Billionaire Oilman T. Boone Pickens Backs Wind Power

(CNN) -- Billionaire oilman T. Boone Pickens is sinking billions of dollars into a new wind farm in Texas. It is likely to become the biggest in the world, producing enough power for the equivalent of 1.3 million homes. CNN's Ali Velshi asked the oil legend why he thinks wind could be the answer to this country's energy problems:

Ali Velshi: Tell me about the wind. Now, you are buying, for a start, more than 600 wind turbines from General Electric. You're going to put them on this big tract of land in Texas, and you're going to generate a lot of electricity.

What happens to that electricity? Tell me where you think you're going to make your money and how this is going to help the situation in America.

T. Boone Pickens: Well, that's the first step to a 4,000-megawatt wind farm. This is 1,000 megawatts.

We start receiving those turbines in mid 2010. We will have the total 4,000 megawatts finished by the end of 2015. That power will go into a transmission line that will tie into the Electric Reliability Council of Texas system in the state of Texas, and it will be transmitted downstate.

Velshi: What's your view of wind power? It's one of several things that we should be looking at in terms of powering our homes, electrical power? We get most of it from coal and natural gas, and some from nuclear. Are you thinking it's one of the formats of power we should be thinking about, or is this going to be bigger than we all thought?

Pickens: The Department of Energy came out with a study in April of '07 that said we could generate 20 percent of our electricity from wind. And the wind power is -- you know, it's clean, it's renewable. It's -- you know, it's everything you want. And it's a stable supply of energy.

It will be located in [the] central part of the United States, which will be the best from a safety standpoint to be located. You have a wind corridor that goes from Pampa, Texas, to the Canadian border. And it has -- the wind, it's unbelievable that we have not done more with wind. Look at Germany and Spain. They have developed their wind way beyond what we have, and they don't have as much wind as we do. It's not unlike the French have done with their nuclear. They're 80 percent power generated off of nuclear, we're 20 percent.

Velshi: I'm fascinated by wind power. I love going by a field of these turbines. And I think they're fascinating.

You don't happen to think they're attractive, and you're not really putting them on your land. You're going to be using other people's land to put these things on.

Pickens: That's right. And it's very clear, these are my neighbors. And they want them. It generates income for them.

A turbine will generate somewhere around 20,000 [dollars] a year in royalty income. And on a 640-acre tract, you can put five to 10 of these on the tract. And you don't have to have them if you don't want them.

Velshi: And it's quite common that people who maybe have a piece of land, they might be farmers or something like that, this is extra income to them by making a deal with somebody like you who is going put these things up, if they don't mind having them on the land. Do they get the electricity from it or do they just get a royalty check?

Pickens: A royalty check. But look at Sweetwater, Texas. That town was 12,000 people, then went down below 10,000. The wind came in, it's above 12,000 in population now. The local economy is booming.

That can be repeated over and over and over again all the way to the Canadian border. Then you have a solar corridor that goes from Sweetwater, Texas, west to the West coast, and that solar corridor can also be developed.

But we are going to have to do something different in America. You can't keep paying out $600 billion a year for oil.

Venezuela Cuts Off Oil Shipments to Exxon Mobil

Venezuelan President Hugo Chavez stopped oil exports to Exxon Mobil on Tuesday, escalating a multibillion-dollar fight with the U.S. company two days after threatening to cut off all supplies to America.

The anti-U.S. president's retaliation for Exxon's legal offensive, which froze $12 billion in Venezuelan assets, pushed oil prices higher in late trading.

State oil company PDVSA said it broke off commercial ties and halted the supply of crude and petroleum products to America's largest company in a fight over Exxon's demand for compensation after Chavez seized a crude project last year.

"Faced with the legal-economic harassment started by Exxon Mobil against PDVSA and as an act of reciprocity, PDVSA has decided to suspend commercial relations," the Venezuelan company said in a statement.

Venezuela is the No. 4 energy supplier to the United States, which is its biggest customer.

Washington has played down Chavez's threat, industry analysts say it is unlikely he will carry it out and even his deputy energy minister said Venezuela wanted to avoid a general cutoff because it would be costly for the OPEC nation.

But after regularly issuing conditional warnings over ending exports to what he calls the evil superpower, Tuesday's albeit limited move was the first time Chavez has taken any concrete action over supplies in a dispute.

