Oil-Rich UAE Pushes U.S. to Consider Green Energy

[Abu Dhabi] The capital of the UAE, Abu Dhabi, is investing heavily in alternative sources of energy. The oil rich emirate, the fourth largest OPEC producer, with 10 percent of the world’s known oil reserves, is keen to become a global center for the development and implementation of clean energy technology. The Masdar Initiative - a carbon-neutral city - backed by hundreds of millions of dollars of Abu Dhabi’s money is considered an ambitious goal. However, this historic step does not indicate that the rich emirate wishes to reduce its future investments in oil and gas. The oil and gas sectors still retain dazzling appeal to United States oil companies.

Big U.S. energy firms have a strong presence in UAE’s oil and gas sector, with a market share of 51%, according to published data. The giant multinational Halliburton unveiled plans last March, to move its base to Dubai, one of the UAE's seven emirates. Halliburton, which was headed by U.S. Vice-President Dick Cheney until 2000, said this move will take advantage of the Gulf region's vast oil and gas markets. The New York Times quotes Energy Intelligence Group analyst Susan Shook saying, “they are moving to the center of the Eurasian-African hemisphere and that’s where the bulk of the work is going to be in the future.”

According to the National U.S. Arab Chamber of Commerce publication, last June the U.S. Ambassador to the United Arab Emirates, Michele Sison, said, “with almost $12 billion in U.S. goods exported to the UAE in 2006, opportunities for American industry are virtually unlimited. Among the many sectors showing excellent promise are aircraft and parts, the oil and gas sectors, construction materials, safety and security equipment, medical equipment and project management and architectural and engineering services. “

The country’s current total oil production is around 2.8 million barrels per day, but in April 2007, the UAE’s Minister of Energy, Muhammad Bin Zain Al-Hamili, announced plans to increase production to 3.5 million barrels per day by 2009. Al-Hamili was also president of the Organization of Petroleum Exporting Countries (OPEC) in 2007.

One of the more important energy investments planned for the UAE in the next few years will be by ExxonMobil, which along with ADNOC and the Japan Oil Development Company, plans to increase production from Abu Dhabi’s huge Upper Zakum oil field from 520,000 barrels a day to around 750,000 barrels. ExxonMobil is also establishing a Technology Center in Abu Dhabi to support and train personnel in the most advanced production technologies. Abu Dhabi Oil and Gas City, a $1 billion tax-free zone for the energy industry, will house offshore firms in such fields as engineering, project management, consulting and finance. Occidental Petroleum is also working on the Dolphin Project, a multi-billion dollar initiative to bring natural gas from Qatar to the UAE and Oman.

Given the UAE’s critical need for energy and power, the energy sector is a key area for investment. A vital component of this strategic relationship is maintaining an unhindered flow of oil and gas.

In his meeting with David Hamoud, chairman of the American Arab Chamber of Commerce, ‘Salah Salim A-Shamsi, chairman of the Abu Dhabi Chamber of Commerce and Industry encouraged American companies to increase their investments in Abu Dhabi. A-Shamsi stressed the importance of allowing American companies an opportunity to enter the fields of engineering consultancy, oil services, and other fields and assured Hamoud that the UAE authorities would facilitate and pave the way in this regard.

Clean Energy

Abu Dhabi, bloated with oil money, is eager to explore the clean energy sector, which will definitely represent new opportunities for U.S. clean-tech companies. The Masdar initiative has attracted both attention and skepticism due to the relatively simple fact that Abu Dhabi’s Masdar initiative to research and develop renewable energy sources seems odd coming from one of world’s leading oil exporters. Despite the criticism, Masdar is still pursing its goals and showing how serious it is. Thus, Masdar is partnering the most prominent U.S. companies, educational institutions, and investment firms. The Abu Dhabi Future Energy Company (ADFEC), a government owned organization mandated to execute the Masdar Initiative, is open to new partnerships from all over the world.

Dr. Sultan Al-Jabir, CEO of Masdar, explained, "The world needs a portfolio of solutions, It can no longer be hydrocarbons or renewables. It is a combination of both." Since its commencement, Masdar gained momentum and support by participating in the Clinton Global Initiative on Energy and Climate Change (CGI) last year in New York.

