Tom Philpott at Grist notes that of the 3 major inputs for industrial agriculture, 2 are controlled by cartels and one is produced using natural gas. Get used to high prices - Industrial ag-onistes (subtitled "The WSJ on fertilizer markets so manipulated, they might make a Saudi prince blush").

For all the misery it has caused, the global food-price crisis has at least forced people to think more seriously about food production.

I can think of few things more taken for granted in modern post-industrial society than fertilizer. Few people know people know what fertilizes the fields that produce the food they eat -- fewer, I'd bet, than know the source of their drinking water or electricity. To modern consumers, all of these things appear as if by magic.

But with food prices hovering at elevated levels and hunger protests simmering in the global south, stuff like fertilizer is suddenly front-page news. The Wall Street Journal uncorked a doozy the other day. Did you know that dominant fertilizer giants like Mosaic and Potash Corp. of Saskatchewan -- the ones I'm always writing about -- are organized into OPEC-style cartels and legally allowed to collude on price? I didn't.

Prices have rocketed for all the major inputs of industrial farming, the Journal reports, but fertilizer takes the cake.

In April, farmers paid 65 percent more for fertilizer than they did a year earlier, according to the U.S. Department of Agriculture. That compares with price increases of 43 percent for fuel, 30 percent for seeds and 3.8 percent for chemicals such as weedkillers and insecticides over the same period ...

As a result, farmers and fertilizer-importing nations are furious and beginning to look at the structure of fertilizer markets. What they've found is jaw-dropping.

In several countries, obscure laws shield makers of potash and phosphate from certain antitrust rules. In the U.S., for example, phosphate makers are among a handful of industries empowered by the 1918 Webb-Pomerene Act to talk with competitors about pricing and other issues.

It gets weirder.

In the U.S., Potash Corp. and Mosaic are the sole surviving members of a phosphate export cartel called the Phosphate Chemicals Association. Under a 90-year-old law designed to promote American exports, the companies are allowed to legally market and sell their product overseas as a single entity at a price set in consultation with one another. Similarly, Canada has Canpotex, and Russia has Belarus Potash Co., another export cartel.

So a Canadian and a Russian cartel dominate the global potash market, and a U.S. cartel controls phosphorous. These groups have a literally dominant grip on the world's serving spoon -- at least the vast swath of the earth that relies on industrial-scale agriculture for sustenance. And they're using their market power to jack up prices and reap enormous profits.

Helped by soaring potash prices, Potash Corp. of Saskatchewan Inc., one of the companies that make up Canpotex along with Minnesota-based Mosaic Co. and a smaller Canadian producer called Agrium Inc., posted first-quarter net income of $566 million, or $1.74 a diluted share, nearly triple the year-earlier figure. The company's stock has risen nearly eightfold to around $200 from about $25 three years ago. Mosaic's latest quarterly earnings came in at $520.8 million, up more than 10-fold from a year earlier.

No wonder a Wall Street analyst recently called Potash Corp. of Saskatchewan the "Saudi Arabia of Fertilizer." Actually, Saudi princes might look with envy on a Potash exec. According to the analyst:

Potash Corp. owns 22 percent of the world's potash production capacity, while Saudi Arabia accounts for roughly 13 percent of global oil production. ... The Middle East has more than 60 percent of the world's proven oil reserves, while Canada sits on about 57 percent of the world's potash reserve base.

It's jarring to reread those lines, now that I know that Canada's few potash producers are literally organized into a cartel.

Of course, the producers themselves -- sounding much like their Saudi counterparts -- say there's nothing to worry about: Just keep handing over the big bucks, and we'll supply the fertilizer. Here's the Journal again:

Potash Corp. said it can raise production to 15.7 million tons by 2015 from its current capacity of 10.2 million tons by improving the operation of its existing mines. Opening a new potash mine can cost more than $2.5 billion and take about seven years, the company said. "Developing new production takes a long time, a lot of money, and an expertise that few possess," Potash Corp.'s Mr. Doyle recently told investors.

As for phosphorous, an exec at Mosaic -- the dominant phosphorous producer, two-thirds owned by agribusiness giant Cargill -- says everyone should calm down:

Mosaic ... said it plans to "de-bottleneck" some of its Florida phosphate mines to boost supply.

Awesome. He forgot to add, though, that phosphate mining is environmentally ruinous. Among its depredations, it leaves behind radioactive waste that no one knows what to do with.

So industrial agricultures relies on three macronutrients: N, P, and K. Two are controlled by cartels, the third (nitrogen) is derived from natural gas. I ask yet again: Might there be other, less-dodgy ways to "feed the world"?

The New York Times reports that surging fertiliser prices have led to a revival of interest in guano - so much so that Peru Is Guarding Its Guano. Hopefully the spectre of new guano wars is not going to rear its head again. See here for a slideshow.

The worldwide boom in commodities has come to this: Even guano, the bird dung that was the focus of an imperialist scramble on the high seas in the 19th century, is in strong demand once again.

Surging prices for synthetic fertilizers and organic foods are shifting attention to guano, an organic fertilizer once found in abundance on this island and more than 20 others off the coast of Peru, where an exceptionally dry climate preserves the droppings of seabirds like the guanay cormorant and the Peruvian booby.

On the same islands where thousands of convicts, army deserters and Chinese indentured servants died collecting guano a century and a half ago, teams of Quechua-speaking laborers from the highlands now scrape the dung off the hard soil and place it on barges destined for the mainland.

“We are recovering some of the last guano remaining in Peru,” said Victor Ropón, 66, a supervisor from Ancash Province whose leathery skin reflects his years working on the guano islands since he was 17.

“There might be 10 years of supplies left, or perhaps 20, and then it will be completely exhausted,” said Mr. Ropón, referring to fears that the seabird population could be poised to fall sharply in the years ahead. It is a minor miracle that any guano at all is available here today, reflecting a century-old effort hailed by biologists as a rare example of sustainable exploitation of a resource once so coveted that the United States authorized its citizens to take possession of islands or keys where guano was found.

As a debate rages over whether global oil output has peaked, a parable may exist in the story of guano, with its seafaring treachery, the development of synthetic alternatives in Europe and a desperate effort here to prevent the deposits from being depleted.

“Before there was oil, there was guano, so of course we fought wars over it,” said Pablo Arriola, director of Proabonos, the state company that controls guano production, referring to conflicts like the Chincha Islands War, in which Peru prevented Spain from reasserting control over the guano islands. “Guano is a highly desirous enterprise.” ...

Peru’s guano trade quixotically soldiers on after almost being wiped out by overexploitation. The dung will probably never be the focus of a boom as intense as the one in the 19th century, when deposits were 150 feet high, with export proceeds accounting for most of the national budget.

The guano on most islands, including Isla de Asia, south of the capital, Lima, now reaches less than a foot or so. But the guano that remains here is coveted when viewed in the context of the frenzy in Peru and abroad around synthetic fertilizers like urea, which has doubled in price to more than $600 a ton in the last year.

Yahoo Finance's Tech Ticker reports that Reports of Oil Boom's Death Look Premature.

Rob at Entropy Production thinks the oil market is getting ahead of itself ( Things That Make You Go Hmmm...) - according to his MORON model the price should be closer to $95 a barrel.

Reuters reports that the US and UK have launched probes into oil price manipulation.

WOWOWOW wonders if the surge of investment funds into commodities is the prime cause for rising oil prices - Institutional Investors: The 'Dark Force' Driving Oil Prices Sky High?.

The Economist thinks that neither speculators nor peak oil theorists are to blame for high oil prices, and that market forces are resulting in increased supply and decreased demand. They claim that oil production will grow by 3 million barrels per day over this year and next. We'll see if that is any more accurate than their prediction of oil sinking to $5 a barrel back in 1999.

The Economist also reports that oil production in the North Sea is falling faster than predicted, though Aberdeen remains prosperous courtesy of sky high oil prices.

One more from the Economist, this one on a carbon neutral clothing factory in Sri Lanka.

Renewable Energy World has a post on the Severn Tidal Power Study Moving Ahead, with the UK energy minister noting it could meet 5% of UK demand.

The Daily Telegraph reports that Scotland has its first tidal power generator up and running - Tidal power fuels Britain's National Grid .

Scoop reports that the New Zealand Government is funding a tidal power project in Kaipara harbour.

The ABC reports that Air New Zealand is planning a trial flight using a biofuel derived from jatropha later this year - Air New Zealand to trial new bio-fuel.

The New York Times has a report on a cooling tower collapse at a nuclear power plant in Vermont. Apparently some unusual cattle have been observed in the local area.

The NYT also notes that cost continues to make clean coal a mirage - Mounting Costs Slow the Push for Clean Coal.

One more from the NYT - an article on armed bandits stealing used grease from restaurants (and Burger Kings) - As Oil Prices Soar, Restaurants Learn to Lock Up Old Grease.

Grist has a post on Slave ethanol, noting an mnesty International report on forced labour in Brazil's sugarcane fields.

