By: KEN THOMAS
Associated Press
09/12/10 3:55 PM EDT WASHINGTON — The first wave of mass-produced advanced batteries funded by the Obama administration's economic recovery program are starting to roll off assembly lines, setting the stage for new hybrid and electric vehicles.
So how will consumers respond?
Fending off criticism of the $787 billion stimulus program, the administration has cited the battery industry as one of the success stories. With new facilities coming online in the Midwest, battery manufacturers for the advanced vehicles are providing a test case for the government's attempt to revive the economy.
Battery maker A123 Systems Inc. planned to open a new lithium ion battery plant Monday in Livonia, Mich. About 300 workers, many formerly laid-off auto workers, were to join Energy Secretary Steven Chu and Michigan lawmakers to promote their production of battery cells and components. The Watertown, Mass.-based company received $249 million under the stimulus program and plans to open a second facility next year in Romulus, Mich.
Automotive supplier Johnson Controls Inc. last week started shipping batteries that were made at a Holland, Mich., facility built with the help of $299 million in federal grants. The factory expects to employ 90 workers by late next year and could produce 75,000 to 150,000 batteries a year, depending on the mix of hybrid and electric vehicles it supplies.
The Energy Department estimates that the 48 advanced battery and electric drive projects announced last year under the $2.4 billion program could lead to the production of about 75,000 batteries by next year and 500,000 batteries annually by 2014. Michigan, Indiana, Ohio and South Carolina are the states with the largest share of the projects.
Despite the fanfare, the battery industry faces many hurdles. Gas-electric hybrid vehicles represent about 1 percent of new vehicle sales, and many plug-in hybrids and battery electric cars are just entering the market.
Costs are high. The government has estimated that a battery with a 100-mile range costs about $33,000, although stimulus money could bring that down to $10,000 by the end of 2015.
The federal money has raised questions about whether the projects could create more capacity to build the electric batteries than will be met with demand for the vehicles in the future.
Mary Ann Wright, a Johnson Controls vice president, said if all of the battery companies follow through on plans to build up the industry, it could create more capacity than is needed in the short term. But she said the administration was working to address that by creating tax policies to encourage consumers to buy the vehicles and directing government fleets to adopt the technology.
"The rapid buildup of production capacity by companies with limited experience for product with challenging market may prove wasteful," said Menahem Anderman, founder and president of Total Battery Consulting, a California-based battery consulting firm.
Anderman said by e-mail that if by 2013-14 the factories are profitable and running at full capacity, Obama officials will be able to claim success. "Unfortunately that scenario is pretty unlikely," he said.
Matthew Rogers, an Energy Department senior adviser who has overseen the battery grants, said the administration was "very confident" that the demand for the vehicles — both for typical consumers and commercial fleet customers — will keep the factories operating. "The prices of these batteries are coming down faster than we expected," he said.
The companies say the federal incentives played a major role in opening the plants in the United States. Without the money, they would have turned to Asia, where the vast majority of electronic batteries and components are now built.
"This money was instrumental in the decision to put manufacturing in North America. We think that without this, it's very unlikely that plants of this size and nature would have been happening in the U.S.," said David Vieau, A123 Systems's chief executive.
With unemployment levels close to 10 percent across the nation and higher elsewhere, state governments say the battery program could create a transformative industry that could pay dividends for years.
Gov. Jennifer Granholm, D-Mich., whose state economy has been ravaged by the economic downturn, said the federal battery program, along with state incentives, are projected to create 63,000 jobs in Michigan. Having the "entire battery ecosystem" will help her state compete for more work as electric vehicles take root.
"This is not the end-all and be-all. This is one slice of the stimulus that has worked and will work — not just for temporary jobs but for permanent, long-term jobs that takes our automotive industry and our mobility in a new direction," Granholm said.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/breaking/hybrid-electric-car-battery-program-funded-by-federal-stimulus-beginning-to-bear-fruit-102722879.html?utm_source=feedburner+dcexaminer%2Fbreaking&utm_medium=feed+Breaking+News&utm_campaign=Feed%3A+dcexaminer%2Fbreaking+%28Breaking+News%29feed&utm_content=feed&utm_term=feed#ixzz0zORjxoZX
Monday, 13 September 2010
Energy Efficiency and PV: Together Forever
We have seen a marriage of the energy efficiency and solar energy industries as the US has worked to green its buildings. In fact, some financing programs require that all cost-effective efficiency be pursued before solar panels are installed.
Here Elisa Wood interviews Liz Merry, owner of Verve Solar Consulting, about how the solar industry views energy efficiency and the outlook for companies that tackle both EE and PV.
What do solar installers think of the idea that a building should be made energy efficient before solar equipment is installed?
I've heard some solar leaders say "Energy efficiency eventually, sales first." That makes complete sense in some cases, where the solar installer has recruited the customer and the customer already has an energy efficient home. If the customer has to call another contractor to come in and get the building 5 percent more efficient at a high cost before the solar project can go forward it is going to kill the solar project.
But, in the cases where the home is older and simply leaking energy out of its thin windows and walls, the solar company that recruits this customer has an opportunity to sell a bigger job by doing the energy retrofit project, or partnering with a building performance contractor. I picture the energy efficiency first requirements as a mandate for smart contractors to become energy service companies, not just solar, not just efficiency.
Energy retrofit work isn't always easy, and sometimes it is hard to find energy contractors. Can solar installers always find contractors to the work if a home must be made efficient before solar is added?
It's not easy, but it's possible. And where there is challenge there is opportunity. The building performance contractor business is about to get very busy, and the entire trade will become more efficient and standardized with experience, just has it has developed in the PV and thermal businesses over time. We're just in that rough spot between initial demand creation and plenty of supply available.
