To hell in a breadbasket

Yesterday's edition of the New York Times ran the following two front page articles: "Mounting Costs Slow the Push for Clean Coal" and "As Oil Prices Soar, Restaurants Learn to Lock Up Old Grease." The lead story on the front page of the Business Section was "Food Report Criticizes Biofuel Policies."

Bottom line: we've made quite a mess of the world. So why then, in our search for solutions, would anyone suggest that Africa adopt the U.S. model of industrial agriculture as a way of addressing its serious food needs?

The answer, of course, is pretty simple. Look closely at the sources. These recommendations are not being offered by individuals interested in helping pull Africa out of poverty. These are the voices of corporate America who see ways of capitalizing on Africa's situation and its vast resources.

Africa beware. (GW)

Agriculture's Last Frontier

African Farmers, U.S. Companies Try to Create Another Breadbasket With Hybrids

By Roger Thurow
Wall Street Journal
May 27, 2008

ARSI NEGELE, Ethiopia -- Babou Galgo, a 61-year-old farmer, proudly showed off his prized harvest from last season: two shiny gold medals from the regional and federal government and a slick certificate praising his "outstanding performance in increasing agriculture production and productivity."

What he had done was boost his corn yields on his small farm in southern Ethiopia an eye-popping sevenfold over the past several years. Even more impressive, he had boosted the well-being of his family as well: With the added income, they moved out of a traditional mud-brick tukul and into a brick and concrete house furnished with a refrigerator, television and DVD player, rare luxuries for a farmer in one of the world's poorest countries.

Indeed, not long ago, Mr. Galgo would have had no need for a refrigerator as meager yields had him struggling to feed his family. "It's the seeds," he says, noting the reason for his reversal of fortunes. "Hybrids."

Africa's nascent push to finally feed itself is turning the clock back to the early part of 20th-century America. It was in the 1930s and '40s when Iowa-based Pioneer Hi-Bred International popularized hybrid seeds in the U.S., swelling corn yields throughout the Midwest. Seven decades later, African farmers and U.S. companies are trying to recreate the same boom that turned America into the world's breadbasket, only this time in the harsh climate -- environmental and political -- of Ethiopia and greater Africa.

If agriculture has a final frontier, it is Africa. After agriculture transformations in Asia and Latin America since the 1960s, Africa remains the one place where the farming potential has barely been scratched. African agriculture has less irrigation, less fertilizer use, less soil and seed research, less mechanization, less rural financing, fewer paved farm-to-market roads than any other farming region in the world. Conflict in many parts of the continent has chased farmers out of their fields, and neglect by both local governments and international development experts have let Africa's agriculture infrastructure fall into dire disrepair.

American farming interests, like those of agricultural icons Pioneer and John Deere, have avoided large swaths of Africa in the past, believing that farmers were too poor to pay for their products or wary of political instability that has rocked some of Pioneer's other African operations. But now, with global grain surpluses down, demand rising and prices soaring, the calculations at home and abroad have changed and progress can't come fast enough.

In Ethiopia, only about one-quarter of the country's total corn area is planted with hybrid seeds. Hybrids, produced from conventional breeding to increase yields and to thrive in harsher climates and to resist pests, usually can double or triple harvests over the standard seeds passed down through generations. And there are only several thousand tractors for more than 50 million people who depend on farming to survive.

"Africa is the only continent where per capita food production is declining, so the need is there," says J.B. Penn, the chief economist of Deere & Co. and a former undersecretary at the U.S. Agriculture Department. The present food crisis "is solved only through higher production," adds Paul Schickler, president of DuPont Co.'s Pioneer unit. "That is what is needed in Africa, through the use of better technology, genetics and agronomic practices."

Chombe Seyoum sees the need and potential every day. A farmer himself, Mr. Seyoum began selling John Deere equipment in Ethiopia two years ago hoping both to accelerate the mechanization of his country's farmers and to fulfill his father's vision. In 1968, his father bought a small John Deere tractor and introduced machine farming to his region of the country's southern wheat belt. Several years later, Emperor Haile Selassie was toppled by a communist dictatorship, farmland was collectivized and some of the Seyoum family's machinery was confiscated.

Mr. Seyoum studied to become an engineer. But when the communists were ousted in the early 1990s, he returned to farming and saw how far his country had fallen behind as he worked to rebuild the family farm.

Now, from his office in Addis Ababa, he sells Deere equipment -- 100 in the past two years. While drought and hunger still plague parts of Ethiopia, the fertile Rift Valley and highland regions, given good weather, have the country rivaling South Africa as the continent's largest cereal and grain producer south of the Sahara. Rising corn and wheat prices have spurred demand for machinery from farmers hoping to expand their acreage. Making up for lost time, Mr. Seyoum welcomes customers ready to purchase big-ticket machinery.

"We are in a rush," says one customer, Abdi Abdullahi Hussein. Mr. Hussein once worked with nomadic herders before seeing the business potential in farming this year. The spring planting season was fast approaching and he badly needed a tractor. He and a partner have about 60 acres and he intends to rent the tractor to others. "Our idea is to introduce technology in our area and plow more land," he says.

Mr. Seyoum suggests an 85-horsepower tractor costing about $30,000. Mr. Hussein doesn't flinch at the price; He has pooled his savings with neighbors' who will share the tractor. In Ethiopia and throughout Africa, banks are reluctant to lend to farmers who have little collateral; pooling money is a common way to raise the funds. But he cringes at the four-month delivery time from Deere's factory in Brazil. Instead, he ponders a 65-horsepower tractor, which will be available sooner.

"We've got a long list of people coming to us for tractor service," says Mr. Hussein.

As Mr. Hussein leaves, another farmer arrives to complete a purchase of a combine. Haji Kawo, like most wheat farmers in Ethiopia, plants by hand and harvests with a machine. After years of hiring others to cut his wheat, Mr. Kawo decided to get into the harvesting business himself. He figures he can pay off the $70,000 combine within a year given that there are 20,000 small farmers in his area who need harvesting service. He envisions moving from farm to farm during the harvest season much like combine services that methodically move up from the southern U.S. and into Canada.

Offering to help with financing, Mr. Seyoum sees Mr. Kawo as a model farmer who can demonstrate the benefits of mechanization to others and drive sales. Ethiopian farmers "see a success somewhere, and they want to do it, too," says Mr. Seyoum.

Melaku Admassu, an Ethiopian who runs Pioneer's operations here, uses the same farmer-to-farmer sales method that Pioneer employed in the U.S. He began by handing out seeds from the back of his pickup truck, particularly to farmers like Babou Galgo who worked land near the major roads so more people could follow the growth of the hybrids. At harvest time, Mr. Admassu would return with small scales to weigh the yields and compare them to the harvests of farmers who weren't using the hybrids.

"When I heard that only 1% or 2% of the U.S. population are farmers, and they feed the whole country, I couldn't believe it," Mr. Admassu says. "I started dreaming that if every farmer in Ethiopia increases production, we can change the whole country. We can change Africa."

It has certainly changed lives in the Rift Valley lakes region. When Mr. Admassu first came to his village with the new seeds and advice on how to better till his land, Debebe Ayele, 47, was struggling to feed his family. "We were getting food aid," he says. "I was ready to try anything to improve my situation."

The new seeds were a risk. They were more expensive than the standard fare and they were new. He planted two acres the first year, then four and now he rents land from his neighbors to increase his acreage. His harvests multiplied and for the first time in his life he had regular surpluses to sell on the market. He replaced the thatched grass roof of his house with corrugated iron. He bought better furniture and better clothes. He wants his children to go as far as they can in school.

As Mr. Ayele recites his progress, Mr. Admassu beams. "When we see our farmers go from barefoot to shoes, we know that is because of increased production," he says.

