IMF Reports Global Energy Subsidies are Unmanageable, Inefficient and Reinforce Inequality

A new report from the International Monetary Fund (IMF) urged policymakers the world over to reform subsidies for products from coal to gasoline, arguing that this could translate into major gains both for economic growth and the environment.

Image Source:  http://bit.ly/1LO0yQb

Source: www.imf.org

>” […] In a speech at the Peterson Institute for International Economics in Washington D.C., marking the release of the paper, IMF First Deputy Managing Director David Lipton noted that “subsidy reform can lead to a more efficient allocation of resources, which will help spur higher economic growth over the longer term.” Removing energy subsidies can also strengthen incentives for “research and development in energy-saving and alternative technologies,” he said. He also noted that, while intended to benefit consumers, subsidies are often inefficient and “could be replaced with better means of protecting the most vulnerable parts of the population.”

“The paper shows that for some countries the fiscal weight of energy subsidies is growing so large that budget deficits are becoming unmanageable and threaten the stability of the economy,” Mr. Lipton said, adding that IMF research shows that 20 countries maintain pre-tax energy subsidies that exceed 5 percent of GDP. For other emerging and developing countries, he said, the share of the scarce government resources spent on subsidies remains “a stumbling block” to higher growth and fundamentally impairs their future. “Because of low prices, there is little investment in much-needed infrastructure. More is spent on subsidies than on public health and education, undermining the development of human capital.”

Energy subsidies also reinforce inequality because they mostly benefit upper-income groups, which are the biggest consumers of energy. “On average, the richest 20 percent of households in low- and middle-income countries capture 43 percent of fuel subsidies,” said Mr. Lipton.

At the same time, Mr. Lipton warned that an increase in prices which can result from subsidy reform can have a significant impact on the poor and that “mitigating measures to protect them as subsidy reform is implemented” must be an integral part of any successful and equitable reform program.

In addition, Mr. Lipton noted that “subsidies aggravate climate change and worsen local pollution and congestion.” The study finds that eliminating pre-tax subsidies would reduce global CO2 emissions by about 1-2 percent which would, by itself, represent “a significant first step in reducing emissions by delivering about 15-30 percent of the Copenhagen Accord’s goal.” As for advanced economies, he noted that subsidies most often take the form of taxes that are too low to capture the true costs to society of energy use (“tax subsidies”), including pollution and road congestion. “Eliminating energy tax subsidies would deliver even more significant emissions reductions said Mr. Lipton, reducing “CO2 emissions by 4.5 billion tons, a 13 percent reduction.” […]”<

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Economist reports proposed Site C Dam ‘dramatically’ more costly than BC gov’t claims

Peace Valley Landowners Association commissioned leading U.S. energy economist, Robert McCullough, to look at the business case for what will be province’s most expensive public infrastructure project

Image source:  http://unistotencamp.com/?p=601

Source: www.theglobeandmail.com

>”Just weeks before BC Hydro plans to begin construction of the $8.8-billion Site C project, a new report says the Crown corporation has dramatically understated the cost of producing power from the hydroelectric dam.

…Mr. McCullough, in his report, said it appears the Crown corporation BC Hydro had its thumbs on the scale to make its mega project look better than the private-sector alternatives.

“Using industry standard assumptions, Site C is more than three times as costly as the least expensive option,” Mr. McCullough concluded. “While the cost and choice of options deserve further analysis, the simple conclusion is that Site C is more expensive – dramatically so – than the renewable [and] natural gas portfolios elsewhere in the U.S. and Canada.”

The report challenges a number of assumptions that led the government to conclude that Site C is the cheapest option. Mr. McCullough noted that the province adopted accounting changes last fall that reduced the cost of power generated by Site C. He said those changes are illusory and the costs will eventually have to be paid either by Hydro ratepayers, or provincial taxpayers.

Mr. McCullough, a leading expert on power utilities in the Pacific Northwest, also disputes the rate that BC Hydro used to compare the long-term borrowing cost of capital for Site C against other projects, noting that other major utilities in North America use higher rates for such projects because they are considered risky investments. The so-called discount rate is critical to the overall cost projections, and he said the paper trail on how the Crown arrived at its figure “can only be described as sketchy and inadequate.”

