Energy crisis

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Energy_crisis 

An energy crisis is any significant bottleneck in the supply of energy resources to an economy. In literature, it often refers to one of the energy sources used at a certain time and place, in particular those that supply national electricity grids or those used as fuel in Industrial development and population growth have led to a surge in the global demand for energy in recent years. In the 2000s, this new demand — together with Middle East tension, the falling value of the U.S. dollar, dwindling oil reserves, concerns over peak oil, and oil price speculation — triggered the 2000s energy crisis, which saw the price of oil reach an all-time high of $147.30 a barrel in 2008.

Causes

The gasoline shortages of World War II brought about the resurgence of horse-and-wagon delivery.

Most energy crisis have been caused by localized shortages, wars and market manipulation. Some have argued that government actions like tax hikes, nationalisation of energy companies, and regulation of the energy sector, shift supply and demand of energy away from its economic equilibrium. However, the recent historical energy crisis listed below were not caused by such factors. Market failure is possible when monopoly manipulation of markets occurs. A crisis can develop due to industrial actions like union organized strikes and government embargoes. The cause may be over-consumption, aging infrastructure, choke point disruption or bottlenecks at oil refineries and port facilities that restrict fuel supply. An emergency may emerge during very cold winters due to increased consumption of energy.

Large fluctuations and manipulations in future derivatives can have a substantial impact on price. Large investment banks control 80% of oil derivatives as of May 2012, compared to 30% only a decade ago. This increase contributed to an improvement of global energy output from 117 687 TWh in 2000 to 143 851TWh in 2008. Limitations on free trade for derivatives could reverse this trend of growth in energy production. Kuwaiti Oil Minister Hani Hussein stated that "Under the supply and demand theory, oil prices today are not justified," in an interview with Upstream.

Pipeline failures and other accidents may cause minor interruptions to energy supplies. A crisis could possibly emerge after infrastructure damage from severe weather. Attacks by terrorists or militia on important infrastructure are a possible problem for energy consumers, with a successful strike on a Middle East facility potentially causing global shortages. Political events, for example, when governments change due to regime change, monarchy collapse, military occupation, and coup may disrupt oil and gas production and create shortages. Fuel shortage can also be due to the excess and useless use of the fuels.

Historical crises

• 1970s energy crisis - caused by the peaking of oil production in major industrial nations (Germany, United States, Canada, etc.) and embargoes from other producers
  • 1973 oil crisis - caused by an OAPEC oil export embargo by many of the major Arab oil-producing states, in response to Western support of Israel during the Yom Kippur War
  • 1979 oil crisis - caused by the Iranian Revolution
    
• 1990 oil price shock - caused by the Gulf War
• The 2000–2001 California electricity crisis - Caused by market manipulation by Enron and failed deregulation; resulted in multiple large-scale power outages
• Fuel protests in the United Kingdom in 2000 were caused by a rise in the price of crude oil combined with already relatively high taxation on road fuel in the UK.
• North American natural gas crisis 2000-2008
• 2004 Argentine energy crisis
• North Korea has had energy shortages for many years.
• Zimbabwe has experienced a shortage of energy supplies for many years due to financial mismanagement.
• Political riots occurring during the 2007 Burmese anti-government protests were sparked by rising energy prices.

Kuwait's Al Burqan Oil Field, the world's second largest oil field

• 2000s energy crisis - Since 2003, a rise in prices caused by continued global increases in petroleum demand coupled with production stagnation, the falling value of the U.S. dollar, and a myriad of other secondary causes.
• 2008 Central Asia energy crisis, caused by abnormally cold temperatures and low water levels in an area dependent on hydroelectric power. At the same time the South African President was appeasing fears of a prolonged electricity crisis in South Africa."Mbeki in pledge on energy crisis". Financial Times. Retrieved 2008-02-10.
• In February 2008 the President of Pakistan announced plans to tackle energy shortages that were reaching crisis stage, despite having significant hydrocarbon reserves,. In April 2010, the Pakistani government announced the Pakistan national energy policy, which extended the official weekend and banned neon lights in response to a growing electricity shortage.
• South African electrical crisis. The South African crisis led to large price rises for platinum in February 2008 and reduced gold production.
• China experienced severe energy shortages towards the end of 2005 and again in early 2008. During the latter crisis they suffered severe damage to power networks along with diesel and coal shortages. Supplies of electricity in Guangdong province, the manufacturing hub of China, are predicted to fall short by an estimated 10 GW [DJS-Hour?]. In 2011 China was forecast to have a second quarter electrical power deficit of 44.85 - 49.85 GW.
• Nepal experienced a major energy crisis in 2015 when India imposed an economic blockade on Nepal. Nepal faced shortages of various kinds of petroleum products and food materials which severely affected Nepal's economy.
• The Gaza electricity crisis is a result of the tensions between Hamas, who rules the Gaza Strip, and the Palestinian Authority/Fatah, who rules the West Bank over custom tax revenue, funding of the Gaza Strip, and political authority. Residents receive electricity for a few hours a day on a rolling blackout schedule.
• 2019 California energy crisis

