All about gas, coal has lost it

It is all about gas. Coal has lost it, but it is a good distraction. Petroleum is a convenient price setter. Renewables are the future and the trick is to be to get the traditional utility models to take ownership. But what is the price?

World wide scholarly types have put forward a number of maps of energy analysis for, Japan and globally. Japan is topical because they are more likely to be a first tier part of Australia’s trade. 

The trade approaches call for model development for energy demand, costing, efficiency, and green house gas emission – We trust you noted that models needed included Greenhouse Gas emissions. Why? Because Japan for its energy security must consider its short and long selling trades on energy. Energy needs include considering an individual process basis including fuel cell technology, vehicle technology, internal electricity needs and the usage strata on all levels including regional or national levels with a multiplicity of competing energy processes.

That said, Japan is only one of our global partners with similar concerns. All must consider in their national interest what are some of the comparable energy pathways. Those pathways include: Coal importation, fuels used for electricity production, electricity use in either residential, commercial, and transportation sectors etc. In all these considerations the answers can change over time and some of the drivers will be the relevant technology needs, the gaps in sustainable delivery mechanisms to meet the demands and gaps in supply, and they must also consider the time frames needed to close each fuel supply type and substitute them.

Australia’s politics is sending up a big smoke screen – Coal is King. World prices and demand says something different something like ‘Coal is dead long live the Coal’ 
 We hear of ‘clean coal’ and then we hear it is a nonsense. What is certain is it becoming an undesirable fuel source. This is not saying unnecessary it is simply saying much less attractive on the world stage. Why, technology can now provide better fuel sources without the climate change consequences. So much so that at any price, coal is too expensive. Coal can be burnt, but needs processing to be useful for other purposes. The term embodied energy come to mind here. It means the amount of energy needed to convert may be higher than the value of the material compared to alternative process. Then there is gas! Gas can be used for its molecule – to make fertilizer for instance, to fuel your stove, boiler, it can be a by-product of another process such as syngas. Your waste can even be used to produce it. Gas can be processes or extracted to supply. But the choices are better, cleaner. Granted, not the best energy source, but far more sensible than relying on coal. Hence, the now is all about gas.

Then there is the markets that determine viability to produce. Despite what our Australian policy makers might be telling us – the truth is more than ‘real’, it more than to be affective it is about being effective. It is not good enough to be positioned well, you also need an effective agenda. Or, at least have you agenda smarter than the other guys. What is there to critique about our stance, now:

Carbon Tax – the UK, US Republicans are all active in thinking a Carbon Tax is good. It is a market mechanism that works. This flies in the face of Australia’s Environment Minister saying it does not – even though the evidence suggest Australia’s Carbon Emissions reduced 11% since the introduction of a carbon price. Even more perplexing is why the Australian government put forward to confuse carbon price and carbon tax. For instance in the legislation for clean energy was the term the Carbon Price. The ‘price’ included offsetting for a transition of industry to a low carbon future. In the repeal legislation is substituted the words Carbon Tax as meaning Carbon Price. The UK and US clearly think there is a difference between the two definitions.

An example of the critics is, on 9 July 2014, Lord Deben – a UK Tory and is noted from the Thatcher years to now as expert on the environment has issued a statement through the ABC saying the Abbott Government “appears to be more concerned with advancing its own short-term political interests” than dealing with global warming.

Also, on 7 July 2014, Solar Reserve chief executive Kevin Smith told the ABC’s Four Corners program the company had been deterred by a drift in policy and the planned scrapping of the carbon tax.

It was also concerned about the appointment of Dick Warburton, who doubts that carbon emissions are causing global warming, to lead a review of Australia’s Renewable Energy Target.

“That policy change pretty much took the life out of the renewable energy sector as far as large-scale projects for utility applications [are concerned],” Mr Smith said.

“Other markets around the world are advancing. Australia is going to get left behind.”

On Mr Warburton’s appointment, Mr Smith said: “Clearly that appointment was made because they want to move back towards conventional fuels, coal and oil.

“It’s pretty clear that the policy in Australia is now being centred around big coal. The coal industry clearly has rallied to move policy away from renewable energies because they view renewable energy as a threat and want to move back to convention coal.”

“Just think, these coal companies won’t be able to sell their coal overseas unless they get sequestration or offset commitments and the only way they can do that is if they have an ETS; they can’t pay for it unless they’ve got carbon credits.

