Fueled by Green Policy, Corn Production Hurts Environment

While federal ethanol subsidies expired last year, the Obama Administration’s strict clean fuel standards still give farmers across the United States an incentive to plant corn — to the detriment of the environment.

The Associated Press reports that “across the Dakotas and Nebraska, more than one million acres of the Great Plains are giving way to cornfields as farmers transform the wild expanse that once served as the backdrop for American pioneers.”

The physical expansion of the American Midwest, the world’s largest contiguous piece of farmland, is fueled by a green energy policy that requires oil companies to blend billions of gallons of corn ethanol into their gasoline, keeping prices high. Read more “Fueled by Green Policy, Corn Production Hurts Environment”

Study: No Reason Not to Build Canada Oil Pipeline

A United States State Department study released late Friday afternoon found “no significant impacts to most resources” along the route of a proposed pipeline extension from Canada to Oklahoma, defying environmentalists’ warnings that building the pipeline will degrade underwater water supplies.

The report leaves President Barack Obama, who delayed approval of the pipeline’s construction more than a year ago, with little reason to further obstruct the project.

A previous State Department study, released in August 2011, similarly anticipated minimal environmental impact from building the pipeline.

The $7 billion Keystone XL Pipeline is supposed to carry the equivalent of more than 700,000 barrels of oil per day from the tar fields of Alberta to refineries and ports along the Gulf of Mexico. Read more “Study: No Reason Not to Build Canada Oil Pipeline”

Coal Country Papers Chastise Obama’s Energy Policy

The editorial pages of local newspapers in coal mining states in the United States this week chastised the Obama Administration for what opposition Republicans have dubbed its “war on coal.”

The Journal points out that West Virginia is losing thousands of jobs in the coal industry, largely as a result of new environmental regulations that, the newspaper says, are “making it more difficult for surface mines to obtain permits.”

Obama’s defenders insist the war on coal is a myth. But production cuts, mine closings and thousands of layoffs are no myth. They may be gratifying to a White House determined to wreck the coal industry but they are new causes for concern among residents of West Virginia, Ohio and many other states where tens of millions of people rely on inexpensive electricity generated from coal.

The president never was very popular in the Mountain State. He lost West Virginia to Hillary Clinton in the Democratic Party’s presidential primary election four years ago and to Republican John McCain in November 2008. Read more “Coal Country Papers Chastise Obama’s Energy Policy”

No Mirage: American Energy Boom Coming

Pennsylvania gas plant
An hydraulic fracturing station in Lycoming County, Pennsylvania, August 12 (Nicholas A. Tonelli)

The huge increase in oil and gas production in the United States in the last few years has fueled what could be an “energy boom” with the potential of reinvigorating the American economy.

Yet some are skeptical. In The New York Times, Steve A. Yetiv wonders if the energy boom isn’t a “mirage.” Read more “No Mirage: American Energy Boom Coming”

Germany, Poland Oppose Stricter Emission Rules

Poland will block changes to the European Union’s Emissions Trading System and is confident that other Central and Eastern European states are opposed to more stringent emission rules as well.

The Polish environment minister Marcin Korolec told Environmental Finance last week that he sees no “perspective” for new regulations that increase the price of carbons. Read more “Germany, Poland Oppose Stricter Emission Rules”

America’s King Coal Hopes to Reign in China

When he was still a candidate for the presidency, Barack Obama famously predicted in 2008 that under his administration, “if someone wants to build a coal power plant, they can, it’s just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

As president, Obama failed to enact the sort of cap-and-trade legislation that would have taxed emissions but constructing new coal plants has become virtually impossible as a result of new environmental standards.

The regulatory obstructionism of the current government is only in part to blame for coal’s struggles however. Gas’ huge success is killing the competition.

Improvements in drilling techniques are unlocking vast shale gas and oil reserves across the American northeast in states that used to be dominated by coal and steel production.

In this part of the country, also known as the Rust Belt, the coal workforce has shrunk by 90 percent in the last forty years. Now, energy companies are planning billions worth of investments to revitalize the natural gas industry.

Coal is forced to turn elsewhere and there is a huge market to be found in China. Coal fuels almost 80 percent of China’s electricity. Although it has the second largest proven coal reserves in the world after the United States, in 2009, China became a coal importer for the first time in its modern history. But a fraction of its imports are American.

China doesn’t represent a big market for the United States either. Last year, less than 7 percent of American coal exports left the country via Pacific Ocean ports. The vast majority of exports is still headed for Europe. Yet there are huge coal reserves situated nearby in the states of Idaho, Montana and Wyoming.

