TEHRAN, Iran - Russia, Iran and Qatar made the first serious moves Tuesday toward forming an OPEC-style cartel on natural gas, raising concerns that Moscow could boost its influence over energy markets spanning from Europe to South Asia. Such an alliance would have little direct impact on the United States, which imports virtually no natural gas from Russia or the other nations.
But Washington and Western allies worry that closer strategic ties between Russia and Iran could hinder efforts to isolate Tehran over its nuclear ambitions. In addition, the United States opposes a proposed Iranian gas pipeline to Pakistan and India, key allies. In Europe - which counts on Russia for nearly half of its natural gas imports - any cartel controlled by Moscow poses a threat to supply and pricing.
Russia, which most recently came into confrontation with the West over its five-day war with Georgia in August, has been accused of using its hold on energy supplies to bully its neighbors, particularly Ukraine. Moscow cut natural gas exports to the former Soviet republic over a price dispute during the dead of winter in 2006 - a cutoff that caused disruptions to European nations further down the pipeline.
“Big decisions were made,” said Iranian Oil Minister Gholam Hossein Nozari. His Qatari counterpart, Abdulla Bin Hamad al-Attiya, said at least two more meetings were needed to finalize an accord, according to the Iranian Oil Ministry’s Web site. No timeframe was given. Calling the grouping the “big gas troika,” the chief executive of Russia’s state-controlled energy company Gazprom, Alexei Miller, said it would meet three or four times a year. “We are consolidating the largest gas reserves in the world, the general strategic interests and - what is very important - the high potential for cooperation on three-party projects,” Miller said.
Liquefied natural gas - a rapidly growing segment of the market - could be traded as a commodity similar to oil at some point in the future, and the move by Russia, Iran and Qatar appears to anticipate that, said Konstantin Batunin, an analyst with Moscow’s Alfa Bank. Gazprom, the Russian state energy company, is looking to make the U.S. one of its prime markets for liquefied natural gas, and sent senior executives to Alaska last week to discuss energy projects. See more here. See more also on Russia and Energy here.
This report is part of an ongoing oversight investigation into the funding and partisan political activities of environmental groups. An article in the trade publication Greenwire reaffirms the findings of Senator James Inhofe’s (R-OK) ongoing oversight investigation into the multi-million dollar funding and partisan political activities of environmental groups. The Greenwire article by reporter Alex Kaplun reported that “since the start of the fall campaign, every dollar spent by these organizations has been aimed at helping Democrats.”
Greenwire’s article on October 22 echoed Senator Inhofe’s report, detailing how environmental groups are essentially a funding and advocacy arm of the Democratic Party. The article noted the partisan activity of major environmental groups in battleground political campaigns and concluded, “In every instance, the environmental groups are backing the Democrat.”
A September 25, 2008, Inhofe report exposed the questionably overt political activities of environmental organizations that are often misleadingly disguised as non-partisan environmental causes. See: Inhofe Report Exposes Environmental Groups as ‘Massive Democratic Political Machines’ & Follow up to Report: Defenders of Wildlife’s Partisan & Misleading Ads on Aerial Wolf Hunt - October 15, 2008 & LCV’s ‘Environmental Scorecard’ Marred by Partisan Politics, Inhofe Says - October 17, 2008
Senator James Inhofe (R-Okla.), Ranking Member of the Senate Environment and Public Works Committee, said on September 25, “Campaigns to ‘save the cuddly animals’ or ‘protect the ancient forests’ are really disguised efforts to raise money for Democratic political campaigns. Inhofe added, Environmental organizations have become experts at duplicitous activity, skirting laws up to the edge of illegality, and burying their political activities under the guise of non-profit environmental improvement.
LCV leads the pack, with over $730,000 spent on the presidential race, with the Sierra Club and Defenders of Wildlife trailing—each having spent more than $500,000. Environment America has also spent about $140,000. The Sierra Club is the only one of those major environmental groups that has actually spent more money—in fact, the overwhelming majority of it—on the presidential race rather than congressional contests. And campaign finance records show that in many instances the environmentalists’ efforts in the White House contest overlap with their efforts in the congressional races, as much of their money has been spent in the states of Colorado, New Mexico and New Hampshire—all three have been considered battlegrounds. Read more here.
By Roger Pielke Jr. on Prometheus
The New York Times had an article on the upcoming carbon dioxide auction of the Regional Greenhouse Gas Initiative (RGGI) of 10 northeastern U.S. states participating in this new cap and trade program (h/t Adam Zemel at the BT blog). The evolving performance of RGGI should add weight to the argument that cap and trade is simply not up to the challenge of reducing greenhouse gas emissions. Here is an excerpt from the NYT article: The program is due to get off the ground in nine days, but already there are worries that it may fail to reduce pollution substantially in the Northeast, undermining a concept that is being watched carefully by the rest of the country, by Congress and by European regulators.
The concept has been praised by environmentalists and state officials. But the emissions cap was based on overestimates of carbon dioxide output, which has dropped sharply from 2005 to 2006 and is on a lower trajectory than anticipated.
In the end, emissions from the 10 states went down instead of up. After growing from 176.9 million tons in 2002 to 184.5 million tons in 2005, they dropped in 2006, the most recent year for which there is complete data, to 164.5 million tons. Estimated emissions for 2007 are 172.4 million tons, according to Environment Northeast, a research and policy organization.
Using the Environment Northeast data, I have calculated annual emissions for the 10 states since 2000 to their estimated 2008 value, and they have declined by just under 1% per year. If we take a look at the cumulative emissions allowed under RGGI for 2009-2018 we see that the total is about 1.83 GtC (gigatons of carbon). Because emissions allowances that are unsold in one auction roll over to the next, it is the cumulative number of permits over the performance period that matters, not the annual amount.
The following figure shows that emissions will have to grow by more than 1% per year for the RGGI to even have any effect on business as usual. And even a growth rate of 2% would result in a reduction in emissions from 2008 of less than 4%. So for RGGI to actually make a difference on emissions trajectory for these 10 states will require a stark departure from emissions trends over the past 9 years. Energy prices, fuel switching, and the push for alternative energy all work against this for this region. Champions of cap and trade will find themselves in the awkward position of cheering for rapid emissions growth for RGGI to show any teeth. Otherwise, it is just business as usual.
And this is indeed the problem with cap and trade. Any policy, no matter how theoretically sound, that cannot meet the test of political and economic realities is indeed fatally flawed. RGGI may do many things, but reducing emissions does not seem to be among them. It is high time we started calling cap and trade what it really is - tax and charade. Read full post here.