Fossil Fuels | Green World Investor

$600 Billion – Shocking Global Support of Fossil Fuels

16 Feb, 2012

While there is massive outrage amongst some politicians against the giveaways to support renewable energy, there is very little discussions on the massive subsidies given to the fossil fuel sector. Note globally more than half a trillion dollars is given away to support fossil fuels which is already a mature competitive sector. Green Energy which is a developing industry has got compete with not only the established 100 year infrastructure of fossil fuels but also against these massive $600 billion. However propagandist’s and ignorant sections of the media protest against the support given to the cleantech industry.Here is some bad and shallow journalism on German Solar subsidies

I continue to be surprised by bad and shallow analysis of renewable energy subsidies done by media. Most of it is due to bad research and lack of investigative and unbiased journalism. Writers with little or no background in energy or cleantech sensationalize an issue taking a report from some biased thinktank. Here is one example from a website called ironically Reason.com which you can read here http://reason.com/blog/2012/01/31/black-hole-sun-germany-spends-100-billio

What the writer is saying that Germany is spending massive amounts of subsidies to get little amount of power. What he has missed

With most of the world’s leaders and polticians in the pockets of the fossil fuel industry nothing but empty rhetoric come out in support of renewable energy these days. Global Warming has become a stale issue despite being one of the biggest threats facing mankind.

Climate Change Mitigation and Global Warming have been put in cold storage by world’s major countries like USA and China.While Europe and Japan are pushing initiatives to stop Global Warming,their efforts have been stymied by states like Saudi Arabia, USA and Canada.Some countries keep polluting like there is no tomorrow.USA is far from passing even a watered down climate and energy bill while Canada continues in its merry carbon emitting ways.China which has not committed to a reduction target ans was one of the principal wreckers on a global agreement on climate change in Copenhagen in 2009.China has now surpassed the USA as both the largest energy consumer and GHG emitter.No country is willing to sacrifice even a penny for climate change.A lot of the Green Energy Investment by countries have been to promote their economy rather than concern over climate change.China’s solar industry accounts for more than 50% of the world’s solar production but China has yet to pass a solar subsidy Feed in Tariff Law.The USA is even worse with one of the highest per capita emission of Greenhouse Gases.Despite Obama campaigning on a Green platform,we have not seen any serious efforts by the administration on climate change.The UN official in charge of climate change pessimistically said that she does not envision a climate deal in her lifetime

IISD Detailed Reports on Subsidies

Reports from the IISD examine in details the massive subsidies given by countries both poor and rich to the oil and gas sector. Reports have been issued for Canada , Indonesia and Norway till data. I would urge people to read this research to get a handle on the deep and complex issue of support to the energy industry.

Globally, subsidies to fossil fuels may be on the order of US$ 600 billion per year, of which the GSI estimates about US$ 100 billion is provided to producers. Nobody knows the real number, however, because there is no international framework for regularly monitoring fossil-fuel subsidies.

The GSI’s third report in the series Fossil Fuels – At What Cost? identifies and estimates support for oil and gas production in Norway. This detailed analysis identifies nine subsidies, six of which totalled around NOK 25.5 billion (US$ 4 billion) in 2009. These subsidies include a tax reimbursement for exploration expenses, accelerated deductions on investments, research and development grants, the provision of seismic investigations by the Norwegian Petroleum Directorate, the provision of infrastructure and facilities by Gassco, and special treatment of the Snøhvit field in Northern Norway.

The GSI’s second report in the series Fossil Fuels – At What Cost? identifies and determines the value and impact of oil production subsidies in Alberta, Saskatchewan and Newfoundland & Labrador. This detailed analysis is the first of its kind in Canada and allows appropriate comparisons of subsidies with other countries. It finds 63 subsidies at the federal and provincial level, amounting to C$ 2.84 billion in 2008.

The GSI’s first report in the series Fossil Fuels – At What Cost? studies the subsidies provided to fossil-fuel producers in Indonesia. It identifies three subsidies totaling US$ 1.8 billion in 2008. This is a lower-bound figure for Indonesia, as at least seven other potential subsidies were identified but could not be assessed or quantified based on available information.