Farmer Galgo is ready for another upgrade. Sitting in his comfortable living room, beneath wall murals of Jesus and a peace dove, he tells Mr. Admassu, "I want to expand my land and buy a tractor. A big tractor, with a lot of power."

Another tractor customer.

States of the ocean

Buckminster Fuller's Dymaxion Map reveals that the Earth's former super-continent Pangea has evolved into a one-world island in a one-world ocean. Our one-world ocean has never been more important nor in more peril. Within the last decade two commissions (US and Pew) have issued historic reports outlining the crises our one-world ocean is facing and what needs to be done to prevent their ecological demise.

In the absence of federal leadership many coastal states have had to take it upon themselves to plan for the protection and sustainable development of the ocean waters off their coasts. This week Massachusetts became the first state to initiate a comprehensive, ecosystem-based plan for managing that portion of the world ocean that lies within three miles of its coast. There are a wide variety of potentially conflicting activities that will need to be addressed and accommodated in the plan including recreational and commercial fishing and boating, aquaculture and energy facilities siting.

The Massachusetts legislature has set December 2009 as the deadline for completing the plan. (GW)

Patrick signs bill to better manage ocean resources

By Associated Press
May 28, 2008

Massachusetts today became the first state in the country to embark on the ambitious initiative to create a single document to cover a myriad of ocean activities, from wind farms and ocean fishing to whale watching and environmental conservation.

The Oceans Act of 2008 will even include steps to protect the cod — a fish so central to the state’s early development that a carving of the "sacred cod" still hangs in the Massachusetts House chambers.

"This law will help protect our vital natural resources and balance traditional uses with new ones, such as renewable energy," Gov. Deval Patrick said during a bill-signing ceremony outside the New England Aquarium with Boston Harbor as a backdrop.

The new law requires Massachusetts to make sure all decisions and permits related to state-controlled waters up to three miles from the coast conform to a single, science-based management plan, instead of being considered on a case by case basis.

The bill creates a 17-member Ocean Advisory Commission to help Massachusetts’ environmental secretary develop the plan over the next 18 months. They will be assisted by an ocean science advisory council, consisting of nine scientists who have expertise in marine sciences and data management.

The plan would cover everything from cruise ships and recreational sailing to commercial activities such as liquefied natural gas terminals, wind turbines and the sand and gravel industry.

The bill is also designed to help guard the fragile ocean habitat including protecting fishing stocks of cod and creating safeguards for the migration paths of endangered right whales.

Environmental activists have long pushed for the law.

"It’s a monumental step forward for ocean conservation and stewardship," said Priscilla Brooks of the Conservation Law Foundation. "This will provide a blueprint to enable the state to balance commercial use, personal recreation and the protection of underwater ocean habitats and wildlife."

Massachusetts’ miles of coastal waters — from the fishing port of New Bedford to the beaches of Cape Cod and the vacation hotspots of Nantucket and Martha’s Vineyard — are increasingly coming under pressure.

One of the most contentious projects is a proposal by Cape Wind Associates to build 130 windmills across 25 miles of federal waters in Nantucket Sound. The cables bringing the power to land would run through state waters. There’s nothing in the new law to block the project.

A second offshore wind farm has been proposed near in Buzzards Bay and a company pushing for a liquefied natural gas terminal near Fall River is floating the idea of building an offshore berth that would allow tankers to unload the liquefied natural gas into a four-mile pipeline.

The law specifically allows for "appropriate scale" offshore renewable energy facilities in state waters except for the waters off the Cape Cod National Seashore, and is also designed to manage the development of technologies that haven’t even been proposed, like wave energy technology.

Other states, including California, have laws in place to create marine conservation areas, but Massachusetts’ law is more comprehensive.

"This is really looking at opportunities for renewable energy, opportunities to better manage coastal habitats," said Tom McCann of the Ocean Conservancy. "Its going to provide a road map for the rest of New England and the country."

McCann said Congress should follow Massachusetts’ lead and pass federal oceans protection legislation.

When finished, Massachusetts’ plan will be incorporated into the state’s existing coastal zone management plan and be enforced through the state’s regulatory and permitting processes, including the Massachusetts Environmental Policy Act.

"We have well-established laws for the use of our land, and now we will have the necessary framework and process in place for the management of one of the commonwealth’s greatest assets - our ocean," said Massachusetts Senate President Therese Murray, D-Plymouth.

European Union pondering biofuels retreat

Humanity does have a variety of options available to combat climate change. Those options may not manifest themselves in terms of the number of renewable energy sources that make environmental and economic sense in our current socioeconomic/cultural context. Rather the most robust menu of options may not be revealed until some tough decisions tough strategic decisions are made.

We need to transition out of the fossil fuel era as quickly and as painlessly as possible. Choosing the right mix of technologies and policies to bring about such a transition will require a combination of vision and political courage.

Mistakes are an important part of the design science process. Bucky Fuller often reminded us that "if you don't make mistakes, you don't make anything". However, in order for mistakes to assume their true value, we have to acknowledge them as such -- even (especially?) when it's not the most politically expedient thing to do.

With so much at stake we can ill afford to squander precious human and financial resources pursuing paths sh0wn to hold little promise. (GW).

MEPs seek reduced biofuel commitments

EurActiv
May 28, 2008

The pressure is rising on the Commission to water down plans to raise the share of biofuels in transport to 10% by 2020, as leading MEPs on the issue call for the target to be cut to 8% or scrapped entirely.

Background:

In March 2007, EU leaders committed to raising the share of biofuels in transport from current levels of around 2% to 10% by 2020, following growing concerns over rising oil prices, energy security and climate change.

The goal was then translated into legal proposals, presented on 23 January 2008 by the Commission, as part of a broader Directive on renewable energies .

The draft directive introduces a range of "sustainability criteria" for biofuels to counter growing concerns about the risks related to their mass production, including deforestation, hikes in food prices and water shortages.

"Given the many unknowns today, the responsible way to go forward seems to be to reverse the decision about the 10% renewable target and, instead, go for a lower target – like 8%," states the report drafted by Swedish MEP Anders Wijkman for Parliament's environment committee.

His report conflicts slightly with the one published last week for the industry committee by the leading MEP on the issue, German Green Claude Turmes. Indeed, the Turmes report goes even further by completely scrapping biofuels from the EU agenda (EurActiv 13/05/08).

The Turmes report justifies the rejection of biofuel mandates by saying: "Heads of state and government put specific preconditions to be fulfilled, i.e. a) the production must be sustainable and b) second generation must be commercially available. Since March 2007, evidence is growing that these conditions will not be fulfilled. The 10% target must therefore be abandoned."

Nevertheless, speaking at a joint briefing with Wijkman in Parliament on 27 May, Turmes signalled that, while he believes it is "too early" to set any form of target, he could shift on the issue.

Turmes further added that Energy Commissioner Andris Piebalgs had assured him that he would "not stand in the way" if he succeeds in clinching a deal with member states on reducing the target.

According to Turmes, while France and Poland have tried to rush through the 10% target, Germany, the UK and the Netherlands are more sceptical. Another 15 countries have no clear position and are "hiding behind" the Commission, he said, adding that he would be upping the pressure on the EU executive to change its stance on the 10%.

Wijkman wants the 8% target to be combined with a requirement for all biofuels which count towards the target to achieve greenhouse gas savings of at least 50% compared to conventional fuels – which is higher than the 35% proposed by the Commission.

He defends his proposal by saying: "We need a target for investors." According to him, the 10% target was "political" and "too high", although he did not explain why an 8% goal would be any different.

The reports should be voted upon in committees in July, while the full plenary is due to express its position on 23 September.

