Archive for February, 2008

World’s Environment Ministers Meet to Mobilize Global Green Economy

A green economy is emerging worldwide as growing numbers of companies embrace environmental policies and investors pump hundreds of billions into clean technology and renewable energies, finds the 2008 United Nations Environment Programme Year Book.

The Year Book was presented here today at the opening of the largest gathering of environment ministers since the UN climate conference in Bali, Indonesia last December.

The ministers, joined by representatives of business, organized labor, science and civil society, are attending UNEP’s Governing Council/Global Ministerial Environment Forum with the theme “Mobilizing Finance for the Climate Challenge.”

“Hundreds of billions of dollars are now flowing into renewable and clean energy technologies and trillions more dollars are waiting in the wings looking to governments for a new and decisive climate regime post 2012 alongside the creative market mechanisms necessary to achieve this,” said Achim Steiner, UN under-secretary general and UNEP executive director.

Climate change, as documented in the Year Book, is increasingly changing the global environment, from the melting of permafrost and glaciers to extreme weather events.

But it is also beginning to change the mind-sets, policies and actions of corporate heads, financiers and entrepreneurs as well as leaders of organized labor, governments and the United Nations itself.

Combating climate change increasingly is being viewed as an opportunity rather than a burden and a path to a new kind of prosperity instead of a brake on profits and employment, the UNEP Year Book shows. The emerging green economy is driving invention, innovation and the imagination of engineers on a scale not witnessed since the industrial revolution of more than two centuries ago.

The report points to the growing interest in novel geo-engineering projects such as giant carbon dioxide, C02, collectors that absorb the greenhouse gas from the air as trees do.

“Based on technology used in fish tank filters and developed by scientists from Columbia University’s Earth Institute, this method called “air capture” can collect the CO2 at the location of the ideal geological deposits for storage,” says the report.

Meanwhile, scientists in Iceland and elsewhere are looking at injecting C02 into that country’s abundant basalt rocks where it is claimed the gas reacts to form inert limestone.

Similar “sequestration rocks” exist in geological formations across much of the world and may provide a safe and long term disposal option for the main greenhouse gas emissions, says the UNEP Year Book.

Some elements of a green economy are already taking shape.

Corporate social responsibility reporting, including environmental concerns, is now found among corporations in over 90 countries – with the number of such statements mushrooming from virtually zero in the early 1990s to well over 2,000 now, the Year Book states.

The Investor Network on Climate Change, launched in November 2003, now has some 50 institutional investors with assets of over $3 trillion.

And the Principles for Responsible Investment, jointly facilitated by UNEP’s Finance Initiative and the UN Global Compact in 2006, now has 275 institutions with $13 trillion of assets.

In 2007, financial transactions in the sustainable energy sector reached $160 billion – up from just over $100 billion in 2006, according to another UNEP report drafted to inform the deliberations of ministers in Monaco.

“An initiative to provide seed money for clean energy entrepreneurs has spawned close to 50 new enterprises in Africa, China and India. The Principles for Responsible Investment, facilitated by the UNEP Finance Initiative and the UN’s Global Compact, has secured the support of over 275 institutions handling assets of over $13 trillion dollars,” said Steiner.

“Among the challenges facing ministers in Monaco is how to accelerate this transformation to ensure that it is far reaching, widespread and above all speedy,” he said.

The Intergovernmental Panel on Climate Change, composed of more than 2,000 scientists established by UNEP and the World Meteorological Organization to advise governments, estimates that to avoid dangerous climate change emissions need to be stabilized at between 535 to 590 parts per million, ppm, in 2050.

In order to meet the stabilization target, global emissions of greenhouse gases will need to decrease in 2050 by 18 to 29 giggatonnes of carbon dioxide with emissions peaking even earlier – somewhere between 2010 and 2030.

A variety of recent assessments such as the Stern Review; ones by the IPCC and others by the UN Framework Convention on Climate Change put the costs of stabilization at between 0.3 percent and four per cent of global Gross Domestic Product, GDP.

Stern estimates it at one percent of global GDP, costing around $134 billion in 2015 rising to $930 billion in 2050.

Industrialized countries, except the United States, are abiding by the Kyoto Protocol, which requires a reduction in six greenhouse gases by an average of 5.2 percent of 1990 levels by the end of 2012.

After 2012, the Kyoto Protocol will be replaced by an global agreement now under negotiation that are expected to be completed by the climate convention meeting in Copenhagen in 2009.

Some developing countries are already committed to a green economy.

