Posted by: Earl
on Feb 24, 2009
This is the final installment Earl's China Energy Adventure.
Earl is not known for his macro-economic expertise but that doesn’t mean he’s not interested and paying attention. The stimulus programs that are being implemented around the world at this time have certainly got his attention. An article in Business China last week struck a nerve.
Zhejiang Province is just to the south of Shanghai. Economists there noticed a weakening of the economy in late 2007 and started to take measures at that time to minimize the impact. Funds were set aside with no clear intention other than wait and see. With the recent China Central Government announcement of a stimulus package Zhejiang officials decided to utilize their funds for local companies as well.
Here’s where it gets interesting. This isn’t a fund where everyone gets a piece of the action. Companies will be evaluated for their utilization of technology and their energy efficiency. Those over the bar get assistance. Those that don’t make the cut will be getting nothing and be allowed to fail. In a sense, it’s survival of the fittest with a twist. Do good and get a boost.
It is clear that Chinese officials recognize that the importance of raising the standards of the companies there. They are not interested in promoting inefficient operations at the risk of dragging down well run companies suffering due to the global economy. The bonus for the rest of the world is reduced carbon emissions and energy demand. Now, if the rest of the world could make some hard decisions and stop catering to bloated, inefficient companies we could get somewhere?
Posted by: Earl
on Feb 14, 2009
Your intrepid energy explorer is reporting this week from China. You’ve heard about the bad air no doubt. It’s no exaggeration. In an interior city, Changsha in the Hunan Province, a taxi driver was only partially joking today that he’d been living in the city for 4 years and had only seen a blue sky 3 times.
That said, it is no exaggeration that the Chinese government and people know they have a problem and are going to great lengths and great expense to improve the situation. The government has set aside 1 trillion yuan (~$150B – that’s B as in billion) to improve the situation. This isn’t future money, this is cash set aside for spending on improving the energy infrastructure; power distribution and improving efficiency.
The China Daily, about the only newspaper Earl can read over here, had a section in the 10 February edition on Energy/Environment. The section titled Mixed Energy Forecast gave an assessment on renewable energy. Here is a synopsis on what was reported about the gains made as a result of the Renewable Energy Law that has been implemented.
- Investment in wind power in 2008 was 88% greater than 2007 investment growing the wind output by 4GW to 10GW total.
- Nuclear power infrastructure investment increased 72% in 2008 over 2007
- The global financial crisis will cause a decline in investment in 2009
- The Chinese government has promised to offer more support to the renewable energy industry
- Several large hydro electric projects came on line adding 20.1 GW to the 2008 hydro output. In addition to the massive Three Gorges project there are 10s of thousands of micro-hydro stations throughout rural China.
- The bad news is that there is an absence of incentive policies for the solar industry. There are currently more than 70 grid-connected to photovoltaic projects but only two of them received feed-in tariffs and most have not benefitted from the Renewable Energy Law.
- Nuclear power goals have recently been increased with plan to bring total nuclear generated electricity to 5% of the demand by 2020.
The paper also reported that from October 2007 to June 2008 subsides of 2B yuan (~$22M) were provided to 148 renewable energy projects. This indicates that these projects are definitely gaining momentum. The global financial crisis has brought down global demand for raw materials such as steel and silicon. This is good news for the renewable energy industry bringing down costs for wind turbine and solar panel manufacturers. The net result of this is lower prices around the world. Stay tuned for more reports.
Posted by: Earl
on Feb 11, 2009
NPR ran a story this week about job creation in the renewable energy and energy conservation areas. Earl can embrace this element of the stimulus bill and I think a large number of the population that are footing the bill. Have a listen at
What Kind of Green Jobs Will Stimulus Spawn?. If you agree please call or email your congressman, tell them that you support this spending, then please politely tell them what they can do with the PORK!
Posted by: Earl
on Feb 1, 2009
Admittedly I'm neither a doctor nor an economist but I'm going to pretend for a moment. When a runner collapses from exhaustion the prescribed treatment is not generally a shot of electrolytes, vitamins, adrenaline, insulin, selenium, and Lipitor all at the same time hoping that one will get them up and running immediately. You'd probably kill him instead of fixing him. When our economy has collapsed from exhaustion (as well as stupid, greedy executives and politicians) a shotgun approach of spending newly printed money on any and every underfunded cause. We need a surgical approach. Any spending excess at this point will likely do more harm than good. Why can't we do a focused stimulus package? For that same reason we can't have a focused national energy policy? We're relying on politicians to figure this out. I'm not holding my breath.
