Coal has not burned out yet

As much as there is growth in alternative resources, coal still remains the number #2 energy resource. According to experts, it still will remain a primary supplier of energy for at least the next two decades. What are the reasons for this?

1. Coal is cheap. It still is much cheaper than natural gas and oil. Clearly, it still remains cheaper than solar, wind, bio fuels when you add up the infrastructure cost to harness that energy.
2. It is easily transportable.
3. It is the supplier of energy for two of the largest growing economies, China and India. China accounts for 1/2 of the global demand for coal and India represent 7.5%.
4. U.S. has not put in place a carbon emissions tax or cap. At this point, it does not look like this will happen in the near future, especially if the Republicans gain some control of Congress. Also, too many states have some connection to coal economically, which reduction of coal usage will have an huge economic impact. In this economic environment with a high unemployment rate, it will be difficult for people to give up their jobs that will impact with the immediate future, their livelihoods, in order to protect the distant future, the planet's livelihood. I person is more concerned about putting food on the table now than what will happen is some hypothetical future created by scientists, who have recently had less credibility with the general public.


The US has stated that it is addicted to oil; however, there is a greater addiction for the global economy, coal. Like any addiction, it takes time to got off of that "drug." At least for now, coal will continue to burn that red glow to meet the energy needs of us.

Hey, at least, we will continue to get the latest upgraded ipod from China at a cheaper price because it was created using the cheap energy resource, coal. I just hope that ipod is waterproof when the sea rises twenty years from now. Then again, I guess we will have time to create one of those too.

A Hot Summer at home and in Russia

I took a hiatus from my blog postings to enjoy the summer. Of course, like many of us, I experienced the hottest summer in history on the east coast. Where I lived, we had 8 heat waves, meaning temperatures above 90 degrees Celsius for three consecutive days. It is September 1st and the temperature today will reach close to 100 degrees. What does it mean? Can all of the global warming pundits shout out in unison, "I told you so"? Of course, that might fall on deaf ears of the people who still deny global warming or that it is caused by man. Perhaps, as we see Russia dealing with forest fires and with 1/5th of Pakistan flooded by the heavy monsoons or Tennessee experiencing the most rainfall in one period of time in more than 1000 years, we can all work together and address this ever changing and unpredictable climate change. We will have to wait and see.



As I stated before, Russia faced the worse wild fires in its history this summer. Moscow throughout the summer was under a smokey haze. Also, Russia's wheat industry has been wiped out by these fires. As a result, spot prices for wheat rose by 24% in July and by more than 50% between the beginning of June and August 6th. In fact, the futures prices for September contract on the Chicago Board of Trades, which sales contracts of commodities, such as wheat, rose by more than 5%, which was the biggest daily increase since the end of the 2007-2008 food price spikes. Now, before you run to the supermarket and stock up on bread and flour, this movement in pricing is not unusual. The weekly wheat-price rises in July were no larger, compared with four weeks previously, than those during May and November 2009. In fact, if we look at prices over 12 week periods, they actually rose more at the end of 2009 than the past three months. According to Manuel Hernandez of the think tank, the International Food Policy Research Institute, this volatility is normal. The better indicator is not short term contract here, but long term ones, which have risen in price, but slowly. Another reason for calm is that we still have a significant global supply of wheat. In June 2008, the last "food-crisis", world wheat stocks fell to 121 m tonnes, the lowest level in 30 years. This was caused by the bio fuel frenzy and emerging markets growing demand for wheat. Today, we sit on 197m tones of wheat. This should be enough to absorb the impact of Russia's destroyed crop, which represent only 8% of the world's crop. Overall, the UN's Food and Agriculture Organization forecast that the wheat harvest will fall by about 5% this year. There will be a impact here, but not as cataclysmic as some feared. Also, this should benefit the US economy as one of the largest growers of wheat. Nevertheless, maybe it still is a good idea to get an extra bag of flour next time you are at the supermarket.

