The New Gold Rush  

The Observer has an interesting piece on the rush for black gold going on above the arctic circle, now that global warming is liberating the region from its icy manacles.

Giant snowflakes tumble down outside the Kaikanten bar. Inside, Mustafa Mirreh from Somalia stares down his pool cue, trying to pot the black. His opponent, Italian engineer Pier Luigi Poletto, has turned to the slot machine. The Kilkenny beer has run out. There is only canned Guinness. This could be grounds for a fight, but French fishermen J-P and Max have been distracted by the rare sight of a woman crossing the floor.

These are the Klondikers of global warming: men from all over the world who have come to Hammerfest, gateway to the Barents Sea, to make their fortune from new resources - oil, gas, fish and diamonds - made accessible by the receding ice.

It is the dark season here - two months from November to January when the sun never rises above the snow-laced rocks around Hammerfest, ice-free thanks to the Gulf stream. In the horseshoe-shaped port, trawlers from all over the world wait for favourable weather to head back into the Barents Sea. Hammerfest, with its colourful wooden houses, feels cosy. But it is a nerve centre of the scramble for the Arctic's wealth that raises urgent questions.

The 14 million sq km Arctic Ocean is home to 25 per cent of the planet's unextracted oil and natural gas. With a population of four million, the region is much more stable than the Middle East. Global warming, in combination with the current high oil price, makes it ever more accessible. Yet the bordering countries - Russia, Canada, the US, Norway and Danish Greenland - have yet to agree on who owns what. Long-forgotten bays, waterways and islands are moving to the top of the international agenda.

Mirreh, 19, has spent eight months as a cleaner at Snow White, a giant liquefied natural gas (LNG) plant at Hammerfest, one of the world's biggest building sites. 'The wage is £20 an hour. I have saved £20,000. The problem is there is nothing to do and not enough women,' he said.

Another energy gold rush that is going on is the one for coal, which has seen a sharp rise in demand according to reports from Australia, the UK (maybe natural gas depletion will eventually be known as Scargill's Revenge) and the US.

What Parramatta Road is to car yards, the New England Highway is to coalmines. Head north-west through the upper Hunter Valley towns of Singleton and Muswellbrook and you will witness a vibrant mining mecca - Beltana and Bengalla, Camberwell and Cumnock, Mount Owen and Mount Arthur and many others mines yielding millions of tonnes of black gold a year.

The horizon is cut by the chimneys of the power stations that burn the coal to produce some of the world's cheapest electricity and the railway tracks groan under the weight of massive coal trains on their way to Newcastle - the world's busiest coal port.

Australia is in the midst of a mining boom driven by high commodity prices.

The latest report from the Australian Bureau of Agriculture and Resource Economics shows a record 241 minerals and energy projects on the drawing board valued at $29.4 billion - 15 of them coal-related projects in the Hunter. Last financial year, export earnings by the minerals and energy sector jumped by 29 per cent to a record $67.4 billion. Exploration spending increased by 20 per cent to more than $2 billion. The bureau predicts the value of minerals and energy exports will reach $87.2 billion in 2005-06, a rise of almost 28 per cent.

Government and industry are spending hundreds of millions of dollars upgrading railways and ports in the Hunter to cope with demand.

Chris Burgess, manager of Whitehaven Coal Mining, reckons the Kamilaroi Highway, which branches off from the New England Highway just north of the Hunter at Willow Tree and heads north-west over the Liverpool Plains through Gunnedah, will become the state's next great coal road.

The massive Gunnedah coal basin starts near Murrurundi on the Great Dividing Range and stretches for more than 200 kilometres, ending on the other side of Narrabri. "It's certainly an exciting area," Burgess says. "It's the new coal frontier."

As well as its Whitehaven open-cut mine between Gunnedah and Boggabri, the company is a partner in a new mine that opened earlier this year at Werris Creek. Whitehaven's East Boggabri mine will start operating about Christmas, while Belmont, also near Boggabri, should be going within two years. Each of the new mines will directly employ more than 50 people. The company is continuing extensive exploration of the Gunnedah basin and is looking at the possibility of opening another mine near Narrabri.

