For decades, fusion has been the holy grail of nuclear energy researchers. ‘Hot’ fusion – the process that creates energy in the sun and hydrogen bombs – involves the fusing of hydrogen or deuterium atoms into helium. After decades of research, scientists have yet to crack the problem of managing the extreme temperatures involved. ‘Cold fusion’, which, in theory, would create useable energy at room temperatures, has for a long time been a similarly elusive dream.

In 1989, two scientists at the University of Utah, Pons and Fleischmann, claimed to have demonstrated a cold fusion reaction that produced excess energy, that is, more energy than would be yielded by a normal chemical reaction.

However, other researchers had great difficulty in replicating the Pons-Fleischmann experiments, and the whole notion of cold fusion became discredited as ‘junk science’.

Nonetheless, some scientists scattered around the globe have continued this line of research and, in the past few years, there has been a renewed explosion of interest in the subject.

The term ‘cold fusion’ has fallen out of favour, to be replaced by the more accurate label of low-energy nuclear reactions, or LENRs.

Scientists working in several labo- ratories have claimed to have produced excess heat energy when mixing hydrogen gas with nickel or palladium under certain conditions. Remarkably, the reactions produce no greenhouse gases or radioactive waste.

Last year, an Italian engineer and entrepreneur named Andrea Rossi catapulted himself to fame – or possibly infamy – by claiming to have invented a device – called the energy catalyser, or E-Cat – that produces commercially viable quantities of LENR energy using a special catalyst.

In October, Rossi performed a demonstration of a 1 MW E-Cat to a handful of scientists and a potential buyer at the University of Bologna. Subsequently, Rossi said he sold his device to an unnamed American buyer, which some people have speculated could be a branch of the US Department of Defense.

With Swedish company Hydro Fusion acting as the agent, the website ECAT.com is advertising 1 MW units for sale at $1.5-million each – a 25% price cut after two months, resulting from a “close and successful colla- boration with the first (still undisclosed) customer” and “new favourable and scalable production processes”. That price would equate to about R47-billion for capacity equal to the Medupi power station, which has a price tag of upwards of R120-billion. The fuel and maintenance costs are said to be a negligible $1/MWh each, while the estimated life span of a device is 30 years. ECAT.com claims that 10 kWh household units will be available for purchase by next year.

Rossi’s claims triggered a storm of debate, with many critics saying it was a scam, as his device defied the known laws of physics. Rossi has yet to allow independent scientific validation of his device, arguing that he wants to secure a patent first.

In recent months various competitors have emerged with similar assertions.

Greek company Defkalion Green Technologies issued a press release in November stating that it will begin selling an LENR device dubbed Hyperion this year. Another statement, released on January 23, invited inde- pendent third parties to test the reactors.

In mid-January, the US National Aeronautics and Space Administration (Nasa) released a short video in which a Dr Joseph Zawodny says that the LENR process “has the demonstrated ability to produce excess amounts of energy cleanly, without ionising radiation, without producing nasty waste”. He says this heat could be used on a household scale for space and water heating and converted into electricity generation, on an industrial scale for power generation and, ultimately, for transportation.

On his blog, Zawodny subsequently stated: “When considered in aggregate, I believe excess power has been demonstrated. I did not say, reliable, useful, commercially viable, or controllable.” Nevertheless, he says the video was released as part of a patent application filed by Nasa for an LENR device.

Most recently, several blogs are reporting that scientists at the Massachusetts Institute of Technology held a short course on cold fusion in the last week of January, where a successful LENR demonstration was apparently conducted.

If commercial energy from LENR proves to be viable and cheap, it could completely revolutionise the world’s energy systems, rendering fossil fuels and conventional nuclear fission reactors obsolete and making fresh- water through desalination affordable. But a widespread transition to LENR energy would likely take a decade or two.

It is still too early to tell whether commercial LENR is imminent or will turn out to be a red herring. But this story is definitely one to watch.

Published in Engineering News, 17 February 2012

http://www.engineeringnews.co.za/article/is-low-energy-nuclear-reaction-new-physics-or-an-old-scam-2012-02-17

Every year the National Treasury increases so-called ‘sin taxes’ on cigarettes and alcohol, both addictive substances whose use results in large health and social costs. So why not impose a similar tax on another substance that is a national addiction, deleterious to our long-term health and depleting globally – namely, oil?

