Friday, February 26, 2010
Quotes that summarize the article:
"If [China's] growth rate continues, in ten years China will be emitting four times the carbon of the U.S., meaning that the U.S. becomes an insignificant producer of carbon whether we go green or not."
"If you are seriously worried about global warming, the solution is in technology adopted by India and China. If you can't come up with cheap green, then the alternative is prayer."
February 16, 2010
Are We Hypocrites on China?
As the global community gets serious about supporting renewable energy and dealing with climate change, all eyes are on China. Most people view China as a player that will either make or break any international climate agreement. So why then, do people in the U.S. get so upset when China actually starts taking action on energy issues?
For example, last November a $1.5 billion, 600 MW wind project was announced for Texas. The project, which may qualify for stimulus funds, would be financed by American and Chinese investors and use 240 wind turbines manufactured in China. Many policymakers expressed deep outrage that stimulus dollars would be used to create manufacturing jobs overseas, rather than in the U.S.
In an attempt to assuage fears, the Chinese company providing the turbines announced shortly after that it would construct an 1,100 MW-a-year turbine manufacturing plant somewhere in the U.S. However, many policymakers and renewable energy advocates are still skeptical of the deal. For some reason, many of those same politicians barely said a word when Spain-based developer Iberdrola received more than $500 million in stimulus funds a month earlier.
Concerns like these are nothing new. Now that China is becoming a major player in manufacturing and deploying renewable energy equipment, there are growing concerns about how the country will impact the dynamics of this burgeoning industry in the U.S. The situation puts America in an uncomfortable position: We fully support China's aggressive expansion of renewables, but can we handle the consequences?
We won't just import more products from Chinese companies. We'll also import more products from American companies that are setting up shop in China. In recent months, we've seen some solar and battery companies move operations overseas, despite being offered large incentives from state governments. In the end, states can't always compete with China. People are now asking, "Will the clean energy revolution even take place here?"
Those fears are certainly valid, but some would argue they are not always warranted. A number of leading Chinese solar companies in an effort to meet the demand of local markets and build trust in their brands have announced new manufacturing facilities in the U.S. In addition, the more we engage China in trading these products, the more opportunities American companies will have to sell into the rapidly-growing Chinese market.
The Obama Administration has been pushing for more cooperation between China and the U.S. on renewable energy issues. As it turns out, on the same day the 600 MW Texas wind project was announced, China lifted its requirement for local wind turbines and components. That could be a boon for American and European manufacturers. After all, along with being the world's biggest emitter of carbon, China is also now the world's largest wind market.
"It is a win-win for the U.S. and China to cooperate as much as possible on renewable energy development. It only serves to help everyone if we welcome each other into each other's markets," says Lou Schwartz, an expert on the Chinese energy markets. "We need China and China needs us."
In other words, it all comes out in the wash.
"I think we have to avoid very narrowly looking at one deal or another and reaching the conclusion that somehow China is up and we're down...Over time, there will be plenty of business in China for U.S. manufacturers," says Schwartz.
That doesn't necessarily ease fears about U.S. jobs going overseas today. Much of the interest in renewable energy revolves around the promise of domestic manufacturing jobs. What if American products can't compete with Chinese products? Won't that put a damper on the U.S. renewable energy manufacturing sector?
These worries are also legitimate. But if our ultimate goal is to drive down the cost of renewable energy as quickly as possible, I'm all for China helping that process along.
"China needs to play a role if we are going to bring the cost of solar down to match the cost of generating energy from fossil fuels," says Steve Chan, chief strategy officer for Suntech Power, a top Chinese solar manufacturer.
China will certainly become more prominent as the renewable energy industry grows. Solar and wind resources are local, but the market for equipment to harness those resources is global. If we want the Chinese to do something about their dirty energy problem, we'd better be prepared to compete with them too.
This puts us in a tricky situation. Do we want to support cost reductions in manufacturing at the expense of local jobs? Is it hypocritical to push China to deal with climate change and then not deal with the consequences? And if we're so worried about China, can we even say if the U.S. will lose out in the deal?
The answers are not clear cut. We've only begun to see how China will impact the industry. But it is clear that the country is now a major force in renewable energy. And however you see that development–good or bad–this is only the beginning.
Thursday, February 25, 2010
(P.S. We will be visiting Inner Mongolia on our trip.)
China's High-Growth Ghost Towns
Visiting the eerily vacant epicenter of unsustainable progress, far out in the grasslands of Inner Mongolia.
BY APRIL RABKIN | FEBRUARY 17, 2010
Foreign Policy (FP.com)
In the gritty Inner Mongolian wind, I stood at the pinnacle of the global economy, at least in terms of GDP growth: the main drag of one of the fastest growing cities in the fastest-growing region in all of China, the world's supposed new economic powerhouse.
Built in a breakneck five years, Kangbashi is a state-of-the-art city full of architectural marvels and sculpture gardens. There's just one thing missing: people. The city, built by the government and funded with coal money, its chief industries energy and carmaking, has been mostly vacant for as long as it has been complete, except for the massive municipal headquarters. It's a grand canyon of empty monoliths. In a paradox only possible in today's economic system, Kangbashi manages to be both a boom town and a ghost town at the same time.
