Eric Reguly Environment Bits & Pieces
Post
19/09/06, Eric Reguly, Ethanol's dirty little secrets, (Source).
21/09/06, Eric Reguly, Facts discolour BP's green image, (Source).
19/09/06, Eric Reguly, Ethanol's dirty little secrets, (Back).
How do you convince consumers that what's bad for you is good for you? You feed them a load of bull, and hope they don't catch on. So it is with the Ontario and federal governments, which are spinning their pro-ethanol campaigns as consumer-friendly solutions to our energy and environmental problems.
Ontario's new ethanol pamphlet is a masterpiece of creative propaganda. The pamphlet is to be distributed at gas stations between now and January, when gas containing 5-per-cent ethanol -- that's the law -- arrives at a pump near you. The ad features a little girl in a pink sundress. She's frolicking in a green field and carrying a butterfly net. "Feel better about filling up," the ad says. The inside pages promise that "Cleaner air is on its way" because putting corn-based ethanol in your tank will reduce greenhouse gas emissions by some 800,000 tonnes a year.
Sounds good so far. Leaving aside the greenhouse gas claim, which is probably exaggerated and might be entirely bogus (more on this in a moment), the pamphlet is misleading by omission. Nowhere does it say your car's fuel economy will suffer because of the ethanol content. And guess what? Ethanol is generally not cheaper than gas -- sometimes it's far more expensive, as it was in the summer -- so the drop in fuel economy won't be offset by lower prices at the pump.
Nor does the pamphlet tell you the whole truth about the 5-per-cent content. The figure is an annual provincial average. Since huge swathes of Ontario, including Northern Ontario and some cities, are too far from the plants that can blend gas with ethanol, the mix will probably be consumed largely in the Greater Toronto Area. To maintain the 5-per-cent provincial average, drivers in the GTA might be forced to buy fuel with a higher ethanol content, perhaps as much as 10 per cent. That means GTA drivers will be paying even more to keep their cars on the road.
How much more? In a cover story called The Ethanol Myth, the October issue of Consumer Reports magazine provides a clue. Its editors tested two Chevy Tahoe SUVS, one which ran on gas, the other with a blend of 85-per-cent ethanol and 15-per-cent gas (known as E85). The average fuel economy of the E85 Tahoe was 27 per cent less than that of the gas-powered version. The driving range fell from 440 miles to about 300 miles. Acceleration also suffered. Science provides the answer. The energy content of ethanol is far less than that of gas, so you have to burn more ethanol to go the same distance.
Now, assume you are a driver in the GTA and have to fill up with a blend of 10-per-cent ethanol and 90-per-cent gas (or E10) starting in January. Based on the Consumer Reports calculations on E85, algebra says your fuel economy will suffer by about 3 per cent. That's not a lot. But it could be more depending on the volatility of ethanol prices. And it will certainly hurt you in the wallet if you do a lot of driving. Ontario's brochure doesn't highlight this, of course.
But you're supposed to feel good about the environmental benefits. While there is no doubt that burning ethanol emits less smog-causing pollutants and greenhouse gases than burning gasoline, several respected scientists have shown that making ethanol is an energy-intensive process that may actually increase emissions if you measure the energy inputs from the corn field (fertilizer, diesel fuel to power tractors and the like) to the retailer.
Ontario has a problem of its own that can only detract from the claims that ethanol is good for children and other living things: It has created local demand that cannot be met by local supply.
With the recent opening of Suncor's ethanol plant in Sarnia, the province has the capacity to produce about 400 million litres a year of ethanol. The 5-per-cent ethanol content rule will require about 750 million litres a year. The shortfall will have to be imported by truck, trains and ships, sometimes from great distances. The last time anyone looked, trucks, trains and ships still burned fuel. You can bet the government doesn't include these emissions in its calculations. Ontario is also importing corn to feed the ethanol plants.
If burning ethanol were the greatest thing since the elimination of leaded gas, you would think environmental groups would be cheering its arrival. They are not. Canadian environmental groups, such as the Pembina Institute, neither endorse nor condemn the fuel. In the United States, the Sierra Club has considered suing ethanol factories for violations to the Clean Air Act.
