Probably Not the "Hottest Year"

The off-shore drilling moratorium, the proposed cap & trade taxes, (or shall we say the energy penalty for being American?), and the continued, unsubstantiated claims of man-made global warming...we Americans need to know the truth about what all this will cost each and every one of us every day.

With more than 14 million Americans unemployed today, can you imagine what $7 per gallon gas will do to the economy?

We're not lucky enough to travel on Air Force One (or Two for a luxury vacation in Spain), or chopper six miles on Marine One to speak about how the economy continues to crash...we just pay for those flights. That's in addition to filling our own gas tanks to get to work if we HAVE a job. You get the drift.

If you had any questions about the existence of global warming, and whether it's YOUR fault, take a look at THIS...

It’s a Desperate Time for the Global Warming Campaigners
James Hansen of NASA, an ardent believer in man-made warming, announced recently that “The 12-month running mean global temperature in the Goddard Space Institute analysis has reached a new record in 2010 . . . NASA, June 3, 2010. The main factor is our estimated temperature change for the Arctic region.” The GISS figures show that recent temperatures in the Arctic have been up to four degrees C warmer than the long-term mean.

Should we be alarmed? Probably not very.

My esteemed colleague Art Horn, at the Energy Tribune blog, has blown the whistle on Hansen and GISS. He points out that GISS has no thermometers in the Arctic! It has hardly any thermometers that are even near the Arctic Circle. GISS estimates its arctic temperatures from land-based thermometers that supposedly each represent the temperatures over 1200 square kilometers. That’s a pretty heroic assumption.

Meanwhile, the Danish Meteorological Institute is publishing sea-surface temperatures from the Arctic showing a cooling trend in the Arctic oceans during melt season since about 1993. Clearly, we have no accurate measure of the real temperatures and trends in the Arctic at this moment. Probably that’s not very important. The Russians say that the Arctic has its own 70-year climate cycle. The files of the New York Times, in fact, are filled with stories from the 1920s and 1930s, clearly showing that the Arctic was as warm then as now.

But this is the moment when proposed energy taxes would start to scuttle 85 percent of the energy which powers the modern world and its lifestyles. Global climate alarmists, Hansen among them, are playing a desperate and short-sighted game of “pass the energy taxes.”

President Obama says energy taxes are a high priority—perhaps high enough to ramp up his “health care reform” strategy. In a lame-duck Congressional session, after the November elections, Congress persons who had already lost their seats, would vote to saddle America with energy taxes that would triple our electric bills and, according to a Harvard study, drive gas prices to $7 per gallon.

The energy taxes are intended to make fossil fuels expensive! The idea is to deliberately drive fossil fuel prices high enough to force us to stop using them. Then we’re supposed to depend on costly and erratic solar and wind power. (Biomass can never produce much energy: biofuel crops would take too much land, and we can’t make ethanol out of cellulose sources.)

The man-made global warming believers have invested 20 years in their campaign to convince us of CO2-driven climate calamity. To their chagrin, the earth’s temperatures started to trend downward in 2007.

The sunspot index, which has a much stronger correlation with our thermometer record than CO2 (79% versus 22%) started predicting the cooling in 2000. The sun is still in a long cold-predicting minimum.

In 2008, NASA itself told us that Pacific had shifted into its cooling mode. The history of the Pacific Decadal Oscillation indicates a 30-year cooling phase, the opposite of the 1976–1998 warming trend.

They’re panicked about losing the whole ball game. They feel they must get an energy tax on the books before the earth has a chance to resume the recent-and-predicted cooling trend. They imagine that if the law gets on the books, a restart of the cooling wouldn’t push the next Congress to repeal the energy tax!

They might even be right, though it seems a stretch given the American people’s already-massive Obama-debt and the demonstrated history that tax cuts grow the economy and tax increases strangle it.

It’s a desperate time, not for the earth, but for the global warming campaigners.

DENNIS T. AVERY is an environmental economist, and a senior fellow for the Hudson Institute in Washington, DC. He was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Hundred Years, Readers may write him at PO Box 202, Churchville, VA 24421 or email to cgfi@hughes.net.

A Chill Hits Wind Power

Would you like to save money? Of course you would! If you live in a house or rent an apartment then you probably consume electricity and have to pay an electrical bill at the end of the month. In this spirit of saving money, CARE has decided to take a realistic look at the cost-effectiveness of a popular renewable energy source; wind power.