Kangbashi represents a particularly destructive economic force at work in China today: an obsession with GDP that ignores all other metrics of progress or human capital. GDP as calculated in China -- or the rest of the world, for that matter -- doesn't make any distinction between quantity and quality, or between creative and destructive expenditures.
Due to the industrial pollution billowing out of the country's GDP-enhancing factories and mines, cancer is the leading cause of death in China. A recent government survey showed that 30 percent of children in Yunnan province suffer from lead poisoning. Perhaps the biggest and most destructive GDP boost came from construction of the Three Gorges Dam, for which 1.24 million people were evicted. Even some of the newly rich, however, shower in tainted brown tap water.
Wednesday, February 24, 2010
The best place to find information about travel health is your doctor or health care provider, but here are links to a couple of good sources on the topic.
Kaiser Travel Health Page
Center For Disease Control - China Page
The Cities we will visit are Beijing, Yulin, Ordos, Baotou, Yichang, Sandouping, and Shanghai. We will be staying in hotels and not visiting farms.
I am going to the Kaiser Travel clinic Friday afternoon and let you know what they poke me with. Possibly H1N1 and Japanese Encephalitis . Hopefully not Rabies....
Tuesday, February 23, 2010
http://news.yahoo.com/s/afp/chinaenvironmentpollutionwaterSHANGHAI (AFP) – Authorities in eastern China have said they will release 20 million algae-eating fish into one of the nation's most scenic lakes that has been ravaged by pollution.
Taihu Lake, which straddles Zhejiang and, has been severely polluted by sewage as well as industrial and , triggering a blue-green algae plague.
Authorities started using fish to try to clean up the lake in February last year when they released 10 million mostly green and silver carp into the water, after the algae tainted the drinking supply of millions of residents.
Over the next few days, around 20 million more algae-eating fish will be released into the water, the Taihu Lake Fisheries Management Committee said in a statement Monday.
The campaign, funded by the government and public donations, cost a total of 8.6 million yuan (1.3), according to the statement.
A silver carp can consume 50 kilogrammes (110 pounds) of algae and other plankton in its lifetime while gaining only one kilogramme in weight, authorities have said.
Millions of algae-eating fish have been used in the past to clean up Taihu and other lakes, with previous efforts hailed as a boon for the localdespite concerns over consumption of fish that have feasted on toxins.
Algae blooms, which are common on freshwater lakes in, are chiefly caused by the presence of untreated sewage containing high concentrations of nitrogen, a main ingredient in detergents and fertilisers.
China's environment has suffered severely amid the nation's breakneck economic growth over the past three decades.
This end-of-pipe "solution" can be ineffective:
Because they feed on plankton, they are sometimes successfully used as methods for controlling water quality, especially in the control of noxious cyanobacteria(blue-green algae). However, these efforts are sometimes not successful. Certain species of blue-green algae, notably the often toxic Mycrocystis, can pass through the gut of silver carp unharmed, and pick up nutrients while in the gut. Thus, in some cases blue-green algae blooms have been exacerbated by silver carp. Also, Mycrocystis has been shown to produce more toxins in the presence of silver carp. Silver carp, which have natural defenses to the toxins produced by blue-green algae, sometimes can contain enough algal toxins in their systems that they become hazardous to eat. (http://en.wikipedia.org/wiki/Silver_carp)
By the end of 2009, the amount of the crude oil that China imported from Saudi Arabia exceeded 1 million barrels per day, while the US, the primary importer of the country's oil before, imported less than 1 million barrels per day for the first time since more than 20 years.
Full article here: http://business.globaltimes.cn/china-economy/2010-02/507404.html
Saturday, February 20, 2010
Asian pollution delays inevitable warming
Dirty power plants exert temporary protective effect.
By Jeff Tollefson
Published online 17 February 2010 | Nature 463, 860-861 (2010)
The grey, sulphur-laden skies overlying parts of Asia have a bright side — they reflect sunlight back into space, moderating temperatures on the ground. Scientists are now exploring how and where pollution from power plants could offset, for a time, the greenhouse warmingThe grey, sulphur-laden skies overlying parts of Asia have a bright side — they reflect sunlight back into space, moderating temperatures on the ground. Scientists are now exploring how and where pollution from power plants could offset, for a time, the greenhouse warming of the carbon dioxide they emit.
A new modelling study doubles as a thought experiment in how pollution controls and global warming could interact in China and India, which are projected to account for 80% of new coal-fired power in the coming years. If new power plants were to operate without controlling pollution such as sulphur dioxide (SO2) and nitrogen oxides (NOX), the study finds, the resulting haze would reflect enough sunlight to overpower the warming effect of CO2 and exert local cooling.
But this effect would not be felt uniformly across the globe and would last only a few decades. In the long run, CO2 would always prevail, and the world could experience a rapid warming effect if the skies were cleaned up decades down the road.
How quickly China and India will move to clean up their coal emissions is unclear. In the past few years China has been aggressively installing SO2 scrubbers on many of its power plants in an attempt to improve air quality and protect public health. But some experts have questioned whether those scrubbers are being used properly — or even turned on.
Full article here: http://www.nature.com/news/2010/100217/full/463860b.html
The Federal Regulatory Energy Commission has granted Google Energy, a wholly owned subsidiary of the search giant, the right to behave like a utility.
The order grants Google Energy the power to sell energy, capacity and services at market rates.