Article continues: http://blog.cleantechies.com/2010/09/10/energy-efficiency-and-pv-together-forever/
Here Elisa Wood interviews Liz Merry, owner of Verve Solar Consulting, about how the solar industry views energy efficiency and the outlook for companies that tackle both EE and PV.
What do solar installers think of the idea that a building should be made energy efficient before solar equipment is installed?
I've heard some solar leaders say "Energy efficiency eventually, sales first." That makes complete sense in some cases, where the solar installer has recruited the customer and the customer already has an energy efficient home. If the customer has to call another contractor to come in and get the building 5 percent more efficient at a high cost before the solar project can go forward it is going to kill the solar project.
But, in the cases where the home is older and simply leaking energy out of its thin windows and walls, the solar company that recruits this customer has an opportunity to sell a bigger job by doing the energy retrofit project, or partnering with a building performance contractor. I picture the energy efficiency first requirements as a mandate for smart contractors to become energy service companies, not just solar, not just efficiency.
Energy retrofit work isn't always easy, and sometimes it is hard to find energy contractors. Can solar installers always find contractors to the work if a home must be made efficient before solar is added?
It's not easy, but it's possible. And where there is challenge there is opportunity. The building performance contractor business is about to get very busy, and the entire trade will become more efficient and standardized with experience, just has it has developed in the PV and thermal businesses over time. We're just in that rough spot between initial demand creation and plenty of supply available.
Article continues: http://blog.cleantechies.com/2010/09/10/energy-efficiency-and-pv-together-forever/
Hydropower, once shunned because of environmental concerns, is making a comeback
Water Surge
By STEPHANIE SIMON
LEADVILLE, Colo.—The giant pipes wheeze and rumble, the whoosh of water coursing through them as noisy as a freeway. The Mount Elbert hydropower plant high in the Rocky Mountains isn't much to look at—or listen to. But to true believers, it's a road map to a greener future.
Larissa Bender, Bureau of Reclamation
Hydropower, shunned just a few years ago as an environmental scourge, is experiencing a remarkable resurgence in the U.S. Dams are still viewed warily; in fact, Congress is considering dismantling four hydroelectric dams blamed for depleting salmon in the Klamath River basin in southern Oregon and northern California.
But engineers and entrepreneurs are pressing an alternative view of hydropower that doesn't involve new dams. They argue that plenty of efficient, economical energy can be wrung from other water resources, including ocean waves, free-flowing rivers, irrigation ditches—even the effluent discharged from wastewater treatment facilities.
There's a surge of interest, too, in adding small power plants to dams built years ago for flood control or navigation—as well as in turning reservoirs into battery packs of sorts, releasing energy when the grid needs it most.
Globally, hydropower provides 16% of electricity, slightly more than nuclear power and closing in on natural gas, according to the London-based International Hydropower Association.
In the U.S., by contrast, hydropower now provides about 7% of electricity generation. All other renewable sources combined account for about 3%.
Even without building large dams, expanding efforts to draw power from water could add 40,000 megawatts to the grid by 2025, says the Electric Power Research Institute, a nonprofit research firm in Palo Alto, Calif. That's the equivalent of putting at least two dozen new nuclear power plants online.
Pouring It On
Such estimates are stirring action. The U.S. Department of Energy spent nothing on hydropower research as recently as 2007 but allocated $50 million this year. The Federal Energy Regulatory Commission issued 50 preliminary permits for small hydro projects last year, up from 15 in 2007. At least two dozen states have mandated that utilities draw more power from renewable sources—and many include small hydropower as an option, along with wind and solar. Colorado Gov. Bill Ritter recently announced an agreement between his state and the federal government that will streamline the permitting process for developing small hydropower projects in Colorado.
The Department of Energy estimates a new hydro project in 2016 would generate power at a cost of $120 per megawatt-hour. By contrast, the cost per megawatt-hour would be $150 at a wind farm going online that year and nearly $400 at a photovoltaic solar array. (Those figures don't take into account various tax incentives meant to offset the cost of renewable energy, especially wind and solar.)
Hydro also has technical advantages over other renewables. Daily water flow in many areas is far more predictable than wind or sunshine. It's relatively easy to store the energy pent up in water so it can be released when the grid needs it most. And certain types of hydro plants can rev up from low power to full capacity within seconds.
"There remains tremendous untapped potential in North America," says Don Erpenbeck, a vice president at MWH, a global hydropower construction and engineering firm in Broomfield, Colo. "After decades of delay, we are starting to realize that potential."
But Mr. Erpenbeck adds that years-long waits for federal permits and high capital costs make hydropower a tough sell to some utilities and investors. Maximizing water energy in the U.S., he says, "is going to take some guts."
Countries such as Brazil and China remain committed to large hydroelectric dams and are forging ahead with big projects. Yet they are also looking at smaller solutions favored by environmentalists. The International Hydropower Association estimates that North America has developed nearly 70% of its available hydropower resources and Europe 75%. But the group sees huge potential in South America, Asia and especially Africa, where just 7% of resources have been developed.
Dam Smart
In the U.S., one strategy gaining popularity is to add power plants to some of the 80,000 existing dams that don't have hydroelectric capacity. Technological advances like turbines that are gentler on fish and oxygen-injection systems that help balance aquatic ecosystems have won favor even among some environmental groups.
In one such project, American Municipal Power Inc. is spending $2 billion to add power plants to three dams on the Ohio River and invest in additional hydropower elsewhere.