CARE is not against wind power or renewables in general, but our friend Dennis T. Avery, an environmental economist and senior fellow for the Hudson Institute, has brought some sobering facts to our attention that we would like to share with you. One such fact is that "General Electric has just announced a big wind project: 338 turbines, rated at 845 MW. GE claims it will power for 235,000 homes, and is applying for appropriate federal subsidies." This is troublesome because GE could only realistically provide power for 21,000 households while costing taxpayers money at a time when America is drowning in red ink. This trend isn't limited to America; it's affecting countries that are seen as leaders in wind power such as Denmark and Germany. The British are even being forced to become more dependent on Vladimir Putin's Russia because they overinvested in wind power and... well we better stop there so you have a reason to read the whole article!

A Chill Hits Wind Power
CHURCHVILLE, VA—As I write, a strong wind is blowing across the Alleghany Mountains onto my house. It’s bringing an "Arctic Clipper" that will drop my temperatures this weekend to a frigid and unusual 6 degrees F. Why can’t I get some good from this chill wind—with a wind turbine to harvest the "free" energy?

Out in Oregon, General Electric has just announced a big wind project: 338 turbines, rated at 845 MW. GE claims it will power for 235,000 homes, and is applying for the appropriate federal subsidies.

Will the wind turbines power 235,000 homes? Don’t bet on it. My friend Donald Hertzmark—an energy economist—warns the power deliveries from this wind project are likely to average only 25 percent of its rated capacity. That would serve only 58,000 homes, not 235,000.

But Hertzmark says even this is too high because the wind is highly variable. The Texas power grid’s experience is to rely on no more than 9 percent of the wind farm’s rated capacity. That would reduce GE’s real subsidy claim to about 21,000 households.

It gets worse.

Most of Oregon’s power comes from dams, and the lean period for hydropower is winter. That’s when heating demand peaks—but also when the dams have to restrict their water flow to protect fish, control flooding, and save up irrigation water for the next summer.
How likely is it that wind turbines can add to Oregon’s generating capacity in the midst of the winter electricity demand surge, and offset the hydroelectric generating restrictions? Not very, says Hertzmark.

This January, Britain’s wind turbines (6 percent of total generating capacity after many billions of dollars invested) supplied virtually no power on most days. The wind tends not to blow when and where it’s already very cold.

The stars of the British winter power demand were natural gas turbines, which are 34 percent of capacity and supplied 40 percent of the power during the winter wind lull. But Britain’s North Sea natural gas is running out; the only likely new source would be natural gas piped from Vladimir Putin’s Russia. Ouch.

"Wind cannot be relied upon to provide firm generation at full capacity coincident with peak demand." warns Hertzmark. "Wind might be capable of contributing to the peak demand requirements at some times. However, this will rarely happen—and when it does, it will be for brief periods. For significant periods of time, no households will be served by the wind farms."

Nor have either of the worlds "wind leaders"—Denmark and Germany—decommissioned any fossil fuel plants. The fossil generators are kept in "spinning reserve"—burning fossil fuels—to keep the lights on in the schools, factories, and hospitals when the wind dies.

Why build wind turbines at all? Well, wind and solar were the only energy sources the Greens would endorse, probably because they’re so expensive and erratic that there’s no danger of anybody getting hooked on cheap power again. Denmark was also selling wind turbines to other countries, so they had to be demonstrated at home. Now China is making cheaper turbines. Who will buy?

The cost of the "free wind"? Projections are about 17 cents per kwh—far higher than other energy sources. One of my neighbors has just invested $100,000 in a wind turbine. I think he’s wasted his money—and some of yours.

DENNIS T. AVERY is an environmental economist, and a senior fellow for the Hudson Institute in Washington, DC. He was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Hundred Years, Readers may write him at PO Box 202, Churchville, VA 24421 or email to cgfi@hughes.net

Barrel of Oil Cost to Increase by End of 2009

With uncertainty in the air about the future cost of a barrel of oil, CARE contacted our good friend Michael J. Economides, a nationally energy analyst, to provide us with some foresight. As a regular contributor to national TV and radio programs and PhD petroleum engineer that has performed technical and managerial work in more than 70 countries; Dr. Economides has both the credibility and expertise to predict how much a barrel of oil will cost in months ahead. With both international political calculations and oil-producing nation's economic policies guiding the future price for a barrel of oil, things can get confusing sometimes and it takes an expert to provide clarity. Below is Dr. Economies's case that the cost of a barrel of oil will soon increase from $80 per barrel to $100 per barrel.