Positions:

In a recent press release, the European Commission concedes that "the target has never been to reach 10% biofuels at any price. It is 10% biofuels under strict conditions. Those conditions include a workable and robust sustainability scheme, and commercial viability for second generation biofuels."

However, it underlines that an EU sustainability scheme, which will ensure that production does not have damaging side-effects, is currently under discussion and that it would be to Europe's advantage to promote such a scheme internationally (EurActiv 01/04/08).

"With or without the Union's 10% target, there will be a further increase in the worldwide production of biofuels. Europe can best make a contribution by doing everything possible to show that a sustainability scheme can work and to ensure a rapid transition to the new generation of biofuels. In the transport sector today, the only alternative to non-sustainable fossil fuel is biofuel," it stressed.

Biofuel producers are alarmed at the prospect of Europe retreating on its commitments, with European Bioethanol Fuel Association (eBio) Secretary General Rob Vierhout lamenting the fact that the debate has become "so emotional and irrational".

He cautioned against dropping the 10% target, saying this would simply shift the EU away from biofuel use while countries like the US and Brazil, which do not necessarily produce to the standards envisaged by the EU in its sustainability criteria, continue their production.

"There is no point in singling out biofuels as the source of all evil. Stopping biofuels would only have a very marginal impact on food prices," he told EurActiv, adding that existing scientific assessments show the 10% target to be "absolutely manageable" without unsustainable pressure being put on soil, water and biodiversity, even if it is entirely based on domestic production.

Farmers' associations are also angered by Parliament's plans, with Copa-Cogeca insisting that "the binding minimum objective of 10% for biofuels in transport must be maintained".

UK National Farmers' Union Vice-President Paul Temple adds that biofuels are the only practical solution to replacing a diminishing supply of fossil fuels and that targets are vital to reduce transport emissions.

Furthermore, biofuel technology, including second generation biofuels, can only progress with investment, which in turn requires long-term targets, he stressed. "Simple, comprehensible targets like this will help to give companies the confidence to deliver advanced biofuels," he said.

"Removing the 10% target means the EU would hold no sway over the sustainability standards of the fast-developing international market in biofuels and bioenergy, or any sustainability criteria for other agricultural commodities which may follow," he added.

While campaigners from a range of Europe-wide NGOs welcomed the proposals to scrap the target, they rejected the Wijkman proposals for an 8% target.

In a press release issued on 28 May, Nina Holland from Corporate Europe Observatory said: "An 8% target will cause almost as much damage as a 10% target. Pushing up food prices is causing hunger and that fact is inescapable. The EU's targets should be dropped."

Ariel Brunner, EU Agriculture Policy Officer for BirdLife International, agrees: "It is time for the biofuels target to be set aside and for fresh thinking on how to really tackle climate change while preserving natural habitats."

Next steps:

• 16 Jul. 2008: Industry and Energy Committee scheduled to vote on Turmes report.
• 23 Sep. 2008: Plenary scheduled to vote on the report.

Oil games

Oil Shockwave is a scenario exercise developed by Securing America's Future Energy (SAFE) and the National Commission on Energy Policy. One could almost call it a precursor to War Games. In a half-day exercise on June 23, 2005, top former government officials took part in a series of Principals meetings of the Cabinet over a seven-month period in order to advise the President on how to respond to a series of events that affect world oil supplies. The simulation is set six months into the future to provide distance from current events.

Here's one of the conclusions of the 2005 Oil Shockwave session:

"Given today’s precarious balance between oil supply and demand, taking even a small amount of oil off the market could cause prices to rise dramatically. In Oil ShockWave, a roughly 4 percent global shortfall in daily supply results in a 177 percent increase in the price of oil (from $58 to $161 per barrel)."

One critique of this project referred to it as "a well-funded analysis of the obvious". (GW)

Has Russian oil output peaked?

By Fred Weir
Christian Science Monitor
May 28, 2008

Production dropped this year after reaching a post-Soviet high in October. On Monday, Putin's newly convened cabinet made the issue its first order of business.

Moscow - The Kremlin often touts Russia's image as an "energy superpower," but now the country's oil production is declining. Some say Russia may have already reached peak oil output.

Underscoring the urgency of the issue, Prime Minister Vladimir Putin's new cabinet made its first order of business on Monday the approval of a package of measures to relieve the oil-production crisis.

"It's a good first step," says Natalia Milchakova, an oil and gas analyst for Otkritiye, a Moscow-based brokerage firm. But she adds that "rapidly slowing" oil production, which was growing by more than 10 percent five years ago, isn't "something that can be quickly fixed with political declarations."

As the world's second-largest oil exporter, Russia joins a growing number of top oil suppliers wrestling with how to address declining or peaking production. Like Venezuela and Mexico, Russia is heavily dependent on oil, which accounts for more than two-thirds of government revenue and 30 percent of the country's gross domestic product. Now, Moscow is trying to remedy a situation caused in part by outdated technology, heavy taxation of oil profits, and lack of investment in oil infrastructure.

The Presidium of the Cabinet, as it is officially known, in its inaugural meeting Monday approved tax holidays of up to 15 years for Russian companies that open new oil fields and proposed raising the threshold at which taxation begins from the current $9 per barrel to $15. Oil companies welcomed the measures, but experts say that after almost two decades of post-Soviet neglect, which have seen little new exploration, it may be too little, too late.

After rising steadily for several years to a post-Soviet high of 9.9 million barrels per day (bpd) in October, Russian oil production fell by 0.3 percent in the first four months of this year, while exports fell 3.3 percent – the first Putin-era drop. Russia's proven oil reserves are a state secret, but the Oil & Gas Journal, a US-based industry publication, estimates it has about 60 billion barrels – the world's eighth largest – which would last for 17 years at current production rates.

Energy Minister Viktor Khristenko recently admitted the decline, but suggested it might be overcome by fresh discoveries in underexplored eastern Siberia or in new Arctic territories recently claimed by Russia. "The output level we have today is a plateau, or stagnation," he said.

But Leonid Fedun, vice president of Russia's largest private oil company LUKoil, went one step further in an interview with the Financial Times last month.

"Russian oil production has peaked and may never return to current levels," he said.

That poses problems for Russia, which has talked of expanding beyond its main oil market – Europe – to China, Japan, and the US. In 2006, then-President Putin approved construction of an $11 billion pipeline across Siberia to the Pacific Ocean to carry eastward exports. Putin and his successor, Dmitri Medvedev, have insisted Russia can meet demand by increasing output but oil analysts around the globe are pessimistic that oil supplies can meet rising consumption in the coming decade.

No supply squeeze applies to Russia's natural gas industry, which has both vast reserves and a favorable tax regime. Gas prices have been rising on world markets in lockstep with oil, but in Russia only one company, the state-owned giant Gazprom, enjoys a monopoly on exports. "Gas producers are comparatively well off. The export tax for gas is fixed and does not rise when the price goes up," says Ms. Milchakova.

Oil profits, on the other hand, are taxed at nearly 90 percent, which has filled the state's coffers as prices for crude oil have risen from $10 per barrel a decade ago to more than $130 last week. Petrowealth was a key factor enabling Mr. Putin to concentrate political power in the Kremlin, which he used to take over huge slices of the formerly private oil and gas industry. The looming production crunch, therefore, suggests a need for sweeping political reforms as well as economic adjustments, some experts say.

"As long as energy prices keep going up and the easy money keeps rolling in, there is no incentive to liberalize," says Yevgeny Gavrilenkov, chief economist at Troika Dialog, a Moscow investment bank. "If the golden goose stops laying eggs, then they'll start to recognize the need for change."

A sharp debate is breaking out among economists, some of whom argue that the crisis is an opportunity for Russia to develop a long-term strategy to husband its remaining energy resources and diversify its economy.