The utility's CEO, Marc Gerken, says the new hydropower will cost more initially than coal or natural gas. But after the construction costs are paid off in 30 years, the utility will enjoy cheap power for several decades because the fuel—the rushing river—is essentially free and the plant is designed to run without much maintenance for 60 or 70 years. AMP, based in Columbus, Ohio, is a nonprofit corporation owned and operated by municipal utilities in the six states the company serves.
Other technologies are more speculative. A much-ballyhooed experiment that involved suspending a turbine from a barge in the Mississippi River didn't prove to be worth expanding. The turbine is generating power, but Hydro Green Energy LLC, the Houston-based start-up that developed the device, says it has moved on to more promising ventures. "It's still a power-producing, money-making device," but the economics don't support expansion, says Vice President Mark Stover.
Several companies are experimenting with "low-head" turbines that can pull energy from relatively small volumes of water dropping as little as five feet over natural or man-made falls. One such project, launched by Natel Energy Inc. of Alameda, Calif., uses low-head technology to extract energy from an Arizona irrigation canal.
Federal scientists say some of these approaches look promising but need more study. "With these new technologies, nobody knows what their environmental impacts might be," says Doug Hall, who manages the water-energy program at the Department of Energy's Idaho National Laboratory.
Pump Action
A less-experimental technology, dating back more than a century, is also gaining currency as a means to store energy and back up the grid: pumped storage, the system used by the Mount Elbert hydro plant outside Denver.
The plant, sitting on the jewel-like Twin Lakes and managed by the Bureau of Reclamation, plays a key role in keeping lights on and air conditioners humming across the West.
At night, when demand on the power grid is low, the Mount Elbert plant sucks water from the lakes, sometimes using wind power to pump that water up into a reservoir above the plant. The reservoir acts as a liquid battery—a huge pool of potential energy.
As the day warms up and the grid shows signs of strain, workers begin to release the water down a 470-foot drop, through devices that turn the pent-up energy into usable electricity. The water eventually pours back into the lakes, where it can be recycled into power again the next evening.
Pumped storage is quite popular abroad; China has 2,200 projects under construction, and India and Ukraine aren't far behind. An analysis by MWH shows that countries as varied as Romania, Thailand, Switzerland, South Africa and Italy are also moving heavily into pumped-storage construction. The U.S. has lagged, but federal authorities saw a surge in permit applications in 2008 and again so far this year.
"No new dams are being built," says Dave Sabo, a senior adviser with the Bureau of Reclamation. But just about every other approach to hydropower, he says, is being studied and tested intensively. Says Mr. Sabo, "All this stuff is in play right now—pretty heavily."
Ms. Simon is a staff reporter in The Wall Street Journal's Dallas bureau. She can be reached at stephanie.simon@wsj.com.
By STEPHANIE SIMON
LEADVILLE, Colo.—The giant pipes wheeze and rumble, the whoosh of water coursing through them as noisy as a freeway. The Mount Elbert hydropower plant high in the Rocky Mountains isn't much to look at—or listen to. But to true believers, it's a road map to a greener future.
Larissa Bender, Bureau of Reclamation
Hydropower, shunned just a few years ago as an environmental scourge, is experiencing a remarkable resurgence in the U.S. Dams are still viewed warily; in fact, Congress is considering dismantling four hydroelectric dams blamed for depleting salmon in the Klamath River basin in southern Oregon and northern California.
But engineers and entrepreneurs are pressing an alternative view of hydropower that doesn't involve new dams. They argue that plenty of efficient, economical energy can be wrung from other water resources, including ocean waves, free-flowing rivers, irrigation ditches—even the effluent discharged from wastewater treatment facilities.
There's a surge of interest, too, in adding small power plants to dams built years ago for flood control or navigation—as well as in turning reservoirs into battery packs of sorts, releasing energy when the grid needs it most.
Globally, hydropower provides 16% of electricity, slightly more than nuclear power and closing in on natural gas, according to the London-based International Hydropower Association.
In the U.S., by contrast, hydropower now provides about 7% of electricity generation. All other renewable sources combined account for about 3%.
Even without building large dams, expanding efforts to draw power from water could add 40,000 megawatts to the grid by 2025, says the Electric Power Research Institute, a nonprofit research firm in Palo Alto, Calif. That's the equivalent of putting at least two dozen new nuclear power plants online.
Pouring It On
Such estimates are stirring action. The U.S. Department of Energy spent nothing on hydropower research as recently as 2007 but allocated $50 million this year. The Federal Energy Regulatory Commission issued 50 preliminary permits for small hydro projects last year, up from 15 in 2007. At least two dozen states have mandated that utilities draw more power from renewable sources—and many include small hydropower as an option, along with wind and solar. Colorado Gov. Bill Ritter recently announced an agreement between his state and the federal government that will streamline the permitting process for developing small hydropower projects in Colorado.
The Department of Energy estimates a new hydro project in 2016 would generate power at a cost of $120 per megawatt-hour. By contrast, the cost per megawatt-hour would be $150 at a wind farm going online that year and nearly $400 at a photovoltaic solar array. (Those figures don't take into account various tax incentives meant to offset the cost of renewable energy, especially wind and solar.)
Hydro also has technical advantages over other renewables. Daily water flow in many areas is far more predictable than wind or sunshine. It's relatively easy to store the energy pent up in water so it can be released when the grid needs it most. And certain types of hydro plants can rev up from low power to full capacity within seconds.
"There remains tremendous untapped potential in North America," says Don Erpenbeck, a vice president at MWH, a global hydropower construction and engineering firm in Broomfield, Colo. "After decades of delay, we are starting to realize that potential."