Consumers already pay taxes and levies on petroleum fuels – amounting to about a third of their retail prices, which are now near their all-time nominal highs over R10 per litre. Further fuel price increases would hurt poor people who generally spend a large proportion of their meagre incomes on transport. Rather, the Treasury should impose a ‘syn’ tax – a windfall tax on the profits of synthetic fuel producers Sasol and PetroSA, which together contribute about a third of our fuel supplies. At the same time, consumers should begin a ‘rehab’ programme to address their oil addiction.

A windfall tax on synfuel profits will not make any difference to the price of fuel paid by consumers. This is because national fuel prices are determined by the Department of Energy on an ‘import parity price’ (IPP) basis. That is, local ‘basic fuel prices’ are benchmarked on international refined petroleum product prices, to which are added transport costs, wholesale and retail margins, and levies and taxes. Thus Sasol and PetroSA sell their synthetic petrol and diesel at the same prices as the companies – Engen, BP, Shell, Chevron and Sasol again – that refine imported crude oil.

Any increase in international crude oil prices or a weakening of the rand exchange rate pushes up local fuel prices, raising the rate of inflation and hurting SA’s consumers but boosting the profitability of synfuel producers. PetroSA recorded a R871 million net profit in fiscal year 2011, while Sasol Group operating profit increased by 25% to R30 billion.

Sasol is SA’s largest company by sales and market value and contributed R25 billion in direct and indirect taxes in the past financial year, ranking it amongst the country’s largest corporate tax payers. PetroSA by contrast is wholly owned by the state.

So should an extra windfall tax be imposed on the synfuel producers? This question was addressed comprehensively by a special Task Team appointed by then-Finance Minister Trevor Manuel in 2006. The Task Team found that both Sasol and PetroSA have benefitted extensively from state support over several decades.

Sasol was created and funded by the Apartheid state in the 1950s, but was privatised in 1979 and is now listed jointly on the JSE and the New York Stock Exchange. Sasol’s first synfuel unit was financed by the state-owned Industrial Development Corporation. The company has always been guaranteed full uptake of its products at import parity prices, enjoyed low tariffs on the pipeline network constructed by Transnet over the years – which gave Sasol market access for synfuels and gas and amounted to a subsidy of approximately R860 million per year – and benefited from tariff protection between 1979 and 2000 to the tune of at least R6 billion.

Moreover, Sasol was privatised “on terms very favourable to investors”, thereby benefitting a small group of shareholders, 40 percent of whom are foreigners.

Mossgas, which later became part of PetroSA, benefitted from tariff protection on the same basis as Sasol, ultimately enjoying subsidies from motorists amounting to R1.5 billion up to November 2004. Soeker, which discovered the gas feedstock, was funded by government but later absorbed into PetroSA. The state invested R13 billion in Mossgas and R8 billion in Soekor, and wrote off loans to these entities amounting to R8 billion and R1.5 billion, respectively.

The Task Team cited several independent estimates of the costs of production for existing CTL and GTL; these ranged between $22-45 per barrel and $18-30 per barrel, respectively. Even though these costs have surely risen over the past five years, the profitability of the synfuels producers indicates that they are considerably lower than recent crude oil prices.

In short, the Task Team commented that “very large amounts of the tax payers’ money have been used to support and maintain the synthetic fuels industry”. Thus they recommended the imposition of a windfall tax of R1.25 per litre of synfuel at an oil price of $110 per barrel, which would garner over R10 billion in annual tax revenue.

However, then-Finance Minister Trevor Manuel shunned this advice, saying the tax might undermine further investment in the synfuel industry, which he argued was necessary for bolstering energy security. An additional reason cited by the Treasury was that it could not be sure whether the windfall profits were of a cyclical or structural nature. With hindsight, it is clear that oil prices have been trending upwards for at least eight years now. And they are expected to shoot much higher after the world passes ‘peak oil’ production.

As it happens, at the same time that the Task Team released its report, Sasol announced that it was considering building a new coal-to-liquid plant, dubbed Mafutha. But the company later said it needed partial government funding for an investment set to cost in excess of R50 billion.

Last year Sasol put project Mafutha on ice because of concerns about the costs of greenhouse gas mitigation and the quality of coal in the Waterberg field. Thus the main justification for withholding the windfall tax has not materialised – and given climate change and other pollution concerns, that might be for the best.

