US Exim Bank criticized for providing credit finance to Mega Coal Power Plants in India and Africa

14 Jul, 2010
Climate Change,Coal,Energy,Renewable Energy,USA

US Export Import Bank (Exim) is a government owned financial institution which helps support US trade through credit financing of exports/imports of US companies.The Bank is also an instrument of US government policy which supports renewable energy and acts against climate change.However its recent policy actions have been criticized heavily by environmental groups for supporting dirty energy in developing countries of Asia and Africa.Note Exim Bank already support Energy Projects 95% of which are based on Fossil Fuels.The Exim bank has come under fire for succumbing to US business lobbies for providing credit financing to the tune of $560 million for coal mingin equipment to be supplied by Bucyrus International  to India’s Reliance Power’s massive Sasan Coal Plant.This financing which was rejected 3 weeks ago has been “reconsidered” ostensibly due to Reliance Power’s 250 Renewable Energy Plant.

Note the order 3 weeks ago had found huge opposition from political and business groups.The usual reasons  were touted for opposing this order such as loss of  jobs,loss of orders etc etc.There was no consideration for the fact that Coal is the dirtiest form of energy and needs no explicit and implicit subsidies.It is estimated that Fossil Fuels get $550 Billion in Subsidies globally and this is one the major reasons behind the slow uptake of Green Energy forms like Solar,Wind,Geothermal etc.Such retrograde decisions under pressure from vested interests will help neither US nor India ,only the profiting business and political groups.Environmental groups are lobbying to force multilateral lending institutions like the Exim Bank,World Bank and IFC to consider GHG emissions in their lending decisions.Even US officials are talking about it.However action speak louder than words.

U.S. Export-Import Bank Reconsiders India Coal Financing Deal – Bloomberg

The U.S. Export-Import Bank will reconsider its rejection of a loan guarantee for Bucyrus International Inc. so it can sell coal-mining equipment for a power project being developed by India’s Reliance Power Ltd.The bank acted after Democratic lawmakers in Wisconsin, where Bucyrus is based, appealed the rejection last week of $560 million in financing on environmental grounds. Reliance told the bank it may buy U.S. equipment for a renewable energy project, bank Chairman Fred Hochberg said in a letter.

The bank “will take into account Reliance’s expressed commitment to invest in the renewable energy sector” in its review, Hochberg wrote to Reliance chairman Anil Ambani today.Bucyrus would lose an order worth as much as $560 million for electric drag lines and rope shovels to mine coal without getting the Export-Import bank’s guarantee, Bucyrus Chief Executive Officer Timothy Sullivan said in an interview June 28. The financing request was turned down last week as part of the lender’s review of the project because of its potential carbon emissions.

Exim bank applauded for decision on Sasan – Business Standard

A San Francisco-based non-profit organisation, Pacific Environment’s Responsible Finance Program holds public banks such as the US Export-Import Bank accountable to taxpayers, project-impacted communities and the environment.The group issued statement after the businesses and local politicians in Wisconsin asked President Barack Obama and Ex-Im Bank to reverse its decision, with regard to not approve the financing the project as it would result in hitting as many as 1,000 jobs in the US.

The 3,960 megawatt (MW) Sasan coal power and mine is one of the 9 earmarked ‘ultra-mega’ coal-fired power stations proposed by the Indian government as an effort to reach specific energy capacity goals by 2017.The project would release vast amounts of pollution into the local environment and the global atmosphere. The annual greenhouse gas emissions from this project alone would nearly triple the total annual emissions of all fossil fuel projects approved by Ex-Im Bank in 2009, the statement said.

“We have been long concerned that Ex-Im Bank’s fossil fuel financing has been skyrocketing, and support for Sasan would have sent those emissions off the charts,” said Norlen, adding we hope the decision on Sasan marks a pivotal point for Ex-Im Bank as they avert future involvement with harmful fossil fuel projects.

Ex-Im Bank’s decision to decline support for Sasan brings the federal government export credit agency more in line with the rest of the Obama Administration’s efforts to reduce fossil fuel subsidies and expand support for renewable energy and energy efficiency, the NGO said.

U.S. eyes geothermal for Exim Bank’s $1 bln Indonesia credit – Reuters

Part of a $1 billion credit facility backed by the Export-Import Bank of the United States (Exim Bank) for Indonesia should be used to help develop clean energy projects such as geothermal power, a senior U.S. official said on Monday.The U.S. Exim Bank announced in late June it had pre-approved 11 Indonesian banks to receive funds under the scheme, which aims to make credit available to public and private sector businesses under low or fixed-interest rates.

