Coal and the IPCC

This is a guest post by Professor Dave Rutledge. A brief biography is given at the end of the post. Cross posted from Climate Etc.

Now that Working Group 3 has put its chapters on line, all six thousand pages of the IPCC’s 5th Assessment Report have arrived. Coal is the specter that looms. In the IPCC’s business-as-usual scenario, Representative Concentration Pathway (RCP) 8.5, coal accounts for half of future carbon-dioxide emissions through 2100, and two-thirds of the emissions through 2500. The IPCC’s coal burn is enormous, twice the world reserves by 2100, and seven times reserves by 2500. Coal so dominates that it is not an exaggeration to say that the IPCC and climate-change research programs depend on this massive coal burn for their existence. Without the threat of coal, the IPCC could close up shop and the research program funding would drop to a small fraction of what is spent on research in weather forecasting.

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Blowout week 16 – Easter Weekend

World: «Газпром» — Бованенковское месторождение

Awesome pictures from Russian gas production facilities on the Yamal Peninsula, Siberia. Hat Tip to Energy Matters commenter Syndroma.

World: Ukraine unrest: Russian outrage at fatal Sloviansk shooting

Russia has expressed outrage at a fatal shooting in eastern Ukraine which it blamed on Ukrainian nationalists. Russian state media reported that five people had been killed in a gun attack on a checkpoint manned by pro-Russian activists near the town of Sloviansk.

The Energy Matters news gathering network is on Easter vacation. And so a light but eclectic mix of stories this week. Tension between Russia and Ukraine builds, blackouts in Scotland, coal in Germany, shale in Australia, even more oil in Russia, pipelines blown up in Iraq. Continue reading

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Belarus grows while Ukraine withers

Following the collapse of the Soviet Union, Belarus, Ukraine and Russia were all on the same trend of collapsing GDP and energy consumption (Figure 1). Belarus has no indigenous energy supplies, at least BP do not bother reporting production data, and must therefore import most energy from Russia. Since the mid 1990s the Belarusian economy recovered, showing strong annual growth and is now on a par with Turkey.

This is a very different story to Ukraine where the economy, that was showing feeble growth, collapsed again in 2009 and has not yet recovered. Economic malaise will no doubt underpin the civil unrest in Ukraine. EU and Russian leaders would do well to understand and try to fix the root causes for economic stagnation and to set aside the sabre rattling. The 2009 collapse took place on Prime Minister Yulia Tymoshenko’s watch. She was subsequently imprisoned, recently released, she is now a candidate in next month’s Presidential election.

Figure 1 The trends on this chart all represent a time series where 1990 is to the right. Following the collapse of the Soviet Union Gross National Income (GNI) and energy consumption in Russia, Ukraine and Belarus all collapsed along a similar trend, heading towards zero. In the mid 1990s each of these economies began to recover along much more energy efficient trends. Recovery in Ukraine was much weaker than in Russia and Belarus and the economy collapsed again in 2009 (the Ukraine point farthest to the left) and has shown only weak recovery since. Data from BP [1] and the World Bank [2].
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Wind and Solar Reach 7.5% of EU+ generation in 2012

The headline “European Union Gets 23.4% of Electricity From Renewables” published in CleanTechies [1] on April 3rd and posted on Blowout Week 14 [2] created a fair bit of email correspondence. Had wind and solar really made such inroads? Old hands knew that the statistic would include legacy hydro that may distort the message that was being sent. Where did the truth lie?

BP data [3] suggest that wind and solar accounted for 7.5% of EU+ electricity generation in 2012. So, is this a triumph or not?