$80 oil on the way to $100 by the end of 2009
Oil has been flirting with $80 per barrel and from the start of this year I have been predicting $100 oil before the end of the year. Almost all other analysts were predicting $40 to $60 oil. I am not quite ready to declare that I was exactly right and they were wrong but it looks like increasingly so.

There are obvious and real underlying reasons for the escalating oil prices which we will expound upon below but news headlines have ruled the price of oil since at least 2004. There was no real rational economic reason for almost $150 oil (which for people with short memories may seem to have happened last century – it happened a year ago, July) nor was there any reason for below $40 oil, which happened right after the late last year "crises" such as the economic crisis, the credit crunch crisis etc. In fact had it not been for those events delegating oil announcements to the seventeenth page of newspapers, a report by the International Energy Agency in Paris last November, which showed that world oil production from operating wells has been declining by 9.1 percent per year, the largest ever, would have shot the oil price to over $200. In fact, even now, there is a lingering possibility that a strike by Israel on Iran may close the Straits of Hormuz and will shoot the price overnight to the stratosphere.

The headlines started in 2004 and included the Abu Ghraib photographs, which increased enormously the fear factor in the Middle East, the re-Sovietization of Russia’s oil industry following the assault on Yukos by then President Vladimir Putin and the re-nationalization of Venezuela’s oil industry by the Hugo Chavez government. That perfect storm of headlines created one of the most telling and repeatable events from 2004 to last year’s economic collapse. With escalating energy and energy product prices, every quarter ExxonMobil, the largest multinational oil company, would announce the biggest profits of any company in the history of the world and "Big Oil" would be in the mouth of many politicians in many countries as the devil-incarnate himself. And yet that very same day, mystifying to many people, their stock would plunge because in smaller letters they would announce that their oil production and reserves were declining. Shut out of reserves in some of the most prolific oil provinces of the world, such as Russia and Venezuela, international Big Oil was, and is, in trouble.

Recent hints of economic recovery and the price of the dollar are offered now as the reason for the oil price escalation. They are real reasons but they hide others. There should be no mistake: oil producing countries love $100 oil and they have little incentive to shoot themselves in the foot by increasing production. Neither the price escalation of the previous four years nor the oncoming one have anything to do with "peak oil". This will eventually happen but not for decades. Physically but not necessarily politically, the world can produce 130 million barrels of oil per day, compared to the current 85 million, but with proper investment and management and will.

Many of the oil producing and exporting nations are run by regimes that want the oil revenue not for technological and even business re-investment and long-term resource management but to affect other internal political and geopolitical aims.

Let’s look first at Russia. From 1998 and the admittedly imperfect privatizations that involved Yukos and Sibneft when the country produced 6 million barrels per day to 2005 when production escalated to more than 9.5 million barrels per day (almost 10% increase per year) Russia was the brightest spot in the international oil business. There was talk of increasing production to 12 million barrels per day which some Yukos executives touted as very realistic. Since then Russia has vegetated to about the same production and the tax regime and government control of the oil business can mean only one thing: imminent declining production and no incentive to do any of the spectacular things that Yukos and Sibneft became legendary for.

Venezuela is an even bigger factor, considering its oil dominance in the Western hemisphere. Before Hugo Chavez took office in 1999 Venezuela was producing 3.4 million barrels per day and there were concrete plans to increase that production by now to 6 million. Instead, after the massive firing of practically all petroleum professionals and the re-nationalization and expulsion of international oil companies, Venezuela is producing 2.6 million barrels per day, the lowest volume since the first nationalization in the 1970’s.

And of course Iraq, with a demonstrable ability to escalate its oil production to 6 million barrels per day has been languishing at 2 million. It may have been quieted down a bit but the sectarian violence is barely beneath the surface and the risks are still great. In a recent auction for oil blocks the interest by international oil companies was abjectly disappointing.

