The Week That Was
October 25, 2003









9. ALL HISS AND WIND: Comments in The Sun (UK)

2. Administration to Address Precautionary Principle:

An interagency working group within the Bush Administration has developed a draft position paper on the use of the precautionary principle in developing environmental and trade policies. According to Chemical Policy Alert, the draft paper emphasizes the need to study the risks, costs, and benefits of potential hazards. It also urges using uncertainty analysis, value of information studies, and risk tradeoff studies to evaluate possible precautionary alternatives before banning or restricting product uses.
The paper is expected to present a position on the precautionary principle that is closer to recent EU positions on the topic, and may eventually lead to a call for joint guidelines to be developed on the controversial topic. OMB regulatory chief John Graham, who chaired the working group, has said publicly "the U.S. government supports precautionary approaches to risk management but we do not recognize any universal principle. We consider it to be a mythical concept, perhaps like a unicorn."


3. Lawmaker Seeking To Form "Sound Science" Caucus:

According to Chemical Policy Alert, Rep. Chris Cannon (R-UT) is seeking to form a new caucus in the House to ensure that federal agencies, including EPA, use peer-reviewed science when developing regulations and implementing policies. Cannon has also expressed support for creating a new science undersecretary at EPA as part of legislation to elevate EPA to the cabinet level. A source in Cannon's office says EPA "is one of the most obvious agencies the [science] caucus would look at."

The group will be named the House Sound Science Caucus and its main goal will be to encourage agencies to rely on peer-reviewed science. The group will also promote legislation advancing the use of sound science. Cannon is talking to other lawmakers about joining the group and hopes to officially create it by the end of this congressional session or early next year. Cannon also plans to conduct oversight next year on federal agencies' use of science.

4. European Union is poised to create single markets for both gas and electricity.

Commercial and industrial customers will be able to choose their suppliers beginning in July 2004 while residential users will have those choices in 2007.
The EU will require its members to open their pipeline and distribution lines to third parties, which will allow consumers to choose from among a variety of suppliers. It will accomplish that by encouraging natural gas companies to separate their pipeline, production and supply functions. The separation, of course, is an attempt to prevent the enterprise that operates the pipes from favoring its own marketers or sources of supply.
Further, entities must publish non-discriminatory prices, or tariffs, for the use of their pipelines. The aim is that those markets would gradually open, although nothing says that they must be privatized.
To eliminate any unfair competitive advantages, incumbents will be required to charge themselves the same rates for use of the pipelines as they charge competitors. It's certain to be a bumpy ride, but through a combination of government regulation, legal proceedings and private initiatives, the hope is that markets will stabilize and competition will develop. The United Kingdom and Germany have operated in fully open natural gas markets since 1998 while Ireland, Spain and the Netherlands have done so to some extent since January 2000. At the same time, Belgium, Austria, France and Italy are working toward liberalizing their natural gas industries.
The notion of deregulation is spreading across Western Europe. Natural gas consumption by electric facilities has jumped by 50 percent in recent years, the EU says, because the gas is a cleaner-burning fuel and the opportunities to transport that energy source from gas-rich regions are also growing. At the same time, the EU is in the midst of liberalizing the electricity sector-a step guaranteed to result in the building of new gas-fired plants.
The key to success lies in whether there will be real third-party access to pipelines-the first step toward bringing prices down, says Branko Terzic, director of energy and utility services for Deloitte & Touche in Washington, D.C. and a former commissioner at the Federal Energy Regulatory Commission.
Secondly, regulators within the member nations should require-not encourage-a forced separation of the sales and transportation services. Without such a mandate, incumbents' pipeline operators would favor their own suppliers and it would be nearly impossible to break their holds over the market, says Terzic.
Privatization of pipeline enterprises is the final step necessary toward achieving a fully open market, he says. Most countries realize that privatization is a necessary component of reform, although the pace and degree by which that is happening is varying. Some countries are selling off nationally owned assets. Others are partially privatizing them. Still others are leasing them out to private companies.
Meanwhile, the rules governing competition must be fair. "If a sound regulatory structure is in place, an open market will follow and competition will take place," adds Sebastian Eyre, with Energywatch in London.
Opportunities for alternative suppliers in Western Europe are rising. Natural gas usage can only increase, given its environmental status. Moreover, new pipeline construction is enabling the fuel easier passage between producers and suppliers, which could bring prices down. An interconnect between the UK and Belgium completed in 1998, for instance, will have the effect of enabling marketers to buy gas in the UK where it is cheaper and to transport it to Continental Europe where it has been more expensive.
Similarly, France, Portugal and Spain are cooperating to interconnect pipelines that link the three countries. Energy regulators there said that they want to implement economic incentives and non-discriminatory network access rules that will facilitate more efficient gas trading and help create a single European gas market. Specifically, the regulators want to increase capacity of the gas flow between France and Spain. They also aim to construct a new pipeline on the Mediterranean coast of Spain.
Roadblocks, however, do stand in the path of liberalization. The concern is that to achieve diverse sources of gas imports, countries must build new pipelines that require large amounts of capital. Right now, the long-term contracts between pipeline operators and distribution companies are providing the security needed to go to the financial markets. In Europe, if the pipelines can earn fair returns and the upward projections as to domestic gas consumption hold, experts say the capital markets will respond.
In Russia, which is a major supplier of natural gas to continental Europe and which holds 35 percent of the world's gas reserves, the challenge is more difficult. RAO Gazprom is a major supplier to Western Europe and other parts of the world, and exports about 200 billion cubic meters annually. Government officials there recognize that cumbersome rules have stifled development and precluded investors from jumping aboard.
The country aims to build more gas pipelines, and particularly the Yamal-Europe line that is estimated to cost $40 billion. The project foresees gas field development and pipeline construction across Russia, Poland and into Germany, before heading into Hungary and Italy. Meanwhile, a Finnish-Russian joint venture announced in 1999 would build a pipeline to carry Russian gas via Finland into Western Europe.
The total investment for all Russia's infrastructure needs: $550 billion to $700 billion between 2001 and 2020, says the International Energy Agency. But that investment won't materialize, it adds, unless authorities eliminate the obstacles to investment as well as improve corporate governance and raise domestic gas prices to a level that is consistent with export prices-a tough step as the leaders of Gazprom carry much sway and are resisting change.
Developing Russia's gas pipeline network may be years off, but new pipelines are linking the Caspian Sea, Middle East, and North Africa with Continental Europe. Algeria, for example, is increasing the capacity of its export routes that carry gas into Italy, and efforts are also underway to do the same for routes into France and Germany. Meanwhile, Turkmenistan, Iran and Turkey are performing feasibility studies to deliver gas into Central Europe.