The proceeds of a syn tax should not be used to subsidise domestic fuels, as this would encourage our oil addiction. The revenues should instead be utilised to reduce SA’s dependency on oil imports. Global oil production has been essentially stagnant for six years and an increasing number of analysts warn that we are at or near ‘peak oil’ production, and that annual output will begin an inexorable decline within the next few years. As the International Energy Agency’s chief economist Fatih Birol is fond of saying, “we must leave oil before oil leaves us”.

Thus syn tax revenues should be invested in renewable electricity capacity and more efficient and sustainable transport systems, like electrified rail for both freight and passengers. Subsidised public transport would be a much more sustainable form of support to poorer commuters than fuel subsidies.

In a country with amongst the highest levels of inequality in the world, it is iniquitous that a few private shareholders – many of whom are foreigners – should profit at the expense of our citizens. Our government should follow the example set by their Australian counterparts – in respect of their mining ‘super-tax’ – and divert resource rents to sustainable investments for the benefit of all South Africans.

Published in the Mail & Guardian, 10 February 2012

http://www.mg.co.za/article/2012-01-20-barrelling-towards-fuel-shortages/

Everything about the People’s Republic of China is big. It is the world’s second-largest country by land area, has the biggest population at over 1.3 billion people, and in 2010 its economy surpassed that of Japan to become the second largest in the world. China’s rampant industrialisation has profound implications for the global economy, energy security, environment and geopolitics.

For the past three decades the economy has grown at an average compounded rate of almost 10% per annum, which means the economy has been doubling in size roughly every seven years. Industrial growth, of course, requires energy – and China’s demand for energy has been growing prodigiously, so much so that the nation is now the world’s top energy consumer.

Coal is the mainstay of China’s economy, providing two-thirds of primary energy supply and fuelling over 80% of the country’s electricity. China is far and away the world’s top coal consumer and producer, accounting for 48% of global coal consumption in 2010. In each successive doubling cycle – about every decade – China consumes as much coal as it did in all of its previous history. According to a report by the German-based Energy Watch Group, China’s coal production could peak as early as 2015, although two Chinese researchers estimated the peak will likely occur between 2025 and 2032.

Oil is also increasingly important for the Chinese economy, accounting for 17% of primary energy supply in 2009. Oil consumption grew on average by 7.2% a year from 2003 to reach 9 million barrels per day (mbpd) in 2010. Chinese total vehicle sales were 18.5 million units in 2011, having overtaken the US in 2009. China’s expressways network is expected to exceed the total length of the US Interstate Highway system within the next couple of years.

The country is currently the world’s second-largest consumer and net importer of oil behind the US. Production in 2010 was 4.1 mbpd, but is expected by researchers at the China University of Petroleum to peak within the next few years. China already relies heavily on Middle Eastern oil producers – chiefly Iran and Saudi Arabia – for close to 50% of its oil imports.

China’s voracious appetite for energy has three major consequences for the world at large.

The first is pressure on world energy prices. While oil consumption has been declining in the rich Western nations since 2006, China has accounted for around half of world demand growth and thus much of the rise in oil prices. In 2009 China became a net coal importer, which has already had a noticeable impact on international coal markets.

The second implication of China’s hunger for energy concerns the country’s greenhouse gas (GHG) emissions and contribution to global climate change. In 2006 China overtook the U.S. as the largest absolute emitter of GHGs. China plans to reduce its energy intensity – energy consumed per unit of GDP – by 31 percent between 2010 and 2020. Beijing also recently announced a plan to introduce a moderate carbon tax. The world desperately needs China to accelerate its transition to low-carbon fuels to help avoid a climate catastrophe.

The third big ramification of China’s growing energy use is geopolitical. Depletion of finite fossil fuels implies increasing competition with other countries – notably the U.S. – over access to energy resources. In December 2011 President Obama announced that the U.S. military would be shifting its main focus from the Middle East to the Asia-Pacific area, obviously to counter China’s growing influence in the area. Nonetheless, the military actions by the US and its allies in Africa and the Middle East could be partly aimed at restricting China’s access to oil.

For its part, China is rapidly modernising its military, reportedly spending around $100 billion on defence in 2010. But Beijing’s main strategy has so far been to lock up energy resources in bilateral contracts with producer countries. And Chinese oil companies – mostly state-owned – have been investing aggressively in many resource-rich nations.