They point to figures showing that gas and oil exports have risen since 2000 from under half to over 60 percent of Russia's gross domestic product and say that to continue trading nonrenewable resources for rapidly devaluing dollars is a big mistake.

"Russia should not be a colonial country that provides raw materials to more developed countries," says Nodari Simonia, director of the Center for World Energy Studies, an independent Moscow think tank. "We don't need to export more crude, we have to invest resources in our manufacturing base."

Russian oil profits, taxed by the state, have been accumulating in a special 'stabilization fund' that now totals about $130 billion. Earlier this year the government put another $32 billion into a sovereign wealth fund that is expected to begin investing in Russian infrastructure and social welfare schemes. "Russia's economy so far can't absorb the oil cash that's coming in. That, not increasing oil output, is our biggest worry," says Sergei Glaziev, head of the National Institute for Development, a Moscow think tank. "We urgently need to diversify our economy away from this dependence on natural resources."

Others say Russia's gas-and-oil sector can continue to grow, but only if there are massive new investments and critical reforms to an industry that under Putin became dominated by two state-owned behemoths, Gazprom and Rosneft. Both companies have accumulated huge debt in an ongoing campaign to take over formerly private assets that have returned nearly half of Russian oil and gas reserves to state control in recent years.

"Ten years ago the bulk of our oil resources were held by private companies, and growth rates were very high," says Michalkova. "Growth rates have become sluggish for complex reasons lately, but political interference and battles over ownership have not been helpful."

Major investments will be needed to eke out further production from the largely exhausted Soviet-era oil fields of western Siberia, experts say. "Production costs have more than doubled in the past six years, and the current tax regime makes additional output at older fields unviable," says Valery Nesterov, an energy expert with Troika Dialog.

Even if new finds are made in Russia's uncharted east, they are likely to be much smaller, more remote, and difficult to access. "In the early '80s a typical new oil field held reserves of up to 50 million tons, but today a company celebrates if it finds a field with 3 million tons," says Mikhail Krutikhin, an analyst with Russian Energy, a Moscow-based consultancy. "Therefore we need more small oil companies, which are best for operating small fields. But Russia has a few giant companies, whose fixed costs and attitude are all wrong.

Russia's new president, Mr. Medvedev, has talked about a need to encourage small business, but Krutikhin is skeptical given Medvedev's background as former chairman of Gazprom. "To reinvigorate our oil and gas industry, Russia needs dramatic tax reform, antitrust measures, and strong support for small enterprises," says Mr. Krutikhin. "But Medvedev comes from Gazprom, which is the biggest enemy of small business in Russia, so I really don't have any high expectations."

Batteries included

We can do this. Humanity can pass "Nature's final exam" and avoid the path to species extinction if we put our collective minds, hearts and technology to the task.

The pieces are falling in place, for the most part in isolation. Sooner than later world leaders will heed the call of grassroots organization and NGO's and begin cooperating to bring about an energy revolution that will eventually end up with an integrated, world-around smart grid powered exclusively by renewable energy.

That's the vision. As recently as a year ago this would have (deservedly) been dismissed as pure fantasy.

While still a monumental challenge, today the vision -- and more importantly the path to get there-- is coming into focus.

I think it was Pogo who said "You've got to believe it to see it".(GW)

Wind power could make Norway "Europe's battery"

By Alister Doyle
Reuters, UK
May 26, 2008

OSLO (Reuters) - Norway could become "Europe's battery" by developing huge sea-based wind parks costing up to $44 billion by 2025, Norway's Oil and Energy Minister said on Monday.

Norway's Energy Council, comprising business leaders and officials, said green exports could help the European Union reach a goal of getting 20 percent of its electricity by 2020 from renewable sources such as wind, solar, hydro or wave power.

"Norway could be Europe's battery," Oil and Energy Minister Aaslaug Haga told Reuters after she was handed the report, which will be considered by the centre-left government in coming months.

"The thinking is that Norway is blessed, is lucky, to have big energy resources. There is undoubtedly a large potential for wind power," she said. Norway says it has the longest coastline in Europe, from the North Sea to the Arctic Barents Sea.

The 30-page report, mapping out a big shift for the world's number 5 oil exporter, said: "Norway ought to have access to up to 40 terrawatt hours of renewable energy in 2020-2025, of which about half would come from offshore wind power."

Sufficient wind parks -- totaling 5,000 to 8,000 megawatts installed capacity -- would cost between 100 billion Norwegian and 220 billion Norwegian crowns ($43.89 billion) assuming prices of 20-28 million crowns per installed megawatt.

The energy would be equivalent to up to about eight nuclear power plants. Norway pumps about 2.2 million barrels of oil per day -- $44 billion represents the value of about half a year's output.

WIND, HYDRO

Haga said offshore wind parks -- which would stop on calm days -- could be supplemented by hydro-power reservoirs which can be turned on and off to turn them into a battery storing power. Norway has about half Europe's reservoir capacity.

"We can deliver a product whether the wind is blowing or not," she said. Haga will meet EU Energy Commissioner Andris Piebalgs in Brussels on Thursday, partly to discuss the report.

It said Norway still needed new laws, competitive subsidies and more infrastructure. Norway sometimes has problems supplying even its own electricity needs with its existing hydro-power.

And it said that Denmark, Germany and Britain had done much more to develop wind power, both on land and in shallow waters. Norway's advantage was wide experience from deeper offshore oil and gas installations.

StatoilHydro said last week that it will invest $80 million to build the world's first full-scale floating wind turbine to start up in 2009. Power from such installations is likely to be more costly than on land.

The report said that Norway would have to agree long-term wind supply contracts with EU countries, including access to EU subsidies. But Haga also said: "I don't expect Europe to subsidize Norwegian wind power production."

"It's not a first choice to import power," said Steinar Bysveen, who led the report. He said EU nations such as Germany might need imports because of a lack of space to build wind parks at home and plans to phase out nuclear power.

The Energy Council report said that 40 terrawatt hours of electricity from wind could cut 20 million tonnes of heat-trapping carbon dioxide emissions, blamed for stoking global warming. Norway's 2007 emissions were 55 million tonnes.

Possible pesticide link to devastation of bees

German officials have traced chemical pesticides produced by Bayer CropScience as a source of widespread bee mortalities. This is the same company that makes Aleve, Alka Seltzer, and Bayer Aspirin. The product name for its Clothianidin use is called Poncho.

Here's what an EPA fact sheet says about Clothianidin:

"Clothianidin has the potential for toxic chronic exposure to honey bees, as well as other nontarget pollinators, through the translocation of clothianidin residues in nectar and pollen..In honey bees, the effects of this toxic chronic exposure may include lethal and/or sub-lethal effects in the larvae and reproductive effects in the queen."

Could this chemical be responsible for the devastation of bee hives (colony collapse disorder) in the United States? (GW)

Pesticides: Germany bans chemicals linked to honeybee devastation

By Alison Benjamin
Guardian
May 23, 2008

Germany has banned a family of pesticides that are blamed for the deaths of millions of honeybees. The German Federal Office of Consumer Protection and Food Safety (BVL) has suspended the registration for eight pesticide seed treatment products used in rapeseed oil and sweetcorn.

The move follows reports from German beekeepers in the Baden-Württemberg region that two thirds of their bees died earlier this month following the application of a pesticide called clothianidin.

"It's a real bee emergency," said Manfred Hederer, president of the German Professional Beekeepers' Association. "50-60% of the bees have died on average and some beekeepers have lost all their hives."

Tests on dead bees showed that 99% of those examined had a build-up of clothianidin. The chemical, produced by Bayer CropScience, a subsidiary of the German chemical giant Bayer, is sold in Europe under the trade name Poncho. It was applied to the seeds of sweetcorn planted along the Rhine this spring. The seeds are treated in advance of being planted or are sprayed while in the field.

