Total won't drill in the Arctic...because a spill may damage its image!

In an interview with the Financial Times, the French energy company Total is reported as saying

Energy companies should not drill for crude in Arctic waters, marking the first time an oil major has publicly spoken out against offshore oil exploration in the region. Christophe de Margerie, Total’s chief executive, told the Financial Times the risk of an oil spill in such an environmentally sensitive area was simply too high. “Oil on Greenland would be a disaster,” he said in an interview. “A leak would do too much damage to the image of the company”.

Call me a cynic, but I am not impressed by this apparent volte-face. Mr de Margerie does not seem to be concerned about the environmental damage per se, but about what it might do to the image of Total. Don't worry about the polar bears or the near pristine environment, just think about poor old Total...

Of course it's worse than than that. A Macondo-style spill might kill some wildlife, or pollute a few ice floes, but successful drilling could be even worse for the environment. If there really are billions of barrels of oil locked away under the Arctic Ocean or the Barents Sea, releasing it to the market would add many more millions of tonnes of carbon dioxide. And in turn that could lead to catastrophic climate change that could affect wildlife across the globe, not just around Total's rig.

Am I being too harsh on Total? Probably not, although the other big oil companies are equally culpable. True Shell has suspended drilling for this year due to environmental concerns and it did seem slightly less concerned about its image, but not before it has spent a reported US$4.5 billion: I suspect that they won't abandon the Arctic after making that investment in it.

So is there an alternative? Well, conservation - energy efficiency and investment in better public transport - has to be the starting point for reducing demand, with alternative fuels still worthy of consideration. There have been some interesting developments in algae-based biofuels recently, and I may blog on those in the near future. Or we could look instead at trying to capture solar energy to generate electricity, which can drive land vehicles directly, or through creating hydrogen from electrolysis of water. And here Total may get a small plaudit from me, as they have at least one public hydrogen refuelling station in Berlin, in partnership with Norway's Statoil.

CO2 emissions from cycling

The Environmental Transport Association (ETA) Trust (always an interesting website) reports that the European Cyclists Federation (ECF) have compared the CO2 produced by cycling with other modes of transport.

According to the report cycling is responsible for CO2 emissions of 21g per km. The calculations included emissions associated with production, maintenance and fuel. The figures were based on a heavy 19kg European-style town bike built using 14.6kg of aluminium, 3.7kg of steel and 1.6kg of rubber and the cost of producing the extra calories consumed by a cyclist rather than a motorist. The report calculated that an average car produced 271g and a bus 101g.

It concludes that Europe could reduce its overall emissions by one quarter if its population cycled as regularly as the Danes. In Denmark the average person cycles almost 600 miles each year – far more than the EU average of almost 120 miles per person per year and a total of 46 miles in Britain. ETA comment that this is largely due to better facilities in Denmark, as the climate and generally flat urban areas are similar in both.

Figures like this are always fun, but a little misleading. Although it’s right to consider the embodied emissions in the bike itself, an even more favourable comparison would be to look purely at the marginal emissions for those who already own a bike (and that’s most of us) – mainly tyre wear for a bike (plus a teeny bit of oil, brake blocks and wear & tear on other components).

When I cycle to work (2.5 miles each way, not very flat) I usually reward myself with a bun or a few biscuits, but the calorific value consumed (and net carbon emissions) are lower than the marginal energy that I exert compared to the wet days when I drive. In other words I’m eating into my fat resources on cycling days, and adding to them on other days. So there’s not too many extra CO2 emissions from that. I have attempted to use a more direct carbon conversion from, say, the footprint on some packets of crisps but it’s very hard to know exactly how much energy I use cycling (and I do know I use less energy now that am I fitter than when I first started regularly cycling to the office 6 years ago).

Finally, there’s one thing to avoid – that tempting shower on arrival at the office. If heated by electricity, the emissions from an extra shower are likely to undo all the good work cycling. A 3 minute shower using an average 8.5kW (based on electric ones advertised in the UK) and Defra grid average emissions would use 0.425kWh, equivalent to about 223g of CO2 (see the NEF's Carbon Calculator for an easy converter). Longer showers - baths - only add to the net emissions.