Saudi Arabia is the only country with excess production capacity, estimated at 2.5 million barrels per day, and this is a role that the country found itself once more, in the 1980s, when at the prompting of then US President Reagan it overproduced. The ensuing oil price collapse contributed greatly to the demise of the Soviet Union which depended on oil for almost all its foreign revenues. Russia today depends pretty much at the same level on oil and gas and Saudi Arabia has the capability, if it chooses, to bring enormous hardship on that and other oil producing countries. There is no evidence they will do so, considering it will bring huge hardship on them as well.

Finally, the signs of imminent Chinese exploding oil demand are already here. After phenomenal economic growth in the first seven years of this decade, oil demand was growing by annual double digits. A short-lived slowdown lasted for a few months after the dire headlines of last year’s economic crisis. But Chinese economic growth has bounced back to more than 8 percent. So did oil demand which just came in with vengeance. Last January and February, Chinese oil imports stood at 3.1 million barrels per day, compared to an average of 3.87 million barrels per day in 2008. But from March to June oil imports averaged over 4 million barrels per day and in July they jumped to an unprecedented 4.6 million barrels per day, close to a 20% increase over the average of 2008. (Source: China Customs, August 2009.) This level of imports inch towards the two-thirds of total demand that the United States has been experiencing.

All signs point that oil is on its way to $100 very soon and it will not stop there.

Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy Tribune Houston, TX.

A Stronger Russia and a Weaker America = Changes in Energy's Balance of Power

With Russia flexing its energy muscle once again, CARE contacted the leading national expert on Russia and their contril of Europe's oil and gas: Michael Economides, author of From Soviet to Putin and Back and the Color of Oil (An executive summary of the Color of Oil is available on the CARE Website). Once again he did not disappoint us. He has provided us with powerful insight into the energy news behind the news. What is really behind Russia's current battle in the Ukraine? Is it all about the Ukraine? Read on.

Once you read this piece, we encourage you read Professor Economides' other postings here with CARE.

Russia’s Energy Imperialism
If Russia was supposed to shut off natural gas supply to Ukraine in a pricing dispute that is a repeat of what happened three-years ago, why is it that gas was also turned off in Bulgaria, Romania, Turkey, Austria, the Czech Republic and Greece? It does not really matter that gas is re-started soon. Europe’s dependence on a country that is willing and, especially, is able to plunge it in freezing cold and darkness, is the crux of the issue. Russia relishes the role and the Ukraine gas dispute and last year’s Georgia invasion is the modern day manifestation of Russian hegemony in what can be called energy imperialism.

Ukraine, as a transit country for Russian natural gas pipelines transporting gas through its territory to Europe has received gas at a much discounted price -- about $180 per 1,000 cubic meters ($4.90 per million Btu) -- but Russia wanted to increase the price to $250 per 1,000 cubic meters. Ukraine rejected that price and Russia threatened to charge the full rate it charges Europe -- $418 dollars per 1,000 cubic meters ($13.08 per million Btu). By comparison US prices are less than $6 per million Btu.

A giant looms to the east of Europe – occasionally in the shape of a country, other times in the shape of a company, the two often indistinguishable. Russia and Gazprom are poised to dominate the whole of Europe and its Asian neighbors.

OAO Gazprom’s influence has been underestimated and astonishingly not discussed enough. Gazprom has been the flagship of former president Vladimir Putin’s strategy, and the battering ram to break down foreign defenses. The Russian state owns 50.01 percent of the company, and almost all top company executives are Kremlin loyalists. President Dmitri Medvedev was Gazprom’s chairman. He replaced Putin, who became prime minister, thereby replacing Victor Zubkov, who became Gazprom’s chairman. You get the story.

It was in early 2006 that Gazprom cut off gas supplies to Ukraine after it balked at seeing its gas prices rise by a factor of four. Of course, then and today, the issue is not what is happening to Ukraine, which draws a tiny portion of the flowing gas. Cutting Ukraine’s gas flow means massive gas deficits in a freezing Europe.

The Ukrainian affair three years ago was the trumpet heralding the sovereign. Hints of a new Russian empire, this time riding on oil and gas, projected dominance over its neighbors, from East Asia to Europe. Putin was the new Tsar, and most Russians, starved for power after the Soviet collapse, loved him.

Gazprom clearly has a strategy, and it’s to lock up as much gas as possible. In July 2008, Gazprom offered to buy all of Libya’s exportable gas supplies. Russia’s brash move to further control the European energy markets is hard to disguise. Libya is its only credible and neighboring competitor.