The company says an application error by the seed company which failed to use the glue-like substance that sticks the pesticide to the seed, led to the chemical getting into the air.

Bayer spokesman Dr Julian Little told the BBC's Farming Today that misapplication is highly unusual. "It is an extremely rare event and has not been seen anywhere else in Europe," he said.

Clothianidin, like the other neonicotinoid pesticides that have been temporarily suspended in Germany, is a systemic chemical that works its way through a plant and attacks the nervous system of any insect it comes into contact with. According to the US Environmental Protection Agency it is "highly toxic" to honeybees.

This is not the first time that Bayer, one of the world's leading pesticide manufacturers with sales of €5.8bn (£4.6bn) in 2007, has been blamed for killing honeybees.

In the United States, a group of beekeepers from North Dakota is taking the company to court after losing thousands of honeybee colonies in 1995, during a period when oilseed rape in the area was treated with imidacloprid. A third of honeybees were killed by what has since been dubbed colony collapse disorder.

Bayer's best selling pesticide, imidacloprid, sold under the name Gaucho in France, has been banned as a seed dressing for sunflowers in that country since 1999, after a third of French honeybees died following its widespread use. Five years later it was also banned as a sweetcorn treatment in France. A few months ago, the company's application for clothianidin was rejected by French authorities.

Bayer has always maintained that imidacloprid is safe for bees if correctly applied. "Extensive internal and international scientific studies have confirmed that Gaucho does not present a hazard to bees," said Utz Klages, a spokesman for Bayer CropScience.

Last year, Germany's Green MEP, Hiltrud Breyer, tabled an emergency motion calling for this family of pesticides to be banned across Europe while their role in killing honeybees were thoroughly investigated. Her action follows calls for a ban from beekeeping associations and environmental organisations across Europe.

Philipp Mimkes, spokesman for the German-based Coalition Against Bayer Dangers, said: "We have been pointing out the risks of neonicotinoids for almost 10 years now. This proves without a doubt that the chemicals can come into contact with bees and kill them. These pesticides shouldn't be on the market."

Harnessing the power of film to heal and unite

Can art -- and in particular film -- help bring the world together? The organizers of the recently-held Web even called "Pangea Day" think so. Pangea was the super-continent that existed during the Paleozoic and Mesozoic eras about 250 million years ago, before each of the component continents were separated into their current configuration. In other words, it marks the time when the Earth's land masses were physically united -- well before humans arrived on the scene.

There have been numerous environmental music events over the years, but the problem with many of these as far as I'm concerned is that there was seldom a direct connection between the music and the message. Just the opposite with the powerful and touching films presented as part of Pangea Day. Check them out.

Also check out their Web site to find out how you can get involved in case you missed the event. (GW)

Pangea Day

A global event harnessing the power of film to strengthen tolerance and compassion while uniting millions of people to build a better future.

May 10, 2008
TED Conferences
c/o Pangea Day

The Pangea Day Mission & Purpose

Pangea Day is a global event bringing the world together through film.

Why? In a world where people are often divided by borders, difference, and conflict, it's easy to lose sight of what we all have in common. Pangea Day seeks to overcome that – to help people see themselves in others – through the power of film.

The Pangea Day Event

Starting at 18:00 GMT on May 10, 2008, locations in Cairo, Kigali, London, Los Angeles, Mumbai, and Rio de Janeiro will be linked for a live program of powerful films, live music, and visionary speakers. The entire program will be broadcast – in seven languages – to millions of people worldwide through the internet, television, and mobile phones.

The 24 short films to be featured have been selected from an international competition that generated more than 2,500 submissions from over one hundred countries. The films were chosen based on their ability to inspire, transform, and allow us see the world through another person's eyes. Details on the Pangea Day films can be viewed here.

The program will also include a number of exceptional speakers and musical performers. Queen Noor of Jordan, CNN's Christiane Amanpour, musician/activist Bob Geldof, and Iranian rock phenom Hypernova are among those taking part.

What Will Happen After Pangea Day

People inspired by Pangea Day will have the opportunity to participate in community-building activities around the world. Through the live program, the Pangea Day web site, and self-organized local events, everyday people will be connected with extraordinary activists and organizations.

Many of the films and performances seen on Pangea Day will be made available on the Web and via mobile phone, alongside open forums for discussion and ideas for how to take social action.

A Pangea Day documentary will be created to catalyze future activities, and dozens of talented filmmakers will make strides in their careers.

History

In 2006, filmmaker Jehane Noujaim won the TED Prize, an annual award granted at the TED Conference. She was granted $100,000, and more important, a wish to change the world. Her wish was to create a day in which the world came together through film. Pangea Day grew out of that wish. Watch Jehane Noujaim’s 2006 acceptance speech now.

Pangea Day is a project of the Sapling Foundation

There is a better way

If you look carefully, more and more individuals are signing on to the Design Science Revolution. For the time being, the fact that they may not acknowledge that's what they're doing doesn't matter. What does matter is that the dots are being connected and people are realizing that there is a better way to go about the business of meeting our basic needs.

Knowing that there is a better way is an important step in launching a re-tooling of society. As noted in yesterday's post, members of the architectural profession have recognized their role and responsibility in this redesign process. A similar sense of hope and optimism can be drawn from the growing ranks of sustainable farming and clean energy advocates/practitioners.

Not too long ago one could only find these scenarios of a sustainable future in publications like The Whole Earth Review or Mother Earth News. The true visionaries knew that it was just a matter of time before they would grace the pages of The New York Times and Wall Street Journal. (GW)

Continuing The Clean-Car Revolution

By Paula J. Dobriansky and R. James Woolsey
Wall Street Journal
May 24, 2008

Between the two of us, we've served the last five presidents. We join together in the belief that America has to end its addiction to oil, and find a global solution to climate change. Success will require revolutionary efforts from the public and private sectors.

As prices soar, oil imports add more than $1 billion a day to our trade deficit. There is also a security cost: The tight supply increases our vulnerability to disruptions by terrorists or other causes that could send prices even higher. On top of all this, oil is a leading source of global greenhouse gas emissions.

There's a better way.

At the U.S.-sponsored Washington International Renewable Energy Conference in March, we saw that government and industry have exciting new opportunities to create national energy systems powered by clean technologies.

President Bush addressed the conference, praising the 8,000 international participants as "pioneers on the frontiers of change." He also toured the trade show, during which we joined him in examining Jim's next-generation plug-in hybrid Prius (with its bumper sticker "Bin Laden Hates This Car"). The range of hardware and know-how displayed at that conference should give all of us great hope.

Consider: Plug-in hybrid vehicles will be in dealers' showrooms in the next two-three years for American families to purchase – thanks to investments from automakers, federal spending, and new tax incentives. Plug-in hybrids can be recharged at a regular electrical outlet and achieve, overall, more than 100 miles per gallon. At current gas prices, they cost about one-fifth as much to operate as conventional cars.

Plug-in hybrids can and should also be able to run on various combinations of ethanol, methanol, butanol and other second-generation biofuels produced from sustainable renewable sources such as agricultural and forest waste products, and grasses. These advanced biofuels will reduce concerns about competition between food and fuel. And compared with gasoline, these biofuels may cut carbon emissions by up to 86%.

For example, a plug-in burning E-85 (85% ethanol) when it needs liquid fuel can get up to 500 miles more per gallon of fossil fuel. A billion dollars of federal investment and new federal mandates, strengthened by the joint action of the Bush administration and Congress, are boosting advanced biofuels. Growing commitments of venture capital are validating their commercial promise.