Sayonara, nuclear power?

Japan has - temporarily at least - closed its final nuclear power station, for testing and maintenance, in the continuing aftermath of last year's disaster at Fukushima. Some pundits are suggestion that this may simply be a Japanese way of ending nuclear power in the country for good, with pro-nuclear commentators claiming that they have ducked taking the tough decision to keep nuclear operational, instead creating the risk of summer power cuts as air-conditioners are switched in in Japan's humid weather.

However it may be that the right decision is to admit that relying heavily on nuclear power in an area noted for its seismic activity wasn't such a good idea after all. If fracking is leading to a global fall in gas prices (albeit unevenly distributed), then maybe LNG is a safer prospect (in both senses of the word safe). And a nation that is collectively as keen on high-tech solutions as Japan will likely find more cost effective ways of storing energy from renewables, if they know that they have not got the base load of nuclear on which to fall back. Moreover, Japan is also a world beater in finding ways of cutting energy demand without damaging industrial competitiveness, and is socially cohesive enough that a call for citizens to show restraint in cooling their homes or offices in summer in order to conserve energy is likely to succeed. So it may be a smart decision to go for the short sharp shock and end nuclear power in the country now.

Ironically, this may then make nuclear a better option in the UK, as if LNG is being swallowed up by Asia, the cost of delivering to Milford Haven shoots up. And that makes our CCGT generation look less attractive. Of course, we can always wait for the Japanese to solve the energy storage issue...

Have Eon/RWE killed nuclear power in the UK?

The two large German-owned UK energy suppliers Eon and RWE Npower have announced that they are abandoning their plans to build two new nuclear power stations through their Horizon joint venture. If they are unable to find a buyer for Horizon, it is unlikely that new nuclear power stations will be built at Wylfa, on Anglesey, or Hinkley Point in Gloucestershire. So is this an early warning sign for the end of the Government's plans to revitalise the UK nuclear power sector?

This view is to some extent supported by Npower's chief executive, who is quoted as saying that "the payback is too long compared with conventional and renewable sources of power". However it may be too early to write off nuclear power completely, as both partners in Horizon have German parent companies, and are being forced to close nuclear power stations in their home market and to invest heavily in new conventional sources. Investors in the other six sites earmarked by the UK Government for new nuclear plants may be able to take a longer investment view, even though it is likely to be 2022 before any new power stations come on stream.

Nuclear power is still an important part of the UK energy mix, providing around a quarter of all electricity. On the same day that Horizon announced its withdrawal from building new nuclear power stations, the Government announced that emissions of carbon dioxide, the main gas contributing to global climate change, had fallen to their lowest levels for 40 years in 2011. While there are several factors, including a milder winter and reduction in manufacturing, the largest single factor was that output of nuclear power rose 11% in the year.

So what does all this mean for UK consumers? Firstly, it shows that that the cost of renewable electricity is already competitive with (or lower than) new nuclear power, so creating demand for more green energy will encourage companies to invest in it. But it also shows that the UK still has a long way to go if it wants to limit both carbon dioxide emissions and the use of nuclear power. Although UK renewables output rose by nearly 10% in the year (mainly due to large - often offshore - wind), it is still only a tint fraction of the overall total.

And finally, it should remind us that reducing demand, usually by encouraging greater energy efficiency, is still most important, especially if we are to rely on a greater proportion of renewable energy sources rather than building more giant nuclear power plants. The time lag in building any plants also means that we may have to (again) extend the life of existing plant if we are to avoid the danger of damaging power cuts towards the end of this decade.

A Summer of Climate Disasters

OK, I haven't posted for a long while, but thought I would just share this, from 350.org:

Sometimes 'climate change' can seem like an abstraction. That is, until you see it in action, as we have this summer in Pakistan, in the mountains of China and in the overheated peat bogs of central Russia.

This is all part of the reality we face in our current world of 392 ppm CO2. Our main work is to try and slow down the climate crisis before it gets worse--by getting to work on climate solutions that can get us back to 350.

But working to create a safe climate future doesn't mean we don't need to try and help the victims of the climate crisis along the way. When our comrades and colleagues issue a call for assistance, we do everything we can to respond.