U.S. companies currently have $18 billion worth of investment in Indonesia, which boasts the potential to produce an estimated 27,000 megawatts of electricity from geothermal sources.U.S. energy major Chevron Corp is among firms that have bid for a geothermal power project in Indonesia, as the country seeks to boost erratic power supply and cut its greenhouse gas emissions.

However, geothermal energy production is expensive and struggles to compete in Indonesia, where fossil fuels are heavily subsidized.

Is the Jindal Rs 42000 crore Coal to Liquid project in Orissa wasteful just like the Tata-Sasol CTL plant?

13 Jul, 2010
Clean Coal,Coal,Energy,Oil

Jindal Steel and Power Limited (JSPL),one of India’s biggest private sector Steel companies is looking to build a Rs 42000 crore ( ~$10 billion) Coal to Liquid (CTL) project in India’ eastern state of Orissa.Note JSPL is headed by Naveen Jindal who is also a leader of India’s ruling Congress party.This CTL plant will be a part of an ~$22 billion proposed investment in Orissa by the Jindal group.I had earlier written that the Tata-Sasol Group planned $10 billion CTL project might not be the best usage of India’s mineral and land resources.

Jindals and Tatas the only 2 shortlisted applicants for CTL projects in 2009

The  Jindal Group along-with Tatas had been shortlisted from 22 applicants in 2009 for building Coal to Liquid projects in Orissa.They had also been awarded coal blocks for securing raw material for their plants.Note there was no revenue sharing agreement over these proposed projects.These plants which have a proposed timeline of 8 years to completion will produce around 80,000 barrels of petroleum products a day.Both these companies don’t have the technology as Sasol-Lurgi have monopoly over this technology,so don’t know what the criteria was for awarding these companies these huge coal blocks.Also both of them have no previous experience in CTL projects as well though both would have coal technology experience being heavily involved in the steel industry.

Sasol and Lurgi seem to be monopolistic holders of the Coal to Liquid (CTL) Technology

The technology provider for this project will be Lurgi, a German company which is also the technology provider for the Sasol Group which is a JV partner with the Tatas.In fact the Sasol-Lurgi JV seems to be the only Coal to Liquid (CTL) technology provider globally.The other plants being build in China and Qatar have also got these 2 firms playing the role .Note Lurgi has been bought over by the Air Liquide Group earlier.Sasol is a South African giant which controls most of the fossil fuel and petrochemical production in South Africa.It has come under criticism for deriving super normal profits and also for other infractions of the law as well.

Tatas, Jindal Steel first companies to make oil from coal – MyDigitalFc

Tata Sons and Jindal Steel and Power (JSPL) will be the first two companies in the country to produce oil from coal through projects entailing a total investment of about Rs 90,000 crore.A decision to this effect was taken by the prime minister’s office (PMO) on February 27 — two days before the code of conduct came into force. However, the haste would ensure no profit for the government because it will not get any share from the near 3.5 million tonnes of oil and oil products from each coal-to-liquid (CTL) block.

A top coal ministry official said Strategic Energy Technology Systems (SETSL) — the consortium between Tata Sons and South Africa-based Sasol Synfuels International (Proprietary) — has bagged the Arkhapal block.Jindal Steel and Power has been awarded the Ramchandi promotional block. Both the blocks lie in Talcher, Orissa.

On being contacted, a Tata Sons spokesperson said refused to make any comments.A JSPL spokesperson confirmed the company is interested in the project. The spokesperson, however, said the company has not received any written communication from the government. JSPL will partner with Germany’s Lurgi for developing the project.

The ministry official said that the government could not ask for its share from the CTL projects because the coal sector has not yet been opened for competitive bidding. A bill to amend the Mines and Minerals (Development and Regulation) Act, 1957, was introduced for discussion in Parliament during the recent session that concluded on February 26.

JSPL may ink MoU for Rs 42K-cr CTL plant next month – Business Standard

Targeting an investment of Rs 1 lakh crore in Orissa over the next one decade, the Naveen Jindal-led Jindal Steel and Power (JSPL) today said the company is likely to sign an MoU with the state for setting up a Rs 42,000-crore coal-to-liquid (CTL) plant next month.

“After completing the official procedures, we will sign an MoU for the CTL project involving an investment of Rs 42,000 crore,” JSPL Executive Vice-Chairman and Managing Director Naveen Jindal told reporters after a meeting with Chief Minister Naveen Patnaik here this evening.A coal-to-liquid project involves extracting fossil oil from coal. Once completed, this is will be first such project in the country.

