Rome BURNS: Berlusconi, Putin and a Natural Gas Pipeline

Robert Rand, BURN Editor

In Sochi, Russia, on a warm summer evening in August, 2005, Vladimir Putin, the Kremlin leader, stood on a pier overlooking the Black Sea with his friend, Silvio Berlusconi, the Italian Prime Minister. Their wives were with them, and the group had just enjoyed a sunset walk along the beach. The previous day, according to The Moscow Times newspaper, Putin had shown Berlusconi his new pony, which the Italian, casually dressed in rolled up sleeves and a sweater tossed over his shoulders, leaned over and petted as a smiling Putin stood nearby.

The two men liked each other, and their relationship reflected a longstanding bond between Italy and Russia. In the 15th century, Moscow claimed the title “Third Rome” after the fall of Constantinople. Peter the Great built St. Petersburg with the help of Italian architects. Myriad Russian writers found inspiration on the banks of the rivers Tiber and Arno. During a visit to Rome in 2000, Putin dedicated a monument to Alexander Pushkin, the great Russian poet.  “The level of our relations, including personal ones, is such that interstate problems just don’t exist,” Putin told Berlusconi, the Moscow Times reports.

south stream pipeline

The South Stream pipeline on its way through Bulgaria. (Photo: Gazprom)

Putin invited his friend to Sochi to talk about energy, in particular natural gas. The Russian presided over a resource rich country and wanted to increase his reach into European markets. The Italian wanted a reliable source of gas and contracts for energy companies back home. Negotiations ensued. Four years later, in 2009, Berlusconi returned to Sochi. Putin, seated behind the wheel of a black limo, picked Berlusconi up at the airport. Russia’s Channel One says Putin whisked him to a meeting where Italy joined a consortium of countries building a pipeline to the West that now runs more than 300 miles under the Black Sea.

Dubbed the “South Stream”, the pipeline, which is slated to start up next year, will bring Russian natural gas directly to Italy and elsewhere in southern and central Europe. It bypasses Ukraine, the transit state for a different Russian pipeline that currently provides the EU with much of its natural gas. Pricing disputes between Moscow and Kiev in 2006 and 2009 led Gazprom, the Russian state energy giant, to shut down that line, causing serious energy shortfalls in Europe.

If Putin was in the driver’s seat in Sochi in 2009, his control over EU gas exports looms even larger now in the wake of the crisis in Ukraine. The concern is that Moscow might manipulate EU and Ukrainian access to Russian gas if the West punishes Putin for his move into Crimea. The New York Times reported today that to offset Putin the U.S. wants to reduce Russia’s energy grip by exporting American shale gas to Europe, which would decrease EU dependence on Russian supplies. However, the New York Times says implementation is several years down the road since U.S. export terminals are still under construction.

The Russians charge EU countries a lot of money for natural gas. European gas prices are three times higher than in America, where, in contrast to Europe, there is a natural gas bounty thanks to fracking.  Fracking, or hydraulic fracturing, is the technology that injects a highly pressurized cocktail of fluids and substances into the ground to extract gas from shale formations.

Poland is set to become the first European country to start commercial shale gas production, according to Bloomberg. Britain, Romania and Ukraine are also interested, as is Italy. But environmental concerns have slowed the move towards fracking in Europe. Opponents, and there are many, say fracking’s mix of water and chemicals is toxic. France and Bulgaria have banned the technology, and Germany has a moratorium in place.

The Ukraine problem has made the debate over shale gas extraction more urgent. Europe must either “embrace shale gas or embrace Russia,” warned Paolo Scaroni, CEO of Eni, the Italian energy conglomerate that has partnered with Gazprom in the South Stream pipeline project.

Eni is collaborating with a Ukrainian company to explore and develop natural gas formations in Ukraine, which is thought to have some of Europe’s most promising shale deposits. Ousted Ukrainian President Viktor Yanukovych supported fracking, but some politicians in the movement that deposed him think differently, citing environmental concerns and corruption.

A few months before Yanukovych’s fall from power Berlusconi suffered his own high stakes drama. Last November, he was forced off the central stage of Italian politics when the Italian senate expelled him following a conviction for tax fraud.

Nicknamed Il Cavaliere (“The Knight”), Berlusconi left public service with a reputation for sexual indiscretion, corruption and wily political governance. Berlusconi’s sleight of hand allegedly involved the Kremlin. In December, 2010, Wikileaks published a cable from the U.S. embassy in Rome citing allegations by Italian politicians that “Berlusconi and his cronies are profiting personally and handsomely from many of the energy deals between Italy and Russia.”

Berlusconi denied these allegations, stating the U.S. clearly knows “that I have absolutely no interest in any other country; that there are absolutely no personal interests, and that I only look after the interests of the Italians and my country.”

In the weeks following Berlusconi’s ouster, The Times of London said Italian media reported that Putin thought about making his old friend the Russian Ambassador to the Vatican, a move that would have allowed Berlusconi to keep a diplomatic passport.

Interestingly, the crisis in Ukraine has boosted Berlusconi’s profile in Italy. In a move that generated publicity, the leader of Berlusconi’s political party, as well as the party’s newspaper, said that the current Italian government should dispatch Berlusconi to negotiate with Putin to defuse the Ukraine crisis. And Italian press reports said the U.S. Ambassador to Italy, John Phillips, lunched with Berlusconi earlier this week.

