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Energy Policy - Feb 7

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Many more articles are available through the Energy Bulletin homepage


Pennsylvania Launches Energy Independence Plan

Jon Hurdle, Reuters via Climate Ark
HARRISBURG, Pa. - Pennsylvania on Thursday launched an US$850 million program to conserve energy and boost production of non-fossil fuels in a bid to reduce dependence on imports, reduce greenhouse gas emissions, and stimulate the state's clean-energy industry.

The state set a target of producing 1 billion gallons of biodiesel and ethanol by 2017, about equal to the amount of fuel Pennsylvanians buy from external sources, costing about US$30 billion a year. ..

Pennsylvania's program, called the Energy Independence Strategy, will also promote conservation by providing rebates for consumers who swap inefficient air conditioners and refrigerators for models that use at least 15 percent less energy.

It will also pay up to 50 percent of the cost of installing solar panels on a home or small business, and encourage the use of "smart meters" in homes to reduce the use of energy at peak periods.

John Hanger, president of PennFuture, an environmental group, called the plan "the best energy package that any state governor has come forward with." When implemented, he said it will allow about a quarter of Pennsylvania's 5 million homes to be fueled by wind or solar power within a decade. ..
(2 Feb 2007)
The Post-Gazette's Governor's budget inspiration? Jimmy Carter and Alaska has more on the Gross Profits Tax on oil companies, quoting the Pennsylvania Governor:

"These profits have come from one source -- the pockets of the American people," Mr. Rendell said near the end of his 55-minute speech. "It is time for the oil companies to finally pay their fair share of the transportation tax burden in Pennsylvania."


Nigeria's Energy Crisis

Ijeoma Nwogwugwu, This Day
Just as the ink on my article last week about this administration's mismanagement of the power sector since 1999 was starting to dry up, the country was dealt another knock out punch by the Power Holding Company of Nigeria (PHCN). PHCN through its Public Affairs unit informed the country that power generation dropped again by almost 60 per cent from over 3,000MW to below 1,500MW.

The blame was placed squarely on Shell Petroleum Development Company (SPDC), which had shut down its gas gathering and compression facilities for routine maintenance as well as Agip's new Independent Power Plant (IPP) at Okpai. Agip we were told had also shut down some of its generating units for maintenance. Given our penchant for not making provisions for any form of back up, PHCN went on to mention that the situation was further exacerbated by the low reservoir levels at the hydro power stations as a result of the dry season. ..

The answer is to all this is that we lack the political will to deregulate the price of products in the downstream and gas sub-sectors, and by perpetuating market inefficiencies, have made it unattractive for investment by the private sector. In the same breath, the privatization of the refineries (that is if NNPC, whose officials feed fat from the inefficiencies in the system, does not scuttle the process again) will just not sail through.

As I write this, I can imagine that the labour unions and Adams Oshiomhole with whom I have had a running battle on this issue for years must be bristling with indignation at my advocacy for the removal of subsidies on fuel and gas. They will accuse me of advocating IMF and World Bank policies that are not people friendly. They will wonder if I am unaware of the inflationary impact the removal of subsidies will have on the economy.

I will even be reminded that the availability of efficient transportation infrastructure in advanced economies helps to cushion the effect of market determined fuel prices in those environments. The raison d'etre will be the argument that if advanced countries can subsidise their farms and agriculture sector, then why can't Nigeria subsidise fuel products?

As populist as this line of reasoning may seem, it is not at all people oriented. It is the agricultural sector and not the oil and gas or electricity sectors that account for a huge chunk of Nigeria's gross domestic product (GDP). According to the Central Bank's Annual Report in 2005, agriculture alone accounted for 42 per cent of GDP while the oil and gas, and electricity sectors combined accounted for less than 15 per cent of GDP. Unlike the agriculture sector, industries in the energy sector import 90 per cent of their input and raw materials requirements from oversees. As such their contribution to the nation's GDP is low. Agriculture, on the other hand, remains the largest employer of labour in Nigeria (well over 60 per cent of the working population). ..