The report, obtained by The Globe and Mail, will be released on Tuesday by the PVLA.

The group will call on Premier Christy Clark to delay construction to allow time for a review by Auditor-General Carol Bellringer.

Ken Boon, president of the association, said the government needs to put the project on hold because it has approved the project based on poor advice. […]”<

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Woodfibre LNG Plant: Old Technology, Design Flaws and Environmental Issues

Speakers at a presentation in West Vancouver on the risks associated with the proposed LNG project in Howe Sound voiced concerns, Wednesday, over everything from environmental contamination to the risk of explosions from transporting natural gas.

Source: www.nsnews.com

>”[…] “Canada doesn’t have a whole pile of rules about LNG because it doesn’t have a whole pile of plants,” said Eoin Finn a seasonal resident of Bowyer Island in Howe Sound, and speaker at the event. Finn holds a PhD in physical chemistry and is a close follower of the LNG project.

He said an LNG plant of this size has never before existed in Canada. He has concerns over the country’s lack of environmental regulations in place against this particular resource.

“There are no plants on the West Coast of Canada nor on the U.S. except a tiny one in Alaska but that’s 100 miles from anywhere and it’s about one-tenth (the size of) Woodfibre.”

When it comes to the risks associated with the proposed development, Finn said there are many, including emissions output, the risk of shipping accidents and the plant’s cooling system, which would use seawater.

“One of the big issues is that the plant will be cooled by seawater from the sound. This is pretty old technology that’s been dismissed and refused and abandoned in California and Europe.”

He said that the current proposed cooling system for the plant would suck in 17,000 tonnes of seawater (3.7 million gallons) per hour, and chlorinate it while it circulates through the system, before releasing it back into Howe Sound.

Finn explained that any such practice would be “extremely damaging” to marine life and that similar systems down the coast in California have been banned.

Although the plant will be powered by electricity, Finn said it will still produce emissions, including 140,000 tons of carbon dioxide a year.

Among Finn’s other concerns was tanker traffic associated with the project, which would see between six and eight tankers navigating through the sound per month.

He cited a risk of explosions associated with the ships, which could have potential negative effects on area property values. Large waves generated from those vessels could also be a problem for the area, something Finn compared to the BC Ferries Fast Cat situation years before.  […]

Wade Davis, Bowen Island resident and professor of anthropology, said the issue of whether or not the plant will go in place holds a deeper meaning than simply a local environmental danger.

“This is not simply about a local issue in Howe Sound, this is a metaphor for who we are to be as a people,” he explained to the audience. “If we are actually prepared to invest our lives in this way, the most glorious fjord in the world, what else in our country will be immune to such violations?” he asked.  […]”<

 

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China’s Capital City to Shut Major Coal Power Plants due to Excessive Pollution

(Bloomberg) — Beijing, where pollution averaged more than twice China’s national standard last year, will close the last of its four major coal-fired power plants next year.

Source: www.bloomberg.com

>” […]

The capital city will shutter China Huaneng Group Corp.’s 845-megawatt power plant in 2016, after last week closing plants owned by Guohua Electric Power Corp. and Beijing Energy Investment Holding Co., according to a statement Monday on the website of the city’s economic planning agency. A fourth major power plant, owned by China Datang Corp., was shut last year.

The facilities will be replaced by four gas-fired stations with capacity to supply 2.6 times more electricity than the coal plants.

The closures are part of a broader trend in China, which is the world’s biggest carbon emitter. Facing pressure at home and abroad, policy makers are racing to address the environmental damage seen as a byproduct of breakneck economic growth. Beijing plans to cut annual coal consumption by 13 million metric tons by 2017 from the 2012 level in a bid to slash the concentration of pollutants.