The recent floods in Pakistan have displaced 20 million people, and nearly a fifth of the country is literally underwater. The scale of the suffering is difficult to fathom.

And to us, more comfortable Westerners, not only could it happen here, but aren't we in some (not so little?) way responsible for it, though? So we also have a responsibility to help alleviate the suffering, through DEC, Oxfam, or even 350.org itself, as well as working to change the causes of climate change.

Peak Oil and Demand - Again

I have been thinking again about my recent post on high oil prices and the possibility of our having reached “peak oil” (ie. maximum supply levels). In the last post, I noted that there was some evidence that Saudi Arabia and other swing producers were unwilling – or unable – to increase their production so as to take global supplies of oil above around 85 million barrels per day. (Bear in mind, that's still around 35mn tonnes of CO₂ pushed out into the atmosphere every day, too.) Looking at a graph of global production, I now see that we have not yet reached a plateau, although there is still no guarantee that production can exceed this level unless countries such as Russia, Nigeria or Iraq get their act together.


Oil production (and roughly consumption) has been rising steadily at an average of around 1 million barrels per day since the early 1980s, from a level of just under 60mn bbl/day to current levels. Over the past few years the net growth in demand has been a little higher – perhaps 1.5mn bbl/day on average over the past 5 years. Almost all of this extra demand has been in industrialising or developing countries, with China responsible for almost a third of the total.

Now conventional wisdom might say that these poorer countries are likely to be the first to cut back in response to higher prices. However, much of their demand is driven by our insatiable demand for cheap consumer goods in the West, and while China (and other industrialising countries) can continue to pare costs through greater efficiency (not necessarily of oil, but in the overall manufacturing process) then they can swallow the costs. And with a strong renminbi against a weak dollar, coupled with relatively high domestic inflation, even Chinese consumers – with their rapidly escalating personal income – can cope with higher oil prices.

Outside China, many of the same factors apply; and some of the largest increases in demand for oil (and electricity) are coming from the Gulf, where they are cushioned against high prices by high oil prices! Even so, some Gulf Cooperation Council countries are looking seriously at stopping using oil or gas to generate electricity, preferring to sell it on the global market at high prices; instead they are looking at moving to cheaper imported coal or even building nuclear power plants.

This suggests that if we do indeed have a capped oil supply it is more than likely to be Western countries that reduce consumption, not the fast developing economies (who use much less oil per capita in any case). The Western countries are instead likely to invest more in capital initiatives to reduce oil consumption – energy efficiency and investment in alternative supplies. That’s not to say that industrialising countries are uninterested in these technologies – they too can see the need for energy efficiency as part of an efficient manufacturing process (and to a lesser extent in the domestic sectors, although transport efficiency often leaves much to be desired in the shift towards private cars), and are interested in renewables, especially if it comes with support through Kyoto credits.

So will high oil prices give a fillip to energy efficiency in the West? Many commentators seem to think so, especially when backed with strong policies against climate change, including emissions trading systems that include a cap and trade element. I personally am not so sure; high energy prices will certainly improve payback periods or NPV calculations, which may lead to more rational investment decisions in efficiency in the next few years. But most consumers – in the UK at least – seem to be more concerned about grumbling a little, possibly kicking out the politicians in power (whose fault it probably isn’t, except insofar as they should have been encouraging greater energy efficiency over many years), and driving a little less far until such time as they have got used to the new higher prices. This may pressurise Governments into reducing fuel taxes (French and British truck drivers can really frighten a Government) and let demand slip back up. Unless of course the creep back upwards of demand cannot be met by extra supplies, as a result of really having reached peak oil...

Peak Prices, Peak Oil – and Peak CO2 emissions?

I have resisted the temptation to comment over recent energy prices, especially that of oil. There’s a real danger of gloating over the high prices that may make renewable energy look a whole lot more attractive (in economic terms at least), even though it may simultaneously be driving as many as 2 million UK households back into fuel poverty. When oil prices first $100/barrel, my reaction was that it would be short-lived, especially as it seems that the first trades were done by a small player keener to be the record breaker than to set a sustainable price.

