In the news today, of course, Condi Rice's speech in Paris and the Middle East cease-fire. Bring any interesting view points on these in the comments below...
Today, I'll focus on energy. Is it just that this is a topic of interest to me or is my impression real that this is coming more and more to the forefront of the news (with some justification)?
Here goes:
- nuclear
- wind
- oil reserves
- resources vs aid
Fears of global warming boost comeback hopes for [nuclear] reactors
At least two developments have renewed interest in nuclear power. One is mounting concern about the security of oil supplies in the Middle East. More importantly, however, nuclear power is seen as a potential answer to global warming as scientists have warned that the world needs to cut its dependence on fossil fuels that emit greenhouse gases.
Unlike coal and gas, nuclear power does not emit greenhouse gases and therefore offers the potential for continuing energy-intensive ways of life without the associated cost of climate change. (...)
However, the nuclear industry requires "concerted efforts to address concerns about cost, susceptibility to accidents and terrorist attack, management of radioactive wastes and proliferation risks".
New technologies make nuclear power appear much safer and cheaper than in the past. The pebble-bed design China is pioneering is one example. The technique uses as fuel thousands of small graphite balls flecked with tiny amounts of uranium, instead of the fuel rods in conventional designs.
Alongside comes this warning that the West may soon lose its technological edge even in that sector if it keeps on dithering:
One day Asia may become the world's workshop in nuclear power as in other things.
On top of a stream of new atomic power stations China is ordering comes the news that the country is poised to develop a "pebble bed" reactor, putting it in competition with a US, UK and South African consortium to produce this potentially cheaper and safer form of nuclear power.
Driving this is China's desire to develop home-grown alternatives to foreign oil and gas and cleaner alternatives to China's own abundant coal. But other Asian countries are also pursuing the nuclear option in order to improve their energy security and to reduce pollution from fossil fuels.
Contrast this with Europe's divisions, and America's ambivalence, on nuclear power, even though both regions have as great a need as Asia to improve their energy security and combat climate change.
As if to reinforce the point, still in the same paper the same day: Wind farm drive damaging rural areas, claims energy foundation
Climate change policies that promote the development of onshore wind farms are threatening the security of future energy supplies as well as damaging the countryside, the government was warned yesterday.
The Renewable Energy Foundation, which has television presenter Noel Edmonds as its president, said over-reliance on electricity generated from wind, which might not blow when power was needed, would "fail to produce cost effective reductions to greenhouse emissions".
Denmark and Germany had invested heavily in wind farms but the random nature of wind meant that expensive, dirty, back-up fossil fuel power stations were required, said the REF. The electricity grids, which were required to ensure there was enough power to meet de-mand, had also come under strain in both countries.
This is a load of crap. Electricity networks do come under strain, but only when wind starts making more than 30% of total production, which is the cases in some parts of Denmark and northern Germany but certainly not elsewhere. This is a disingenuous argument, using a real but remote issue to avoid bringing the debate where it belongs - NYMBIism
Meanwhile, the huge profits made by oil companies do not hide the very real issues in their underlying business - most of all where to find new reserves to develop profitably. As I wrote earlier, the oil majors have trouble finding new places to invest in, and their rate of replacement of reserves has become one of the most watched items in their reports. The article below is quite interesting as it provides an insight on a very complex topic where only the headline (Reserves Down" / "Reserves Up") are noticed by most people.
US rules on oil reserves produce shortfall for BP (FT)
Under industry rules devised by the US Securities and Exchange Commission, BP replaced 89 per cent of the oil and gas it used last year. This was reduced to 78 per cent when stripping out partners such as TNK in Russia. Royal Dutch/ Shell replaced 30-40 per cent of its proved reserves last year under SEC rules, before divestments.
However, the SEC has been criticised because it insists companies use the year-end oil price when calculating reserves.
A growing proportion of reserves is held in "production-sharing deals" with governments, where companies are paid their share in barrels of oil.
A higher oil price means a lower number of barrels owned by the oil company, so the year-end crude price of $40 has led to most companies cutting reserves.
Companies such as ExxonMobil and BP believe it makes more sense to use their long-term price assumptions of $20 when calculating reserves, the figure they use when investing. Under UK rules, which allow for the use of the $20 price, BP replaced 110 per cent of the oil and gas extracted.
Production sharing agreements are indeed the main tool for big oil investments, and they bring along a lot of complexity, which is indeed hard to capture in financial reports. The bigger problem is that the biggest oil producing countries (Saudi Arabia and Iran to start with) do not allow foreign investment, PSA or not.
And finally, another perspective on natural resources and aid...
Castro, Chávez benefit from resource-sharing deal
All told, Cuba has sent more than 14,000 doctors, 3,000 dentists, 1,500 eye specialists and 7,000 sports trainers to Venezuela - a contingent representing as much as
one-quarter of Cuba's entire medical establishment.
(...)
The assistance began to flow in 2003 after first a military coup, and then a general strike failed to unseat Mr Chávez, and it has helped Venezuela's leader increase his popularity, especially among the poor.
In December, collaboration with Cuba increased under a little-noticed agreement. For most of the last two years, Venezuela has been supplying cut-price oil to Mr Castro in a deal that helps ease Cuba's energy and transport problems.
Some of that assistance represented a partial payment for Cuba's help. But the bulk of medical help was offered to Mr Chávez under a generous Cuban programme in which poor host countries such as Haiti and Mali pay the Cuban doctors a small monthly stipend, but make no further payment to the Cuban government.
Although the terms of the new agreement are hardly transparent, it appears that Venezuela agreed to make separate payments for existing and increased medical help. A Cuban official says that in the December agreement, the prices that the World Health Organisation attaches to medical services might be used to calculate the value of services. According to a Cuban economist, overall earnings from the export of medical, teaching and other professional services could reach $750m (586m, £404m) this year, most of it from Venezuela.