Looking ahead, three scenarios present themselves.

One is a derailment of the Chinese growth juggernaut. Concerns are mounting that the real estate bubble could soon burst, landing China with the same fate as Japan, whose economy stagnated for more than a decade after its property and equity bubbles burst in the early 1990s.

A second scenario is that China continues its relentless growth, powered principally by fossil fuels. This would be a world of rising carbon emissions and escalating geopolitical tensions. But in the face of oil and coal depletion, this path will also come to an end sooner or later.

Thirdly, if the Chinese government is really serious about transforming their energy-economy system to one that is sustainable and provides greater energy security, it could conceivably lead the world in a transition to renewable energy sources.

One thing is sure: when the Chinese jump, the world shakes.

Published in Engineering News, 3 February 2012.

http://www.engineeringnews.co.za/article/when-china-jumps-the-world-shakes-2012-02-03

Tension between Western powers and Iran, which has been simmering for decades, has heated up considerably in recent weeks and is in danger of boiling over into full-scale military conflict.

Because South Africa sources about a quarter of its crude oil imports — about 100 000 barrels a day — from Iran and another quarter from neighbouring Saudi Arabia, geopolitical events involving these countries could seriously knock the local economy.

The South African government should be crafting contingency plans to deal with possible fuel supply disruptions and price surges.

The ostensible reason for the tension is Iran’s nuclear programme, which Tehran insists is for civilian energy production only, but Western countries allege it is a cover for the production of nuclear weapons.

But it is no secret that energy security is a major driver of United States and Nato foreign policy and that Iran possesses the world’s second-largest reserves of both natural gas and oil. Moreover, the Islamic state has close ties with Russia and China, both of which have invested heavily in Iran and supplied it with conventional weaponry and, in the case of Russia, nuclear energy technology.

The hawkish Israeli leadership continues to threaten a “pre-emptive” military strike on Iran’s nuclear facilities. Defence Minister Ehud Barak recently stated that after September it would be too late to disable Iran’s nuclear-enrichment capabilities because some of the installations were being moved underground.

For now, however, the US and European Union (EU) are opting to use economic pressure on Tehran. On New Year’s Eve President Barack Obama signed into law the controversial National Defence Authorisation Act that, among other provisions, imposes harsh economic sanctions on corporations or central banks that transact with the Central Bank of Iran. The legislation, due to come into effect within six months, aims to obstruct the sale of Iranian oil exports and thereby deprive Tehran of critical oil revenues.

Although the Act authorises Obama to grant waivers in cases in which oil purchasers experience difficulty in reducing their consumption of Iranian crude, the sanctions may force South Africa to find alternative suppliers and pay higher prices for one-quarter of its oil imports. So far, the government has not decided how it will respond.

On January 4 the EU agreed in principle to establish an embargo on oil imports from Iran, which sells 600 000 barrels a day to the bloc. Analysts from French bank Société Générale warned that an embargo could send Brent crude prices into the $125 to $150 a barrel range.

As a result of the existing and threatened sanctions, Iran’s currency has depreciated a precipitous 40% in the past month, rendering many imports increasingly unaffordable. In response to the sanctions Iran has threatened to close the Straits of Hormuz, the narrow “choke point” in the Persian Gulf through which one-third of the world’s seaborne oil is shipped. At the end of December the Iranian military conducted 10 days of war games in the straits — and now the US and Israel are preparing to hold their largest joint naval exercises in the Gulf.

Both sides have a lot to lose from an all-out war: much of Iran’s infrastructure would be destroyed, whereas spiking oil prices would deal another crippling blow to fragile, debt-ridden Western economies. Nonetheless, there is a danger that the current brinkmanship could result in a miscalculation that triggers a “shooting incident”. Société Générale reckons a temporary closure of the Straits of Hormuz could result in oil spiking to between $150 and $200 a barrel.

South Africa would suffer economic consequences with the rest of the world, much as we did after the last oil spike in 2008 that helped to spur the great recession.

In the past few years South Africa has experienced several episodes of localised petroleum product shortages, including road construction companies being unable to source bitumen, households facing shortages of liquefied petroleum gas, aeroplanes being grounded because of insufficient jet fuel stocks and petrol and diesel pumps running dry at hundreds of service stations.