Why does Google want to do this? Right now, the company rakes in billions of dollars from ads and it doesn't have to have extensive support desks and remote repair teams -- i.e., the kind of people power providers must have on staff -- in order to do it. Selling power is a much more hands-on business.
Google has said it wants to go carbon neutral. With the FERC order, it can now effectively erect as many solar panels and install as many fuel cells as it likes without worrying about having purchased too much capacity; the company can now sell off the extra power it generates.
But more importantly, Google can now exploit its massive data centers to provide services for controlling power consumption in commercial buildings, industrial sites, and homes. It is largely a task that should be handed off to large computer rooms.
Providing these services will allow Google to better leverage its hardware resources. Search will get cheaper because the hardware budget can be amortized over more services. Both Web 2.0 companies and energy services companies will complain about being undercut by the big G. Consumers will also have to get used to Google having even more information about their daily habits.
But can Google charge for energy management services? That could be a challenge. The average person might rightly balk at suddenly being asked to write a monthly check to one of the biggest companies in the world, particularly if other companies offer the same services.
This is where the power part comes in. Consumers will pay for power. If Google combines its services -- for free -- with competitively priced electricity, consumers will likely lose that reticence. It will be a better combination than what their utility can provide.
Conversely, Google could charge for these services the same way energy services companies like Siemens do: if Google saves you $200 on your utility bill, you pay the company half. You pay, but you still save. It's a theory, but clearly the company and its founders are obsessed with alternative energy.
Friday, February 19, 2010
We will also be discussing historical patterns, main drivers and impacts of urbanization, and will show a case study of a city we will visit during the trip.
Thursday, February 18, 2010
Wednesday, February 17, 2010
Has some important charts that we've looked at throughout classes and additional interesting information.
China, the United States, and the Climate Change Challenge | World Resources Institute
Posted using ShareThis
Tuesday, February 16, 2010
The article assumes coal must contribute to growth in carbon emissions, and does not spend much time talking about potential technological changes that could allow for coal to be burnt without carbon implications.
Does the Huge China-Australia Coal Deal Square With the Copenhagen Accord?
Bradley Smith, spokesman for Friends of the Earth in Queensland, Australia, said it "drives another nail into the coffin of climate change. If the project goes ahead, then emissions from the exported coal would equal 20 percent of Australia's total domestic emissions."
"It's always been something of an anomaly for us that while they are talking about an emissions trading system domestically, they are rapidly expanding their coal exporting," Woods said. But, she added, "It's something that's difficult for us to tackle because it's been so integral to Australia's economic identity for so long."
Mongolian Harvard Elites Aim for Wealth Without ‘Dutch Disease’
By Michael Forsythe
Feb. 16 (Bloomberg) -- Mongolia’s billions of dollars worth of copper, gold, uranium and coal reserves promise the greatest influx of wealth for the country since Genghis Khan conquered much of the known world in the 13th century.
They also may spawn a crisis. Sudden prosperity can overwhelm an economy, exposing it to commodity-price swings. Mongolia’s leaders, some educated at Harvard and Cambridge, say they are determined to avoid this syndrome, known as “Dutch Disease” -- a sudden surge in wealth that ultimately hampers expansion.
Working with the Washington-based World Bank, they are dispatching officials to nations such as Chile, which successfully harnessed its copper resources to help drive growth. They are also leveraging their democratic system to build support for policies including greater investment in transportation and a new budget law aimed at curbing the impact of volatile metals prices.
“If you go to most developing countries, they’ll tell you, ‘We’re saved; we’ve found uranium,’” said Hernando de Soto, a Peruvian free-market economist. Mongolia has “a president who says, ‘We are in grave danger because we have discovered we have a lot of natural resources.’” The fact that “they are forewarned gives you hope.”
De Soto was interviewed in Ulan Bator, the capital, where he met last week with President Tsakhia Elbegdorj and Prime Minister Sukhbaatar Batbold. Elbegdorj graduated from Harvard’s Kennedy School of Government in Cambridge, Massachusetts, and helped translate de Soto’s 2000 book, “The Mystery of Capital,” into Mongolian.
“Dutch Disease” was first applied to a surge in income from new natural-gas fields in the Netherlands during the 1960s, which caused the currency to appreciate, making exports less competitive and reducing manufacturing companies’ profitability.
Last year Mongolia reached an agreement with Vancouver- based Ivanhoe Mines Ltd. and London’s Rio Tinto Group to develop the Oyu Tolgoi copper and gold mine, which the government estimates will produce $30 billion in revenue. The government is talking to companies including St. Louis-based Peabody Energy Corp. about mining the $2 billion Tavan Tolgoi coal deposit, among 15 strategic mineral deposits it seeks to develop.
Batbold told reporters Feb. 9 the new wealth will cause gross domestic product to rise “several fold in a fairly quick period of time.” GDP was $5.3 billion in 2008, the World Bank estimated.
Sudden prosperity may not improve living standards. Nigeria, Africa’s biggest oil exporter, has seen almost no growth in real GDP per capita in three decades. Venezuela, South America’s biggest oil exporter, had a higher GDP per person in 1977 than in 2008, according to the World Bank.