Thanks to Consumer Reports and other publications, Americans are starting to get the message that ethanol is a dead loss for consumers, a disaster for taxpayers because of the endless billions in subsidies and, at best, of marginal benefit to the environment. Yet in Canada, you will not find a politician who will even discuss ethanol's shortcomings. Ontario is diving head-first into an ethanol market of its own creation. The feds are next, with a national 5-per-cent renewable fuels (read: ethanol) requirement slated for 2010. Suncor and the corn farmers are beaming at your expense.
ereguly@globeandmail.com
21/09/06, Eric Reguly, Facts discolour BP's green image, (Back).
BP and its CEO, John Browne, have been through hell since early last year. There was the explosion at a Texas refinery that killed 15, the U.S. government accusations that the company illegally tried to corner the propane market, endless production problems and the Alaska oil spill that forced the company to shut down the enormous Prudhoe Bay field. In July, Lord Browne said he would hit the road in 2008.
Tarnished image? You bet. Still, BP takes pride in its reputation as the greenest of the big oil companies. BP no longer stands for the old British Petroleum; it became "Beyond Petroleum" a few years ago. Its symbol is the green and yellow starburst-like design that it named Helios, after the Greek sun god. Its gas stations are green and it wants you to know it is at the forefront of the alternative energy industry and is reducing greenhouse gas emissions from its operations in 100 countries.
In spite of the recent calamities, the greener-than-thou image has largely stuck. A pipeline rupture or two doesn't necessarily mean Beyond Petroleum is just cynical PR. Surely, BP is earning, or striving to earn, its green image. Or is it?
For answers, we go to BP's annual report, websites and the "carbon disclosure" update, all of them marvels of succinct disclosure and slick writing.
Let's start with the breakdown for capital expenditures and acquisitions. In 2005, the company spent $14.1-billion (U.S.) in this area, the vast majority of it on exploration and production (as any oil company that wants to stay in business should do). Spending on "gas, power and renewables" falls within this area. The amount? A mere $235-million, down from $524-million the year before. BP's otherwise helpful communications people in London won't break down the figure. You can bet the smallest portion goes to renewables: wind and solar power, hydrogen and the like.
Hold on. To its credit, BP last year launched a new company called BP Alternative Energy, which promises to invest $8-billion in "low carbon alternative power" such as wind power. Sounds good, except the amount is for 10 years: an average $800-million a year. At first glance, it's still an impressive figure. But compared with the annual capital expenditures, which ranged from $14.1-billion to $19.6-billion in the last three years, it's almost insignificant for a company pumping the "Beyond Petroleum" motto.
There are other investments too, all disclosed in the "Innovation" section of the carbon disclosure material. They range from the sponsorship of energy policy studies at various universities to research on a carbon dioxide "capture and storage" project in Algeria. The total value of the listed initiatives is about $120-million. But again, it's not as good as it sounds because BP has partners in all these projects, meaning it's not putting up the full amount. BP admits this, but won't break down the contribution figures.
Next we turn to BP's greenhouse gas emissions. BP takes great pride in its emissions-reduction program. It says it's ahead of schedule on this front and last year was an impressive case in point. On a direct equity accounting basis -- that is, if it owns 40 per cent of a plant, it accounts for 40 per cent of plant output -- the output was 78 million tonnes in 2005, down from 81.7 million tonnes the year before, for a fall of 4.5 per cent. That's an extraordinary achievement for a company whose oil and gas sales are growing at double-digit rates.
Turns out BP uses a clever sleight-of-hand to arrive at the lower figure. In 2005, some 3.5 million tonnes of emissions came off the books because of "shutdowns," notably that of the huge Texas City refinery before hurricane Rita hit. Guess what? The refinery is coming back into production, along with its greenhouse gas output. In other words, the reduction of 3.5 million tonnes was not permanent.
BP also removed 2.2 million tonnes because of "portfolio changes," which is another way of saying plant sales. Those plants still exist, though under different ownership. So do their greenhouse gas emissions. Put the Texas City refinery and the unloaded plants back into the equation and BP's emissions actually rose in 2005.
Beyond Petroleum? Sure doesn't look that way. Last month, John Kenney, one of the advertising executives who helped to create BP's new green image, wrote in the New York Times: "I guess, looking at it now, 'beyond petroleum' is just advertising. It's become mere marketing -- perhaps it always was -- instead of a genuine attempt to engage the public in the debate or a corporate rallying cry to change the paradigm."
To be fair, BP was the first big oil company to admit that man-made global warming wasn't some piece of propaganda invented by the loony left. It, unlike Exxon Mobil, is throwing more than a token few pennies at alternative energy. It's just that BP is guilty of misleading advertising. It's promoting a deep green image. Shine a light on it and the colour fades considerably.