Although caused by temporary problems at local refineries, these events revealed both inadequate strategic reserves of refined petroleum products and the fragile nature of our logistics chains. Fuel shortages can cause great inconvenience to commuters and substantial financial losses to businesses. They can also be devastating to farmers if they occur at critical harvesting or planting times.

The threat of military conflict involving Iran should be taken seriously by the South African government. Authorities should formulate emergency response plans to deal with sudden and severe limitations on petroleum imports. They must be ready to implement measures for rapid demand restraint — such as carpooling and eco-driving — in combination with a fuel rationing system that includes a prioritisation plan to ensure the continued functioning of emergency services, the transporting of medical supplies, food production and distribution, and deliveries of coal to power stations.

In addition, the state must have plans to respond to the possible social panic, hoarding behaviour or civil unrest that could accompany dislocations in fuel and food supplies and sharply rising prices.

Let us not repeat the folly of denial and complacency that precipitated the electricity crisis in 2008, but rather take positive steps to build our resilience against external shocks.

Published in the Mail & Guardian, 20 January 2012.

http://mg.co.za/article/2012-01-20-barrelling-towards-fuel-shortages/

“In 2010, 34.3% of the African population, or 313 million people, were classified as middle class, compared with 26.2% or 111 million people in 1980… The class is defined as those who spend between $2 and $20 a day, a range the bank says is appropriate given the cost of living in the world’s poorest continent.”

Meanwhile, in the United States “the poverty level for 2011 was set at $22,350 (total yearly income) for a family of four”, which translates to $15.3 per person per day.

So is the way to solve US poverty is to let them live in mud huts and eat maize, so their ‘overheads’ are lower? Then by African standards they’ll be back in the middle class.

By comparison, the poverty line in SA is about R500 per person per month ($2 a day). Almost half of our population of 50 million live below the poverty line, despite SA being categorised as an “upper-middle income country”. We are one of the most unequal societies in the world, and income inequality has deteriorated since 1994.

Where would you rather be poor?

These days the news is full of dire warnings about another financial meltdown emanating from the sovereign debt crisis in Europe. Professor Nouriel Roubini, who was catapulted to international fame after correctly predicting the 2008 financial crash, says Europe is sliding into a ‘double-dip’ recession – if not depression – and a break-up of the eurozone is increasingly likely.

So in the face of this downside economic risk, why does the price of oil remain stuck above $100 per barrel? What are the short, medium and long-term prospects for oil prices? And most importantly, what do the underlying currents imply for future economic prosperity?

To answer these questions, we need to interrogate the ‘usual suspects’: the insatiable Chinese dragon; supply fundamentals; the OPEC (Organisation of Petroleum Exporting Countries) cartel; the geopolitical risk factor; and assorted speculators.

Before starting the inquisition, some historical context is useful. Between 1986 and 2003 the oil price traded in a remarkably stable and narrow range, averaging about $20 per barrel. From 2003, it rose steadily for several years and then spiked dramatically to reach an all-time nominal peak of $147/barrel in July 2008. When the world sank into recession after the global financial crisis later that year, demand for oil fell rapidly and the oil price plunged to around $40/barrel. Since then, the price has ratcheted up again, and has traded in triple figures for the whole of 2011.

The resilience of the oil price reflects first and foremost the tightness between the global supply and demand for oil.

Despite oil consumption having apparently peaked a few years ago in the industrialised countries, demand for oil products continues to grow apace in emerging economies.

China leads the pack, expanding its oil consumption by nearly 10% a year. Last year 13 million new cars were sold in China, topping US vehicle sales for the first time ever. And it seems that whenever the oil price falls, China taps into its vast foreign exchange reserves – over $3 trillion and counting – to stockpile crude for its strategic petroleum reserve.

Meanwhile, oil producers can’t seem to meet demand like they used to. A number of independent oil analysts have been warning for years that oil production could reach its all-time peak early in the 21^st century. Now even the International Energy Agency agrees that conventional crude oil output likely peaked in 2006. The data show that world liquid fuel production has been essentially stagnant for the past six years, aside from an increase in biofuel output that has in turn boosted food prices.

Global spare oil capacity is now minimal, which means that the slightest market disturbance can trigger big price fluctuations.

