"Energy and Global Warming News for March 12th: China finds itself awash in wind turbine factories; Japans cabinet endorses cap-and-trade bill"
China’s massive investment in wind turbines, fueled by its government’s renewable energy goals, has caused the value of the turbines to tumble more than 30 percent from 2004 levels, the vice president of Shanghai Electric Group Corp. said yesterday.
There are now “too many plants,” Lu Yachen said, noting that China is idling as much as 40 percent of its turbine factories.
The surge in turbine investments came in response to China’s goal to increase its power production capacity from wind fivefold in 2020.
The problem is that there are power grid constraints, said Dave Dai, an analyst with CLSA Asia-Pacific Markets, noting that construction is slowed because of that obstacle. Currently, only part of China’s power grid is able to accept delivery of electricity produced by renewable energy. “The issues with the grid aren’t expected to ease in the near term,” he said. Still, they “should improve with the development of smart-grid investment over time.”
The constraints may leave as much as 4 gigawatts of windpower generation capacity lying idle, Sunil Gupta, managing director for Asia and head of clean energy at Morgan Stanley, concluded in November.
China has the third-largest windpower market by generating capacity, Shanghai Electric’s Yachen said.
A funny thing happened outside the twisted world of Congressional energy politics. Over at the Senate Banking Committee, Chairman Chris Dodd (D-Conn.) announced he’s going to push forward with finance reform and consumer protection bill, even if Republicans don’t want to help.
This comes after weeks of negotiating between Dodd and Tennessee Republican Bob Corker, who showed more interest in protecting large banks and predatory lenders. (Payday lenders, as it happens, have a strong presence in Tennessee and have given Corker more than $31,000.) Now Dodd’s fed up and moving the bill. As a result, Congress may eventually get something done on the issue.
On healthcare reform too, Harry Reid sent Mitch McConnell a letter saying he’s done playing games with Republicans who want to “start over.” Instead, he’s going to finish the job.
White House press secretary Robert Gibbs yesterday said he expects the Senate energy and climate bill will get a much-needed push this summer after gasoline prices start their annual climb.
During his daily briefing, Gibbs said President Obama “absolutely” wants Congress to pass an energy and climate bill this year. And he predicted the measure would soon get some momentum.
“Energy has made it through the House, and my guess is there will be a clamoring for an energy bill when gas prices go up, as they normally do, as we get closer to more driving as we get closer to the summer,” Gibbs said.
Obama met Tuesday with 14 senators at the center of the climate and energy debate, one in a series of meetings with lawmakers this week aimed at getting congressional updates on his domestic agenda. Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) visited the White House yesterday to talk immigration reform.
Asked whether Obama wants a climate bill or immigration reform finished this year, Gibbs replied, “Absolutely.”
“But again … it’s got to be more than the president wants to get something done,” Gibbs added. “The president is going to ask, as he did in the energy meeting and as he will when he meets with Schumer and Graham, to see what progress they’ve made in aligning their colleagues for the type of reform that all three support. That’s what’s going to be key to moving any of these issues forward.”
Graham and Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) have been at the center of the months-long effort to craft a climate and energy bill capable of winning 60 votes in the Senate.
Lieberman said the three have a goal to have a draft bill by the Easter-Passover recess that begins March 26. “It’ll be a draft. It won’t be final,” Lieberman said Wednesday. “But it’ll give us something in legislative language.”
Kerry on Wednesday ducked the timeline question. “I don’t want to bet on times,” Kerry said. “I don’t want to get into a ‘not today, not tomorrow’ routine. We’re working on doing it as soon as we can.”
Closed-door talks next week on the energy and climate bill are expected to include representatives from several major trade associations, including the American Petroleum Institute, National Mining Association and U.S. Chamber of Commerce. The same groups met with Kerry, Graham and Lieberman on Wednesday before the senators went to the White House.
“We can only go as fast as the meetings converge and allow us to make certain decisions,” Kerry said. “We’ve made a lot of decisions. We’ve got a couple of things that are hanging out there, two or three, that we still need to try to bring to closure and we’re working on that.”
Kerry declined comment when asked what “decisions” the trio has made.
The three senators still face pressure to move an “energy only” bill.
Sen. Lisa Murkowski (R-Alaska) said her message to Obama on Wednesday was to focus on a bill that passed in early 2009 out of the Energy and Natural Resources Committee that promotes renewables and domestic energy production, without putting a price on carbon.
“We have a good strong energy bill that really can get this country going down the right track when we are talking about energy efficiencies and conservation and how we move toward renewables and increased domestic production, and it was a bipartisan bill that was ready to go to the floor and it would help this country,” said Murkowski, the Energy Committee’s ranking member. “Energy first — not a bad approach.”
Oil company BP PLC will acquire exploration rights for areas in Brazil, the U.S. Gulf of Mexico and the Caspian Sea from U.S.-based Devon Energy Corp. The $7 billion purchase will give BP 10 offshore blocks covering 1.4 million acres in a promising region off Brazil.
Devon is changing its focus to concentrate on North American onshore natural gas and oil. In December, the company sold its stakes in three Gulf of Mexico developments to Maersk Oil.
BP is the largest presence in the Gulf of Mexico, with more than 650 blocks producing 400,000 barrels of oil a day. Devon has a share in more than 450 offshore blocks in the gulf. After buying out Devon’s stake, BP now fully owns the Kaskida discovery in the gulf, which could be worth $6 billion.
