Peak Energy's 10th Birthday  

Posted by Big Gav

Following hot on the heels of Energy Bulletin's 10th birthday I'm happy to declare Happy Birthday to Peak Energy which also turned 10 today.

For those people still reading after all this time I hope you have enjoyed the show - and I'll not that I'll probably continue my sporadic posting here for another decade or so...

Edward Snowden - Man Of the Year ?  

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Edward Snowden (who has an interview in The Washington Post that uses the alarming words "Mission Accomplished") should be a shoe in for "Man of the Year" for 2013 (however TIME magazine, now an anachronism, doesn't seem to agree, relegating him to runner up).

The UK's Channel 4 let him deliver their Christmas message - Edward Snowden's Christmas Message.

Whistleblower Edward Snowden, who revealed the mass surveillance programmes organised by the US and other governments, will give this year’s The Alternative Christmas Message on Channel 4.

Six months ago, Snowden, a computer analyst turned whistleblower, brought to global attention top-secret National Security Agency (NSA) documents leading to revelations about widespread United States surveillance on phone and internet communications.

In his first recorded TV video since arriving in Moscow, Snowden lays out his vision for why privacy matters and why he believes mass indiscriminate surveillance by governments of their people is wrong.

He says: “Great Britain’s George Orwell warned us of the danger of this kind of information. The types of collection in the book – microphones and video cameras, TVs that watch us are nothing compared to what we have available today. We have sensors in our pockets that track us everywhere we go. Think about what this means for the privacy of the average person.

“A child born today will grow up with no conception of privacy at all. They’ll never know what it means to have a private moment to themselves an unrecorded, unanalysed thought. And that’s a problem because privacy matters, privacy is what allows us to determine who we are and who we want to be.”

He acknowledges the growing pressure facing the White House over its bulk collection programmes from world leaders, the US courts and even its own advisors and ends his message on an optimistic note: “The conversation occurring today will determine the amount of trust we can place both in the technology that surrounds us and the government that regulates it. Together we can find a better balance, end mass surveillance and remind the government that if it really wants to know how we feel asking is always cheaper than spying.”

Snowden revelations continue to trickle out - some of the latest stories talk about tracking people's phone locations, putting backdoors into RSA security products (the sort of behaviour that will kill US tech firms eventually, prompting them to complain to the White House) along with some judicial to-ing and fro-ing about the legality of the NSA's surveillance programs.

Happy 10th Birthday Energy Bulletin  

Posted by Big Gav

Resilience / Energy Bulletin has a post celebrating 10 years of operating - Energy Bulletin and Resilience: Behind the scenes of the first 10 years.

In 2003 two young Australians, Adam Grubb and Liam Cranley, teamed up to fill a gap in the World Wide Web: solid information on peak oil. Prompted by a suggestion from Richard Heinberg, author of The Party's Over: Oil, War, and the Fate of Industrial Society, they imagined a website that would gather all the best information about peak oil and related topics. Although neither had any experience with such a project, they launched Energy Bulletin that year.

Those Australians were soon joined by a curious Californian who landed on their site the following year. Bart Anderson, who would become the longest serving editor for Energy Bulletin (now Resilience) struck up a transoceanic relationship with the Australians. Together they built the web's most recognizable peak oil-related site, one that has been expanded to cover a wide range of topics related to energy and sustainability.

Longtime contributor Kurt Cobb spoke with Anderson, and emailed questions to the founders and two current co-editors, Kristin Sponsler and Simone Osborn. In these excerpts, the founders and editors share their experiences and insights from the first 10 years of this remarkable web publication.

Power plays over the Syria war  

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I was talking with a Jewish friend over my Christmas break and he expressed concern that Israel will become unimportant to the US as the shale oil boom reduces the importance of middle east to the US economy.

I'm doubtful that this will be the case (although hopefully military interventions like the Iraq war won't be repeated) - the reasoning I'm using is that while the US may be able to meet the majority of it's (declining) needs for oil using domestic production (including that from Canada) for some time, middle eastern oil will remain highly valuable for some time as Iraqi oil that can be produced for $5 per barrel has far more profit potential than US shale oil costing $80 per barrel to produce. As a result, there will always be an economic interest in interfering in the middle east (along with the leverage that is conferred over oil importers like Japan and China by controlling middle eastern supplies).

So I'm guessing Israel won't be left to their own devices by the Americans any time soon - this may change in a couple of decades time (possibly accelerated if there is a rapid shift to electric vehicles).

