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World faces hi-tech crunch as China eyes ban on rare metal exports

Ambrose Evans-Pritchard, Telegraph comment
A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

China mines over 95pc of the world’s rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price.

Alistair Stephens, from Australia’s rare metals group Arafura, said his contacts in China had been shown a copy of the draft — `Rare Earths Industry Devlopment Plan 2009-2015’. Any decision will be made by China’s State Council.

“This isn’t about the China holding the world to ransom. They are saying we need these resources to develop our own economy and achieve energy efficiency, so go find your own supplies”, he said…
(24 August 2009)

Ukraine, Russia PMs resolve gas dispute: Tymoshenko

Denis Dyomkin, Reutersvia the Washington Post
Russia and Ukraine have resolved a long standing dispute over natural gas supplies, Ukrainian Prime Minister Yulia Tymoshenko said on Tuesday after meeting her Russian counterpart Vladimir Putin.

Rows over gas supplies have dominated Russia’s relations with Ukraine over recent years, leading last winter to the longest interruption to European Union supplies for decades.

“We have removed all of the gas problems,” Tymoshenko said after talks in Sopot, a resort on the Baltic coast in northern Poland.

“We feel that all the crisis-like occurrences in this sphere have gone.”

Russia supplies a quarter of the European Union’s gas and most of this goes through pipelines across Ukraine. The clashes over Ukraine’s imports of Russian gas have repeatedly led to disruption of transit flows to Europe…
(1 Sept 2009)

As hybrid cars gobble rare metals, shortage looms

Steve Gorman, Reuters
The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little-known class of elements found in a wide range of gadgets and consumer goods.

That makes Toyota’s market-leading gasoline-electric hybrid car and other similar vehicles vulnerable to a supply crunch predicted by experts as China, the world’s dominant rare earths producer, limits exports while global demand swells.

Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. One promising U.S. source is a rare earths mine slated to reopen in California by 2012.

Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make the high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Focus, as well as in generators for wind turbines…
(31 August 2009)

Iranian Media: Iran Ready to Negotiate

Maayana Miskin, Arutz Sheva
Iran’s state-run television reported Tuesday that Iranian leaders are ready to negotiate with the West over the country’s nuclear program. “Iran has prepared an updated nuclear proposal and is ready to resume negotiations with world powers,” said senior nuclear negotiator Said Jalili.

Several world leaders, including United States President Barack Obama, had warned that they would impose harsh economic sanctions on Iran if it continued to refuse dialogue over its nuclear development.

German Chancellor Angela Merkel and French President Nicolas Sarkozy issued an announcement Monday warning that world leaders would reevaluate their stance on Iran at a G-20 summit scheduled for late September. “Initiatives must be taken during the month of September which take account of Iran’s will to cooperate, or lack thereof,” Sarkozy said…
(3 Sept 2009)

Slow Boat to Rare Earth

Ilargi, The Automatic Earth
Ilargi: I’ve always had this nagging feeling that China will play a different part in our deeply troubled world economy than what most people seem to believe. For instance, dumping its dollar reserves to hurt America has never seemed a likely move in my eyes. Most Westerners can’t see through Chinese eyes, they can only think in terms of what they’ve learned, but not figure out what China is after. Which is not being a copy-cat imitation of America and, I’m sure.

In my view, those dollar reserves most of all mean power for Beijing. And not just the power of the threat of dumping them. Once that would happen, the power would disappear. How could that be good for China? It might be 10 or 20 years from now, in a greatly changed environment, perhaps, but not now. Seeing the foreign reserves lose some of their value along with the dollar has never been a major issue. There are so many commodities that China buys in the world markets that are denominated in US dollars they are laughing all the way to the bank on that one. All the more so since they still have the cash to buy what they want, something we can’t say for every country these days.

That said, I also think that China’s economic and internal political problems are way bigger than is generally recognized. There may be all sorts of jubilant numbers coming from the Forbidding City, but who believes those? They’re as (in-)credible as what the White House issues. The US needs to create about 2 million extra jobs every year just to have employment numbers stay even. China needs a lot more. A massive movement has been set in motion in the country which can’t easily be halted, and which is best summarized by pointing out that the by far largest mass migration in the history of mankind is ongoing in China as we speak. Tens of millions of people every year move from the countryside to the cities, and they come looking for jobs…
(2 Sept 2009)

Peak Water

James Quinn, Financial Sense Editorials
The notion of peak water probably sounds crazy to most people. The earth is 70% covered by water. The water cycle replenishes water on a continuous basis. The global warming enthusiasts tell us that glaciers are melting and oceans are rising. This should make water more plentiful. But, as they say in the real estate business – Location, Location, Location. Freshwater shortages in the wrong places could have calamitous consequences to those regions, worldwide commodity prices, the economic future of nations with water shortages and possible war. Regional water scarcity means water usage exceeds the annual natural replenishment from the water cycle. The impact of water scarcity can be far reaching. It can lead to food shortages, famine, and starvation. Many nations, regions and states have mismanaged their water resources, and they will have to suffer the long-term consequences.

The peak oil debate gets a tremendous amount of press and generates heated disagreements on both sides. The focus on peak oil has permitted the future water crisis to stay under the radar. As usual, myopic self serving politicians have ignored resource issues for the last 30 years. These were 30 years of debt financed good times with relatively low prices for all natural resources and commodities. The end of this period of low prices is nigh. The brilliant investment manager Jeremy Grantham lays out the future in his recent newsletter:

“We must prepare ourselves for waves of higher resource prices and periods of shortages unlike anything we have faced outside of wartime conditions. In fact, I believe we are already several years into this painful transition but are still mostly invested in denying it.”…
(31 August 2009)

Iowa’s future shouldn’t depend on fossil fuels

Richard Heinberg, Des Moines Register
More than 70 percent of Iowa’s electricity comes from coal. That’s a much higher proportion than the national average of 50 percent. Not only does this imply a supersized statewide contribution to global, climate-changing, greenhouse-gas emissions, it also means vulnerability to higher coal prices.

Higher coal prices? The very idea seems ludicrous today, as depressed energy demand has led to a temporary national coal glut. Moreover, we have all been lulled by the mantra that “America has 250 years’ worth of coal.”

But coal is a depleting non-renewable resource, and we have tended to extract the best first. That’s why Britain, formerly the world’s coal powerhouse, has virtually no coal industry left. That’s why nearly all of Pennsylvania’s anthracite is gone. That’s why the energy content per ton of U.S. coal has been declining steadily for well over a decade…
(2 Sept 2009)
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