To beat the resource curse, Mongolia’s government has proposed a law based on a Chilean measure that will save surplus revenue from mineral royalties when prices are high to stabilize the budget when they fall. In 2009, it set up a Human Development Fund modeled on an Alaskan program that distributes some royalties to citizens.
The country is overhauling its social-welfare system to target aid only to the poor. It also plans to improve roads and railroads, creating access to new mines and helping herders bring cattle and sheep to market.
Mongolia is the world’s least densely populated country, with 2.6 million people spread across an area the size of western Europe, two-fifths in rural areas on windswept steppes. Twenty-two percent lived on $1.25 a day or less in 2005, and 29 percent were undernourished, according to the latest United Nations data.
Mongolia’s leaders say democracy will help smooth the adjustment to new wealth. Sandwiched between China and Russia, which have dominated the country in the past, Mongolians freely criticize their government, as evidenced at a Feb. 8-9 Mongolian Economic Forum. Activists, journalists and parliamentarians complained officials aren’t doing enough to alleviate poverty and unemployment.
“We are trying to build a bridge and a mechanism between the government and public and private sector so that we hear each other,” Batbold said in a Feb. 8 interview in Ulan Bator. One initiative is a push to make mining contracts available on the government’s Web site to help spur public debate, he said.
If he and other leaders don’t keep their promises on openness and transparency, “that will be a big problem” and “they may lose” the next parliamentary election in 2012, said Dambadarjaa Jargalsaikhan, an economist who helped organize the forum and founder of the advocacy group Mongolians for Fair Taxes, Wise Spending.
Mongolia’s income gaps are visible in Ulan Bator, where a statue of Genghis Khan looks south from the steps of parliament at newly opened Louis Vuitton and Ermenegildo Zegna stores. Meanwhile, the most severe winter in three decades is killing livestock in western Mongolia, where the UN says people may face starvation.
Sanjaasuren Oyun, a 12-year parliamentary veteran with a doctorate in earth sciences from Cambridge University in the U.K., said she is pushing the government to avoid politically popular cash dividends for citizens and focus on infrastructure improvements and job growth.
“Because poverty and unemployment are still the most pressing issues in this country, it is easy to win the vote by promising cash,” Oyun said in an interview. “But members of both parties in parliament are saying that in the future, these promises should not be made.”
Sunday, February 14, 2010
Plans are afoot for a "national renewable energy center" in China...
China draws up plans for national renewable energy center from China Daily.
Also, coverage by Reuters and UPI as well.
By Wan Zhihong and Sun Xiaohua (China Daily)
China plans to build a national renewable energy center to further support development of the industry, an energy official said yesterday. The center will be responsible for policy-making, key project and program management, market and industrial operations, database and information platform establishment and international exchange program coordination, Han Wenke, director general of Energy Research Institute under the National Development and Reform Commission, said yesterday.
The establishment of the center is still in the preliminary planning stages, Han said at the launch of the Sino-Danish Renewable Energy Development Program. The Danish government will invest 100 million Danish krone (130 million yuan) in the program, which is slated to last until 2013.
The combination of Denmark's sector experience and China's strong economic position offer a good starting point for the program. "The project is set to combine the advantages of the two countries and promote renewable energy development fast and well in China," said Danish Minister of Climate Change and Energy Lykke Friis.
Some Danish companies have already made large financial commitments to China. Vestas, a world leader in wind power equipment manufacturing said last year its investment in China would exceed 3 billion yuan by the end of 2009. The company's rapid growth in the country is in line with the strong growth of China's wind energy sector, according to the company.
China made great progress in renewable energy growth last year. It accounted for 7.5 percent of the country's primary energy consumption in 2009 - or the equivalent of 230 million tons of coal, said Liu Qi, vice-director of the National Energy Administration.
"No matter what happens with international climate change negotiations, reducing fossil fuel consumption and developing renewable energy will be the best way to ensure a secure energy supply," said Liu. "The target of reducing carbon intensity by 40 to 45 percent in 2020, based on 2005 emissions, will depend more on the development of renewable energy."
China has become the third largest producer of wind power in the world and is responsible for around 40 percent of the output of the world's solar photovoltaics. Photovoltaics or PVs are arrays of cells containing a solar photovoltaic material that converts solar radiation into electricity.
Renewable energy is helping China complete its economic transformation and achieve energy security, said analysts.
It's unclear from the article what "build" means -- to establish/create, to construct a physical facility for, perhaps both ... As People's Daily notes, the official "made these remarks at the launch of a Sino-Danish Renewable Energy Development Program Tuesday, without providing further detail."
These articles also illustrate two other key features of reporting/media on China.
1) There is a problem with statistics not always agreeing. One must find out what the statistics actually refer to...
Reuters: "Renewable energy consumption accounted for 8.3 percent of the China's total in 2009. The country consumed a total of 3 billion tonnes of standard coal equivalent in the year, more than 90 percent of which was derived from traditional fossil fuels, with more than 70 percent from coal."
China wants renewable energy sources to make up 15 percent of total power generation by 2020, up from about 9 percent currently. It also aims to reduce carbon intensity, or the amount of carbon produced per unit of GDP, by between 40 and 45 percent by 2020 compared with 2005.
UPI, pulling directly from China Daily: Renewable energy accounted for 7.5 percent of the country's primary energy consumption in 2009, or the equivalent of 230 million tons of coal, said Liu Qi, vice director of the National Energy Administration, China Daily reports.
