attributable to custom-built generators, invertors, storage batteries and complex circuitry.
Question time
Although he had initially dismissed wind turbines, an Oxford student's question three years ago led to a rethink. Gregg teaches an electrical power and machines option, including a study of "induction machines" (a class of electric motors).
The student's question was this: how can an induction motor work as a generator? Do it with an ordinary motor and you will get out the right voltage and frequency. If you turn an induction motor's rotor expecting to induce a current in the primary windings (normally energised to power the rotor), what you get out varies with the speed.
"So, pride suitably dented, I spent a long time puzzling out the answer for him," says Gregg. In doing so, he was able to spot a novel – and very cheap – method of using an induction motor (found in everything from domestic appliances to industrial machines) for wind turbines.
The electricity generated by using an AC induction motor as a generator doesn't appear at the mechanical speed like an ordinary motor. Instead, the electricity appears at the frequency which would make the total impedance of the generator plus its load equal to zero. All you do is connect a load, correctly switch the primary windings, and turn.
"Then you'll see a voltage appear on the load and the harder you wind, the bigger that voltage gets," says Gregg. "The bigger the load you put on, the lower the voltage you get for given wind conditions."
Wind turbines came back on Gregg's agenda when he realised that hot-water tank heater elements don't mind variable voltages or frequencies. "That's why we can make it cheaply and why it performs well because we are not handcuffed by the necessity to deliver 240V 50Hz," he says.
To make the new turbine work efficiently, Gregg designed a patented electronic control method, which draws inspiration from Swiss locomotives. "There is no mechanical gearbox but as the train pulls out of a station, you can feel it 'changing gear' electrically as the field windings on the motor are switched to give maximum acceleration at all speeds. Well, our generator works in a similar fashion."
And that is the big advantage here. "Because the generator is configured as a constant power source and acts effectively as a generator and a continuously variable electronic gearbox, the turbine aerofoils operate on the peak of their performance curves at all times, and all the power they deliver is harvested and channelled to the load. So, the diminished wind power that you get at low altitude is used to maximum effect."
The wind turbine (which has six-metre diameter blades and a standard 7.5kW induction motor used as a generator) in his mother's garden provides electricity for a heat exchanger tank, which in turn feeds the domestic hot-water tank. "On windy days, the hot tank is pre-fed with hot water so less mains electricity is used. The heat exchanger tank also has a heat exchanger coil that ploughs surplus heat into the domestic central heating system, so saving on heating oil," says Gregg.
His early results already show the equivalent of 1kWh continuous power — a useful reduction in his mother's electricity bill. By combining a large diameter blade with an inexpensive generator system, the wind turbine is expected to pay for itself in three to seven years.
With his co-inventor Dr Mazhar Bari, Gregg is now proposing a spinout company, Renewox, through Isis Innovation, the technology transfer company of the University of Oxford.
Wind of change
AbuBakr Bahaj, professor of sustainable energy at the University of Southampton, has been undertaking the data analysis work for the UK national micro-wind trials funded by the Energy Saving Trust. A key issue for prospective wind turbine users is understanding their resources.
"Regardless of whether the wind turbine produces electricity or heat, if the wind resource is poor, the device will perform inadequately," he says. "It is important to consider for a realistically sited micro-wind turbine what the wind resource is, rather than considering performance at for example a 12m/s wind speed [how commercial large-scale turbines are rated] – this is very misleading for micro-wind."
It also comes down to the user's usual source of energy. For example, the home heating oil used in rural areas is more expensive than gas, with 60% of the domestic energy budget being consumed by heating.
"I assume that the market for this device is housing which is not on the national gas network," says Bahaj. "This obviously helps the economics because the heating costs are much higher than normal."
As the world invests in renewable resources, every little counts.

Solar panel glut hits silicon chip maker

Reduced demand for solar panels has pushed down the profits of PV Crystalox Solar, the silicon wafer maker, after companies cut back on green spending.