Figure 1 Electricity generation in Europe according to BP [3]. The 21 EU members reported by BP are included + “other countries” that may include some countries outside of the EU, such as those in the Balkans. Norway and Switzerland are also included since they are integral parts of the European grid. The EU appears to be succeeding in phasing out fossil fuel and nuclear based thermal power generation, but at what cost to the pocket of consumers, GDP growth and viability of the electricity grid?
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Blowout week 15

Russia-Ukraine: Do Americans know where it is? Europe contemplates suicide as a way of punishing Russia; Obama calls for other countries to help Ukraine; Putin points out that Russian gas discounts have already contributed $35 billion

Shale: Japan gets in on the act; Earthquakes hit Ohio and Oklahoma

Renewables: Butterflies fried by solar power; Davey says renewables cheap; CBI warns on high energy prices; Record US wind production

Coal: Trillions of tonnes turning up everywhere [I'm suspicious]; In situ gasification in focus

World: Russia’s South Stream pipeline in deep freeze as EU tightens sanctions noose

The European Union is close to freezing plans to complete the $50bn (£30bn) South Stream gas pipeline through the Black Sea from Russia, the first serious EU action to punish the Kremlin for the seizure of Crimea.

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Does the UK Economy Run on Energy or Hot Air?

  • UK oil, gas, coal and nuclear production are all in decline. In the year 2000, the UK exported energy worth £9 billion. In 2012 we imported energy costing £21 billion. This swing of £30 billion in 12 short years has caused a structural change in the UK balance of trade with the rest of the world. On current path this will simply get worse for every year that passes. Cameron needs to take some urgent and tough action to fix this problem.
  • Since 1970, UK GDP has more than doubled and now stands at $2.4 trillion ($2005). In the same period population has risen 13% but total energy consumption has been flat. The UK has increased GDP without increasing energy use by 1) improved efficiency, 2) offshoring manufacturing, 3) creating phantom GDP in The City, 4) increasing  debt and 5) blowing property bubbles.
  • Much of the growth in the UK economy since 1980 is indeed hot air while energy consumption still underpins the real economy providing heat, light, food, shelter, security, mobility and enormous leverage in manufacturing.

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From Financial Subprime To Global Energy Subprime

This is a guest post by Andrew McKillop. Andrew has held posts in national, international and European Commission energy, and energy policy divisions and agencies. An extended bio is given at the end of the post.

Russian Sanctions and the Energy Subprime

The U.S. subprime crisis of 2008, although it was cast in stone by 2006-2007, was a dreadful surprise for political deciders. It sprang at them from the murky world of Wall Street’s frenzied brewing of incomprehensible financial instruments with names like algos, swaps and derivatives. The crisis surged at them from outside, forcing deciders to make a panic recourse to more government debt and massive new borrowing, to shore up the financial economy and then the real economy.

We live with the enduring results, today. The “mature postindustrial democracies”, symbolized by the G7 group, are locked into slow growth-high unemployment for the long term. Sovereign debt goes on rising. The return of all-out panic on financial markets, for many analysts, is only a matter of time.

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Getting the Economics Numbers Right

In the comments to my post on Turkey [1] commenter teo said [2]:

You are doing a tremendous job. I am reading constantly your blog. But the economic data of Turkey is a little bit wrong. The country has a structural trade deficit. Last year they had a trade deficit of 100 billion dollars.

It really made my day to discover that the economics data I downloaded from the United Nations data base [3] may somehow be incorrect. I have found a second source at the World Bank (WB) [4]. The problem with the trade balance data identified by teo is that I was using deflated constant $2005. I believe this is the correct approach when looking at historic GDP but creates serious data aberations when looking at trade balance data.

In Current $US (money of the day) GDP and trade balance data from the UN and World Bank are identical for Turkey back to and including 1998 (Figures 1, 3, 4). Prior to then there is a divergence in GDP and Exports data. The imports data are similar throughout. In current $US (money of the day) GDP data and trade balance data from the UN and WB are identical for the United Kingdom (UK) for the whole data series from 1970. I do not understand why the constant $2005 data series appears to distort the trade balance in a way that goes beyond correcting for inflation.

This is a separate data issue for Turkey to the one highlighted by teo that would require an explanation from either the UN or the WB.

Figure 1 Comparison of UN constant $2005 and UN current $ GDP data for Turkey. Using constant $2005 is a way of correcting data for the effects of inflation. Anchoring on 2005 has the effect of inflating numbers prior to 2005 and deflating numbers post 2005. The comparison of UN and WB data shows that the two data sources are identical back to and including 1998 but prior to 1998 there is a divergence that requires an explanation from either the UN or the WB. Continue reading

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Blowout week 14

Russia goes her own way: Sanctions busting deal with Iran; Lukoil brings on 120,000 bpd in Iraq; raises gas price for Ukraine; attacks petro $ system?

