Power Plays: Fury as 'Fuel Poverty' Soars Close to a 10-Year Record

WORLD ENERGY WATCH

The World Energy Watch presents recent news and analysis highlighting the activities of the players involved in the power struggle for the world's remaining energy resources.  

1//The Guardian/Observer
FURY AS 'FUEL POVERTY' SOARS CLOSE TO A 10-YEAR RECORD

One in six British households is living in fuel poverty, the highest for almost a decade, according to new figures that threaten the government's target to eradicate the problem in England by the end of the decade.  Fuel poverty is defined as when a household spends more than a tenth of its income on utility bills. The consumer group Energywatch said yesterday there are now about 4.4 million of these in the UK, with just over 3 million in England alone.  Charities and other groups, led by the Association for the Conservation of Energy, are preparing a legal challenge in the next few weeks to force the government to meet the 2010 target, to which it is committed by law.  The figures came at the end of a week in which the UK's largest energy supplier, British Gas, said it was increasing bills by 15 per cent. This month EDF Energy and Npower raised prices by up to 27 per cent, and two-thirds of British households will have to pay higher tariffs. Other suppliers are likely to follow suit soon.  The regulator Ofgem's estimate of 4 million UK households living in fuel poverty in 2006 does not take into account the price rises announced this month. According to government figures, the last time there were as many fuel-poor households was in 1999 when the figure was 4.5 million. Numbers then fell until about 2005, when fuel poverty started increasing again. ... The Secretary of State for Regulatory Reform, John Hutton, defended the energy industry last week in the Commons. He pointed out it was spending £56m this winter to fund social tariffs. Yet the six largest energy suppliers made profits of £2bn in six months alone last year.  

2//The Toronto Star, Canada
TO WORK, CARBON TAX MUST STING

Most Canadians tell pollsters they're concerned about climate change. Many insist they'd like to do something about it, and would even pay for measures to reduce greenhouse gas emissions. 

But propose actual cash amounts - 25 cents a litre on gasoline, perhaps, or a $10 daily commuter toll - and support evaporates.  "Once you put a price on it, people tend to think twice about it and say, `Maybe not,'" says Mario Canseco of Angus Reid Strategies, which surveyed about 3,700 Canadians on the issue last March.  That's just one reason politicians aren't rushing to embrace an idea endorsed by environmentalists, many economists and even some business groups.  It's also why this month's report from the National Round Table on the Environment and Economy, while it produced a flurry of media headlines, appears fated to join many others on a long, dusty shelf.  The report concludes we must start paying for the carbon we consume when we burn coal, oil, natural gas or gasoline, or use plastics. It proposes imposing a tax based on carbon content, putting a price on carbon dioxide emissions and allowing them to be traded, or a combination of the two.  The basic idea: Boosting the cost of anything containing carbon - the main greenhouse gas - would compel industries and consumers to seek cheaper alternatives. They'd switch to cleaner fuels or consume less - either by adopting more efficient technologies or simply reducing their activity. Presumably, the alternatives would be better for the environment.  The problem: No government appears willing to impose a cost high enough to actually change behaviour. And while several industry groups argue pricing carbon is a good idea, their enthusiasm is less than it seems. ... Liberal environment critic David McGuinty argues the time and roughly $1 million spent on the report were wasted. What was needed, and the Conservative government didn't allow, he says, was a careful analysis of how either carbon pricing system might work. ... The Round Table predicts the overall effect of a much higher carbon price on Canada's economy wouldn't be significant - likely the equivalent of a year or two of forgone growth by 2050. ... The oil industry has won publicity points by saying it supports a price on carbon, but it won't go above $15 a tonne. "The companies have made plans" based on that price, says Pierre Alvarez, president of the Calgary-based Canadian Association of Petroleum Producers.  Canadian Manufacturers and Exporters, the group that represents manufacturing industries, is onside, too, but only as long as the U.S., China, India, Brazil and other trade competitors also go along. Since there's no sign of that in the foreseeable future, these businesses would likely punish any government that enacts an effective Canadian carbon price.  

3//The Globe and Mail, Canada
OTTAWA MOVES TO EMULATE U.S. ON NEW FUEL MILEAGE STANDARDS

Canada's auto makers as well as consumers are keen to see new fuel economy standards applied on a national basis, says federal Transport Minister Lawrence Cannon.  "Industry and the average Canadian, they all want to have a national standard," Mr. Cannon said this morning at the unveiling of a 60-day consultation process aimed at developing a fuel-economy target by 2020. 