US Coal Companies become latest Victims of Cheap Natural Gas

9 Feb, 2012

Coal,Gas

US Coal Companies are being forced to close coal mines and reduce production because of a massive glut of cheap natural gas and emission standards . Note Coal Disadvantages are much more than that of other fossil fuels making it the dirtiest form of energy. While India and China face massive coal shortages , USA on the other hand faces a glut . Coal has been coming under increasing attack in the West with few new thermal plants being opened and many closed due to tougher pollution standards. Note Clean Coal Technologies and CCS is being promoted to prolong the use of Coal but they are not getting much traction.

We face a 2 track world where in USA ,Energy has become cheap because of the Shale Gas Technology while it increases in Asia . While Indian Power Companies are desperately scouting for coal resources, US companies are being forced to shutter mines.

Australian,Indonesian,African Coal Mines Selling like Hot Cakes amongst Power Hungry Indian,Chinese Companies

With domestic coal production rising at a snail’s pace,these companies are racing to secure coal supplies at whatever price they can get.Steel companies too are hungry for coal as it forms a major component of their product.Lanco Solar,Adani Power,Reliance Power,Tata Power,Tata Steel,Coal India have all bought or are in the process of buying coal mines and coal companies in foreign countries.Australian and Indonesian miners are minting top dollar as competition hots up with Rio and BHP Billtion also using thier massive cash hoard into play.Australian coal mining company Whitehaven Coal is the latest to put iself on the selling block with a price tag of more than $3 billion.More than 20 companies are set to be looking into entering the tendering process.

Alpha Natural to cut coal output as demand weakens

Alpha Natural Resources said it will scale back production at many of its central Appalachian coal mines, citing weakening demand from its electric utility customers.The mining company said it will immediately idle four mines in Kentucky and West Virginia and plans to idle two more by early 2013. Other mines will alter work schedules to reduce output, cutting overall production by 4 million tons a year.

How to Play the Coal Story – Buy KOL

Market Vectors KOL ETF provides a good well diversified way to invest in Coal which is seeing a massive upsurge in demand driven by India and China.Note KOL is the only listed Coal ETF with Assets under Management (AUM) of nearly $900 million.It invests mostly in large cap companies and has a global scope.For investors looking for individual stocks here is a list of US Solar Companies and Stocks and Indian Coal Stocks.China with around 3 Billion Tons of Coal Consumption and India with another 500 million Tons depend on King Coal for majority of their Energy Needs.While China generates 80% of its Electricity from Coal,India generates around 65%.While both countries have Huge Reserves and Production of Coal,their voracious demand is leading to surging imports.These Imports are being sourced from countries like Australia,Canada and USA which are going through Coal Mining Booms.Ports are getting congested as Infrastructure failed to meet the growing coal needs of India and China..The Biggest Advantages of Coal its Abundance and Cheapness of Coal has made it the Fossil Fuel of Choice for Electricity Companies building power plants in developing countries despite its Drawbacks.This has led to a fight to secure Coal Supplies through vertical integration into buying up of coal mines,building ports and railways to transport Coal.Though India too faces some environmental opposition,massive ultra mega power plants with capacity of 4000 MW are getting built by new Indian private utilities.

Coal Stealing on Unprecedented Scale by Indian Mafia contributes to Indian Power Woes

9 Jan, 2012

Coal,Energy,Fossil Fuels

Coal Stealing and Pilferage by the Coal Mafia has always been done on a massive multi million dollar scale. In the coal rich states of Jharkhand, Bihar, West Bengal and Chattisgarh, Stealing of Coal is a major illegal industry. Everyone knows about it and nothing is done as most officials and politicians get a cut of the illegal gains. Corruption in India is institutionalized as governing bodies remain weak and powerless. Despite India’s much touted growth story,all these needling problems have contributed towards the Indian GDP slowing down sharply. Unless governance is improved,its tough to see how India can achieve its potential.

Dreaded Dons openly operate and steal millions of dollars in coal every day in the Indian coal districts. Coal India which is the state owned monopoly producer of coal has openly acknowledged the fact.India is facing a power crisis due to inadequate production of coal and the Coal Stealing is contributing. Note the Uses of Coal are more than just power and this stolen coal is diversified and sold to these companies. There are a number of small private companies who buy this illegal coal at lower than market prices. In fact the entire business model of some of these smaller cement,steel companies is built on pilfered coal.