Whitehaven's coal is used in the heritage 3801 steam train and is exported because of its high quality.

Other companies have plans to establish mines in the the area and in August the State Government called for expressions of interest for exploration of the Caroona coal area near Werris Creek, where there are deposits of 500 million tonnes.

The chief executive of the NSW Minerals Council, Dr Nikki Williams, says the Gunnedah basin has 40 per cent of the state's estimated coal reserves and "in the next 10 years it is going to be very significant". If all the projects planned for the basin go ahead they will employ about 500 people directly and generate another 3000 jobs, half in the local community, she says.

The Mayor of Gunnedah, Gae Swain, says the area was hit hard when three coalmines closed in the 1990s and the mining boom is helping it get back on its feet.

But from the Lake Cowal goldmine development near West Wyalong to Caroona, there is also strong opposition to mining.

In the Caroona area, farmers are concerned that mining will irreparably damage the aquifer they rely on for irrigation. Andrew Pursehouse, an irrigation farmer, says the Government is opening the area for exploration with no hydrological study on the impact mining could have on the Namoi Valley aquifer that is his lifeblood.

The Government says it is "entirely appropriate" that any costly environmental studies be carried out by the company wanting to develop the area, but the farmers fear bias.

While prepared to consider mining on ridge tops if it can be proved there will be no aquifer damage, Pursehouse is opposed to any coalmining on the rich alluvial flats. "This is some of the best arable farming country in the world. Is the short-term gain from coal better than the long-term pain?"

Christine Phelps was among protesters outside the recent annual meeting of Centennial Coal in Sydney. Centennial's proposed Anvil Hill project is the biggest coalmine on the NSW horizon. The open-cut mine is expected to produce a massive 9 million tonnes of thermal coal, used mainly in power generation, a year after it opens in 2008. It will be built near the upper Hunter community of Wybong, about 20 kilometres from Muswellbrook.

It has plenty of supporters, but Phelps and fellow members of the Anvil Hill Project Watch Association say the woodlands around Wybong lie at the conjunction of three bioregions and are home to an "enormous number" of threatened animal and plant species. "It's a bit like a lost world," she says.

MIT Technology Review has an article ("Growing Biofuels") up on biofuel production in Germany by Choren, which seems to be the most advanced producer at the moment.

Biofuels produced from plant and animal feedstocks are growing by 10 percent per year. Nevertheless, if biofuels are ever to supply more than a small percentage of transportation fuels, the technology will need new, more efficient production methods. The most recent sign of such investment in new methods of production is Royal Dutch Shell's partnership with German biodiesel innovator Choren Industries.

Choren's technology addresses a key limitation with today's biofuels: most start as feedstocks such as corn syrup or vegetable oil, which are already in demand as foods. So competition for these feedstocks props up the price of conventional biofuels and, ultimately, even limits their production volumes. A study commissioned recently by the Canadian government, for example, concluded that diverting half of that country's hefty exports of canola to domestic biodiesel production would yield only enough biodiesel to meet 2.7 percent of current diesel demand in Canada.

Choren and other biofuel innovators such as Canadian ethanol developer Iogen (also partnered with Shell) work instead with biomass -- organic leftovers such as sawdust -- which are as abundant as they are cheap. The same Canadian study, for instance, revealed that the biodiesel produced from just 10 percent of the country's agricultural wastes would satisfy 16.7 percent of its appetite for diesel.

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First, Choren's process heats biomass to 500 C, causing the tars to turn into a gas. The coal-like char left behind is then ground into a powder and blown into a high-temperature chamber, along with the gaseous tar. The resulting chemical reactions and temperatures as high as 1600 C break down the tars and simultaneously convert the carbon char into syngas pure enough for Fischer-Tropsch chemistry.

Steve Brown, Shell's London-based commercial manager for biofuels, says the result is a domestically produced fuel that outperforms both petroleum and plant oil-based biodiesel. Brown says studies that account for each joule of energy consumed in growing or pumping feedstock and fuel production show motoring on gasification biodiesel produces 85-90 percent less climate-changing carbon dioxide than using fossil diesel, while conventional biodiesel offers only a 50 percent reduction.

