Tuesday, February 28, 2012

Recent Violence in China - Potentially Related to Oil and Gas?

I found this article on the BBC news site today. The state media is reporting that 12 people have been killed in riots in the northeastern region of China. It doesn't give an exact date of the riots but I believe they are very recent as the article was published just a few hours ago. The riots are occurring near the city of Kashgar in Xinjiang province. The state media is not reporting what might have triggered this recent violence but the region has been tense for the past several years. The BBC article cited that the violence might be due to the "migration of the Han Chinese workers from the east" who are believed to be taking jobs away and eroding the culture of the area. The article also states that part of the reason for the migration is due to China's heavy investment in the area due to the region's rich oil and gas deposits. Very loosely then, you could say that violence in the area is due China's dependence on oil and gas.


China Launches its First Renewable Energy Think Tank

China appears to have moved one step further towards strengthening its position in the global renewable market by taking on more international collaborations.  According to China Daily, last week China sets up its first national think tank on renewable energy to develop the country's R&D programs and policies to deal with climate change and reduce carbon emissions.

The China National Renewable Energy Center, established by the National Energy Administration (NEA) with the support of the National Development and Reform Commission (NDRC), will also draft industry standards and carry out international cooperation programs.  The four major areas of focus are estimates of the potential for offshore wind power, biomass, solar power, and the grid integration of renewable energy.

Denmark is collaborating with China related to the new center, donating US$17.9 million to support billateral work in renewable energy.  China will also pursue cooperation with energy agencies from other countries including the US and Spain.

Full article here: http://www.chinadaily.com.cn/bizchina/2012-02/24/content_14686084.htm


Sunday, February 26, 2012

Migrations within China

Wealth disparities between rural and urban areas are inducing huge migrations within China (although strictly regulated by the government). As coastal cities are becoming richer and richer, jobs are relocated in more inland regions, slowly changing the migration patterns.

Saturday, February 25, 2012

Energy Intensity Drops 2% in 2011

In the 12th Five-Year Plan, China set a target of a 16% decrease in energy intensity. The numbers are in from 2011, and the drop was just 2.01%, a shrinkage from 2010's 4%.


Friday, February 24, 2012

The "Smarter Zhenjiang, Smarter Tourism" Project

Although transportation policy has traditionally focused on three main components of the transportation equation (fuel chemistry, vehicle efficiency, miles traveled), managing overall SYSTEM EFFICIENCY is increasingly being viewed as a valuable tool for tackling transportation issues like emissions and congestion. In this spirit, the city of Zhenjiang announced today that it was partnering with IBM to implement IBM's "Intelligent Transportation" solution, which will provide city managers with a comprehensive, real-time picture of the city's traffic network to anticipate traffic jams before they happen, alleviate congestion, maximize road capacity, and respond quickly to incidents.

Two good articles:



This could be a cool sneak peak of tomorrow's urban transit systems, and (if fully implemented) would go a long way to alleviating China's urban air quality and congestion issues.

Thursday, February 23, 2012

Solar PV Trade Wars

An interesting article about the current market for silicon and solar PV. Right now, most analysts agree that there is a glut of silicon in the market leading to oversupply and thus abnormally cheap costs for solar PV cells. However, the cause of this is more controversial. Some blame the overbuild of solar factories and silicon supply chains during the pre-bust era of high demand. However, other (namely U.S. solar manufacturers) blame malicious solar subsidy practices of the Chinese. Either way, it is unclear what the best policy for the U.S. is going forward. If the U.S. imposes protectionist tariffs on Chinese imports, this will allow U.S. manufacturing to build out more in its relatively "infant" state. However, many in the U.S. (including solar installers) argue that the higher prices from tariffs will create an additional barrier to an industry that is already struggling to compete economically. They believe there is the potential for this barrier to cause permanent damage to the industry with no real tangible long term benefits.


Article posted from the Rocky Mountain Institute

An Upside to China’s Air Pollution: More Snowfall in the Sierra Nevada

An article came out last week suggesting that the particulates blown over from Asia contribute to nucleation of snowflakes in the Sierras, increasing snowfalls. I guess this year the correlations between high pollution in China and high snowfall in the Sierras aren't showing up yet :)


Tuesday, February 21, 2012

Keystone XL Pipeline Exports May Go To China Instead

Late last month, President Obama rejected the permit for the Keystone XL pipeline that would bring oil from Canada to Gulf Shore refineries. Following that decision, Canada is looking to China as an opportunity to diversify its exports beyond the "fickle" American market.