Shutting all the major coal power plants in the city, equivalent to reducing annual coal use by 9.2 million metric tons, is estimated to cut carbon emissions of about 30 million tons, said Tian Miao, a Beijing-based analyst at North Square Blue Oak Ltd., a London-based research company with a focus on China.  […]

Closing coal-fired power plants is seen as a critical step in addressing pollution in China, which gets about 64 percent of the primary energy it uses from the fossil fuel. Coal accounts for about 30 percent of the U.S.’s electricity mix, while gas comprises 42 percent, according to Bloomberg New Energy Finance data.  […]

Air pollution has attracted more public attention in the past few years as heavy smog envelops swathes of the nation including Beijing and Shanghai. About 90 percent of the 161 cities whose air quality was monitored in 2014 failed to meet official standards, according to a report by China’s National Bureau of Statistics earlier this month.

The level of PM2.5, the small particles that pose the greatest risk to human health, averaged 85.9 micrograms per cubic meter last year in the capital, compared with the national standard of 35.

The city also aims to take other measures such as closing polluted companies and cutting cement production capacity to clear the air this year, according to the Municipal Environmental Protection Bureau. […]”<

 

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State and Solar Advocates Complete Legal Agreement for Full Net Metering Credit to Utilities

The Act 236 agreement also settles rules for legal solar leasing.

Source: www.utilitydive.com

>”[…]  The South Carolina Public Service Commission last week approved a settlement agreement between Duke Energy Carolinas, South Carolina Electric & Gas (SCE&G) and major environmental groups that allows rooftop solar owners to get full retail value for electricity their systems send to the grid.The agreement on net energy metering (NEM) is part of Act 236, passed in 2014 after a consultation process involving renewable energy-interested stakeholders. Solar systems installed before the end of 2020 will earn full retail value bill credit for each kilowatt-hour that goes to the grid.Act 236 also legalizes third party ownership of solar, more widely known as solar leasing, and sets up rules by which leasing companies like SolarCity and Sunrun must operate.

Dive Insight:  To study the emerging solar opportunity, a South Carolina General Assembly-created oversight group organized a coalition of environmentalists, solar advocates, and utilities and electric cooperatives into an Energy Advisory Council in 2013. Act 236 was formulated out of its report.

The NEM settlement also raises the size limit of eligible systems from 100 kW to 1 MW and raises the cap on NEM systems from 0.2% of each utility’s peak capacity to 2%.

Act 236 requires leasing companies to be certified by the state and limits the size of leased residential systems to 20kW and leased commercial systems to 1000kW. Leased systems can only serve one customer and one location and cannot sell electricity to third parties. The total of leased solar is capped at no more than 2% of a utility’s residential, commercial, or industrial customers average retail peak demand.

Groups that led the settlement with the utilities include the Coastal Conservation League, the Southern Environmental Law Center, and the Southern Alliance for Clean Energy. […]”<

 

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Amager Resource Center Copenhagen, Designed by Bjarke Ingels Group (BIG)

The waste-to-energy plant in Copenhagen was selected as a citation winner in the 62nd Annual Progressive Architecture Awards.

Source: www.architectmagazine.com

“BIG won the competition for the 1.02 million-square-foot Amager Resource Center with this widely touted scheme, which promises to turn a waste-to-energy plant into a popular attraction. By integrating a ski slope into the roof and a rock-climbing wall up one face, the architects build upon the project’s location: a part of Copenhagen on the island of Amager that has become a destination for extreme sports enthusiasts, thanks to its parks, beaches, dunes, and a lagoon for kayaking and windsurfing.  At 100 meters tall, the center will be one of the city’s tallest landmarks when completed—and a striking example of building-as-landscape. Indeed, the client has taken to calling it the Amager Bakke, or Amager Hill.”

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University Researchers Find Abandoned Wells Leak Substantial Quantities of GHG’s (Methane)

After testing a sample of abandoned oil and natural gas wells in northwestern Pennsylvania, the researchers found that many of the old wells leaked substantial quantities of methane.

Source: www.princeton.edu

>” […] To conduct the research, the team placed enclosures called flux chambers over the tops of the wells. They also placed flux chambers nearby to measure the background emissions from the terrain and make sure the methane was emitted from the wells and not the surrounding area.

Although all the wells registered some level of methane, about 15 percent emitted the gas at a markedly higher level — thousands of times greater than the lower-level wells. Denise Mauzerall, a Princeton professor and a member of the research team, said a critical task is to discover the characteristics of these super-emitting wells.