Russia has been recently leading the pack to create a new gas cartel, mirroring OPEC for oil. This involves newly minted gas giant Qatar, a western ally but also Iran, perhaps the most energy militant nation, other than Russia.

The situation, repeating itself and likely to re-emerge over and over again is now transparent and reminiscent of the Khrushchev era: world beware – the energy-invigorated Russian bear is at bay. After the Soviet Union’s collapse and its resulting economic calamity, it was up to Putin, through Gazprom, to redefine Russia’s position in the world. Its abundant oil and gas resources are now being put to work to accomplish what nuclear weapons and 50 years of the Cold War were unable to.

Europeans act like helpless sitting ducks. With no energy alternatives to speak of, an assertive Russia breathing on them and flaccid domestic policies influenced greatly by Green parties, European countries may become the victims of the old dictum: be careful what you wish for you might just get it. And this is the lessening of a muscular America leading an assertive western alliance.

Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy Tribune Houston, TX

The Social Responsibility of Coal

Omigosh! Reading this is like reading all of the last year’s worth of op-eds, newsletters and blog posting from CARE. It is like the author Paul Driessen got inside CARE and said everything in one smart, and articulate posting. You must read this!

In fact, CARE and Paul are very close--as you will see if you go back and review the various writings available through CARE. But this piece is just brilliant! It captures the current worldwide energy picture in a clear and concise manner. Read it and pass it on to everyone you know who cares about energy.

Relying More on Coal Generates Benefits that are Too Often Ignored
They get little credit for their efforts, but most resource extraction, manufacturing and power generation companies strive to be “socially responsible”--by emphasizing energy efficiency, resource conservation, pollution control and worker safety in producing the raw materials, consumer products and electricity that improve, safeguard and enrich our lives.

It’s not easy, due to the nature of their business, public intolerance for any ecological impacts--and the fact that “corporate social responsibility” (CSR) is often defined and used by activist groups to promote ideological agendas. Above all, activists want to engineer a “wholesale transformation” of our energy and economic system, away from hydrocarbon fuels and into “eco-friendly” renewable resources; reduce our living standards to “sustainable” levels (their definition again); and give them power over the power that sustains our modern society.

This “hard green” version of CSR largely ignores socio-economic considerations, the many benefits of fossil fuel and nuclear power, the significant land and environmental impacts of wind, solar and ethanol--and the oppressive effects of soaring energy prices on jobs and poor families.
Speaker Nancy Pelosi closed down the House of Representatives on August 1, to avoid an energy vote that Democrats would have lost, and later displayed her acumen on the subject when she opined: “natural gas is a clean, cheap alternative to fossil fuels.” News flash: Natural gas is a fossil fuel.

An Energy Economics 101 course is clearly needed, so that members of both parties can legislate more astutely … understand why mining and burning coal is a socially responsible component of sound energy policy … and help stanch the unnecessary flow of $700 billion a year in foreign oil payments.

Energy is the master resource, the foundation for everything we eat, use and do. Sound policies ensure that energy is abundant, reliable and affordable. Restricting supplies in the face of rising global demand drives up prices and sends shockwaves through families, industries, communities and nations.

Average total energy costs for a typical American household doubled from $2,400 in 1997 to over $5,000 in 2007. Food prices also soared, while wages remained relatively stagnant. More low and middle income families have been forced to choose between heating, eating, driving, medicines and housing--with little left over for vacations, emergencies, retirement, college or charity.

Thankfully, most electricity bills rose more modestly, because half of all US electricity is generated using coal, and the price for that fossil fuel has risen far less than oil, gasoline and natural gas prices. However, in places like Florida--where coal is verboten, natural gas is promoted but drilling for it is banned, and wind and solar are all the rage--electricity prices continue to climb. Florida Power & Light must pay four times as much for photovoltaic power as for coal power, the Heartland Institute reports, and schools face budget crunches for buses and electricity.

America has centuries’ worth of coal. Our reliance on this resource has tripled since 1970--but sulfur dioxide and particulate emissions are down 40% and 90% below 1970 levels, respectively, notes air pollution expert Joel Schwartz. New technologies and regulations will reduce coal power plant emissions even further by 2020, but even current emissions (including mercury) pose no significant risks to human health, he emphasizes.