We'll also need to change the way we produce electricity for American families and businesses. The federal government and leading U.S. companies must increase their support for renewable energy and low-carbon advanced nuclear technologies, and also for the development of new coal-fired power plants that sequester carbon and thus emit few or no greenhouse gases. Wind-generated electricity is now among the fastest growing U.S. industries, having increased by more than 400% since 2000.

These new ways to produce and use energy are the beginning of a clean technology revolution, one that will allow us to sever the linkage between economic growth and fossil fuels.

The global economy has changed dramatically over the past 20 years; and major emerging economies must also join the effort to slow, stop and eventually reverse the growth of emissions. We'll need to respect that national capabilities and circumstances vary, so we must work out a coherent way for each nation to determine the best way to reach the goals we each set.

The Major Economies Process, launched by the president last year, brings together countries representing some 80% of the world's economic output, energy use and greenhouse gas emissions – in pursuit of key elements for a new international agreement on climate change. Leaders of major economies will meet this summer to finalize plans.

The U.S. government and cutting-edge American companies deserve credit for elevating our country's commitment to a new energy system. These efforts can quickly move us toward greater security and reduced climate changing-emissions. But much more needs to be done.

The coming years will determine whether we continue down the path of oil dependency and rising climate risks, or break our addiction and realize the promise of a clean and prosperous future.

A clean technology revolution is underway. Only if we work together on both of these goals can we get the job done.

Ms. Dobriansky is undersecretary of state for democracy and global affairs. Mr. Woolsey, former director of Central Intelligence, is a venture partner with VantagePoint.

Architecture 2030

According to the Energy Information Administration, the building sector comprises 48% of the increase in carbon emissions in the United States since 1990. Up to 80% of carbon emissions in urban areas come from buildings.

It seems pretty obvious that cities -- and the built environment in particular -are major points of leverage in the battle to mitigate climate change.

Here in my home state of Massachusetts an innovative program called The Cambridge Energy Alliance aims to reduce the city of Cambridge’s carbon footprint by 10% in five years through an innovative program that provides energy auditing, renovation, and financing – all in a relatively simple “one-stop-shop” process. Loans for proposed renovations made through the program are designed to pay for themselves through savings from lowered energy costs. City officials aim to enlist 50% of the city’s building stock into the program within the next five to six years.

On a grander scale, Architecture 2030 has set a national standard for reducing the built environment's contribution to greenhouse gas emissions.

If the U.S. were to meet the targets set by Architecture 2030 as outlined below and the U.S. Department of Energy's “20 Percent Wind Energy by 2030” target, we would definitely be making some serious progress towards sustainability. (GW)

Global Warming, Climate Change, and the Built Environment

Architecture 2030

Rapidly accelerating climate change (global warming), which is caused by greenhouse gas (GHG) emissions, is now fueling dangerous regional and global environmental events. Data from the U.S. Energy Information Administration illustrates that buildings are responsible for almost half (48%) of all GHG emissions annually. Seventy-six percent of all electricity generated by US power plants goes to supply the Building Sector. Therefore, immediate action in the Building Sector is essential if we are to avoid hazardous climate change.

Architecture 2030 Mission

Architecture 2030, a non-profit, non-partisan and independent organization, was established in response to the global-warming crisis by architect Edward Mazria in 2002. 2030’s mission is to rapidly transform the US and global Building Sector from the major contributor of greenhouse gas emissions to a central part of the solution to the global-warming crisis. Our goal is straightforward: to achieve a dramatic reduction in the global-warming-causing greenhouse gas (GHG) emissions of the Building Sector by changing the way buildings and developments are planned, designed and constructed.

We are achieving our mission by galvanizing both the building industry and the nation to adopt and implement the 2030 Challenge, a global initiative stating that all new buildings and major renovations reduce their fossil-fuel GHG-emitting consumption by 50% by 2010, incrementally increasing the reduction for new buildings to carbon neutral by 2030.

We issued the 2030 Challenge in January 2006, and since that time, numerous groups have signed on and are now working to implement its targets, including the US Conference of Mayors (Resolution #50), American Institute of Architects (AIA), US Green Building Council (USGBC), Leadership in Energy and Environmental Design (LEED), Environmental Protection Agency (EPA/Target Finder), Royal Architecture Institute of Canada (RAIC), International Council for Local Environmental Initiatives (ICLEI), World Business Council for Sustainable Development (WBCSD), Union Internationale des Architectes (UIA), and many, many others.

The Challenge

Credible scientists give us 10 years to be well on our way toward global greenhouse gas (GHG) emissions reductions in order to avoid catastrophic climate change. Yet there are hundreds of coal-fired power plants currently on the drawing boards in the US. Seventy-six percent (76%) of the energy produced by these plants will go to operate buildings.

Buildings are the major source of demand for energy and materials that produce by-product greenhouse gases (GHG). Slowing the growth rate of GHG emissions and then reversing it over the next ten years is the key to keeping global warming under one degree centigrade (°C) above today's level. It will require immediate action and a concerted global effort.

To accomplish this, Architecture 2030 has issued The 2030 Challenge asking the global architecture and building community to adopt the following targets:

• All new buildings, developments and major renovations shall be designed to meet a fossil fuel, GHG-emitting, energy consumption performance standard of 50% of the regional (or country) average for that building type.
  
  
• At a minimum, an equal amount of existing building area shall be renovated annually to meet a fossil fuel, GHG-emitting, energy consumption performance standard of 50% of the regional (or country) average for that building type.
  
  
• The fossil fuel reduction standard for all new buildings shall be increased to:

60% in 2010
70% in 2015
80% in 2020
90% in 2025

Carbon-neutral in 2030 (using no fossil fuel GHG emitting energy to operate).

These targets may be accomplished by implementing innovative sustainable design strategies, generating on-site renewable power and/or purchasing (20% maximum) renewable energy and/or certified renewable energy credits.

A bridge between rural producers and urban consumers

Last summer a cover story in Time magazine fueled a heated debate among advocates of sustainable agriculture. The story centered around the question of whether it is more important that our food is locally or organically grown. While some saw this as a bit of a "red herring" (Why can't it be both?), in this era when $200-per-barrel oil seems all but inevitable, one may be faced with the decision whether to buy organically grown carrots from a multi-hundred acre farm 2,000 miles away or a bunch grown 35 miles away using a limited amount of chemicals as part of a responsibly administered pesticide management plan.

Preserving the capacity to produce locally grown food is becoming increasingly important. In a prior post, Richard Heinberg made the case that fifty million farmers will ultimately be needed to sustainably meet U.S. food needs in an energy-starved, human-induced warming world.

City farms and farmers are going be more important than ever. (GW)

Where Industry Once Hummed, Urban Garden Finds Success

By Jon Hurdle
New York Times
May 20, 2008

PHILADELPHIA — Amid the tightly packed row houses of North Philadelphia, a pioneering urban farm is providing fresh local food for a community that often lacks it, and making money in the process.

Greensgrow, a one-acre plot of raised beds and greenhouses on the site of a former steel-galvanizing factory, is turning a profit by selling its own vegetables and herbs as well as a range of produce from local growers, and by running a nursery selling plants and seedlings.

The farm earned about $10,000 on revenue of $450,000 in 2007, and hopes to make a profit of 5 percent on $650,000 in revenue in this, its 10th year, so it can open another operation elsewhere in Philadelphia.

In season, it sells its own hydroponically grown vegetables, as well as peaches from New Jersey, tomatoes from Lancaster County, and breads, meats and cheeses from small local growers within a couple of hours of Philadelphia.

The farm, in the low-income Kensington section, about three miles from the skyscrapers of downtown Philadelphia, also makes its own honey — marketed as “Honey From the Hood” — from a colony of bees that produce about 80 pounds a year. And it makes biodiesel for its vehicles from the waste oil produced by the restaurants that buy its vegetables.