Inhabitat has a report on Apple's new patent to build thin film solar cells into computer screens.



Inhabitat's funky green building of the week is this ‘Cybertecture Egg’ for Mumbai, due for completion in 2010.



Jamais at Open The Future has a post on the politics of geoengineering - Who gets to determine the "right" climate for the Earth?.

Alex at WorldChanging has a post on The Real Green Heretics, rebutting some of the silliness in Wired's issue on "inconvenient truths".

The Daily Telegraph has a series of articles on biomimicry - Natural leaders.

The Asia Times claims that Bush is planning an air strike on Iran by August.

The Washington Post reports that ex-Bush spokesman Scott McClellan has outed the "sophisticated propaganda campaign" used to mislead the US into the Iraq war.

Cryptogon has an entertaining rant about a British plan to introduce carbon rationing - Every Adult in Britain Should be Forced to Carry ‘Carbon Ration Cards’ (according to The Daily Mail anyway). While I think if you objectively consider trading carbon taxes for income tax cuts you'll decide its a good thing - but carbon rationing is over-the-top from my point of view.

Cryptogon also reports that Children in Katrina Trailers Provided By FEMA May Face Lifelong Ailments.

Mother Jones has a report on smart grids - Breaking the Efficiency Gridlock.

The Little Beaver is what's known in the utility biz as a "peaking unit." Peaking units are the benchwarmers of the electric industry, the last-resort generators that utilities turn to when electricity use surges, like a July heat wave when everyone's blasting the AC. Under federal rules, utilities must have enough reserve power plants to meet the most extreme spikes in demand and prevent massive blackouts. As our appetite for electricity grows, so has the number of peaking plants, which now constitute at least 14 percent of our 2,600 power plants. And because peak demand is growing even faster than overall energy use, that number will continue to grow. Scott Simms, spokesman for the Bonneville Power Administration, another Pacific Northwest utility, likens the peaker boom to "building an extra freeway lane to accommodate one day of Super Bowl traffic."

Steve Hauser believes there's a better way. As the president of GridWise Alliance, a consortium of businesses and utilities seeking to modernize the electrical grid, he's lobbying for a "Smart Grid" that would accommodate spikes in electrical demand not by generating more power but by spreading out the load, microadjusting how much power consumers use and when. "The system we have now is pretty black-and-white," he says. "Either a power plant is on, or it's off." In a Smart Grid, digitally equipped appliances, thermostats, and rooftop solar panels would relay their constantly shifting energy demands to a computerized hub, which would transmit usage data and rate information back to household "smart meters," allowing consumers—and their appliances—to adjust accordingly by, say, turning off a clothes dryer's heating element for a while on a scorching summer day. And all without building lots of expensive or dirty power plants.

The Smart Grid represents "the difference between flexibility and building for the worst-case scenario," says Hauser. "I heard someone say recently, 'You wouldn't pay to build a huge store and keep it stocked year-round just to meet Christmas demand.' But that's what the electricity industry is doing."

Yet the Smart Grid isn't designed just to minimize waste in the current grid. It's designed to minimize waste in us. As imperfect as transmitting power is—six percent of generated power is lost during delivery—there's no affordable way to improve that. What can be improved is what happens at the other end: the billions of kilowatt-hours fried away by a nation of wide-screen TV watchers and computer junkies. In theory, the Smart Grid offers a user-friendly way to curb our electric appetites. "The reality is that no one turns the thermostat down to 60," Hauser shrugs. The most compelling thing about the Smart Grid is that it could change the way we use energy without requiring us to do anything.

In one scenario, the utility—and eventually, our appliances themselves—would do the thinking, raising and lowering the power pulled into our houses so subtly that we'd hardly notice it. In the current "dumb" grid, information runs in one direction: from the user to the utility. As a result, there's usually no way for consumers to know about real-time rate changes until weeks later, when the added cost shows up on their electricity bill. In a smart system, usage and rate information would flow both ways and also arrive in real time.

But is the Don't Tread on Me nation ready to hand control of the thermostat over to for-profit utilities that don't always have our financial best interest at heart? (See the 2001 Enron-triggered California energy crisis.) It's not impossible. Many of us have come around to paying our bills automatically. With the appropriate protections in place, there's no reason to think that consumers would balk at a chance to save money and energy—so long as that six-pack stays cool.

Should the smart-appliance approach fail, there's an alternative scenario in which consumers would make their own power adjustments. Just as hospital patients with control of their own morphine drips tend to use less painkiller, so Hauser believes that consumers kept informed of power surges and rising rates might volunteer to turn the AC down. "You've just got to make it easy for them," he says.

EcoGeek has a post on PayPal and Tesla Motors founder Elon Musk and his (well founded) belief that solar will provide most of our power needs in a few decades time.

Elon Musk, the founder of PayPal and chairman of electric car company Tesla, recently said that he believed most of the world's power would come from solar by 2040. That seems remarkably optimistic to me.

At the Future in Review Conference, Musk said that in 30 years, solar thermal and solar photovoltaic power will, combined, produce more electricity than any other source. That title is currently held (and held firmly) by coal. Displacing the coal industry with renewables would require massive capital investments and innovations, particularly in power storage.

I have to say, my mind doesn't have to stretch too far to see how it would be possible. But a few things need to happen first. Solar needs to get cheaper, and photovoltaics have to stop relying on raw materials (indium / monosilicon) that are difficult to acquire. And then we need to figure out how to store the power so we can use it at night. This could be through a combination of utility-scale power storage and distributed power storage through home fuel-cell and hydrogen creation systems.

Musk, as the chairman of Solar City, a company that installs panels on houses, sometimes with no down payment at all, obviously believe in the distributed power model. The goal of Solar City is to have people pay, not for the $30,000 panels on their roof, but for the 30 years of electricity those panels will generate. Already Solar City is projecting $80 M in revenue for this year.

The final piece of the puzzle in getting to solar supremacy came out in Musk's speech as well. Very simply, "There should be a carbon tax."

Rob at Entropy Production has some notes on the fast growing solar PV market.

According to photovoltaic industry analyst SolarBuzz, total PV installations in 2007 were 2826 MW_peak, representing a growth rate of 62 % (!!!) over 2006 . By way of comparison, Worldwatch claims that PV installations were 2935 MW_peak in 2007.

Germany continues to be the main driver for the PV industry, although Spain is now coming on very strong with their subsidy program as well. Ontario now has a similarly (over) generous subsidy program in operation so we are starting to see many announcements for PV power plants there as well. Japan is falling behind as their subsidy program was for a fixed capacity (i.e. 100,000 homes).

Thin film is growing much faster than poly- and mono-crystalline Silicon. SolarBuzz claims growth of 123 %, from 180 MW to 400 MW of installed capacity. Since a lot of the newer thin-film capacity is either CdTe or microcrystalline Silicon rather than the simpler amorphous Silicon (which happens to degrade quicker), the 400 MW number is probably actually 'firmer' than the 180 MW deployed in 2006.

The current leader of the direct bandgap thin film solar industry is First Solar of Ohio. The manufacturer of CdTe thin film solar cells has gone from $67 million in sales in the first quarter of 2007 to $197 million in the first quarter of 2008. Net profits increased 830 %, from $5 million to $46.6 million. With profits being about 25 % of sales, they have a much higher profit margin than most industries, including any oil major. That tends to imply they will be able to grow their production capacity very, very fast. They are currently advertising for 105 positions. According to the above report, First Solar is selling their modules for $2.45/W_peak, and since the cost of sales is 47 % of total sales, that implies a cost of $1.15/W_peak.

It will be interesting to see how the CIGS manufacturers stack up. As long as the price of solar is supported by overly generous government subsidies we aren't going to see technology sorting out winners and losers in the market, however.

Update: in case you wonder what $1.15/W_peak means, I calculate that for an environment with a capacity factor of 0.2 (i.e. San Franciso), when amortized over 25 years it works out to under $0.04/kWh. Each peak Watt will average 1.6 kWh/annum (max of 1.75 kWh in first year, dropping by 20 % over 25 years). Assumptions: energy inflation of 2.5 %/annum, general inflation of 2.5 %/annum, interest on financing of 6.0 %/annum. You have to add in all ancillary costs onto that four cent figure (such as frames, inverter, etc.) but the point remains obvious.

Crikey has a report on the sorry state of energy policy from both the opposition and the government - Rudd in a public policy race to the bottom.

During Budget week the federal Coalition started the race to the bottom on the public policy debate. The really frightening thing this week is the Rudd Government showed signs of joining the race.

The big picture policies outlined in the Budget have not rated a mention. The billions going into infrastructure funds and climate change action, vast improvements to the health and education systems, are lost opportunities in a poor budget sell.

It's looking like a case of "rope-a-dope". Nelson and Turnbull were taking the early body blows from their lack of unity over petrol excise cuts. Then what does the government do? Slams its own head into the turnbuckle through a similar lack of discipline.