Using Choren's biodiesel also generates less soot and smog because the fuel contains none of the sulfur found in conventional diesel and few aromatic hydrocarbons, such as benzene. Carmakers DaimlerChrylser and Volkswagen, which helped finance Choren's pilot plant, test-drove on its fuels and measured a 30-50 percent drop in exhaust soot and up to 90 percent less smog-forming pollutants, compared to the cleanest grades of conventional diesel.

Shell's cash and expertise is helping Choren build the world's first commercial biomass-to-biodiesel plant. By early 2007, the company expects to be consuming approximately 67,000 tons of biomass and pumping out 15,000 tons of biodiesel annually. If all goes well, Choren plans to build a series of larger plants each capable of pumping 200,000 tons of biodiesel per year.

Even at that scale, though, Choren's biodiesel will be pricey. Rudloff predicts that Choren will produce biodiesel for €0.70 per liter (about $3.10 per gallon). That is marginally more than the cost of conventional biodiesel and two to three times more than wholesale diesel in the United States.

However, Shell's Brown cautions that biodiesel's price per liter is not the whole story. He says Shell believes biofuels use will double over the next five years because it responds to government pressures to reduce carbon emissions and to strengthen energy security, and that these advantages will be ultimately be rewarded.

Brown says government incentives are already leveling the playing field. Many European countries, including Germany, Austria, Italy, and Spain, exempt biodiesel from their hefty fuel taxes. Diesel fuel currently sells for €1.05 per liter in Freiberg, of which €0.65 is tax. That leaves plenty of room to guarantee biodiesel producers such as Choren and Shell a profit.

It's not surprising, then, that in Germany -- Europe's leader in biodiesel production and consumption -- Shell is now a major distributor of conventional biodiesel.

WorldChanging makes some comments about this new process in "The Biofuel dilemma", noting that biofuels won't be sufficient to meet increasing energy needs or handle oil depletion - they are best thought of as a "bridge" technology as we reconfigure the way we create and use energy in the coming years.

There's much to like about biofuels. They can replace fossil fuel uses without requiring significant modification of machinery. Since they are generally derived from vegetation, they're close to carbon-neutral (as the next crop of plants will take up the carbon dioxide released from burning the previous biofuel crops). Biofuels like biodiesel produce significantly fewer particulates and carbon monoxide than regular diesel, and produce few of the sulfur emissions leading to acid rain. And while some regions hope to become biofuel powerhouses, the ability to make biofuels is not limited by geography, so cartels and "peak production" won't become problems.

But biofuels have some notable drawbacks, too. Making biofuels from plants already in demand for food, such as soy, corn and canola/rapeseed, raises the prices of the food versions and reduces available supplies. And increased demand for biofuels is triggering the expansion of agricultural land, with devastating results in some areas. According to this week's New Scientist, the clearing of land in south-east Asia for palm oil production is the leading cause of rain forest destruction in the region; Brazil faces a similar problem with soya plants, already the primary cause of deforestation prior to the biofuel boom.

The solution may be to stop looking at new crops for biofuels, and to start looking at waste biomass.

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Of course, this isn't the first attempt to make biofuels out of otherwise waste biomass. As I noted back in June, University of Wisconsin researchers figured out a better method of converting plant carbohydrates into fuel, using a biomimetic process. And just a few days ago, Jeremy posted about work done at the US National Renewable Energy Laboratory using "jungle rot" fungus as a natural method of breaking down cellulose for use in ethanol production.

We should be careful not to imagine that biofuels alone will replace our use of fossil fuels. We need a much bigger change -- a combination of high-efficiency systems, redesigned communities, and energy produced from clean, renewable sources. But changes of that scale take time. Biofuels, like hybrid cars and rooftop solar panels, are a kind of bridge technology, helping us get to where we need to go without cutting us off from our existing systems. It's crucial that our use of them doesn't make things worse in other ways.