PDVSA said it would not break certain contracts with Exxon, an apparent reference, analysts said, to the jointly owned Chalmette refinery in Louisiana.

Venezuela's other sales to Exxon in November were about 90,000 barrels per day, a drop in the bucket for the world's largest oil company.

Jim Ritterbusch, president of Ritterbusch & Associates oil consultants, said Chavez's move was "saber-rattling."

"It is to Venezuela's interest to keep oil prices high and its response to the Exxon Mobil asset freeze orders has done just that," he said.

With two-thirds of Venezuela's oil exports going to the United States, industry analysts believe Chavez is unlikely to carry out his supply threat because it would slash revenue he uses to fund the social programs that underpin his popularity.

The Exxon battle pits Chavez, a leading proponent of resource nationalism who calls capitalism an evil, against one of a giant company seeking access to increasingly restricted oil deposits around the globe.

Chavez, a self-styled socialist revolutionary who clashes with Washington over everything from oil prices to democracy, says Exxon is a proxy in a U.S. economic war against him.

Venezuela's oil minister, Rafael Ramirez, said fellow OPEC members had expressed solidarity with the South American nation in the fight and consulted with the oil producers group's lawyers on a defense strategy.

But an official of the Bush administration, which has distanced itself from the Exxon action, said the United States had lined up allies in the spat too.

Other major oil producers have assured Washington they would make up for any interruption to Venezuelan supplies, said the official who declined to be named, adding a cutoff would hurt ordinary Venezuelans.

And the head of the International Energy Agency, which coordinates the release of global crude oil and refined product stockpiles in the event of a major supply disruption, said the group was willing to act if needed.

It was not immediately clear whether PDVSA would still supply some crude to Chalmette or what it would do with the excess crude that would normally go to the U.S. company.

Exxon Mobil said it will act to ensure supply to its clients.

"It is our long-standing practice to take appropriate steps to meet our customer needs," spokeswoman Margaret Ross said.

source - CNBC

Shell Oil Exec Ponders Impending Energy Crossroads

By Jeroen van der Veer

By 2100, the world’s energy system will be radically different from today’s. Renewable energy like solar, wind, hydroelectricity, and biofuels will make up a large share of the energy mix, and nuclear energy, too, will have a place.

Humans will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.

Indeed, the distant future looks bright, but much depends on how we get there. There are two possible routes. Let’s call the first scenario Scramble. Like an off-road rally through a mountainous desert, it promises excitement and fierce competition. However, the unintended consequence of “more haste” will often be “less speed,” and many will crash along the way.

The alternative scenario can be called Blueprints, which resembles a cautious ride, with some false starts, on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technological innovation provides the excitement.

Regardless of which route we choose, the world’s current predicament limits our room to maneuver. We are experiencing a step-change in the growth rate of energy demand due to rising population and economic development. After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand.

As a result, we will have no choice but to add other sources of energy – renewables, yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.

In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast. Taking the path of least resistance, policymakers pay little attention to curbing energy consumption – until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.

The Blueprints scenario is less painful, even if the start is more disorderly. Numerous coalitions emerge to take on the challenges of economic development, energy security, and environmental pollution through cross-border cooperation. Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes, and other policy instruments to improve the environmental performance of buildings, vehicles, and transport fuels.

Moreover, as calls for harmonization increase, policies converge across the globe. Cap-and-trade mechanisms that put a price on industrial CO2 emissions gain international acceptance. Rising CO2 prices in turn accelerate innovation, spawning breakthroughs. A growing number of cars are powered by electricity and hydrogen, while industrial facilities are fitted with technology to capture CO2 and store it underground.

Against the backdrop of these two equally plausible scenarios, we will know only in a few years whether December’s Bali declaration on climate change was just rhetoric or the start of a global effort to counter it. Much will depend on how attitudes evolve in China, the European Union, India, and the United States.

Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another. But, faced with the need to manage climate risk for our investors and our descendants, we believe the Blueprints outcomes provide the best balance between economy, energy, and environment. For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced.

But the Blueprints scenario will be realized only if policymakers agree on a global approach to emissions trading and actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, transport, and buildings.

This will require hard work, and time is short. For example, Blueprints assumes CO2 is captured at 90% of all coal- and gas-fired power plants in developed countries by 2050, plus at least 50% of those in non-OECD countries. Today, none capture CO2. Because CO2 capture and storage adds costs and yields no revenues, government support is needed to make it happen quickly on a scale large enough to affect global emissions. At the least, companies should earn carbon credits for the CO2 they capture and store.