Canada's prime minister visited China recently and touted his country's growing status as an energy producer and its desire to "sell our energy to people who want to buy our energy". Last Friday, newspapers reported that the first shipment of oilsands crude has left for China.


Chinese oil imports increase even as Iranian supply contracts stall

Chinese imports from Iran are the lowest since August.  The U.S. and Europe are implementing sanctions in response to Iran's nuclear program, but it may be that China's motivation is just to squeeze better prices out of Iran, and the sanctions of other countries actually increases China's bargaining power with Iran.  In January, China paid over $110 on average her barrel of Iranian oil. 


A Five-year Plan

I received the following e-mail from Students for a Sustainable Stanford (SSS). It's only tangentially related to China, but I just had to point out the reference "Five-year Plan," heh heh. Do take the time to fill out the survey though; Stanford is actually somewhat responsive to input from the grassroots.
"Hello -

Stanford is in the process of creating its next 5-year sustainability plan. Students have a unique opportunity to add their voices to a plan defining the future of Stanford. To capture your voices, we created this survey, which will take less than 5 minutes. Anyone who fills out the online survey and enters their email will be entered into a raffle to win one of fifty $10 gift cards to Coupa Café, Jamba Juice, or Ikes.


This is our campus and this is our chance to make a difference."

Monday, February 20, 2012

EVs and Air Pollution in China

A common critique of vehicle electrification is that it simply shifts emissions from tailpipes to powerplants. While a host of studies have shown that EVs still have lower lifecycle emissions in the US, a recent report from University of Tennessee suggests that the coal-dependent Chinese power grid may mean that EVs in China actually have higher fine-particulate emissions than their gasoline counterparts. The report, which has garnered some press, looks at both the makeup of Chinese generation as well as the proximity of the population to the plants.

Of course, EVs offer some additional benefits as well in terms of energy security, and it could be argued that point source pollution (e.g., powerplants) are easier to regulate and clean than non-point sources (e.g,. vehicles). It's a good discussion topic, in any case.

A disastrous side effect to industry pollution

Widespread lead poisoning from industry pollution has been accompanied now by officials restricting access to blood testing.  Those who speak out are being silenced, and children in particular are susceptible to dangerous concentrations of the various toxins found in the farmland.  Refusal to treat the children is followed by sending them right back to their contaminated homes.  Although environmental regulations attempt to address the pollution responsible, the health effects already encountered are not being addressed.


Coal and CCS: another opportunity for China to export technology

Last week, I shared with the group an article on nuclear energy technology in China and the possibility that China might become a net technology exporter in that domain. Well, the news today is similar, but from the coal + CCS sector. Duke Energy is considering applying Huaneng Group’s low-cost carbon capture process at unit 3 of Duke Energy’s Gibson Station in Indiana. There are five units at Gibson with a combined capacity of 3,145 megawatts.


Trend in China's Wind: Larger Turbines

The development of renewable energy is concerned not only with adding more new capacities, but also setting up the right projects at the right places. In terms of wind energy, as we talked about in last week’s class, China is the world #1 in new installation, but it faces significant challenges in grid integration, insufficient load factors, mismatch of source and use locations, etc. This Bloomberg New Energy Finance article presents an opinion from industry practitioners on the technological trend in the wind sector: though the common 1.5MW turbines dominate the market, the installations of larger turbines (over 2MW) are increasing. Also, wind farm projects are more regulated than before to ensure a sustainable expansion path.

Sunday, February 19, 2012

Environmental Groups Fighting Coal Exports to China Through Pacific Northwest Ports

Environmental groups are fighting proposals to ship coal to China from Wyoming’s Powder River Basin out of ports located in Washington and Oregon. The groups against the coal exports are concerned with contributing to burning coal in China for energy because of its dirty nature and are also concerned with the risk of accidental coal spills and coal dust in the US ports. In my home state of Washington, people are very concerned about coal spills in the Puget Sound that could occur due to a proposed export location in Bellingham, near Canada. The Puget Sound supports fragile and unique ecosystems, making it a very contentious topic. On the other hand, these projects would create much-needed jobs in the Pacific Northwest.



(Marielle Price)

Thursday, February 16, 2012

Overview of Energy resources

although this is not explicitly related to China, it offers a general comparison and criticizes the pros and cons between the different types of energy sources. Considering our presentations has covered quite a lot of material since the beginning of the quarter, i figured this would be fitting just to see the big picture..

The author, a stanford professor, discourages ccs and nuclear power while promotes wind energy and battery electric vehicles as the best currently available technologies that can make a difference "now."