"No matter what happens with international climate change negotiations, reducing fossil fuel consumption and developing renewable energy will be the best way to ensure a secure energy supply," said Liu. "The target of reducing carbon intensity by 40 to 45 percent in 2020, based on 2005 emissions, will depend more on the development of renewable energy."
2) A lot of the Western wire services depend on China Daily, Xinhua and other English-language Chinese media for their stories. You'll often see articles pop up a day or two later, citing China Daily or Xinhua as its source. The good thing is that the reporting by good wire services like Reuters, AP or Agence France-Presse is clearer, and may even give additional details or explanation -- especially if it's a complex issue where Western audiences may appreciate a little context or background. Still articles can often be here's what China Daily said, written more cleanly, succinctly (and grammatically). This makes sense, as they don't have large news bureaus and a stock of reporters out in the field; they're trying to keep readers abreast of the news in China, and a lot of that (though of course not all of it) is funneled through state media.
In any case, sometimes it helps to "check backward" and see what the original story may have said. Even if it doesn't provide all the details, the way in which things are phrased in state media can be interesting to observe.
Tiger graphic http://www.nipic.com/show/3/9/45c55e3d0e5a5217.html
China Daily http://www.chinadaily.com.cn/bizchina/2010-02/10/content_9456628.htm
People's Daily http://english.people.com.cn/90001/90778/90862/6892537.html
Thursday, February 11, 2010
The year 2009 was one of deep crisis for large parts of the world’s automobile industry, with production and sales that plunged in many countries, factory closings, job loss, and a reshuffling of the leading producers. Production of passenger cars and light trucks declined 13 percent, and sales dropped 6 percent, from 66.2 million light vehicles in 2008 (and the previous peak of 69.4 million in 2007) to 62.4 million in 2009.
Read: Auto Industry in Turmoil, but Chinese Production Surges by Michael Renner
Note - you will need to create an account to read the full report (free)
China forms "Super Ministry" in move toward coordinated energy policy
On Jan. 28, 2010, the Chinese central government officially announced the formation of the National Energy Commission.
China’s newly formed National Energy Commission (NEC) will be headed by Premier Wen Jiabao and will consist of 22 other high-level government officials, including Vice Premier Li Keqiang (who will serve as deputy head) as well as the top leaders of the National Development and Reform Commission (NDRC) and the ministries of finance, environmental protection, land and resources, and foreign affairs.
The seniority of the NEC members is a clear indication of the central government’s commitment to overcoming the bureaucratic infighting that has made it difficult to secure cooperation among the relevant players – including government agencies and large state-owned energy companies – on energy initiatives considered vital to sustaining China’s economic growth.
With the meteoric rise of its economy, beginning with the advent of the Reform and Opening Up policy in December 1978, China has become both a major energy producer and consumer. Not surprisingly, this rapid development has also been accompanied by growing pains. In attempting to meet the ever-increasing energy demands of a population of 1.3 billion fanned out over an area of 3.7 million sq mi (9.6 million sq km), China’s government and domestic energy industry have faced a multitude of challenges. How these challenges have been handled has led to a great deal of criticism, domestically and internationally.
On the domestic front, China’s leaders have had to contend with the increasingly boisterous outcry from its population regarding, among other energy-related matters, environmental degradation on a massive scale, coal mining accidents, fuel shortages, and rolling brownouts. Criticism from some influential members of the international community has also been heard as a result of China’s perceived reluctance to adopt international norms, including its stance on the reduction of carbon emissions and its willingness to overlook the darker side of some of its business partners while it conducts an aggressive campaign to secure overseas energy supplies.
It is fair to say that much of the criticism has been a result of the fragmented nature of China’s system for managing its energy policy. For example, unlike most countries that consume and/or produce energy on a similar scale, China does not have a ministry of energy. In fact, prior to the creation of the NEC, the existing government authorities handling energy-related matters at the national level have been the relatively low-ranking National Energy Administration (NEA), under the NDRC (China’s main planning agency), and the National Energy Leading Group, under the State Council (China’s Cabinet). The combined total staff of these organizations is approximately 200. (By contrast, the US Department of Energy has about 4,000 employees dedicated to energy matters.)
China’s minimal capacity, coupled with a lack of political clout, has led many experts to deem these authorities unable to cope with the scale of energy issues that China faces. Furthermore, various energy sectors, including those respectively dedicated to coal, oil, and gas, are controlled and operated by other powerful government authorities and large state-owned enterprises. These various actors often have differing strategic interests that at times have led to clashes that ultimately have harmed Chinese consumers.
The fuel shortages experienced in China at the end of 2007 provide an instructive example. Because of the record high cost of crude oil at the time and an inability to pass on that cost to the consumer because of government controls, Chinese oil companies did not expand their refining activities despite the increasing demand for fuel. As a result, fuel supplies ran low, leading to long lines at gas pumps and the disruption of trucking services throughout the nation.
Partly in response to the negative fallout from this fuel-shortage debacle, in March 2008 the People’s Congress approved a proposal to create two new bodies - the aforementioned NEA (which was established in March 2008 and replaced the now defunct Energy Bureau under the NDRC) and the NEC, which was initially intended to replace the National Energy Leading Group. It was reported that the NDRC initially resisted the attempt to set up an authority as powerful as the NEC. (Although the precise reasons for the NDRC’s reluctance remain unclear, the fact that it took nearly two years to formally announce the formation of the NEC readily illustrates the depth of the power struggles at play.)