Radical environmentalists worry and wail about speculative health risks, to justify anti-coal campaigns. But their concerns often disappear when the discussion shifts to millions of Africans who die every year from real, preventable lung and intestinal diseases that result from an absence of electricity for cooking, heating, refrigeration, safe drinking water, hospitals and decent living standards. Wind and solar will save few of those lives--and yet green pressure groups stridently oppose fossil fuel, nuclear and hydroelectric power for Africa.

US electricity consumption will continue climbing, even with conservation, because our population and technology use are increasing steadily. Meanwhile, 59 coal-fired plants were cancelled in 2007 thanks to eco-activists, who are challenging 50 more.

The US now has virtually no excess capacity, and switching to natural gas as a primary power plant fuel (and fuel for backup generators to support wind farms) means electricity prices could increase “as much as tenfold,” says energy analyst Mark Mills, especially if we continue to ban drilling. “After that we may see forced conservation, or even blackouts in rotation among business and residential customers.”

Energy shortages and price hikes could cost millions of jobs in the automotive, airline, tourism, food and beverage, textiles, paper making, plastics, chemicals, metals and manufacturing industries--especially if Congress also enacts cap-and-trade rules. Most will never be replaced by “green collar” jobs that some claim will be created by intermittent, unreliable wind and solar energy.

Switching to plug-in hybrid cars will only exacerbate the problem. They will need a well-stocked power grid to plug into, and current energy policies virtually ensure that it won’t be there.

In addition to balance of trade issues, over-reliance on imports has major national security implications, as Russia’s invasion of Georgia forcefully reminded Europe. Germany imports 40% of its natural gas from Russia, and six Eastern European countries are entirely dependent on Mr. Putin’s energy. Shackled further by their opposition to nuclear power, fear of climate change Armageddon and fixation on the Kyoto Protocols, the EU has barely protested actions by a rogue bear that has already cut off natural gas supplies to Latvia, Lithuania and the Czech Republic, to impose its will.

That should cause Congress to reflect more soberly on US dependence on oil from Venezuela, Nigeria, Iran and Russia. Coal could be converted into synthetic liquid and gas fuels, to replace the oil and gas we refuse to develop, but legal and regulatory hurdles restrict that option, too.

A key justification for these anti-energy policies is cataclysmic global warming. However, 32,000 scientists have signed the Oregon Petition, saying they see “no convincing evidence” that humans are causing climate change, or that it will be catastrophic. Climate models continue to predict chaos but, as one scientist wryly notes, faith in their predictions is as misplaced as reliance on emails from Nigeria, advising recipients that they have won the Lotto.

Global temperatures have not increased since 1998, despite steadily increasing carbon dioxide levels, and solar scientists like Pal Brekke say the sun’s formerly high activity level is leveling off or abating, which could bring falling global temperatures.

China and India are planning or building 700 coal-fired power plants; European countries plan to build 50 more in five years, to reduce dependence on Russian gas; and other nations are also increasing fossil fuel use for transportation and power generation.

Thus, no matter how much the USA reduces its energy use, driving, heating, air-conditioning and living standards--no matter how much it punishes poor families or commits economic suicide--its actions would not reduce global CO2 levels, or affect Earth’s climate.

We need to conserve, and continue improving renewable energy technologies that currently provide just 0.5% of our energy. But at this time renewables are simply too inefficient, expensive and unreliable to permit a shutdown of hydrocarbon-based systems.

Putting “social responsibility” and “environmental justice” in the hands of eco-activists and liberal Democrats is like giving a machine gun to an idiot child. We need definitions that recognize the full spectrum of societal needs, and energy policies that acknowledge life in the real world.

Paul Driessen is author of Eco-Imperialism: Green power ∙ Black death (http://www.eco-imperialism.com/) and senior policy advisor for the Congress of Racial Equality and Center for the Defense of Free Enterprise, whose new book (Freezing in the Dark) reveals how environmental pressure groups raise money and promote policies that restrict energy development and hurt poor families.

Russia, Georgia and the Implications to American Energy

When the entire world was watching the Olympics, Russia thought they could slip, unnoticed, into Georgia—and they almost did. If they actually knew it happened, it seems that the average person on the street has little comprehension of what that skirmish means. Now, while all eyes are focused on Denver and the Democratic Convention the Georgian/Russia chaos is all but forgotten. Yet, there are deep implications to America’s energy picture—one of the top topics on the minds of most Americans and in each campaign and convention.