China Has Built Almost Half the World’s Wind

News item from Greentech Media.

The world built 42.2 gigawatts of wind in 2011; 18 gigawatts were from China.


Cloud of Uncertainty Hovers Over China’s New Emissions Trading Plans

From Worldwatch....

By Haibing Ma (and Alexander Ochs)

Describes the carbon trading system plan developing in China.

Here is a key excerpt:

The National Development and Reform Commission (NDRC) recently issued an official notice to initiate pilot carbon-trading programs in seven regions. By embracing market-based approaches to mitigating climate change, China is seeking to facilitate a smooth and efficient transition to sustainable development. The seven pilot regions are the cities of Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen, as well as Guangdong and Hubei provinces.


Wednesday, February 15, 2012

China Solar Silicon Production Curbed 30% to Lift Prices

This fairly straight-forward article reports that some of the major Chinese producers of poly-crystalline silicon (including DongFang Electric, mentioned in class yesterday), have been cutting back their output to bolster prices. Poly-crystalline silicon prices had plummeted to a decade-low $28/kilogram at the end of last year before the output cut.

Major Chinese PV manufacturers, who purchase the raw material, noted that the rise in prices lowered their margins but did not prevent them from operating, while some smaller manufacturers were prohibitively affected. Analysts expect an upper bound of $40-50/kg before suppliers re-enter the market.

Being a big-time homer for raw materials use and commodity markets, I found one inference of the article fascinating. While the pricing mechanism for polysilicon isn't entirely clear, it appears to be market driven rather than centrally set (unlike power, for example). This makes for an interesting interplay of the supply chain. With fixed power prices and market-determined prices for a key input (silicon) and the power-producing product (the PV cell), who takes the profits/losses from the fixed prices? It will be interesting to see how the industrial organization of poly-crystalline PV unfolds, and I suspect that we will see some vertical integration in the sector



Tuesday, February 14, 2012

"Clean Coal" asks for teamwork between China and the US

As China is building a new coal-fired power plant every week, on average, the rapid development and installment of carbon capture and storage (CCS) technology is of critical importance to control the nation's ever increasing greenhouse gas emissions. Critics say that a cooperation between China and the US, where a lot of research on CCS has been performed, might be the only way to attain substantial CO2 reductions. However, this may stay wishful thinking, as the China-US relationship has always more resembled rivalry than cooperation.

Read the full story here: http://news.nationalgeographic.com/news/energy/2012/12/120213-us-china-teamwork-on-clean-coal/

By the way, today, on Valentine's day, the Chinese Vice President Xi Jinping has visited President Obama. Perhaps they have exchanged some words on energy ...?

Sunday, February 12, 2012

Further reasons to avoid running in China--new study of pollution

I recall that our first speaker had shared with us a story about a woman who found out she had lung problems because she ran every morning in Beijing.
A new study shows that the level of PM2.5, the smallest solid particles in the atmosphere, is well above safe levels in most regions of China. Previous, Chinese government reported only PM10 (bigger particles) data, but due to rising public pressure it will start paying more attention to PM2.5. PM2.5 actually poses the greatest health risks and result from combustion activities (coal, wood, vehicles) as well as industrial activities.
The article has a map of China, color coded for different levels of PM2.5. Almost all of the regions surpass the level that is considered safe under the WHO guidelines (10mg/m^3)

another: http://www.economist.com/node/21542826

and if you want to learn more about PM2.5 and PM10:

China 'bans' Airlines from Joining EU Carbon Scheme

I didn't realize that the EU implemented an Emissions Trading Scheme (ETS) effective January 1st. The goal is to cut carbon emissions and part of the ETS is a tax on flights through EU airspace. The tax depends on the carbon emissions of the flight. The China Air Transportation Association previously said it didn't support the ETS due to the approximately $124 million it would cost Chinese airlines. Now, the government has banned all airlines from joining the ETS and also banned the increase of fares or implementation of additional charges in connection with the scheme. The US and Canada have also voiced disapproval for the ETS and it is unclear how the dispute can be resolved without third party intervention.


Wednesday, February 8, 2012

Nuclear Energy in China

Last quarter, in a class I was taking at the GSB, there was a lot of discussion about China becoming an exporter of nuclear energy technology and infrastructure to the U.S. This article seems to shed more light on this topic. It seems that the Chinese are not only interested in expanding their nuclear power capacity, but also in expanding their share of this market worldwide. With China acting faster than the U.S. on new nuclear technologies, this seems to be a likely scenario.