Emerging oil shortage

“Peak oil” is the period when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. It relates to a long-term decline in the available supply of petroleum. This, combined with increasing demand, significantly increases the worldwide prices of petroleum derived products. Most significant is the availability and price of liquid fuel for transportation.

The US Department of Energy in the Hirsch report indicates that “The problems associated with world oil production peaking will not be temporary, and past 'energy crisis' experience will provide relatively little guidance.”

Mitigation efforts

To avoid the serious social and economic implications a global decline in oil production could entail, the 2005 Hirsch report emphasized the need to find alternatives, at least ten to twenty years before the peak, and to phase out the use of petroleum over that time. Such mitigation could include energy conservation, fuel substitution, and the use of unconventional oil. Because mitigation can reduce the use of traditional petroleum sources, it can also affect the timing of peak oil and the shape of the Hubbert curve.

Energy policy may be reformed leading to greater energy intensity, for example in Iran with the 2007 Gas Rationing Plan in Iran, Canada and the National Energy Program and in the USA with the Energy Independence and Security Act of 2007 also called the Clean Energy Act of 2007. Another mitigation measure is the setup of a cache of secure fuel reserves like the United States Strategic Petroleum Reserve, in case of national emergency. Chinese energy policy includes specific targets within their 5-year plans.

Andrew McKillop has been a proponent of a contract and converge model or capping scheme, to mitigate both emissions of greenhouse gases and a peak oil crisis. The imposition of a carbon tax would have mitigating effects on an oil crisis. The Oil Depletion Protocol has been developed by Richard Heinberg to implement a powerdown during a peak oil crisis. While many sustainable development and energy policy organisations have advocated reforms to energy development from the 1970s, some cater to a specific crisis in energy supply including Energy-Quest and the International Association for Energy Economics. The Oil Depletion Analysis Centre and the Association for the Study of Peak Oil and Gas examine the timing and likely effects of peak oil.

Ecologist William Rees believes that

To avoid a serious energy crisis in coming decades, citizens in the industrial countries should actually be urging their governments to come to international agreement on a persistent, orderly, predictable, and steepening series of oil and natural gas price hikes over the next two decades.

Due to a lack of political viability on the issue, government mandated fuel prices hikes are unlikely and the unresolved dilemma of fossil fuel dependence is becoming a wicked problem. A global soft energy path seems improbable, due to the rebound effect. Conclusions that the world is heading towards an unprecedented large and potentially devastating global energy crisis due to a decline in the availability of cheap oil lead to calls for a decreasing dependency on fossil fuel.

Other ideas concentrate on design and development of improved, energy-efficient urban infrastructure in developing nations. Government funding for alternative energy is more likely to increase during an energy crisis, so too are incentives for oil exploration. For example, funding for research into inertial confinement fusion technology increased during the 1970s.

Kirk Sorensen and others have suggested that additional nuclear power plants, particularly liquid fluoride thorium reactors have the energy density to mitigate global warming and replace the energy from peak oil, peak coal and peak gas. The reactors produce electricity and heat so much of the transportation infrastructure should move over to electric vehicles. However, the high process heat of the molten salt reactors could be used to make liquid fuels from any carbon source.

2010s oil glut

Rather counterintuitively, the world economy has had to deal with the unforeseen consequences of the 2015-2016 oil glut also known as 2010s oil glut, a major energy crisis that took many experts by surprise. This oversupply crisis started with a considerable time-lag, more than six years after the beginning of the Great Recession: "the price of oil [had] stabilized at a relatively high level (around $100 a barrel) unlike all previous recessionary cycles since 1980 (start of First Persian Gulf War). But nothing guarantee[d] such price levels in perpetuity".