Out of this background, the NEC has been established as a “super-ministry” charged with taking the reins and exerting control over the relevant actors.
Implications for China’s energy industry
According to a notice released by the general office of the State Council, the NEC will be in charge of formulating energy development strategy, reviewing energy-security policies and coordinating international cooperation. Moreover, the existing NEA will be subordinate to the NEC, but will continue to be responsible for the drafting and implementation of energy plans, industrial policies and standards.
The NEC also will outrank all other government departments and state-owned enterprises that are currently in charge of the various energy sectors. Although NEC decisions will still require approval by the State Council, given the seniority of its members it is well positioned to coordinate all such decisions made concerning energy policy.
There are two areas where the introduction of the NEC will likely create an immediate impact: renewable energy and energy security.
Since the United Nations Climate Change Conference was held in late 2009 in Copenhagen, China has issued a series of policies and regulations in an effort to boost the country’s renewable energy sector. As a result of its plenary powers, the NEC will have the heft to push forward many of the green initiatives that otherwise might have stalled prior to its formation.
Another top priority of the NEC will relate to energy security. Given China’s concern over being too reliant upon energy imports (it became a net importer of oil in 1993), it is anticipated that the NEC will spur the development of additional onshore energy projects as well as the acquisition of offshore energy projects by large state-owned enterprises. In particular, the NEC will be instrumental in facilitating the completion of the various administrative formalities required to approve and finance such plans.
In sum, as the NEC begins to flex its administrative muscle in various sectors, such actions will provide telltale signs as to what China’s leaders have deemed to be their top priorities within the energy field.
Wednesday, February 10, 2010
Financial Crisis Paves the Way for Chinese Solar GiantsSales of Chinese solar modules, which accounted for nearly one third of the global market share, were shadowed in the wake of the financial crisis. However, what did not kill the Chinese companies made them stronger, especially in terms of product cost and market access.
Along with sales recovery, the Chinese may have grabbed more market share from their international competitors. "Trina's global market share is estimated to have reached 6 to 7 percent in 2009, up from 3.5 percent in 2008, " said Tzou. "We also estimate that Chinese solar module manufacturers, including Taiwan, answered over half of the world's demand in 2009."
Better cost advantages played a key role. Up until mid-2008 Chinese manufacturers had to buy extremely high priced polysilicon, a major part of solar modules production cost, while their international competitors had access to long-term supply agreements at significantly lower prices. However, following the financial crisis, the global polysilicon price slumped by 87.5 percent, giving the Chinese a way in.
Tuesday, February 9, 2010
P.S. At the end of January, Ministry of Environmental Protection announced that two new pollution indicators, NOx ("discharged from vehicles and power plants and causes acid rain") and ammonia nitrogen ("another major measure of water quality") were introduced into the emission control list for the 12th Five-Year Plan (2011-15).
Currently, the pollutants they are focusing on are SO2 for air, and chemical oxygen demand (COD) for water. China is apparently on track to meet its target of reducing 10% of emissions below 2005 levels, by 2010. (Not including this new census data, which takes into account agricultural pollution).
China Report Shows More Pollution in Waterways
By JONATHAN ANSFIELD and KEITH BRADSHER
The New York Times / February 10, 2010
BEIJING — China’s government on Tuesday unveiled its most detailed survey ever of the pollution plaguing the country, revealing that water pollution in 2007 was more than twice as severe as official figures that had long omitted agricultural waste.
The first-ever national pollution census, environmentalists said, represented a small step forward for China in terms of transparency. But the results also raised serious questions about the shortcomings of China’s previous pollution data and suggested that even with limited progress in some areas, the country still had a long way to go to clean its waterways and air.
The pollution census, scheduled to be repeated in 2020, took more than two years to complete. It involved 570,000 people, and included 1.1 billion pieces of data from nearly 6 million sources of pollution, including factories, farms, homes and pollution-treatment facilities, the government announced at a news conference.
But the comprehensiveness of the survey also resulted in stark discrepancies between some of the calculations and annual figures that the government has published in the past. By far the biggest of these involved China’s total discharge of chemical oxygen demand — the main gauge of water pollution. These discharges totaled 30.3 million tons in 2007, the census showed.
In recent years the Ministry of Environmental Protection has done a much narrower calculation of these discharges, excluding agricultural effluents like fertilizers and pesticides as well as fluids leaking from landfills. By that narrower measure, discharges came to only 13.8 million tons in 2007, which officials described at the time as a decline of more than 3 percent from 2006 and a “turning point.”
Thursday, February 4, 2010
- Pipeline projects in Burma/Myanmar may help China tackle the "Malacca Strait dilemma," an issue of national/energy security
- Pipelines may be easy target to sabotage for rebel groups fighting the military junta
- Despite China being its largest weapons supplier, Myanmar government is deeply suspicious of Beijing
- China risks public relations disaster over human rights, as the government in Myanmar is truly repressive
"The fear is that during a conflict, a hostile power could choke off energy supplies that are taken on supertankers through the narrow Strait of Malacca between Malaysia and Indonesia. Some 80 percent of China's oil imports arrive this way. [This is known in domestic energy strategy circles as the "Malacca Strait dilemma."] Bringing energy supplies through Myanmar is a handy way to avoid the Strait, and expands efforts to diversify supply routes with crude and gas pipelines from Central Asia."