During the conversation we also touched on the Syrian conflict - I explained my theory that gas pipeline routes were one of the prime causes of the violence which resulted in the question being posed "why doesn't anything like this ever get written in the Australian media".

News Corp controlling 60% of the Australian media probably accounts for most of this, with Fairfax's continuing shrinkage of original reporting making matters worse. I had a quick look around to see if there was anything else but couldn't find anything other than a shallow piece at The Daily Reckoning and this post by Xavier Rizos at the ABC's "Drum" (and he is from France originally) - Power plays over the Syria war.

Despite these intolerable crimes against humanity, the situation is more complex than a fight between a 'good' rebellion and an 'evil' dictator. What initially looked like a repeat of the 2003 Iraq war is less likely to happen. 2013 is not 2003, Syria is not Iraq, and gas is not oil: this is the key to reading the new situation.

The Syrian conflict started as a domestic crisis but with significant global contributing factors.

For the past 10 years, IMF-backed reforms have caused an increase in unemployment and inequality. Falling oil revenues have cut the regime's ability to subsidise its economy, and drought possibly brought by climate change has contributed to rebellion in rural areas.

However it has now become a regional conflict tangled in the political strategy of isolating Iran, and the economic strategy of securing gas supplies.

This means that the crisis is beyond the point where the 'simple' removal of Assad would bring resolution or stop the blood bath fuelled by Qatar on one side and by Iran and Russia on the other side.

So far, judging by the way Putin has pushed his agenda, like a chess master culminating with an unprecedented op-ed in the New York Times, Russia is emerging as the winner from this war.

Following the dissolution of the USSR, the Russians realised they had lost the energy war. They had not secured access to the Middle East oil fields, which remained under American control. Vladimir Putin vowed not to repeat this mistake when he became president. He understood that gas was the new battlefield, and his weapon to win this time was going to be the giant company Gazprom. In the 1990s, it was privatised and its assets were stripped by corrupt oligarchs who transferred them to their families. Putin prosecuted them, ended this looting, and established state control of this strategic asset.

What came out of it has had a direct impact on today's war.

Since then, Gazprom has established a quasi monopoly on gas exports to Europe. This came to Europe's attention most powerfully in winter 2009 when a dispute between Russia and Ukraine resulted in Putin ordering cuts to exports by 60 per cent overnight. It plunged the EU into an energy crisis and reinforced its paranoia about becoming a hostage of Gazprom.

This is the origin of the EU's love affair with Qatar.

Qatar possesses some of the world's largest natural gas reserves and has been financing the Syrian rebels. In fact it has become to gas what Saudi Arabia used to be to oil, which puts it on a direct collision course with Russia and Iran.

Indeed tensions are increasing between the Qatari Sunni Emirate and the Shiite Iranian Islamic Republic because of the gas fields they share right in the middle of the Persian Gulf. While international sanctions are frustrating Iran's gas exports, Qatar is emptying the shared reserves. It is shipping liquefied gas on tankers via the Strait of Hormuz, which is under the military control of Iran. To break this vulnerability, Qatar had a project to build a gas pipeline to the Mediterranean Sea via Syria.

However Assad refused to go with this Qatari project, preferring to sign a 'Pipelineistan' deal with Iran, which had a possible extension to Lebanon to reach Europe. It was supported by Moscow which wants to prevent Qatar from supplying Europe. The Syrian civil war derailed this plan and an angered Qatar has been funding the Syrian rebels in revenge.

Former BP geologist: peak oil is here and it will 'break economies'  

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The Guardian has an article on a recent lecture by Richard Miller - Former BP geologist: peak oil is here and it will 'break economies'.

A former British Petroleum (BP) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of "continuous recession" and increased risk of conflict and hunger.

At a lecture on 'Geohazards' earlier this month as part of the postgraduate Natural Hazards for Insurers course at University College London (UCL), Dr. Richard G. Miller, who worked for BP from 1985 before retiring in 2008, said that official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil had most likely peaked around 2008.

Dr. Miller critiqued the official industry line that global reserves will last 53 years at current rates of consumption, pointing out that "peaking is the result of declining production rates, not declining reserves." Despite new discoveries and increasing reliance on unconventional oil and gas, 37 countries are already post-peak, and global oil production is declining at about 4.1% per year, or 3.5 million barrels a day (b/d) per year:

"We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply... New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover – but production is still falling at 4.1% p.a. [per annum]."