TreeHugger points to a post on RealClimate about the collation and analysis of 650,000 years of greenhouse gas data and how it confirms a lot of the climate change modelling work that has been done.

Not long ago, we wrote about the new scientific research that shows that greenhouse gases are at their highest point in 650,000 years (with a strong progression in the past 50 year). Now, the scientists and climate experts at RealClimate have a post shining some light on the implications of the Antarctica findings, followed by a very interesting, and sometimes technical, discussion on the subject in the "comments" section. It will no doubt take a while to crunch all the new data and run new climate models, but this preliminary information is quite interesting and seems to confirm (once again) many theories.

This ice core extended the record of Antarctic climate back to maybe 800,000 years, and the first 650,000 years of ice have now been analysed for greenhouse gas concentrations saved in tiny bubbles. The records for CO2, CH4 and N2O both confirm the Vostok records that have been available for a few years now, and extend them over another 4 glacial-interglacial cycles. This is a landmark result and a strong testament to the almost heroic efforts in the field to bring back these samples from over 3km deep in the Antarctica ice. So what do these new data tell us, and where might they lead?"

First of all, the results demonstrate clearly that the relationship between climate and CO2 that had been deduced from the Vostok core appears remarkably robust. This is despite a significant change in the patterns of glacial-interglacial changes prior to 400,000 years ago. The 'EPICA challenge' was laid down a few months ago for people working on carbon cycle models to predict whether this would be the case, and mostly the predictions were right on the mark. (Who says climate predictions can't be verified?). It should also go almost without saying that lingering doubts about the reproducibility of the ice core gas records should now be completely dispelled. That a number of different labs, looking at ice from different locations, extracted with different methods all give very similar answers, is a powerful indication that what they are measuring is real. Where there are problems (for instance in N2O in very dusty ice), those problems are clearly found and that data discarded.

TreeHugger also notes that design visionary Bill McDonough has been named "Big Thinker of the Year" by Esquire.

The December 2005 "America's Best & Brightest" issue of Esquire (the one with Bill Clinton on the cover) declares William McDonough the 'Big Thinker of the Year - Designer of the Better World' for his achievements in "reinventing almost everything" for the better. They write: "There was a time when architect William McDonough was best known for his buildings. Then he decided to move on to bigger and better things. Like re-designing the whole world."

Talk about a nice compliment for the man, and one more step toward the mainstream recognition of green ideas. "His guiding tenet: Like nature, industrial design should be self-renewing; every product should not only be manufactured using nontoxic ingredients and green energy sources but also be capable of being broken down into its basic biological and technical elements so it can be reborn and reused at the end of its life span, whether in factories or compost heaps... It's a world in which no material is ever wasted."

Following on from my note about compressed air wind energy storage systems yesterday, Energy Bulletin has a more detailed article on the topic.

In a 2003 paper entitled “Large Scale Energy Storage Systems”, six students of engineering at Imperial College London noted that compressed air energy storage (CAES) systems typically relied on plants burning fossil fuels to compress the air stored in large underground caverns, which then used this air to produce energy at peak hours.

Also, besides burning fuel to complete the compression work in the first place, this air was mixed with natural gas and itself burned in a turbine to create the electricity.

The researchers also noted that another approach, called compressed air storage (CAS) would hold the compressed air in man-made vessels, but that “current technology is not advanced enough to manufacture these high-pressure tanks at a feasible cost. The scales proposed are also relatively small compared to CAES systems.”

A few years later, this is exactly the road now being taken by the industry, and by at least one technology developer.

Earlier in 2005, a Vancouver, B.C. company, Encore Clean Energy Inc., released news about a system it is working on that will allow wind energy producers to store energy in the form of compressed air in underground steel tanks or pipes, and release it through a special generator to create electricity when it is needed.

The company’s CEO, Dan Hunter, says his firm aims to be the first to build this kind of system for a wind producer and will use its unique technology to do it.

Encore will make use of its core technology, the Magnetic Piston Generator (MPG), as the turbine for its wind energy storage systems.