But politics and media circus aside, why would the Rudd Government contemplate cutting petrol taxes anyway? At current usage growth rates, this finite fossil fuel will propel Australia's transport emissions from 14% of total emissions to 67% of Australia's emissions by 2020. That will put a big hole in whatever emissions reduction target Rudd agrees to as part of his response to the Garnaut review.

What sort of a backward country considers cutting fuel taxes while allowing the states to levy a tax on employment? They are a Labor government after all. And what cut of the forgone $1.8 billion from petrol excise cuts would flow to low income households, the punters who really need a break on prices? 8% or $150 million. What a joke. The Opposition should be dead and buried on this issue but for the Government's lack of discipline.

How did the Government get sucked into flagging a review of their luxury car tax; who was complaining about it?

For a new and confident government, the descent into knee-jerk politics this week should teach them a lesson. It is a one-way road. People want their leaders to stick to their guns unless there is a very good reason. It shows you have some vision and the ability to deliver that vision.

One of the few Ministers to shine despite the fuel panic of the last few days has been Shadow Treasurer Chris Bowen. He has been disciplined and has staunchly stuck to his guns in his portfolio. His defence of FuelWatch in the face of his opposite number Peter Dutton's puerile attacks has enhanced his standing. He showed some guts and leadership.

The only other winner from the last couple of weeks is Malcolm Turnbull. Despite his continuous lack of discipline, he at least looks fit for a leadership role for arguing against a stupid policy position on fuel excise (even though he now tows the line).

For the first time since the election last year, the Opposition has led the agenda through a cheap political stunt and a fair bit of luck. Let's hope it's not a sign of things to come. Australians deserve better from a young and energetic government.

If you've studied the history of Iraqi oil in some detail you'll realise just how dodgy and self-serving this latest piece from the Economist is - whitewashing our oil grab and blaming the current state of the Iraqi oil industry on misfortune and the Iraqis themselves - rather than the seven sisters' policy of restricting Iraqi oil production for many decades. From An oil saviour?:

Iraq has the potential to supply much more oil

The growing concerns in the world energy market about the risks of a supply crunch have been a critical factor behind the recent surge in oil prices to a new record of US$135/barrel. Speculators are betting huge sums on the assumption that the oil market (and other primary energy markets) will remain tight for many years to come, owing to the inelasticity of demand and to the constraints on long-term supply. Saudi Arabia, the world's largest oil exporter, is doing its bit to allay these concerns, but has acknowledged that once its current crop of oilfield projects is complete in around 2013, there will be little scope for further capacity increases. Similar strains are evident in most of the other major oil-producing countries. One significant exception is Iraq, which holds (at least) 10% of the world's proven reserves, but accounts for only 2.5% of total production. Iraq has the potential to furnish a long-term solution to the oil market's long-term supply problem, but it will need to improve dramatically on its recent performance before buyers of oil futures will be convinced that it can deliver.

All about oil

If history had been kinder, Iraq could now be producing at a comparable level to Saudi Arabia. Instead, three wars, 13 years of sanctions and five years of internal conflict have eroded Iraq's oil infrastructure and human capital. However, Iraq also has a history of recovery. Production peaked at over 3.5m barrels/day (b/d) in 1980 on the eve of the Iran-Iraq war, but then averaged less than half that level during the eight-year war. It had nearly recovered to 3.5m b/d in 1990, after which the invasion of Kuwait and the subsequent UN sanctions severely limited exports, and hence production. In the five years before the US-led invasion of 2003, the sanctions regime gradually permitted greater exports, and production was often above 2.5m b/d. However, it fluctuated considerably due to the impact of years of underinvestment, restrictions on the import of spare parts and isolation from the international oil industry.

This volatility in production has continued in post-Saddam Iraq, although the average level has usually been below 2m b/d, and only exceeded the immediate pre-war level of 2.3m b/d for the first time at the end of 2007. Operations have been frequently disrupted by events ranging from the bombing of pipelines to the murder of oil workers. Moreover, the competition between political factions for influence at every level in the industry—as well as widespread corruption—has not provided suitable conditions for a revival of the industry. There is even concern that damage may have been caused to some fields in order to maintain production at modest levels.

Things may be changing. Iraq's deputy prime minister, Barham Salih, said in April that Iraq's total reserves, could be as high as 350bn barrels, triple the 115bn that has been its officially stated level for many years. The figure is aspirational and should be treated carefully but, given that there has been barely any new exploration of Iraq's promising geology in 30 years, an upward revision of the official reserves figure seems long overdue. This underlines Iraq's uniquely large reserves-to-production (RP) ratio, which was already the world's highest and, based on Mr Salih's estimate and at the expected production level of 2.3m b/d in 2008, would stand at a remarkable 415 years (compared with a world average of about 40 years). If Iraq were able to achieve the average Middle East RP-ratio of 80 years then it would be pumping 4m b/d based on the current reserves, and 12m b/d based on Salih's aspirational estimate. Getting there would take some time, around five years for 4m b/d and probably more than 20 years for the most optimistic level. It would also require Iraq to achieve a sufficient degree of stability. However, if there are promising signs of progress over the next 18 months, then it might be enough to mitigate fears of shortages next decade and dampen the futures market.

TomDispatch has a look at the history of "turning points" in Iraq and the sorry record of John McCain in both supporting the war and failing miserably to predict its course.

At first, we were impressed by the senator's statements in Republican primary debates about how he had actually opposed the Bush administration's conduct of the war from the start. As he told CNN's Kiran Chetry, in August of 2007, "I was the greatest critic of the initial four years, three-and-a half years."

Well, having dug into those missing years a bit, here, for the record, is what we found to be Senator McCain's typical responses to some of the key questions posed above:

How would American troops be greeted?: "I believe… that the Iraqi people will greet us as liberators." (March 20, 2003)

Did Saddam Hussein have a nuclear program that posed an imminent threat to the United States?: "Saddam Hussein is on a crash course to construct a nuclear weapon." (October 10, 2002)

Will a war with Iraq be long or short?: "This conflict is… going to be relatively short." (March 23, 2003)

How is the war going?: "I would argue that the next three to six months will be critical." (September 10, 2003)

How is it going (almost two months later, from the war's "greatest critic")? "I think the initial phases of [the war] were so spectacularly successful that it took us all by surprise." (October 31, 2003)

Is this war really necessary?: "Only the most deluded of us could doubt the necessity of this war." (August 30, 2004)

How is it going? (Recurring question for the war's "greatest critic"): "We will probably see significant progress in the next six months to a year." (December 4, 2005)

Will the President's "surge" of troops into Baghdad and surrounding areas that the senator had been calling for finally make the difference?: "We can know fairly well [whether the surge is working] in a few months." (February 4, 2007)

In April 2007, accompanied by several members of Congress, Senator McCain made a surprise visit to Baghdad to assess the surge, had a "stroll" through a market in the Iraqi capital, and then held a news conference where he discussed what he found: "Things are better and there are encouraging signs. I've been here many times over the years. Never have I been able to drive from the airport. Never have I been able to go out into the city as I was today. The American people are not getting the full picture of what's happening here today."

The next evening, NBC's Nightly News provided further details on that "stroll." The Senator and Congressmen were accompanied by "100 American soldiers, with three Blackhawk helicopters, and two Apache gunships overhead." (In addition, the network said, still photographs provided by the military revealed that McCain and his colleagues had been wearing body armor during their entire stroll.)

Reality check: Five months later, on September 12, 2007, McCain again observed that "the next six months are going to be critical."

Six months later, McCain claimed that the U.S. had finally reached a genuine turning point in Iraq and that his faith in the surge was (once again) vindicated. On March 17, 2008, he reported: "We are succeeding. And we can succeed and American casualties overall are way down. That is in direct contradiction to predictions made by the Democrats and particularly Senator Obama and Senator Clinton. I will be glad to stake my campaign on the fact that this has succeeded and the American people appreciate it."

Well, we at the Institute of Expertology appreciate it, too, and we are, of course, pleased to record the Senator's ever-renewable faith in this latest turning point. As scrupulous scholars, however, we do feel compelled to add that the Senator is not the first to detect such a turning point. Indeed on July 7, 2003, Undersecretary of Defense for Policy Douglas J. Feith said: "This month will be a political turning point for Iraq."

On November 6, 2003, President Bush observed: "We've reached another great turning point..." On June 16, 2004, President Bush claimed: "A turning point will come two weeks from today."

That same day the Montreal Gazette headlined an editorial by neoconservative columnist Max Boot: "Despite the Negative Reaction by Much of the Media, U.S. Marines Did a Good Job in Fallujah, a Battle That Might Prove a Turning Point." On February 2, 2005, Secretary of Defense Donald Rumsfeld stated: "On January 30th in Iraq, the world witnessed an important moment in the global struggle against tyranny, a moment that historians might one day call a major turning point." On March 7, 2005 William Kristol wrote: "[T]he Iraqi election of January 30, 2005... will turn out to have been a genuine turning point."