Also related to the expansion of nuclear power in the country, this article, published yesterday by Bloomberg Businessweek, shows the increased demand for Uranium. China is actively seeking international ventures.


Tuesday, February 7, 2012

Hydropower--A source of contention between Myanmar and China

I highly recommend people check out this article from the Asia Times that came out today.

Myanmar has suspended the construction of a major hydroelectric dam that is estimated to cost $3.6 billion (and to be funded by China). China is outraged and is accusing Myanmar of breaching their contract. 90% of the power from the dam was expected to be sold back into China. The dam was also a symbolic bellwether on Myanmar's stance on Chinese investment (including that pipeline the Natural Gas presentation talked about). On top of all this there is major debate about the environmental impacts both with climate change and glacial melt and potential for earthquakes.


Thursday, February 2, 2012

Renewable Energy in Tibet

Renewable Energy in Tibet

If anyone else was as confused as I was to why Tibet stood out so much in the "Percent Electricity Generated by Renewable Energy by Province" graph in the Energy and Oil Presentation last Tuesday, here is a little insight to why that is the case.

According to the China Business Council for Sustainable Development:

"Tibet is rich in solar, geothermal and wind energy, while short of coal, gas and oil.

In cooperation with the United Nations Development Program and the Italian Government, Tibet has set up the largest geothermal power plant in China.

Local government is also undertaking a comprehensive appraisal, in preparation for the construction of a series of large-scale wind power stations."

Here is a link to a great paper about Tibet's prospects for renewable energy. The paper focuses on solar power but does a great job in conveying the overarching ecological and energy challenges in Tibet.


- Michelle Valentine 

China Olympic Standards, can it go back?

Remember when China hosted the olympics? This is a bit old but still pretty impressive.
Due to the Olympics, China experienced a stimulated economy due to increase in infrastructure and tourism. Even its environmental standard dramatically improved. One of the biggest concerns was the hampered air qualities due to factories. During the Olympics China shut down upstream industrial companies to help meet regulations for hosting the event. Granted it was short lived, can China, or at least Beijing, have pristine conditions and reduce it emissions?

This  article from ES&T talks about some of the fancy building that where build during the Olympics, how they had planned to reduce energy intensity by 20% by 2010, introduces its carbon program and ambition for reliance on wind.

oh and did i mention that professor Ortolano is featured in the paper? ;]


China Reinforces Energy Supplies Through US

BEIJING—Chinese institutions unveiled three separate energy deals in North America and Europe on Thursday that underscore Beijing's continued interest in foreign assets as it looks for supplies to feed its booming economy.

State-controlled PetroChina Co., the Hong Kong-listed unit of China National Petroleum Corp., said it bought a 20% stake in a Canadian shale-gas project owned by Royal Dutch Shell PLC. Terms weren't disclosed. The deal marked the latest in a string involving North American shale-gas projects, which tap previously unreachable supplies and have transformed the U.S. energy industry.

Meanwhile, sovereign-wealth fund China Investment Corp. acquired a minority stake in asset-management firm EIG Global Energy Partners, according to the U.S.-based firm. A spokeswoman for CIC declined to immediately comment, and EIG didn't disclose financial terms or the size of the stake. EIG said it has investments in oil and natural-gas projects, as well as in alternative-energy technologies such as geothermal and wind power.

The investment involves no associated voting rights, EIG said, adding that CIC is also an investor in some funds managed by EIG.

In Spain, a unit of state-controlled China National Offshore Oil Corp. struck a deal with closely held solar-power-equipment maker Isofoton SA to create a joint venture that will develop solar-power projects mainly in China, a spokeswoman for Isofoton said. The venture's initial investment is estimated at $300 million for the development of 150 megawatts during 2012, and the funds will be provided by the Chinese company, she said. In addition, Cnooc will manufacture energy-storage batteries on a large scale for the venture.

The deals come as China looks to secure supplies in uncertain times. International pressure to curb business with Iran, a major oil supplier, and turmoil involving another supplier, Sudan, have called attention to China's vulnerability to disruptions in energy supplies.

China has moved cautiously recently—acquiring minority stakes and establishing joint ventures—after earlier attempts to make big purchases encountered significant political pressure and ultimately faltered, including a bid for U.S.-based Unocal, now part of Chevron Corp.

PetroChina said it bought the 20% stake in Shell's Groundbirch project, in northeastern British Columbia. PetroChina hopes to gain experience in the exploration and development of unconventional gas resources through its cooperation with Shell, the Chinese company said in a written statement. Groundbirch's natural-gas output is 125 million cubic feet per day, the company said.