But Mr. Erpenbeck adds that years-long waits for federal permits and high capital costs make hydropower a tough sell to some utilities and investors. Maximizing water energy in the U.S., he says, "is going to take some guts."
Countries such as Brazil and China remain committed to large hydroelectric dams and are forging ahead with big projects. Yet they are also looking at smaller solutions favored by environmentalists. The International Hydropower Association estimates that North America has developed nearly 70% of its available hydropower resources and Europe 75%. But the group sees huge potential in South America, Asia and especially Africa, where just 7% of resources have been developed.
Dam Smart
In the U.S., one strategy gaining popularity is to add power plants to some of the 80,000 existing dams that don't have hydroelectric capacity. Technological advances like turbines that are gentler on fish and oxygen-injection systems that help balance aquatic ecosystems have won favor even among some environmental groups.
In one such project, American Municipal Power Inc. is spending $2 billion to add power plants to three dams on the Ohio River and invest in additional hydropower elsewhere.
The utility's CEO, Marc Gerken, says the new hydropower will cost more initially than coal or natural gas. But after the construction costs are paid off in 30 years, the utility will enjoy cheap power for several decades because the fuel—the rushing river—is essentially free and the plant is designed to run without much maintenance for 60 or 70 years. AMP, based in Columbus, Ohio, is a nonprofit corporation owned and operated by municipal utilities in the six states the company serves.
Other technologies are more speculative. A much-ballyhooed experiment that involved suspending a turbine from a barge in the Mississippi River didn't prove to be worth expanding. The turbine is generating power, but Hydro Green Energy LLC, the Houston-based start-up that developed the device, says it has moved on to more promising ventures. "It's still a power-producing, money-making device," but the economics don't support expansion, says Vice President Mark Stover.
Several companies are experimenting with "low-head" turbines that can pull energy from relatively small volumes of water dropping as little as five feet over natural or man-made falls. One such project, launched by Natel Energy Inc. of Alameda, Calif., uses low-head technology to extract energy from an Arizona irrigation canal.
Federal scientists say some of these approaches look promising but need more study. "With these new technologies, nobody knows what their environmental impacts might be," says Doug Hall, who manages the water-energy program at the Department of Energy's Idaho National Laboratory.
Pump Action
A less-experimental technology, dating back more than a century, is also gaining currency as a means to store energy and back up the grid: pumped storage, the system used by the Mount Elbert hydro plant outside Denver.
The plant, sitting on the jewel-like Twin Lakes and managed by the Bureau of Reclamation, plays a key role in keeping lights on and air conditioners humming across the West.
At night, when demand on the power grid is low, the Mount Elbert plant sucks water from the lakes, sometimes using wind power to pump that water up into a reservoir above the plant. The reservoir acts as a liquid battery—a huge pool of potential energy.
As the day warms up and the grid shows signs of strain, workers begin to release the water down a 470-foot drop, through devices that turn the pent-up energy into usable electricity. The water eventually pours back into the lakes, where it can be recycled into power again the next evening.
Pumped storage is quite popular abroad; China has 2,200 projects under construction, and India and Ukraine aren't far behind. An analysis by MWH shows that countries as varied as Romania, Thailand, Switzerland, South Africa and Italy are also moving heavily into pumped-storage construction. The U.S. has lagged, but federal authorities saw a surge in permit applications in 2008 and again so far this year.
"No new dams are being built," says Dave Sabo, a senior adviser with the Bureau of Reclamation. But just about every other approach to hydropower, he says, is being studied and tested intensively. Says Mr. Sabo, "All this stuff is in play right now—pretty heavily."
Ms. Simon is a staff reporter in The Wall Street Journal's Dallas bureau. She can be reached at stephanie.simon@wsj.com.
The Arctic oil rush
Greenland is a land apart – where many people welcome global warming, dislike Greenpeace, and hope the arrival of Big Oil will transform their lives. But at what price to this pristine wilderness?
Terry Macalister The Guardian, Monday 13 September 2010
The fight was over almost before it began. A short, middle-aged woman had smashed her fist into the face of another female drinker, and within seconds was dragged to the door by a hulking bouncer and flung on to the streets of Nuuk. It was midnight on a Tuesday but the atmosphere in the Kristinemut bar resembled a hardcore weekend: raucous band, chaotic dancing, and more than a handful of revellers (of all ages) best described as "blotto".
Not everyone in the bar may have realised it, but these residents of Greenland's capital had good reason to celebrate. That morning, local television reported that traces of gas had been discovered by the British exploration company Cairn Energy in Baffin Bay a few hundred miles to the north-west. If these first hydrocarbon traces prove an accurate indicator of major reserves below the Arctic seabed, they may in time produce untold wealth for Greenland's population – financially dependent on Denmark – of 56,000 Inuit and other ethnic groups, clinging to existence 460 miles from the North Pole in one of the world's harshest terrains.
The bulk of this huge land is a vast – and breathtakingly beautiful – white desert. A layer of ice, 3km thick, covers 80% of the country for 12 months of the year. Even along the coastline, where the population is huddled, the black rock of the precipitous mountains and brown vegetation are only visible during the summer months. With virtually no trees and a winter temperature that can sink as low as -70C, the name Greenland is misleading – deliberately so, in fact. It was an early "marketing tool" used by Erik the Red in 982, as he tried to lure fellow Vikings from warmer climes to settle here, having failed to sell a similar message about Iceland.
These days the terrain is even bleaker (where once pigs and cattle roamed in the south of the country, now there are polar bears, seals and walruses), but this frozen and largely unexplored land will not deter today's prospectors, tempted by the possibility of an Arctic "oil rush". The kind of oil and gas reserves believed to reside in the wider Arctic region could be worth as much as $7tn, which is why all the big oil companies are queueing up to woo the Greenland government into granting them exploration licences.