By Rowena MasonPublished: 4:05PM BST 19 Aug 2009
The Oxfordshire company's revenue fell 4pc to €121.6m (£105m) in the six months to the end of June, as it reported that the number of new panels installed fell by 20pc to 30pc this year.
Its profits were 70pc lower at £22.2m following currency exchange losses of €13.7m and higher costs.
The company supplies silicon ingots and wafers to solar-panel makers in Europe and Japan.
But businesses are holding back on installing new green energy devices in the recession, which has led to an oversupply of components that is forcing down prices.
Costs rose after PV Crystalox opened a new €6.6m polysilicon manufacturing facility in Germany in an attempt to supply half of all its own silicon by 2011.
"Silicon was one of the key bottlenecks for the growth of the industry over previous years and that caused prices to more than double," said Iain Dorrity, the chief executive said. "It gives us independence in terms of the silicon pricing environment. Whichever way it develops we are well placed."
Wafer shipment volumes fell by 9pc over the first half and demand was lower than contracted with higher requests for deferrals from customers who had already placed orders.
Shareholders collect a 2 cent interim dividend on October 21.

Opec’s greed will herald the end of the oil age

If producers keep prices high even when demand is slack, the world will be surprisingly quick to wean itself off fossil fuels
Bill Emmott
Proclamations of economic recovery in the past week in Japan, France and Germany, and soon in Britain and America too, may signal the end of the Great Recession of 2007-09, albeit bumpily. As things stand, though, this month may also signal the beginning of the end of something far more historic and significant: the age of oil.
Given how bleak the world looked as this year began, it feels remarkable to be seeing growth again so soon. But it is even more remarkable that the world is emerging from such a severe financial shock and slump with its most basic fuel, crude oil, priced at close to $70 a barrel, seven times its price of a little over a decade ago and double the level it was as recently as March.
So this must mean the rebound is even stronger than we think, with demand for oil soaring again? Not at all. Admittedly, this is a pretty opaque market, with many countries treating oil stocks as an official secret. Still, analysts at Banc of America Securities-Merrill Lynch reckon that global oil demand has been three million barrels a day lower in the second quarter of this year than in early 2008. They don’t expect it to get back above that until 2011 at the earliest.
No, the explanation for this potentially recovery-sapping (and certainly wallet-threatening) resurgence in the price of oil, and thus petrol at the pump, lies on the supply side. So, too, does the prospect of prices rising higher still, towards the extraordinary $147 a barrel reached in July 2008, or even beyond.
This point in the analysis is where the planetary gloomsters start citing a concept called “peak oil” (or, to the real oil nerds, “Hubbert’s peak”). This is the idea that the planet’s oil reserves are nearing (or, in some eyes, are past) a time at which the output from oilfields starts to decline. Don’t pay them any attention. The world is not running out of oil. What it is short of has been investment in oilfields and production. And the reason for that can be found in a different four-letter word: Opec.
The oil producers’ cartel has deliberately cut production by nearly five million barrels a day, which is more than the drop in global demand, to keep prices high. Opec members account for only about 35 per cent of world supply, but Russia, a non-member, accounts for a further 11.5 per cent and is co-operating with their efforts. Moreover, the Gulf states that dominate Opec have the largest oil reserves and lowest production costs, so can most easily and painlessly turn their taps on and off.
In the early years of this decade the kingpins of Opec, Saudi Arabia, used to say that their ideal price range for crude oil was $20-25 a barrel. Now, they say that it is $70-75. Crucially, the nationalists in Opec and the extortionists in Russia have blocked the big Western oil companies from investing as much in developing their oil reserves as they would have liked, driving them into higher-cost fields elsewhere. Investment there, even before the financial crisis, has been slow as the sudden rush to explore and expand drove up the costs of engineers and equipment. Since the financial crisis, it has slumped.
That will change over the next decade or so, if prices stay high. Brazil has discovered a huge new offshore oilfield and Angola has shown just how quickly development can occur. In seven years it has trebled its oil output, joined Opec and is now challenging Nigeria for its status as sub-Saharan Africa’s biggest oil producer — and hence as the leading oil-rich basket case. That is why the US Secretary of State, Hillary Clinton, swallowed her human rights scruples and paid homage to the Angolans on her tour of Africa, lest they become overly friendly with China instead.
Yet by the time non-Opec oil supply has been boosted, something even more important will have occurred, if Opec continues to overplay its hand and support painfully high prices. In the 1970s, the rather quotable Saudi Oil Minister, Sheikh Zaki Yamani, had a nice saying: “The Stone Age did not end because the world ran out of stones. Nor will the oil age end because we have run out of oil.”
It will end when oil consumers run out of patience with greedy oil producers, and develop substitutes instead. The Arabs should surely see a warning sign in the fact that the first new product of which Fritz Henderson, boss of the fresh-out-of- bankruptcy (and quasi-nationalised) General Motors, emerged to boast was the Chevrolet Volt, a petrol- electric hybrid, which is claimed to do 230 miles per gallon.
They may just dismiss that as good politics, given the urge of governments all around the world to paint their fiscal stimulus packages a deep shade of green by handing out subsidies to anyone claiming to be developing cleaner technologies. Yet they should remember this. When the 1970s oil shocks gave Japan a second whammy after a sharp revaluation of the yen had given it a first, its Government and industry set about transforming themselves from cheap clunker-producers into the world’s leading makers of semiconductors, consumer electronics and fuel-efficient cars — all within ten years.
This time around, there are scientists and engineers all over the globe dying to bring about just that sort of transformation — but nowhere more so than in China, the world’s second-biggest oil consumer, whose policymakers fully expect their currency to have to be revalued, hitting cheap energy-guzzling producers, and where the need to clean up the environment is urgent.
There are also scores of governments keen to show their green credentials at the Copenhagen climate change conference in December this year by promising limits on the carbon dioxide emissions of which coal and oil are the biggest source — and keen to find tax revenues to plug their huge fiscal holes, for which fuel tax will come in very handy indeed.
The usual forecasts, based on extrapolation of past trends, do not see electric cars or non-fossil fuel power plants having a really big impact for another 20-30 years. Imagine, though, the effect on innovation of oil at $100-200 a barrel, of hundreds of thousands of Chinese (and Japanese, European and America) engineers trying to do for solar power and for car batteries what has been done in the past decade for mobile phones and computers.
Then, the usual forecasts will turn out to be wrong — as usual. The oil age, which began in earnest a century ago in America, will be at an end.
Bill Emmott was Editor of The Economist, 1993-2006