Blueprints will not be easy. But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age.

The world faces a long voyage before it reaches a low-carbon energy system. Companies can suggest possible routes to get there, but governments are in the driver’s seat. And governments will determine whether we should prepare for bitter competition or a true team effort.

* Jeroen van der Veer, Chief Executive of Royal Dutch Shell plc, is Energy Community leader of the World Economic Forum energy industry partnership in 2007-2008 and chaired this year’s Energy Summit in Davos. He also chairs the Energy and Climate Change working group of the European Round Table of Industrialists.

Big Coal's Dirty Plans for Our Energy Future

Just as the American people and the world are beginning to recognize the necessity of shifting to renewable energies, Big Coal, in collusion with an out-of-step administration, is pushing their dirty fossil fuel as the solution to our nation's energy crisis.

Big Coal and its cohorts envision a "clean coal technology" future fueled by liquifying and gasifying coal, capturing the carbon emissions and injecting them underground. By 2030 the West Virginia Division of Energy -- a nascent state agency formed in July, 2007 -- wants to oust oil and exalt coal by displacing the 1.3 billion gallons of foreign oil the state currently imports every year.

The WVDoE believes "that higher energy prices are providing and will continue to provide market opportunities" for a variety of alternative coal technologies including "coal waste, coal fines and coal bed methane," according to a document released in December 2007 called, "A Blueprint for the Future."

But scientists and environmentalists say "clean coal" does not exist; it is a misnomer and an oxymoron. The National Resources Defense Council has said, using the term "clean coal" makes about as much sense as saying "safe cigarettes." The extraction and cleaning of coal inevitably decimate ecosystems and communities.

Citing abundant supplies of quality domestic coal, escalating oil prices that are hoving around $100 per barrel, and security concerns raised by dependence on foreign oil, the coal industry is chomping at the bit to secure their stake in the false pursuit of domestic energy independence through a federally assisted coal-based economy. But as the world wakes up to the climate crisis and people learn more about modern coal mining and the continuing exploitation of Appalachia, which has sickened entire communities, polluted the water and air, and condemned vast sections of an ecologically extraordinary land to death, the coal industry faces an increasingly uphill battle against growing public awareness and concern.

Just this year, plans for a dozen new coal plants in Texas, Florida, Oklahoma, Minnesota, Kansas and others have been repudiated by the growing public awareness and concern about the role of coal and other fossil fuels in our climate crisis. Playing on stereotypes and employing scare tactics about the unpredictability of the Middle East, the coal industry is developing a Frankenstein-like future for U.S. energy needs.

In Kansas, Gov. Kathleen Sebelius recently blocked plans for two coal-fired electricity plants; afterwards, on Nov. 5, a full page ad in Kansas newspapers explained that now, because of Sebelius' decision, "Kansas will import more natural gas from countries like Russia, Venezuela and Iran." The ad displayed the grinning faces of the leaders of these countries and continued, "Without new coal-fueled plants in our state, experts predict that electric bills will skyrocket and Kansans will be more dependent than ever on hostile, foreign energy sources." In fact, Kansas exports natural gas to other states and the United States does not even import natural gas from Russia, Venezuela or Iran, according to the U.S. Department of Energy.

Why carbon capture is no safety net

Nationwide there are grandiose plans for more than 100 new coal-fired power plants but that will all hinge on being able to sell the public and legislators on outfitting and funding these new plants with Carbon Capture and Sequestration (CCS) technology. This process siphons off or "captures" carbon dioxide before it can escape into the atmosphere, contributing to acid rain, smog and warming the planet. The sequestered carbon would then be pumped and stored underground.

But is it really possible to bury our daily CO2 emission? Australia's renown physicist, Karl Kruszelnicki, who is running for public office on the Climate Change Coalition ticket, told the Sydney Morning Herald on Nov. 1, "One cubic kilometer of CO2 to get rid of every day? It's not possible! But they don't tell you that that's what they've got to get rid of. They make reassuring noises that they're spending millions looking for underground caverns. But I'm here to tell you that they're not going to find it ... The point is that they can only store 1,000th of 1 percent, not all their daily output."