Furthermore, most new oil sources outside a few Persian Gulf states – many of which are in deep water – have marginal production costs of around $80 per barrel. Canada’s tar sands have marginal costs of about $90-100.

Another perennial suspect is OPEC countries: most of them can no longer ‘afford’ for the price to drop below $100, as they are dependent on high oil revenues to maintain government spending and social stability.

Speculators no doubt played a part in amplifying the wild price gyrations in 2007-2009, but without fundamental price drivers they would have nothing to bet on.

Our final suspect is geopolitical risk. Certainly, the conflict in Libya this year played a significant role by taking about 1.2 million barrels per day of world oil exports offline. And tensions persist throughout the Middle East region, centred now on Syria and Iran.

So all in all, there are many forces keeping the oil price in three digits. Meanwhile, there seems to be a ceiling for oil prices at around $120; above this level, it destroys demand.

Forecasting oil prices with any great precision is notoriously difficult. Nonetheless, we can be reasonably confident about certain trends.

In next year or two the oil price kite will continue to be buffeted by the winds of financial turmoil and an increasingly tight demand/supply balance. If the world economy continues to grow, spare oil capacity will essentially disappear next year. But if Europe falls into a financial/economic abyss, the oil price could drop markedly, although probably not for very long.

For the remainder of this decade, the greatest likelihood is that oil prices will continue their volatile swings, but around a rising trend driven by falling supply.

Beyond that, the trajectory for oil prices will depend largely on how governments and societies respond to diminishing oil supplies. If they attempt to continue business-as-usual and compete for a shrinking pool of the black liquid, it will become increasingly unaffordable and engender economic chaos.

If, on the other hand, there is a concerted mobilisation to reduce oil dependency through conservation and efficiency, investing in alternative energy supplies, and electrifying transport systems, then eventually the oil price train could run out of steam.

Indeed, the economic fortunes of the world hinge on which of these scenarios comes to pass. The window of opportunity for launching a crash programme to mitigate the impending decline in oil production and accelerate a transition to a sustainable global economy is rapidly closing.

So fasten your seatbelt and tighten your economic belt: 2012 promises to be another wild ride on the oil roller-coaster.

Published in the Mail & Guardian, 25 November 2011.

After a hectic Rugby World Cup Final and a pool tournament (which I lost by one point in sympathy with the Tricoleurs), I retired to bed soon after 8pm. Just before dropping off, I was rudely shaken from my impending slumber by the frantic, ear-splitting barking of my daughter Jade’s Daschund puppy. My wife rushed out onto the stoep, expecting to find one of the chickens in death throws at the hands (I mean, paws) of some or other nocturnal predator – genets and mongooses being the most common culprits. However this time we could hear a deafening fight for survival going on across the stream on our neighbour’s property – it sounded something between a Jack Russell and a young baboon screaming in agony.

Throwing caution to the wind (well, actually it was a perfectly still evening), I donned my wellington boots, grabbed my spotlight torch and bravely headed off to investigate what foul murder was taking place. I jogged up the path through our little grove and slipped through the gate onto our neighbour’s access road, following it down a short hill to where it crosses the stream. There I stopped and pulled the trigger on my torch, and a one million candle power beam illuminated the violent scene some 25 metres up the track.

To my great surprise, I witnessed a tug-o-war between two Honey Badgers, the ‘rope’ being a third Badger. I watched in fascination as these black-and-silver, solid but squat little beasts fought in a ferocious tumble of teeth and claws. They stand about 30cm high and are up to a metre in length from nose to tail tip. After an eternity of seconds, they suddenly stopped fighting and screeching, and looked towards me. At least one immediately started running towards me, fearless (it seemed fearless too).

Instantly deciding that ‘discretion was the better part of valour’ (apologies to Chick Henderson, the venerable SA rugby commentator), I turned tail and sprinted back up the hill. Now in case you think I was unduly cautious, don’t let the sweet-sounding name “honey badger” mistake you. The Afrikaans name for this rugged creature is the “Ratel”, a name adopted for the South African-made armoured troop vehicle celebrated for its ability to withstand landmine explosions. And if you’ve watched the classic Jamie Uys film “The Gods Must Be Crazy II” (which coincidently – or not – I watched for the first time just a week ago), you’ll know that once a Ratel bites your boot, it never lets go.