China takes risky step with Myanmar pipelines
Reuters / 03 Feb 2010
By Ben Blanchard
BEIJING, Feb 3 (Reuters) - China will soon be burning oil and gas piped in through Myanmar, but putting some of its energy security in the hands of a pariah state beset by international sanctions and civil strife could be a risky gamble.
A gas pipeline with annual capacity of 12 billion cubic meters is due to come on-stream within the next two years, carrying the fuel from military-ruled Myanmar's rich offshore deposits into southwestern China.
If all goes to plan, China at some point in the near future will start also receiving 12 million tons of oil a year via a separate pipeline, about as much as it imported from Sudan last year, its fifth-largest supplier. There is no exact date for its opening yet.
Myanmar [once known as a Burma] is a friend of China, which has stood by the country's ruling generals, selling arms and providing diplomatic cover when needed -- with an eye firmly on Myanmar's natural resources and access to the Indian Ocean.
But the relationship is more a practical partnership than a meeting of minds, despite the parallels between the two authoritarian governments. Myanmar's military harbors a profound mistrust of its powerful northern neighbor, while China worries instability in Myanmar could spill over into its territory. Those fears came to the fore last August when fighting between Myanmar's military and the Kokang rebel group pushed thousands of refugees into China. Myanmar's army ended up firing across the border, provoking irritation in Beijing.
"If Beijing thinks that the pipeline in Burma is going to be relatively trouble-free then they ought to rethink," said Maung Zarni, a Myanmar expert at the London School of Economics (LSE) Centre for the Study of Global Governance. "Even a regime that is currently in a marriage of convenience with them would fire into Chinese territory," he added.
MALACCA STRAIT PROBLEM
China, the world's second-largest oil user, sees the pipelines as a way to get around what in domestic energy strategy circles is known as the "Malacca Strait dilemma".
The fear is that during a conflict, a hostile power could choke off energy supplies that are taken on supertankers through the narrow Strait of Malacca between Malaysia and Indonesia. Some 80 percent of China's oil imports arrive this way.
The area already has a piracy problem. In 2005, the Joint War Committee of the Lloyd's Market Association added the area to its list of war risk zones.
Bringing energy supplies through Myanmar is a handy way to avoid the Strait, and expands efforts to diversify supply routes with crude and gas pipelines from Central Asia.
"One of the pipelines will be purely for oil, and that oil isn't coming from Burma. It will be offloaded from tankers coming from the Middle East and then piped to Yunnan and on. It's very important," said Ian Storey, a fellow at Singapore's Institute of Southeast Asian Studies. "One way of looking at the Kokang incident is the Burmese were actually just clearing the border in preparation for that pipeline. So China couldn't be too critical of that incident because it's in their own interests."
But the benefits may be more than offset by two major risks -- the many disparate rebel groups who have fought Myanmar's central government for decades, and popular mistrust at an influx of Chinese migrants and traders into Myanmar.
"Think of a population that is seething with resentment towards the Chinese that borders on hatred," said LSE's Maung Zarni. "An 800-km pipeline is too good a target if the Burmese want to harm Chinese interests."
Already, residents along the pipelines' route have attacked Chinese workers and offices, angry at the seizure of their land and property, said Wong Aung, a spokesman for the Shwe Gas Movement, which is campaigning against the project. "We can only imagine people's anger at the Chinese," he said by telephone from Thailand. "That kind of social unrest, or attacks, could take place at any time."
Factor in India's jockeying for influence in Myanmar, driven by Delhi's fears that China is surrounding it with pro-Beijing states, and the potential for problems rises further. "If at any time India feels they have lost Burma to China, you can easily imagine a scenario where India quietly assists disgruntled military units or dissident groups which may become radicalized to target Chinese assets," Maung Zarni said.
But Myanmar is keeping India in the game by offering stakes in the pipeline to two Indian gas companies. State-run Gail India will pick up a 4 percent stake and Oil and Natural Gas Corp (ONGC) will take another 8-8.5 percent, Indian media reported last month.
PUBLIC RELATIONS DISASTER
The project could become another international public relations disaster for China, coming hot on the heels of the opprobrium Beijing attracted ahead of the 2008 Olympics for its oil investments in Sudan.
Rights groups have repeatedly expressed concern that pipeline construction will bring abuses against local peoples, mainly by Myanmar's army which will be tasked with protecting the project.
Yet desire for the oil and gas is such that the risk of another unhappy round of poor global public relations for China is one Beijing will be happy to take, said David Mathieson, Myanmar researcher for New York-based Human Rights Watch.
"Potentially that pipeline project could really become a touchstone for all the other things China does in Burma, and it could be immensely embarrassing to them," he said. "(But) I actually don't think that's enough to stop the project. They've wanted that gas for a very long time."
Wednesday, February 3, 2010
Interesting use of new legal mechanisms by an ordinary citizen to gain more information on Three Gorges. We'll see how this turns out.