Not only Coal,but other Fossil Fuels like Petrol, Diesel and Gas also have related Mafias stealing and making billions out of their illegal trade. These Mafias are so powerful that they think nothing of killing honest government officials who take them on.

India’s Fossil Fuel Subsidies have led to a massive growth of the petrol and diesel mafia in the country.India gives subsidies on diesel,kerosene and cooking gas through its state owned petro/gas companies like BPCL,IOCL,HPCL etc.These subsidies have been given for a long time and have led to the growth of a parallel black economy in these products.They not only lead to capital misallocation but also to the massive illegal profits for a few.It is a well known fact that all petroleum pump owners adulterate petroleum ( which power most of the cars) with subsdized diesel and kerosene.This massive racket earns millions of dollars (if not billions) for a network of company officials,pump owners,government bureaucrats and politicians.The mafia is so strong and powerful that it thinks nothing of burning alive a senior police official.The racketeers are so rich and well connected that despite common knowledge nothing gets done about it.

List of major Indian Coal Companies

1) Coal India Limited (CIL)- The State Owned Giant Coal Producer dwarfs the other companies through its sheer size,scale,cost and reach.The company has fared poorly in the current year after its IPO as its production growth has almost come to Zero.However its sells coal at such a low cost,that it could easily raise prices of coal in select categories to meet its financial goals.One of the safest investments in the stock market.It posseses high level of cash,low valuation compared to global peers and has a huge room to raise coal prices in the future.

2) Neyveli Lignite Corporation is a PSU like NTPC and is also involved in lignite mining company in India. The company is mainly based out of the southern state of Tamil Nadu and mines some 24 million ton of lignite per year with an installed capacity of 2490 MW

3) Singareni Collieries Company Limited (SCCL) is a PSU jointly owned by Andhra Pradesh and the Federal Governm .The company is involved in mining coal in the GodavariValley region, with reserves of around 8 Billion Tons with production of around 50 million tons a year.Note listed currently still one of the major coal companies in India.

Shocking Land Degradation and Pollution against Environmental Norms by Coal India revealed

4 Jan, 2012

Coal,Energy

Coal India the monopoly producer of Coal in India and responsible for providing almost half of India’s Energy Requirement is a very inefficient organization is well know.Corruption and pilferage of massive amounts of coal is a well known fact to all industry participants.In fact stealing of coal is a major livelihood for lakhs of poor Indians in coal belt areas.What is not well known is that Coal India has flouted all norms of environment and conservation.It has not restored sites of open cast and underground mining leading to massive losses for the local environment and citizens.Sand meant to fill up the old mines has been sold in the market for profits.RTI application has shown that this government maharatna has been negligent towards it duties in a huge scale.No wonder there are so many protests for land acquisitions by industry and the government given the degradation and pollution that these companies do.

The Disadvantages of Coal are many but still most of India’s power plants are being built using coal as fuel.Here is a recap of the major cons of Coal

Greenhouse Gas Emissions - One of the biggest cons of Coal Energy is that it releases Carbon Dioxide which has been sequestered for millions of years in the dead bodies of plant and animals.This transfer the Carbon from the Earth to the Environment leading to the Global Warming Effect.Global Treaties have failed in putting a Cost on this,though individual countries are tying to account for this through Carbon Taxes and Cap and Trade.

2) Coal Mining Deaths - Coal Mining has resulted in thousands of deaths each year ever since man discovered coal.Note Coal Deaths happen not only in countries which don’t have good safety regulations like China but also in developed countries like USA and New Zealand.

3) Devastation of Earth and Scenery Near Coal Mines – Open Cast Mining of Coal has resulted in destruction of the habitat and destruction of the scenery.It leads to removal of trees and pollution of air and water in areas surrounding the mines.Coal Mine Fires have burned for hundreds of year underground and make living in those areas hazardous.Those burning underground can be difficult to locate and many cannot be extinguished. Fires can cause the ground above to subside, their combustion gases are dangerous to life, and breaking out to the surface can initiate surface fires as well.

4) Displacement of Humans due to Mining Destruction - In West Bengal,India people are being displaced in huge numbers as the hollowing of the earth due to underground coal mining has made those places unsafe as the Land Caves in without warning.