Plans are underway to build six major new port facilities in Oregon and Washington to ship more coal to China but again, the industry is facing pushback from environmentalists.

In the absence of a federal framework to curb emissions, the leftist state governments in the Pacific northwest will likely be tempted to impose restrictions of their own as soon as coal export terminals start appearing on their coastlines.

In Portland, Oregon on Monday, environmental activist Robert Kennedy Jr. predicted that increased oil exports would leave the state “with a legacy of pollution, poison and corruption.”

Coal doesn’t share its wealth. It keeps it for itself and it makes a few people billionaires by impoverishing everyone else. Coal is crime. Do not let it come through this community.

Members of President Obama’s Democratic Party are in the majority in the state legislatures of Oregon and Washington. The governors of both states are Democrats. It’s likelier that they will listen to the likes of Kennedy than advocates of coal, whatever the cost to the industry.

Shale Gas Boom Could Reinvigorate Rust Belt

Once industrial states in the northeastern United States that have seen manufacturing jobs shipped overseas in recent decades can prosper anew if there is a boom in the chemical and natural gas industry.

Improvements in drilling techniques have the potential of transforming the American energy landscape by unlocking the vast shale gas and oil reserves in states that used to be dominated by coal and steel production.

In the northern Appalachian mountain region, energy conglomerates are planning billions of dollars worth of investments to revitalize the natural gas sector and construct new chemical plants. Read more “Shale Gas Boom Could Reinvigorate Rust Belt”

Chinese Dam Building Tests Southeast Asian Resilience

China’s hydropower development activities on the Mekong and Salween Rivers are a clear illustration of the country’s potentially destabilizing strategy, with both diplomatic and environmental impacts, in Southeast Asia.

These waterways, along with the Yangtze River (one of China’s domestic targets for intensive development), constitute the Three Parallel Rivers UNESCO World Heritage Site in southern China’s Yunnan Province. China has thirteen projects planned on the Salween (known in China as “Nu”) River above its entry into Burma, including several adjacent to or within the ecologically sensitive heritage site.

The environment is clearly not a priority in the Chinese decisionmaking process on the topic of energy development. But what about the priorities of China’s neighbors?

Beijing is, in fact, planning and building dams on several rivers that originate in southern China and flow into other South and Southeast Asian nations, including the Mekong, the Salween and Yarlung-Tsangpo or Brahmaputra River.

Downstream riparian nations include Bangladesh, Burma, Cambodia, India, Laos, Thailand and Vietnam. All of these countries will be affected by China’s dam building and hydropower operations in upstream reaches of the aforementioned rivers.

We may also consider nearby projects on the few Southeast Asian rivers that do not necessarily originate in China but in which Chinese investment and interests are focused.

As one example, in 2011 the president of Burma suspended construction of the Chinese funded $3.6 billion Myitsone Dam project on the upper Irrawaddy River over safety issues, resident relocation programs and environmental concerns. Nevertheless, China is pressing for resumed construction on the site from which it expects to reap the majority of generated power for Yunnan growth once the 6,000megawatt project is completed. Myitsone is just one component of a six dam Chinese project on the upper Irrawaddy River intended for energy export to Yunnan.

Despite the suspension, however, a recent report from an nongovernmental organization operating in northern Burma indicates that work surrounding the project continues, with Chinese workers continuing preparation on the Myitsone site and accelerated mineral extraction in the intended reservoir area.

Chinese impacts on the Mekong River community are not yet so overt or contested. Where the Lancang River exits China and becomes the Mekong, it contributes about 18 percent of the total mean annual flow of the entire Mekong River basin. The other 82 percent of Mekong River flow originates in the lower basin from its numerous tributaries there.

During the dry season (northern winter), as much as 30 percent of the total flow in the Mekong River comes from the Chinese portion of the basin. Compared with a population of roughly ten million in the upper basin, concentrated primarily in Yunnan Province, there are more than sixty million residents of five countries in the lower basin area.

With an overall basin size of 800,000 square kilometers, there seems more than enough water to sustain the people of the Mekong River basin, if water was all they needed. Of historically greatest importance to downstream nations is the productivity of the inland freshwater fishery along the Mekong River, which is estimated at more than two million tonnes annually.

Unless the river flow regimes and their influence on this fishery are better understood before further disruption, dam building activities and the ensuing strict flow regulation for hydropower production could decimate a principal food resource in downstream areas.

Working ahead of its downstream neighbors, China has five operational hydropower dams on the Lancang River in and above Yunnan, with three more projects currently under construction and as many as 23 more in planning stages.

All of these projects in China are on main reaches of the Lancang, as few workable tributaries exist in that narrow portion of the basin.