On December 18, as that year ended, Vice President Cheney, while conceding that "the level of violence has continued," assured ABC News: "I do believe that when we look back on this period of time, 2005 will have been the turning point..."

The Institute continued to record turning points in remarkable numbers in 2006, and 2007, but perhaps in 2008 the surge will, indeed, turn out to be the turning point to end all turning points. After all, Senator McCain has staked his campaign on it.

Scoop has an interesting viewpoint from New Zealand, arguing that smaller power generation plants make for a better, more competitive energy market - Smaller and Smarter Wind Energy.

A smarter way to achieve sustainable electricity in New Zealand was presented to the Energy Trusts of NZ conference in Wellington today by Windflow Technology Chief Executive and Director Geoff Henderson.

Mr Henderson told attendees at the Powering the People themed conference that, “the trend towards very large wind farms of several hundred megawatts using very large turbines is concerning for New Zealand”. His presentation was titled "Smaller and Smarter Wind Energy”.

“The media is increasingly reporting local opposition to these types of projects, and the large ‘lumpy’ investments that they propose are not conducive to creation of a competitive electricity market which could deliver lower and more stable electricity prices”.

Mr Henderson's presentation showed that large energy projects such as the 360 megawatt Taranaki Combined Cycle plant caused electricity prices to drop initially, then long gaps between new large lumps of generation caused a "feast and famine" cycle which cause price instability.

This lumpy investment problem is being repeated in the wind industry based on a false economic argument for “bigger is better”. This is a myth, he said, with smaller turbines actually being cheaper than larger turbines on an installed megawatt basis.

He also stressed the lower environmental and social impacts of “smaller and smarter” wind energy projects. “Smaller is smarter for New Zealand for many reasons, and with the right competitive market conditions, the country will be better off with this model in the long run”. Mr Henderson concluded.

The SMH has a enthusiastic report on the growing interest in geothermal energy - Renewable energy just got hotter.

The world is watching a hot rocks plant with massive potential in South Australia. It is clean, renewable and quiet, writes Phil Cornford. By the end of the year, the diesel-fuelled generators in Innamincka will fall silent when Australia's first power plant fuelled by hot rocks, four kilometres below the Earth's surface, supplies electricity to the sun-scorched Cooper Basin outpost 1100 kilometres north-west of Adelaide.

"It'll be a lot quieter without the generators running 24 hours a day," says Kym Ford, owner of the Innamincka Hotel, one of only a half dozen buildings in the hamlet, which was not there when explorer Charles Sturt rode past in 1845. It will also save the hotel an annual diesel bill of $150,000.

Innamincka, which has a population of 12, is a long way from everywhere, and the power plant will generate only 1 kilowatt of electricity, a modest beginning. But it will be the first exploitation of deep-earth geothermal energy in what is known as the South Australian Heat Flow Anomaly, a vast area of subterranean fractured granite with estimated potential to produce 60 times more electricity than the Snowy Mountains hydro-electric scheme.

In these times of climate change, it is significant that geothermal power replenishes itself and is clean, producing none of the carbon dioxide gases that contribute to global warming. Geothermal power figures as a major contributor in Federal Government plans to drastically reduce greenhouse emissions, with predictions that hot rocks will supply 6.8 per cent of Australia's total energy by 2030.

The Innamincka power plant is being developed by Geodynamics Limited, which plans to expand it to 50megawatts in 2012. That is enough capacity to supply up to 50,000 households, but it will send electricity 110 kilometres to the Moomba oil and gas field. The company plans a 500 megawatt plant by 2016, when it expects to supply power down a 500-kilometre, high-power transmission line to the national electricity grid in Port Augusta, and another transmission line to BHP Billiton's Olympic Dam mine, 490 kilometres away. The estimated cost is $2 billion.

Petratherm Limited will drill two four-kilometre wells later this year and early next year at its Paralana site, 320 kilometres north-east of Port Augusta and 180 kilometres south of the Geodynamics tenements. Petratherm plans a 7.5 megawatt power plant by 2010, supplying electricity to the nearby Beverley uranium mine, expanding to 30 megawatts in 2012 and 260 megawatts in 2020, with transmission lines to Port Augusta, and 300 kilometres east to Olympic Dam. The estimated cost is $2 billion.

One of the advantages of hot rocks energy is that, unlike coal and gas which are consumed in generation, the heat and water resources are recirculated, giving them life expectancies of 50 years and more.

To produce 50 megawatts, the explorer Geodynamics will drill nine wells four kilometres down into fractured granite, heated to more than 250degrees by the radioactive decay of uranium, thorium and potassium.

Broken by horizontal fractures, the granite becomes a conduit for a reservoir of superheated water which is thrust up five wells at great pressure, surfacing at 210 degrees as steam to drive electricity turbines. When it is used and cooled, it is pumped down four wells to be used again.

Each well costs $10 million and takes about 110 days to build, although Geodynamics expects to reduce this to 70 days after spending $32 million buying the biggest drilling rig in Australia, capable of drilling down to six kilometres. But to expand its power plant to a 500 megawatts capacity, it will have to drill 81wells in four years, a task needing at least six drilling rigs.

But there is a worldwide shortage of deep drilling rigs, and Geodynamics, Petratherm and other explorers will all want them at the same time. Where to get them? "It's a problem we're working on," a spokeswoman from Geodynamics says.

By the end of last year, four other geothermal companies had drilled in the Cooper Basin - Green Rock Energy Limited, Geothermal Resources Limited, Torrens Energy Limited and Scopenergy-Panax. Thirty-three companies have taken exploration licences in the Cooper Basin, where the Heat Flow Anomaly has the world's greatest and hottest reservoir of hot fractured rocks within a depth of five kilometres.

Geodynamics estimates the potential of its 2500 square-kilometre exploration area to be 11,000 megawatts. Petratherm estimates its resources will provide 13,000 megawatts. The potential of the entire Cooper Hot Rocks Flow Anomaly is estimated to be 100,000 megawatts. These are enormous resources when compared to Australia's 2006 production of 44,000 megawatts from mostly coal-fired power plants.

Geodynamics also has exploration tenements south of Muswellbrook where seismic tests suggest there are hot rocks granite deposits, not yet confirmed by deep drilling. If there is potential for geothermal energy, it has the enormous advantage of being close to big markets, unlike the isolated South Australian tenements.

Petratherm has geothermal projects in Spain, the Canary Islands and China. Geothermal developments are under way in France, Germany, Switzerland and California, where hot rocks generate 1.6 per cent of total United States energy, the most in the world. But it is the Cooper Basin which has the greatest prospects, with geothermal potential estimated to be sufficient to meet Australia's total electricity demand for 450 years.

Another report today talks about GeoDynamics' other geothermal venture - this one near Singleton in the Hunter Valley - nice and close to Sydney and to existing transmission lines.

A company proposing to tap into a geothermal energy source in the upper Hunter Valley will drill deeper, with tests showing temperatures are hot enough for the project to be viable. GeoDynamics' Hot Rocks project involves pumping water down boreholes onto hot underground granite and using the steam that is generated to drive power station turbines. The company has been conducting shallow test drills near Singleton for eight years.

The latest results show temperature gradients of up to 58 degrees Celcius per kilometre, which are comparable to those in the company's larger Cooper Basin project in South Australia. Executive director Doone Wyborn says the next step is deeper drilling to between four and five kilometres underground.

Mr Wyborn believes temperature gradients at that depth would exceed 100 degrees Celcius per kilometre. "We've got pretty reasonable temperature gradients, not as good as in South Australia," he said. "But they're pretty reasonable considering we're right in the middle of the energy capital of Australia, if you like, with all the coal fired power stations. There's powerlines virtually running overhead from our site so we are keen to start looking a bit deeper down."

Crikey has the first in a series on "oil, the future and you", with the first installment featuring Adam Grubb of Energy Bulletin (which has the full text for non-Crikey subscribers).

The high price of petrol today is causing discomfort among motorists. So much so that our federal politicians have spent almost a week haggling over whose scheme is best suited to knocking a few cents per litre from the pump price.

But in a world where oil is increasingly scarce, where the security of supply remains a problem, and where the environmental cost of using fossil fuels to power your car is soon to be factored into the pump price, is that the right response? What are the long terms solutions to our oil dependence? And is this the beginning of a new era of high-priced oil?

Crikey asked a panel of experts to answer questions on the good old days of cheap oil, what the politicians should really be arguing about, and how our economy will look when petrol costs many dollars per litre.

Today, Adam Grubb, the Australian editor of Energy Bulletin, answers Crikey’s questions.



Have we entered a new energy era of high-priced oil? Are the days of $1/litre petrol gone for good?

Yes, the fundamentals would suggest so. We appear to have reached the peak in oil production. Global conventional oil production peaked in May 2005. Australia as a net importing nation is particularly vulnerable. Our internal oil production peaked in 2000.