When I reached the top of the rise after about 40 metres I stopped momentarily and shone my torch back down the track – only to see two bright blue lights growing larger every split second. No, it wasn’t the police; it was the Ratel’s eyes reflecting the torch light. So on I sprinted for another 40 yards or so till I reached the wrought-iron entrance gate, where I paused again to see if my stalker had given up the chase. But no, it was still in hot pursuit! Over-wrought was not an option, so I squeezed between the bars of the gate and hurtled down the road, jumped over a barb-wire fence and raced around to our cottage, shouting to Jacqui to get our two diminutive dogs inside.

Whew, that was close! Panting like a dog, I retrieved my Field Guide to Mammals from the bookshelf and flipped to the Honey Badger entry. There the section on behaviour confirmed the prudence of my quick-witted reactions: “Very territorial and aggressive. Have been known to attack elephant and buffalo, and humans when threatened.”

In any event, I felt quite chuffed as I’d managed to break up the fight – clearly at least one Ratel had engaged the classic psychological defence mechanism of ‘transference’, and decided to vent its aggression on me instead of its rivals. The rest of the night, all was peaceful and quiet on the little Riverndale Farm we know so well.

In case you think I’m over-dramatising, check this out:

http://www.badassoftheweek.com/honeybadger.html

In Part 1, Jeremy outlines our “addiction” to oil, and details three assumptions that we have about oil — namely business as usual will prevail, that there is plenty of oil left, and markets will solve the problem of depletion. For each assumption, Jeremy provides a reality check.

http://www.youtube.com/watch?v=ooXpYkLzLCQ

In Part 2, Jeremy continues to detail our erroneous assumptions about oil and its substitutes, and shows us how we are heading for a reality check mate. This is followed by an analysis of the global and South African implications of Peak Oil.

http://www.youtube.com/watch?v=d719QRRPC-A&feature=related

Part 3 focuses on how we can respond to the challenges of Peak Oil. Jeremy argues that our society must urgently embark on a ’sustainability mobilisation’ that revolutionises our energy, transport and industrial systems, underpinned by a shift in values to reflect environmental realities. He suggests practical responses that can be taken by government, businesses and individuals. He concludes with a reminder that Peak Oil is NOW, that the impacts will intensify, and that proactive mitigation can ease the inevitable transition to sustainability.

http://www.youtube.com/watch?v=CEqOK5FaTSU&feature=related

The Department of Energy’s “Integrated Electricity Resource Plan
2010″ (IRP2010) aims to guarantee security of energy supply, diversify
the country’s energy mix and reduce carbon dioxide emissions over the
next 20 years. After a round of public consultation, the DoE presented a
revised plan to Cabinet, which approved it on 17 March.

The latest publicly available version, a “revised balanced scenario”
(RBS), is based on a string of deeply flawed assumptions and mean the
country is being steered further down an unsustainable path towards
economic contraction, social dislocation and environmental degradation.

This is a critical juncture in our country’s history, where energy
investment decisions can play a pivotal role in the transition to a
sustainable socio-economic system.

The RBS displays a worrying lack of appreciation of the global and
domestic energy and resource contexts, includes problematic economic and
social parameters, and shows a callous disregard for several critical
environmental factors.

To begin with, several assumptions underlying this scenario are
highly problematic in the face of the imminent decline in global oil
production and its probable impacts.

Most obviously, diesel to fuel new - not to mention existing - open
cycle gas turbines (OCGTs) will most likely be prohibitively expensive
by 2020, if not earlier.

More generally, the costs of the build programme are likely to
escalate substantially as oil prices drive inflation and interest rates
higher.

The assumption of 4.6% annual economic growth is highly unrealistic
in the context of continuing oil price shocks and looming supply
constraints.

Deteriorating economic conditions could also jeopardise imports of coal and electric power from neighbouring countries.

Meanwhile, over the coming years our transport system will need to be
progressively weaned off oil and powered by electricity instead.
Replacing our current fleet of over eight million road vehicles with
electrified transport will require several additional gigawatts of power
capacity.

But oil is not the only fossil fuel that is rapidly depleting. Global
and South African coal production cannot keep pace with voraciously
growing appetites from the likes of China and India for much longer.
Research published in the academic journal Energy last year suggests
that world coal energy output could peak this year, sparking a dramatic
rise in prices.

According to several scientific studies published in the past year,
South Africa’s own rate of coal production is very likely to peak this
decade.

