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The Bullroarer - Thursday 5th June 2008
Posted by aeldric on June 4, 2008 - 9:14pm in The Oil Drum: Australia/New Zealand
NZ Herald - New green economy bad news for exports
New Zealand will pay a price for its small size and physical isolation in the new global carbon economy no matter what it does locally, says the United Nations environmental chief.
Achim Steiner, director of the UN's environment programme, told business leaders in Auckland yesterday that New Zealand was disadvantaged in the carbon economy because of its distance from markets such as Asia, Europe and North America.
The Age - Energy chill hits hauler
A DIVISION of one of Victoria's biggest transport companies, Pure Logistics, has gone into receivership, with high fuel prices and energy costs partly blamed.
The Age - Energy habits are fuelling food crisis
WORLD Environment Day this year should pierce the minds of more Australians than ever before. As we feel the pinch at the petrol pump our leaders are flinging solutions at us such as tax cuts and biofuels. In the meantime, across the globe, there is a massive food crisis brewing that is already threatening 100 million people.
NZ Herald - Brian Fallow: Bollard reacts to comatose economy
Reserve Bank governor Alan Bollard has given the clearest possible signal that he is more worried by the fact economic growth is virtually at a standstill than by demoralising effects of high - and rising - inflation in the short term.
[.....]
The reason is that the bank's latest forecast embody a bleak outlook for households, under the combined effect of a 22 per cent fall in real house prices, a weakening housing market and high oil and food prices.
The NZ Herald discusses future prospects in more detail here:
NZ Herald - Brian Fallow: Food fight to help cut prices
[.....] What if food price inflation proves to be a persistent or a repeated feature of the world going forward? And the same for oil?
It is not hard to imagine why they might. World oil demand has risen 4.3 million barrels a day over the past four years, according to the International Energy Agency. That is equivalent to half of Saudi Arabia's output.
Herald Sun - Fuel to add to taxi prices
THE soaring cost of fuel will flow on to taxi fares under reforms to be considered by the State Government.
The Age - UK petrol stations target fuel thieves
Owners of petrol stations in Britain are increasingly installing tyre-spikes on forecourts to stop drivers escaping without paying their bills.
Reports said a sharp rise in what is known in the industry as "drive-aways" was being linked to escalating fuel prices in recent months.
Radio Australia - Malaysia fuel price up 40 per cent
The days of cheap petrol in Malaysia are over, after the government announced a 40-per cent rise in the price of fuel.
The pump price will rice to 84 US cents a litre, after Kuala Lumpur revamped its old subsidy system.
SMH - How to save the world
Do your bit by following these commonsense tips on recycling, ways of saving energy, all-round efficiency in the home and a healthier lifestyle.
News.com.au - Air NZ ready to fly on weed
AIR New Zealand says it could be using a poisonous weed to power commercial flights before the end of the year, thus revolutionising air travel and leading to fare cuts.
The breakthrough fuel source will be a noxious weed called jatropha, an ugly fast-growing drought-proof bush that can grow in virtually any soil.
SMH - How businesses Are Trying To look Greener
Many companies are confused about where to start in improving their environmental performance, writes Bronwyn McNulty.
It seems every time a consumer looks up from fishing another dollar from the pocket, another business has added "green" to its list of credentials.
Many businesses are hopping on the environmental bandwagon in an effort to please eco-savvy consumers and differentiate themselves in a crowded marketplace - but how many of them can back up the claims?
TV NZ - BA outlook uncertain
British Airways has warned that economic pressures on passengers may begin to hit demand for flights as it reported May traffic down 0.7%year-on-year.
The company, which raised its fares last week to offset the soaring cost of fuel, said long-haul economy travel was already weak and that it remained to be seen how regular flyers would cope with having less disposable income.
"We have not seen a significant impact on volume so far, but clearly the pressure on people's budget is greater today than a year ago," BA head of investor relations George Stinnes told reporters, citing higher petrol costs and utility bills as factors.