Ever since the days of John D Rockefeller's Standard Oil, the oil industry has thrived on breaking open new energy frontiers – and there is no greater challenge than the Arctic, particularly in the wake of BP's Gulf of Mexico nightmare.
Environmentalists, of course, regard the exploitation of one of the last remaining areas of pristine wilderness on the planet with horror, and up in Baffin Bay, there has been an ongoing physical confrontation between a Greenpeace ship, Esperanza, and the Danish navy as it defends the Cairn Energy rig from marauding protesters. The setting could not be more symbolic: around them, glaciers and icebergs melt as a direct result of global warming, a phenomenon that will only be exacerbated should the Arctic be allowed to give up its oil and gas reserves.
Inside the Kristinemut bar, Nive Nielsen, a local singer with a growing international reputation, is decidedly sober about the implications of any major oil find in Greenland. "I guess what I would like to see is the government tread very carefully. I am worried they are rushing ahead too quickly [with oil licensing]," she says. "Most people here – possibly 80% – think this drilling can only be good for Greenland, but we have already seen the traditional ways of doing things being eroded, and people herded into [modern town-housing] blocks."
Kenni Rende, a 44-year-old shop assistant at the Nota Bene electronics shop, is more positive about the prospect. "We have always believed there was oil and gas off this island; we've been waiting for something like this to happen for decades. I hope it will provide income for Greenland, so we can finance our way to becoming a more independent nation."
His upbeat mood is, not surprisingly, shared at the Bureau of Minerals and Petroleum a few blocks away, where Henrik Stendal has been digesting the news of the Cairn find in a presentation room packed with rock samples and geological maps. "It is exciting . . . This amounts to an appetiser for all oil companies to come here and do more exploration," says Stendal, who is head of the bureau's geology department. The affable rocks specialist claims not to have known about Cairn's find until the company announced it on 24 August with a simple statement: "First hydrocarbons discovered in Baffin Bay basin by T8-1 well, which has encountered gas."
The release of drilling information is always sensitive. It can send a company's share price soaring and act as a magnet for competitors. As a result, relations between small government and Big Oil are complex. The Greenland government is keen to keep the discovery's momentum going and attract new investment; but it is also anxious not to upset Cairn and its City investors by speaking out of turn (when the Guardian quoted a foreign ministry official as saying he was "hopeful" of a positive drilling result the day before Cairn announced it, a government public relations adviser was quickly in touch to admonish me).
Cairn Energy's founder and chief executive officer is Sir Bill Gammell, a former Scottish rugby international and public-school friend of Tony Blair. His Edinburgh-based company, while not in the Shell or BP league in scale, likes to work in frontier areas and has already attracted a stream of loyal investors after striking oil in the Indian state of Rajasthan, on acreage sold to it for a song by an unusually slipshod Shell.
Speaking about Cairn's Arctic find, Gammell said he was "encouraged that we have early indications of a working hydrocarbon system with our first well in Greenland, confirming our belief in the exploration potential". Yet even such tentative enthusiasm was dampened by one worker on the rig who, asking to remain anonymous, told the Guardian that there had been laughter aboard Cairn's Stena Don drilling unit when newspapers and television began to report the discovery. "We thought the media had made it up until we saw the company's statements," said the rig worker, adding that the quantity found was little more than you might find if you drilled a hole in your back garden.
Cairn has dismissed this version of events and most industry commentators do not take it seriously. Tellingly, it is not what the majority of Greenland's politicians and public want to hear either, determined as they are to loosen their sovereign ties with Denmark and, ultimately, establish independence.
At around four times the size of Britain, Greenland is the least densely populated country in the world, and desperately dependent on fishing, a small amount of tourism, and one working gold mine. The national books are balanced courtesy of a DKK3bn (£333m) annual handout from the Danish taxpayer. While the hunting of seals and other local animals is still practised by a handful of Greenlanders, the bulk of the population finds work in the public sector – in schools, hospitals or administration. But all that would change if the oil industry moved in.
The town of Nuuk is a strange mixture of attractive clapboard houses painted in bright colours typical of the Nordic region, and drab apartment blocks with graffitied stairwells that might look more at home in the former Soviet Union. Mineral extraction – be it oil or gas, gold or diamonds – is seen as a huge opportunity by the residents here. Already, crude oil has been found leaking out of the rocks in the Disko Bay area, and offshore, Greenland's west coast is believed to possess the same basic rock formations as those on the Canadian east coast, where massive oil finds have already been made.
According to a 2009 US Geological survey, there could be 90bn barrels of oil – a third of the size of Saudi Arabia's reserves – and 5otn cubic metres of gas in the wider Arctic region. Tentative drilling has already been happening all the way from the Chukotka Sea off Alaska to the Faroe Islands north of Scotland, although some has been halted while safety agencies reconsider the risks in the light of the Deepwater Horizon spill.
Few regions, though, have been pushing as hard to attract Big Oil as Greenland. As early as this week, its government may announce the winners of new exploration licenses, with many of the big names including Shell and Statoil of Norway – but not BP – expected to begin frontier-drilling here for the first time. With the continued rise in global commodity prices, this could yet turn into a fully fledged oil rush.
And, while the Cairn gas discovery has centred attention on hydrocarbons, there is a parallel drive to uncover all sorts of precious metals including diamonds, rubies and other rare earth products. This autumn, the Greenland government will decide whether uranium for nuclear power stations could also be mined here.