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Rome BURNS: Russia to raise Ukranian natural gas prices

Robert Rand, BURN Editor

Just around lunchtime today, Dmitry Medvedev, the Russian Prime Minister, sat down to chat with Aleksei Miller, the head of Gazprom, the Russian state gas monopoly.

“So how’s it going?” Medvedev began, according to a transcript of the conversation released by the Russian government. “Anything interesting happening? Anything good going on?”

“We’re exporting 162 billion cubic meters of gas to Europe,” Miller said, adding that in 2013 more than half of that volume flowed through pipelines that transit Ukraine.

The transcript didn’t say whether the men were smiling.

Moscow shut down those pipelines during a pricing dispute with Kiev in January, 2009, causing widespread wintertime fuel shortages in Europe during a time of peak demand.

Miller’s statement seemed designed to remind the European Community that it could happen again if the West, in response to Russia’s seizure of Crimea, leveled sanctions against the Kremlin.

The EU imports nearly a third of its natural gas requirements from Russia.

After a bit more chit chat from Miller, Medvedev got to the point of the meeting.

“So let’s talk about current events,”  Medvedev said. With theatrical understatement he continued: “How are relations with Ukraine? Are there any new problems going on, or is everything as it was in the past?”

Following the revolution in Maidan square, of course, very little between Ukraine and Russia remains the same except for the fact that the Kremlin supplies Kiev with some 70 percent of its natural gas requirements. Russian President Vladimir Putin cut the price of that gas by nearly one-third late last year in a deal that convinced the deposed Ukrainian president, Viktor Yanukovych, to step back from establishing closer economic and political ties with the EU. That move triggered the political revolt that sent Yanukovych fleeing to Russia, where he remains.

Miller went on to tell Medvedev that Ukraine, whose economy is crashing, is 1 billion 529 million dollars behind in its natural gas payments to Russia.  “Ukraine hasn’t fulfilled its obligations,” Miller said. “Gazprom has decided not to extend the subsidy beginning the first of next month.”

Medvedev was ready with a reply.

“He who doesn’t pay his bills must understand that there will be negative consequences,” he said.

The Russian prime minister and Gazprom chief executive met in a town called Gorky, outside Moscow. Gorky means “bitter” in Russian. It’s not clear whether the venue was intended deliberately to underline the Kremlin’s mood regarding developments in Kiev.

Afterwards, the Russian government’s Twitter feed reported the news:

pravitelstvo_logo

Правительство России ‏@Pravitelstvo_RF  5h

«Газпром» с апреля отменит льготы на газ для Украины в связи с неисполнением Киевом обязательств по контракту http://bit.ly/1eQpHeU

 

“From April Gazprom will curtail favorable gas pricing for Ukraine in connection with Kiev’s failure to fulfill contractual obligations,”  the tweet said.

Just as this registered on social media, U.S. Secretary of State John Kerry was in Kiev, voicing Washington’s support for the new Ukrainian government and, as the saying goes, putting money where his mouth is. Kerry offered 1 billion dollars in loan guarantees to help offset the price rise in Russian gas.

In related economic news, the ruble fell to a record low against the dollar yesterday in reaction to developments in Ukraine.  With more value for the American currency, it would be a good time to visit Russia if you were inclined to do so.

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Rome BURNS: The Ukraine-Russia Conflict Flows out of an Energy Pipeline

Pipeline mapRobert Rand, BURN Editor

In Europe, during the sub-zero winter of 2009, a nasty energy pricing dispute between Moscow and Kiev prompted Vladimir Putin, the Kremlin leader, to cut off natural gas exports to Ukraine, which receives 70 percent of its gas from Russia.

On the sidelines of that quarrel stood the rest of Europe, which depends on Moscow for nearly a third of its natural gas requirements. Since 80 percent of that gas flows through pipelines in Ukraine — pipelines that were decommissioned by Putin’s action — much of central Europe was affected, with supplies either reduced or completely cut off at a time of peak demand. It was the European Union’s worst ever energy crisis.

“It’s freezing cold outside,” one resident of Sarajevo, Bosnia-Hercegovina, told the BBC at the time. “Our gas heating stopped working…. We wear as many clothes as we can and wrap ourselves in blankets.”

“We are beginning to feel the effects of the gas cut-off,” said a man in Budapest, Hungary. “Now it’s cold inside as well as outside….  Last night we called a repairman about the heating but he said that he is getting calls from everyone and there’s nothing he can do about it.”

Now, five years later, Moscow and Kiev are at it again, this time with loaded pistols.  The revolution that toppled Ukraine’s pro-Russian leadership ostensibly caused the faceoff. But behind the current conflict — behind the rapidly breaking news of troop movements and threats of war — is an energy security problem that could again entangle all of Europe if the Kremlin decides to lash out.

The reason: Russia remains a Goliath-like provider of natural gas to Ukraine, and to a lesser extent, to the West. In other words, Vladimir Putin controls a rather large on/off energy button. If so inclined he could use it.