Australian oil production

Most of the major countries we depend on for imports are themselves past their own peaks of production: Vietnam, PNG, Malaysia, New Zealand and Indonesia. Internal affluence and oil consumption is increasing in most of these countries such that exports are falling far more rapidly than actual oil production. Of the major countries we depend on, only the UAE has not been decreasing exports in recent years. (See this article on The Oil Drum.)

This is a trend we are seeing globally. Competition for increasingly scarce oil exports will make procuring replacement oil an expensive exercise, perhaps one sometimes resulting in conflict. Only a fairly severe global recession is likely to make oil a less scarce commodity, and then only temporarily. ...

Sketch a picture of the Australian economy when petrol is $5/litre and rising, considering things like food, infrastructure, the family budget and inflation?

The McMansion suburbs are likely to fall into disrepair as the price of commuting and mortgage repayments cause many houses to be completely abandoned and stripped for copper wiring and other resources. Many formally middle class people who have lost their homes will be living out of their cars, perhaps even in gated car camps as are already being set up in the US. Many adult children won’t be able to afford moving out of home, and many households may take in boarders and relatives, creating larger households.

Repair and reuse industries will flourish, many based in garages and sheds. Urban and peri-urban food production will increase and vacant lots will be turned into food gardens. The streets will be more lively, with ad-hoc markets in used goods and home produce.

Use of foot transport, bicycles and public transport will increase. Street crime will not necessarily increase in direct proportion to economic hardships, as greater social use of the streets, due to less cars and the presence of walkers may provide a level of surveillance.

Some infrastructure and centralised social services may be slowly beginning to break down. Important phone lines will be left unanswered more often, unfilled potholes will be more prevalent. Many services of the welfare state may be withdrawn, depending on the political climate.

Restaurants, tourism, recreation, personal services and electronics are likely to be some of hardest hit industries. The cheap airline industry will collapse.

There may be food rationing of basic items.

Despite rapidly rising input prices, farmers, where the season is kind, will once again be making fair returns on their efforts, and will be able to employ some of those moving from the cities.

Those with strong community or family bonds will fare better than new immigrants and the otherwise socially isolated. Adaptability and resilience will be key personal strategies. Those too institutionalised by schooling and wage work, and those who consider high consumption lifestyles a birthright and the alternatives unthinkable will have a psychological struggle to adapt. Ecologically inspired strategies such as permaculture design will move from being an environmentalist hobby to a core economic strategy.

Those who are looking for solutions which simultaneously tackle environmental impacts, build social bonds, save money and increase health and wellbeing, will find ideal solutions in local food production and a network of manufacture and repair microindustries.

At the SMH, the front page (and the business section) was filled with energy news, with the biggest splash (featuring ASPO Australia's Garry Glazebrook) reporting on the surge of commuters onto public transport.

SOME rail passengers are being left behind on platforms and bus commuters are enduring long queues as motorists baulk at the soaring price of petrol and switch to public transport.

Morning peak-hour numbers on CityRail vastly exceed the State Government's "high-growth" predictions, and bus corridors are suffering a commuter crush. There has even been a surge in demand for inter-city Greyhound coach services.

The rush for public transport comes as motorists begin to ration their petrol use. Sales of unleaded petrol fell by 4.4 per cent in the first three months of the year.

Garry Glazebrook, urban planning lecturer at the University of Technology, Sydney, said traffic growth was beginning to slow because fewer people could afford petrol. "In Sydney, the price of petrol and the tolls combine with interest rates and inflation, and there is less room in the budget," he said. "Something has to give."

It is possible that a huge proportion are shifting to rail. In the 12 months to February, there were almost 1.2 million new passengers on the Bankstown line, a growth rate of 8.4 per cent.

In 2001, the Government's Transport Data Centre predicted a worst-case scenario in which the network was hit by 2 per cent yearly growth to 2021. In the year to February, that figure was more than 4.7 per cent. Patronage climbed 7.4 per cent on the Inner West Line, 6.3 per cent on the Western Line and 6.2 per cent on the East Hills Line. Trains are so full on the Bankstown and Western lines that some morning commuters are being left behind.

Meanwhile, patronage on the Hillsbus morning peak service to the city soared from 170,000-odd passengers in September 2005 to almost 300,000 in August 2007. "We had about 65 buses in 2005 operating on the M2. It is now closer to 140 buses coming out every morning," said Hillsbus's chief executive, Owen Eckford. "We have reason to believe that growth is likely to continue."

George Monbiot has a classic column on some of the bizarre contradictions evident in the energy policies of the UK in particular and the West in general in this open letter to the King of Saudi Arabia.

King Abdaullah of Saudi Arabia

Your Majesty,

In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.

You and I know that there are several reasons for the high price of oil. Low prices at the beginning of this decade discouraged oil companies from investing in future capacity. There is a global shortage of skilled labour, steel and equipment. The weak dollar means that the price of oil is higher than it would have been if denominated in another currency. While your government says that financial speculation is an important factor, the Bank of England says it is not, so I don't know what to believe. The major oil producers have also become major consumers; in some cases their exports are falling even as their production has risen, because they are consuming more of their own output.

But what you know and I do not is the extent to which the price of oil might reflect an absolute shortage of global reserves. You and your advisers are perhaps the only people who know the answer to this question. Your published reserves are, of course, a political artefact unconnected to geological reality. The production quotas assigned to its members by Opec, the oil exporters' cartel, reflect the size of their stated reserves, which means that you have an incentive to exaggerate them. How else could we explain the fact that, despite two decades of furious pumping, your kingdom posts the same reserves as it did in 1988?

You say that you are saving your oil for the benefit of future generations. If this is true, it is a rational economic decision: oil in the ground looks like a better investment than money in the bank. But, reluctant as I am to question your Majesty's word, I must remind you that some oil analysts are now wondering whether this prudence is a convenient fiction. Are you restricting supply because you want to conserve stocks and keep the price high, or are you unable to raise production because your fabled spare capacity does not in fact exist?

I do not expect an answer to this question. I know that the true state of your reserves is a secret so closely guarded that oil analysts now resort to using spy satellites to try to estimate the speed of subsidence of the ground above your oil fields, as they have no other means of guessing how fast your reserves are running down.

What I know, and you may not, is that the high price of oil is currently the only factor implementing British government policy. The government claims that it is seeking to reduce carbon dioxide emissions, by encouraging people to use less fossil fuel. Now, for the first time in years, its wish has come true: people are driving and flying less. The AA reports that about a fifth of drivers are buying less fuel. A new study by the Worldwide Fund for Nature shows that businesses are encouraging their executives to use video conferences instead of flying. One of the most fuel-intensive industries of all, business-only air travel, has collapsed altogether.

In other words, your restrictions on supply - voluntary or otherwise - are helping the government to meet its carbon targets. So how does it respond? By angrily demanding that you remove them so that we can keep driving and flying as much as we did before. Last week, Gordon Brown averred that it's "a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market". In the United States, legislators have gone further: the House of Representatives has voted to bring a lawsuit against Opec's member states, and Democratic senators are trying to block arms sales to your kingdom unless you raise production.

This illustrates one of our leaders' delusions. They claim to wish to restrict the demand for fossil fuels, in order to address both climate change and energy security. At the same time, to quote Britain's Department for Business, they seek to "maximise economic recovery" from their remaining oil, gas and coal reserves. They persist in believing that both policies can be pursued at once, apparently unaware that if fossil fuels are extracted they will be burnt, however much they claim to wish to reduce consumption. The only states that appear to be imposing restrictions on the supply of fuel are the members of Opec, about which Brown so bitterly complains. Your Majesty, we have gone mad, and you alone can cure our affliction, by keeping your taps shut.

Our leaders, though they do not possess the least idea of whether the oil supplies required to support it will be sustained, are also overseeing a rapid expansion of our transport infrastructure. In the UK, we are building or upgrading thousands of miles of roads and doubling the capacity of our airports, in the expectation that there will be no restriction in the supply of fuel. The government's central forecast for the long-term price is just $70 a barrel.

Over the past few months, I have been trying to discover how the government derives this optimistic view. In response to a parliamentary question, it reveals that its projection is based on "the assessment made by the International Energy Agency in its 2007 World Energy Outlook". Well, last week the Wall Street Journal revealed that the IEA "is preparing a sharp downward revision of its oil-supply forecast". Its final report won't be released until November, but it has already concluded that "future crude supplies could be far tighter than previously thought". Its previous estimates of global production were wrong for one simple and shocking reason: it had based them on anticipated demand, rather than anticipated supply. It resolved the question of supply by assuming that it would automatically rise to meet demand, as if it were subject to no inherent restraints.

Our government must have known this, but it has refused to conduct its own analysis of global oil reserves. Uniquely among possible threats to the economy and national security, it has commissioned no research of any kind into this question. So earlier this year, I asked the Department for Business what contingency plans it possesses to meet the eventuality that the IEA's estimates could be wrong, and that global supplies of petroleum might peak in the near future. "The government," it replied, "does not feel the need to hold contingency plans." I am sure I do not need to explain the implications if its forecasts turn out to be wildly wrong.