Energy Retail Association in bid to block bill-cutting device

Ben Webster, Environment Editor
Energy companies are trying to block a government proposal to install devices in every home that would cut the average annual energy bill by £130.
The Energy Retail Association (ERA), which represents British Gas, EDF, npower and the other main suppliers, is lobbying ministers against the idea of installing a £15 digital display that would tell people exactly how much their energy is costing them.
The displays, which are wireless and can be moved anywhere in the home, would also allow people to compare the energy usage of different devices and instantly see the savings made by not leaving TVs and computers on standby.
The Local Government Association (LGA) accused the companies of trying to sabotage a policy proposal that would not only save people money but result in a huge reduction in carbon dioxide emissions.
Paul Bettison, chairman of the LGA environment board, said: “If energy firms succeed in blocking this plan to give people in-home energy monitors, millions of households will be denied the chance to cut their fuel bill. Energy displays help people change how they use electricity, cut back and save money.
“The plan to put a smart meter in every home is good but unless it is accompanied by an in-home energy display, for consumers, it is virtually worthless. What you can see, you can save. Why not give people all the information so they can make better choices about how much energy they use?”
The Government has pledged to install so-called smart meters in every home by 2020. These meters use the mobile phone network to send details of usage back to the companies, meaning they will no longer need meter readers.
The companies are keen to install the meters because they will save them £306 million a year in meter-reading costs and make it easier for them to reject customer complaints about overcharging. But they have written to the Department of Energy and Climate Change saying that they do not want to be obliged to issue a display with every smart meter.
A spokesman for the association said that its members wanted to be allowed to give information about usage to customers in various ways, including via e-mail and text message.
“The ERA and its members firmly believe that energy companies should not be restricted to providing a one-size-fits-all solution, but should be allowed to innovate and offer customers precisely the kind of display they would find most useful — whether this is with a display unit, via a website, or even through a mobile phone application.”
Research by the Environmental Change Institute at Oxford University shows that in-home energy display monitors can help people reduce their fuel bills by between 5 and 15 per cent.
On current energy bills which, according to USwitch.com, average £1,293, a 10 per cent cut would result in householders saving nearly £130 a year.