The Human Being Burden

I have watched extensive coverage of the oil disaster in the Gulf of Mexico. I see the horrible images of wildlife soaked in crude oil and blobs of oil washing up on beaches and suffocating the wetlands, yet I turn off the TV and I continue my normal activities. Unfortunately or fortunately, there is an underlying emotion of guilt in these activities. I continue to drive my car to work and purchase my morning coffee,which comes in a Styrofoam cup. Status quo. I am not effected by the oil spill. In fact, the gas prices have not even skyrocketed. So I or many others do not see any of the effects even though we see it on the television. That is the problem. It seems to me that in order for the US and the rest of the World to take action, it has to be effected in its entirety. Unfortunately, you do not want a global impact that becomes irreversible because then it would be too late. How do we get it in our thick heads that we are damaging the planet? The signs are there from the 1000 year drought in Australia or to the last decade being the warmest ever or the more frequent El Nino effect. Then there is the oil spill in the Gulf. Once again, it is out of sight out of mind. Is the problem that we look at all these events independently and not together? I am not sure what would make us change our habits. I know I need to change mine. I just hope the rest will follow.

The Australian-Chinese Partnership could be bad for Australia and the rest of the World

Australia has just come out of the worst drought in over 1000 years. The country has become the present example of the future impact that global warming will have on the rest of world. Yet, the country has been unable to get a carbon cap/credit legislation passed and it continues to export the largest carbon emitting energy resource, coal, to other countries to support their energy needs. In fact, coal is the major export for Australia and one of its primary recipients of this exported energy resource is China.

Although China is making great strides to shift its energy resources to renewable ones, its infrastructure is outdated and incapable of transmitting that energy to power its cities and factories. Unfortunately, it is years away from upgrading its infrastructure. As a result, coal remains and will remain its primary energy resource. In fact, China this past year was facing potential power outages at many of its power plants due to dwindling supplies of coal. As a result, China opened up many coal mines that were shut down for safety violations even though the existing safety issues were not remedied. If China is willing to risk the lives of its own citizens to avoid blackouts, what would China do if its actions threaten the citizens of other countries.

This creates a problem for Australia and the rest of the world. Australia's economy is largely dependent on this energy export; however, the environmental impact caused by coal is not restricted by a country's boundaries. The immediate benefit for Australia and China may result in a long term detriment for all of the world.

The immediate solution is for China to develop and incorporate more energy efficient solutions in its economy. This means developing energy efficient buildings and infrastructure. China continues to put up buildings that have inadequate insulation; as a result, these buildings require a significant amount of heat (energy) during the winter time. China should continue to develop alternative renewable energy resources and update its infrastructure as an intermediate and long term solution.

Unfortunately, the world's second largest economy will continue to use coal as its main energy resource and many countries will continue to supply that appetite for their own immediate economic benefit without considering the long term cost to their own and the world's economy.

China and Coal

For a long period of time, China was predominantly an exporter of coal. However, this coal consumption pendulum has swung from an exporter to an importer of coal. This has pushed up the price for coal. According to golbalCoal (an international trading platform), the benchmark price at Australia's Newcastle port for the type of coal burned at power plants (thermal coal) hit $108 a metric ton, which is the highest price since October 2008.

This shift from exporting to importing coal began last year. In fact, China's imports of coal jumped 165% from March 2009. It seems this level of consumption will remain. Even though China has been pushing for alternative energy solutions, such as wind and solar, 70% of China's electricity comes from coal-fired power plants. This is demand is expected to expand by 10% for this year.

There have been a variety of factors that have created China's demand for foreign coal. There has been a drought in southwestern China, which has made the rivers too low to power its hydroelectric dams. Also, there have been several mining accidents that have slowed production as the government is cracking down on safety violations. However, it is possible that this pendulum may swing back to China being an exporter of coal. But, one thing remains certain is that China's demand for coal will increase as it continues to run its factories to supply products to the world economy and also to its growing middle class. China needs a lot of electricity to run these factories and coal still remains the primary source of to create such electricity.



Data Source: Wall Street Journal.

How much does a gallon of gas cost?

Many of us are watching from a far the ecological, economic and human tragedy that is unfolding in the Gulf Coast. People are throwing out numbers of the cost to clean up this oily mess in there to be in the billions. BP has stated that it will take full responsibility to pay for this clean up; however, as this cost grows, I am not sure that humanitarian and ethical stand that BP is taking now will remain. In fact, BP may have law on its side that caps the liability of oil companies from these types of events at $75 million. So if the law is on BP's side, who will pay the rest of the tab? Yes. The American taxpayer.

This made me think about the real cost for me when I fill up my car with gasoline. The gas pump says $3 a gallon. That must be the real cost. Right? Nope. There is study by the Institute for the Analysis of Global Security, which claims we are paying a lot more than $3 a gallon (http://www.iags.org/costofoil.html). According to this articles, when you add the tax breaks and subsidies we provide to the oil companies along with the foreign aid to the oil rich countries and the defense costs for securing these regions, you are actually paying $5.28 a gallon.