(Back)
21/09/06, Eric Reguly, Facts discolour BP's green image, (Source).
19/09/06, Eric Reguly, Ethanol's dirty little secrets, (Back).
How do you convince consumers that what's bad for you is good for you? You feed them a load of bull, and hope they don't catch on. So it is with the Ontario and federal governments, which are spinning their pro-ethanol campaigns as consumer-friendly solutions to our energy and environmental problems.
Ontario's new ethanol pamphlet is a masterpiece of creative propaganda. The pamphlet is to be distributed at gas stations between now and January, when gas containing 5-per-cent ethanol -- that's the law -- arrives at a pump near you. The ad features a little girl in a pink sundress. She's frolicking in a green field and carrying a butterfly net. "Feel better about filling up," the ad says. The inside pages promise that "Cleaner air is on its way" because putting corn-based ethanol in your tank will reduce greenhouse gas emissions by some 800,000 tonnes a year.
Sounds good so far. Leaving aside the greenhouse gas claim, which is probably exaggerated and might be entirely bogus (more on this in a moment), the pamphlet is misleading by omission. Nowhere does it say your car's fuel economy will suffer because of the ethanol content. And guess what? Ethanol is generally not cheaper than gas -- sometimes it's far more expensive, as it was in the summer -- so the drop in fuel economy won't be offset by lower prices at the pump.
Nor does the pamphlet tell you the whole truth about the 5-per-cent content. The figure is an annual provincial average. Since huge swathes of Ontario, including Northern Ontario and some cities, are too far from the plants that can blend gas with ethanol, the mix will probably be consumed largely in the Greater Toronto Area. To maintain the 5-per-cent provincial average, drivers in the GTA might be forced to buy fuel with a higher ethanol content, perhaps as much as 10 per cent. That means GTA drivers will be paying even more to keep their cars on the road.
How much more? In a cover story called The Ethanol Myth, the October issue of Consumer Reports magazine provides a clue. Its editors tested two Chevy Tahoe SUVS, one which ran on gas, the other with a blend of 85-per-cent ethanol and 15-per-cent gas (known as E85). The average fuel economy of the E85 Tahoe was 27 per cent less than that of the gas-powered version. The driving range fell from 440 miles to about 300 miles. Acceleration also suffered. Science provides the answer. The energy content of ethanol is far less than that of gas, so you have to burn more ethanol to go the same distance.
Now, assume you are a driver in the GTA and have to fill up with a blend of 10-per-cent ethanol and 90-per-cent gas (or E10) starting in January. Based on the Consumer Reports calculations on E85, algebra says your fuel economy will suffer by about 3 per cent. That's not a lot. But it could be more depending on the volatility of ethanol prices. And it will certainly hurt you in the wallet if you do a lot of driving. Ontario's brochure doesn't highlight this, of course.
But you're supposed to feel good about the environmental benefits. While there is no doubt that burning ethanol emits less smog-causing pollutants and greenhouse gases than burning gasoline, several respected scientists have shown that making ethanol is an energy-intensive process that may actually increase emissions if you measure the energy inputs from the corn field (fertilizer, diesel fuel to power tractors and the like) to the retailer.
Ontario has a problem of its own that can only detract from the claims that ethanol is good for children and other living things: It has created local demand that cannot be met by local supply.
With the recent opening of Suncor's ethanol plant in Sarnia, the province has the capacity to produce about 400 million litres a year of ethanol. The 5-per-cent ethanol content rule will require about 750 million litres a year. The shortfall will have to be imported by truck, trains and ships, sometimes from great distances. The last time anyone looked, trucks, trains and ships still burned fuel. You can bet the government doesn't include these emissions in its calculations. Ontario is also importing corn to feed the ethanol plants.
If burning ethanol were the greatest thing since the elimination of leaded gas, you would think environmental groups would be cheering its arrival. They are not. Canadian environmental groups, such as the Pembina Institute, neither endorse nor condemn the fuel. In the United States, the Sierra Club has considered suing ethanol factories for violations to the Clean Air Act.
Thanks to Consumer Reports and other publications, Americans are starting to get the message that ethanol is a dead loss for consumers, a disaster for taxpayers because of the endless billions in subsidies and, at best, of marginal benefit to the environment. Yet in Canada, you will not find a politician who will even discuss ethanol's shortcomings. Ontario is diving head-first into an ethanol market of its own creation. The feds are next, with a national 5-per-cent renewable fuels (read: ethanol) requirement slated for 2010. Suncor and the corn farmers are beaming at your expense.
ereguly@globeandmail.com
21/09/06, Eric Reguly, Facts discolour BP's green image, (Back).
