The chairman of China Petrochemical Corp (also known as Sinopec), Fu Chengyu, has spoken of changes he sees as necessary to China’s long-term energy strategy. Despite the current North American boom in oil and gas production, Mr Fu foresees that increasing global competition for oil will create a scarcity, and that China should therefore look to clean coal and alternative energies to power the country if it is to continue to grow and avoid geopolitical conflict. Talking with a timeframe of decades in mind, he was quoted as saying in a Wall Street Journal article that “If we don’t change, China will really threaten the world.” He continued that “Over the long run I believe the rate of growth of supply will be not enough to meet the growth rate of demand.” In 2011, China consumed 417 million tonnes of oil, and without change is due to consume 544 million tonnes by 2020, a growth of 23% over the decade.
Industrial production in September across Europe has fallen. Countries reporting falls included Germany (1.8%), France (2.7%), Italy (1.5%), Sweden (4.1%), Hungary (3.8%), and Ireland (13.9%), meaning the falls were both within the Euro zone and outside of it. The automotive industry in particular was sluggish, with an expected fall of new car registrations in the order of 8-10%. In engineering, Siemens reported a fall in orders of 4%. While the declines were relatively large, they followed modest growth in July and August.
Marubeni, the Japanese firm which was one of the first to enter Myanmar after last year’s democratic reforms, has described the effect of decades of isolation on the country’s power generation infrastructure. Repairs have been made with super glue, and air vents have been manually scrubbed instead of replaced, as replacement parts have been unavailable. For the country as a whole, the challenge of refurbishing its power generation is augmented by the need to dramatically increase capacity. In addition, differences in expectations are complicating works and plans – government officials are pushing cheaper, shorter-term solutions, or are not prepared to wait for equipment to be manufactured and delivered. Marubeni feels that Myanmar, by being too hasty, may not take full advantage of the firm’s expertise. Still further, the bureaucracy is reported as being extremely intricate. For foreign companies, becoming part of Asia’s latest growth engine will be an interesting experience.
Microsoft has become the latest US company to move to self-generation of a portion of the power it consumes. Concerned at the intermittency of the grid power supply and its susceptibility to chance events, and needing highly reliable power supplies, some businesses have begun to shift to biogas fuel cells or solar panels to produce electricity, such as AT&T (which self-produces 17.1 MW), Adobe and Sierra Nevada Brewing Company (1.2 MW). Microsoft’s venture will produce just 300 kW at its Cheyenne, Wyoming data centre, from a fuel cell powered by biogas from a local wastewater treatment plant. While these amounts are small portions of the total power the companies use, it reflects a desire on the part of the companies to switch to using their power generation as standard, with grid electricity a backup, rather than the other way around.
Legislation and Regulation
California’s first carbon permit auction has raised $US 309 million/€238 million for the state, with all 23.1 million permits for 2013-2014 purchased at $US 10.09/tonne (€7.77/tonne), as well as some of the available permits covering the 2015-2016 period being purchased. The price was lower than the $US 11.75 to $12.50 analysts had predicted, even though participation in the auction was higher than expected. Entities forced by law to comply with carbon caps, such as utilities, manufacturers and oil companies, bought 97% of the permits, while financial institutions bought the remaining 3%. In a somewhat circular arrangement, the money raised is to be given to utility companies, which must use it to protect consumers through spending on clean energy projects and energy efficiency programs. California’s Chamber of Commerce had attempted to derail the auction through legal action in the week proceeding it, but failed. The auction came a week after Californian voters elected to direct $US 2.5 billion/€1.93 billion into clean energy and energy efficiency projects. In relation to the vote, Mary Nicols, chair of the California Air Resources Board, said “We back up what we do in regulation by shifting subsidies from things that pollute and are inefficient to things that are more efficient and make our state more resilient.”
The standards group CSA and non-governmental organisation International Performance Assessment Centre for Geologic Storage of Carbon Dioxide have announced the development of the first bi-national standard for geologic carbon dioxide storage, reaching consensus between Canada and the USA. It was produced by a technical committee of more than 30, representing industry, regulators, researchers and NGOs. It is intended that the standard will form the basis of an international standard to be developed by the International Standards Organisation.
The World Bank has released a report into the effects of climate change in tackling poverty around the world, in which it has stated that if all countries fully comply with their currently-stated climate change mitigation objectives, the world is likely to warm by an average of 3 oC by 2100, and if some do not, the likelihood is that it will rise by 4 oC on average in the same timeframe. These averages mask much high local temperature rises, with some parts of the Mediterranean expected to be subject to summer temperatures higher by 9 oC. The poorer parts of the world are likely to be more severely affected, because they are less able to afford adaptation infrastructure, and also because many of them are in low-lying areas subject to flooding, and/or heavily reliant on agriculture. The need to combat climate change is a challenge for the World Bank, as it also attempts to combat energy poverty. The release of the report coincided with the release of a paper by the University of East Anglia, the University of Colorado, and PriceWaterhouseCoopers, published in Nature Climate Change, which recommended that the United Nations change the process of negotiating and agreeing climate change agreements to speed the system up. They recommended limiting the number of delegates a country can send to talks (as larger delegations can carry their viewpoint through ‘negotiation by exhaustion’), and moving to majority voting instead of unanimous consensus.
Research, Development and Technology
The Carbon Capture Journal has reported on the launch of a new four-year, €4 million/$US 5.19 million research project to be coordinated by Bureau de Recherches Géologiques et Minières (the French earth sciences public research organisation) into the long term storage of CO2 in geological formations. The project, known as ULTimateCO2, is to include lab, field and modelling studies of trapping mechanisms, fluid-rock interactions, leakage, and effects on the integrity of capping rock formations. Recommendations will be developed and given to operators and regulators as part of the project, which is funded by the European Commission.
Alstom has been awarded a contract to perform a concept study for a full-scale carbon capture and storage plant to be located at Technology Centre Mongstad, near Bergen, Norway. The contract was awarded by Gassnova, the Norwegian state-owned carbon capture and storage enterprise, and will include developing a cost estimate based on the use of Alstom’s proprietary chilled ammonia process (CAP) at the plant. It is the third stage in Gassnova’s wider Technology Qualification Program, the first two stages of which have also been conducted by Alstom. CAP uses chemical absorption to capture carbon which can later be released by warming the ammonium, and has been utilised at pilot (5 MW) and validation scale (54 MW) in the USA.
Tata Steel announced on 23 November that it would be shedding 900 jobs in the UK as it restructures its business to be an “all-weather steel producer, capable of succeeding in difficult economic conditions”. Most of the jobs, which are to be lost in south Wales, Yorkshire, the West Midlands and Teesside, are in the company’s distribution and processing hubs, with 12 sites to be closed. The news came a few weeks after The Wall Street Journal reported that the company was to be fined $US 1 billion/€771 million by the Indian state of Orissa for excessing mining, one of the largest ever fines against an Indian mining company. Tata has said it will appeal the ruling, which is part of a crackdown on mining companies across the country.