Dr. Miller, who prepared annual in-house projections of future oil supply for BP from 2000 to 2007, refers to this as the "ATM problem" – "more money, but still limited daily withdrawals." As a consequence: "Production of conventional liquid oil has been flat since 2008. Growth in liquid supply since then has been largely of natural gas liquids [NGL]- ethane, propane, butane, pentane - and oil-sand bitumen."

Inexpensive oil vanishing at alarming rate  

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The Globe and Mail has an update on peak oil - Inexpensive oil vanishing at alarming rate.

The United States is awash in shale oil. Iran, once OPEC’s second-largest producer, is slowly ramping up output. Oil consumption growth in the Western world has been somewhere between negative and flat since the 2008 financial crisis. The “peak oil” theory has pretty much vanished, along with The Oil Drum, the bible of peak oil believers. Rest in peace.

Or turn in your grave, for the oil price charts tell a different story.

On the New York Mercantile Exchange, crude oil futures are up 13 per cent over one year. Since 2009, they have climbed every year except 2012. In Europe, the Brent crude futures are flat over the year after rising three years on the trot. Brent, the de facto global benchmark, trades at about $108 (U.S.) a barrel; West Texas Intermediate, the North American benchmark, is at $97. For the sake of argument, let’s say the world is valuing oil at $100. You would think the price would be far less as the United States challenges Saudi Arabia for top producer status.

While the oil forecasters were pumping out bearish calls, the market itself has stuck to its triple-digit price outlook. Oil buyers apparently know the Western world’s economic recovery will boost consumption, since growth and oil use are aligned. That’s not all. They also know that the math doesn’t work: Prices can’t go into gradual, long-term decline, or even stay flat, when the world’s conventional oil fields are in fairly rapid decline.

Exotic production – oil sands, biofuels, natural gas liquids – are supposed to fill the gap. But this so-called unconventional production is highly expensive and quite possibly insufficient to cover the drop off in cheap, conventional production. Prices will rise to the point that demand will have to level off or fall. The “peak oil” and “peak demand” theories are really opposite sides of the same coin.

A few days ago, Richard Miller, the former BP geochemist turned independent oil consultant, delivered a sobering lecture at University College London that laid out the case for dwindling future oil supply. His talk was based on published data from the U.S. Energy Information Agency, the International Energy Agency, the International Monetary Fund and other official sources.

The data leave no doubt that the inexpensive oil is vanishing quickly. Conventional oil production peaked in 2008 at about 70 million barrels a day and is declining by about 3.3 million barrels a day, every year. Saudi Arabia pumps about 10 million barrels a day. The math says a new Saudi Arabia has to be found every three years to offset the conventional oil drop off. Good luck. Now you know why Russians, Canadians and Americans are so keen to lock up the Arctic, the alleged keeper of vast new reserves.

About one-quarter of conventional production comes from the 20 biggest fields and most of them are in decline, some precipitously. North Sea oil production peaked at 4.5-million barrels a day in 1999. This year’s production is forecast at between 1.2 million and 1.4 million barrels a day. The so-called Forties field, the North Sea’s biggest, has been losing 9 per cent a year for more than 20 years. Ditto two other North Sea biggies – Brent and Ninian.

Great Britain shed its status as an energy powerhouse about a decade ago, when it became a net energy importer. Its energy import bill is horrendous. Last year, Britain spent almost £22-billion ($38-billion) buying foreign oil, natural gas and coal.

Repeat all over the world, from Mexico to Indonesia. Indonesia’s oil production has been in steady decline since the mid-1990s, and the country has gone from oil exporter to importer, at which point it got kicked out of the Organization of Petroleum Exporting Countries. While new exploration and technologies will extend the life of some of the gasping old fields, the long-term downward trend is intact.

Oil, Gas and the Senkaku / Diaoyu Islands Dispute  

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Martin Wolf at the FT is warning that "Beijing, in its dispute with Japan, risks repeating the errors of an earlier era that led to war" as the sabre rattling over the disputed Senkaku / Diaoyu islands continues - China must not copy the Kaiser’s errors.

The latest development in the tension over the islands (and the seabed surrounding them) is an announcement by South Korea extending its air defence zone to cover the islands, overlapping the zones proclaimed by Japan and China - South Korea extends its air defence zone to overlap with China's.

The BBC says the dispute is over a range of factors, including oil and gas - Q&A: China-Japan islands row.