In February 2007, the ADFEC signed a cooperative agreement with the Massachusetts Institute of Technology (MIT) whereby MIT faculty would help expand the curriculum and organization of the Masdar Institute. Sultan Ahmad Al-Jabir, CEO of Masdar, hailed the agreement with one of the world’s most prominent universities. He said “The Masdar Institute will serve as the nucleus of the Masdar Initiative, feeding it with talent and innovative technologies to enhance economic development and promote new industries using renewable energy and resources in the emirate and the region.”

President George W. Bush visited a proposed model of Abu Dhabi’s Masdar City at the Emirates Palace Hotel in January this year. He said, "We just heard a briefing about how they're going to construct a city based entirely upon renewable energy. It will be an opportunity to see what works and what won't work, and an opportunity to share their technology with others.”

In Jan 21 this year, the ADFEC hosted the first World Future Energy Summit in Abu Dhabi, attracting around 200 of the world’s foremost innovators and experts clean energy, and an exhibition of alternative energy technologies. During the summit, His Highness, General Sheikh Muhammad Bin Zayyid Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, announced the most ambitious sustainability program ever launched by a government, to be funded by an initial investment of $15b. for projects targeting solar, wind and hydrogen power; carbon reduction and management, and sustainable development.

It is worth noting that American companies and universities are involved in the building and operation of Masdar. U.S. company CH2M HILL was appointed program manager for the first phase of the development and will be responsible for technology integration. Also, the American Louis Berger Group of consulting engineers will manage the Masdar city design process. So far, four architects firms have been shortlisted for the contract for designing the Abu Dhabi Future Energy Company (Masdar) headquarters in its planned carbon-neutral city. Shortlisted are Foster & Partner, Murphy & Young and Atkins, all of the UK, and the US firm, Smith & Gill. Khalid 'Awad, director of the property development unit at Masdar said, "We will announce the winner soon." Groundbreaking on the world’s first zero carbon emmission city took place on 9 February. On the other hand, some analysts say that this city seeks to create a new global community only for the elite as it is not a social project.

SIDEBAR:

UAE-U.S. Security Ties By Sherin Deghedy

Security issues play an important part in the U.S.-UAE bilateral relationship, and given regional tensions, will continue to do so for the foreseeable future. For more than a decade, the Defense Cooperation Agreement of 1994 between the U.S. and the UAE has provided a solid basis for military cooperation and coordination. Under this agreement, the UAE has participated in joint military training exercises with U.S. forces and offered U.S. forces access to UAE ports and territory. Lockheed Martin Corporation, for example, has worked closely with the UAE government on providing solutions to its defense needs, such as the F-16 fighter plane. Raytheon has had a presence in the UAE for decades and has been a key provider of UAE air defense systems since 1980.

Written by Sherin Deghedy

photo credit - NREL

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U.S. Moving Toward Ban on New Coal-Fired Power Plants

In a report compiled in early 2007, the U.S. Department of Energy listed 151 coal-fired power plants in the planning stages and talked about a resurgence in coal-fired electricity. But during 2007, 59 proposed U.S. coal-fired power plants were either refused licenses by state governments or quietly abandoned.

In addition to the 59 plants that were dropped, close to 50 more coal plants are being contested in the courts, and the remaining plants will likely be challenged as they reach the permitting stage.

What began as a few local ripples of resistance to coal-fired power is quickly evolving into a national tidal wave of grassroots opposition from environmental, health, farm, and community organizations and a fast-growing number of state governments. The public at large is turning against coal. In a September 2007 national poll by the Opinion Research Corporation about which electricity source people would prefer, only 3 percent chose coal.

One of the first major coal industry setbacks came in early 2007, when environmental groups convinced Texas-based utility TXU to reduce the number of planned coal-fired power plants in Texas from 11 to 3. And now even those 3 proposed plants may be challenged. Meanwhile, the energy focus within the Texas state government is shifting to wind power. The state is planning 23,000 megawatts of new wind-generating capacity (equal to 23 coal-fired power plants).

In May, Florida’s Public Service Commission refused to license a huge $5.7-billion, 1,960-megawatt coal plant because the utility could not prove that building the plant would be cheaper than investing in conservation, efficiency, and renewable energy sources. This argument by Earthjustice, a non-profit environmental legal group, combined with widely expressed public opposition to any more coal-fired power plants in Florida, led to the quiet withdrawal of four other proposals for coal plants in the state. Republican Governor Charlie Crist, who is keenly aware of Florida’s vulnerability to rising seas, is actively opposing new coal plants and has announced that the state plans to build the world’s largest solar-thermal power plant.