Downstream countries along the Mekong have been working consistently together on the Mekong River Commission and, until recently, have refrained from reservoir and hydropower construction on main river reaches.

Laos has proposed for MRC approval the controversial Xayaburi Dam, a $3.5 billion project that is expected to generate 1,260 megawatts of electricity for the country and could earn back its cost in a single year for the Thai developer.

A single dam along the lower Mekong River would certainly alter flow regimes in the region but will only marginally exacerbate the changes that are seen with China’s dam building activity upstream. However, spurred on by China’s concentration of projects, another ten dams on main river reaches are currently in the proposal and planning stages for MRC countries. That rush of project development is in addition to 41 hydropower dams on tributaries to the Mekong River that are expected to be complete by the end of 2015 and as many as 37 more lower basin tributary dams that could be developed in the 2016-2030 period.

Unlike dams on the main reaches of the Mekong River, which are subject to MRC approval, these tributary dam projects can proceed under the development practices of the individual lower basin countries.

China’s influence on the lower basin has, in effect, spurred the potential fragmentation of an historically strong MRC and its cooperative process. Instead of attempting to deal with the lower basin as a bloc, China could more easily overcome opposition to its own plans for the Mekong River on an bilateral basis, at which China excels when seemingly limitless investment packages are employed as leverage. For the MRC states, however, it’s not all about the money.

Lower basin riparians have, until most recently, recognized the delicate balance between hydropower projects to provide energy for economic development in individual nation and the need to maintain the ecologically vulnerable shared freshwater fishery that provides food security to millions of Southeast Asian residents.

China seems to see no such necessity for balance and is interested in the Lancang primarily as a resource for producing energy.

Widening the regional gap in priorities, China has refused to participate with fellow riparians in the MRC to date. Eventually, as China proceeds with its own dam building efforts, the lower basin countries will reach a point at which effects on river flow regimes become obvious and the sustainability of the vital Mekong basin freshwater fishery wanes.

With full dam building efforts applied in both upper and lower basin regions, complete collapse of the subsistence fishery ecosystem is well within the realm of likelihood, destroying 81 percent of the protein source for the lower basin peoples. A recent study has found that the tributary dams are actually more at fault for such a potential collapse, although flow regulating dams on the main Mekong River reaches will only hasten the demise of the Southeast Asian fisheries ecology.

As the first and most ambitious single actor, the overall upstream riparian and the basin country with the least apparent consideration for a cooperative and balanced approach to the river, China will take much of the blame for this decline.

As with the MRC, while the lower basin countries are all members of ASEAN, China is not. Without a common local or regional authority, MRC countries have little alternative but to appeal to the United Nations for intervention in their emerging dispute with China over the uses and hydrologic alteration of the Mekong River basin.

One potential outcome is a procedural stalemate, by which the long cycle of international mediation allows China to complete its dam building efforts on the Lancang River. At that point, the damage to the lower basin is done and MRC nations must simply deal with the consequences of a diminished resource.

Working sooner and more quickly, however, the lower basin countries could propose a river treaty with an independent overseer. A valuable precedent for this action can be found in the Indus River basin, where India and Pakistan have maintained the Indus Waters Treaty for more than fifty years with oversight by the World Bank. There are still disputes between the countries over (accused) abuses and violations of treaty provisions and allowances but at the very least there is an established mechanism for dispute resolution through independent evaluation and arbitration by a third party.

As a second potential outcome of the MRC complaint, and following on historical precedent, China may attempt to employ capital investment in infrastructure development as a way to get what it wants from the downstream nations.

China could make such a preemptive move in order to mitigate, by diplomatic and economic means, the physical impacts of its new dams on the lower riparians. Specifically, China may offer to help the MRC countries build their own dams, on tributaries and/or main Mekong River reaches, in exchange for freedom of construction and regulation on the Lancang River in the upper basin.

China has precious few opportunities to do that before any further alteration of the river flow regime occurs and downstream impacts become too difficult on the shared resources of the MRC nations.

Lower basin states must hold firm to an understanding of the impacts that their own dam building activities will have on shared resources and reject China’s “help” that is actually aimed at fragmentation of the lower basin system.

With such a realization of Chinese plans, the MRC states will finally recognize the potential impacts of Chinese involvement and push back at China in a concerted effort to bring the upstream nation’s own dam building activities under control and environmentally responsible oversight, though by then the fishery could be lost entirely.

Demands will be made for China to pay for lost resources in the lower basin and any dispute could lead to negotiation, conflict or both.