Not only do we not have the capacity to store all the CO2 we produce, but the technology isn't there yet. The coal industry acknowledges that CCS is 15 years away, but continues to promulgate the myth of "clean coal technology" and to guide generous government subsidies to themselves and to West Virginia universities, assigning valuable research money to dirty technology. The Massachusetts Institute of Technology's 2007 report "The Future of Coal" stated that "there is no standard for measurement, monitoring, and verification of CO2 distribution. Duration of post-injection monitoring is an unresolved issue."

In other words, Big Coal is betting on a pipe dream with an entire ecosystem at stake. Adding CCS to plans for the more than 100 proposed coal-fired power plants on the drawing board would increase operating budgets by 50 percent to 80 percent. And the gasifying and liquifying of coal into syn-gas and diesel would create potential emissions twice as carbon-rich as petroleum based gasoline or natural gas. If Big Coal gets its way, the U.S. Air Force will cruise the skies on liquid coal fuel -- spewing dangerously concentrated CO2 into our fragile atmosphere, and we'll be building more polluting plants based on false promises from an outlaw industry.

Exacerbating the water crisis

To many observers, the next natural resource wars will be waged over water, not oil or coal. People in the United States are waking up to the reality of a looming water crisis, but the coal industry is still advocating for a technology that is part of the problem, not the solution.
The U.S. Department of Energy stated in December 2006, that the demand for water to produce coal conversion fuels "threaten our limited water supply." Coal conversion -- gasification or liquefaction -- requires an absurd amount of fresh water. Each new Integrated Gasification Combined Cycle (IGCC) or Coal to Liquid (CTL) plant will require millions of gallons of fresh water every day. And these new plants will require even more coal.

Big Coal's proposed plans will require a large increase in coal extraction -- at least 15 percent more, though some reports quote as high as a 45 percent increase in coal production would be necessary to fuel "clean coal technology." The surge in demand for coal would be met with a surge in mountaintop removal coal mining, which means more water pollution. Mountaintop removal mining and the chemical cleaning of coal also threatens Appalachian headwater streams, which are the drinking water source for the southeastern United States -- an area that has endured frightening water shortages this year in Florida, Georgia and South Carolina.

The coal-to-liquid plants that coal state politicians like Gov. Joe Manchin, III of West Virginia and Gov. Ernie Fletcher of Kentucky are scrambling to site in their states would have one consequence that many observers underestimate or ignore: the increase in production of coal sludge -- one of the least known and least regulated toxic wastes in the United States -- a direct threat to water supplies.

Ben Stout, a biologist from Wheeling Jesuit University in Wheeling, W.Va., who testified in the landmark Bragg v. Robertson case, where 88 community members sued a coal operator for destroying their land, has witnessed the environmental and human health devastation wreaked on the unique mountain ecosystems and communities of Appalachia firsthand.

"Clean Coal Technologies is a misnomer," he said. "There's nothing clean about coal. The extraction end is not addressed; if you live in southern West Virginia, the landscape you grew up in has been destroyed and rearranged. The question is, why are so many people in West Virginia so desperate to get hooked up to county water supply?"

The answer is: toxic coal sludge. Coal sludge, laden with heavy metals found in coal and released during extraction, like arsenic, chromium, cadmium and mercury, has been pumped underground in West Virginia for decades, with scant regulatory oversight. The sludge has intercepted underground water tables, from which mountain communities draw their drinking water. Coal sludge also contains carcinogenic chemicals like floculants, which are used to process coal.

In West Virginia, the second-largest coal-producing state in the nation, more than 470 mountaintops have been blown apart, 800 square miles of the most diverse temperate hardwood forest razed and replaced with more than 4,000 valley fills and 675 toxic coal sludge ponds. By 2012, the U.S. government estimates that we will have destroyed 2,500 square miles of pristine Appalachia. Currently there are over 107 trillion gallons of coal slurry stored or permitted to be stored in active West Virginia "impoundments."

The total mechanization of coal extraction epitomized by mountaintop removal/valley fill coal mining has buried thousands of miles of vital headwater streams and pumped previously mined lands full of sludge. The coal industry says that it has "elevated" some streams -- after they've buried them upstream -- relocating them and "repurposing" them into chemical spillways called National Pollution Discharge Elimination System (NPDES) streams.