They matter because they are close to important shipping lanes, offer rich fishing grounds and lie near potential oil and gas reserves. They are also in a strategically significant position, amid rising competition between the US and China for military primacy in the Asia-Pacific region.
The Economist is also pondering the dispute - Who really owns the Senkaku islands?.
If possession is nine-tenths of the law, the answer is simple: Japan. It claims to have “discovered” the islands, a terra nullius belonging to no one, in 1884. In early 1895 it annexed them, shortly after Japan had defeated a weakened China in a brief war and seized Taiwan, which lies just to their south, as war spoils. One Tatsushiro Koga was licensed to develop the islands. He set up a bonito-processing station whose 200 employees also killed the once-abundant short-tailed albatross for its feathers. The Koga family’s last employees left during the second world war. Upon Japan’s defeat in 1945 control fell to the Americans, who used the islands for bombing practice. In 1972, at the end of the American occupation, the Japanese government resumed responsibility for the Senkakus.

By then, however, oil and gas reserves had been identified under the seabed surrounding the islands. China, which calls them the Diaoyu islands, asserted its claim, as did Taiwan, which is closest to the islands (and which is also claimed by China). China’s claim is vague, and is based on things such as a Chinese portolano from 1403 recording the islands. It all speaks to an earlier world in which China lay at the heart of an ordered East Asian system of tributary states—an order shattered by Japan’s militarist rise from the late 19th century. What this history tells you is not—contrary to modern Chinese claims—that China controlled the Diaoyus, for it never did.

The Diplomat has an article by Michael Turton (much repeated in the conservative press) arguing that Chinese claims to the Senkakus began shortly after oil was discovered in the area - Constructing China's Claims to the Senkaku.

An astonishing thing occurred in 1971: after decades of complete ignorance, the two Chinese governments in Taipei and Beijing both suddenly discovered that they owned the Senkaku Islands. That's right. Prior to 1971, neither government believed that it owned the Senkaku (Diaoyutai, in Chinese). Maps and texts from both governments during the period between 1895, when Japan seized the islands, and 1971, when the claim was first mentioned, have three things in common: (1) they always assign their sovereignty to Japan; (2) they refer to them using the Japanese names; and (3) they never refer to the disputed status of the islands. Simply put, there was no "dispute" over the Senkaku until after scientists raised the possibility of oil in the area in the late 1960s.

National Geographic is also pointing to oil as a factor - Why Are China and Japan Sparring Over Eight Tiny, Uninhabited Islands?.

It's all a bit bewildering—until you consider the rich natural gas deposits of the East China Sea. "Energy is clearly what's driving a lot of Chinese behavior," says Sheila Smith, a senior fellow at the Council on Foreign Relations in Washington, D.C. "They will give you a long, historical explanation of their sovereignty claim. But the idea that there are vast resources under the East China Sea just off their coast is a tremendous motivation for the intensity of their territorial dispute."

Just how much oil and natural gas is at stake, in either the South China or the East China Sea, is unclear. The territorial disputes have prevented any reliable survey. One Chinese estimate puts the oil stores in the South China waters at 213 billion barrels, an amount that would exceed the proved reserves of every country except Venezuela (296.5 billion barrels at the end of 2011) and Saudi Arabia (265.4 billion barrels). That's about ten times higher than a U.S. Geological Survey estimate from the mid-1990s—but even that lower figure puts the South China Sea's oil potential at four or five times that of the Gulf of Mexico. Similarly, China estimates that one of the world's largest natural gas deposits, containing some 250 trillion cubic feet, lies all but untapped in the East China Sea. U.S. energy analysts reckon the "proven and probable" reserves there at only 1 to 2 trillion cubic feet—much less than the Gulf of Mexico, but still considerable.

Bloomberg also has an article looking at the possible reserves of oil in play - Disputed Islands With 45 Years of Oil Split China, Japan.

China is the world’s largest energy consumer and is running out of oil because its aging onshore fields cannot keep pace with near double-digit economic growth. By the end of this decade, the country will need to import more than 60 percent of its crude compared with about 50 percent now and one third of its natural gas, according to estimates from China Petroleum & Chemical Industry Federation. ...

The sea east of China may hold as much as 160 billion barrels of oil and the South China Sea 213 billion, according to Chinese studies cited by the U.S. Energy Information Administration. The EIA says those figures are too high and has its own estimate for the East China Sea of as much as 100 million barrels.