The principal reason for opposing new coal plants is the mounting concern about climate change. Another emerging reason is soaring construction costs. And then there are intensifying health concerns about mercury emissions and the 23,600 U.S. deaths per year from power plant air pollution. (See data.)

Utilities have argued that carbon dioxide (CO2) from coal plant smokestacks could be captured and stored underground, thus helping keep hope for the industry alive. But on January 30, 2008, the Bush administration announced that it was pulling the plug on a joint project with 13 utilities and coal companies to build a demonstration coal-fired power plant in Illinois with underground carbon sequestration because of massive cost overruns. The original cost of $950 million when the project was announced in 2003 had climbed beyond $1.5 billion by early 2008, with further rises in prospect. The cancellation effectively moves the date for any coal plants with carbon sequestration so far into the future that this technology has little immediate relevance.

Some utilities are being refused licenses for coal plants because they have not examined alternative methods of satisfying demand, such as increasing the efficiency of electricity use. For example, insulating buildings greatly reduces energy needs for heating and cooling. Shifting to more-efficient light bulbs would save enough electricity to close 80 U.S. coal power plants.

The Sierra Club, the national leader on this issue, is working with hundreds of local groups to mount legal challenges in state after state. Other national groups that are actively involved include the Rainforest Action Network, the Natural Resources Defense Council, and Environmental Defense. Information on the grassroots momentum to oppose coal plants is tracked on the Web site Coal Moratorium NOW!.

States that are working to reduce carbon emissions are banding together to discourage other states from building new coal plants simply because it would cancel their own carbon reduction efforts. In late 2006, for instance, the attorneys general of California, Wisconsin, New York, and several other northeastern states wrote to Kansas health officials urging them to deny permits for two new coal power plants of 700 megawatts each. The permits were subsequently denied, citing that carbon dioxide is an air pollutant and should be regulated, as determined in an April 2007 Supreme Court ruling. And in a letter on January 22, 2008, a similar grouping of states urged South Carolina’s Department of Health and Environmental Control to refuse a permit for the proposed 600-megawatt Pee Dee coal plant.

Coal’s future is also suffering as Wall Street turns its back on the industry. In July 2007, Citigroup downgraded coal company stocks across the board and recommended that its clients switch to other energy stocks. In January 2008, Merrill Lynch also downgraded coal stocks. In early February 2008, investment banks Morgan Stanley, Citi, and J.P. Morgan Chase announced that any future lending for coal-fired power would be contingent on the utilities demonstrating that the plants would be economically viable with the higher costs associated with future federal restrictions on carbon emissions. On February 13, Bank of America announced it would follow suit.

In August 2007, coal took a heavy political hit when U.S. Senate Majority Leader Harry Reid of Nevada, who had been opposing three coal-fired power plants in his own state, announced that he was now against building coal-fired power plants anywhere in the world. Investment banks and political leaders are beginning to see what has been obvious for some time to climate scientists, such as NASA’s James Hansen who says that it makes no sense to build coal-fired power plants when we will have to bulldoze them in a few years.

In early November 2007, Representative Henry Waxman of California announced his intention to “introduce legislation that establishes a moratorium on the approval of new coal-fired power plants under the Clean Air Act until EPA finalizes regulations to address the greenhouse gas emissions from these sources.” If a national moratorium is passed by Congress, it will mark the beginning of the end for coal-fired power in the United States.

We may be on the verge of a monumental victory in the worldwide effort to stabilize climate. In our new book, Plan B 3.0: Mobilizing to Save Civilization, I propose cutting carbon emissions 80 percent by 2020. The first step is to stop building any new coal-fired power plants. If the United States imposes a moratorium on such construction, as Denmark and New Zealand have already done, it would send a powerful signal to the rest of the world, bolstering the effort to cut carbon emissions. The next steps are to quickly exploit the vast worldwide potential to raise energy efficiency and to massively develop renewable sources of energy, such as wind, solar, and geothermal, in order to phase out existing coal-fired power plants.