Stating that he discussed with the chief minister the group’s four projects comprising the Rs 52,000-crore steel plant, a thermal power plant involving Rs 6,600 crore, the Rs 42,000-crore CTL plant and an industrial complex envisaging an investment of Rs 500 crore, Jindal said a total of Rs 1,01,100 crore would be invested in Orissa over the next decade.

Lurgi offers coal to liquid technology – FE

Lurgi India Company Pvt Ltd (LND), a wholly owned subsidiary of the Frankfurt based Lurgi AG of Germany, has evinced interest to provide coal to liquid (CTL) technology to India. Many potential CTL project proponents like JSPL, GAIL, IOC, Sterling Energy, Bhushan Steel and others have identified Lurgi as a complete technology and engineering services provider for CTL projects.

Lurgi is a technology-based engineering company with expertise for entire processes chain of CTL projects and has the desired engineering experience of several decades.

According to sources, Lurgi has proposed to the coal ministry that it would be prudent to develop three-four CTL projects in India using low-rank high-ash coal from the large reserves in Orissa, Chhattisgarh, Jharkhand and West Bengal. The capacity of the plants could be 40,000 barrel per day (bbl/day) in the first phase with plans for expansion of 80,000 bbl/day.

Lurgi has argued that this approach will indeed help India to assimilate the technology & plant engineering and develop experience in plant operation and maintenance within a reasonable time frame. Sources said Lurgi’s interest to provide CTL technology is crucial when the coal ministry had put on offer three coal blocks in Orissa with combined estimated reserves of 6 billion tonne of coal — one block with 3 billion tonne and the other two blocks with 1.5 billion tonne each. The company that is allocated the block with 3 billion tonne reserves, however, will be allowed mining only up to 1.5 billion tonne of coal in line with the requirements of such projects, with the remaining coal in the reserves to be used for other purposes later.

India and China try to curb GHG Emissions through Coal Taxes and CCS

2 Jul, 2010
Carbon Capture and Storage,China,Climate Change,Coal,Indian Markets

India-China Economic Growth leads to sharp increase in GHG Emissions

The 21st Century is said to be a China-India Century with these Large Asian economies expected to dominate the world through their fast growing economics and large sizes.Their economic development has led to a rapid increase in Global GHG Emissions making China the world’s largest emitter of GHG emissions in the world.India is also rapidly catching up despite a very low per capita emission of 2.1 tons of GHG emission per year compared to 20 tons for the US.China’s rate of emissions has alarmed scientists around the world due to its large size and high growth rate.Both these countries have pledged to reduce their energy intensity of emissions though without any international checks.While China has promised a 40-45% reduction in energy intensity by 2020 from 2005 levels,India has set a target of 25% reduction.

Per-Capita Emissions Rising in China – NY Times

Carbon dioxide emissions per person in China reached the same level as those in France last year, the Netherlands Environmental Assessment Agency said Thursday.The Dutch agency said that per capita emissions were 6.1 tons in China in 2009, up from only 2.2 tons in 1990. Among the French, emissions were 6 tons per person last year, said Jos Olivier, a senior scientist at the Dutch agency.It was the first year since 1992 that the agency had not recorded an annual increase in global carbon-dioxide emissions. From 2002 to 2008, the average annual rate of growth in emissions had been 3.5 percent.Emissions from fossil-fuel combustion – including burning waste gas from oil drilling and other industrial processes – decreased by 7 percent last year across parts of the world like the European Union, Japan and the United States.

But in China, those emissions increased by 9 percent and in India by 6 percent, according to the Dutch agency. India surpassed Russia last year as the fourth largest emitter after China, the United States and the EU-15, Mr. Olivier said.

Global Warming Put into Cold Storage though India and China making small efforts

However the recent Global Financial Crisis has thrown the Climate Change Issue into Cold Storage.China has said that it might not meet its earlier targets while a Global Agreement on Reduction of GHG emissions remains a mirage.However both countries are taking initiatives to reduce GHG emissions.India has imposed a $11/ton tax on Coal while China is planning a 3 million ton Carbon Capture and Sequestration (CCS) Project in Inner Mongolia Region.India also recently partially removed subsidies on Oil and Gas products which should further reduce the usage of Fossil Fuels.All of these steps while not enough to prevent the GHG emission growth,shows the intent of these countries.India’s subsidy reduction and Carbon Tax will go a long way in promoting Green Energy sources like Wind,Hydro and Solar Energy.It is estimated that around $550 Billion is spend on global Fossil Fuel Subsidies.Compare that to the huge protests on minuscule subsidies spent on promoting Renewable Energy.More needs to be done by developed countries as well.While Japan and Europe have been quite progressive in this regard,USA and Canada have callously disregarded their responsibility.Both of these countries top in per capita emissions at  almost 20 tons.US has been making no progress on the Climate Legislation while less said about Canada the better.