Environment Agency launches investigation as algae problem spreads

Harbours around Britain are being 'suffocated' by algae, according to the Government’s environment watchdog.

By Louise Gray, Environment CorrespondentPublished: 2:51PM BST 19 Aug 2009

The green seaweed saps oxygen from water - meaning other marine life cannot survive - and spreads, taking over hundreds of acres of mudflats and estuaries.
The Environment Agency (EA) is so concerned about the problem that it is mapping out how far the algae has spread using aerial images.

Algae blooms happen when nutrients from sewage works or fertilisers from farms leak into the sea from rivers. A period of sunshine then allows the plant to grow.
This year has been particularly bad after a spell of rain followed by warm weather.
The areas affected are Chichester and Pagham harbours in Sussex, Portsmouth and Langstone harbours in Hampshire, Newtown and Bembridge harbours and the Medina estuary on the on the Isle of Wight, the Hamble estuary in Hampshire and Poole Harbour and Holes Bay in Dorset. An area around Lindisfarne in Northumberland, Seal Sands around Teeside, the Ythan Estuary in Aberdeenshire, Belfast Lock and the Montrose Basin in Angus have also been affected.
In France an area around Brittany was recently struck by toxic algae after a large amount started to decompose.
David Lowthion, marine team leader at the EA, said the problem is set to get worse with climate change because of warmer wetter summers. Also as populations grow and farmers use more chemicals.
“Green sea weed is growing in harbours around the UK in fairly large amounts and in some areas causing ecological issues,” he said.
He said the seaweed can group up to several inches deep, starving invertebrates like worms and therefore affecting birdlife and other animals.
“It suffocates the animals in the mud underneath and changes the whole balance of the ecosystem,” he said.
Every summer the Environment Agency carries out an aerial survey to find out how widespread the problem is and will then work with farmers and local authorities to “starve the algae” by reducing the run off from fields and stopping leaks from sewage works.
In a separate operation the agency has teamed up with the Met Office to provide “algae” forecasts for bathing areas in the UK.
The satellite images use high tech cameras to detect a slight discolouration in the water that can cause algae.
At the moment the technology is being piloted in the South West but will be used to provide “algae forecasts” for popular bathing areas around the country by 2015 when new European laws will make it obligatory.