The world is moving toward a political tipping point on the climate issue. If it comes soon enough, we may yet avoid catastrophic climate change.

Lester R. Brown -- Earth Policy Institute

Pumping pollution beneath the desert

World's oil companies will be carefully watching Abu Dhabi's plan to capture carbon emissions underground

Abu Dhabi is planning to construct the world's largest carbon capture and storage project, as part of the oil-rich emirate's $15-billion (U.S.) bid to become a leader in clean technology and renewable energy.

While countries around the world are wrestling with the daunting economics of carbon sequestration, Abu Dhabi is planning to invest up to $4-billion to capture as much as 15 million tonnes of CO{-2} annually from eight industrial plants, and then inject the gas underground to enhance oil recovery.

Once injected, it is expected that the greenhouse gas will remain sequestered underground indefinitely.

The effort is being spearheaded by Abu Dhabi Future Energy Co., a state-owned company that has been endowed with $15-billion to spend on carbon management programs, alternative power sources such as solar and energy-from-waste, and a model, zero-emission city that would be powered by renewables.

It is all part of the emirate's effort to invest its vast and growing oil wealth in new technologies that will broaden its economic base, while meeting international commitments to begin reducing greenhouse gas emissions.

Though other countries have individual carbon capture projects - including one run by EnCana Corp. in southern Saskatchewan that is the world's largest - none has moved beyond single, isolated endeavours. As a result, oil companies from around the world will be watching the effort to determine whether a carbon-capture network can be economically viable.

In Alberta, where massive oil sands development is raising fears about rapidly rising greenhouse gas emissions, the federal and provincial governments have indicated a willingness to help finance a pipeline that would deliver CO{-2} to oil fields for use in enhanced recovery. However, industry officials say the gathering system represents a small fraction of the cost - the biggest expense is the effort to capture carbon dioxide from the emissions stream.

With Montreal-based SNC-Lavalin Group Inc. doing feasibility work, the Abu Dhabi project - known as Masdar - has identified eight sources of CO{-2}, including power plants and refineries. It initially plans to proceed with the "low hanging fruit" from four of them, said Sam Nader, the project's director of carbon management.

Masdar, established in 2006, is working with state-owned Abu Dhabi National Oil Co. - which produces virtually all of the emirate's 2.5 million barrels of crude per day - to identify oil fields that would benefit from CO{-2} injection to enhance oil recovery.

"This is a win-win situation for us," Mr. Nader said in a telephone interview from Abu Dhabi. "We get the environmental benefit from capturing the CO{-2}, and also enhance oil production."

As one of the world's most prolific oil producers, Abu Dhabi is also a major emitter of greenhouse gases - third in the world on a per capita basis after neighbours Qatar and Kuwait.

In addition to the revenue generated by replacing the natural gas that is currently used to enhance oil production, the Abu Dhabi company will profit from the sale of emission credits generated by the reduction in greenhouse gases.

SNC-Lavalin principal consultant Doug Macdonald presented the preliminary results of the feasibility study at an energy futures conference hosted by Abu Dhabi last week. He told the conference that up to six of the eight projects can be implemented in a "relatively short" amount of time, Bloomberg News reported.

"Our mandate is to act as an agent for promoting sustainability in this part of the world," Mr. Nader said. "The Middle East has been a laggard in terms of adapting to a carbon-constrained world, but we believe we can catch up."

As part of that overall $15-billion announced last week, Masdar Clean Tech Fund is investing $250-million in renewable energy and other clean technologies that would be appropriate for the desert conditions of the region.

Masdar fund manager Alex O'Cinneide said in an interview that he is looking for a commercial rate of return on the investments in industries like solar and energy-from-waste. But at the same time, the company is investing in technology "that can be scaled up for Masdar to deploy in the region."

Those technologies will then be featured in Masdar City, a planned six-kilometre-square development that the emirate unveiled last week. It will feature zero greenhouse gas emissions, zero waste, with no cars allowed. The emirate is also partnering with Massachusetts Institute of Technology to establish in the city a graduate level program in clean-tech engineering.

The urban centre, with a projected population of 47,500, will include an electric light-rail system, a solar-power plant and a desalination plant, with wastewater being used to grow plants for biofuels. Construction is to begin next month, and residents are to begin moving in next year.
Mr. O'Cinneide said the Abu Dhabi commitment is unprecedented for any government.