In a strategy briefing two weeks ago, BP said it expected to boost annual pretax profit by more than $3 billion over the next few years, as well as a 1 to 2 percent increase in oil and gas production within five years. The company will make investment decisions on 24 new projects over the next two years, with plans to start up 42 projects by 2015. The company also sold a 50 percent stake in the Kirby oil sands interests in Canada to Devon for $500 million.
BP Chief Executive Tony Hayward said the BP-Devon deal “fits well with BP’s operating strengths and key interests around the world, offering us significant additional long-term growth potential with an emphasis on high-margin oil”
Environmentalists ratcheted up their campaign today for passage of a comprehensive new global warming law, including plans for an Earth Day rally April 25 on the National Mall.
Some of the country’s biggest advocacy groups said they were launching an “Earth Day Revolution” over the next 40 days aimed at nudging the stalled Senate climate legislation, which sponsors hope will put a first-ever price on greenhouse gases.
Their campaign includes the Earth Day march in Washington and educational events around the country, including states with swing-vote senators, to promote the climate bill.
In a press conference outside the Capitol, Denis Hayes, honorary chair of the Earth Day Network, said he hopes the march will signal a groundswell of public support for global warming legislation. “We want to make this something that’s a voting issue,” he said.
Other participants include the League of Conservation Voters, the Sierra Club, the Natural Resources Defense Council, the Truman National Security Project, Rock the Vote, the National Association for the Advancement of Colored People, the Hip Hop Caucus and Environment America.
Also today, more than 2,000 economists and climate scientists delivered a letter to the Capitol highlighting what they said was at least 90 percent certainty that global warming over the last several decades is primarily due to human activities.
“The longer we wait, the harder and more costly it will be to limit climate change and to adapt to those impacts that will not be avoided,” the group wrote. “Many emissions reduction strategies can be adopted today that would save consumers and industry money while providing benefits for air quality, energy security, public health, balance of trade and employment.”
Signing the letter were eight Nobel laureates, 32 National Academy of Sciences members, 11 MacArthur “genius award” winners and three National Medal of Science recipients.
In a conference call hosted by the Union of Concerned Scientists, Sen. Tom Udall (D-N.M.) said the campaign from scientists and economists would help make the case for passage of climate legislation.
“A letter like this is a very significant event,” Udall said. “It’s a call for action for those of us in the Senate.”
Closed-door negotiations on the Senate’s climate and energy bill are likely to stretch into next month without a clear sign that they will be able to reach agreement on a measure that can win 60 votes. Udall said he was not worried that specifics have yet to emerge, saying that enough members remain at the table.
“We may not get a perfect bill, but we’ll get a bill that’ll price carbon and move us in the right direction,” Udall said.
Japan’s Cabinet has endorsed a climate-protection draft law today that would cap industrial emissions and thrust the second-biggest economy into the $125 billion market for trading carbon credits.
Some polluters will be subject to a flat ceiling on emissions while others may face a limit per unit of production, according to a copy of the bill, distributed to reporters by the Environment Ministry today. The draft leaves open which industries will be affected.
Efforts to pass climate legislation in Australia and the U.S. have stalled over criticism of proposed emission-trading programs. In Japan, power utilities, steelmakers and seven other industry groups said now isn’t the time for a law they claim will hurt domestic companies as they compete with peers in China and India who won’t face the same pollution limits.
“It’s extremely regrettable the Cabinet approved the bill without enough nationwide discussion,” the group led by Tokyo Electric Power Co. and Nippon Steel Corp., two of the nation’s biggest emitters of greenhouse gases, said in a statement today. “We ask the government to ensure the public understands the issues before the bill is debated in the Diet.”
Prime Minister Yukio Hatoyama has set a goal for Japan to cut emissions by 25 percent by 2020 and may pursue European- style trading of carbon-emission credits. China and India, the world’s fastest growing major economies, have said they will target a reduction of emissions per unit of gross domestic product rather than setting a ceiling on overall emissions.
One of the notable moments from the meeting with the Greek prime minister yesterday was when someone asked him how he was planning to get the economy back on its feet, and he answered with . . . green jobs, of course! He correctly pointed out that Greece, having all those islands, has a great opportunity to install windmills. But aside from early modern Holland, I’m not sure where windmills have proven a useful antidote to massive economic and political problems. (Today’s exhibit: protesters clash with police in Athens).
But green jobs have become the ginseng of progressive politics: a sort of broad-spectrum snake oil that cures whatever happens to ail you. They are the antidote to economic malaise, an underskilled labor force, the inherent unwillingness of the public to suffer any significant economic and personal dislocation in order to save the environment. They enhance nationalistic vigor. (If we don’t act now, the Chinese will steal all of our green jobs!) They stave off aging of stale political platforms. And I’m pretty sure they’re good for bunions, too.
Obviously it is true that if we subsidize various environmental activities, this will create jobs for some people. Unfortunately, it will also destroy jobs for other people–people who make the things that would otherwise have been purchased with tax dollars. They may partially offset the economic losses of switching off a very efficient, cheap, high density energy source. They will also, hopefully, give us cleaner, cooler air to breathe. But they do not represent a net improvement in either GDP or the unemployment rate. They represent a loss.
But they’re green! And green is such a pretty color. Also, everyone loves frogs. So who could possibly be against my green jobs except some cranky libertarian? And even this crazy libertarian isn’t really against the green jobs, as such . . . only the ridiculous way politicians use green jobs to shield them from hard questions.