"Customers are fairly accepting of a (rise in) fuel surcharge; they know it is a cost being passed on ... But it depends on how essential people think foreign holidays are," he said, adding that short-haul weekend breaks were particularly vulnerable to a downturn.
Stuff.co.nz - Kicking the carbon habit
What will it take to give us the shock we need? Power cuts on a cold winter's night? Petrol at $3 a litre? A lack of fresh food on supermarket shelves? Water restrictions?
New Zealand may have been chosen to host this year's World Environment Day today, but we are a long, long way from Prime Minister Helen Clark's vision last year of a "truly sustainable nation".
Scoop.co.nz - Wave Energy Popular With New Zealanders
New Zealand’s waves and tides are a world-class resource for energy generation, and recent research by the Energy Efficiency and Conservation Authority (EECA) shows 75% of New Zealanders support marine energy as a future electricity generation option.
A test generator from Wave Energy Technology New Zealand(WET-NZ) is being trialled in Wellingtonharbour today.
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I note the PM is cock-a-hoop over Australia's mineral boom. Maybe there's no connection but...
April 2008 Australia falls in with a monthly trade deficit of only $2bn due to a 23% increase in the value of coal exports.
May 2008 is the driest May in Australia after 150 years of record keeping.
And its been raining ever since. Warmer means wetter, with local variation. Models which disagree can't do a good job on recreating past climates. [However there are reasons why southern Aus might be a dry variation, with Antarctic circulating fronts held closer to the pole.]
The money coming in must balance money going out, with the price set in the foreign exchange markets. So if there is a $2bn trade deficit, that must mean that $2bn coming in with nothing going out. That could be Australians borrowing money from overseas, or it could be overseas investors. A little thought will show that there is no way to distinguish those things: at this level they're the same. So if there is more interest in investment money flowing into Aus than out, then there must be a matching trade deficit, so that the money flow can balance. If people say "foreign investment good, trade deficit bad" then they're confused.
That's how America kept the goods flowing in without matching outflows. The people went into debt, the debt was securitized, and sold to suckers around the world. No wonder Saudi Arabia now thinks that keeping the oil in the ground might be a better investment for the future.
It hasn't been raining here in SW Tas and I live within an hour's drive of about 1.2 GW of nominal hydro capacity. That's why the State reckons they spent $100m in April on gas peaking or imported coal fired electricity via Basslink.
This tells me a couple of things
1) plan for +/- 70% rainfall variation
2) HVDC spreads dirty energy, not clean.
You might be right about living on credit but it doesn't seem to happen in nature. Could the fabled petri dish of yeast live on credit?
Once the mainland has converted to solar, wind and geothermal HVDC will dispense clean energy, so even in the short term it is a good investment...
Martin Ferguson seems more intent on pushing CTL and GTL with lip service to solar wind and geothermal and I don't see a flood of IPO's happening to launch any of this anytime soon. You couldalmost back it in that Ferguson will be arguing against Carbon Trading schemes of any sort at the cabinet table and it appears that the government is already backtracking and choosing their words very carefully. Wihout carbon trading or other government support, the renewables industry is still looking very much still like a collective wish rather than a viable alternative to coal and hydro.
We cannot plan a future based on these renewable technologies being fait accompli. We should be planning for there to be less electricity and liquid fuels which means rationing by the usual market mechanism: price. We can employ exisiting, proven, technologies like samller houses closer together, capturing and storing water in the places wher it falls and where we use it, travelling less distance from our homes each day (which means questioning the true value of many of the jobs that are currently done), growing food closer to where it is consumed and generally giving up our long held fantasies that we can harvest an ever expanding supply of energy from diffuse environemntal sources in the same way that we have with all the fossil fuels.
These technologies aren't going to come out of Oz - we're just a mine and don't innovate - our brains flee elsewhere whenever they come up with a marketable idea.