The good thing is that the government has finally taken the first step in the right direction by merging the power and petroleum government departments under one Ministry. Having done this, it should take the next step of merging all the regulatory agencies into one commission with the powers to regulate, licence and monitor a truly liberalised energy sector as a whole.
(5 Feb 2007)
Makes strong argument for cutting energy subsidies in favour of higher agricultural subsidies. Agree or disagree, this is writing worthy of the times. –LJ


Saudi to boost fuel supply to US forces in Gulf

Reuters via Daily Times (Pakistan)
LONDON: Saudi Arabia has steeply raised the amount of its jet fuel earmarked for the United States military, which is expanding its presence in the Gulf, Middle East trading sources said.

They said state oil company Saudi Aramco may have put aside upwards of a million tonnes of the aviation fuel for possible use by the US military this year, compared with around 200,000 tonnes in 2006. “I believe that Saudi Arabia was warned in advance of the increased US military activity starting early 2007 and may have allocated 1.0 million to 1.2 million tonnes of jet fuel for possible use by the US military during 2007,” one source said.

The Pentagon dispatched a second aircraft carrier strike group to the Gulf last month. The Defense Energy Support Center, which oversees the Pentagon’s fuel purchases, said an increased presence would entail more fuel demand.

“We are expecting to send another 20,000-25,000 troopers to the Middle East in the near term, so there should be a significant increase in fuel demand,” said Patrick Jones, a DESC spokesman in Virginia. He said the extra supply of jet fuel, as well as other oil products, would come from existing contracts with Middle East suppliers. A spokesman for the US Navy’s Fifth Fleet in Bahrain said all naval aircraft used JP-5, a high flash point aviation fuel. While refineries typically produce standard jet A-1 for civilian aircraft, this can easily be upgraded to JP-5.
(6 Feb 2007)


China's armed forces ordered to cut costs, reduce energy

Staff, Xinhuanet
The People's Liberation Army (PLA) has ordered China's armed forces to cut costs and save energy in response to the government's call for a resource efficient and environment-friendly society.

"The armed forces should be leading the drive to build a resource efficient society," Liao Xilong, director of the PLA General Logistics Department, said at a meeting on the "modernization" of military logistics.

A report from the General Logistics Department said the armed forces saved 1.4 billion yuan (179 million U.S. dollars) by reducing water use by 40 million tons, coal use by 1.157 million tons of coal and oil fuel by 55,000 tons in 2006, according to Tuesday's People's Daily.

The newspaper quoted unnamed officials as saying further efforts would be made to promote the use of wind power, solar energy and geothermal energy in the armed forces.

The logistics department would also tighten checks on military infrastructure projects to prevent the unnecessary demolition of barracks and the construction of extravagant new buildings.

But Liao also warned army officials against aiming for quick results and instant gains in practicing thrift. "Energy saving should not be achieved at the cost of the army's combat effectiveness and logistical support," Liao was quoted as saying by the newspaper.

China's defense expenditure in 2004 was 220 billion yuan, an annual growth of 15.31 percent, rising 12.5 percent to 247.49 billion yuan in 2005, and the budget for 2006 was 283.83 billion yuan (35.5 billion U.S. dollars).
China's spending per serviceman averaged 107,607 yuan, amounting to 3.74 percent of that of the United States and 7.07 percent of that of Japan.
(6 Feb 2007)


China’s First strategic oil reserve begins operation

Dai Yan, China Daily
The Zhenhai reserve base, China's first strategic oil reserve base, began operation on January 29 as oil started filling up its tanks, according to Zhu Hongren, a National Development and Reform Commission official.

The reserve, located in Ningbo, East China's Zhejiang Province, has a capacity of 5.2 million cubic meters. About 3.7 billion yuan (US$462 million) has been invested in the reserve.

China approved construction of four national strategic oil reserve bases in 2004.
Rest in January issue of subscription-required China Energy, a monthly published by China Daily.
(1 Feb 2007)

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