5. Sweden boosts energy taxes

Sweden is increasing fuel taxes and taxing electricity for industry for the first time in its 2004 budget (in line with EU directives). This coupled with huge spending increases for the Ministry of Environment and EPA, which will each receive close to half a billion $.

Taxes on CO2 increase by nearly 20% and tax on household heating oil by 15%. On the other hand, each taxpayer will receive a refund of about $25.


6. Windpower lobby opposes nuclear reactor phase-out

German windpower installers have suddenly discovered that they depend on continued and reliable base power. Otherwise, wind power is useless. SO they have started to argue against the early phase-out of reactors, as demanded by the Greens. ("Tagesspiegel" Sept 9).


Meanwhile, 16 reactors in the US have received operating extensions to 60 years. Another 16 applications are in the pipeline. (NucNetNews 9/21/03).


7. Canada fights Kyoto: Alberta responds to Suzuki

The David Suzuki Foundation is running this ad in Globe and Mail in Canada: (Case-sensitive)

It claims that "Putin is being pressured by Bush not to sign {Kyoto]" and asks people to write to Putin (or Suzuki)

SEPP asks: Shouldn't we be running ads also? Give me yr views. I have lots of ideas and think I can raise the money from our readers
But Alberta is fighting back. See <>

Putin's Kyoto position buoys Alberta

EDMONTON - Buoyed by Russia's continued refusal to ratify the Kyoto accord, Alberta Environment Minister Lorne Taylor will now take the province's anti-Kyoto message to the governors of oil-rich Russian states.
Kyoto ride promises to be a rocky oneJust as the bitter memories of the Great Kyoto Debate were beginning to fade,

Klein urges Russia to kill Kyoto accord

EDMONTON - Premier Ralph Klein says he hopes Russia will reject the Kyoto protocol, effectively killing it.
Nyet to KyotoRe: "Kyoto ride promises to be a rocky one," Charles Frank, Opinion, Oct. 3.

Nyet to Kyoto
Calgary Herald, October 08, 2003

Re: "Kyoto ride promises to be a rocky one," Charles Frank, Opinion, Oct. 3.
Charles Frank missed an important reason why the Kyoto accord should be dumped -- Kyoto almost certainly won't work since science does not support it.
Thousands of climate scientists know that, while we are still decades away from understanding what drives global climate, it is not significantly influenced by human activity. The sun, ocean currents, volcanoes and other natural factors have far more impact than humanity has ever had.
Russian scientists recognize that climate has varied naturally for millions of years and will continue to do so no matter what treaties governments sign. Contrary to Environment Minister David Anderson's rhetoric, data from weather satellites show the Earth has not warmed appreciably in the past quarter-century. Anderson and his European counterparts have fallen victim to the unrealistic predictions of computer modellers instead of listening to those of us who base our opinions on real climatological data.
S. Fred Singer is President of The Science & Environmental Policy Project, Distinguished Research Professor at George Mason University and Professor Emeritus of environmental science at University of Virginia.


