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Nations & resources - Aug 4

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Many more articles are available through the Energy Bulletin homepage


Energy Shortages, the Monsoon, India and Pakistan

heading out, The Oil Drum
The international impacts from a lack of sufficient power are often missed when debate swirls about the price of oil and gas, and the need to control emissions as part of an effort to change climate dynamics. There is a site, Energy Shortage, which provides information on the different parts of the world where energy shortages are occurring, both as short-term events, such as the power outage in Belize over the weekend a week ago, (though with more forecast) and the longer term problems that I have discussed before with power shortages between demand and supply. This impacts countries such as India which currently has a gap of between 15,000 and 20,000 MW between what is needed and what is available. Pakistan is currently seeing both problems, a short-term (though now over 48-hours) blackout in Karachi, because of torrential downpours due to the monsoon, and a longer term national shortage of more than 3,000 MW.

Part of the problem in this part of the world is that it relies on the rains of the monsoon season to provide hydroelectric power.

Thus far, in India, the monsoon has not been strong, though the converse is the case in Pakistan, as the situation in Karachi demonstrates. There the rain has been sufficient to restart operations at one of the hydroelectric plants, that at Mangla, which is producing 220 MW, and expects to double that in a few days. Overall the national picture has improved over the last year, it being reported that while the overall shortfall was 4,633 MW last year, the drop to the current levels shows a significant improvement. Thus load shedding of 10 – 12 hours last year, has fallen to 8 – 10 hours this year.

But in India the rains are late and have been, until recently, weak.

...It is however, not just with rain that the country is beginning to fall short. More than half of India’s power generation comes from coal, and the stocks for the power plants are reportedly down some 50% from normal.

It is light of this situation that the recent friction reported between Secretary Clinton and the Indian Government must be born in mind. India intends to construct something on the order of 78.7 gigawatts of new power plant in the next five years, much of which will be fueled by coal. The country needs the power, and there is little other than coal that can be expected to meet this demand.
(25 July 2009)

As usual with the Oil Drum, many informative comments follow this article, leading off with one by Gail the Actuary...-KS



Foreign Investors Snap Up African Farmland

Horand Knaup and Juliane von Mittelstaedt, Der Spiegel
Governments and investment funds are buying up farmland in Africa and Asia to grow food -- a profitable business, with a growing global population and rapidly rising prices. The high-stakes game of real-life Monopoly is leading to a modern colonialism to which many poor countries submit out of necessity.

Every crisis has its winners. A group of them is sitting in the Stuyvesant Room at the Marriott Hotel in New York. The conference room, where the shades are drawn and the lights are dimmed, is filled with men from Iowa, Sao Paulo and Sydney -- corn farmers, big landowners and fund managers. Each of them has paid $1,995 (€1,395) to attend Global AgInvesting 2009, the first investors' conference on the emerging worldwide market in farmland.

A man from the Organization for Economic Cooperation and Development (OECD) gives the first presentation. Colorful graphs travel up and down his PowerPoint charts. Some are headed downward as the year 2050 approaches. They represent the farmland that is disappearing as a result of climate change, soil desolation, urbanization and the shortage of water. The other lines, which point sharply upward, represent demand for meat and biofuel, food prices and population growth. There is a growing gap between these two sets of lines. It represents hunger.

According to most prognoses, there could be 9.1 billion people living on earth in 2050, about two billion more than today. In the coming 20 years alone, worldwide demand for food is expected to rise by 50 percent. "These are pessimistic prospects," says the OECD man. He looks serious and even a little sad, as he describes the future of the world.

But for the audience in the Stuyvesant Room, mostly men and a handful of women, all of this is good news and the mood is buoyant. How could it be any different? After all, hunger is their business. The combination of more people and less land makes food a safe investment, with annual returns of 20 to 30 percent, rare in the current economic climate.

These are not Wall Street experts, nor are they people who shoot money across the continents like billiard balls. On the contrary, these are extremely conservative investors who buy or lease land to grow wheat or raise cattle. But land is scarce and expensive in Europe and the United States. Solving the problem means developing new land, which is only available in Africa, Asia and South America. This combination of factors has triggered a high-stakes game of real-life Monopoly, in which investment funds, banks and governments are engaged in a race for access to the world's arable land.

'The Final Frontier for Finding Alpha'

Susan Payne, a red-haired British woman, is the CEO of the largest land fund in southern Africa, which currently includes 150,000 hectares (370,000 acres), mainly in South Africa, Zambia and Mozambique. Payne hopes to raise half a billion euros from investors. She talks about fighting hunger, but the headings on her PowerPoint slides, embellished with photos of soybean fields at sunset, tell a different story. One such heading refers to "Africa -- the last frontier for finding alpha." The word alpha signifies an investment for which the return is greater than the risk. Africa is alpha country...
(30 July 2009)


Risky price for energy exportation
(video interview with transcript)
Greg Hoy, Australian Broadcasting Corporation
KERRY O’BRIEN, PRESENTER: The Federal Government is soon due to release a preliminary report on Australia's energy security, outlining controversial decisions that must be made to help the nation reach its internationally-touted targets on carbon emissions. But there are already serious concerns in business circles that the process may have been hijacked by multinational energy producers more interested in exporting Australia's energy reserves such as natural gas at premium prices than in securing affordable fuel supplies for local business and consumers. Critics are calling on the Federal Government to intervene, although they aren't holding their breaths. Business editor Greg Hoy reports.

GREG HOY, REPORTER: Flick of a switch: power. But now producing 255 billion kilowatt hours of electricity each year to power Australia. The nation's power stations are under increasing pressure - most are ageing, many heavily in debt and 84 per cent coal-fired. The dilemma for government is: while nuclear remains a dirty word and carbon sequestration a distant dream, what can secure Australia's base load energy needs between now and 2030?

ROMAN DEMANSKI, ENERGY USERS ASSOCIATION: There's likely to be a much greater reliance on gas, including for electricity generation as a sort of a lower emission fuel.

BELINDA ROBINSON, PETROLEUM PRODUCTION & EXPLORATION ASSN: We have in Australia many hundreds of years worth of natural gas, and we sit on the doorsteps of some of the country's with the highest levels of economic growth being projected. To somehow suggest that we should be denying those trading partners access to something that we have hundreds of years worth so that we can perhaps distort a domestic market by flooding it to ensure long-term cheap prices for a handful of very large, successful international companies, can't - shouldn't go unchallenged.
(3 August 2009)
Suggested by EB contributor Michael Lardelli, -KS

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