Rule of law meets the Three Gorges dam
Probe International / January 27, 2010
Ren Xinghui, a Beijing resident, has made headlines in the Chinese Internet press by using the country’s new disclosure law to request information about government funding of the Three Gorges dam.
Last October, Mr. Ren filed formal requests for bonds, loans, special electricity charges, among other sources of financing, from three key government departments in charge of the dam: the Ministry of Finance, the Three Gorges Project Construction Committee Executive Office under the State Council and the China Three Gorges Corporation.
The Three Gorges dam on China’s Yangtze is the world’s largest and most expensive dam, though the final cost is unknown because of state secrecy. Estimates of its cost vary between $32 billion and $88 billion. Corruption has plagued the project’s resettlement operation, which has flooded nearly 1.2 million people from their homes.
According to the law, Mr. Ren’s request for data on the dam’s cost is entirely by the book: Article one of the regulation, which came into force on May 1, 2008, states that its purpose is to safeguard “the legal access to government information by citizens, legal persons and other organizations, improving the transparency of government work, promoting the administration according to law and giving full play to the role of government information of serving the people’s production, living and social and economic activities.”
Mr. Ren's attempt to use the law to secure government spending records is pioneering. Government officials who fielded his initial requests last October seemed caught off guard, denied knowledge of such things, couldn’t find responsible officials (they were away on a business trip or occupied in meetings), cited internal procedures for prohibiting the submission of the requests and directed Mr. Ren to the Propaganda Office.
Now, having considered his initial request, the Ministry of Finance has rejected it on the grounds that the income and expenditure of the dam project was made available in 2008 and that Mr. Ren’s own production, domestic or research affairs are not affected by the expenditures, so he has no right to the data.
Mr. Ren disputes this and argues that he, like all Chinese electricity consumers, has been forced to contribute to the Three Gorges Construction Fund through a special charge in their electricity rates. On that basis, he says, he is entitled to see the financing and cost data.
On Monday, Ren Xinghui filed his suit against the Ministry of Finance with Beijing’s No. 1 Intermediate People's Court, asking it to decree that the Ministry of Finance provide the data on the cost of the Three Gorges to him. The Court is now reviewing whether to accept the case.
Tuesday, February 2, 2010
Blog post: http://switchboard.nrdc.org/blogs/bfinamore/china_renews_its_commitment_to.html
1. Changes to the Mandatory Connection Policy
One of the most significant aspects of the Renewable Energy Law when it was originally passed was the introduction of the “Mandatory Connection” policy, which essentially required grid companies to connect and purchase all renewable energy generated that could be fed into the grid. After four years of experience with the Mandatory Connection policy, however, it became clear that not all grid companies were complying with their obligations to purchase all renewable power and connect it to the grid.
While China has rapidly increased its installed capacity of renewable energy over the last five years, there are concerns that too much of this capacity is not promptly connected to the grid and that not all power being generated is being purchased as required by the law. For example, China’s installed wind capacity has doubled every year for the last four years, but according to recent reports, about 30% of China’s wind capacity is not connected to the grid and may be lying idle (emphasis added).Unlike any of the previous targets, the new target created by the amendments places responsibility directly on grid companies to purchase a fixed share of their power generation from renewable energy sources, and these grid-level targets will be enforced through penalties for non-compliance (Art. 29). A Mandatory Market Share (MMS) that sets the percentage of non-hydro renewable power generation out of total power generation was introduced in 2007 in the Mid and Long Term Plan for Renewable Energy that was issued by China’s chief national economic planning agency, the National Development and Reform Commission (NDRC). (See here in English and here in Chinese) While this 2007 target is similar to the new target provided for in the amendments, this is the first time in China that an RPS-style target has been expressly provided for in the law, creating an enforceable, legal obligation with which grid companies must comply.
While much of the detail still remains to be worked out, the amendments on their face clearly impose a new obligation on the grid companies that did not exist under the original legal framework.
While setting compulsory national technical standards is a positive step, one issue with the amendments is that they do not specify who will set the standards and how they will be monitored. Although technical guidelines for wind, solar and geothermal were issued in China in 2005, compulsory national standards do not currently exist.
One other very important change to the law is how grid companies are compensated when purchasing renewable energy instead of cheaper, dirtier forms of energy, such as coal.
Given that renewable power is generally more expensive than conventional fossil fuels, China has instituted feed-in tariffs for a variety of renewable energy technologies to compensate grid companies for the additional cost of purchasing renewable energy. The original law created a system in which these feed-in tariffs and additional costs associated with connecting a renewable generator to the grid would be funded by a surcharge on end-users of electricity.Under the original law, the grid company would directly withhold the surcharge from the end-user’s regular electricity bill. This surcharge is set by the government and is periodically increased (as of Nov. 2009 the surcharge is set at RMB .004/kWh). Now, instead of the grid companies’ collecting the surcharge directly from the end-user, the end-user will pay the surcharge into a Renewable Energy Development Fund. Once the surcharges have been pooled, the grid company will then seek compensation from the fund for the additional cost of purchasing the renewable energy, including the costs associated with integration. Although this change might seem like a mere technicality, it is actually quite significant because pooling all the surcharges into one large fund will allow the government to use this considerable amount of money (689 million USD in 2009 and an estimated 1 billion USD in 2010) not only to compensate grid companies, but also to invest in various renewable energy development projects, including R&D (Art. 24).