In any case, China stands to lose a valuable cache of trust and goodwill with its neighbors, if not also valuable investment and trade markets, not just in Southeast Asia. Other resource and trade partners watching all of this unfold will think twice about their relations with China after such alienating behavior in its own neighborhood. No country has it in their national strategy to be taken advantage of by a neighbor or trade partner.

Without preemptive engagement and China’s cooperation and a willingness to consider alternatives alongside fellow riparians in the lower basin, MRC nations will lose control of the Mekong River and the abundance of its valuable ecosystem. MRC nations can bring China to the negotiating table through diplomatic and economic sanctions, an action to which China must acquiesce for fear of losing one of its nearest and fastest growing markets.

Once China is forced to negotiate for its use of the upper basin in the Lancang and Mekong River system, the evaluation and arbitration process will slow China’s progress considerably by subjecting its dam building projects to international standards of environmental assessment on an individual and collective basis, which China has largely avoided to date. Its ambitions for a cascade of strictly regulated hydropower dams on the Lancang River, which are considered vital to economic and industrial development in its southern provinces, will be slowed or lost entirely.

This article was adapted from a strategic simulation run by Wikistrat, the world’s first massively multiplayer online consultancy.

UN Recast Limits to Growth As “Planetary Boundaries”

A United Nations panel of heads of state and environmental ministers on Monday warned that the world can no longer afford to ignore the ecological impact of growth and “must define what scientists refer to as planetary boundaries” beyond which human activity could wreck the planet.

The secretary general of the United Nations, Ban Ki-moon, said, “We need to chart a new, more sustainable course for the future, one that strengthens equality and economic growth while protecting our planet.”

A report that was released by the group drafted fifty specific policy proposals. Among them, a recommendation that environmental and social costs be somehow factored into how the world measures economic activity and a revised measure of wealth that goes beyond the “narrow” calculus of gross domestic product.

If this sounds familiar, it should. Exactly forty years ago this year, the Club of Rome, a group of notable academics and industrialists, predicted in a study titled The Limits to Growth that population growth, industrialization and resource depletion would ultimately inhibit the global economy’s ability to expand.

The Limits to Growth echoed the predictions of Thomas Robert Malthus who, as early as the eighteenth century, before the Industrial Revolution changed the world forever, advocated population controls to prevent people from reproducing at an “unsustainable” rate.

Even if the Western world has seen only growth since, Malthusianism never died. There was Thomas Friedman last year, writing in The New York Times that the planet was on the verge of crossing a red line on growth, climate, resources and population “all at once.”

We are now using so many resources and putting out so much waste into the Earth that we have reached some kind of limit, given current technologies. The economy is going to have to get smaller in terms of physical impact.

Friedman proposed to move away from “consumer driven growth” toward a model that is “happiness driven,” based on people “working less and owning less.”

See where this is going? When supply appears to stall, the natural instinct of liberals is to equalize and ration. Just as Malthus couldn’t envision the world ever breaking out the “trap” he had set, today’s environmentalists cannot imagine that man will ever survive on anything but existing resources.

The supposed finiteness of supply conveniently serves their larger purpose which, as President Barack Obama so neatly put it, is to “spread the wealth around.” If there’s less to go around, they argue, we should all suffer equally. Or, as Margaret Thatcher said, they “would rather the poor were poorer, provided the rich were less rich.”

We have been warned for decades that industry and overconsumption will wreck the planet by nearly the same people who believe that demand drives growth and economies should be flooded with cheap money if there’s a contraction yet here we are, despite the recent downturn, in an age of abundance.

There is only so many times you can cry wolf before people start to wonder whether disaster truly looms on the horizon.

Time and again, human enterprise, ingenuity and technology propel us toward higher standards of living. In those parts of the world that are economically freest, people enjoy more and more diverse food than ever. There is an ample supply of natural resources to fuel our cars and power our factories for generations to come, if only governments would allow companies to drill and extract.

There is a mistaken belief that because resources are finite, so is growth. This confuses the engine of economic expansion for the mere presence of resources which would be perfectly useless if not man learned to make use of them. He, specifically his mind, is what makes progress.

If there is less coal, we’ll drill for more oil. If there is less oil, we will switch to using more natural gas. If there is less gas, we will certaintly find ways to make wind and solar profitable. (Hint: subsidies aren’t helping! Actually, they discourage innovators from improving the technology.)

The fact that we’ll add more people to the world population than ever before over the next decades is not to say we should grow at a slower pace and consume and produce and work less. There is nothing romantic or “happy” about living in hunger and poverty, Mr Friedman. We should work harder instead! The Earth may be limited but the human capacity to create and improve is not.