“They’ve killed themselves. Coal is dying anyway, but they’ve killed themselves even quicker.

“The whole politics of climate change has regained a bit of ground.”

Then consider:

Palmer United Party’s commitment to keep part of the architecture of the carbon laws in place – the Renewable Energy Target, the Clean Energy Finance Corporation and the Climate Change Authority – is a big win, and the reality is it’s driven by the market, ‘Newman’ says.

“That’s enough for now; we’ll regroup. We’ll get there.”

But do we really have to lose the ETS mechanism?

The suggestion Is then that the government cross benches are not happy:

This disaster started to unfold to vote for the ETS in 2009?

“A Victorian senator, Judith Troeth, a senior figure in the Liberal Party’s moderate faction, and a Queensland senator, Sue Boyce, crossed the floor to vote with Labor senators when the legislation was finally put to a vote,” reported the Sydney Morning Herald at the time.

Both these women are now gone. But maybe there are a few other senators willing to vote with their conscience.

It’s a time for bravery. There are Titanic shifts everywhere right in both the US and Australia and impressively they are from the conservative big end of town.

Last week was the think piece in the New York Times from the über-conservative Republican politician Hank Paulson, a former US Treasury Secretary, that ricocheted around the world.

It was based on a bipartisan report, Risky Business, that argued that global warming was no different to the global financial crisis and even more dangerous. And yet it was if the world was ploughing straight into a mountain, Paulson said.”

You might even note here – we are not talking technology, it is the passion of addressing the ‘real’ issues.

We wonder what would happen if you introduced the technology issues with wind-based electricity for water electrolysis for hydrogen production and the use of hydrogen in fuel cell vehicles, the use of biomass to produce biofuels for transportation. I bet the vested interests would do all they can to stop the innovation. Despite how short sighted it is to oppose.

To recap why we mentioned our agenda needs to be smarter. Consider this:

“LNG spot prices for Japan at 3-year low

TOKYO — Spot prices of liquefied natural gas for Japanese buyers have been hovering at the lowest level in about three years due to increased supplies and sluggish demand.

     Spot prices are about $11 per million British thermal units, about the same as immediately after the March 2011 earthquake in Japan. From February this year, the price has dropped about 40%.

     Supplies for Asia are increasing. An LNG project in Papua New Guinea, in which Exxon Mobil and JX Holdings have stakes, began production in May instead of the originally scheduled September or later. Now, more than 300,000 tons of LNG from Papua New Guinea flow into the spot market monthly. And shipments from Indonesia and Australia are also steady.

     In contrast, demand is not as strong. Ten Japanese power companies had 2.44 million tons of LNG inventories at the end of April, up 13% from a year earlier. With the temperature through May having been warmer than usual, these companies did not have to generate as much electricity as a year before.

     In South Korea, state-owned gas company Korea Gas piled up LNG inventories as the country restarted nuclear power plants. It is now asking such Japanese companies as Tokyo Gas and Chubu Electric Power to buy its excess.

(Nikkei)”

Danger Danger no doubt!

Policy – Position – Agenda – where does it sit?

The President of the Solar Council made the point: The political position of denying does not matter in the end. From that we can conclude that ultimately the posturing will change as the influences around them change and the policy models too will change.

If you have rang a Call Centre recently it is very likely you might have been confronted with ‘its policy of ‘. No longer do they say is ‘the position of ‘. Why is this?

Policy – the business dictionary like to say it is the declared objectives to achieve and preserve – the free dictionary likes to say a plan or course of action intended to influence and determine. Most others say something very similarly, so we can conclude the meaning is a rule or contract when used as a noun. We can say the synonyms can also include a Rule, Strategy, Plan, Procedure, and Dogma, Program. All of which is a Guiding Principle.

Our point. You have every right to question if it is an appropriate course of action. Why because it indicates the decision is primarily based on material interest.

Position – Think the right or appropriate space. Where your point of view could also be described a thesis or the laying down of a proposition.

It also can be characterised by the unsolicited offer to an existing customer with wording such as ‘you do not need to do a thing’. Then some time later you are penalised because you did not object. Do you want an energy use example?

Well think this: Step by step the instructions are tweaking you into being positioned. However, is this an acceptable principle? Maybe, so long as the policy is accountable.

Then there is the issue of what is the purpose of the policy. In the name of justice is often cited. It then must be broken down into for whom? If it is for the workplace, than it is vague. If it is for welfare, it is wide reaching. Here lies a problem, it can be vague and wide reaching and have no other purpose other than to be resisted and discarded. In effect the agenda you did not know about.