UNEP Governing Council President Roberto Dobles of Costa Rica told reporters today that his country wants to become a carbon neutral, zero impact economy by 2021.

“To change the economy, we have to become more resource efficient, the culture of consumption will have to change,” Dobles said.

Although the country enjoys a 62 percent forest cover, last year Costa Ricans planted six million trees and aim to plant seven million trees this year, he said.

Costa Rica will be reducing emissions and increasing its capacity to mitigate climate change, Dobles said. “We will be increasing our well-being through a low carbon economy.”

In a video message played at the Governing Council today, UN Secretary-General Ban Ki-moon appealed to the environment ministers to usher in a “new generation” of solutions to climate change.

“You can help us meet the crucial challenge of mobilizing finance to meet the climate challenge,” he said. “We must sustain the momentum, including through practical actions now.”


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Nigeria: Operators Demand Stable Fiscal Environment for Oil Sector

Nigeria’s traditional partners in the exploration and production of hydrocarbon resources are calling on the government to install fiscal regimes and congenial environment to ensure the continued survival of the joint ventures that sustain revenue inflow from the sector.

Chairman and managing director of ExxonMobil in Nigeria who spoke for the industry at a strategic conference in Abuja weekend said that only stable fiscal environment, sanctity of contracts, guaranteed returns on investment and securitization of payment would continue to incent investments from international oil companies.

He made it clear that the role of the private sector in the partnership to realize Nigeria’s economic goals through optimum valorization of her petroleum resources would anchor on commercial viability of investments in the local environment.

Business Champion reports that government activated a string of reforms in the industry that threaten to alter deepwater contracts signed on producing fields and commit operators to delivery of gas for the domestic market where prices are regulated.

Government and oil firms in the country have recently taken different positions on the new measures introduced by the state to earn maximum returns from exploitation of the nation’s petroleum resources.

Apart from the directive on oil firms to end routine flaring of associated gas by the end of the year, the industry is also under directives to ensure adequate supply of produced gas to the domestic market to ease out scarcity and enhance economic development of the country.

Also, there is an existing directive on the companies to refine 50 percent of their production locally and export white products from the country to reverse the current trend of massive export of crude oil and massive high cost importation of white products to fuel the domestic economy.

In his opening address at the just concluded Nigerian Oil and Gas conference in Abuja last week, President Umaru Yar’Adua said the industry reforms with associated changes in operating modalities would be enacted into law to give it permanent teeth.

He expressed dissatisfaction with the level of progress made by the industry in driving economic development of the nation in the last 50 years, pointing out that a lot of basic challenges still faced the nation despite hosting a robust oil and gas industry.

“Ours is a story of a nation with abundant oil and gas resources but has stunted growth,” he said, adding that Nigerian content of the industry has remained low while the country still depended on imported petroleum products when the country should meet its fuel needs and export to contiguous nations.

He made it clear that “this situation should not be allowed to continue.”

Similarly, while presenting the details of the reform programme to the conference, the honorary strategic adviser to the President on energy matters, Dr. Rilwanu Lukman, informed the oil companies that their commercial interests should be realigned to drive national aspirations in the industry.

On his own, the Director of Department of Petroleum Resources (DPR) Mr. Tony Chukwueke, made it clear that government would review a set of Production Sharing Contracts (PSCs) signed with the oil companies in the past to reflect the current market value of crude oil.

He said the review of the agreements would be urgent in order to avoid further revenue losses to government as production and export go on daily at offtake sites operated by the oil majors.

Earlier in a chat with newsmen in Lagos, the new managing director of Shell, Mr. Mutiu Sumonu, said most of the requirements on the operators were issue of investment decision rather than mandatory requirement.

In responding to issues on the radical reforms in the industry, Mr. Chaplin noted the reforms have posed an exciting and challenging time for the energy industry in the country, adding that what makes the transformation so important is the opportunity for economic growth for Nigeria that can be achieved by ‘getting this transformation right.’

He emphasised the need for government to recognise its roles in providing stable fiscal and regulatory frameworks, access to resources and allowing markets to operate freely.

“Countries that want to expand or develop their energy industry and compete globally for investment capital must have these elements in place to allow them to compete,” he maintained.

He added other congenial requirements to include non-discriminatory administration of laws and regulations; impartial dispute resolution; minimising obstacles to building or operating facilities; minimal import or export restrictions; freedom to negotiate commercial arrangements; and sanctity of contracts.