We'll start using technologies developed elsewhere when they become cheaper than the alternatives. Fossil fuel depletion and global warming driven carbon taxes / caps (via international agreements, not local initiatives) will be the vehicles that make this happen - not some policy voluntarily adopted by the government.
As you say, Ferguson will push CTL and GTL - and these will keep us going for a few decades - at an ever increasing price driven by international markets. At some point, however, electric vehicles and large scale solar etc power will become the economically superior alternative and we'll start shifting across en-masse...
I agree that there are viable alternative energy sources that become finacially competitive at a much higher price point than what is on the market today.
I think we need to keep in mind that there is a critical price point at which people will look for alternatives that involve reducing or eliminating grid supplied energy, including liquid fuels or piped gas.
It is the differential between those two price points and the realtive positioing of them that gives rise to long term doubt about the profitability of investing in them.
As an example, heating my home currently costs about $80 month over winter. Today the sun is shining but my house is not oriented correctly for passive solar. The cost to implement an active solar thermal collector panel and adequate thermal mass inside the house will cost about $3-4K or approxiamtely 12 years worth of gas.
Even if I were to put the solar panels in, I would still need the back up of some other heating arangement for those times when the sun doesn't shine, which is at least 13 hours a day at the winter solstice. So my heating costs would blow out way out of proportion with the current cost of gas.
The price of gas would need to rise by at least a factor of 10 before I could justify going to a solar type alternative. My options will be a wood fire first for about $1000 and then $2-300 per year for wood. Before I get to that it's a wooly jumper, ugg boots and singlets for the family. There is also reverse cycle A/C which may be more economical even if electricty were to go up by the same factor.
Whats true on a small household scale is also true of the broader economy. As the price increases, we can cut back dramtically if we have to, by not wasting energy on trivial pursuits and small comforts. The demand reduction of energy may be quite large even while the overall percentage of household expenditure on energy remains constant. The new renewable technologies will then need to compete with FF for a shrinking market. The accountants will have something to say baout that no doubt.
Of course, if large scale solar CSP ends up cheaper than coal, as many of the companies involved in the sector are aiming for, then this line of reasoning becomes moot...
That is still a big if, not a certainty. It depends where on the price scale that crossover occurs. There may be a lot of casualties well before that point is reached which will have the effect of reducing demand to a point where fewer coal power stations can do the whole job, with capital that has already been spent (and presuamably a lot of spare capacity).
Nothing in life is certain, but it seems like a good bet to me.
At some point the energy system needs to be put onto a sustainable footing - better sooner than later...
So, Air New Zealand is planning to get high on weed...
Its a Kiwi tradition.
Climate change will probably beat us: Garnaut
June 5, 2008 - 7:46PM
Economist Ross Garnaut thinks humanity will probably lose the fight against climate change.
The architect of Australia's response to climate change says the issue is "too hard" and there is "just a chance" the world will face up to the problem before it's too late.
Professor Garnaut issued the chilling prognosis in a speech in Canberra tonight.
"There is a chance - just a chance - that Australia and the world will manage to develop a position that strikes a good balance between the costs of dangerous climate change and the costs of mitigation," his prepared speech said.
"The consequences of the choice are large enough for it to be worth a large effort to take that chance, in the short period that remains before our options diminish fatefully."
My respect for Garnaut just went up. I think he realises he can't compete with Neanderthals like Ferguson or procrastinators like Rudd.
FWIW I think changes to weather patterns are a bigger cause for concern than high oil prices.
True, weather patterns will really screw with our food supply but there really is not much we can do about it. The only thing we can really do is affect the quantity of GHG's we put into the atmosphere but that may not be the only variable at play. IMO we are still way to high on the greed scale to see any serious contemplation of using less energy in total and therefore FF. Ferguson now wants to go CTL and GTL for Oz but I don't know how thats going to fit into the carbon cap. My guess is that cabon trading Rudd style will be so full of holes and exemptions as to be useless, but theer will be plenty of promises to phase things in to ease the burden. Yeah right.