Coal sludge, the waste by-product of the chemical cleaning of coal in preparation for shipping to market, is initially put into surface ponds, but eventually this chemically concentrated, pudding-like waste leaches into the groundwater. In southern West Virginia, where the largest seams of coal lie, whole communities have been poisoned over years by mining waste that has contaminated their drinking water.

Coal sludge is a disaster waiting to happen, like the 2.8 billion gallons of toxic sludge that stand behind a 325-foot, leaking, unsound dam of slate, 400 yards from the Marsh Fork Elementary School in Sundial, W.Va. Or, Brushy Fork, in Boone County, W.Va., one of the largest coal sludge dumps in the world, holding back 9 billion gallons of coal waste.

Sludge is also injected underground into the sprawling abandoned mine works of decades past. Coal sludge is turning up in the water in Mingo County, W.Va., where documentation of this practice stretches back for more than 30 years. Residents of Mingo County have suffered catastrophic illness after the toxic sludge breached the local aquifers that feed home wells. More than 650 of these residents have signed on to a massive class-action lawsuit against the offending coal company, Massey Energy.

Pursuing "clean coal technology" will cause an increase in the production of coal and toxic coal waste which contains dangerous levels of arsenic, barium, cadmium, coper, iron, lead, manganese and zinc. In some cases, there are no standards by which to measure contaminants because some have never been found in drinking water before.

While scrubbers on smoke stacks have cleaned coal fired power plant emissions considerably, the cleaning on the combustion end causes the processing of coal for market to be exponentially dirtier. The coal going to market is cleaner burning today, with lower sulfur and mercury content, but these dangerous elements are left behind in the coal sludge and in drinking water.

The dirty truth about "clean coal"

The environmental destruction caused by mountaintop removal coal extraction is just one of many reasons to immediately transition out of coal. A plethora of substantial hurdles for the alternative coal industry include technological uncertainties, billion dollar budgets, lack of project partners willing to invest in coal, growing concern about carbon emissions from coal fired power plants, uncertainty about future environmental regulations, rising constructions costs and an array of water contamination issues.

But, we've been here before. In response to the energy crisis of the 1970s, the U.S. government invested $15 billion in a failed attempt to jump-start the coal-based synthetic fuel industry including the infamous 1.5 billion syn-fuel plant in Beulah, N.D. In the end, the '80s era attempt at gasification and liquefaction of coal failed miserably because of volatile oil prices bankrupting the nascent industry leaving taxpayers with a $330 million loss.

The newborn West Virginia Division of Energy -- formed to put a better face on coal -- would like to institutionalize all possible manifestations of coal production. The state agency says it would like to surround coal extraction sites and the coal-fired power plants with "additional advance coal opportunities" like the "production of ammonia nitrate from coal, as well as nitrates for fertilizer."

These processes require the same copious amounts of water as CTL and IGCC plants. WVDoE's outline for an energy future goes hand-in-hand with what mountain people call the declaration of a "National Sacrifice Zone" fueled by a plan to depopulate the coal-rich region of the southern mountains. A similar strategy was publicly declared when the federal government found uranium under Native American lands in the Four Corners area in the 1970s. In the end, the uranium was deemed more important than the land and the people; vast regions of Native American lands were declared "National Sacrifice Zones," and people were forced from their homelands.

Massey Energy's CEO, Don Blankenship, recently suggested the idea of a far-reaching coal industrial complex upon releasing a statement regarding the purchase of vast parcel of coal lands, increasing Massey's reserve holding to 100 million tons in Northern Appalachia. "This region is becoming increasingly important to the coal and energy industry, and this transaction will enable us to take advantage of the growth in demand for Northern Appalachian coal," he said. Massey's newly acquired coal lands are in West Virginia, across the Ohio River from Meigs County, Ohio, where a notorious cluster of coal-fired power plants are concentrated.

And momentum is building in the region. At a coal-to-liquids conference in Beckley, W.Va., in August this year, U.S. Sen. Jay Rockefeller sent word to the crowd that, "We need the equivalent of the Apollo and Manhattan Projects that would provide billions in federal funding for research and development so that the best and brightest engineers and scientific minds can tackle carbon capture sequestration and CTL development."

It is time to stop the momentum and break our coal habit. Instead we need an Apollo and Manhattan project to replace coal with solar, wind and geo-thermal or our kids will be stuck cleaning up after the dirtiest energy industry. Coal companies are notorious for leaving their mess behind.