Thus whether sourced from home or abroad, the coal needed to feed new
- and possibly old - thermal power stations will become increasingly
expensive and at some point simply unavailable. This flies in the face
of the RBS’s projection that coal costs will decrease from R300 to R200
per tonne.

Other economic parameters contained in the IRP2010 revised scenario
are equally tenuous. For example, assuming the exchange rate will hold
at R7.40/$ is unrealistic in the face of looming oil shocks, which
historically have triggered capital flight and sharp currency
depreciation.

Furthermore, the RBS projections exclude the potentially enormous
costs of decommissioning power plants and of storing and safely
disposing of spent fuel (if that is even possible).

From a social equity perspective, the assumed real discount rate of
8% is much too high, as it effectively writes off the welfare of future
generations. It contrasts starkly with the much lower discount rates
assumed in the Stern Review on the Economics of Climate Change (0.1%)
and our government’s own Long Term Mitigation Scenarios.

We cannot assume that future generations will be wealthier - in fact,
the greater likelihood, given fossil fuel depletion, environmental
degradation and climate change, is that they will be economically poorer
than we are today. Thus consumption by our children will be even more
valuable than it is for us, which should be reflected in a zero (or even
negative) discount rate.

Environmentally, too, the current IRP has major shortcomings.

Water scarcity seems to be totally disregarded, and could impose a tough binding constraint on energy production.

Negative environmental and social externalities - like air and water
pollution and associated health impairment from coal combustion - are
not sufficiently incorporated into the costs. A recent peer-reviewed
academic study calculates that the hidden costs of coal mining and use
in the USA amounts to approximately $345 billion a year - enough to
nearly treble the price of coal-fired electricity.

The rate at which carbon dioxide emissions are reduced in the RBS is
much too slow, and ignoring the carbon content of imported coal is
arbitrary.

And has anyone in the government considered the possible impact of
sea level rise on coastal nuclear power plants, which are supposed to
last at least 40 years? Perhaps the tragic events in Japan will provide a
needed jolt.

Grounding the IRP on these realities has some profound implications.

First, the levelised costs of the various energy sources change
significantly. Taking into account the likely trend of rising coal
prices, as well as incorporating the external costs of coal, means that
coal-fired electricity is no longer a cheap option. Power from OCGTs
will quickly rise off the scale of affordability. And incorporating full
life-cycle costs into nuclear calculations would substantially change
its economic profile.

Meanwhile, economies of scale in the production of solar and wind
technologies will reduce their average costs over time. Thus renewables
are actually much more economically favourable than presented in the
RBS.

Second, there is a major risk of power shortages down the line,
unless the economy contracts substantially. If we remove the new build
options from the RBS that are likely to be unaffordable, unavailable or
undesirable, we are left with a meagre net increase in national power
capacity of just 9 gigawatts by 2030.

Three major strategies should be followed to meet the laudable goals of the IRP.

First, our country needs a much more ambitious energy conservation
and efficiency programme that aims to eliminate wastage of energy,
alleviate bottlenecks in the roll-out of the solar water heater
programme, and provide simple and cheap solar cookers - especially to
low-income households.

Second, several critical institutional reforms must be accelerated.
The renewable energy feed-in-tariff (REFIT) must be implemented urgently
so that small and large-scale independent power producers have the
certainty needed to undertake investments. Electricity distribution must
be extricated from Eskom’s monopoly power. And residential consumers
and small businesses should no longer subsidise multinational mining
companies who pay discount rates for bulk electricity.

Third, government must lead a massive, crash programme of investment
to scale up local renewable energy production capacity. As in a war-time
mobilisation - for that is the urgency we face - car factories should
be retooled and workers retrained to manufacture solar photovoltaic
panels, concentrated solar plants and wind turbines. This will boost
local employment and incomes and reduce reliance on imported energy and
equipment.

The so-called Integrated Resource Plan lacks an integrated vision of
the present and future based on a realistic assessment of resource
availability and the waste-absorption capacity of the environment.

We are at a critical turning point in the history of our country and
indeed our species: either we make a successful transition to a
sustainable socio-economic regime, or we face a painful disintegration
of our partially industrialised civilisation.

Energy is the paramount resource sustaining any complex society, so
let us choose our energy path wisely to ensure a peaceful and prosperous
future for ourselves and our children.