Back to the Call Centre: Do they have an agenda? We can assume they want you to accept what they do is the correct position. You will than accept that their view is correct, and they can say we have wide reaching evidence of the acceptance of our policy – you can conclude the agenda was for acceptance of the positioning.

Do you have a position on the renewable energy policy? Talking at – yes there was some disagreement, the Chairperson of the Australian Institute of Energy, on 5 June 2014, it was clear the definition of what was effective as the tools for success was not obvious. What we are saying is that ‘any action’ taken must be clearly a benefit over the established position. For instance: Solar is technologically superior as a generator. Energy Efficiency reduces the need to generate. They both affect the transport needs of the energy. They both can be local fixes in constrained areas of the network, and conversely they can affect negatively in areas of a distribution system that has not any capacity issue. It gets even more perverse when you consider the transmission network – moving from one distribution area to the next. The battle then becomes who can best serve in the supply demand balancing equation! Answer, it can be both. However, we are then talking about energy security. In this aspect the reference is to the balance between sustainability and reliability and cost efficient power. When we do we are speaking in terms of the national security.

For another discussion we might talk about energy conservation verses energy efficiency. Hint – the definitions must be addressed before you can proceed.

 

Trade with Asia – price points of gas

We are part of Asia, and an island. We are isolated and that works for and against our security. Energy Security that is, our trading partners have different views on what is a benefit. As an island we need to transport singular purpose vehicles with product from point A to Point B in the most direct line and this method does not share any of the wealth or contribute to other points and their economy.

If you did not know Russia is on top of this issue and they intend to supply gas to Asia and have been into the driver’s seat in the last two years, to do so: A related project to the gas deal announcements is the intention to build a railway transport system from South Korea though to North Korea into Russia, and then connecting to the Trans-Siberian Railway. The intention is to create high-speed rail connections directly from South Korea to the markets of Europe.

“If such a natural gas line and railway were to be built — and there is strong support for this in parts of the South Korean establishment and business community — it would not only provide South Korean producers direct land access across Central Asia and all of Europe.

It would also provide the impetus for transforming the North Korean economy — and change that region’s frozen geopolitics in the process.

In short, if its vision comes to pass, Russia would become anchored in Asia as it never has been in the past. Better yet for Moscow, all major economies of East Asia would become linked to Russia in a way few had previously imagined possible. And that would be truly a pivot to Asia.” Source The Russia-China Energy Agreement Is the world’s largest commercial deal ever. By Kenneth Courtis, May 25, 2014

What about our (Australia’s) great trade hopes? We are deliberately killing off our innovation capabilities, our industries are moving out – even New Zealand seem more preferable! Even the US learnt it lesson that being a service industry country is a lesson of folly. It takes innovation and small innovations to grow into big to be great. So the question must be asked: Do we think we will be rewarded for thinking Asia revolves around Australia? I guess Russia is laughing uncontrollably at this time at such a thought. After all we have our leader saying I am confident, and the advisors or facts did not substantiate that. It seems that Russia will become enmeshed in East Asia in ways to pose new challenges for Russia and Australia.

The opening paragraph of this post said there are differing views on energy supply within Asia. This evolves around the fact that the new Russian Deal on Gas supply to China has been based on an oil price reference formula. Meaning when oil prices are high, the oil-based price formula for natural gas allows the sale of gas at a higher price than if it were based on spot-market natural gas prices. The implications are the entire world’s gas price will follow this formula. The only difference will be transport costs!

Should have mentioned earlier “the size of the Russia China Deal The largest previous natural gas deal which China has signed was with Australia, a dozen years ago. That was a $25 billion deal and runs through to the end of the next decade. The China-Russia natural gas deal is about 16 times larger.

By any measure, it is a big, big deal. Indeed, it is the single largest trade deal ever.” Again the source is Kenneth Courtis.

Now it seems the odd one out of this deal is Japan, our shining light, maybe:

“Japan is the world’s largest importer of natural gas. It continues to seek to diversify its sources of supply.

Japanese buyers are less focused on price than is China, as they also include in their calculations security of supply, stability of supply and consistency of the composition of imported natural gas. Japan also has accepted an oil reference formula for pricing its natural gas purchases.

Now comes the big question: Who in Australia is talented enough to head us in the right direction?