8. Arctic gas pipeline debate

The projected pipeline would be a 10-year, 3,500-mile project that would usher 4-5 billion cubic feet per day from Alaska's North Slope to the Lower 48. The fields where the gas is found hold 35 trillion cubic feet of known reserves and would undoubtedly help serve America's energy needs. The particulars of the pipeline project, however, could also drive a wedge between the United States and Canada as well as harm independent producers in the Lower 48 that would compete with the Alaskan gas.
It's a tight-rope act but one that must be undertaken to bolster America's energy security and to harness the vast gas resources of Alaska. Congress opted in September to endorse a path along the southern route of the state and into Alberta, Canada, as the quickest way to get the natural gas to the Lower 48. It also has indicated that it could vote to implement guarantees that would provide a floating subsidy if the price drops below roughly $3.25 per million BTUs-against the will of the Bush administration that supports an 80 percent loan guarantee to finance the $20 billion project.
Congressional insiders say that the subsidies won't be a deal breaker. That's good news for ConocoPhillips Co. and BP, which back the actions taken by Congress to date, and which are two of the three major owners of the oil and gas held in the Alaska North Slope. ExxonMobil Corp., however, which is the third owner, says the project should be able to stand on its own without federal subsidies. It also says that the route through Alaska's northern coast and into Canada's Mackenzie Delta- where it holds a large stake-is better because the pipeline should connect with one planned by Canada.

9. All Hiss and Wind

Jeremy Clarkson in The Sun (Oct 4, 2003) (UK's biggest selling newspaper-and you wonder why?)
AN announcement this week that Britain is poised to get an enormous new wind farm in the Lake District will bring glee and joy to the land. Twenty-seven 400ft turbines will stand proud and tall over this area of outstanding natural beauty.
A recent survey found that 82 per cent of people like the idea of wind power, believing it to be filled with pine-fresh, dew-kissed, morning goodness. And what's more, because Britain is the windiest country in Europe, the very air itself is enough to bring clean 'n' green light 'n' warmth to everyone's home, for all of eternity.
Well forgive me for undoing my flies and urinating all over your eco-friendly bonfire with its scented logs, but have you ever actually heard one of these windmills at full tilt? It sounds like someone is feeding five million volts through the Grateful Dead's speaker stack. I'd rather live next door to a home for demented dogs.
And it gets worse. Britain currently has 1,030 windmills, which between them provide enough electricity to power 386,000 homes. So one windmill can only handle 375 houses. To provide enough electricity for 22million houses, you'd need 58,000 windmills. And that's before you get to the factories and the shops and the businesses.
And where are all these damn things going to be built? In the windiest parts of Britain? Well you can kiss goodbye to all the beauty spots then.
Many, it's said, will be built offshore, which is fine, but not what you'd call cheap. In fact, your electricity bill is going to look like the quote for rebuilding Iraq.
If you don't believe me, go to Germany.
In the last five years, since the Green Party won a slice of the government, 14,000 windmills have sprouted out of the Fatherland. You honestly cannot move for them. They are quite literally everywhere.
And now the whole country is starting to say: "Hang on ein minute. This isn't really working." Because electricity generated by a windmill is so expensive, the government has to pay massive subsidies just to keep them going. And new laws have been introduced forcing the power companies to buy some of their electricity from the wind farms.
Even the German bird lovers are up in arms - and it's not surprising. The chances of a sparrow being able to fly across Germany without being minced are nil.
Talk to Germans about the new white blight on their landscape and you always get the same answer. "WHAT? YOU'LL HAVE TO SPEAK UP. I can't hear you above that Godawful drone."
So what is the answer then?
Well Iceland claims it has enough geothermal activity to power the whole of Western Europe for a thousand years. All we need is to build some pylons from Scotland to Reykjavik . . . oh, hang on a minute, that's 900 miles across the roughest seas in the northern hemisphere.
Well I suppose we could burn coal and gas. It's cheap. It's easy. It's efficient. And you don't have to sit around in the dark, freezing your nuts off every time the wind drops.

Archive: Precautionary principle; Sound Science Caucus; Swedish energy taxing; Arctic gas pipeline; Wind power put down



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