Your Majesty, I recognise that this is not among your usual duties as the ruler of Saudi Arabia. But I respectfully beg you to save us from ourselves.

Yours Sincerely,

George Monbiot

Technology Review reports that Verenium have opened the first cellulosic ethanol plant in the US - "a 1.4 million gallon demonstration-scale plant will use waste biomass to make biofuel".

A biorefinery built to produce 1.4 million gallons of ethanol a year from cellulosic biomass will open tomorrow in Jennings, LA. Built by Verenium, based in Cambridge, MA, the plant will make ethanol from agricultural waste left over from processing sugarcane.

The new Verenium plant is the first demonstration-scale cellulosic ethanol plant in the United States. It will be used to try out variations on the company's technology and is designed to run continuously. Verenium wants to demonstrate that it can create ethanol for $2 a gallon, which it hopes will make the fuel competitive with other types of ethanol and gasoline. Next year, the company plans to begin construction on commercial plants that will each produce about 20 to 30 million gallons of ethanol a year.

Until now, technology for converting nonfood feedstocks into ethanol has been limited to the lab and to small-scale pilot plants that can produce thousands of gallons of ethanol a year. Since these don't operate continuously, they don't give an accurate idea of how much it will ultimately cost to produce cellulosic ethanol in a commercial-scale facility.

Almost all ethanol biofuel in the United States is currently made from corn kernels. But the need for cellulosic feedstocks of ethanol has been underscored recently as food prices worldwide have risen sharply, in part because of the use of corn as a source of biofuels. At the same time, the rising cost of corn and gas have begun to make cellulosic ethanol more commercially attractive, says Wallace Tyner, a professor of agricultural economics at Purdue University. A new Renewable Fuels Standard, part of an energy bill that became law late last year, mandates the use of 100 million gallons of cellulosic biofuels by 2010, and 16 billion by 2022.

So far, however, there are no commercial-scale cellulosic ethanol plants in operation in the United States, although a number of facilities are scheduled to start production in the next few years. The Department of Energy is currently funding more than a dozen companies that will be building demonstration- and commercial-scale plants. One of these, Range Fuels, based in Broomfield, CO, plans to open a commercial-scale plant next year. It will have the capacity to produce 20 million gallons of ethanol and methanol a year.

Verenium will use a combination of acid pretreatments, enzymes, and two types of bacteria to make ethanol from the plant matter--called bagasse--that's left over from processing sugarcane to make sugar. It will also process what's called energy cane, a relative of sugarcane that's lower in sugar and higher in fiber. The high fiber content allows the plants to grow taller, increasing yield from a given plot of land.

The SMH reports what has been pretty obvious to me - its hasn't rained this month (bar a brief and localised thunderstorm this afternoon) - Record dry May looms for Sydney.

Sydney appears set to record its driest May in 150 years of record keeping, after the month's best chance for rain passed with only localised falls. The thunderstorm that rolled across the city late on Wednesday caused a downpour of 37mm in just 45 minutes at Campbelltown, in the city's south-west, but it dissipated as it moved over central Sydney.

Just 0.6 of a millimetre fell at Observatory Hill, taking the city's official May total to 2mm - below the 3.7mm which fell in the record dry May of 1957. Bureau of Meteorology senior forecaster Dave Williams said rainfall data had been collected at the central Sydney site since 1859.

The WSJ has a report on the rollout of 3 million smart meters in Dallas (and more in Houston).

Landis+Gyr Holdings Pty Ltd., an international utility-meter company, is expected to announce Tuesday a $360 million deal to furnish Dallas utility Oncor Electric Delivery Co. with "smart" meters for three million homes and small businesses.

The meters are part of an important trend to help consumers control electricity use and to help utilities cut operating costs and improve electric-system reliability. Texas has seen some of the sharpest electricity price increases in the U.S., and the meters have the potential to curb costs by giving retail suppliers new pricing options.

Among other features, the meters will send readings wirelessly, giving consumers and suppliers very detailed information on electricity use.

"What seems pretty clear, as people try to make better use of electricity and water, is that the old monthly meter reading won't cut it anymore," said Howard Scott, managing director of the Scott Report, a publication that covers the advanced-meter industry and is a unit of Cognyst Advisors LLC. It doesn't invest in any of the companies it covers.

Though the contract is big, it is likely that even bigger ones are coming as the nation's utilities and regulators search for ways to cut "peak" energy use, which plays an especially large role in pushing up energy costs. The biggest California utilities are making meter selections currently.

In a recent analysis by Deutsche Bank, researchers said 50 million old-fashioned meters in the U.S. are likely to be replaced by advanced meters by 2010, at a cost of about $18 billion. ...

Oncor is proposing to give all low-income consumers free in-home display monitors to enable them to see, at a glance, how much electricity they have consumed and at what cost. The displays will help "the low-income consumers stay within their budgets so they can manage their costs better" and avoid bill shocks, said Oncor spokesman Chris Schein.

Oncor doesn't yet have rate approval, but it said its program, as currently envisioned, will cost its customers $2.35 a month for 11 years, or about $300. The meters alone cost about $120.

The Guardian has an open letter from British PM Gordon Brown saying that Britian needs to become a low carbon economy and reduce dependence on oil - "We must all act together".

The global economy is facing the third great oil shock of recent decades. The oil price, just $10 a barrel a decade ago, has reached $135, pushing up the price of petrol and domestic heating as well as contributing to higher food prices. And I know that families up and down the country are feeling the impact in the cost of filling up at the petrol station and in the rise in gas and electricity bills.

As every country faces increased costs, it is now understood that a global shock on this scale requires global solutions. This is why the UK is arguing that at the top of the economic agenda for the forthcoming G8 summit in Japan should be a global strategy for addressing the impact of higher oil prices.

The cause of rising prices is clear: growing demand and too little supply to meet it both now and - perhaps of even greater significance - in the future. Higher demand is one of the major results of the scope, speed and scale of globalisation as Asian economies, as well as Opec countries themselves, demand more oil. To take one example: by 2020 there could be as many as 140m cars in China - more than three times as many as today. Overall, by 2020, global demand for energy will rise by 50%.

It is the market's belief that ever-growing demand will continue to outstrip supply that has pushed up the oil price. And we are becoming increasingly aware of the technical, financial and political barriers to the production of more oil. Every country must find ways of being more efficient and diversifying supply. And as continuing high oil prices present us all with an immense challenge, the way we confront these issues will define our era.

While the world will always seek new sources of supply, and we must continue to reduce barriers to investment, our strategic interests - reducing energy costs, increasing our energy security, tackling climate change - all now point in the same direction: decreasing dependency on oil, through substitution with other energy sources and through energy efficiency. And what we do to change the balance for the medium and long term can have an effect in the short term because it can give greater certainty about future supply and demand, and create a more stable market.

So our goal that Britain becomes a low-carbon economy is now an economic priority as well as an environmental imperative. And if we are to ensure a better deal for consumers, energy security and lower greenhouse gas emissions, Britain, Europe and the world will have to change how we use energy and the type of energy we use.

So, as John Hutton has said, we need to accelerate the development and deployment of alternative sources of energy, reducing global dependence on oil. Britain will increase its investment in renewables, including decentralised generation. We will build one of the world's first commercial-scale carbon capture and storage coal plants and we have committed to a nuclear building programme to ensure that the UK's emissions and dependence on fossil fuels do not rise as existing nuclear stations close.

He might want to rethink that last bit about swapping some new nuclear power stations in for old ones as they stop working - the decommissioning costs are horrendous.

The cost of cleaning up the UK's ageing nuclear facilities, including some described as "dangerous", looks set to rise above £73bn, the BBC has learned. A senior official at the Nuclear Decommissioning Authority said the bill would rise by billions of pounds.

Nineteen sites across the country, some dating from the 1950s, are due to be dismantled in the coming decades. A spokesman for the Department for Business said it was ready for an adjustment in the clean-up costs. In January, the National Audit Office said that the cost of decommissioning ageing power sites had risen from £12bn to £73bn.

At the largest site, Sellafield, on the Cumbrian coast, I saw for myself one of the "ponds" in which an unknown mass of radioactive material was dumped in the 1950s. Beneath the unruffled surface of the water lies an unrecorded collection of rusting metal containers holding everything from nuclear fuel rods to radioactive waste. Beside it, workers are constructing a vast new building to handle the material when a retrieval operation eventually gets under way.

Speaking to the BBC, Jim Morse, a senior director at the authority, said of the projected cost: "I think it's a high probability that in the short term it will undoubtedly go up. "We've still a lot to discover, we haven't started waste retrieval in those parts of the estate where the degradation and radioactive decay has been at its greatest."

When asked if the cost increases could run into billions of pounds, Mr Morse said: "I'm sure it'll be some billions, I really don't know. "No-one's done this before. It's very difficult to find another measure. There's nothing in engineering terms that allows you to extrapolate from what you have today."