Scientists uncover new ocean threat from plastics

By Steve Connor, Science Editor
Thursday, 20 August 2009

Scientists have identified a new source of chemical pollution released by the huge amounts of plastic rubbish found floating in the oceans of the world. A study has found that as plastics break down in the sea they release potentially toxic substances not found in nature and which could affect the growth and development of marine organisms.
Until now it was thought that plastic rubbish is relatively stable chemically and, apart from being unsightly, its principle threat to living creatures came from its ability to choke or strangle any animals that either got caught in it or ingested it thinking it was food.
But the latest research suggests that plastic is also a source of dissolved substances that can easily become widely dispersed in the marine environment. Many of these chemicals are believed to toxic to humans and animals, the scientists said.
The scale of plastic pollution in the sea has only been widely recognised in recent years when sailing yachts reported vast areas of ocean, such as an area estimated to be twice the size of Texas in the North Pacific, that seem to be permanently covered in a layer of floating marine litter caught up in swirling ocean currents or gyres.
Some of the items were found to be many decades old, suggesting that the plastic took a long time to degrade. However, a study by Katsuhiko Saido at Nihon University in Chiba, Japan, has found that plastics degrade relatively quickly in the conditions and temperatures that were designed to simulate the environment of the open ocean.
“Plastics in daily use are generally assumed to be quite stable. We found that plastic in the ocean actually decomposes as it is exposed to the rain and sun and other environmental conditions, giving rise to yet another source of global contamination that will continue into the future,” Dr Saido said.
“To date, no studies have been conducted on plastic decomposition at low temperature in the environment owing to the mistaken conception that plastic does not decompose. The present study was conducted to clarify that drift plastic does indeed decompose to give rise to hazardous chemicals in the ocean,” he said.
The scientists found that when plastics decompose in the ocean they release a range of chemicals, such as bisphenol A and substances known as polystyrene-based (PS) oligomers, which are not found naturally. Bisphenol A has been implicated in disrupting the hormonal system of animals.
A common form of plastic rubbish is styrofoam, which soon gets crushed into small pieces in the sea. However, it also releases substantial quantities of a toxic substances called styrene monomer, which is known to cause cancer, as well as styrene dimers and trimer, which are suspected of being carcinogenic. The trimer also breaks down into the toxic monomer form.
Findings from the study were released yesterday at the American Chemical Society meeting in Washington. Dr Saido said that samples of seawater collected from the Pacific Ocean were found to be contaminated with up to 150 parts per million of some of these components of plastic decomposition.
“This study clearly shows new micro-pollution by compounds generated by plastic decomposition to be taking place out of sight in the ocean. Thus, marine debris plastics in the ocean will certainly give rise to new sources of global contamination that will persist long into the future,” he said.
It is estimated that there could be hundreds of millions of tons of plastic rubbish floating in the world’s oceans. In Japan alone, it is calculated that 150,000 tons of plastic is washed up on its shores each year.

Brazil's former environment minister leaves ruling party over 'destruction of natural resources'

Marina Silva is expected to make a 2010 presidential bid and put the environment back on the agenda
Tom Phillips in Rio de Janeiro
guardian.co.uk, Wednesday 19 August 2009 17.36 BST
Brazil's former environment minister, the rainforest defender Marina Silva, has resigned from the ruling Workers' party, paving the way for a 2010 presidential bid, which supporters hope will put the environment back on the political agenda of South America's largest country.
For weeks speculation has been growing that Silva, who resigned from government last May after a dispute over the development of the Amazon region, would defect to the Green party in order to dispute the presidential elections next October.
Speaking at a press conference in Brasilia earlier today, Silva, who has been a Workers' party member for over 30 years, said politicians had failed to give sufficient attention to the environmental cause.
In her resignation letter to the president of the Workers' party, Silva said her decision was an attempt to break with the idea of "development based on material growth at any cost, with huge gains for a few and perverse results for the majority" including "the destruction of natural resources".
She added that "political conditions" had meant that "environmental concerns had not been able to take route at the heart of the government."
Silva, 51, stopped short of formally announcing a presidential bid but few doubt that she will now front the Green Party's 2010 election campaign.
The Brazilian media has been overtaken with Marina mania since earlier this month when rumours about a possible bid for the presidency began spreading. This week one major news magazine stamped Silva's photograph onto its front-page alongside the headline: "President Marina?"
Writing in the O Globo newspaper yesterday, the influential columnist Zuenir Ventura said Silva could bring a touch of Barack Obama to the Brazilian elections.
"Marina excites young people, those who are disenchanted with the current situation [and] with the Workers' Party … in such a way that she could create a spontaneous and contagious movement within society … as innovative as that which occurred in the US with Obama," he wrote.
Born in an impoverished community of rubber tappers in the remote Amazon state of Acre, Silva was orphaned at 16 and was illiterate until her early teens.
In 1994, aged 35, she was elected as Brazil's youngest ever female senator and subsequently became renowned for her staunch defence of the Amazon rainforest and its inhabitants, winning a succession of international awards for her work. The president, Luiz InĂ¡cio Lula da Silva, has not so far commented on her resignation.