Dennis Thomas, a veteran British mining prospector, is currently making his first visit to Greenland in more than 40 years, as he scouts the world for new projects. "I have seen gold prospects, iron, copper, rare earths," he says. "It's all very early stage, but the time is right in terms of the economics and the willingness of the government [to open up]."
But it is not going to be easy. While global commodity prices have boomed over the last decade due to demand from countries such as China, Greenland remains a high-cost place to mine, not least because of the treacherous weather conditions. "You have to bring in everything by helicopter and you might have only a three-month season to do the work," Thomas says. But the prospector, who lives near Yeovil in Somerset but works for financial and mining investors around the world, still describes Greenland as an "exciting" prospect.
As for the islanders themselves, they are very focused on self-determination and self-sufficiency. Unemployment in some towns now runs as high as 15%, and the standard of food in the shops is often rudimentary. And while the number of people living below the poverty line was last measured at 9% – lower than in the United Kingdom – the suicide rate here increased from a historically very low level in the 70s to one of the highest in the world by the mid-90s, at 107 per 100,000 people.
Clearly, politicians in Nuuk regard economic and political independence as the path to a better future for their people. (This, remember, is a country that has already stuck its nose up to the west by leaving a club that everyone wants to join: the European Union.) But while they want to see more oil exploration – and hopefully production – they also insist their safety regulations meet the world's toughest standards, aware that most Greenlanders fear the health issues that could arise from an influx of oil companies.
The politicians' and public's views on global warming – another key reason for Greenpeace's presence in Baffin Bay – are more mixed, however. Global warming might be threatening to harpoon the local hunting way of life, but it will also lessen the hardships of living in a country where burying dead bodies in the frozen ground can be problematic. The melting of the local ice cap, which currently covers 80% of the country's land mass, will raise sea levels in countries such as Bangladesh and the Maldives – but it could open up further economic opportunities in Greenland. In future, Nuuk might act as a lucrative stop-off point for ships traversing the world via the currently iced-up North West Passage, and also make it a centre of onshore mineral mining.
"Yes, we are gaining more land, you can say that," says Stendal. And a spokesman from the Greenland Natural Institute of Resources and Climate Change talks about the possibility of "golden years" ahead, as the temperature warms up.
This is not the only unexpected view that foreign visitors encounter in Nuuk. Greenpeace, which has hero status in most capitals of the world, is fairly unpopular here, even among the young – not so much because the environmental group is opposed to an oil industry that could be good for Greenland's political self-determination, but because it once opposed seal hunting. Greenpeace now says its campaign was only ever aimed at "unsustainable" activities in Canada, but it admits that Greenland got caught in the slipstream, because any kind of seal hunting was deemed unacceptable by a north European public. As a result, what was a healthy export trade of the distinctive and mottled skins has been stopped in its tracks. Seal skins still cover rows of seats in the otherwise rudimentary airport lounges around this vast country, but only locals will buy a seal-skin waistcoat.
So, while a top team of daredevil environmentalists has led (only temporarily successful) raids on the Cairn rig, others have been making an equally brave attempt to appease vocal critics in Nuuk – without, apparently, much success.
Political correctness as prescribed by the west is not something that hangs heavy in the priorities of the Greenlander. The tourism industry on the island is built around the top end of the market, not least because it costs a pretty penny to fly here, involving a transit in Denmark or Iceland. Once here, visitors are still forced to move around by plane because no towns are connected by road – in fact, there are only two traffic lights on the entire island, a vast country of 840,000 square miles.
It is hardly an easy place for Nive Nielsen to fulfil her musical ambitions. Despite having recorded in Britain, she must still shrug off depressing attempts to label her Deer Children band "eskimo rock", and ignorant questions such as "How do you plug in an electric guitar in an igloo?" But Nielsen, and her fellow Greenlanders too, are determined to shape their own destiny – with or without oil.
Terry Macalister The Guardian, Monday 13 September 2010
The fight was over almost before it began. A short, middle-aged woman had smashed her fist into the face of another female drinker, and within seconds was dragged to the door by a hulking bouncer and flung on to the streets of Nuuk. It was midnight on a Tuesday but the atmosphere in the Kristinemut bar resembled a hardcore weekend: raucous band, chaotic dancing, and more than a handful of revellers (of all ages) best described as "blotto".
Not everyone in the bar may have realised it, but these residents of Greenland's capital had good reason to celebrate. That morning, local television reported that traces of gas had been discovered by the British exploration company Cairn Energy in Baffin Bay a few hundred miles to the north-west. If these first hydrocarbon traces prove an accurate indicator of major reserves below the Arctic seabed, they may in time produce untold wealth for Greenland's population – financially dependent on Denmark – of 56,000 Inuit and other ethnic groups, clinging to existence 460 miles from the North Pole in one of the world's harshest terrains.
The bulk of this huge land is a vast – and breathtakingly beautiful – white desert. A layer of ice, 3km thick, covers 80% of the country for 12 months of the year. Even along the coastline, where the population is huddled, the black rock of the precipitous mountains and brown vegetation are only visible during the summer months. With virtually no trees and a winter temperature that can sink as low as -70C, the name Greenland is misleading – deliberately so, in fact. It was an early "marketing tool" used by Erik the Red in 982, as he tried to lure fellow Vikings from warmer climes to settle here, having failed to sell a similar message about Iceland.
These days the terrain is even bleaker (where once pigs and cattle roamed in the south of the country, now there are polar bears, seals and walruses), but this frozen and largely unexplored land will not deter today's prospectors, tempted by the possibility of an Arctic "oil rush". The kind of oil and gas reserves believed to reside in the wider Arctic region could be worth as much as $7tn, which is why all the big oil companies are queueing up to woo the Greenland government into granting them exploration licences.