But now we have had oil prices of over $100 for several weeks, and Goldman Sachs are predicting $200 by the end of the year. Again my instinct is to say that if they are talking oil prices up, there is only one way that it can go (and that’s down). And yet the men in braces are willing to commit to $140 oil on futures (and as I write West Texas is around $135/barrel)¹. But we have got a real surge in oil prices: almost back to 1973 levels when inflation adjusted, and certainly well above the trend of the last decade. So what might this do for sustainable energy?

Firstly, it must provide added impetus to energy efficiency. The cheapest barrel of oil is always the one not used, and even though efficiency may have significant upfront costs, there is something very compelling about not having to buy oil when you are saving over $100 a barrel. (And we must remember that it’s not just oil: global gas prices tend to follow oil, as does tradable electricity in open markets such as the UK. Hence my concerns about fuel poverty.)

Secondly, it may also add to pure energy conservation – the avoidance of waste. US gasoline consumption fell by 0.4% in February 2008², the first recorded fall for several years, as hard-pressed consumers avoided unnecessary trips to the local supermarket, planning their shopping trips more carefully. Now a single month’s data may be unreliable, but the strong price signal being given when gasoline is $3.50-$4.00 a (US) gallon can’t be totally ignored, especially by those feeling the double whammy of an incipient recession. Even in New Jersey (where – somewhat perversely – US gas prices are lowest, despite a state-wide ban on self-service), the $2.99 gallon is fast becoming a fading memory. Of course, Western European consumption has been falling for years, partly due to a switch to more efficient diesel cars (not the Energy Don’s favourite, it must be said, as he doesn’t like particulates and the carbon emissions are hardly lower), but also – in countries such as the UK – due to lower average mileages. (This latter effect is reported by DfT, but not wholly understood, but may be linked to “anti-car” policies such as parking restrictions and the London congestion charge, or to broader economic issues such have been seen in the USA. Alternatively, it may be related to higher fuel prices, as the AA say³.) What's more, this does not just extend to road travel; American Airlines are reported to be cutting a significant proportion of their flights due to lower passenger numbers and higher fuel prices.

Thirdly, it will support the development of low-carbon renewables, most of which have high initial costs built low or zero running (fuel) costs. We are seeing this at a macro level in the planned floatation by EDP (Electricity of Portugal) of part of its renewable energy subsidiary (EDP Renováveis) – taking advantage of both high electricity prices and the need to raise additional capital to raise further investment. EDP is a specialist in wind power and at the current level of €65/MWh many turbines are profitable without any support mechanisms. But other renewables are also looking more attractive: my friend Steve claims that he can sell me PV with a payback of 7 years, and even allowing for his usual mathematical tricks, I suspect that his imported Chinese units may have a true payback of 15 years.

So how does this relate to peak oil? It seems that global production is stuck in a rut of around 85 million barrels a day (a back of the envelope calculation still suggests that this is equivalent to the realise of a further 35 million tonnes of CO₂ a day) and that non-OPEC countries cannot raise production and OPEC countries won’t (or maybe cannot either, although they are understandably a bit coy on this point). This may act a cap on production at any price, and hence as a peak CO₂ emission. (OK, I have forgotten coal, and there’s an awful lot of heavy oil in Canadian oil sands.) But if this is a peak figure it may help climate modellers establish the worst-case CO₂ concentration on a business as usual scenario. That’s the good news; the bas it that with global concentrations still rising by 1.7 to 2 ppm per annum, there is s dangerously high level of new emissions, with the risk of really catastrophic global warming by mid-century.

In the meantime, we should be slightly thankful for the high prices, as they should act as a spur to more sustainable energy systems. And that applies not just in Europe and America but in the rapidly developing countries; if China’s central planners foresee high oil prices, they may wish to encourage Chinese industry to be more energy efficient, and Chinese cities to allow for better public transport as well as more cars and highways.

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¹ BBC website (22/5/08) says "US light, sweet crude for July delivery reached $135.04, taking its gain for the year so far above 40%." See http://news.bbc.co.uk/1/hi/business/7414093.stm

² Financial Times, 20 May 2008

² Edmund King of the AA, speaking on Radio 4's Today, 22 May 2008