Here in a nutshell is what’s at stake, neatly articulated by Edward Goldberg, a professor at Baruch College, in an interview with thefiscaltimes.com:

“The reality today is that Russia supplies 31 percent of EU gas imports, 27 percent of crude oil imports, 24 percent of EU coal imports, 30 percent of total EU uranium imports, and is the EU’s third-largest supplier of electricity. In turn, the EU is not only easily Russia’s largest trading partner, but it is the market for 88 percent of Russia’s oil exports, 70 percent of its gas exports, and 50 percent of its coal exports.”

It’s worth remembering that energy was the point man in the ongoing Russia-Ukraine affair. Late last year, Kiev was prepared to move closer to the EU, economically and politically. That was a popular idea in much of  Ukraine. But Russia, whose interests in Ukraine go back many centuries, objected. Putin wooed Kiev by promising to reduce the price of natural gas by a hefty one-third. Ex-Ukrainian president Viktor Yanukovych agreed and pivoted away from the EU. That’s when the revolution found its footing and Maidan rose to the level of Tiananmen as one of history’s most famous squares. Within two months, the pro-Russian Yanukovych was gone. And the EU was voicing support for the government that replaced him.

The Kremlin has accused the EU of seeking a sphere of influence in Ukraine.  As of this writing, nobody in Putin’s camp has publicly threatened to retaliate by cutting off EU energy access. But over the weekend, as Moscow seized control of Ukraine’s Crimean peninsula, a spokesman for Gazprom, Russia’s state gas company, warned that Kiev is likely to lose the gas discount promised by Putin. Another Russian energy official said it would be “stupid” to extend the discount under current conditions.

If developments in Ukraine continue to escalate and the EU and U.S. respond with sanctions against Russia, it’s possible that Moscow could shut down the pipeline of energy exports to Europe as it did in 2009. Since that time, however, thanks in part to the growth of U.S. shale gas production, there are alternate gas suppliers around, and a Russian cutoff probably wouldn’t sting as much.  But if Vladimir Putin does use the energy weapon against the West, memories of that cold winter five years ago will fade in the face of something that will look more like another Cold War.

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The Hydrogen Economy, Hydrogen Sources, and the Science Behind These

The hydrogen-filled Hindenburg in 1936 or 1937. Photo from DeGolyer Library at Southern Methodist University.

THE HYDROGEN ECONOMY

The hydrogen economy is a hypothetical future in which energy can be bought, sold, stored, and transported in a currency of hydrogen, much like today’s energy is often exchanged in electricity. Because hydrogen doesn’t need to be attached to the electricity grid, it can be used in forms of transportation like buses and cars.

The end-user of the hydrogen, for example an automobile driver, doesn’t experience significant pollution beyond the formation of water from burning the hydrogen.

For more details about the hydrogen economy see here.

Hydrogen, a gas, isn’t a fuel like gasoline or coal; hydrogen is a way to store and transport energy made from other fuels, like a battery or electricity. Unlike fossil fuels, pure hydrogen isn’t stable, so forming hydrogen in the first place requires energy and produces carbon dioxide, and storing hydrogen involves special considerations because this light gas is very flammable and also quickens rust and oxidation in pipelines and storage containers.

HOW HYDROGEN IS DIFFERENT FROM FOSSIL FUELS

Allowing hydrogen (a gas) to burn in the presence of oxygen releases that stored energy in the form of heat. Hydrogen can also be reacted in a fuel cell to produce electricity. In either case, electricity or heat can then be used to power cars or any number of other devices. Gasoline, biofuels, wood, and other carbon-based fuels all produce carbon dioxide when they are burned, and rising carbon dioxide levels are widely implicated in climate change. Burning hydrogen produces energy, water and a few trace compounds, but it doesn’t produce carbon dioxide.

2 H2 (hydrogen gas) + O2 (oxygen gas) = 2 H2O (water vapor) + energy

It’s unclear what widespread emission of water vapor could do. According to recent published estimates, atmospheric water vapor is responsible for 75 percent of the greenhouse effect. However, water vapor can condense, and it’s naturally-occurring in the atmosphere. It is much easier to trap and transform to liquid than the carbon dioxide normally emitted by burning gasoline. Carbon dioxide won’t form a liquid at atmospheric temperatures and will solidify into dry ice only below -108.4 Fahrenheit, so proponents say it can be easier to trap the vapor in hydrogen-powered machines.

If the energy used to generate and purify and store and ship hydrogen doesn’t require emitting greenhouse gases or toxics, proponents argue that hydrogen is a clean alternative.

SOURCES OF HYDROGEN: THE UNFORTUNATE REALITY TODAY

Hydrogen, not carbon, is the most prevalent atom in the human body. There are two hydrogen atoms in every water molecule, and as many as hundreds of hydrogen atoms on the basic building blocks of life, from DNA to plant fibers. Nonetheless, harvesting the hydrogen atoms out of any of these structures to make hydrogen fuel isn’t easy because hydrogen likes to be bonded to carbon or oxygen; it doesn’t like to be elemental gas.

To produce pure hydrogen today, industries use primary fuel source like petroleum, natural gas, coal, or biomass. Through chemical processing, the hydrogen atoms are stripped from the fuel by way of an input of energy from electricity (more than 80 percent of which comes from fossil fuels in the United States). Furthermore, the leftover material from the stripping is carbon dioxide, the same carbon dioxide that would have been produced if the fuel was burned in an engine.