"The worst offenders declare bankruptcy, opting to clear their plate of financial obligations and skip town," says Earthjustice attorney Lisa Evans. "Residents are left with poisoned soil and water; taxpayers are stuck with a hefty clean up bill." Only 3 percent to 5 percent of West Virginia mined lands have been reclaimed and developed -- the Twisted Gun Golf Course in Mingo County, Mt. View High School in McDowell County and a FBI complex in Clarksburg, W.Va., are all built on unstable, previously mined lands -- but the lands can never be truly reclaimed because of the extent of the destruction. Large-scale surface mining has converted forests to grasslands, resulting in a loss of carbon sequestration capacity of approximately 1.4 million acres, according to Stout.

When Big Coal talks about economic benefits of CTL, they talk about how cheap raw coal is and how we need to stick with cheap energy. But they avoid talking about the budgets in the multi-billions, the fact that CCS is unproven and untested commercially, and the externalities of extracting coal: the decimation of Appalachia's ecosystems and communities.

It is impossible to estimate the true cost of coal in a dollar figure -- how do you calculate the destruction of animal habitats, forests, fresh water, heritage, family history, hometowns, livelihoods, and personal health? When you add it all up, coal costs too much!

The plunder and destruction of West Virginia began with a plan in 1760 called the Great Land Grab, when a small group of wealthy Americans plotted to buy the coal-rich lands out from under the mountain people who didn't know the value of what was beneath their homes. Today, coal advocates ignore the global climate crisis, while pushing untested coal-based technology and scaring Americans about our dependence on foreign oil, hoping to fuel the planet with their coal, regardless of the consequences.

No matter what, the immediate transition away from coal is necessary and inevitable, as is a moratorium on all new coal-fired power plants. The world is coming to understand the impacts of dirty energies like coal and the need for sustainable, renewable, clean energy. James Hansen, the leading climate scientist at NASA, who shared the Nobel Prize this year with the Intergovernmental Panel on Climate Change (IPCC), testified as a private citizen at the Iowa Utilities board and said, "Coal will determine whether we continue to increase climate change or slow human impact."

The coal industry's proposed path to a coal-based energy independent future for the United States is like laying down a 16-lane superhighway through the bedrooms of coal-rich regions like Appalachia. "Clean coal technology" would require a sizable increase in coal extraction and for the mountain communities of Central Appalachia, already suffering under the mountaintop removal/valley fill coal-mining campaign, "clean coal technology" is a highway to hell. We have a choice -- let's build a new road to renewable energy and sustainable communities.

By Antrim Caskey, AlterNetPosted on December 14, 2007, Printed on December 14, 2007http://www.alternet.org/story/70475/

The Undeclared Oil War

While some debate whether the war in Iraq was or was not "about oil," another war, this one involving little but oil, has broken out between two of the world's most powerful nations.

For months China and Japan have been locked in a diplomatic battle over access to the big oil fields in Siberia. Japan, which depends entirely on imported oil, is desperately lobbying Moscow for a 2,300-mile pipeline from Siberia to coastal Japan. But fast-growing China, now the world's second-largest oil user, after the United States, sees Russian oil as vital for its own "energy security" and is pushing for a 1,400-mile pipeline south to Daqing.

The petro-rivalry has become so intense that Japan has offered to finance the $5 billion pipeline, invest $7 billion in development of Siberian oil fields and throw in an additional $2 billion for Russian "social projects" -- this despite the certainty that if Japan does win Russia's oil, relations between Tokyo and Beijing may sink to their lowest, potentially most dangerous, levels since World War II.

Asia's undeclared oil war is but the latest reminder that in a global economy dependent largely on a single fuel -- oil -- "energy security" means far more than hardening refineries and pipelines against terrorist attack. At its most basic level, energy security is the ability to keep the global machine humming -- that is, to produce enough fuels and electricity at affordable prices that every nation can keep its economy running, its people fed and its borders defended.

A failure of energy security means that the momentum of industrialization and modernity grinds to a halt. And by that measure, we are failing.

In the United States and Europe, new demand for electricity is outpacing the new supply of power and natural gas and raising the specter of more rolling blackouts. In the "emerging" economies, such as Brazil, India and especially China, energy demand is rising so fast it may double by 2020. And this only hints at the energy crisis facing the developing world, where nearly 2 billion people -- a third of the world's population -- have almost no access to electricity or liquid fuels and are thus condemned to a medieval existence that breeds despair, resentment and, ultimately, conflict.