Social and economic effects

The macroeconomic implications of a supply shock-induced energy crisis are large, because energy is the resource used to exploit all other resources. Oil price shocks can affect the rest of the economy through delayed business investment, sectoral shifts in the labor market, or monetary policy responses. When energy markets fail, an energy shortage develops. Electricity consumers may experience intentionally engineered rolling blackouts during periods of insufficient supply or unexpected power outages, regardless of the cause.

Industrialized nations are dependent on oil, and efforts to restrict the supply of oil would have an adverse effect on the economies of oil producers. For the consumer, the price of natural gas, gasoline (petrol) and diesel for cars and other vehicles rises. An early response from stakeholders is the call for reports, investigations and commissions into the price of fuels. There are also movements towards the development of more sustainable urban infrastructure.

In 2006, survey respondents in the United States were willing to pay more for a plug-in hybrid car

 

Global New Investments in Renewable Energy

In the market, new technology and energy efficiency measures become desirable for consumers seeking to decrease transport costs. January 30, 2008 Planet Ark. Examples include:

• In 1980 Briggs & Stratton developed the first gasoline hybrid electric automobile; also are appearing plug-in hybrids.
• the growth of advanced biofuels.
• innovations like the Dahon, a folding bicycle
• modernized and electrifying passenger transport
• Railway electrification systems and new engines such as the Ganz-Mavag locomotive
• variable compression ratio for vehicles

Other responses include the development of unconventional oil sources such as synthetic fuel from places like the Athabasca Oil Sands, more renewable energy commercialization and use of alternative propulsion. There may be a Relocation trend towards local foods and possibly microgeneration, solar thermal collectors and other green energy sources.

Tourism trends and gas-guzzler ownership varies with fuel costs. Energy shortages can influence public opinion on subjects from nuclear power plants to electric blankets. Building construction techniques—improved insulation, reflective roofs, thermally efficient windows, etc.—change to reduce heating costs.

Crisis management

An electricity shortage is felt most acutely in heating, cooking, and water supply. Therefore, a sustained energy crisis may become a humanitarian crisis.

If an energy shortage is prolonged a crisis management phase is enforced by authorities. Energy audits may be conducted to monitor usage. Various curfews with the intention of increasing energy conservation may be initiated to reduce consumption. For example, to conserve power during the Central Asia energy crisis, authorities in Tajikistan ordered bars and cafes to operate by candlelight."Crisis Looms as Bitter Cold, Blackouts Hit Tajikistan". NPR. Retrieved 2008-02-10.

In the worst kind of energy crisis energy rationing and fuel rationing may be incurred. Panic buying may beset outlets as awareness of shortages spread. Facilities close down to save on heating oil; and factories cut production and lay off workers. The risk of stagflation increases.

2007 Russia–Belarus energy dispute

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/2007_Russia%E2%80%93Belarus_energy_dispute 

 

Druzhba pipeline goes from Russia through Belarus to other European countries

The Russia–Belarus energy dispute began when Russian state-owned gas supplier Gazprom demanded an increase in gas prices paid by Belarus, a country which has been closely allied with Moscow and forms a loose union state with Russia. It escalated on 8 January 2007, when the Russian state-owned pipeline company Transneft stopped pumping oil into the Druzhba pipeline which runs through Belarus because Belarus was siphoning the oil off the pipe without mutual agreement. On 10 January, Transneft resumed oil exports through the pipeline after Belarus ended the tariff that sparked the shutdown, despite differing messages from the parties on the state of negotiations.

The Druzhba pipeline, the world's longest, supplies around 20% of Germany's oil. It also supplies oil to Poland, Ukraine, Slovakia, the Czech Republic, and Hungary.

Background

Oil pipelines in Europe and Northwestern Asia.

