Politics and economics – Jan 22

January 21, 2006

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Many more articles are available through the Energy Bulletin homepage


Moscow eats up energy as temperatures drop sharply

Pravda
According to press service of the United Energy System of the Russian Federation (RAO UES), the Russian grid, on Tuesday night the Moscow energy system’s capacity load reached a historical high – 15,329 megawatt. However, a new record was set by Wednesday night after power consumption went up to 15,760 megawatt due to continuing decrease of temperatures.
On Wednesday at 15.00 the Moscow energy authorities switched to energy saving mode to minimize the supply of additional electricity to industrial facilities in Moscow and Moscow region. The emergency shutoff plans were agreed with about 250 companies, according to a statement by Marita Nagoga, chief of the media liaison department of RAO UES. The energy authorities also called on city residents to refrain from using certain household appliances such as kettles, coffee grinders, washers, and heaters during the peak power consumption period in the morning and at night.

The Moscow authorities also took steps to save energy throughout the city during the cold spell. Pursuant to a decree of the city emergency committee for coordination of actions during the period of subfreezing temperatures, power supply to nearly 4 thousand facilities was to shut off. …
(21 January 2006)


Iran Cuts off Natural Gas Flow to Turkey

Khaleej Times (UAE)
ANKARA — Iran cut the flow of natural gas to Turkey a few days ago to 5 million cubic metres a day from the 26 million cubic metres set out in a contract, a Turkish Energy Ministry official said yesterday.
The official told Reuters Turkey had asked Iran to stick to the terms of the contract and officials met late on Thursday to consider strategies. He said there had been hitches because of the cold weather, as there were every year, and said measures had been taken so that industry in particular would not be affected.
(20 January 2006)
A few other mentions in the Turkish Daily News, Zaman and Reporter.gr.


China struggling with energy price controls

China Daily
Though policy-makers made clear their intent to allow energy prices to rise, the increase in liquefied natural gas (LNG) in South China since the end of last year is stretching their patience to the limit. Last month a regulation strengthening price control was issued by the State Development and Reform Commission the country’s pricing authority to curb LNG price hikes.

But government efforts have not stopped gas prices from soaring. In Guangzhou the cost of a 15-kilogram bottle of LNG has risen to 115 yuan (US$14) from 95 yuan (US$12) since the beginning of this year. Worse, a shortage of bottled LNG has become a pressing problem for many cities in South China. Local retailers are reducing their supply to minimize losses as rising wholesale prices cancel out almost all of their profits. Undoubtedly the ongoing short supply of LNG reminds us of the similar oil crisis that hit the same region last year. …

The oil panic was resolved, but at a dear price. Simply compensating for the “loss” a domestic oil giant suffered by selling oil at home for less than international prices cost the government more than 10 billion yuan (US$1.2 billion). …

It is true the impact of energy price adjustments will be felt unevenly by various groups. It will also take time for all of these groups to absorb the energy price shock. But that is not an excuse for delaying necessary pricing reforms. To facilitate such reforms, government support should first be promptly delivered to the underprivileged. …
(20 January 2006)


China’s Renewable Energy Law Takes Effect

Renewableenergyaccess
China’s landmark renewable energy law took effect on January 1, prompting the government to issue a number of pertinent new rules and technical criteria, according to the Worldwatch Institute.

In particular, financial subsidies and tax incentives for the development of renewable energy sources — including wind power, solar energy, biomass, and others — are in the enactment process, said Zhang Guobao, vice director of the National Development and Reform Commission, at a press conference on January 12.

Based on the “feed-in laws” that have been successful in advancing renewables in Germany and other European nations, one new regulation addresses the core issues of pricing and fee sharing for on-grid renewable energy. …
(19 January 2006))


In Shadow of Foreign-Owned Refineries, Bolivia’s Poor Wait for Energy Profits

Alan Clendenning, Associated Press
SANTA CRUZ DE LA SIERRA, Bolivia — Just outside the barbed wire fence surrounding a highly automated petroleum refinery, Dora Rosado bakes meals for her six children in a wood stove fashioned from dried mud and bricks.

While the sprawling installation owned by Brazil’s Petrobras churns out cooking gas, it’s a fuel the single mother has never used in her two-room shack of rusty metal and roughhewn planks, where she’s lived for 14 years without running water or electricity.

Bolivia’s state-owned oil company sold the refinery and another for $100 million in the 1990s in a privatization wave intended to boost production and exports from its huge natural gas reserves. But such deals did little to benefit the 64 percent of Bolivia’s 8.5 million citizens who live in dire poverty.

Evo Morales was elected with the most popular support of any Bolivian presidential candidate in recent history after promising to secure more natural gas profits for people like Rosado. Even before Sunday’s inauguration, he’s been lobbying for better deals from the foreign companies extracting, refining and exporting the nation’s gas.
(18 January 2006)