While drilling will be needed to confirm the size of the resource and what is recoverable, China’s estimates are larger than the confirmed reserves in Saudi Arabia of 265 billion barrels and would be enough to meet the country’s needs for a century based on 2011 consumption data provided by BP Plc. Gaining control over the largely untapped areas in the South China and East China Seas would help China avoid Japan’s postwar energy model, where its security is largely staked on oil tanker supplies originating 7,700 kilometers (4,800 miles) from Tokyo in the Middle East. ...

The country is being forced to buy more from the Middle East, importing a record 35.5 million tons of crude from Saudi Arabia, its biggest supplier, in the first eight months of this year, according to data compiled by Bloomberg. The amount was 10 percent higher than the same period last year and the bill came to $29 billion.

If you poke around enough you can find claims of a CIA report saying whatever it is you would like to hear - a Japanese blogger is pointing to a CIA report back from the genesis of the dispute (hosted at Cryptome) - The CIA’s 1971 Secret Report On The Senkaku Islands Dispute.

First of all, you can find the entire CIA report on the Senkaku Islands here, should you be interested. The report was written in 1971 and then “approved for release” on May 2, 2007, which hopefully means nobody in dark suits will be knocking on my door anytime soon. Interestingly enough, that dates the release of this article to before the recent flare-ups between Japan and China, so it’s not entirely new. It does, however, bring up an interesting perspective and thus allows us to see what part of the report has come true (or not true), as well as have an idea of what may be to come. ...

In 1969, the Japanese government sponsored a survey of the underwater geology around the Senkaku Islands. At this point, there really was no thought from really anyone that the Senkaku Islands belonged to anyone but the Japanese. After the survey, they released newspaper accounts that they had confirmed an earlier UN survey saying there was possibly a lot of oil to be had.

Deep Green Power Plant Taps Low-Velocity Tidal Energy With Underwater Kites  

Posted by Big Gav in , ,

Forbes has an article on a Swedish tidal power technology company - Deep Green Power Plant Taps Low-Velocity Tidal Energy With Underwater Kites.

A Swedish start-up company is generating electricity from low-velocity tidal currents with a system of underwater kites called “Deep Green.” The kites are equipped with turbines tethered to the ocean floor and move through the current in an 8-shaped trajectory. Based in Gothenburg, Sweden, Nordic marine energy company, Minesto, claims to have developed the only cost-effective tidal power plant capable of operating in low velocity currents. A prototype of Deep Green is currently producing electricity in the waters off Strangford Lough, Northern Ireland.

Japan Wants To Ring The Moon With Solar Panels To Power The Earth  

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Gizmodo has a post on an unusually ambitious plan for space based solar power being promoted in Japan (being dubbed a "death star" in some quarters) - Japan Wants To Ring The Moon With Solar Panels To Power The Earth.

After the Fukushima boondoggle back in 2011, Japan has wholeheartedly embraced solar power as its alternative energy of choice. So much so, that one Japanese construction firm is campaigning to power the whole Earth with solar energy — that they will beam down from the moon.

The Shimizu Corporation wants to, essentially, build a ring of solar panels around the moon’s equator and transmitted back to the Earth via microwave. And they want to get the project, dubbed LUNA RING (yes, all caps), started by 2035.

East Timor Complains About Australian Spying On Oil And Gas Negotiations / Australia Detains Whistleblower  

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I recently read John Le Carre's latest book, "A Delicate Truth", and today's news stories about Australian intelligence agencies spying on East Timor's government as it negotiated with Australia over oil and gas resources in the Timor Sea did leave a similar bitter taste in the mouth.

The SMH has a report on the case - ASIO raids office of lawyer Bernard Collaery over East Timor spy claim

ASIO officers have allegedly detained a man and raided the office of a lawyer who claims that Australian spies bugged the cabinet room of East Timor's government during negotiations over oil and gas deposits. Attorney-General George Brandis confirmed last night that he had issued a search warrant for a Canberra address and that ASIO had executed it, seizing a number of documents "on the grounds that [they] contained intelligence related to security matters". The current director general of ASIO, David Irvine, was head of ASIS when the alleged bugging operation against East Timor took place.

Lawyer Bernard Collaery is representing the East Timorese government in the Hague as it seeks arbitration over a treaty it signed with Australia over the lucrative deposits, which it has since declared invalid. East Timor, also known as Timor Leste, will tender evidence of the eavesdropping as part of its case.