BP and its CEO, John Browne, have been through hell since early last year. There was the explosion at a Texas refinery that killed 15, the U.S. government accusations that the company illegally tried to corner the propane market, endless production problems and the Alaska oil spill that forced the company to shut down the enormous Prudhoe Bay field. In July, Lord Browne said he would hit the road in 2008.
Tarnished image? You bet. Still, BP takes pride in its reputation as the greenest of the big oil companies. BP no longer stands for the old British Petroleum; it became "Beyond Petroleum" a few years ago. Its symbol is the green and yellow starburst-like design that it named Helios, after the Greek sun god. Its gas stations are green and it wants you to know it is at the forefront of the alternative energy industry and is reducing greenhouse gas emissions from its operations in 100 countries.
In spite of the recent calamities, the greener-than-thou image has largely stuck. A pipeline rupture or two doesn't necessarily mean Beyond Petroleum is just cynical PR. Surely, BP is earning, or striving to earn, its green image. Or is it?
For answers, we go to BP's annual report, websites and the "carbon disclosure" update, all of them marvels of succinct disclosure and slick writing.
Let's start with the breakdown for capital expenditures and acquisitions. In 2005, the company spent $14.1-billion (U.S.) in this area, the vast majority of it on exploration and production (as any oil company that wants to stay in business should do). Spending on "gas, power and renewables" falls within this area. The amount? A mere $235-million, down from $524-million the year before. BP's otherwise helpful communications people in London won't break down the figure. You can bet the smallest portion goes to renewables: wind and solar power, hydrogen and the like.
Hold on. To its credit, BP last year launched a new company called BP Alternative Energy, which promises to invest $8-billion in "low carbon alternative power" such as wind power. Sounds good, except the amount is for 10 years: an average $800-million a year. At first glance, it's still an impressive figure. But compared with the annual capital expenditures, which ranged from $14.1-billion to $19.6-billion in the last three years, it's almost insignificant for a company pumping the "Beyond Petroleum" motto.
There are other investments too, all disclosed in the "Innovation" section of the carbon disclosure material. They range from the sponsorship of energy policy studies at various universities to research on a carbon dioxide "capture and storage" project in Algeria. The total value of the listed initiatives is about $120-million. But again, it's not as good as it sounds because BP has partners in all these projects, meaning it's not putting up the full amount. BP admits this, but won't break down the contribution figures.
Next we turn to BP's greenhouse gas emissions. BP takes great pride in its emissions-reduction program. It says it's ahead of schedule on this front and last year was an impressive case in point. On a direct equity accounting basis -- that is, if it owns 40 per cent of a plant, it accounts for 40 per cent of plant output -- the output was 78 million tonnes in 2005, down from 81.7 million tonnes the year before, for a fall of 4.5 per cent. That's an extraordinary achievement for a company whose oil and gas sales are growing at double-digit rates.
Turns out BP uses a clever sleight-of-hand to arrive at the lower figure. In 2005, some 3.5 million tonnes of emissions came off the books because of "shutdowns," notably that of the huge Texas City refinery before hurricane Rita hit. Guess what? The refinery is coming back into production, along with its greenhouse gas output. In other words, the reduction of 3.5 million tonnes was not permanent.
BP also removed 2.2 million tonnes because of "portfolio changes," which is another way of saying plant sales. Those plants still exist, though under different ownership. So do their greenhouse gas emissions. Put the Texas City refinery and the unloaded plants back into the equation and BP's emissions actually rose in 2005.
Beyond Petroleum? Sure doesn't look that way. Last month, John Kenney, one of the advertising executives who helped to create BP's new green image, wrote in the New York Times: "I guess, looking at it now, 'beyond petroleum' is just advertising. It's become mere marketing -- perhaps it always was -- instead of a genuine attempt to engage the public in the debate or a corporate rallying cry to change the paradigm."
To be fair, BP was the first big oil company to admit that man-made global warming wasn't some piece of propaganda invented by the loony left. It, unlike Exxon Mobil, is throwing more than a token few pennies at alternative energy. It's just that BP is guilty of misleading advertising. It's promoting a deep green image. Shine a light on it and the colour fades considerably.
(Back)
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