Shell said the deal is the latest example of its strategic cooperation with PetroChina parent CNPC.

The acquisition comes days ahead of a visit to China by Prime Minister Stephen Harper of Canada. In December, Mr. Harper said Canada was "very serious" about focusing its efforts on selling oil and natural gas to Asian countries.

PetroChina, Cnooc and China Petroleum & Chemical Corp.—known as Sinopec—have all invested heavily in Canada's oil and natural-gas patch during the past two years. In January, PetroChina paid 680 million Canadian dollars (US$681 million) to buy the 40% of the MacKay River oil-sands project in northern Alberta that it didn't already own. Last year, Sinopec paid C$2.2 billion for Daylight Energy Ltd., a Canadian conventional oil and natural-gas company.

North America's energy sector has been transformed in recent years by the ability of natural-gas producers to crack tight rock formations known as shale by injecting streams of water and chemicals. At the same time, companies are also pushing ahead quickly to unlock the billions of barrels of oil trapped in Canada's vast reserves of oil sands.


China Opens The Doors To Public Involvement In Hydropower Planning Process

In advance of our presentation on China's nuclear and hydropower resources this coming Tuesday, I thought it would be relevant to post this article from last month by Reuters.  

China's Ministry of Environmental Protection has issued a notice to developers of hydroelectric projects across the country that "projects should be planned 'comprehensively' and must pay attention to 'economic and ecological benefits, local and overall interests (as well as) immediate and long-term interests.' "  This would involve a decision-making process for new project development that includes all potential stakeholders, including residents that could be affected by the dam or impounded reservoir.  On paper, this process sounds similar to the United States Federal Energy Regulatory Commission's (FERC) licensing process for new and existing hydroelectric projects, and reflects a continuing gradual shift away from the completely "top-down" infrastructure decision-making process that has historically prevailed in China.  

Our group intends to simulate one of these stakeholder conferences for a hypothetical project development on Tuesday, and each of you will get your chance to "wear a hat".  These types of licensing processes literally take years in the United States, but we will just have to make the most of our time in class!      

The article also discusses the general sentiment for additional "big hydro" in China at the moment, including the apparent trade-off between hydro and nuclear in the current planning process.  


China Workers Abroad Becoming Easy Prey

During the oil and gas lecture last week, the issue of Chinese investments into Sudanese oil and the high risk exposure that accompanies them were brought to light. This Bloomberg article, released yesterday, shows how apropos that topic of discussion turned out to be.

Reports are arising of Chinese workers being kidnapped and held for ransom, and an apparent willingness by companies/government to pay those ransoms may be exacerbating the situation. A rebel attack on a Chinese encampment in Sudan has prompted members of the Foreign Ministry and representatives of CNPC to speak with Sudanese government officials regarding the safety of their workers abroad. It will be interesting to see how China will address these situations, and how it may affect their future foreign investment decisions


Wednesday, February 1, 2012

China orders 7 pilot cities and provinces to set CO2 caps

China’s National Development and Reform Commission started a pilot program for seven cities and provinces to set CO2 caps to prepare for local pilot carbon markets. These pilot programs will include overall caps, implementation plans, and dedicated funds to support the programs.

-Khalial Withen

The article:

(Reuters) - China has ordered seven provinces and cities to set caps on greenhouse gas emissions in preparation for the launch of local pilot carbon markets, according to a notice issued by the country's state planning agency on Friday.

The National Development and Reform Commission requested the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, along with the provinces of Hubei and Guangdong, to set "overall emissions control targets" and submit proposals as to how the targets will be allocated.

The provinces and cities have also been ordered to set up a dedicated fund to support the project and to draw up comprehensive implementation programs, the notice said.

An implementation plan drawn up by Guangdong, China's biggest CO2-emitting province, has already been approved by the State Council, the country's cabinet.

It commits the province to increasing the share of non-fossil fuels to 20 percent of total energy consumption by 2015, and to cutting the amount of carbon dioxide produced per unit of economic growth -- carbon intensity -- by 19.5 percent.

China as a whole has pledged to reduce carbon intensity by 17 percent over the 2011-2015 period, and said it is committed to using "market mechanisms" in order to reach the target.

It aims to bring 2005 levels of carbon intensity down 40-45 percent by 2020.

Besides the seven official pilot projects, there are more than 100 entities across the country trying to establish their own regional CO2 emissions trading platforms, including the coal-rich province of Shaanxi and the northeast port city of Dalian.

(Reporting by David Stanway; Editing by Ken Wills)