Mr Collaery, who has just arrived in the Hague, told Fairfax Media the raids were a "disgrace". He said the man ASIO had detained in Australia was a whistleblower who had led the Australian Secret Intelligence Serice operation to bug the cabinet room in East Timor. ...

East Timor alleges that former foreign minister Alexander Downer dispatched a team of ASIS officers to East Timor's capital, Dili, to bug the government's cabinet room and Prime Minister's office in 2004. ... At the time of the alleged ASIS operation, the two countries were negotiating a treaty covering the Greater Sunrise oil and gas deposits, worth many billions of dollars and the fledgling country's major source of revenue. ...

The negotiations over the Greater Sunrise were tense and Mr Downer was eventually forced to give East Timor a greater share of the deposits after public outrage here and in East Timor.

The SBS report on the subject notes that the Australian foreign minister at the time, Alexander Downer, went on to become a lobbyist for Woodside after he left politics - PM defends ASIO raid on Timor lawyer's office.

Lawyers for the tiny nation argue the Howard government used the Australian Secret Intelligence Service (ASIS) to spy on the East Timorese government to give Australia an unfair advantage in talks over the resources deal and a benefit to Woodside.

On Wednesday, officers from Australia's domestic intelligence agency, ASIO - on the orders of Senator Brandis - raided the Canberra office of lawyer Bernard Collaery, who is in the Netherlands preparing for the case. ASIO officers also reportedly interviewed a former senior ASIS agent who was expected to give evidence at The Hague, and cancelled his passport.

Mr Collaery says the ASIS agent had decided to blow the whistle on the 2004 operation because former foreign minister Alexander Downer had, after leaving politics, become a lobbyist for Woodside.

Crikey's Bernard Keane notes that US style tactic for suppressing whistleblowers are being adopted here (it's worth noting these revelations aren't part of the endless series of information dumpes coming from Edward Snowden) - The war on whistleblowers — it’s come to Australia.

To the extent that it hadn’t before, the war on whistleblowers and journalists that has been waged in the United States and the United Kingdom for the past several years has now been opened in Australia in the past 24 hours.

The Prime Minister’s attack yesterday on the ABC, Communications Minister Malcolm Turnbull’s unusual direct intervention with the ABC managing director Mark Scott, the smear campaign directed at Scott and The Guardian by loyalist media and then the remarkable news that ASIO had raided a Canberra lawyer’s office to seize information relating to an action brought by Timor-Leste in the International Court of Justice, are all profoundly concerning and all very familiar.

The Timor-Leste matter is entirely separate from the the ongoing Snowden revelations. The information was seized by ASIO agents in a raid on the office of Bernard Collaery, who was ACT attorney-general in the Kaine Liberal government in the late 1980s, authorised by current Attorney-General George Brandis under a remarkably wide warrant. It reveals that the Australian Secret Intelligence Service used Australia’s aid program to Timor-Leste as a cover for bugging the East Timorese cabinet to advantage the Howard government in commercial negotiations. The whistleblower who revealed this particularly shabby and highly damaging operation was also detained.

That whistleblower, said to be a former senior ASIS official, has not approached the media but is instead providing evidence in the legal action brought by Timor-Leste. In a crude attempt to prevent the former official from giving evidence in The Hague, his passport has now been cancelled. This particular dirty laundry goes back nearly a decade: the current head of ASIO, David Irvine, headed ASIS when it undertook this commercial espionage for the Howard government in 2004.

We’ve seen such tactics before, time and again, almost to the point of ritual, from the Obama administration in response to leaks by national security whistleblowers and their reporting by journalists: distract from the information revealed by attacking media outlets and journalists, suggest they are harming national security and should be prosecuted, attempt to discredit the revelations and use whatever legal measures are possible to harass whistleblowers and journalists, including, if necessary, anti-terrorism legislation.

The behaviour of the Abbott government in relation to the Indonesian phone-tapping story perfectly fits this pattern. While admitting that the revelations were a genuine story, both Tony Abbott and Malcolm Turnbull have attacked the ABC, which partnered with The Guardian in breaking the story. In a remarkable statement yesterday, Abbott suggested the ABC had breached its own act by “advertising a left-wing British newspaper”. When Katharine Murphy of The Guardian asked him whether the ABC’s partnering with Fairfax or News Corp to break stories was also “advertising”, Abbott refused to answer.