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Recent editorials from New Jersey newspapers

Ralph Nader, who turns 74 tomorrow, remains as obstinate, prickly and egotistical as ever, hewing to the idea that he must run for president because “dissent is the mother of ascent.”

Using political protest to leverage social change is a sound principle. Nader’s execution of it is not. His presidential run in 2000 wounded Al Gore enough to help George W. Bush sneak into the White House.

Events since have proven Nader was delusional when he insisted there was no difference between the major political parties. The deficit-spawning Bush tax cuts, the administration’s assault on crucial environmental laws and, most tragically, the unnecessary war in Iraq _ Nader bears partial responsibility for all of it.

Nader’s 2000 candidacy garnered almost 3 million votes. Nearly 100,000 of them were in Florida, where Bush defeated Gore by slightly more than 500 votes.

Despite eight years of some of the worst political and social backsliding in the history of the republic, Nader still confuses his narcissism with progress for the nation.

Fortunately, this is not 2000. Nader shouldn’t rise to even the level of a distraction. Gore was a solid candidate, but he was not exciting and he didn’t represent change. Nader won’t take votes from Barack Obama or from Hillary Clinton. Both candidates are sufficiently appealing as agents of change that Nader can’t steal their thunder.

Nader, the stinging wasp, has become the irritating gnat. He says he’s not a spoiler. While it’s true he no longer has the power to be, his intentions are suspect. It’s time for him to go away and stop pretending that what’s good for him is good for the country.


On the Net:

Tuesday’s (Feb. 26) Record of Bergen County on “Freeheld’s” Oscar victory:

On Sunday, a New Jersey story won the Academy Award for short subject documentary. It was a bittersweet moment. In what may go down as the ultimate Oscar irony, a film about gay and lesbian discrimination in Ocean County was announced as the winner by members of the U.S. military serving in Iraq.

Probably no one planning this year’s show thought about the hypocrisy of having the military, which bans openly gay and lesbian soldiers from service, announce a category that included a film about a law enforcement officer’s dying struggle to transfer pension benefits to her legal domestic partner.

“Freeheld” shows how Ocean County freeholders continued to deny Lt. Laurel Hester’s requests to have her pension transferred to her partner, Stacie Andre. The freeholders relented only after Governor Corzine applied personal pressure.

Hester’s publicized battle spurred numerous counties across New Jersey to grant pension rights to their employees in legal domestic partnerships. Since then, New Jersey has expanded rights to same-sex couples with a civil union law. But a recently released report on the one-year-old law shows that benefits discrimination continues despite the state Supreme Court ruling guaranteeing equal rights to same-sex couples.

And while Corzine says he will sign legislation recognizing same-sex marriage if it ever reaches his desk, he also has said that he does not support introducing such legislation in a presidential election year. There is little appetite inside the State House to take on this issue in 2008.

The Oscar win will give “Freeheld” more public exposure. It is a sad, compelling film. Watching Hester slowly succumb to cancer is heartbreaking. Watching her repeatedly being denied equal rights despite her decades of public service is galling. And watching the emotional bond between Hester and Andre as they face the inevitable is proof there is nothing gender-specific about spousal commitment.

“Freeheld” ends in death: Hester died in 2006. It also ends in personal victory. But the struggle for equal rights has never been one individual’s story. Equality for gays and lesbians in New Jersey is a sometime thing. In the U.S. military, it does not exist at all.

It will take more than an Academy Award to change that.

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Corzine Seeks to Cut N.J. Budget and Work Force

TRENTON — Declaring that New Jersey had reached an irrevocable “turning point” because of years of bad fiscal habits, Gov. Jon S. Corzine proposed a budget on Tuesday that would reduce the state’s work force by 3,000 people, close three departments and prune expenses for services including colleges and hospitals.

Corzine’s Proposed Budget Cuts If enacted as proposed, the overall state budget would shrink by $500 million to $33 billion, marking only the fifth time in the last 50 years that New Jersey would spend less money than it did the previous year. Assuming inflation this year at around 3 percent, as it has been since 2004, the cut would be equivalent to roughly $1.5 billion, or 4.4 percent of last year’s budget, in real terms.

“Frankly, New Jersey has a government its people cannot afford,” a somber Governor Corzine told a stone-silent group of legislators, lobbyists and local officials in his annual budget address.

“We must turn away from the era of spending and borrowing beyond our means, once and for all,” he said. “In practical terms, failing to take on the tough choices will only force New Jersey into a deeper fiscal swamp.”