A pilot project to investigate the task of dismantling has been under way for years at one of the most distinctive landmarks at Sellafield - the giant sphere of the 1950s-era Windscale Advanced Gas-cooled Reactor.

And the reliability of the things isn't too inspiring either, with Britain's largest reactor, Sizewell B, having a sudden and unexplained outage yesterday.

Hundreds of thousands of people were hit by electricity blackouts yesterday when seven power stations shut down. The unscheduled stoppages were regarded as an unprecedented sign of the fragility of Britain’s power infrastructure.

Operations were cancelled, people were stuck in lifts, traffic lights failed and fire engines were sent out on false alarms. Householders were unable to use any appliances or make phonecalls as the blackouts hit areas including Cleveland, Cheshire, Lincolnshire and London.

It was unclear last night why the power stations had failed. As the cuts escalated, the National Grid was forced to issue the most serious possible warning — “demand control imminent” — and urged suppliers to provide lower-voltage electricity to meet demand.

Energy suppliers affected by the shutdown, including British Energy and EON, said that they could not reveal the reasons for the cuts, nor would they say when some disrupted stations might resume service, because disclosure could affect the wholesale price of electricity. ...

At midday the Sizewell B nuclear power station, run by British Energy in Suffolk, and the Longanett coal-fired power station, run by Scottish Energy in Fife, went offline within two minutes of each other. ... Some power stations remained shut last night. A British Energy spokesman said that the Sizewell B reactor was offline late yesterday, although a restart plan was under way.

Time for a link dump.

Lots of peak oil in the mainstream press worldwide recently - The Guardian's article "$135 and rising ... has cheap oil gone for ever?" is a typical example.

More from the Dallas Morning News, in an editorial pondering The end of cheap oil?.

Phil Hart has a post at TOD on Saudi Arabian oil reserves - "Oil Reserves: Where Ghawar goes, the rest of OPEC follows".

Energy Bulletin has an article by Roger Blanchard of ASPO-USA on "The illusion of vast undeveloped U.S. oil resources".

The New York Times has a report on the revival of long abandoned coal mines in Japan, as high prices make them viable once again - As Oil Prices Rise, Nations Revive Coal Mining. The Globe And Mail has a report on the success of Japan's longtime efforts to be efficient in its energy use - "As oil soars, Japan's plan makes sense".

The Australian reports that the Burmese junta continues to refuse to allow foreign troops into the country as it is fearful of oil grab by the US. Maybe they read a whole lot of conspiracy theories about Aceh and became paranoid. Upstream Online reports that the Oil Search / Exxon LNG project in PNG has got the go ahead. China's post earthquake woes continue, with some power plants down to 3 days of coal.

Sify is reporting that Indian publicly owned oil companies are weeks away from bankruptcy as the cost of providing subsidised fuel drains their coffers - in the meantime some are starting to ration supplies. The FT also has a report on cuts to Asian fuel subsidies. As a result, Indonesian fuel prices will rise by a third.

European fisherman are proposing an indefinite strike in response to high diesel costs.

CNN reports that Americans are curtailing their driving at record rates, with March travelling dropping by 4.3% compared to the previous year's figure - "As gas goes up, driving goes down". So demand destruction is possible after all.

Triple Pundit has a post outlining some of the massive incentives and tax breaks enjoyed by the oil industry in the US - Oil Subsidies Need to Go.

The Washington Post has an article on peak oil and the "new survivalists" featuring peakoil.com.

Aaron Wissner is organising an "International Conference on Peak Oil and Climate Change" in Michigan.

There are plenty of oil bubble / peak oil contrarian articles about lately. John Mauldin at Trading Gurus outlins his thoughts on "Whither the price of oil ?", wondering what all those tankers full of Iranian crude are doing. George Soros says that the rocketing oil price is in a bubble. Bloomberg notes that soaring oil futures prices have coincided with a decline in open interest - which often signals the end of a particular price trend. One time peak oil believer, now skeptic (and climate skeptic too boot, blaming an elite malthusian conspiracy for the hysteria) F William Engdahl has also jumped on the bubble bandwagon with "More on the real reason behind high oil prices". The Independent has a column saying the global oil price can be blamed squarely on the Iraq war.

Energy Tech Stocks has a 7 part series on "How Execs at 30 Top Cleantech Firms Expect to Make Lots of $$ " - the first installment is on electric vehicles - "Electric Cars = the Next Mass Market Technology".

Cryptogon has a pair of article on homemade electric vehicles - Salvage Economy: Texas Man Builds Electric Car for $4750 and Gav’s Electric Vehicle Conversion (no relation).

Joe Romm has a post on geothermal power in the US - "Hot rocks are a rockin’ hot climate solution".

Vinod Khosla and the WSJ are firing shots at one another over biofuel subsidies - Vinod explains his side of the story in Biofictions.

Jamais Cascio is wondering what a "people's history of the future" would look like, pointing out futurism could be considered history inverted.

The Waterloo Record has an article about a student who has managed to isolate a microbe that eats plastic. Don't let it into your tupperware cupboard - but it could be very useful in landfills.

Technology Review has a look at a Graphene-Polymer Composite which could be used to make lighter, more fuel-efficient aircraft and car parts, as well as stronger wind turbines. They are also good electrical conductors and could be used to make transparent conductive coatings for solar cells and displays.

Greenpeace has a review of a French film called "The world according to Monsanto".

Energy Bulletin has an article on North America's Amish community, speculating they are "least likely to be devastated by collapse".

Bick Turse has a review of this year's big war propaganda film "The Iron Man".

The Huffington Post has an article on efforts by US lawmakers to try and halt Pentagon propaganda being disseminanted in the US (what happens to Fox news in this scenario isn't clear, let alone military assisted Hollywood movies) - "House Votes to Ban Pentagon Propaganda: Networks Still Silent".

The SMH reports that Australian troops in Iraq are "ashamed to wear their uniforms" because they never get to participate in real combat due to their postings in safe areas. I hope they aren't walking around naked.

The Village Voice reports that US forces have bombed Sadr City in Baghdad to bits and that Bush (not to mention the NYT) is now celebrating Iraqi troops moving in to control the ruins.

The BBC reports that South American nations are forming an EU-like community called Unasur - " South America nations found union".

Bruce Sterling has a post on microbes found at a record depth below the earth's surface (one for the abiotic oil fans out there).

The Guardian has a report on cleaning up the waste from British nuclear reactors - Robots scour sea for atomic waste - "Submarines searching for radioactive material dumped off the Scottish coast in the 1980s.

Apparently someone inadvertently dumped some fuel rod waste into the ocean. How careless of them.

Robot submarines are to be used to sweep particles of plutonium and other radioactive materials from the seabed near one of Britain's biggest nuclear plants in one of the most delicate clean-up operations ever in this country.

Each submersible will be fitted with a Geiger counter and will crisscross the sea floor to pinpoint every deadly speck close to Dounreay on Scotland's north coast before lifting each particle and returning it to land for safe storage.

Two kilometres of beach outside the Dounreay nuclear plant have been closed since 1983, and fishing banned, when it was found old fuel rod fragments were being accidentally pumped into the sea. The cause was traced and corrected but particles - including plutonium specks, each capable of killing a person if swallowed - are still being washed on to this bleakly beautiful stretch of sand and cliff on mainland Britain's northern edge.

The UK Atomic Energy Authority (UKAEA), owners of Dounreay, was eventually fined £140,000 at Wick Sheriff Court last year for 'very grave errors' that led to the beach's contamination. The authority's safety director, Dr John Crofts, admitted the release represented 'an unacceptable legacy.'

The seabed clean-up, which will take years to complete, is only one part of the major operation to close down Dounreay. For 40 years, test reactors - part of Britain's fast breeder reactor construction programme - operated there but the technology turned out to be messy. Fast breeders use liquid metal coolants and their contaminated remnants still await removal. 'At the time, engineers were only interested in building reactors. No one thought how we might dismantle them,' said Colin Punler, Dounreay's communication manager. ...

Although the UKAEA kept no precise accounts for building and running Dounreay, it is known to have cost several billion pounds. Now a further £2.5 billion will be spent returning the site to its pre-nuclear condition, leaving only a vault, covered with grass, to hold low-level nuclear waste while high-level waste will probably be shipped to a central UK nuclear store yet to be approved. 'An immense amount of money was spent here,' admitted Steve Beckitt, a senior Dounreay project manager. ...

Fast-breeder reactors were conceived in the Fifties when uranium - the nuclear industry's raw material - was scarce. At the same time, the US was being uncooperative in sharing nuclear expertise, despite Britain's role in developing the atom bomb. So UK nuclear chiefs set up a fast breeder programme to ensure fuel independence and stationed it in remote Caithness - because they feared their first test reactor might explode. They even encased it in a giant sphere of steel, known as Fred the Golf Ball - Fred standing for Fast Reactor Experiment in Dounreay - to contain any blast.