The reactions for various fuel to hydrogen conversions can be found on the U.S. Department of Energy website here.

Hydrogen can also be produced, at great energy loss, through the electrolysis of water: using electricity, water is divided into its constituents, hydrogen and oxygen. However, water electrolysis is the least carbon-neutral hydrogen production method, and it is very expensive ($3 to $6 per kilogram instead of a little more than $1 in the case of using coal for hydrogen), according to the U.S. Energy Information Administration. All hydrogen production methods result in a net energy loss.

 

 

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The Global Energy Mix and Policies

 On this page, you can find energy information about the world’s most populated countries: China, India, the United States, Indonesia, Brazil, Pakistan, Bangladesh, Nigeria, Russia, and Japan. For fossil fuel information about any country, see online tables here.

A nation’s sources of energy hinge on so many factors, from what’s naturally available to geography, political history, and relative wealth.

Even though energy demand is increasing rapidly across the globe, the International Energy Agency estimates a fifth of the world population lacks access to electricity, and a whopping 40 percent of people still use traditional biomass – like wood chips – for cooking. People who live without the energy infrastructure of electricity depend on portable petroleum fuels, manure and methane gas produced from manure, wood, grass, and agricultural wastes. Because these sources of energy are informal, it’s difficult to track and include them in statistics.

World electricity and energy demands are escalating. Countries are expanding energy investment to non-fossil sources like biofuels, wind, solar, and geothermal. At the same time, they are competing to secure access to coal, natural gas, and petroleum both at home and abroad.

 

Nowhere has rapid energy growth been more conspicuous than in the world’s most populated country, China. While most countries saw moderate energy growth in the same period, this Asian nation doubled energy use in less than a decade – see graph – and surpassed the United States in total energy use in 2009, according to International Energy Agency estimates. Until 2009, the United States lead the world in total energy consumption, though not per person consumption, for decades. For a list of the top 30 countries by total energy consumption see here.

Meanwhile, less than 42 percent of people in Africa had electricity at home in 2009. South Asians seemed better off than Africans that year, at 62 percent, but the real story is much more diverse. Nearly 100 percent of Chinese had access to electricity, while in Burma, only 13 percent had access. Worldwide almost 78 percent of people had access to electricity in 2009, according to the International Energy Agency.

 

ENERGY IN THE WORLD’S MOST POPULATED COUNTRIES

 

CHINA (Pop. 1.3 billion)

Between 2008 and 2035, China may triple its electricity demand, adding power plant capacity equal to the current U.S. total, the International Energy Agency projects in one scenario of the 2010 World Energy Outlook.

China is the world’s most populated country and also the world’s largest energy consumer. China gets most of its energy from coal, 71 percent in 2008. China is also the world’s biggest coal producer but only third, behind the United States and Russia, in coal reserves.

In 2008, China generated another 19 percent of its energy from oil, which it imported from all over the world, more than half came collectively from Saudi Arabia, Angola, Iran, Oman, Russia, and Sudan. China used to export its oil, but by 2009 automobile investment was expanded by so much, the country became the second largest oil importer (United States is first).

China is in hot pursuit of securing as much oil as possible, as the nation’s reliance on imported oil is growing far more rapidly than its oil production. Several powerful, national oil companies provide the domestic oil, both from on and off-shore sources. Furthermore, China has purchased oil assets in the Middle East, Canada, and Latin America, and it also conducts oil-for-loan exchanges with other countries, $90 billion worth since 2009, according to the U.S. Energy Information Administration.

Only a small proportion of China’s energy comes natural gas, produced domestically and imported in liquified form, but that may change as prices lower and liquified natural gas terminals are constructed.

China is the world’s biggest user of hydroelectric power, which made up 6 percent of energy and 16 percent of electricity in 2009. The country’s Three Gorges Dam, the world’s largest hydroelectric project, is expected to begin operating in 2012. Nuclear power accounts for only 1 percent of total consumption. However, China’s government predicts it will have seven times its current nuclear capacity by 2020.

A homemade oven. West Bengal, India, 2009.

Detailed data on energy in China can be found here.

 

 

 

 

 

 

INDIA (1.2 billion)

India is the world’s largest democracy. Though India’s population is close to that of China’s, it is only the world’s fifth largest energy user, behind the United States, China, Russia, and Japan.

Like China, India’s electricity comes mostly from coal. However, India doesn’t have enough electricity for everyone, and only 65 percent of the population has access to electricity.

Instead, many Indian use fuels at home for lighting and cooking. A 2004-2005 survey by the government found more than 40 percent of rural Indians used kerosene instead of electricity for home lighting. The same survey showed that for cooking, 74 percent of Indians used firewood and wood chips, 8.6 percent used liquified petroleum gas, 9 percent used dung cakes, and 1.3 percent used kerosene.

India produces oil domestically, but like China, the rate of India’s increasing oil consumption far outstrips its production. India therefore has to import oil; in 2009 its most significant sources were Saudi Arabia, Iran, Kuwait, Iraq, the United Arab Emirates, Nigeria, Angola, and Venezuela, in descending order.

India doesn’t have the electricity capacity to serve its population but aims to add many thousands of megawatts in the near future.

Like China, India has nuclear power, with 14 nuclear plants in operation and another 10 in planning, the reactors purchased from France and Russia.