5) Emission of Harmful Substances like Sulfur Dioxide,Carbon Monoxide,Mercury,Selenium, Arsenic ,Acid Rain - Thermal Plants emit harmful substances such as Mercury and Sulfur Dioxide which cause health hazards among the surrounding population and Acid Rain.While modern equipment has reduced the emission of these harmful substances,it is still very harmful to humans.

DNA Investigations reveal Coal India flouted Environment Ministry guideline

Coal India Limited (CIL) and its subsidiaries have destroyed at least 60,000 hectares of land across these states. Properly reclaimed, this land could have been used to set up these projects.

According to documents in DNA’s possession, the total area covered by open-cast mines as of March 2011 was 35,570.21 hectares, but the area reclaimed was just 14,949.91 hectares. Replies to queries under the Right to Information (RTI) Act revealed that a majority of these mines were closed between 1980 and 2000.

A visit to some of ECL’s abandoned underground mines revealed that the company’s failure to properly fill the mines had resulted in the land sinking at several places. In some cases, officials were found to have sold the sand meant for refilling the mines.

According to the guidelines of the director general of mine safety (DGMS), land excavated for open-cast mines is to be filled with incombustible material after completion of mining operations and restored to the original level within three months. Voids created by excavation in the quarry are to be simultaneously filled with coal extraction.

Earthquakes – The New Deadly Side Effect of Cheap Gas Production from Shale Formations

3 Jan, 2012

Gas

Shale Gas Technology has completely changed the Oil and Gas Picture in North America.Natural Gas prices have touched new low below $3/mmbtu as massive discoveries and production of shale gas has led to a glut.With the Technology being exported to other countries,it is expected that Natural Gas may take over from Coal as the preferred choice of electricity power generation.China and India are already taking out tenders for shale gas blocks.However Shale Gas has a nasty side effect which is normally not talked about.The cases have kept increasing though the mainstream media and the powerful oil lobby has tried its best to suppress it.The first one is water contamination which I had written about earlier

Shale Gas Water Contamination

Shale Gas which is a new form of Gas Extraction through Shale Gas Formation found deep under the Earth through Pressurized Injection of Water Mixed with Chemicals,is coming under Environmental Scrutiny.There have already been questions raised against theEnvironmental Safety of the Shale Gas Extraction Process.However the entry of Big Oil and Gas is preventing a fair and unbiased investigation into the harmful effects of Shale Gas.Note a NGO has accused the provincial officials and Gas Companies of illegaly using Water Supplies in Pennsylvania.The US Environmental Protection Agency (EPA) has deepened the probe into the process by asking 9 Exploration Firms to send Chemicals Data used in Shale Gas.

Earthquakes the New Danger

The digging of new injection wells which is used to dispose of water has been linked to earhquakes in Ohio.Note the biggest disadvantage of hydro power is that it can cause massive earthquakes due to movement of large earth works.Shale Gas does the same in a smaller way.The Technology is quite new and all the side effects are not known.Minor earthquakes near shale gas digging has been reported before as well.

Ohio Shuts Wells Following Quakes

Ohio became the latest state to take action on the possible link between seismic activity and wells used to dispose of waste water from oil and gas production when state officials ordered a halt to the practice near Youngstown this weekend after several minor earthquakes.

The wells, known as injection wells, have been proliferating in Ohio to accommodate growing volumes of waste water left over from hydraulic fracturing, which involves blasting water, sand and chemicals underground to break apart dense layers of rock to free up oil and gas.

Diversion of Water by Shale gas Companies is another bad effect of this new Natural Gas production.Pennsylvania is Ground Zero for Shale Gas Companies as it has the largest Shale Gas Formation in the world – Marcellus Formation.Large Number of Wells have been dug in the State using Millions of Tons of Water.This has come under the spotlight as it is not legal to draw water under the Clean Streams Act.Only communities adjacent to the rivers can use this water.An Environmental Group has also accused the state EPA of colluding with these corporate interests.