In other words, we are on the cusp of a new kind of war -- between those who have enough energy and those who do not but are increasingly willing to go out and get it. While nations have always competed for oil, it seems more and more likely that the race for a piece of the last big reserves of oil and natural gas will be the dominant geopolitical theme of the 21st century.

Already we can see the outlines. China and Japan are scrapping over Siberia. In the Caspian Sea region, European, Russian, Chinese and American governments and oil companies are battling for a stake in the big oil fields of Kazakhstan and Azerbaijan. In Africa, the United States is building a network of military bases and diplomatic missions whose main goal is to protect American access to oilfields in volatile places such as Nigeria, Cameroon, Chad and tiny Sao Tome -- and, as important, to deny that access to China and other thirsty superpowers.

The diplomatic tussles only hint at what we'll see in the Middle East, where most of the world's remaining oil lies. For all the talk of big new oil discoveries in Russia and Africa -- and of how this gush of crude will "free" America and other big importers from the machinations of OPEC -- the geological facts speak otherwise. Even with the new Russian and African oil, worldwide oil production outside the Middle East is barely keeping pace with demand.

In the run-up to the Iraq war, Russia and France clashed noisily with the United States over whose companies would have access to the oil in post-Saddam Hussein Iraq. Less well known is the way China has sought to build up its own oil alliances in the Middle East -- often over Washington's objections. In 2000 Chinese oil officials visited Iran, a country U.S. companies are forbidden to deal with; China also has a major interest in Iraqi oil.

But China's most controversial oil overture has been made to a country America once regarded as its most trusted oil ally: Saudi Arabia. In recent years, Beijing has been lobbying Riyadh for access to Saudi reserves, the largest in the world. In return, the Chinese have offered the Saudis a foothold in what will be the world's biggest energy market -- and, as a bonus, have thrown in offers of sophisticated Chinese weaponry, including ballistic missiles and other hardware, that the United States and Europe have refused to sell to the Saudis.

Granted, the United States, with its vast economic and military power, would probably win any direct "hot" war for oil. The far more worrisome scenario is that an escalating rivalry among other big consumers will spark new conflicts -- conflicts that might require U.S. intervention and could easily destabilize the world economy upon which American power ultimately rests.

As demand for oil becomes sharper, as global oil production continues to lag (and as producers such as Saudi Arabia and Nigeria grow more unstable) the struggle to maintain access to adequate energy supplies, always a critical mission for any nation, will become even more challenging and uncertain and take up even more resources and political attention.

This escalation will not only drive up the risk of conflict but will make it harder for governments to focus on long-term energy challenges, such as avoiding climate change, developing alternative fuels and alleviating Third World energy poverty -- challenges that are themselves critical to long-term energy security but which, ironically, will be seen as distracting from the current campaign to keep the oil flowing.

This, ultimately, is the real energy-security dilemma. The more obvious it becomes that an oil-dominated energy economy is inherently insecure, the harder it becomes to move on to something beyond oil.

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By Paul RobertsWashington Post

Texas startup says it has batteries beat

AUSTIN, Texas - Millions of inventions pass quietly through the U.S. patent office each year. Patent No. 7,033,406 did, too, until energy insiders spotted six words in the filing that sounded like a death knell for the internal combustion engine.

An Austin-based startup called EEStor promised "technologies for replacement of electrochemical batteries," meaning a motorist could plug in a car for five minutes and drive 500 miles roundtrip between Dallas and Houston without gasoline.

By contrast, some plug-in hybrids on the horizon would require motorists to charge their cars in a wall outlet overnight and promise only 50 miles of gasoline-free commute. And the popular hybrids on the road today still depend heavily on fossil fuels.

"It's a paradigm shift," said Ian Clifford, chief executive of Toronto-based ZENN Motor Co., which has licensed EEStor's invention. "The Achilles' heel to the electric car industry has been energy storage. By all rights, this would make internal combustion engines unnecessary."

Clifford's company bought rights to EEStor's technology in August 2005 and expects EEStor to start shipping the battery replacement later this year for use in ZENN Motor's short-range, low-speed vehicles.

The technology also could help invigorate the renewable-energy sector by providing efficient, lightning-fast storage for solar power, or, on a small scale, a flash-charge for cell phones and laptops.