For a long time, the gas price for most of the former USSR republics was significantly lower than for the Western European countries. In 2006 Belarus paid only $46 per 1000 m³, a fraction compared to $290 per 1000 m³ paid by Germany. The annual Russian subsidies to the Belarusian economy were around $4 billion, as Russian president Vladimir Putin said on 9 January 2007. In 2006 Russia announced a higher price for 2007. After Alexander Lukashenko, President of Belarus, rejected this price change, and without a new treaty, Gazprom threatened to cut gas supplies to Belarus from 10:00 MSK on 1 January 2007. Both sides finally agreed on the following terms:

• Russian gas to be sold to Belarus for $100 per 1000 m³ (compared to Gazprom's original request of $200 per 1000 m³)
• Belarus to sell Gazprom 50% of its national gas supplier Beltransgaz for the maximal price of $2.5 billion 
• Gas prices for Belarus to gradually rise to the European market price by 2011
• Belarus's transit fees for Russian gas to increase by around 70% 

Another part of the energy dispute is the dispute over oil. In 1995, Russia and Belarus agreed that Russia would not impose any customs on oil exported to Belarus. In exchange, the revenues from this oil processed in Belarus would be shared by 15% for Belarus and 85% for Russia. In 2001, Belarus unilaterally canceled this agreement while Russia continued its duty-free exports. Lukashenko's state kept all the revenues, and many Russian oil companies moved their processing capacities to Belarus. On this arrangement, Russia also lost billions of dollars annually. Belarus imposed a tariff of US$45 per ton of oil flowing through the Druzhba pipeline, prompting Russia to claim that the move was illegal and to threaten retaliation, since it contradicts bilateral trade agreements and worldwide practice. Only imported or exported goods are being tariffed while transit goods are not objects of tariffing. Russia rejected paying the newly imposed Belarusian tariffs.

In compensation, Belarus began siphoning off oil from the pipeline. According to Semyon Vainshtok, the head of Russia's pipeline monopoly Transneft, Belarus had siphoned off 79,900 metric tons of oil since 6 January. Vainshtok said this was illegal and the move was made "without warning anyone." In response, Russia stopped oil transport on 8 January.

A Belarusian team led by Vice-Premier Andrei Kobyakov flew to Moscow on 9 January to pursue a solution but initially reported that they had not been able to start negotiations.

On 10 January, the Belarusian government lifted the tariff, and Russia agreed to start negotiations. The oil flow was resumed at 05:30 GMT on 11 January. In the wake of the dispute, Gazprom acquired 50% stake in the Belarusian gas pipeline operator Beltransgaz for 2.5 Billion USD.

August 2007 developments

Following the alleged violation of previous agreements and the failure of negotiations, on 1 August 2007 Gazprom announced that it would cut gas supplies to Belarus by 45% from 3 August over a $456 million debt. Talks are continuing and Belarus has asked for more time to pay. Although the revived dispute is not expected to hit supplies to Europe, the European Commission is said to view the situation 'very seriously'. Following overnight negotiations in Moscow, on 3 August, $190 million of the debt was repaid, and Belarus was given a further week to pay the remainder or face a 30% cut in supplies.

As of 8 August Belarus has fully paid its $460 million debt for Russian natural gas supplies, ending a dispute between the country and Gazprom [RTS: GAZP].

Related disputes

The situation is reminiscent of other recent price tensions between Russia, one of the world's energy superpowers, and other states since the start of 2005. These have resulted in increases in the prices paid for gas by Moldova (now paying US$170 per 1,000 cubic meter), Georgia (US$235 per 1,000 cubic meter) and Ukraine (following the 2006 Russia-Ukraine gas dispute, which also resulted in a 4-day cut to European gas supplies).| with Azerbaijan having recently stopped oil exports to Russia.

On 29 July 2006 Russia shut down oil export to Mažeikių oil refinery in Lithuania after an oil spill on the Druzhba pipeline system occurred in Russia’s Bryansk oblast, near the point where a line to Belarus and Lithuania branches off the main export pipeline. Transneft said it would need one year and nine months to repair the damaged section. Although Russia cited technical reasons for stopping oil deliveries to Lithuania, Lithuania claims that the oil supply was stopped because Lithuania sold the Mažeikių refinery to Polish company PKN Orlen.

Impact

All IEA member countries who are net oil importers have legal obligation to hold emergency oil reserves, which is equivalent to at least 90 days of net oil imports of the previous year. Furthermore, under the EU regulations there is obligation to hold reserves equivalent to 90 days of consumption, so unlike the gas dispute with Ukraine in 2006, consumers were not affected. Poland had an 80-day oil reserve. The Czech Republic reported drawing oil from its 100-day reserves. Had the dispute prolonged, it is likely that alternative supplies would have been secured. International oil prices were not significantly affected.

The involved countries have, however, expressed concerns about the reliability of the Russia-Belarus oil pipeline and Belarus as an oil middleman supplier.