Among urban farms, Greensgrow distinguishes itself by being a bridge between rural producers and urban consumers, and by having revitalized a derelict industrial site, said Ian Marvy, executive director of Added Value, an urban farm in the Red Hook section of Brooklyn.

It has also become a model for others by showing that it is possible to become self-supporting in a universe where many rely on outside financial support, Mr. Marvy said.

Mary Seton Corboy, 50, a former chef with a master’s degree in political science, co-founded Greensgrow in 1998 with the idea of growing lettuce for the restaurants in downtown Philadelphia.

Looking for cheap land close to their customers, Ms. Corboy and her business partner at the time, Tom Sereduk, found the site and persuaded the local Community Development Corporation to buy it and then rent it to them for $150 a month, a sum they still pay.

They made an initial investment of $25,000 and have spent about $100,000 over the years on items that included the plastic-covered greenhouses and the soil that had to be trucked in to cover the steel-and-concrete foundation of the old factory site.

“The mission was: How do you take postindustrial land and turn it into some kind of green business?” said Ms. Corboy, an elfin woman with the ruddy cheeks of someone who works long hours out of doors.

She approached her early lettuce-growing operation with conventional business goals and little thought for what an urban farm could achieve.

“I thought you didn’t have to have a relationship with the community,” she said. “You would just be a business person.”

Customers said the farm was a breath of fresh air in a gritty neighborhood.

“It’s a little piece of heaven,” said Janet McGinnis, 47, who lives on nearby Girard Avenue. “We live in the city, and it makes me feel good to wake up and see flowers.”

Ms. McGinnis said she could buy herbs, bread and produce elsewhere but did so at Greensgrow because it is part of the community. “We’ve got to keep it in the community,” she said. “We have to give back.”

Despite the community goodwill, the farm lives with urban problems like theft and violence. “I have gone through every tool in the box eight or nine times,” Ms. Corboy said.

Although no one at Greensgrow is getting rich from the operation — after 10 years’ work, Ms. Corboy is making an annual salary of $65,000 — there is a sense that their time has come.

“Ten years ago when I said we were going green, people thought we were out of our minds,” Ms. Corboy said. “Now we are top of the party list.”

Ocean Wave Technology Validated

It is becoming increasingly clear that the oceans (and Great Lakes) are going to play a very important role in helping this nation achieve a sustainable energy future. Offshore wind has been receiving the lion's share of attention with respect to renewable energy technologies designed to take advantage of the marine environment, but wave-and-current-dependent technologies have also made significant advances of late.

A new ocean wave technology with potential for economically desalinating water. (GW)

Renewable Energy Ocean Wave Technology Validated

Texas A&M University's Report on Independent Natural Resources, Inc.'s SEADOG(R)Pump released

EarthTimes.com
May 20, 2008

Results of three-month Gulf of Mexico demonstration prove effectiveness of power generation and water desalination from renewable resource of ocean waves

MINNEAPOLIS, May 20 /PRNewswire/ -- Following a three-month demonstration of Minnesota-based energy technology company Independent Natural Resources Inc.'s (INRI(TM)) SEADOG Pump system, researchers from the Texas A&M University at Galveston Marine Engineering Technology Department released a report today validating the performance and output of the innovative yet simple technology.

The report, which focused on a SEADOG Pump installed off the Galveston, Texas coast in the Gulf of Mexico, analyzed the pump's performance from July 2007 to November 2007, tracking all weather conditions from calm days to the Category 1 force of Hurricane Humberto.

"Most of the wave energy conversion devices developed to date experience one of many potential problems due to factors such as initial cost, operating cost, long rate of return, installation, and operational and maintenance issues mostly due to the highly-complex nature of structural and anchoring demands for the units. However, when considering the SEADOG Pump, which was conceptualized and developed by INRI(TM), most of the above mentioned potential problems are not present which can be credited to the simple design of the SEADOG Pump. This further implies that this device has the potential to become a good alternative energy conversion device that can be easily fabricated, deployed and maintained. Compared to other wave energy conversion devices developed to date, the SEADOG Pump has a good potential to become a functionally marketable machine in the near future," said Frank Warnakulasuriya, Ph.D., assistant department head, Marine Engineering Technology, Texas A&M University at Galveston.

Dr. Warnakulasuriya also states in the report that the, "Overall effectiveness of the SEADOG Pump as a pump which converts ocean wave energy was around 22 percent and is a very promising value for a demonstration machine. The solid fact for this argument is that most of the highly-engineered and well-improved wave energy converters pretty much show similar values. The possibility of improving the SEADOG Pump to work at an overall effectiveness in the range of 45 to 55 percent is visible."

In the report, researchers praised the pump's design features for good mechanical efficiency that absorbs most of the potential energy and a significant amount of the kinetic energy content in the wave. This report further validates findings from a 21-day sea trial conducted in January of 2007 which compares the amount of energy SEADOG Pump can extract per square mile of deployment compared to other ocean, wind and solar renewable technologies. Because the pumps can be deployed in close proximity to each other, INRI(TM) estimates that they will produce five to 20 times more power per square mile than other technologies.

SEADOG Difference

Generally speaking, wave energy is captured by engineered devices or components attached to stationary or floating structures that are set in motion by waves or swells on the surface of the ocean. Most wave energy technologies grow in cost because the specified equipment is sensitive to corrosive seawater and has intermittency issues similar to wind and solar energy. SEADOG Pump on the other hand, separates itself from other technologies on the market by using a simple pump design with few moving parts and no electronics. Multiple pumps are deployed in fields depending on how much power or water is desired. In addition, the SEADOG Pump moves large volumes of water to shore where it can be stored until needed for energy production or desalination. This ability to store energy removes the intermittency issues associated with other renewable energy technologies.

"We're incredibly pleased with the report findings," said Mark A. Thomas, CEO, INRI(TM). "In the global race to find safe, efficient, renewable energy sources, the ocean waves have shown great promise, but have yet to be harnessed due to a number of challenging issues. The SEADOG Pump addresses these issues and has proven, as this study shows, that it's possible to extract this energy at a low cost, with the highest levels of efficiency and greater benefit to humankind."

Energy System Also Provides Desalination Remedy

The lack of sufficient fresh water is a growing concern in many regions of the world, and seawater desalination is increasingly essential; Texas alone has more than 100 desalination plants. To further prove the SEADOG Pump's commercial viability, INRI(TM) plans to launch an 18-pump field in the Gulf of Mexico between Galveston and Freeport, Texas. This commercial demonstration facility will desalinate seawater using the power generated by the 18 SEADOG Pumps. INRI(TM) has incorporated a wholly-owned subsidiary in the state of Texas that will bottle and distribute the freshly desalinated water. This first-of-its-kind facility will demonstrate the ability to use natural and renewable resources to meet the need for additional global desalination capacity, which is expected to double in size by 2027. Desalination typically requires significant electrical demand (40 to 50 percent of operating costs can be contributed to electric usage). Furthermore, desalination discharges highly-concentrated salt brine that poses disposal difficulties and problems to the environment. Using the SEADOG Pump in combination with new desalination methods, under development by INRI(TM), will make fresh water production less expensive, more accessible and without harmful environmental impacts or the large-scale use of power generated by fossil fuels.

How SEADOG Pump Works

Most wave-energy technologies involve off-shore electrical generation requiring the transmission of power to shore-based electrical grids. The SEADOG Pump captures energy from ocean swells or waves to pump seawater to land-based or sea-based holding areas, where the water can be returned to the ocean through turbines, thereby producing inexpensive, renewable electricity. Adding the ability to store the water and use it when needed will allow the SEADOG Pump to be a primary source of power that can match supply with demand. Other renewable energy technologies are considered to be secondary sources of power due to their intermittency issues. Preliminary estimates based on results from the sea trial suggest that a 1 square mile field of SEADOG Pumps could generate anywhere from 30 megawatts to more than 1,500 megawatts of electricity on average, depending on the wave regime. That electricity could power between 24,000 to more than 1.3 million U.S. households(1), while requiring no fossil fuel and emitting zero carbon dioxide or pollution into the atmosphere.