The ABC has a look at the legality of the events - Would spying on East Timor by the Australian Secret Intelligence Service be illegal?.

The location of the sea boundaries between Australia and East Timor has been an issue of contention between the two countries since East Timor attained independence in 2002. Their differing positions matter because there are major oil and gas reserves lying beneath the Timor Sea, known as the Sunrise and Troubadour deposits.

Following a series of negotiations, Australia and East Timor signed the CMATS treaty on January 12, 2006 and it came into force on February 23, 2007. The purpose of the CMATS treaty was "to allow the exploitation of the Greater Sunrise gas and oil resources" by providing for "equal sharing of the upstream government revenues flowing from the project". It was also agreed that Australia and East Timor would not make further claims over territory in the Timor Sea for 50 years.

The Sunrise project was to be developed by private oil and gas companies including Woodside, Shell and ConocoPhillips.

Both the Australian and East Timorese governments supported the treaty at the time it was signed, although Dr Clive Schofield of the Australian National Centre for Ocean Resources Security at the University of Wollongong notes some have argued that "the treaty is inequitable, favouring Australia at East Timor's expense and that it is the consequence of an unfair bargaining process"

The Age has some commentary recommending a fair border be established - Heed law of the sea and set a fair Timor border.

Indonesia isn't the only country in our region upset about Australia's spying. East Timor has accused Australia not just of spying on it, but of doing so for economic gain. Earlier this year, East Timor launched an arbitration process arguing that a key treaty concerning lucrative oil and gas resources in the Timor Sea was not valid because Australia had spied on Timor's negotiating team and bugged the Timorese cabinet room. ...

Many hoped the Australian-led peacekeeping mission in 1999 would not only be a great redeeming act, but would mark the beginning of a new era in which Australia would finally and unreservedly respect the sovereignty of its tiny neighbour. However, three years later, in 2002, two months before East Timor's independence, Australia made a decision that set a very different tone. It withdrew its recognition of the maritime boundary jurisdiction of the International Court of Justice and the International Tribunal for the Law of the Sea.

By turning its back on the independent umpire, Australia knew East Timor would have no legal avenue to stop Australia from unilaterally depleting contested oil and gas resources in the Timor Sea. This gave Australia an immense advantage when it begrudgingly agreed to sit down at the negotiating table in 2005.

East Timor, understandably, like any sovereign country, wanted to establish permanent maritime boundaries and it wanted to do so in accordance with international law. Australia had other ideas and successfully jostled Timor into yet another temporary resource-sharing agreement that required the establishment of permanent boundaries to be postponed for 50 years.

At the beginning of 2006 the two countries signed the Treaty on Certain Maritime Arrangements in the Timor Sea, which would split 50-50 the upstream revenues to be generated by the massive Greater Sunrise gas field.

The field, which is expected to generate about $40 billion in government revenues, lies just over 100 kilometres from East Timor's coastline. If permanent maritime boundaries were established in accordance with current international law the field would lie entirely within East Timor's exclusive economic zone.

Since the 1982 United Nations Convention on the Law of the Sea, international law has strongly favoured median line boundaries between countries less than 400 nautical miles apart - that is, draw a line halfway between the two countries' coastlines. While there are 80 examples of the median line resolving such claims, there is only one exception; the 1972 Australian-Indonesian seabed boundary.

Australian Natural Gas comes off the backburner with soaring exports and prices  

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The SMH has a summary of the evolution of the Australian natural gas market on the east coast - Gas comes off the backburner with soaring exports and prices.

Natural gas was little more than sideshow when hardy souls first started probing the seabed between Tasmania and the Australian mainland in the 1960s.

Five of the world's biggest oil nations had just formed a restrictive cartel, and Australia's dependence on imported petroleum products was both a concern and an entrepreneurial opportunity for those willing to join the fur seals in the high seas of Bass Strait.

Unable to extract the lucrative black liquid without also bringing up flammable gas, the pioneers struck a deal to hand the gas over to the Victorian government for a pittance as soon as it travelled the 77 kilometres to shore.

But almost 50 years and a few bouts of privatisation later, gas has risen to become very much front of mind in Bass Strait, and is at the centre of a new rush to secure energy supplies before prices soar. ...

Plans to export huge amounts of gas from Queensland to north Asia later this decade are having flow-on effects for the entire eastern seaboard, where a single gas grid connects NSW, Victoria, Tasmania, South Australia and Queensland.