The events have also provoked renewed discussion on the government policy of phasing out nuclear power in Germany.

Reaction

The European Union has demanded an "urgent and detailed" explanation, according to a spokesman for Energy Commissioner Andris Piebalgs.

Piotr Naimski, Poland's deputy economics minister who is responsible for energy security, stated "This shows once again that arguments among various countries of the former Soviet Union between suppliers and transit countries mean that these deliveries are unreliable from our perspective."

German Economy Minister Michael Glos stated that the dispute showed that "one-side dependencies must not be allowed to develop."

Following a meeting with European Commission President José Manuel Barroso in Berlin, German Chancellor Angela Merkel condemned the action, stating "It is not acceptable when there are no consultations about such actions". Commenting on the importance of trust in energy security, she said "That always destroys trust and no trusting, undisturbed cooperation can be built on that." Merkel continued by saying "We will certainly say to our Russian partners but also to Belarus that such consultations are the minimum when there are problems, and I think that that must become normality, as it would be within the European Union." Barroso said that "while there is no immediate risk to supplies, it is not acceptable" for such actions to be undertaken without prior consultation.

Energy Policy Act of 2005

From Wikipedia, the free encyclopedia

George W. Bush signing the Energy Policy Act of 2005, which was designed to promote US nuclear reactor construction, through incentives and subsidies, including cost-overrun support up to a total of $2 billion for six new nuclear plants.

The Energy Policy Act of 2005 (Pub.L. 109–58) is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems, changed US energy policy by providing tax incentives and loan guarantees for energy production of various types. The law also exempted hydraulic fracturing fluids from regulation under several environmental laws, and it repealed the Public Utility Holding Company Act of 1935, effective February 2006.

Provisions

General provisions

• The law exempted fluids used in the natural gas extraction process of hydraulic fracturing (fracking) from protections under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and CERCLA ("Superfund").
• Under an amendment in the American Recovery and Reinvestment Act of 2009, Section 406, the Energy Policy Act of 2005 authorizes loan guarantees for innovative technologies that avoid greenhouse gases, which might include advanced nuclear reactor designs, such as pebble bed modular reactors (PBMRs) as well as carbon capture and storage and renewable energy;
• the Act increases the amount of biofuel (usually ethanol) that must be mixed with gasoline sold in the United States to 4 billion US gallons (15,000,000 m³) by 2006, 6.1 billion US gallons (23,000,000 m³) by 2009 and 7.5 billion US gallons (28,000,000 m³) by 2012; two years later, the Energy Independence and Security Act of 2007 extended the target to 36 billion US gallons (140,000,000 m³) by 2022.
• it seeks to increase coal as an energy source while also reducing air pollution, through authorizing $200 million annually for clean coal initiatives, repealing the current 160-acre (0.65 km²) cap on coal leases, allowing the advanced payment of royalties from coal mines and requiring an assessment of coal resources on federal lands that are not national parks;
• it authorizes tax credits for wind and other alternative energy producers;
• it adds ocean energy sources, including wave and tidal power for the first time as separately identified, renewable technologies;
• it authorizes $50 million annually over the life of the law for biomass grants;
• it includes provisions aimed at making geothermal energy more competitive with fossil fuels in generating electricity;
• it requires the Department of Energy to:
  • study and report on existing natural energy resources including wind, solar, waves and tides;
  • study and report on national benefits of demand response and make a recommendation on achieving specific levels of benefits and encourages time-based pricing and other forms of demand response as a policy decision;
  • designate National Interest Electric Transmission Corridors where there are significant transmission limitations adversely affecting the public (the Federal Energy Regulatory Commission may authorize federal permits for transmission projects in these regions);
  • report in one year on how to dispose of high-level nuclear waste;
• it authorizes the Department of the Interior to grant leases for activity that involves the production, transportation or transmission of energy on the Outer Continental Shelf lands from sources other than gas and oil (Section 388);
• it requires all public electric utilities to offer net metering on request to their customers;
• it prohibits the manufacture and importation of mercury-vapor lamp ballasts after January 1, 2008;
• it provides tax breaks for those making energy conservation improvements to their homes;
• it provides incentives to companies to drill for oil in the Gulf of Mexico;
• it exempts oil and gas producers from certain requirements of the Safe Drinking Water Act;
• it extends the daylight saving time by four to five weeks, depending upon the year (see below);
• it requires that no drilling for gas or oil may be done in or underneath the Great Lakes;
• it requires that the Federal Fleet vehicles capable of operating on alternative fuels be operated on these fuels exclusively (Section 701);
• it sets federal reliability standards regulating the electrical grid (done in response to the 2003 North America blackout);
• it includes nuclear-specific provisions;
  • it extends the Price-Anderson Nuclear Industries Indemnity Act through 2025;
  • it authorizes cost-overrun support of up to $2 billion total for up to six new nuclear power plants;
  • it authorizes production tax credit of up to $125 million total a year, estimated at 1.8 US¢/kWh during the first eight years of operation for the first 6.000 MW of capacity, consistent with renewables;
  • it authorizes loan guarantees of up to 80% of project cost to be repaid within 30 years or 90% of the project's life;
  • it authorizes $2.95 billion for R&D and the building of an advanced hydrogen cogeneration reactor at Idaho National Laboratory;
  • it authorizes 'standby support' for new reactor delays that offset the financial impact of delays beyond the industry's control for the first six reactors, including 100% coverage of the first two plants with up to $500 million each and 50% of the cost of delays for plants three through six with up to $350 million each for;
  • it allows nuclear plant employees and certain contractors to carry firearms;
  • it prohibits the sale, export or transfer of nuclear materials and "sensitive nuclear technology" to any state sponsor of terrorist activities;
  • it updates tax treatment of decommissioning funds;
• it directs the Secretary of the Interior to complete a programmatic environmental impact statement for a commercial leasing program for oil shale and tar sands resources on public lands with an emphasis on the most geologically prospective lands within each of the states of Colorado, Utah, and Wyoming.