UK: Gas prices plunge; vast submarine coal resources in focus; coal mines to close; Big Brother tightens grip on BBC; offshore wind gets £460 million; onshore wind under pressure.

UK: Newly Discovered North Sea Coal ‘Could Power Britain for Centuries’

Scientists have discovered huge coal deposits under the North Sea that could power Britain for centuries.

Data from North Sea oil and gas exploration has been used to build a picture of the large coal deposits.

“We think there are between three trillion and 23 trillion tonnes of coal buried under the North Sea,” Dermot Roddy, former professor of energy at Newcastle University, told the Sunday Times.

26 more stories below the fold.
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Turkey – on its way to a mature economy

  • Turkey is energy poor, has very little oil and gas production and therefore imports significant amounts of oil, gas and coal. It has broken free of developing nation status and is on its way to becoming a mature economy. The country has seen an enormous uplift in per capita GDP since 1970 that now stands at $8,500 per capita per annum.
  • With borders to Greece, Syria, Iraq, Iraqi Kurdistan and Iran, Turkey is surrounded by chaos. A predominantly Islamic country, it is populated mainly by ethnic Turks (not Arabs) and has an extremely rich history and culture. Let us hope that recent riots in Turkey are not a sign of the rot spreading from its neighbours.

Figure 1 In line with many Islamic nations, Turkey’s population has more than doubled since 1970. But GDP in this energy poor nation has increased 6 fold.
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Ukrainian Death Spiral

  • Russia has raised natural gas prices to Ukraine twice this week. The total rise is 80% bringing the price for gas in Ukraine to $485 per 1000 cubic meters [1]* which is well above the European average of $380 in 2013 [2].
  • Prior to the recent geopolitical crisis Ukraine was in a mess. With a population of 45 million, per capita GDP of $2100 is on a par with Egypt (Figure 1) and the country had crippling and mounting debts.
  • Since the dissolution of the Soviet Union in 1991, Ukraine has been in reverse gear. Energy rich Russia has seen relative prosperity on the back of a recovery in its energy industries and rising energy prices (Figure 1). Energy poor Ukraine, on the other side of the coin, has only seen its energy bills rise to the point it could no longer pay them. The gas price action this week is Russia’s response to sanctions imposed by America and the EU.

* subject to verification

[Note added 5th April: Commenter Syndroma points out that the strategy here is to force Ukraine to buy gas from Europe. Ukraine has to pay full market price and Russia gets paid full market price and the bad debt risk is transferred to European suppliers. The gas still comes down the pipe from Russia.]

Figure 1 This chart of per capita GDP versus energy consumption is a work in progress. Since its last outing I have added data for Turkey and Ukraine. Each data set represents a time series that shows how a country’s GDP and energy consumption evolves with time. Generally speaking, successful countries’ per capita GDP grows with time (economic growth) but to achieve this its per capita energy consumption also grows. A steep gradient on this chart is a symbol of efficiency (Turkey is my next post). The former Soviet republics are an aberration where energy consumption was extremely high and productivity relatively low. Where Russia declined following the collapse it has since recovered whereas Ukraine has continued in a post-Soviet death spiral of falling GDP and energy consumption that is going to be severely exacerbated by gas price rises of this week. Data from BP [3] and the UN [4].

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Cameron Warns Norway over Shetland Land Grab

David Cameron today summoned Norwegian Ambassador Hårek Hardbalne to Downing Street to demand that Norway makes clear  it has no territorial interest in the Shetland Islands. This follows yesterday’s extraordinary announcement by the leader of Shetland Islands’ Council, Leif Erikson, that Shetland planned to hold a separate referendum on independence from Scotland should Scots choose independence from the UK on September 18th.