 

UNITED STATES (300 million)

Until China recently outpaced it, the United States was the biggest energy consumer in the world, though per capita use isn’t the highest but in the same range as several developed countries worldwide and less than the per capita use in Canada. The United States relies on petroleum, coal, and natural gas, as well as a small part nuclear, hydroelectric, and various non-fossil sources. The Unites States has significant oil, coal, and natural gas reserves, as well as the potential for significant investment in solar, off and on-shore wind, and biofuels.

The mix of fuels that provide electricity varies widely from region to region. Find a map of fuel mix by U.S. region from the Edison Electric Insitute here.

For more U.S. information:

-Fossil fuel use in the United States, go here.
-U.S. greenhouse gas emissions and energy here.
-U.S. sources of energy, see here.

 

INDONESIA (250 million)

Indonesia is an archipelago of more than 17,000 islands — 6,000 are inhabited — and it is home to 76 active volcanoes and a significant undeveloped geothermal capacity, estimated at 28 gigawatts, about as much total electricity capacity as Indonesia had in 2008.

Indonesia’s energy demand is growing rapidly, split between coal, natural gas, and petroleum sources. Traditional sources of energy like wood and agricultural waste continue to be used, particularly in rural areas and remote islands, and the International Energy Administration estimates these fuels provide about a quarter of the country’s energy.

Indonesia exports coal and natural gas. In the past, the country also exported more oil than it used, but as of 2004 that balance changed. By 2009, the country suspended its membership in the Organization of Petroleum Exporting Countries (OPEC) because it was using so much of its own oil.

 

BRAZIL (200 million)

Tropical Brazil is the largest country in South America both in area and population, and it is the third largest user of energy in the Americas, after the United States and Canada.

Made from sugar cane, Brazil’s ethanol production is the world’s second largest, after the United States, which makes ethanol from corn.

Brazil produces almost as much petroleum as Venezuela and produces slightly more fuel than it consumes.

While Brazil depends on oil for other energy applications like transportation, the country gets an astounding 84 percent of electricity from hydroelectric dams. Brazil also has two nuclear power plants.

PAKISTAN (190 million)

Pakistan has limited access to electricity and energy sources, and its rural population still relies on gathered fuels like wood for heating and cooking.

In 2009 around 60 percent of the population had access to electricity, far better than its neighbor Afghanistan, at just 15 percent. Nonetheless, even with access, most of the population can’t rely on electricity unless they are wealthy enough to own generators. Pakistan suffers from lengthy blackouts, even in its cities, in part because of poor transmission infrastructure and widespread electricity theft. The situation is also aggravated by lack of capacity planning, insufficient fuel, and irregularities in water supply for hydroelectric.

In 2010, angry citizens protested violently after lengthy blackouts — as long as 18 hours according to Reuters — plagued the country. That summer, Pakistan has nowhere near enough electricity for its peak needs, which were roughly 25 percent more than its total production capacity. The widespread blackouts crippled the country’s textile industry, its biggest source of exports, and some reports suggest that hundreds of factories were shuttered as a result of sporadic power.

Meanwhile, several proposals for gas pipelines through Pakistan have yet to get solidified, including one from Iran to Afghanistan (which is opposed by the United States).

 

BANGLADESH (160 million)

Like nearby Pakistan and India, with which it shares cultural and political histories, Bangladesh also suffers from electricity shortages. Only 41 percent of Bangladeshis had access to electricity in 2009, according to the International Energy Administration.

Most of the electricity in this delta nation is generated from natural gas, with smaller amounts each from oil, coal, and hydroelectric sources. More than 30 percent of the country’s energy comes from biomass, agricultural wastes, and other combustible, renewable materials.

In 2011, Bangladesh signed a contract with oil company ConocoPhillips, allowing off-shore drilling for natural gas, despite internal protests that insisted Bangladesh should keep more of the gas for its own. The agreement gives 20 percent to Bangladesh.

 

NIGERIA (160 million)

Nigeria is Africa’s most populous country, and it is world famous for its oil, most of which is exported for sale by huge foreign oil companies like Royal Dutch Shell, ExxonMobil, Chevron, ConocoPhillips, Petrobras, and Statoil. Roughly 65 percent of government revenue comes from the oil sector, and around 40 percent its oil exports are sent to the United States. Nigeria also holds the largest natural gas reserves in Africa.

Extensive oil development has wreaked havoc on Nigeria’s ecology. Oil spills have polluted Nigeria’s water, affecting both fishing and agriculture. Much of Nigeria’s natural gas is flared rather than being collected and sold for fuel. Flaring involves burning off naturally-occurring gases during petroleum drilling and refining, resulting in  environmental degradation, greenhouse gas emissions and loss of revenue.

Even though Nigeria is fossil fuel-rich, only 47 percent of the population have access to electricity, and less than a fifth of energy in that country came from petroleum and natural gas in 2007, reflecting the widespread use of more traditional fuels like wood. Nigeria only used 13 percent of petroleum it produced in 2009.

 

RUSSIA (140 million)

Russia has significant wealth in fossil fuels, including the largest natural gas reserves and the second largest coal reserves, after the United States. In 2009, Russia produced more oil even than Saudi Arabia, mostly from Western Siberia. In 2009, Russia exported far more oil than it used, and 81 percent of its exports went to Europe, notably the Netherlands and Germany.