To close, I'll go back to The Observer, who have a good article (via Energy Bulletin) that points out a lot of the things that I like to blabber on about - we're running out of oil, oil dependency has all sorts of unpleasant side effects, global warming is caused by fossil fuel consumption and needs to be dealt with - and we need to come up with a solution to all of this.

The article notes that the nuclear industry is putting itself forward as the solution to these issues - and that this is just one possible solution, which needs to be compared against the cleaner, long term alternative of renewables based solutions.

The great game of the 21st century is being played out before our eyes, but few seem to notice.

Last week, Tony Blair hinted that he was prepared to go ahead with a new generation of nuclear reactors at an as yet unknown cost. In Iraq, an American-inspired deal to hand over development of oil reserves, the third largest in the world, to US and British companies is being rushed through by the oil minister and Deputy Prime Minister Ahmed Chalabi before next month's election.

In Russia, President Putin has ruthlessly constructed a monopoly of oil and gas production which controls some 90 per cent of the country's reserves. On the way, he imprisoned Mikhail Khodorkovsky, stripping his oil giant, Yukos, of its assets and, in a separate deal, paid off Khodorkovsky's fellow oligarch, Roman Abramovich, with US $13 billion for his stake in the oil producer Sibneft.

The link is the supply of energy to the high-consuming, wasteful Western democracies. With about 50 years of oil reserves left and maybe 85 years of gas, the struggle for control of the world's energy resources will increasingly dictate events. It will impact on each of us and there will be almost no area of domestic or foreign policy unaffected by this desperate scramble. Lest people think that the invasion of Iraq was undertaken to establish democracy and eliminate Saddam's weapons of mass destruction, rather than to secure Iraq's oil reserves, then last Monday's revelations about Chalabi's 30-year binding contracts should give them pause. If you imagine that Tony Blair's musing on the nuclear option popped out of the blue, just remember Putin's visit to Britain in October and the conversation the two leaders had on the sidelines of the Russia-EU summit. Believe me, they were talking about gas, not chatting about democratic reform in Russia.

Having consolidated Russia's state monopoly, Putin came to Europe with his power greatly enhanced. More than 25 per cent of Europe's natural gas is supplied by Russia: By 2020, that figure will be nudging 40 per cent. The former KGB officer has got his hand resting on Europe's throat and with rising gas prices, it cannot be anything but sensible for Blair to look at other options.

These events and the cold assessment of what lies ahead are way above an average individual's understanding or awareness. We are so used to having all the energy we require that we are barely conscious of our needs and do not trouble ourselves with realities of the world as it is and, more seriously, as it will be.

I am often reminded of Sydney Pollack's 1975 classic thriller, Three Days of the Condor, which starred Robert Redford as Joe Turner and Cliff Robertson as a CIA officer named Higgins. Turner uncovers the CIA's covert plan to invade the Middle East and secure the oil supply for the US. At the end of the film, the two meet outside the offices of the New York Times, where Turner has just delivered a dossier exposing the CIA's operation. Higgins asks the idealistic Turner what the US government should do when people start running out of fuel.

Turner replies: 'Ask them.'

'Not now; then!' Higgins snaps. 'Ask 'em when they're running out. Ask 'em when there's no heat in their homes and they're cold. Ask 'em when their engines stop. Ask 'em when people who have never known hunger start going hungry. You wanna know something? They won't want us to ask 'em. They'll just want us to get it for 'em!"

Never a truer word was spoken in an espionage thriller. When the film was released in the wake of Watergate, Joe Turner seemed unquestionably heroic, but 30 years on, it's possible to admire Higgins's scathing realism for the reason that at least he's not having it both ways.

Today, there's so much in the liberal stand against the war in Iraq that is simply politics for the naive, who tremble at the idea of the war while at the same time demanding as much energy as they can use. We were lied to about Saddam's WMD because realists like Dick Cheney, Alastair Campbell and Ahmed Chalabi knew that the Western public would not accept that oil was even part of the mission in Iraq. They know that in our hearts, we just want them to get it for us.