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The Fantasy of European Gas Independence

  • Indigenous and North African supplies of gas to Europe declined by 50 million tonnes per annum over the last decade and are likely to decline by a similar amount in the next.
  • Imports of LNG from the USA and development of  indigenous shale gas may compensate for some of the decline in legacy supply, but it is difficult to imagine that these new sources can begin to substitute for Russian imports of 140 million tonnes per annum.
  • Russia has provided between 25 and 30% of European gas for over 30 years and has been a stalwart swing producer through the cold war and collapse of the Soviet Union. European prosperity has been built in part upon imports of cheap Russian gas. Europe would do well to consider strengthening ties with this reliable source lest Russia goes hunting for new markets in East Asia.

Figure 1 The supply components of gas to the EU. “EU+” production includes Norway. “EU+” consumption includes Norway, Switzerland, Turkey and others. “FSU-” is Former Soviet Union production and consumption data adjusted for exports to Asia. “LNG-” is total LNG imports less LNG imports from Algeria and Egypt that are included in the N African imports category. Generating the data for this chart was more complex than I anticipated and the methodolgy is described in the appendix. Data from BP [1].

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Blowout week 13

UK energy policy in disarray: UK has among cheapest gas and electric in Europe; Government to investigate big 6 utilities for malpractice; Scottish and  Southern Energy freeze prices until 2015 but axes renewables investment; politicians from all sides line up to take the credit.

MENA: Iraq oil production growth accelerates; Libya all but off line

Shale gas: Chesapeake undershoots production target, threatens finance; Sabine Pass LNG export terminal on target; can US LNG exports threaten Russia?

Climate change: AR5 eagerly awaited; some scientists move to distance themselves from report; MET office reveals it is clueless; deniers to be jailed?

UK: UK’s future climate to be all sorts

British winters are likely to become milder and wetter like the last one but cold spells still need to be planned for, says the UK Met Office.

Summers are likely to be hotter and drier, but washouts are still on the cards, it adds.

The assessment of future weather extremes finds the role of human influence is “detectable” in summer heatwaves and in intense rainfall.

33 stories in all in this bumper, bumper issue of Blowout. One ray of light just below the fold where a Guardian poll suggests that Guardian readers have more sense than our politicians and policy makers.
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USA gas independence – looking for export markets

According to the Energy Information Agency (EIA) the USA produced 2.2 trillion cubic feet (TCF) of marketable gas in December 2013 [1]. This translates to 71 billion cubic feet (BCF) per day which exceeds the average daily consumption of 70 BCF per day in 2012 [2]. The USA is already self-sufficient in natural gas and is looking to acquire liquefied natural gas export markets.

The US government has already approved 38.5 BCF / day LNG export terminals, some of which are under construction [3]. The LNG EXPORT USA 2014 congress to be held in Houston at the end of April will bring together suppliers and prospective buyers with senior keynote speakers from China, India and the UK [4].

Experienced voices have warned that US shale gas is a bubble waiting to burst [5]. Losses and write downs in major shale gas producers lend some credence to those claims. The main problem has been a glut and low price. Current data points to the USA becoming an LNG exporter and is out there looking for export markets [4]. Creating an open system where excess gas can be exported at international prices may transform the fortunes of the US shale gas industry.

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Libya – energy, population and economy

Europe has only 4 contiguous suppliers of imported gas and oil. Russia to the East is by far the most important and to the South,  Algeria, Egypt and Libya. Britain and France bombed Libya into submission in 2011. The outcome to date is likely not what was planned. Oil exports are significantly reduced owing to ongoing civil unrest and gas exports through the Greenstream pipeline to Italy have been disrupted as recently as November 2013.

Figure 1 Sarkozy and Cameron celebrate bombing Libya into submission. Libya exported 9 million tonnes oil equivalent of natural gas to Italy and Spain in 2008. The civil war of 2011 brought oil and gas production to a standstill. Recovery in 2012 has since been reversed as the country has lapsed back to civil unrest.

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Blowout week 12

Ukraine: Europe plans to send Russian gas to Ukraine ;-) No fear of gas shortages, summer is on the way [hopefully].