The goal is a target that "achieves at a minimum" recently enacted legislation in the U.S. Congress calling for auto makers' fleets to average 35 miles per gallon, or 6.7 litres per 100 kilometres, by the year 2020.  Mr. Cannon conceded that some provinces have struck out with their own fuel-economy programs but said he believes a common standard can be worked out in the talks. ... But Mr. Cannon pointed out that the U.S. Environmental Protection Agency has launched a court challenge against the California measures and that it makes more sense to use the U.S. Congress legislation as the benchmark. The new U.S. standard falls well short of the regulations proposed by California.  Dubbed the "Turning the Corner" plan, the fuel-economy consultation process is aimed at developing "an integrated, nationally consistent approach to reducing air pollution and greenhouse gases in order to protect the health and environment of Canadians," Mr. Cannon said at a press conference at the Montreal International Auto Show. ... While the Conservatives prefer rules based on the dominant U.S. standard, in recognition of the fact that there is a North American marketplace, Quebec and several other provinces have already pledged to adopt California standards, as have 13 other U.S. states.  However, Ontario -- home of major assembly plants -- has opposed the California approach or its adoption by other provinces, saying there should be one national rule.  "For Canada to adopt the CAFE standard, which President Bush supports, means taking the slow lane in addressing climate change," said Pierre Sadik of the David Suzuki Foundation. "The California standard means getting to a solution much faster."  John Bennett, of Climateforchange.ca, said provinces such as Quebec, Manitoba and British Columbia will likely still go ahead with California standards even if Ottawa does not. 

4//RIA Novosti (Russian News & Information Agency), Russia
IRAN, GAZPROM AGREE TO EXPAND OIL AND GAS COOPERATION 

Russian energy giant Gazprom  is planning to offer Tehran new prospects of oil and gas cooperation, Iran's oil minister said on Tuesday [January 15, 2008].  "We have held serious talks with Gazprom officials and agreed that the Russian company will present its proposals on bilateral energy cooperation by mid-March," Gholam-Hossein Nozari said.  The minister said the Russian company could be interested in oil and gas prospecting, the construction of pipelines, and development of oil and gas deposits in Iran. ... The parties identified oil and gas deposit exploration and development - in particular the further development of the energy-rich Southern Pars deposit in Iran - as priority areas for cooperation.  Stages 2 and 3 of the Southern Pars gas field in the Persian Gulf were initiated by the international consortium of France's Total (which holds a 40% stake), Malaysia's Petronas (30%) and Russia's Gazprom (30%) in 1997. The consortium built two offshore platforms with 10 production wells each, two 100-km (62-mile) underwater gas pipelines and an onshore gas plant with annual capacity of 20 billion cubic meters.  Iran's proven gas reserves total more than 28 trillion cubic meters. In 2006, Iran produced 105 billion cubic meters of gas.  

5//Kommersant, Russia
THE GAS IS ALWAYS GREENER ON THE RUSSIAN SIDE 

Moscow and Kyiv have moved closer to another gas war ahead of the first meeting between Ukrainian Prime Minister Yulia Timoshenko and her Russian counterpart Viktor Zubkov on January 23 in Moscow. Ukraine wants to get rid of mediators in gas trade with Russia and increase transit rates five-fold. Gazprom fought back saying that due to the shortage of Central Asian gas Ukraine is going to get Russian gas which costs 75 percent more. It means that the Ukrainians are going to face an $830 billion bill in Moscow. ... "The persistence of the Ukrainian government may jeopardize talks with Russia," Valery Nesterov says. Director of the Kyiv-based Institute of Global Strategies Vadim Karasev believes that Yulia Timoshenko is "fuelling a gas war with Russia" deliberately. "She needs to create a political image of the enemy and victory over it," he says. The expert adds that the prime minister would not be stopped by the prospect of another January 2006 when gas was cut off to homes in Ukraine and supplies to Europe were in short. Whether a new gas war will start will become clear next week when Yulia Timoshenko arrives in Moscow for talks on January 23. 

Copyright 2008, Gloria R. Lalumia

WORLD ENERGY WATCH