India to Raise $535 Million From Carbon Tax on Coal – Bloomberg

India expects to raise $535 million from a levy on coal producers starting today, the first step by Asia’s third-largest energy consumer to charge companies for fossil fuel pollution.“This will give 25 billion rupees ($535 million) this year alone,” Environment Minister Jairam Ramesh said in Mumbai, calling it “a carbon tax that will be used for clean energy.”

The European Union, South Korea and Japan are considering taxing carbon-dioxide emissions from burning fuels such as coal and oil to slow climate change. Australia’s new prime minister Julia Gillard said June 24 she would “re-prosecute the case for a carbon tax” at home and abroad after her predecessor shelved plans for an emissions-trading plan.

China Starts Building First Emissions Capture, Storage Project – Bloomberg

China, the world’s second-biggest energy user, started construction of its first carbon dioxide capture and storage project in Ordos in Inner Mongolia to reduce emissions.The project will cost 210 million yuan ($30.9 million) and will be able to hold 100,000 metric tons of carbon dioxide a year, China National Petroleum Corp., the country’s biggest oil producer and the plant’s designer, said in a statement on its website today. The facility will start operations by the end of the year, it said.

Fossil Fuel Extraction continues to Directly Inflict Thousands of Human Deaths

22 Jun, 2010
Climate Change,Coal,Fossil Fuels,Oil,Renewable Energy

Fossil Fuels form the main Energy source for  humanity due to their abundance,general ease of extraction and high energy density.However the Environmental costs and the Loss of Lives behind their production is generally hidden from the public.The external costs of fossil fuels like Oil and Coal are very high and not explicitly paid by customers .These costs are paid indirectly through health and pollution hazards and by the  loss of thousands of  human lives.The BP Oil Spill has recently highlighted the pernicious effects of extracting these Dirty Forms of Energy .The BP Oil Spill led to a loss of 11 lives when the Oil Rig exploded and will lead to immense costs to the ecology and wildlife which can’t be quantified.$20 Billion which BP is going to reserve in an escrow fund does not measure the massive destruction that is being caused.Oil explosions and Leaks continue to happen unabated around the world on an ongoing basis though they do not receive the same media attention.

Coal Mining is one of the Leading Human Killers

Coal Mining is one of the most hazardous of all industrial activities.Loss of lives due to disasters in Coal Mines are routine matters in countries like India and China.Even developed countries with higher safety standards like the US have seen deaths being caused due to explosions in Coal Mines.The recent accident at Massey Energy highlights the dangers of Coal Extraction.2000-3000 people are killed every year in India and China in coal mining disasters.Coal mining is one of the leading cause of death in industrial activities.Here is a list from wikipedia about the history of coal mine disasters

The Ever-Growing Human Cost of China’s Coal – Times

China’s coal mining industry saw another disaster today when an mine explosion in the central province of Henan killed 46 miners on the spot. The mine, located in one of China’s biggest coal producing regions, was allegedly operating illegally, according to the government-run Xinhua news agency. Though the cause of the blast is still not known, 72 miners were trapped after explosives blew up in the mine. Twenty-six escaped.In China, such disasters occur with depressing regularity, but that doesn’t make them any less tragic. When I first moved to Hong Kong in 2007, I was shocked to read the constant tally in daily news blurbs of the very frequent — and very deadly — mining accidents unfolding next door on the mainland. That, as it turned out, was shaping up to be a particularly bad time. In 2008, 3,215 people were killed in China’s coal mines; by 2009, the number dropped to 2,631.

Massey faces criminal probe for mine blast: sources – Reuters

Massey Energy Co is under criminal investigation by the FBI after the deadly mine explosion in West Virginia, U.S. officials familiar with the matter said on Friday, news that sent the company’s stock plummeting.The FBI is probing the company and the circumstances surrounding the explosion which killed 29 miners, including for potential negligence, the officials said, declining further identification.

Renewable Energy a Cleaner and Humane Way to Satiate Energy Demand

The Global Financial Crisis has made the world to reduce focus on the problems of Peak Oil,Energy Security and Global Warming.However these problems remain as pertinent and dangerous as ever.Renewable Energy makes sense not only from the above perspective ,but they are also a more humane and environment friendly way to meet the world’s Energy demands.The costs of these forms of energy are continuously declining compared to the increasing prices of fossil fuels.Plus most important of all,the usage of Renewable Energy unlike our Addiction of Fossil Fuels does not lead to loss of human lives

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