Read about the advantages and disadvantages of Natural Gas to examine the issue further

Nuclear Energy Efficiency vs Fossil Fuels (Oil,Gas) in Power Load Factors,Energy Density and Waste

7 Jul, 2011

Fossil Fuels,Nuclear Energy

Nuclear Energy has come under the spotlight after the Japanese nuclear plant disaster with people focusing on the strengths and weaknesses of nuclear power.One of the most important aspects of nuclear based power is that it is highly efficient.Nuclear Energy is currently the most efficient power source in terms of the fuel required,land area needed and also the waste it produces.The reason for this is that nuclear based electricity is primarily produced from nuclear reactions while other forms of energy like natural gas,coal and oil use chemical reactions.Other such as wind energy convert mechanical energy into useful energy.Nuclear Power currently is mostly produced through nuclear fission as nuclear fusion is still in infancy and its not certain that mankind will be able to use nuclear fusion in a safe manner to generate energy.

Energy Densities of Nuclear Energy vs Fossil Fuels

The Energy Density of Nuclear Energy compared to Fossil Fuels is very high.While most fossil fuel types have similar range of energy output per unit of mass,nuclear energy is almost a million times more efficient .The table below shows the energy densites of nuclear energy fission reactor to different types of fossil fuel

Fuel Type	Energy Density (kWh/kg)	Number of Times Denser than Coal
Nuclear Fission (100% U-235)	24,513,889	2,715,385
Natural Uranium (99.3% U-238, 0.7% U-235) in a fast breeder reactor	6,666,667	738,462
Enriched Uranium (3.5% U-235) in a light water reactor	960,000	106,338
Natural Uranium (99.3% U-238, 0.7% U-235) in a light water reactor	123,056	13,631
LPG propane	13.8	1.5
LPG butane	13.6	1.5
Gasoline	13.0	1.4
Diesel fuel/Residential heating oil	12.7	1.4
Biodiesel oil	11.7	1.3
Anthracite Coal	9.0	1.0
Water at 100 m dam height	0.0003	N/A

Source http://nuclearfissionary.com

Efficiency in Terms of Nuclear Power Plants Load Factors

Nuclear Power Plants have one of the highest load factors in the power industry.Nuclear Power Plants do not suffer from fuel shortages (except exceptional cases) like thermal coal power plants (eg. India) .Nuclear power plants account for about 11 percent of America’s total electricity generation capacity, but because they operate at high levels of efficiency and reliability, they produce nearly 20 percent of the country’s annual electricity supply.U.S. nuclear power plants have performed at an average industry capacity factor of more than 87 percent for the past seven years.

Coal Power Plants and Oil Power Plants perform at 80-90% load factors while solar and wind energy power plants perform at between 15-35% depending on the energy resource and technology types.

Efficiency in Terms of Waste Generated

Nuclear Power Plants produce much lower mass of waste as compared to normal fossil fuel plants like coal,natural gas and oil.Note these fossil fuel plants produce greenhouse gases like carbon dioxide etc. besides coal produces byproducts which are highly dangerous to human health like mercury etc.There are also byproducts generated like fly ash which are also dangerous and harmful to the environment if not disposed of carefully.Nuclear Waste though is a different matter.While some can say its low in quantity the potential hazard is also of magnitudes higher.For example the whole Fukushima danger was due to the spend nuclear rods or nuclear waste.Nuclear Waste is one of the most difficult waste products to transport and store because of its dangerous radioactive effects.Given the long life of some of the transuranic elements Nuclear Waste has to be stored in a safe manner for thousands of years which is a tough given that the chances of leakage become enormous in such a long time scale.Storing of Nuclear Waste has to be performed in a extremely complicated manner which is also enormously costly.Also there are problems of NIMBY with Nuclear Waste Storage as nearby residents don’t want such toxic waste stored anywhere close especially as it does not bring any economic or social benefits.Not there is no permanent storage site despite many decades of planning and billions of dollars being spent.While Japan and Europe reprocess the fuel in the hope that they will be used again that remains a dream with thousands of tons of HLW piling up.USA does not reprocess and also has more than 60,000 tons of nuclear waste waiting for a final home.Till then most of the spent nuclear fuel is being stored in spent fuel pools and dry casks making them vulnerable just like another Fukushima

Summary

We can say that Nuclear Power is most efficient form of energy generation in terms of energy density however in case of waste it is not so.This is because disposing of nuclear waste is a very costly and complex activity which many of the developed nations have shown complete disregard for.Nuclear Power is also efficient in terms of cost (the older plants that is) and plant load factors.

Read more about Nuclear Companies and Stocks

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