Mauzerall said the relatively low number of high-emitting wells could offer a workable solution: while trying to plug every abandoned well in the country might be too costly to be realistic, dealing with the smaller number of high emitters could be possible.

“The fact that most of the methane is coming out of a small number of wells should make it easier to address if we can identify the high-emitting wells,” said Mauzerall, who has a joint appointment as a professor of civil and environmental engineering and as a professor of public and international affairs at the Woodrow Wilson School.

The researchers have used their results to extrapolate total methane emissions from abandoned wells in Pennsylvania, although they stress that the results are preliminary because of the relatively small sample. But based on that data, they estimate that emissions from abandoned wells represents as much as 10 percent of methane from human activities in Pennsylvania — about the same amount as caused by current oil and gas production. Also, unlike working wells, which have productive lifetimes of 10 to 15 years, abandoned wells can continue to leak methane for decades.

“This may be a significant source,” Mauzerall said. “There is no single silver bullet but if it turns out that we can cap or capture the methane coming off these really big emitters, that would make a substantial difference.” […]”<

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The Precautionary Principle | Canadian Environmental Law Association

The precautionary principle denotes a duty to prevent harm, when it is within our power to do so, even when all the evidence is not in. This principle has been codified in several international treaties to which Canada is a signatory. Domestic law makes reference to this principle but implementation remains limited.

Source: www.cela.ca

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Kinder Morgan President Shocked by Level of Protest Against Burnaby Trans Mountain Pipeline

Following months of protests, and most recently a court injunction to remove protesters on Burnaby Mountain that resulted in numerous arrests, Kinder Morgan is holding a telephone town hall tonight.

Source: globalnews.ca

>” […] Asked if he was surprised by the protest and the numbers who showed up and Anderson said, no. Instead what was shocking was what he called people’s “willingness to disobey the injunction and put themselves up for arrest.“

[…] Also the diversity of the crowd, which included according to Anderson, “hardcore protesters, local interest groups and residents in the community,” that made it difficult for Kinder Morgan to have a conversation and plan appropriate action.

“We tried to remain calm and not be heavy-handed,” Anderson said.

But five protestors, who were arrested and are being sued for $5 million, may see it differently.

Anderson called the lawsuit an “unfortunate part of the process” but says it was necessary to get the work done safely. […]

The survey work may be done but for the City of Burnaby’s Mayor Derek Corrigan, there’s still a matter of the bill for the Burnaby Mountain policing costs.

“I want [Kinder Morgan] to pay,” Corrigan said in an earlier interview.

“We told them not to go on to the mountain, we told them to obey our bylaws, we were overruled by the National Energy Board, so they can’t possibly say in any way this was our fault or responsibility.”

But for Anderson, the police officers were necessary to enforce the legal injunction for “legally authorized work.”

“The police were there to protect us against unlawful protestors. Policing is a municipal responsibility and I think it remains a municipal responsibility,” Anderson said. […]

“I think Kinder Morgan’s playing the poor me with regards to their activities,” he said.

“I find it quite surprising; I don’t know many people that are going to feel sorry for a multinational corporation that’s exerting its influence on a local government.” […]”

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Studies Are Misleading; Keystone XL Project May Kill More Jobs Than It Creates

The report concludes that the job estimates put forward by TransCanada are unsubstantiated and the project will not only create fewer jobs than industry states, but that the project could actually kill more jobs than it creates.

Source: www.ilr.cornell.edu

>” […] Main findings include:

The project budget that has a direct impact on U.S. employment is between $3 and $4 billion or about half of what industry claims.50% or more of the steel pipe, the main material input used for Keystone XL, will be manufactured outside of the U.S.Jobs will be temporary and between 85-90% of the people hired to do the work will be non-local or from out of state.The Perryman study, which estimates around 119,000 (direct, indirect and induced) jobs is a poorly documented study commissioned by TransCanada.Job losses would be caused by additional fuel costs in the Midwest, pipeline spills, pollution and the rising costs of climate change.  Even one year of fuel price increases as a result of Keystone XL could cancel out some or all of the jobs created by the project.”<

 

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