In case you are interested here are some items in the current stimulus package. Job generation? - you decide!
- $50 million for the National Endowment for the Arts to shore up flagging cultural institutions
- a quarter billion dollars to fix State Department computers
- $200 million to spruce up the National Mall
- $670 million to rebuild restrooms and other buildings in national parks
- $87 million from the stimulus package to pay for expanded family planning services for Medicaid recipients, arguing that it could ultimately be a cost-reducing measure.
- $1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years
- $50 million for that great engine of job creation, the National Endowment for the Arts
- $400 million for global-warming research
- $2.4 billion for carbon-capture demonstration projects
- There's even $650 million on top of the billions already doled out to pay for digital TV conversion coupons
- $1 billion for Amtrak, which hasn’t earned a profit in four decades
- $2 billion to help subsidize child care
- $2.4 billion for projects to demonstrate how carbon greenhouse gas can be safely removed from the atmosphere.
- $650 million for coupons to help consumers convert their TV sets from analog to digital, part of the digital TV conversion.
- $600 million to buy a new fleet of cars for federal employees and government departments.
- $75 million to fund programs to help people quit smoking
- $21 million to re-sod the National Mall, which suffered heavy use during the Inauguration
- $2.25 billion for national parks. This item has sparked calls for an investigation, because the chief lobbyist of the National Parks Association is the son of Rep. David R. Obey, D-Wisc. The $2,25 billion is about equal to the National Park Service’s entire annual budget. The Washington Times reports it is a threefold increase over what was originally proposed for parks in the stimulus bill. Obey is chairman of the House Appropriations Committee.
Posted by: Earl
on Jan 19, 2009
We are about to witness an historic event. Who could have imagined? We’ve elected an African American to the most powerful office in the world. I tend to lean in the other direction politically but I have to say that I am proud to be an American when we’ve come this far.
So what does this really mean? In the grand scheme of things it doesn’t matter what his ethnic heritage is. He’s an American. I’m interested in results – national security, the vision to implement the structural changes in government that are required for the long-term, and economic policies that provide incentive to businesses in the US to continue to lead the world in technological innovation.
Or, is this an investment? If our government authorizes funds to be spent that can show a tangible return perhaps it should be called an investment.
We need to quit quibbling over semantics. A tax cut can be considered an investment if it stimulates more private investment that results in greater tax revenue. The short-term reduction in revenue has nearly always resulted in increased revenues due to the growth is stimulates. It does not matter if it positively affects people with more money than you. They are not keeping that money under their mattress. It is getting invested or spent and that ultimately is good for all of us.
I wish Obama the best! Please make it a priority to see to it that people and companies that have the means continue to have the incentive to invest and grow their wealth. We will all be better off for that. At the same time, you would create an environment for investment in things that will result in reduced reliance on foreign energy, reduce emissions, and make this world a better place for our children.
God speed President Obama!
Posted by: Earl
on Jan 6, 2009
This past weekend President-elect Obama stated in his weekly address that he wants to see the U.S. renewable energy output to double as a result of an economic stimulus program. That's a laudable goal but let's put it into perspective. Bear with me but we have to wade through some numbers.
The U.S. Department of Energy's Energy Information Agency publishes the
Monthly Energy Review. The December 2008 edition documents the U.S. energy consumption through the first 9 months of 2008. It is interesting to note that over the past several years the totals have stayed quite consistent. After extrapolating the 2008 numbers out to 12 months it looks like the 2008 totals will be within 2% of the 2007 numbers. For sake of illustration I'll use the 2007 totals.
First a definition. The unit of energy measure used in the report is a Quad (short for 1 quadrillion BTUs). That is a one followed by 15 zeros. One barrel of oil (42 gallons) will provide approximately 5.8 million BTU. 1 Quad is roughly equivalent to 172 million barrels of oil.
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