This 60-metre metal ball still dominates the site and might even be retained as a key landmark or possibly a visitor centre, according to Scottish Heritage. 'Unfortunately, the sphere still contains about 50 tonnes of highly radioactive liquid metal coolant,' said Simon Middlemas, Dounreay's site director. 'That will take an awful lot of cleaning before people can walk inside.' ...

Today, Dounreay bristles with armed police. The storage of vast amounts of uranium and plutonium, extracted from old fuel elements, has raised fears of attacks by terrorists. Security checks and vehicle inspections are routine - along with the constant clip-clop sound of Dounreay's fissile warning system. 'It's maddening but it tells you things are safe,' said Punler. 'If it speeds up, you know something is wrong and you run.' ..

Now local leaders fear a return to days when farming and fishing were the main occupations, although there are plans to use Dounreay's engineering expertise to create a new energy industry: tidal power. 'The waters here have some of the world's fastest currents and would make an ideal tidal power centre,' said Middlemas. 'We want to redirect our talent to devices like these.' Thus Dounreay, home of Britain's most advanced nuclear site, could find itself being turned into a centre for renewable energy research - an irony not lost on staff or locals.

The Independent reports that further south, in Wales, the country plans to get all its energy from renewables by 2020 - "Welsh energy drive turns the valleys green again".

Wind turbines are replacing pitheads in providing Wales with power, as its valleys turn green again. With energy prices scaling record heights, the principality is preparing to lead Britain out of the carbon age.

Wales will this week become the first country in the world formally to report on the growth of its "ecological footprint" – the measure of its impact on the planet's resources.

It already leads the rest of the UK in trying to reduce it by, for example, getting all its electricity from renewable sources.

On Tuesday, Jane Davidson, the environment minister for the Welsh Assembly Government, will publish a report showing that the country's footprint grew by 1.5 per cent each year between 1990 and 2003, the last year for which calculations could be made.

By the end of that period, its resource consumption stood at 5.19 hectares (12.8 acres) per person: the amount of land needed to provide the resources to sustain each of its people. The report says this is smaller than for Scotland or England's regions, but that if all the world's population lived at that level they would require nearly three planets the size of Earth.

The minister says Wales has policies to stop the footprint growing by 2020, and believes new ones could start to shrink it. This may be less ambitious than plans by four countries – Iceland, Norway, New Zealand and Costa Rica – to go entirely carbon neutral, but is much more so than anything envisaged in Westminster.

Wales aims for renewables, including tidal power from the Severn Barrage, to provide all its electricity by 2020; by comparison, Westminster's target for the country as a whole – which it is not expected to meet – is just 40 per cent. Already, 90 per cent of the energy used by the Welsh Assembly Government's buildings comes from renewables, as does nine-tenths of the electricity used by the NHS in the principality.

The Welsh administration – a coalition between Labour and Plaid Cymru – says it "sees no need for nuclear new-build in Wales" in direct defiance of Gordon Brown's determination to press ahead with it nationwide. And it aims to reduce carbon emissions by 3 per cent a year in areas it controls – the amount British ministers refused to enshrine in their Climate Change Bill.

Bloomberg has an article on the rush to build solar thermal power plants in California, with Google being joined by Chevron and Goldman Sachs in investing in Brightsource - Google, Chevron Build Mirrors in Desert to Beat Coal With Solar.

Along a dusty two-lane highway in California's Mojave Desert, 550,000 mirrors point skyward to make steam for electricity. Google Inc., Chevron Corp. and Goldman Sachs Group Inc. are betting this energy will become cheaper than coal.

The 1,000-acre plant uses concentrated sunlight to generate power for as many as 112,500 homes in Southern California. Rising natural gas prices and emissions limits may make solar thermal the fastest-growing energy source in the next decade, say backers including Vinod Khosla, the founder of computer maker Sun Microsystems Inc.

Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan Chase & Co. and Wells Fargo & Co. invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand outpaces wind turbines and geothermal. ...

Costs for solar thermal may fall as low as 3.5 cents a kilowatt hour by 2020, according to a report commissioned by the U.S. Energy Department. Meanwhile, coal expenses may rise. Congress is considering limits on carbon dioxide and other greenhouse gas emissions. The purchase of pollution permits may be required under a measure the Senate will begin debating next month.

`To Beat Coal'

Ausra's plants will produce electricity at 10 cents a kilowatt-hour starting in 2010, and the price will fall to 8 cents a few years later as it adopts systems with fewer parts that will be less costly when widely deployed, the company says. ``We are going to beat coal,'' says Bob Fishman, Ausra's chief executive officer. His company has a contract with PG&E Corp.'s Pacific Gas & Electric for a site in central California.

Chevron, Goldman Sachs, FPL, PG&E and other companies have filed more than 50 applications with the Bureau of Land Management to lease government-owned desert property for solar power systems. Chevron, which has invested in the solar thermal builder BrightSource Energy Inc. in Oakland, California, and Goldman, the biggest U.S. securities firm, declined to comment.

Google's philanthropic division put $10 million into eSolar, a start-up in Pasadena, California. Dan Reicher, a former Energy Department official who manages the unit's climate and energy initiatives, said there will be more such investments.

The Bloomberg article points to this report from the NREL last year to congress on the Potential impact of CSP for electricity generation (pdf), quoting a likely cost of CSP power of 5 cents per kilowatt by 2020.

Between 2000 and 2003, four reports were released on the potential for CSP. An assessment of the main issues raised by these reports leads to the following conclusions:

1. Further technology development and deployment could reduce the cost of CSP: The S&L study quantified the significant cost reductions that are possible with continued technology development and deployment. It concluded that there were three elements that could reduce the cost of CSP from approximately 12 cents/kWh today to about 5 cents/kWh by 2020: technology development (42 percent), building larger plants (37 percent), and volume production (21 percent). All four studies mentioned in this report are in agreement that the costs of CSP would fall with greater levels of deployment.

2. CSP requires policy incentives for initial deployment: All the reports emphasized that in the near-term, deployment of CSP depends on the establishment of policy incentives that offset the current higher cost of solar energy. The CSP industry provided a list of incentives it stated were necessary to initiate deployment. These were included in DOE’s 2002 report. Six southwestern States have now established renewable portfolio standards, and the Federal Government has created an investment tax credit that encourages the deployment of CSP. These policies have resulted in the establishment of CSP projects in California, Arizona, and Nevada that could result in 2,000 MW by 2010.

Development of CSP could provide energy, economic, environmental, and security benefits. The following factors could make CSP an attractive option for the Southwestern States if policymakers determine that these benefits outweigh the costs.

1. Energy: CSP could provide hundreds of gigawatts of clean power.

2. Economic: Analyses for California, Nevada, and New Mexico estimate that there could be significant benefits in job creation and additions to gross state product accruing from building and operating CSP plants. It is expensive to build a CSP plant and it requires a relatively large number of people to operate and maintain it. Counter balancing this, however, is the absence of a fuel cost. Much of the money that would otherwise be spent on monthly fuel costs, instead is spent on salaries. States and the Federal government have indicated their concern over the rising and volatile price of fossil fuels and their impact on the economy.

3. Environmental: CSP plants do not emit criteria pollutants or greenhouse gases, an issue of growing concern throughout the Federal and State governments. Thus, CSP could be an element of potential future policies related to climate change.

Bruce Sterling has a few comments on the Bloomberg report - as usual his interjections are marked ((())).

Along a dusty two-lane highway in California's Mojave Desert, 550,000 mirrors point skyward to make steam for electricity. Google Inc., (((dot-greens))) Chevron Corp. (((reforming petrocrats))) and Goldman Sachs Group Inc. (((East Coast finance establishment))) are betting this energy will become cheaper than coal.

(((Once people realize that coal plants are drowning major cities, coal plants are gonna get really, really expensive. Like, probably dangerous even to stand around. There must be any number of rich and evil people who own seaside mansions and could hire a global-guerrilla gang to blow up coal plants with truck bombs. You could probably leverage that activity in the markets and make a whole lot of money. Very "Shadow OPEC," except that the general population would cheer you on.)))

The 1,000-acre plant uses concentrated sunlight to generate power for as many as 112,500 homes in Southern California. Rising natural gas prices and emissions limits may make solar thermal the fastest-growing energy source in the next decade, say backers including Vinod Khosla, the founder of computer maker Sun Microsystems Inc. (((Rupert Murdoch's Wall Street Journal is afraid of Vinod Khosla. Proof the guy is onto something useful.)))

Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan Chase & Co. and Wells Fargo & Co. invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand outpaces wind turbines and geothermal.

``Solar thermal can provide a substantial amount of our power, more than 50 percent,'' says Khosla, who along with the Menlo Park, California, venture capital firm Kleiner Perkins Caufield & Byers led a $40 million investment in solar power producer Ausra Inc. ``This is an industrial-strength solution.''