Russia is also the third largest consumer of energy in the world.

The country has a well-developed pipeline system to transport oil from remote regions, a system which is almost entirely controlled by a single state-run company, Transneft.

Like Nigeria, Russia flares gas in the process of drilling and refining oil, and in 2008 Russia flared more gas than any other country in the world, 1,432 Bcf of natural gas, more than double Nigeria’s output and equivalent to the annual greenhouse gas emissions for 1.4 million passenger cars, according the calculator on the U.S. Environmental Protection Agency website and data from the U.S. Energy Information Administration.

Russia operates 31 nuclear reactors, half of which employ a similar design to the ill-fated Chernobyl plant in the Ukraine.

 

JAPAN (130 million)

Japan doesn’t have significant fossil fuel resources, one reason that much of its electricity industry relies on nuclear power. It is the world’s third largest user of nuclear power.

Japan is the world’s third larger oil consumer, and it does produce some oil domestically. However, it also imports a lot of oil and natural gas, the later in the form of liquified natural gas, or LNG. Almost half of its energy came from imported oil in 2009, and just 16 percent of Japanese energy came from a domestic source.

Japan also invests heavily in foreign oil, including in the United Arab Emirates, the Congo, Algeria, Russia, Australia, Papua New Guinea, Brazil, Canada, the United Kingdom, Vietnam, and Indonesia, to name a few.

As of June 2011, Japan is still recovering from a massive earthquake and tsunami that devastated its northeast coast on March 11, 2011, forcing the shutdown of several nuclear reactors as well as damaging refineries, oil and gas generators, and electricity transmission infrastructure.

Japan imports most of its oil from the Middle East: Saudi Arabia, Iran, Kuwait, the United Arab Emirates, and Qatar together supplied 77 percent of imports in 2009.

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Major sources of energy/their advantages and disadvantages

There is no easy answer to what is the best source of energy or electricity. Is the priority reliability, affordability, the economy, international human rights, limiting greenhouse gas emissions, preserving environmental resources, or human health?

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It’s undeniable that today — whether we like it or not — humans worldwide are overwhelmingly dependent on fossil fuels: coal, oil, and natural gas. Everything eaten, worn, lived in, and bought is tied to availability of fossil fuels. Even if 100 percent of politicians were determined to stop using them today, society has neither the electricity grid nor the vehicular and industrial technology to sustain the current American lifestyle on non-fossil sources of energy. Yet.

When comparing sources of energy, it’s easy to forget how universal fossil fuels are. These sources continue to dominate for reasons that are difficult to measure, like political influence, advertising clout, and control over energy infrastructure. Other sources have disadvantages purely because they don’t fit in as well.

Volume brings another difficulty in comparing sources of energy. There is so much more fossil energy, and it’s been used for a long time, so we know a lot more about its hazards and benefits. More modern technologies are harder to quantify. Some are renewable but still pollute (biofuels), some are very clean except in accidents or waste disposal (nuclear). Most electricity sources (renewable or not) use steam turbines, and all the water to make steam has to come from somewhere, but how important should that factor be?



Clicking the graphic above will give an abbreviated chart comparing sources line by line, but that doesn’t provide anywhere close to the whole story.

Each of the following topics compares the major sources of energy  through a different lens. Though environmental and local issues may seem the most important to those of us who don’t own power plants or utility companies, the cost of energy drives which sources are actually in place today and which sources will see investment tomorrow.

 

 

 

 

 

 

 

 

 

 

 


Source: U.S. Energy Information Administration

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The Connections Between Greenhouse Gas Emissions and Energy

Most of the greenhouse gas emitted through human activity comes from the production of energy.

This group of gases is thought to contribute to global climate change, long-term shifts in weather partly due to the tendency of these gases to trap energy, in the form of electromagnetic radiation from the sun, that would otherwise have been reflected back out into space. For more about the relationship between the climate and greenhouse gases, go here.

Noteworthy greenhouse gases  are carbon dioxide, nitrous oxide, methane, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6).

Energy creation results in such a high level of greenhouse gas because the vast majority of energy we use — regardless of what country we live in — comes from burning something, usually coal, petroleum fuels, natural gas, or wood. More than 80 percent of U.S. energy in 2009 came from the combustion of fossil fuels.  Go here for more information about how combustion works.

WE’VE BURNED THINGS FOR EONS, WHY IS IT DIFFERENT NOW?

Plants and some types of microscopic organisms take carbon dioxide gas out of the air and turn it back into solid, carbon-based materials like plant fibers, using the energy of sunlight. The basis for all of our fuels, even the fossil fuels, comes from exploiting the fact that organisms convert  light energy into chemical energy, a potential energy source inside the plant or organism’s cells, whether the energy was converted in the last few decades (wood, biodiesel, ethanol) or millions of years ago (fossil fuels). Today, however, organisms don’t have the capacity to capture anywhere near as much of the greenhouse gas carbon dioxide as we produce, partly because we are burning fuels produced over millions of years.

EMISSIONS ARE A WORLDWIDE PHENOMENON

The United States produces more greenhouse gas each year per person than most other countries. However, even if we stopped producing any carbon dioxide at all, which is unlikely, the world would still keep producing 80 percent of its former output. Other regions produce just as much as we do, particularly Europe and China.