About Independent Natural Resources Inc.

Based in Eden Prairie, Minn., Independent Natural Resources Inc. (INRI(TM)) is an energy technology company that develops innovative products used to generate power from renewable sources in a clean, environmentally friendly manner. The company currently holds the rights to a patented product that can generate power from the excess pressure released by natural gas pipeline systems and the SEADOG(R) Pump system, a patented technology product that captures energy from ocean waves. To learn more, visit the company's Web site at www.inri.us.

EDITOR'S NOTE: To request a copy of the complete Texas A&M Report about the SEADOG Pump, send your e-mail request to seadog@inri.us.

A most unintended consequence

Understanding the nonlinear nature of the Universe is as important for policymakers as it is for physicists and biologists. In our increasingly complex world cause and effect is seldom straightforward. In Nature's grand scheme unintended (unconscious) consequences are often than not beneficial as when, for instance, the honey bee inadvertently pollinates plants as it searches for nectar.

The reverse is usually the case when it comes to the world of policymaking. Last week the Wall Street Journal reported on how the increase in cigarette taxes -- intended to serve as a deterrent to smoking -- has led to new opportunities for organized crime to profit by flooding the market with stolen and bootlegged cigarettes.

Similarly, the creation of cap-and-trade systems designed to limit CO2 emissions is having the effect of buoying the nation's beleaguered nuclear industry. That surely not what most environmentalists think of as a desired outcomes of this strategy. (GW)

Carbon Caps May Give Nuclear Power a Lift

By Rebecca Smith
Wall Street Journal
May 19, 2008

As Congress debates whether to limit carbon-dioxide emissions, one of the most vocal supporters of such legislation -- the nuclear-power industry -- is poised to reap a multibillion-dollar windfall if restrictions take effect.

Some nuclear operators are already forecasting how much their profits could increase under various versions of greenhouse-gas legislation that are under consideration. Among the nuclear operators that stand to profit most are Exelon Corp., FPL Group Inc., Constellation Energy Group, Entergy Corp., FirstEnergy Corp., NRG Energy Inc. and Public Service Enterprise Group Inc.

Carbon limits could usher in a period of "supernormal profits" for nuclear operators in markets where rates are deregulated and have more ability to rise, says Hugh Wynne, utilities analyst for Sanford C. Bernstein & Co. But he warns that profits, if perceived as excessive, run the risk of inciting a public backlash, perhaps including calls for a windfall-profits tax.

Congress is considering several measures that would impose a so-called cap-and-trade system, which would limit the amount of carbon dioxide companies are allowed to emit. Lawmakers this summer are expected to take up a bill sponsored by Sens. Joseph Lieberman (I., Conn.) and John Warner (R., Va.) that initially gives the power industry about half the allowances it needs and requires generators to purchase the remainder on an open market or cut emissions.

Nuclear operators stand to gain from greenhouse-gas legislation in two ways. For starters, their plants don't spew carbon dioxide, so they would not have to buy emissions allowances, giving them a competitive advantage over competitors that burn fossil fuels.

In addition, a cap-and-trade system would probably push up wholesale electricity prices in deregulated markets, as coal- and natural-gas-burning utilities jack up prices to recover the additional cost of allowance purchases. In deregulated markets, generators with the highest costs set the market price, so lower-cost nuclear operators could enjoy the higher prices charged by coal- and gas-burning utilities without the higher costs. In states that didn't deregulate their electricity markets, nuclear plants mostly are part of regulated utilities and furnish electricity to utility customers at prices tied to their underlying costs, eliminating the opportunity for such profit.

Chicago-based Exelon, the nation's biggest nuclear-plant operator by output, could reap as much as $2 billion a year in added earnings before interest, taxes, depreciation and amortization, says Mr. Wynne. His calculation assumes that the cost of carbon emissions would be $25 per million metric tons of emissions, an allowance price typical in Europe.

Exelon has not released its own profit estimates. Executives agree that carbon legislation would burnish earnings, but they say the benefit would be less than $2 billion. They say higher profits are fair because they recognize a multibillion-dollar investment Exelon has made in nuclear power and could fund new plants.

"We have invested in a low-carbon fleet and our rates reflect that," said Elizabeth "Betsy" Moler, executive vice president at Exelon. "Our rates are higher than rates for coal utilities."

New Orleans-based Entergy -- which is seeking regulatory approvals to spin off six nuclear plants into the nation's first stand-alone nuclear-power company, dubbed Enexus Energy Corp. -- says an allowance price of about $30 could net the new company $600 million a year of added profit.

FPL Group, Juno Beach, Fla., calculates its potential boost in earnings, before certain expenses, at $130 million to $727 million, depending on allowance prices and how much electricity is sold. The money would come from FPL's unregulated generation unit, which has interests in three nuclear plants and renewable-energy installations, such as wind farms, not its regulated Florida utility.

For Baltimore-based Constellation, higher profits from its nuclear plants would be partly offset by higher costs for its coal-fired units. Even so, it estimates gross profit would rise by more than $225 million a year, if carbon emissions cost $25 a ton.

Penalizing carbon emissions would improve the economics of nuclear-power development. A study by the Congressional Budget Office, released this month, concluded that nuclear plants could make electricity more cheaply than any other form of power generation if carbon allowances cost $45 apiece.

Opinions differ about how quickly a cap-and-trade system could cause wholesale electricity prices to rise or what allowances would cost. The intent of the Lieberman-Warner bill is to cut greenhouse-gas emissions to 65% below 1990 levels by 2050.

Nuclear-plant owners aren't the only ones that stand to benefit. Natural-gas-fired generators would benefit if they sell electricity where coal-fired plants set prices. That is because gas plants release only about half as much carbon dioxide as coal plants and would need fewer allowances, so their profit margin would widen.

Utilities are lobbying Congress to influence the allowance-allocation method adopted.

Exelon favors an approach under which government officials would sell or allocate a greater portion of emissions permits to utilities with retail customers, rather than to power generators that sell wholesale power to utilities. That would help customers of Exelon's two retail utilities, Commonwealth Edison in Chicago and PECO in Philadelphia, since the utility could sell the allowances to generators and use the proceeds to offset higher energy costs for their customers. It would allow prices to rise on the wholesale market, financially rewarding Exelon's nuclear unit.

Big coal-burning utilities oppose full auctioning of allowances, saying it could drive up their costs and produce an enormous spike in electricity prices, harming many consumers.

Economists generally favor selling allowances rather than giving them away. That is because selling them sends "price signals" to consumers, encouraging conservation and construction of cleaner forms of power generation, helping society achieve permanent greenhouse-gas reductions.

"It's not a bad thing to give more money to nuclear operators if you're trying to give them incentive to invest in new nuclear generation," says Greg Gordon, a utilities analyst for Citigroup Investment Research in New York.

Under the Lieberman-Warner bill, the Environmental Protection Agency would create 125 billion allowances, enough for all 38 years of the program, commencing in 2012. About 5.2 billion allowances would be available the first year. The number would drop by 96 million each year until only 1.56 billion remained in 2050, the final year of the program. The program is intended to make emissions progressively costlier to drive the market to make permanent reductions.

Exelon Chairman John Rowe says the power sector may have to spend as much as $400 billion by 2030 replacing polluting plants with cleaner ones. The sum is nearly equal to the market capitalization of U.S. utilities.