Exporting gas is more attractive for companies because it can be sold for higher prices than the $3 to $4 per gigajoule paid by consumers in the domestic market.

The price pressure has been exacerbated by the growing realisation that some of Queensland's big gas export plants - particularly the one being built by Santos - don't have quite as much coal-seam gas coming down the pipeline as first thought.

That combination of factors is likely to drag domestic consumers into a bidding war with foreign buyers, and UBS energy analyst Nik Burns believes gas prices could triple as a result. ''Our view is that gas prices will peak around the $10 to $12 per gigajoule mark in Queensland from 2015 to 2019. Given the distance from the LNG projects in Queensland, other states will be sheltered from these prices to a certain degree, but we still anticipate gas prices there to nearly double from about $4 to as high as $8 per gigajoule,'' he said.

A squabble for gas would be ironic for a nation heavily endowed with the resource, but that is the likely outcome so long as Australia remains an exporter...

Solar at 2c/kWh? Not a matter of if, but when – and by whom  

Posted by Big Gav in , ,

Giles Parkinson at RNE has an article on the falling price of solar PV - Solar at 2c/kWh? Not a matter of if, but when – and by whom.

Solar PV at 2c/kW by 2050? It’s simply a matter of when, not if, the solar industry says. But the head of one of the world’s leading research organisations is warning that the biggest problem may be creating enough capacity to meet demand.

That’s not the big issue right now for the solar PV industry. For the last two years, solar manufacturing capacity has far exceeded demand, leading to cut-throat pricing that undercut manufacturing costs, causing huge losses and many to be forced out of business.

That balance is now being redressed, as rationalisation takes hold and demand soars in Japan, US, China and some emerging economies. The good news for consumers is that manufacturing costs are still coming down.

Eicke Weber, the head of the Fraunhofer Institute for Solar Energy Systems in Freiburg, Germany, the biggest solar research facility in Europe, and the second biggest in the world, says the greatest concern is that cheap solar may be available to just 10 per cent of the population.

That is why Weber is now advocating what he describes at PV 2.0 – an ambitious plan to build a pan-European manufacturing capacity along the same lines as the Airbus consortium.

Part of this plan is motivated by the desire to ensure that Europe retains the manufacturing capacity of an industry it kick-started through the feed-in tariffs launched in Germany and then adopted around the rest of the continent – and more recently in Australia, Japan and China.

German equipment manufacturers have done well out of the Chinese manufacturing boom, even if German module manufacturers didn’t prosper quite so well in the long term. The equipment suppliers sold some €60 billion worth of equipment to the Chinese manufacturing industry, but the Chinese government is now mandating that 80 per cent of that equipment be supplied locally.

Hence the need for a European manufacturing capability that can match others on scale and cost, for the sake of businesses all along the value chain.

The two great vested interests: bankers and communists  

Posted by Big Gav

Alan Kohler has an interesting post at the BS on the new pope, American bankers and Chinese Communists - The two great vested interests: bankers and communists.

Forty years ago the average wealth of the top 1 per cent was exactly 10 times the average of the rest. Now it's 29 times, and rising, while the wealth of the rest is flat. His point was that inequality is likely to be the next great challenge for the world economy. ...

In his Exhortation last week, Pope Francis wrote: "When a society – whether local, national or global – is willing to leave a part of itself on the fringes, no political programs or resources spent on law enforcement or surveillance systems can indefinitely guarantee tranquility." ...

US radio commentator Rush Limbaugh attacked last week's homily as "pure Marxism", which is slightly ironic given that much of the inequality that the Pope is complaining about is largely coming from the world's last great Marxist state. ...

"This imbalance," Pope Francis writes, "is the result of ideologies which defend the absolute autonomy of the marketplace and finance speculation. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenceless before the interests of a deified market, which become the only rule."

In recent weeks I have been developing an idea – that is, trying it out in speeches – that inequality results when elite vested interests succeed in distorting society to their own ends, and the two great vested interests of the modern world are American bankers and the Chinese Communist Party.

It is hard to decide which of these two groups has been most successful in capturing a disproportionate share of its society's wealth. Each group has been phenomenally successful in its own way ... .

'Pope' Xi Jinping's Exhortation in November following the Third Plenum of the 18th Congress, like Pope Francis', was all about the importance of alleviating inequality – but not through redistribution, as the Holy Father was calling for, but by opening up the economy through market-based reforms.

For the Chinese, it seems, capitalism is the opiate of the masses, not religion as Marx said.

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