We guess you are reading this because you care more about energy—or are more aware of the global ramifications—than the people you’ll run into at the gas station. For you, this interesting posting captures many of the topics we at CARE are most interested in: oil and gas, off-shore drilling and ANWR, nuclear power, biofuel, tar sands, global warming, the Gang Green’s opposition to alternative power, and world energy supplies.

Read on, you’ll be glad you did.

Russian Tanks Signal a “New Energy War”
“Russia’s adventure in Georgia has been described as a ‘warlet,’ a contained firing spree that wound up and down within a week. But to Europe’s energy markets, it was the equivalent of wide-scale carpet bombing,” writes Eric Reguly in Britain’s Global and Mail on August 15th. “Before the Georgian crisis, Europe seemed to be doing all the right things, with little Georgia at the centre of a sensible energy diversification plan. A column of Russian tanks wrecked that strategy in an instant . . . a new energy war is about to begin.”

Since the Russian tank attacks, Europe’s energy position is far worse than America’s. Europe’s North Sea oil and gas are waning, and its marginal coal mines have long been shut down. Europe’s been importing lots of gas, 40 percent of it from Russia. Georgia was threatening to allow another gas pipeline that Russia wouldn’t control—so Vlad the Assailer demonstrated that he can control Caspian-region gas exports whenever he chooses to send tanks.

Europe now urgently wants a long-term partnership with the big undeveloped oil and gas deposits in Libya, Tunisia and the rest of North Africa. Alarmingly, last month Russia’s Gazprom offered to buy all of Libya’s gas exports.

The U.S. is now trapped, however, in the crossfire between Russian military/economic aggression, Moslem extremism and European energy starvation. We will soon be enormously grateful for our opportunity to drill off our own coasts and in our own ANWR, to import our Alaskan gas through a new pipeline, to tap Appalachia’s big, tough gas deposits—and to add more of our own nuclear power. France, Finland and Eastern Europe are already building more nuclear plants, and Germany’s Angela Merkel may block the German nuclear phase-out.

Solar and wind power will be built too, but so far they’ve been expensive, erratic and severely disappointing. Biofuels actually aggravate both global food shortages and greenhouse gas emissions.

Canada’s Athabasca Tar Sands, one of the world’s largest petroleum reservoirs, got a visit last week from U.S. billionaires Bill Gates and Warren Buffett. The Athabasca is also in a strategically secure location for the U.S.—400 miles north of Montana. Eco-activists have lately campaigned against the tar sands, calling it “the worst project on earth” because of the CO2 released as the heavy oil is produced. However, CO2 has had a weak correlation with earth’s temperature changes—only 22 percent since 1860.

Fortunately, the earth’s temperatures are now continuing to decline; more and more clearly separating CO2 emissions from climate change. The first five months of 2008 have been the coolest in at least five years, continuing the cooler trend of the past 18 months. The cooling was predicted by a 2000 downturn in the sunspot index, which has a strong, ten-year-lagged correlation with our temperature history.

The Greens have recommended non-polluting tidal power, but are opposing one of the world’s outstanding tidal-power opportunities on Britain’s Severn River. The Severn has a 40-foot daily tide range. A ten-mile dam across the Bristol Channel would emit no CO2 or radiation, while producing as much electricity as three nuclear power stations for the next 200 years. The eco-activists are unhappy about the loss of local mud flats which would force shore birds to relocate.

It now looks as though the West must choose between relocating some shore birds and seeing lots more Russian tanks monopolize the world’s energy supplies.


DENNIS T. AVERY is a senior fellow for the Hudson Institute in Washington, DC and is the Director for the Center for Global Food Issues. (www.cgfi.org) He was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Hundred Years, Readers may write him at PO Box 202, Churchville, VA 2442 or email to cgfi@hughes.net

The Russia, Georgia and Energy Connection

Why is there suddenly activity in Georgia that looks a lot like war? Most of us know nothing about Georgia and think that it is a state in the US. Why is Russia flexing its muscle? What are we not hearing in the news?