"There are plenty of funds our size," he said. "But from an all-encompassing perspective - building cities, building universities, building a manufacturing base - there's nothing like it," he said.

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Is Congress Finally Ready to Go Green?

As concern over global warming became more and more prominent in the U.S. over the past several years — in the media, in opinion polls, in business and in state governments — the one place where the issue seemed all but invisible was the one place that could really do something about it: Congress. But that began to change in 2007, and nowhere more so than in the Senate's key committee on the environment and public works, which drafts much of the country's environmental legislation. Up until last January, the committee was chaired by Alaskan Sen. James Inhofe, a Republican who memorably called global warming "the greatest hoax ever perpetrated on the American people." When the Democrats took over Congress in the 2006 midterm elections, however, the chairperson's gavel was handed over to Sen. Barbara Boxer of California, and the floodgates opened. Boxer began a series of open hearings on the science of global warming, giving airtime to the sort of experts — including former Vice President Al Gore — who had been suppressed under Inhofe. "As soon as the change took place, I realized that this was going to be one of my number one goals," says Boxer. "Elections have consequences, and this was one of the consequences."

Hours and hours of hearings finally led to a legislative breakthrough in December: the passage out of the committee of the first bill that would put carbon caps on the U.S. economy. Co-sponsored by the Republican Sen. John Warner and the Independent Sen. Joseph Lieberman, the America's Climate Security Act would cap U.S. carbon emissions at 15% below 2005 levels by 2020, with a 70% cut projected for 2050. If enacted, those carbon caps would all but force U.S. businesses to invest in cleaner technology and greater energy efficiency, and would help the country take a leadership role in international climate negotiations.

Similar bills had been put forward over the past several years, only to die in committee. This time, however, Boxer was able to help pull together not only Democrats but also several Republicans on the committee, ensuring relatively bipartisan support. That's key — given how narrowly divided Congress has become, meaningful climate change legislation only has a chance if its supporters can draw allies from across the political aisle. Boxer is confident she can. "The environment has been an issue that has pulled together Republicans and Democrats in the past," she says. "Everyone has to breathe the same air."

The Climate Security Act has passed the first barrier to becoming law, but the road is only going to get tougher. To have a chance in the Senate, the bill needs at least 60 votes — anything less, and opponents can stop it with a filibuster. That will require winning over more conservative Senators, while at the same time ensuring the bill doesn't become so watered down that it loses all effectiveness. And even if the bill were to pass the Senate, and then the House of Representatives, it still has to make it through President George W. Bush, who has shown little inclination to support it. Bush favors what he calls technological solutions to global warming, but without the pressure of carbon caps. "That's like saying let's meet at the field and play baseball, but you don't bring a mitt or a ball," says Boxer. "You can't play the game."

Critics like Bush tend to focus on the economic costs of reducing carbon emissions — through increased energy prices — but Boxer, and many of her supporters, believe that combating climate change can have a net positive effect on the economy. Boxer hails from California, which has already passed the strongest state legislation on climate change, cutting carbon emissions to 1990 levels by 2020. Far from hurting the state economically, Boxer notes, the carbon bill has helped California become the center for green innovation in the U.S., with Silicon Valley venture capitalists pouring billions into alternative energy start-ups. Those businesses will create new, green jobs that should make up for the short-term costs of cutting carbon. "The cure for global warming is positive," says Boxer. "That makes it easy for me to approach it with hope."

Emphasizing the hope, the positive possibilities of dealing with climate change, should also help Boxer broaden the appeal of the Climate Security Act. Americans are worried about global warming, but they're also worried about Iraq, the economy and health care. Make global warming into an economic issue, or an issue of national security, not just an environmental one, and there's a better chance of achieving broad, bipartisan support. Not all environmentalists are happy with the Climate Security Act — it has been criticized by the Sierra Club, among other groups, as too weak. While it could be tightened, the reality is that only a moderate bill is likely to pass soon, and with science telling us that we may have less than 15 years to turn around carbon emissions, we can't afford to hold out for a perfect law. "The longer we wait to do what we need to do, the harder the transition will be," says Boxer. "We're running out of time." She's absolutely right, but at least Congress is no longer standing still.

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