Furthermore, instead of holding steady at a particular emission rate, every year we use more energy and therefore emit more greenhouse gas. For a graph of atmospheric carbon dioxide by year, go here.

When we talk about energy-related emissions, we don’t only mean electricity. Energy involves burning oil and natural gas for heating, burning gasoline, diesel, and jet fuels for transportation. Transportation accounted for just over a third of all carbon dioxide emissions in 2009, electricity was almost 40 percent and residential, commercial, and industrial production, excluding electricity, made up roughly 26 percent.

Some greenhouse gases are thought to alter the climate more than others. Nitrous oxide is a much smaller percent of the gas mix than carbon dioxide, but for its weight it has a much stronger heat-trapping capability.

For more information go to The connection between greenhouse gases, climate change, and global warming.

Each year what proportion of emissions are man-made are carefully tracked by several agencies nationally and internationally, including the National Oceanic and Atmospheric Administration, the National Weather Service, and the National Aeronautics and Space Administration.

Sources:

U.S. Geological Survey
U.S. Energy Information Administration

U.S. Environmental Protection Agency
U.S. National Oceanic and Atmospheric Administration
CIA World Fact Book
World Energy Council
National Renewable Energy Laboratory
Emissions of Greenhouse Gases in the United States 2009: Independent Statistics & Analysis. U.S. Energy Information Administration, Department of Energy. March 2011.

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The Connection Between Greenhouse Gases, Climate Change & Global Warming


 

WHAT IS THE DIFFERENCE BETWEEN CLIMATE CHANGE AND GLOBAL WARMING?

Climate change is the shift in long-term, global weather patterns due to human action; it’s not exclusive to warming or cooling.

Climate change includes any change resulting from different factors, like deforestation or an increase in greenhouse gases. Global warming is one type of climate change, and it refers to the increasing temperature of the surface of Earth. According to NASA, the term global warming gained popular use after geochemist Wallace Broecker published a 1975 paper titled Climatic Change: Are We on the Brink of a Pronounced Global Warming?

Since 1880, the average surface temperature of the Earth has increased by roughly 0.9 degrees Fahrenheit, but the rate it’s increasing is faster than that, depending on which region you live in. If you’re closer to the equator, temperatures are increasing more slowly. The fastest increase in temperatures in the United States is in Alaska, where average temperatures have been increases by more than 3 degrees Fahrenheit per century. For a graph of average global temperatures by year, see the NASA website here.

 

HOW GREENHOUSE GASES RELATE TO CLIMATE CHANGE

Greenhouse gases are those thought to contribute to the greenhouse effect, an overall warming of the Earth as atmospheric gases trap electromagnetic radiation from the sun that would otherwise have been reflected back out into space.

Noteworthy greenhouse gases are methane, nitrous oxide, carbon dioxide, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). These gases are thought to affect the climate directly and indirectly, even though they constitute only a small fraction of the blanket of gases that make up the atmosphere.

Currently, the composition of the atmosphere is mostly nitrogen and oxygen, with just 0.033 percent carbon dioxide and all other gases accounting for even less.

 

WHICH GASES CONTRIBUTE THE MOST?


According to 2010 models cited by NASA, 20 percent of the greenhouse effect is attributed directly to carbon dioxide and 5 percent to all other greenhouse gases. The remaining 75 percent of the greenhouse effect is thought to be due to water vapor and clouds, which are naturally-occurring. However, even though carbon dioxide and the other greenhouse gases are such a small percentage of the total gas in the atmosphere, they affect when, where and how clouds form, so greenhouse gases have some relevance when it comes to 100 percent of the greenhouse effect. Carbon dioxide is thought to modulate the overall climate, like a atmospheric thermostat.

Some greenhouse gases are produced in natural processes, like forest fires, animal manure and respiration, or volcanic eruptions. However, the majority of new greenhouse gases are produced from industrial processes and energy production.

The four largest human sources of U.S. greenhouse gases in 2009 were energy, non-fuel use of fossil fuels, natural gas production, and cement manufacture, in descending order. Non-fuel, greenhouse gas-producing applications of fuels include industrial production like asphalt, lubricants, waxes and other . Emissions related to cement manufacture happen when limestone (calcium carbonate) is reacted with silica to make clinker, the lumps ground to make cement. ( Emissions of Greenhouse Gases in the United States 2009: Independent Statistics & Analysis.)

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Petroleum, Natural Gas, and Coal

The world depends on fossil fuels for its energy, and the United States is no exception. The vast majority of U.S. energy — more than 80 percent in 2009 — comes from burning fossil fuels. (more…)

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“Cap-and-Trade” and Carbon Tax Proposals

CAP AND TRADE

Phosphorus factory smokestack in Muscle Shoals, Alabama.Source: U.S. Library of Congress.

The idea of “cap-and-trade” first emerged in the United States in the 1960s as a device to get the free economy to control pollution, folding in the cost of pollution instead of telling industry how to stop polluting. Often called emission trading, in a working cap-and-trade system, industries that release undesirable compounds into the air, water, or soil have limits of how much they can emit based upon pollution permits. Depending on the system, polluters either are given or have to buy their permits. The government establishes how much total pollution that the permits will grant, an umbrella cap on the economy. If an industry participant wants to release more than the permit allows, they buy the right from another industry player, if available, or perhaps face penalties, depending on the details.