Mr. Corzine delivered the harsh prognosis against a grim national backdrop, given that more than 20 states, New York included, are now grappling with budget shortfalls because of a downturn in the national economy, according to an analysis released Monday by the Center on Budget and Policy Priorities.

But New Jersey’s troubles are especially deep, fiscal analysts say, because of rising costs for pension and health care benefits, a ballooning increase in spending under both Republicans and Democrats over the last decade or so and the longtime practice of paving over deficits with one-shot revenues that dried up the following year.

So while the slumping housing market has led to shrinking tax receipts across the country, only a few states face a greater shortfall than the nearly 10 percent gap New Jersey has to fill, the Center on Budget and Policy Priorities said. Arizona’s deficit is the largest, 16 percent, followed by California, at 15 percent.

Here in Trenton, Mr. Corzine warned that the new math was full of difficult numbers, big and small.

He proposed cutting state aid to colleges and universities by $76 million, or 4 percent. Grants to towns? Down $190 million (about 10 percent). Hospitals? Less $144 million (14 percent). His plan would shut down the Departments of Personnel, Agriculture and Commerce, and trim jobs across the board, largely through buyouts. Residents would face longer lines and shorter hours at motor vehicle registries, and limited hours at public parks.

Beyond the numbers, Mr. Corzine said he wanted to change the culture of the way the state government operated. He said, at several junctures, that he had been humbled by the anger of the public, much of which has been trained on him and his proposed toll increases in a series of town-hall meetings in recent weeks.

In a 25-minute speech, the governor used some variation of the word “cut” at least 28 times and elicited applause just twice: when he entered the Assembly chamber, and when he left.

“I have heard firsthand the public’s frustration and anger generated by too many years of overspending, borrowing and false rhetoric,” he said. “And they’re right.”

He later referred to his plan as “cold-turkey therapy for our troubled spending addiction.”

After the speech, the state’s top two legislators, both Democrats like the governor, offered a guarded assessment.

Senate President Richard J. Codey said that “anything that affects the middle class or the poor is going to get a thorough look at and see whether we can restore some of the cuts that have been proposed.” In a sign of the challenging economy, he added: “But if we do that, we have to also propose a cut of our own.”

Assembly Speaker Joseph J. Roberts Jr. said he believed that the budget reflected the consensus that the public was demanding spending cuts. “I think they’ve said with a very clear and loud voice, ‘We’re not prepared to consider tolls or taxes or revenue anywhere until you can convince us and demonstrate to us that you’ve cut everywhere that’s possible.’”

Republicans, meanwhile, said that they felt vindicated, at least in part, because they had been calling for spending cuts for years.

“It’s a good beginning for us,” said Assemblyman Alex DeCroce, the minority leader. “I would like to see them cut a little deeper.”

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How will you cope with record high oil and record low dollar?

The Fed’s relentless policy of interest rate cuts is working like a charm. The dollar hit a record low against the Euro ($1.5057) and oil hit a record $102 in response — up 325% since January 2001’s $24. The record oil price has not yet found its way to the gasoline pumps — but it will. If oil prices remain above $100, by this summer gasoline prices will top $4 a gallon — or $80 for a 20-gallon tank. Back in January 2001, you would have paid about $1.59 a gallon — so you’ve got a 152% price increase there.

What is going on here? According to the New York Times, producer inflation is up 7.4% — the worst since 1981. The U.S. has pursued a weak dollar policy — relative to the Euro, the dollar has lost 63.7% of its value since January 2001 when it traded at 92 cents to the Euro. And since oil is denominated in dollars, a weaker dollar translates into a higher oil price. That excludes the effects of political instability in oil producing regions — Iraq and environs — and rising oil demand in China and India.

How are you coping with this? The Times reports that one person, Phyllis Berry, a 31-year-old factory worker who drives a beat-up Dodge Caravan, said, “I used to fill it up pretty regularly, but now I drive it until the tank is almost empty, looking for the cheapest place to buy gas.” She said that she used to take her four children to the movies four or five times a month. But with the cost of gas, tickets, popcorn and soda adding up to $70, they now go only once a month.

When the Fed’s Chair Ben Bernanke testifies today, he’ll likely dismiss inflation as a lesser concern than the credit crunch. Is he making the right choice? I don’t think so. How about you?

