Global
warming and the local energy sector
The
Trinidad Guardian
Port
Spain
Petroleumworld.com 01 22 05
The
gradual switch from coal-based power generation to natural gas
in the US and Europe essentially created the demand pull which
resulted in the establishment of an LNG industry in T&T.
Almost
one year ago, in February 2005, the Kyoto Protocol finally came
into force, despite the refusal of the world’s largest
economy and largest producer of greenhouse gases to sign the
agreement.
The
protocol, first agreed to in December 1997, demands a 5.2 per
cent reduction in greenhouse gas emissions (below 1990 levels)
from the developed world by 2012. The protocol was signed and
ratified by T&T in January 1999.
The
Kyoto Protocol was the international community’s response
to the growing concern from scientists and environmentalists
about the impact that greenhouse gases, in particular carbon
dioxide, are having on the global climate.
There
are still many things about the phenomena of global warming
that are unknown, not least because of the fact that the climate
has always shown large fluctuations in global temperature, independently
of any impact from man.
Nevertheless,
most scientists are agreed that the burning of fossil fuels
since the dawn of the industrial revolution in the early 19th
century has contributed to an increase in the concentration
of carbon dioxide in the atmosphere which in turn has contributed
to global warming.
The
Inter-governmental Panel on Climate Change, a scientific body
convened by the UN projects an increase of two to six degrees
Fahrenheit over the next 100 years.
There
is less agreement about exactly how this increased global temperature
will impact on regional and local weather patterns.
For
example, in the last year the record number and intensity of
hurricanes in both the Atlantic and Pacific has been blamed
by many on global warming, while others have pointed to evidence
of a cyclical nature to hurricane intensity and frequency.
Despite
the lack of clarity about the possible local impacts of climate
change, there is clearly very significant cause of concern and
many implications for every country, including T&T.
From
a business perspective the Kyoto protocol meant that businesses
involved in the production and the extraction and consumption
of fossil fuels (coal, oil and natural gas) had to change the
way they did business.
In
1999, business leaders meeting at the World Economic Forum in
Davos, Switzerland voted global climate change as the most pressing
issue confronting the world’s business community.
Last
September, Goldman Sachs listed “environmental accords”
as one of the top ten risks to the global economy.
Included
in this is the cost of implementing Kyoto which William Nordhaus
of Yale University estimates to be in the region of US$200 billion
per year globally.
Individual
companies have, however, sometimes found that efforts to reduce
greenhouse gas emissions have caused them to re-examine their
business practices and actually have resulted in some savings.
For
example, bp has stated that their efforts to reduce flaring
of gas to ten per cent below 1990 levels saved the company over
US$600 million.
T&T
and carbon dioxide emissions
T&T
is consistently listed as one of the major carbon dioxide producers
on a per capita basis in global greenhouse gas rankings.
According
to data published in the 2003 UN Human Development Index and
quoted from the Carbon Dioxide Information Analysis Center,
T&T generates 19.4 metric tones of carbon dioxide per capita.
When compared to other countries, T&T ranks 6th in the world
in terms of carbon dioxide emissions on a per capita basis.
This
data should, however, be treated with a degree of caution.
In
terms of its share of world total carbon dioxide emissions,
T&T accounts for a negligible amount—just 0.1 per
cent.
It
is also important to understand exactly what the ranking of
per capita carbon emissions means.
The
statistics do not actually measure carbon released into the
atmosphere in T&T, but rather they measure primary processing
of hydro-carbons.
In
other words when natural gas is processed to form LNG or methanol
in Trinidad and then exported, this is added to T&T’s
carbon emissions, despite the fact that the majority of emissions
are actual released into the atmosphere in the export market.
Globally,
the main contributor to carbon dioxide emissions is the USA
which accounts for almost a quarter of all carbon dioxide emissions.
The
top eight carbon dioxide producers account for 58 per cent of
emissions.
Only
four of the top producers (the European and Japanese nations)
are bound to make reductions to their carbon dioxide emissions
under the protocol; the USA because of their refusal to sign
and the others because they are not classified as developed
nations. (See Table)
Despite
the per capita rankings, T&T is insignificant in its impact
of global warming and reducing carbon dioxide emissions is unlikely
to be a major policy issue.
Nevertheless,
the impact of climate change on the country could be extremely
serious and is something that has to be planned for, even if
the worst case scenarios never materialise.
Disaster
preparedness is obviously one such policy implication that has
to be at the forefront in the local policy response to global
warming.
Power-generation
The
debate about global warming, and the global policy response,
has also had and continues to have other implications for T&T.
Despite
the media interest in motor vehicles as a cause of global warming,
only 20 per cent of total carbon dioxide emissions come from
transport while the other 80 per cent comes from static sources—industry
and power generation.
In
terms of power generation, it is estimated that a reduction
in emissions of carbon dioxide by one billion tones per year
can be achieved by converting 400 coal powered 1000 megawatt
power plants to natural gas. This is roughly equal to the power
generation capacity of China.
In
light of coal’s dominance in power generation, a lot of
the effort to reduce carbon dioxide emission can be achieved
by substituting natural gas for oil and coal in power generation;
improving the fuel efficient of vehicles; increasing the use
of solar and wind power and building energy efficient buildings.
The
gradual switch from coal-based power generation to natural gas
in the US and Europe essentially created the demand pull which
resulted in the establishment of an LNG industry in T&T.
LNG
from T&T is used in power generation in Boston and other
US cities.
T&T’s
contribution to reducing global carbon dioxide emission levels
must therefore be viewed against the role that T&T LNG plays
in reducing carbon dioxide emissions in the USA and Spain.
The
interests in fuel additives to create more efficient engines
also has implications for the local energy sector, as demand
for these products is likely to remain strong.
While
the Kyoto Protocol represented a step forward in the global
response to climate change, it only goes a very small way to
addressing the issue.
It
is estimated that for the period 2005-2030, 85 per cent of the
growth in carbon dioxide emissions will come from developing
countries—mainly India and China.
Both
countries have ratified the protocol but are not bound to take
action to reduce carbon emissions.
Since
the Kyoto conference in 1997, China in particular has shown
extremely strong economic growth and rapid increases in its
emissions of carbon dioxide and other greenhouse gases.
A
new global policy response is going to be required to address
this new economic and environmental reality.
Trinidad
Guardian
Thursday
19th January 2006
Copyright © 2006Trinidad
Guardian,
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