Libya: Rebels load oil into N Korean tanker; tanker seized by US navy; Libyan PM flees to Europe.

Iraq: Erbil tries to appease Baghdad; violence escalates ahead of elections, 27 killed in one day.

UK budget: Osborne sticks knife into drilling but takes it out of HPHT [stabbing away]. Shell puts up “For Sale” sign on North Sea assets.

Europe: Oettinger: ‘No need to worry about gas’

As a full-fledged member of the European Energy Community, the Ukraine is entitled to receive assistance from us. After examining the Ukrainian gas transit system we have worked out plans for its modernization and reconstruction. These plans could be realized quite quickly, and a part of them will be co-financed with the European Bank for Reconstruction and the World Bank.

They could however be equipped so that they can also transport gas in the opposite direction. That means we could then provide Ukraine with gas from European markets.

27 stories below the fold in this bumper issue of Blowout.
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Post-peak Algeria?

  • Algerian exports of oil and gas, mainly to Europe, peaked in 2005 and have since fallen by 24% / 628,000 barrels oil equivalent per day [1]. Those countries thinking of switching supplies from Russia had best not look to Algeria, N Africa’s biggest gas producer and exporter.
  • The Algerian economy is dominated by oil and gas production and exports. The country is a member of OPEC and is one of the more stable countries in N Africa.
  • The country’s population has grown from 15 million in 1970 to 39 million today [2]. Per capita energy consumption has not changed significantly since the early 80s but population growth has driven gross domestic energy consumption up. Sharply rising electricity consumption [1] must surely bear witness to rising living standards.
  • From 1965 to 2005 Algeria witnessed an immense rise in oil and gas production from 27 to 166 million tonnes oil equivalent per annum in 2005 (0.54 to 3.32 million barrels oil equivalent per day). But since 2005 oil production has declined and gas production has been static / in slow decline. This combined with rising domestic consumption has given rise to a steep drop in exports of both oil and gas [1]. This is one marker for the squeeze on global energy supplies since 2005.

Figure 1 A peak in oil production in 2007 (Figure 10) and a plateau in gas production since 1999 (Figure 12) combined with rising domestic consumption has seen Algeria’s export energy balance decline steeply since 2005. Algeria has no coal production but has imported small amounts of coal in the past. [1]

More of the story and 12 more charts below the fold….
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France Wakes Up to the Fragile Case For Nuclear Power

This is a guest post by Andrew McKillop. Andrew has held posts in national, international and European Commission energy, and energy policy divisions and agencies. An extended bio is given at the end of the post.

First the Politics

March 18, newswires starting strangely with Kuwait’s KUNA, reported that protesters from French environmental action groups, headed by Greenpeace and supported by activists of the green EELV political party which is aligned with French president Hollande’s PS parliamentary majority, broke into France’s oldest nuclear power plant (NPP) at Fessenheim located on the Franco-German border in Alsace, and occupied several parts of the operating section and its roof. Their claims were given considerable coverage by French media, if only to keep minds off Putin’s victory in Crimea, fustigated as an “illegal act” by Hollande and his Foreign minister. One immediate result of this is the halt to construction in French shipyards of two Mistral-class helicopter assault ships for the Russian navy, one of the ships named ‘Sebastopol’, in a contract worth about 1.5 billion euros.

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Putin’s Energy Stranglehold On Europe

This is a guest post by Andrew McKillop. Andrew has held posts in national, international and European Commission energy, and energy policy divisions and agencies. An extended bio is given at the end of the post.

Outdated Geopolitical Musing

March 17, world stock exchanges from Moscow to New York and Frankfurt to Shanghai gave a whoop of joy at the symbolic-only prospect of European and American “hard hitting sanctions” being set against Russia for its Crimean action. The wait was over, the panic wasn’t needed, at least not yet, so jobbers and traders got back to doing the thing they know best of all – talking up share prices. The media and press, however, did what they could to keep the story going, for example Garry Kasparov’s raging in the ‘Wall Street Journal’, telling us that Putin “is another Saddam Hussein or Slobodan Milosevic” and should be treated by the West the same way. Kill him!

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