Ever since the days of John D Rockefeller's Standard Oil, the oil industry has thrived on breaking open new energy frontiers – and there is no greater challenge than the Arctic, particularly in the wake of BP's Gulf of Mexico nightmare.
Environmentalists, of course, regard the exploitation of one of the last remaining areas of pristine wilderness on the planet with horror, and up in Baffin Bay, there has been an ongoing physical confrontation between a Greenpeace ship, Esperanza, and the Danish navy as it defends the Cairn Energy rig from marauding protesters. The setting could not be more symbolic: around them, glaciers and icebergs melt as a direct result of global warming, a phenomenon that will only be exacerbated should the Arctic be allowed to give up its oil and gas reserves.
Inside the Kristinemut bar, Nive Nielsen, a local singer with a growing international reputation, is decidedly sober about the implications of any major oil find in Greenland. "I guess what I would like to see is the government tread very carefully. I am worried they are rushing ahead too quickly [with oil licensing]," she says. "Most people here – possibly 80% – think this drilling can only be good for Greenland, but we have already seen the traditional ways of doing things being eroded, and people herded into [modern town-housing] blocks."
Kenni Rende, a 44-year-old shop assistant at the Nota Bene electronics shop, is more positive about the prospect. "We have always believed there was oil and gas off this island; we've been waiting for something like this to happen for decades. I hope it will provide income for Greenland, so we can finance our way to becoming a more independent nation."
His upbeat mood is, not surprisingly, shared at the Bureau of Minerals and Petroleum a few blocks away, where Henrik Stendal has been digesting the news of the Cairn find in a presentation room packed with rock samples and geological maps. "It is exciting . . . This amounts to an appetiser for all oil companies to come here and do more exploration," says Stendal, who is head of the bureau's geology department. The affable rocks specialist claims not to have known about Cairn's find until the company announced it on 24 August with a simple statement: "First hydrocarbons discovered in Baffin Bay basin by T8-1 well, which has encountered gas."
The release of drilling information is always sensitive. It can send a company's share price soaring and act as a magnet for competitors. As a result, relations between small government and Big Oil are complex. The Greenland government is keen to keep the discovery's momentum going and attract new investment; but it is also anxious not to upset Cairn and its City investors by speaking out of turn (when the Guardian quoted a foreign ministry official as saying he was "hopeful" of a positive drilling result the day before Cairn announced it, a government public relations adviser was quickly in touch to admonish me).
Cairn Energy's founder and chief executive officer is Sir Bill Gammell, a former Scottish rugby international and public-school friend of Tony Blair. His Edinburgh-based company, while not in the Shell or BP league in scale, likes to work in frontier areas and has already attracted a stream of loyal investors after striking oil in the Indian state of Rajasthan, on acreage sold to it for a song by an unusually slipshod Shell.
Speaking about Cairn's Arctic find, Gammell said he was "encouraged that we have early indications of a working hydrocarbon system with our first well in Greenland, confirming our belief in the exploration potential". Yet even such tentative enthusiasm was dampened by one worker on the rig who, asking to remain anonymous, told the Guardian that there had been laughter aboard Cairn's Stena Don drilling unit when newspapers and television began to report the discovery. "We thought the media had made it up until we saw the company's statements," said the rig worker, adding that the quantity found was little more than you might find if you drilled a hole in your back garden.
Cairn has dismissed this version of events and most industry commentators do not take it seriously. Tellingly, it is not what the majority of Greenland's politicians and public want to hear either, determined as they are to loosen their sovereign ties with Denmark and, ultimately, establish independence.
At around four times the size of Britain, Greenland is the least densely populated country in the world, and desperately dependent on fishing, a small amount of tourism, and one working gold mine. The national books are balanced courtesy of a DKK3bn (£333m) annual handout from the Danish taxpayer. While the hunting of seals and other local animals is still practised by a handful of Greenlanders, the bulk of the population finds work in the public sector – in schools, hospitals or administration. But all that would change if the oil industry moved in.
The town of Nuuk is a strange mixture of attractive clapboard houses painted in bright colours typical of the Nordic region, and drab apartment blocks with graffitied stairwells that might look more at home in the former Soviet Union. Mineral extraction – be it oil or gas, gold or diamonds – is seen as a huge opportunity by the residents here. Already, crude oil has been found leaking out of the rocks in the Disko Bay area, and offshore, Greenland's west coast is believed to possess the same basic rock formations as those on the Canadian east coast, where massive oil finds have already been made.
According to a 2009 US Geological survey, there could be 90bn barrels of oil – a third of the size of Saudi Arabia's reserves – and 5otn cubic metres of gas in the wider Arctic region. Tentative drilling has already been happening all the way from the Chukotka Sea off Alaska to the Faroe Islands north of Scotland, although some has been halted while safety agencies reconsider the risks in the light of the Deepwater Horizon spill.
Few regions, though, have been pushing as hard to attract Big Oil as Greenland. As early as this week, its government may announce the winners of new exploration licenses, with many of the big names including Shell and Statoil of Norway – but not BP – expected to begin frontier-drilling here for the first time. With the continued rise in global commodity prices, this could yet turn into a fully fledged oil rush.
And, while the Cairn gas discovery has centred attention on hydrocarbons, there is a parallel drive to uncover all sorts of precious metals including diamonds, rubies and other rare earth products. This autumn, the Greenland government will decide whether uranium for nuclear power stations could also be mined here.
Dennis Thomas, a veteran British mining prospector, is currently making his first visit to Greenland in more than 40 years, as he scouts the world for new projects. "I have seen gold prospects, iron, copper, rare earths," he says. "It's all very early stage, but the time is right in terms of the economics and the willingness of the government [to open up]."