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Cambria County oil company fined $145K over tanks

The state Department of Environmental Protection on Tuesday fined Johnstown-based McKelvey Oil Co. Inc., $145,000 for failing to comply with a prior order and ordered the company to stop operating above-ground storage tanks of home heating fuel at two facilities.One of the facilities — Gilbert Brothers Oil in Ligonier Township — is a bulk fuel distributor with two tanks: one with a 75,000 gallon capacity and the other with a 128,000 capacity, according to a news release the DEP issued about the fine.

The other affected facility, in Stoneycreek Township in Cambria County, also distributes bulk fuel via 10 tanks with capacity levels ranging from 14,600 gallons to more than 29,000 gallons.

In October, DEP issued an order to McKelvey Oil by after the company failed to register the tanks with the state, the DEP said. The company also failed to make required inspections of the storage tanks, according to the DEP.

“McKelvey Oil is paying a steep price for failing to comply with state regulations that are intended to protect the public and environment by preventing storage-tank spills,” said Kenneth Bowman, the DEP Southwest Regional director. “Properly registering and inspecting tanks of this size is essential to preventing a tragedy.”

McKelvey Oil Co. principal William G. McKelvey could not be reached for comment yesterday.

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It’s tough to know when to fill oil tank, if you can afford to

THERE ARE some who say the price of crude oil is experiencing a “psychological disconnect” from its true fundamental value.

In other words, the simple supply-and-demand equation is no longer setting the price of oil. The activity of speculators who are using the oil commodity as an alternative to investing in riskier investments such as real estate and the stock market is pushing the price higher.

It is true that oil has climbed to US$100 a barrel due to growing demand for oil from developing nations India and China. The rising price is fuelled as well by concerns in the U.S. about the falling value of the greenback. Also helping to drive up the price is the continued unrest in Nigeria and noises coming from Venezuela about nationalizing a large portion of that country’s oil sector. But the price reflects more than that.

David Collins, a vice-president at Wilson Fuel Co. in Halifax, says investors are looking for something that they can understand and that offers a reasonable return. Oil provides that. And while the continued high price will also help to reduce demand for the product and therefore lead to lower prices, predicting oil prices is almost impossible.

It is Collins’ opinion that oil inventories are increasing and there should be enough capacity within existing North American refineries to easily keep the market well-supplied with gasoline and heating oil for the next little while. It is inevitable the price will come down, says Collins. He just doesn’t know when that will happen.

For the troubled household that finds it difficult to come up with the money to put heating oil in the tank, that’s a tough spot. While some of us can wait out the market and call for delivery after the price drops a little, those living on a limited income often don’t have that luxury.

If the tank is empty, low-income families must either find a way to come up with the money for fuel or go cold. It really doesn’t matter what the per-litre price is at the time; it’s a simple matter of need.

A survey of heating oil companies in the Halifax area, which is the most competitive heating oil market in the region, shows that the lowest-priced discount oil delivery companies have their prices bumping up against 85 cents a litre. Even at that price, most of the smaller delivery companies are seeing their operating margin — the difference between the wholesale and retail price — squeezed.

The so-called full-service oil companies are charging a posted price that is much higher than that. Although they offer lower prices for those who are regular customers or who had signed up for a “cap” on the price, one must also sign up for automatic delivery, which guarantees the oil company it will be delivering a certain quantity of oil that winter.

The poor don’t have that luxury. They can’t sign up for a program they know they can’t afford.

Although some companies had been making deliveries for as little as $100 worth of fuel, fewer of the discount oil companies say they can afford to continue delivering such small amounts. The only way some can make the oil delivery business worth their effort is to insist on a larger minimum volume per delivery.

Very often that excludes those families who are most in need of oil, because they simply can’t afford to pay more for an oil delivery.

While the heating oil assistance program operated by the Salvation Army provides a stop-gap measure for some, once a family has received assistance from that program, it can’t apply for help again until the following year.

Who cares whether Premier Rodney MacDonald rings the closing bell at the New York Stock Exchange today? The closing bell ceremony, which happens every trading day, is supposed to celebrate Nova Scotia’s recent success in attracting some companies in the financial services sector to establish a presence in our province.

To help build the excitement for his largely American audience, the premier is to be accompanied by Economic Development Minister Angus MacIsaac and Stephen Lund, president and CEO of Nova Scotia Business Inc.

I suspect that will produce a big yawn from the New York audience.

Just a thought. Perhaps the premier should have arranged to bring a couple of more high-profile Nova Scotians, such as Oscar-nominated actress Ellen Page or reigning NHL MVP Sidney Crosby, along with him for the ceremony.

Then maybe someone from Nova Scotia ringing the closing bell would attract some attention.

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