Skeptics, though, fear the claims stretch the bounds of existing technology to the point of alchemy.

"We've been trying to make this type of thing for 20 years and no one has been able to do it," said Robert Hebner, director of the University of Texas Center for Electromechanics.

"Depending on who you believe, they're at or beyond the limit of what is possible."

EEStor's secret ingredient is a material sandwiched between thousands of wafer-thin metal sheets, like a series of foil-and-paper gum wrappers stacked on top of each other. Charged particles stick to the metal sheets and move quickly across EEStor's proprietary material.

The result is an ultracapacitor, a battery-like device that stores and releases energy quickly.

Batteries rely on chemical reactions to store energy but can take hours to charge and release energy. The simplest capacitors found in computers and radios hold less energy but can charge or discharge instantly. Ultracapacitors take the best of both, stacking capacitors to increase capacity while maintaining the speed of simple capacitors.

Hebner said vehicles require bursts of energy to accelerate, a task better suited for capacitors than batteries.

"The idea of getting rid of the batteries and putting in capacitors is to get more power back and get it back faster," Hebner said.

But he said nothing close to EEStor's claim exists today.

For years, EEStor has tried to fly beneath the radar in the competitive industry for alternative energy, content with a phone-book listing and a handful of cryptic press releases.

Yet the speculation and skepticism have continued, fueled by the company's original assertion of making batteries obsolete — a claim that still resonates loudly for a company that rarely speaks, including declining an interview with The Associated Press.

The deal with ZENN Motor and a $3 million investment by the venture capital group Kleiner Perkins Caufield & Byers, which made big-payoff early bets on companies like Google Inc. and Amazon.com Inc., hint that EEStor may be on the edge of a breakthrough technology, a "game changer" as Clifford put it.

ZENN Motor's public reports show that it so far has invested $3.8 million in and has promised another $1.2 million if the ultracapacitor company meets a third-party testing standard and then delivers a product.

Clifford said his company consulted experts and did a "tremendous amount of due diligence" on EEStor's innovation.

EEStor's founders have a track record. Richard D. Weir and Carl Nelson worked on disk-storage technology at IBM Corp. in the 1990s before forming EEStor in 2001. The two have acquired dozens of patents over two decades.

Neil Dikeman of Jane Capital Partners, an investor in clean technologies, said the nearly $7 million investment in EEStor pales compared with other energy storage endeavors, where investment has averaged $50 million to $100 million.

Yet curiosity is unusually high, Dikeman said, thanks to the investment by a prominent venture capital group and EEStor's secretive nature.

"The EEStor claims are around a process that would be quite revolutionary if they can make it work," Dikeman said.

Previous attempts to improve ultracapacitors have focused on improving the metal sheets by increasing the surface area where charges can attach.

EEStor is instead creating better nonconductive material for use between the metal sheets, using a chemical compound called barium titanate. The question is whether the company can mass-produce it.

ZENN Motor pays EEStor for passing milestones in the production process, and chemical researchers say the strength and functionality of this material is the only thing standing between EEStor and the holy grail of energy-storage technology.

Joseph Perry and the other researchers he oversees at Georgia Tech have used the same material to double the amount of energy a capacitor can hold. Perry says EEstor seems to be claiming an improvement of more than 400-fold, yet increasing a capacitor's retention ability often results in decreased strength of the materials.

"They're not saying a lot about how they're making these things," Perry said. "With these materials (described in the patent), that is a challenging process to carry out in a defect-free fashion."

Perry is not alone in his doubts. An ultracapacitor industry leader, Maxwell Technologies Inc., has kept a wary eye on EEStor's claims and offers a laundry list of things that could go wrong.

Among other things, the ultracapacitors described in EEStor's patent operate at extremely high voltage, 10 times greater than those Maxwell manufactures, and won't work with regular wall outlets, said Maxwell spokesman Mike Sund. He said capacitors could crack while bouncing down the road, or slowly discharge after a dayslong stint in the airport parking lot, leaving the driver stranded.

Until EEStor produces a final product, Perry said he joins energy professionals and enthusiasts alike in waiting to see if the company can own up to its six-word promise and banish the battery to recycling bins around the world.

"I am skeptical but I'd be very happy to be proved wrong," Perry said.

By GRANT SLATER,

Associated Press Writer