But it is not going to be easy. While global commodity prices have boomed over the last decade due to demand from countries such as China, Greenland remains a high-cost place to mine, not least because of the treacherous weather conditions. "You have to bring in everything by helicopter and you might have only a three-month season to do the work," Thomas says. But the prospector, who lives near Yeovil in Somerset but works for financial and mining investors around the world, still describes Greenland as an "exciting" prospect.
As for the islanders themselves, they are very focused on self-determination and self-sufficiency. Unemployment in some towns now runs as high as 15%, and the standard of food in the shops is often rudimentary. And while the number of people living below the poverty line was last measured at 9% – lower than in the United Kingdom – the suicide rate here increased from a historically very low level in the 70s to one of the highest in the world by the mid-90s, at 107 per 100,000 people.
Clearly, politicians in Nuuk regard economic and political independence as the path to a better future for their people. (This, remember, is a country that has already stuck its nose up to the west by leaving a club that everyone wants to join: the European Union.) But while they want to see more oil exploration – and hopefully production – they also insist their safety regulations meet the world's toughest standards, aware that most Greenlanders fear the health issues that could arise from an influx of oil companies.
The politicians' and public's views on global warming – another key reason for Greenpeace's presence in Baffin Bay – are more mixed, however. Global warming might be threatening to harpoon the local hunting way of life, but it will also lessen the hardships of living in a country where burying dead bodies in the frozen ground can be problematic. The melting of the local ice cap, which currently covers 80% of the country's land mass, will raise sea levels in countries such as Bangladesh and the Maldives – but it could open up further economic opportunities in Greenland. In future, Nuuk might act as a lucrative stop-off point for ships traversing the world via the currently iced-up North West Passage, and also make it a centre of onshore mineral mining.
"Yes, we are gaining more land, you can say that," says Stendal. And a spokesman from the Greenland Natural Institute of Resources and Climate Change talks about the possibility of "golden years" ahead, as the temperature warms up.
This is not the only unexpected view that foreign visitors encounter in Nuuk. Greenpeace, which has hero status in most capitals of the world, is fairly unpopular here, even among the young – not so much because the environmental group is opposed to an oil industry that could be good for Greenland's political self-determination, but because it once opposed seal hunting. Greenpeace now says its campaign was only ever aimed at "unsustainable" activities in Canada, but it admits that Greenland got caught in the slipstream, because any kind of seal hunting was deemed unacceptable by a north European public. As a result, what was a healthy export trade of the distinctive and mottled skins has been stopped in its tracks. Seal skins still cover rows of seats in the otherwise rudimentary airport lounges around this vast country, but only locals will buy a seal-skin waistcoat.
So, while a top team of daredevil environmentalists has led (only temporarily successful) raids on the Cairn rig, others have been making an equally brave attempt to appease vocal critics in Nuuk – without, apparently, much success.
Political correctness as prescribed by the west is not something that hangs heavy in the priorities of the Greenlander. The tourism industry on the island is built around the top end of the market, not least because it costs a pretty penny to fly here, involving a transit in Denmark or Iceland. Once here, visitors are still forced to move around by plane because no towns are connected by road – in fact, there are only two traffic lights on the entire island, a vast country of 840,000 square miles.
It is hardly an easy place for Nive Nielsen to fulfil her musical ambitions. Despite having recorded in Britain, she must still shrug off depressing attempts to label her Deer Children band "eskimo rock", and ignorant questions such as "How do you plug in an electric guitar in an igloo?" But Nielsen, and her fellow Greenlanders too, are determined to shape their own destiny – with or without oil.
Science Weekly: Richard Dawkins, David Attenborough and algae
Using algae to make environmentally friendly fuel; why cutting science funding is a bad idea; and two of Britain's science heavyweights get together for a chat about pre-Cambrian creatures, neotenous sea squirts and the larynxes of operatic sopranos
Presented by Alok Jha, and Produced by Iain Chambers guardian.co.uk, Monday 13 September 2010 00.05 BST
Alison Smith from the University of Cambridge joins us to discuss what single-celled organisms can do to cure our addiction to oil. Oh, and perhaps help make vitamins and pharmaceuticals too.
Two of Britain's scientific heavyweights get together for a chat about pre-Cambrian creatures, neotenous sea squirts and the larynxes of operatic sopranos. Richard Dawkins and David Attenborough shoot the breeze at Guardian HQ (and it's worth a listen just to hear that voice).
James Randerson and Ian Sample are in the studio to discuss the BP Deepwater Horizon oil spill, the coalition government's proposals to cut science funding and how men should move if they wany to look irresistible on the dancefloor (and avoid looking like their dads). No, seriously.
http://www.guardian.co.uk/science/series/science/podcast.xml
Presented by Alok Jha, and Produced by Iain Chambers guardian.co.uk, Monday 13 September 2010 00.05 BST
Alison Smith from the University of Cambridge joins us to discuss what single-celled organisms can do to cure our addiction to oil. Oh, and perhaps help make vitamins and pharmaceuticals too.
Two of Britain's scientific heavyweights get together for a chat about pre-Cambrian creatures, neotenous sea squirts and the larynxes of operatic sopranos. Richard Dawkins and David Attenborough shoot the breeze at Guardian HQ (and it's worth a listen just to hear that voice).
James Randerson and Ian Sample are in the studio to discuss the BP Deepwater Horizon oil spill, the coalition government's proposals to cut science funding and how men should move if they wany to look irresistible on the dancefloor (and avoid looking like their dads). No, seriously.
http://www.guardian.co.uk/science/series/science/podcast.xml
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