Cap-and-trade can be used to regulate any pollutant, not only carbon dioxide or other greenhouse gases. The U.S. Environmental Protection Agency has three cap-and-trade programs, none of which apply to greenhouse gases. They aim to combat acid rain by reducing sulfur dioxide and nitrous oxide compounds, mostly an issue with coal power.

There is no U.S. cap-and-trade for carbon dioxide, though proposals have been raised regularly, and the U.S. House of Representatives passed an emissions trading program  in an energy bill in 2009, but the bill hasn’t been approved by the U.S. Senate, as of June 2011.

Australia has been considering a cap-and-trade program for carbon dioxide, but that too hasn’t been implemented as of June 2011. The European Union has had a carbon emissions trading program since 2005.

For more about greenhouse gases, climate change, and their relationship to energy go here.

 

CAP-AND-TRADE IN THE UNITED STATES

In the United States, the Acid Rain Program‘s cap-and-trade system has successfully reduced pollution and cost industry far less than expected, at $3 billion per year instead of the feared $25 billion per year, according to a study [that I haven’t found yet] in the Journal of Environmental Management. Savings from cleaner air and water and avoided death and illness are estimated in the range of $100 billion per year, according to the EPA.

However, acid rain chemicals are easier to tame than carbon dioxide. The goal for the subjects of U.S. regulations today – nitrous oxide and sulfur dioxide – is as little as possible. Everyone agrees that these pollutants are bad for the environment and people, and there was a commercially-available solution for nitrous oxides and sulfur dioxide emissions when the cap-and-trade system began in 1990: scrubbers on the smokestacks. Even though the U.S. Congress could have ordered industry to buy the scrubbers, it was easier to pass cap-and-trade politically, and only a certain sector of energy production emits a significant volume of these chemicals. Today, there isn’t consensus about the effects of carbon dioxide gas, which isn’t toxic to humans. There isn’t consensus about how much carbon emissions is acceptable, and there is no viable carbon capture technology. And more than 80 percent (by volume) of energy production methods still produce carbon dioxide, whether that’s from biofuels or coal.

A dynamic map of U.S. carbon dioxide emissions.

 

CAP-AND-TRADE IN EUROPE

In 2005, the European Union passed its own cap-and-trade program to limit carbon dioxide emissions, applied to more than 12,000 factories and power plants in 29 countries. The program includes some limits to nitrous oxide, and airlines will be obliged to participate by 2012. The carbon “cap” on total emissions decreases 1.74% per year.

Some regulators have already claimed success, as the carbon dioxide emissions were reduced in 2009; they increased again a little in 2010. However, the EU admits it gave out too many permits and that future permits will need to be tighter. Furthermore, the recession has acted as a major factor in lowered emissions, and European industries haven’t needed to make any technological changes because of lower demand.

“Power companies were given free carbon permits, but they raised electricity fees anyway — as if they had paid the market price for their permits — and pocketed the markup. Many companies were allocated too many allowances, often the result of powerful industries lobbying the governments that give the permits,”  Arthur Max of The Associated Press wrote from Belgium in a 2011 story about the Europeans’ progress.

If the EU’s carbon dioxide emissions will be reduced in coming years has yet to be determined since the real effects of the cap haven’t truly set in.

For more information about the EU’s program see the EU FAQ here.

 

CAP-AND-TRADE IN INDIVIDUAL STATES

Ten states in the Northeast have applied a cap-and-trade system to carbon dioxide as of 2008, in the Regional Greenhouse Gas Initiative, with the goal of reducing greenhouse gas 10 percent by 2018.

California is planning its own cap-and-trade program, slated to begin December 2011. Ten Canadian provinces and Western U.S. states and have joined California in the Western Climate Initiative, with the hope that there will be a regional cap-and-trade program too.

 

CARBON TAX

Carbon taxes are another way to integrate emissions reductions into the economy. The taxes makes a beeline for fossil fuels, which are far and away the main source of carbon dioxide emissions, whether they’re burned in vehicles or for electricity. A carbon tax on fuels raises the overall price, in theory reducing our ability to buy too much.  That means that industries or individuals can still produce as much carbon dioxide as they please, but they’ll have to pay for it.

Some economists prefer carbon taxes, as they are simpler to enforce, particularly internationally, and there’s likely to be less dramatic shifts in pricing. Others prefer cap-and-trade because there’s a finite ceiling to emissions. Many other arguments support either measure.

From a carbon tax perspective, diesel fuel and natural gas have an advantage over gasoline and coal, respectively, since they produce less carbon dioxide for the energy they generate. Of course, solar and wind produce none, but biofuels are more complex. Many carbon taxes in effect exclude biofuels like wood waste, even though they produce carbon dioxide.

Several European countries and individual U.S. states have various carbon taxes, applied from anywhere in the range of cents to close to $100 per ton, about as much carbon dioxide as would be emitted from using roughly 103 gallons of gasoline. These taxes are still low enough that they aren’t halting emissions. (For more details about calculating carbon emissions, see The Intergovernmental Panel on Climate Change.)

In the United States, carbon taxes in individual states are currently insignificant compared to other market pressures on the price of fuels, particularly in the case of petroleum.

 

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