The response may be is that we need to extract oil domestically; however, all of those off shore oil rigs peppered throughout the US coastline, including the BP's oil rig, do not extract the oil for US consumption only. That oil goes onto the world market where other countries consume the oil.

The fact is that we must stop making compromises on what needs to be done. Does further off shore drilling make sense when the mistakes are too large? Are we going to learn that we have no right to take certain risks that can wipe out species that have no say in our decisions? Can we start committing to other real alternatives and force us to got off oil? I do not know the answers. I believe many of us have the fight in us to get off this oil addiction and, perhaps, this other Gulf Coast disaster will convince the rest of us that we need to stop this addiction too. We keep on saying it, but we do nothing. Unfortunately, we have to have a natural disaster like this to admit that we have an addiction and we need get treatment. Also, unlike many things, the literal and figurative residue of this natural disaster will not disappear for a very long time and will remind us again and again what type of damage our addiction is causing to other species.

It's Climate Change and the Economy, Stupid

After surviving a horrible winter on the East Coast, one must wonder whether or not global warming truly exists. I have told my daughter to drop the reference to global warming because people will brush her off and point to the 4 feet of snow piling up next to the driveway. Also, it is too difficult to explain the science in arguing that the 80 plus inches of snow dumped during the winter is a result of global warming.

However, if you change the message and say that it is climate change, a person might stop and listen. This is especially true when you point out the extreme weather that we are getting from huge snow storms to massive flooding to the reduction in certain types of local plants, vegetables and wildlife. Perhaps explaining this in a broader picture will be a more effective message. In fact, the number of Americans that believe in global warming has dropped down to the 50% range. It seems to me this is a result of bad marketing. In the northeast, we just had one of the heaviest snow falls for winter in recorded history and are now facing one of the wettest springs. These are better arguments than telling a person that the polar ice caps are melting. More importantly, if you can tie in the economy with this message, then a person might really start listening.

Let's face it, America needs another economic revolution. We went through another gilded age in which many of us ended up with higher debt, lower wages and a growing economic disparity between the wealthy and the poor. We are looking at 10% unemployment rate and a fragile economic recovery with no really foundation to build from.

So we have a teetering economy and climate change. Many of us may want to get back under the covers and waive the white flag to the Gods of fate. Actually, now is the best time to take action to help the economy grow and confront climate change.

First, we need to reevaluate how we design buildings, houses, sewage systems and our general infrastructure to handle the new type of weather patterns. We may need to reassess our sewage and flood control systems to deal with additional rain on the East Coast and redesign water capturing systems in the West to deal with droughts.

Second, we need to preserve, recreate and reassess our local plants and vegetation. This might be tricky as the climate changes because plants that might normally grow in one area now can grow in another or can no longer grow in that original area where is was indigenous. We need to evaluate what can be effectively grown in certain areas and promote it.

We also need to diversify our agriculture system. We have become primarily a two crop agriculture system where corn and soybeans reign. We need to diversify our crops and rely on locally grown products. This will help revitalize local economies and maintain the community.

Third, we need to take action to improve our energy and transportation infrastructure. As I mentioned in the past, the United States is falling way behind other countries in providing renewable energy resources, especially at the residential level. We need to take an initiative similar to the US took with the race to the moon in the 1960s or revamping its military in 1940s. We need a concerted effort to push this technology through to become part of our daily lives. This will help create the next revolution for Americans.

Also, we need to reassess how we get from point A to point B. I believe the latest down turn has demonstrated that America can survive with only one major US car manufacturer. Perhaps, the days of every American having a car are over. If you add up the expense of owning a car, it might make sense to reduce the number of cars on the road.

I just took the train down to South Carolina for vacation. It was a 14 hour trip with two kids; however, for the most part it was very enjoyable. I got to read and watch a movie along with spending quality time with my family. More importantly, I did not have to deal with traffic or place wear and tear on my car and my carbon footprint for this trip was very small compared to driving or flying.

Last, we need to reevaluate how Americans work. The days of 9 to 5 job in an office seem to becoming a workplace relic. There are some many alternatives in regard to how we work. We can telecommute, work from a location close to home or work at different times of the day or days of the week. As we become a global society, our work patterns are dictated less on the American work schedule but rather the global work schedule.

Clearly, this is not a panacea to stopping climate change and turning around the economy however, the combination of these will help prepare us for a changing climate, reduce further negative impact on the environment and help the economy grow in a more sustainable manner.