I have been researching alternative energy companies, and have bought a few. For those that view global cooperation on this matter unified minus Bush, I submit that these individuals must be smoking and inhaling some alternative energy plant leaf.
Take China.
During a very recent conference call hosted by a major brokerage, the following was stated in clear terms:
The Chinese promise to cut pollutant energy emissions by 20% between 2006-2010 is not going to occur. Pollutant energy was cut be 1% in 2006. GDP is expected to grow at least 10% annually during the 2006-2010 period.
The conclusion was stated that economic growth remains the number one priority for the Chinese government, with energy intensity and other issues such as pollution all at number two or lower.
Beijing officials were surprisingly frank about China's determination to NOT adhere to stated pollutant energy reduction. Talk is cheap, as they say with a smile.
Coal is king in Chinese energy and will remain so for a long, long time (decades).
In 2006, China added approximately 100 GW of new electrical power of which around 75% was coal fired. 80% of existing power generation is coal fired. Over the next twenty years, it was stated that more than 70% of all Chinese electrical power will be coal fired, using high sulphur product. Fortunately, the new power plants are somewhat more efficient than the older ones, though not at a meaningful pollution reduction level countrywide.
China states that it is planning on closing smaller, more pollutant small power plants,small steel mills,small aluminum smelters and small transportation plants. Unfortunately, their history of permanently closing industrial installations of that sort is poor. For example, the Chinese government has been trying to close down tea kettle oil refineries for about ten years with only a modicum of success at best (8%).
A senior Chinese energy policy maker conceded that as long as China uses 60% more energy to generate the same unit of industrial production as Japan, then China will struggle during the next phase of global economic development. Thus, the rationale behind forceful worldwide efforts by China to lock in cheap energy sources in Africa and South America. This will keep their inefficient factories running, with cheap labor being the wild card in price point.
China is the second largest consumer of oil and is growing fast, a well-known fact that is an inconvenient truth ignored by American bashers and global environmental extremists.
China is thought to not have any inkling of replacing oil with natural gas. Chinese oil imports are rising rapidly. One positive sign to note is that Chinese heavy industry may be tailored in the future to run on coal or natural gas (not yet discovered or secured at this time). Coal might help, as coal bed methane may be transformed into natural gas (although high levels of CO2 are emitted during the process of conversion). Not so with Chinese transportation or home heating and cooking, both grossly inefficient and a heavy pollutant.Oil and high sulphur coal are king with hundreds of millions of mini-polluters across the Chinese mainland.
For the past few years, China has been content to sit back and let the US take the flack for CO2 reduction inaction. However, the US, even without signing any protocols, is reducing CO2 more than any other continent and will leave China scrambling to implement - or explain away- a lack of a coherent alternative energy policy. Clearly, renewable non-pollutant energy use is not near the top of any Chinese policy agenda at this time.
Although China states that it wants an aggressive bio fuel industry,it lacks available agricultural land. And what,if enacted by using these agricultural lands for ethanol, will feed China's population?
Chinese officials have a negative attitude towards imported natural gas and imported liquid natural gas. They prefer cheap coal from African and South American resources, and their huge domestic reserves. Again, pollutant fuels are strategically important to China. Certainly more important than treaties, protocols or demonstrations on global warming or alternative energy.
China will likely surpass the US in power generation over the next five years. This means much more pollution unless Chinese attitudes shift 180 degrees on global warming and pollution matters.
All participants agree that Chinese promises of reductions in global warming-identified power sources have not been backed by any meaningful results. Then again, the same could be said about much of Europe. Russia, Indian, Africa and South America are exempt for the most part. If they were signatories to any global warming initiatives, they all would have failed the test of results anyway.
In regards to Chinese growth, some are waiting for China to slow down. Don't look for China to implode any time soon. GDP is to grow 8-10% per year for the foreseeable future, and is likely to overshoot in 2007 in the run up to the 2008 Olympic Games.
Labor costs differentials will remain about the same, 20:1 vs. the United States and 27:1 vs. the European Union.Western technology given to China on the cheap will exacerbate the cost of production even more in the future.
It is my belief that China expects the decline of the western world to continue into this century, with China assuming the role of leading world power- militarily and economically- with willing allies, by around 2040.
By then, we may be about .7 degrees warmer collectively.