These are but a few of the questions we were asking when we heard the reports of fighting between Russia and Georgia. We turned to someone who knows a great deal about the inner workings of that part of the world, Michael Economides—one of our favorite contributors and author of the new book From Soviet to Putin and Back, subtitled: The Dominance of Energy in Today’s Russia.

We asked Economides for his insights on the situation and this is what he sent us. We believe it will shed new insights on the situation for you.

Scratch Russia-Georgia War and You Find Oil and Gas Pipelines
The war between Russia and Georgia has some nationalist elements, some old grudges but mostly it rubs the wrong way Russia’s newly found power: energy imperialism.

Georgia has refused to play along like other former Soviet states and, if anything, its independent attitude has been a giant irritant for Russia ever since Vladimir Putin used oil and gas to project hegemony over the region and, by extension, into all Europe. At the same time, Georgia, a tiny, 4 million people country has been trying to ward off the giant on its north by seeking membership in NATO or the European Union. In the post-Cold War era, the United States and Russia-dependent Europe are reduced to just pleading for calm.

A look at the map makes the issue at hand quite transparent.

Oil and gas can come from Russia into Europe by tanker through the Black Sea from its massive terminal in Novorossiysk or by pipelines through Belarus, Ukraine and even plans of under water construction in the Baltic. All of these give Russia a huge leverage, almost monopoly, over both the transit and destination countries. More than 25 European countries depend now for more than 75% of their oil and gas from Russia.

But Georgia was eager to act as a spoiler and European countries were even more eager to comply while trying to avoid incurring the wrath of the hand that feeds them.

First, it was the Baku-Tbilisi-Ceyhan (Turkey) oil pipeline that started in 2002 with a much weaker then Russia. The 1776 km line was to connect the Caspian and south Europe in what was to be an “Energy Corridor” for European oil and gas supplies. The pipeline was designed to carry 1 million barrels per day from Azerbaijan’s Caspian oil fields to the export terminal Ceyhan via Tbilisi, with Georgia acting as a very important transit country. This did not sit well with Russia, cutting it out from oil exports to that vital part of Europe. The pipeline, funded by western oil companies and banks at the tune of $3.2 billion, was commissioned in 2006.

What gave and still gives Russia fits is what else can happen that could affect its control. For example, how about building under-water pipelines across the Caspian linking Kazakhstan or Turkmenistan?

What really caused the ire of Russia was the talk of a gas pipeline, similar to the oil pipeline, again linking Azerbaijan and Turkey and points beyond (Baku-Tbilisi-Erzerum) through Georgia. This would give Georgia energy independence and create an alternative route to the holy grail of Russian geopolitics: Gazprom’s monopoly.

Back in 2006, Gazprom, flexing its muscles, was manipulating the former Soviet states, by setting new records in gas export prices practically every month. It was clear then that the geopolitical climate in Eastern Europe would be severely damaged. In fact, double and triple increases in gas prices were imposed on Russia’s neighbors: Ukraine, then Belarus, then Armenia after all of them were threatened with gas supply interruptions, until new contracts with huge price increases were signed. They had no other choice but to surrender on Gazprom’s terms and conditions.

Georgia resisted the Russian might and that conflict predictably ended up with a war.

Things did not deteriorate all of a sudden. The conflict between Russia and Georgia started with the election in 2004 of the western-oriented president, Mikhail Saakashvili, who refused to accommodate Russia’s ambition of control over his country.

Then, Georgians discovered and expelled alleged Russian spies. In return, Russia’s president, Vladimir Putin, stirred a crass witch hunt against ordinary Georgians in Russia while Gazprom threatened to cut off gas supplies to Georgia unless it agreed to pay new gas prices from $110 to $230 per thousand cubic meters.

The blackmail from Gazprom was blatant: “The Georgian side could still maintain lower gas prices. They could compensate for gas price by trading off some assets… For example, Armenia had already paid Gazprom with its transportation network.” What this referred to was that Armenia saw the writing on the wall and kept the same price for gas supplies as before – $110 per thousand cubic meters. But they relinquished control of their gas network in the bargain.

But it was the talk of the construction of the gas pipelines via Georgia that was bound to create an alternative energy supply route to Russian oil and gas, thus threatening Russia’s energy stranglehold on the vast south European markets. This was not something that Russia could tolerate and the war, no matter what the daily pretexts are, is blatant and punishingly brutal.

Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy Tribune Houston, TX