Tax reductions by subject area

• $4.3 billion for nuclear power
• $2.8 billion for fossil fuel production
• $2.7 billion to extend the renewable electricity production credit
• $1.6 billion in tax incentives for investments in "clean coal" facilities
• $1.3 billion for energy conservation and efficiency
• $1.3 billion for alternative fuel vehicles and fuels (bioethanol, biomethane, liquified natural gas, propane)
• $500 million Clean Renewable Energy Bonds (CREBS) for government agencies for renewable energy projects.

Change to daylight saving time

The law amended the Uniform Time Act of 1966 by changing the start and end dates of daylight saving time, beginning in 2007. Clocks were set ahead one hour on the second Sunday of March (March 11, 2007) instead of on the first Sunday of April (April 1, 2007). Clocks were set back one hour on the first Sunday in November (November 4, 2007), rather than on the last Sunday of October (October 28, 2007). This had the net effect of slightly lengthening the duration of daylight saving time.

Lobbyists for this provision included the Sporting Goods Manufacturers Association, the National Association of Convenience Stores, and the National Retinitis Pigmentosa Foundation Fighting Blindness.

Lobbyists against this provision included the U.S. Conference of Catholic Bishops, the United Synagogue of Conservative Judaism, the National Parent-Teacher Association, the Calendaring and Scheduling Consortium, the Edison Electric Institute, and the Air Transport Association. This section of the act is controversial; some have questioned whether daylight saving results in net energy savings.

Commercial building deduction

The Act created the Energy Efficient Commercial Buildings Tax Deduction, a special financial incentive designed to reduce the initial cost of investing in energy-efficient building systems via an accelerated tax deduction under section §179D of the Internal Revenue Code (IRC) Many building owners are unaware that the [Policy Act of 2005] includes a tax deduction (§179D) for investments in "energy efficient commercial building property" designed to significantly reduce the heating, cooling, water heating and interior lighting cost of new or existing commercial buildings placed into service between January 1, 2006 and December 31, 2013. §179D includes full and partial tax deductions for investments in energy efficient commercial building that are designed to increase the efficiency of energy-consuming functions. Up to $.60 for lighting, $.60 for HVAC and $.60 for building envelope, creating a potential deduction of $1.80 per sq/ft. Interior lighting may also be improved using the Interim Lighting Rule, which provides a simplified process to earn the Deduction, capped at $0.30-$0.60/square foot. Improvements are compared to a baseline of ASHRAE 2001 standards.

To obtain these benefits the facilities/energy division of a business, its tax department, and a firm specializing in EPAct 179D deductions needed to cooperate. IRS mandated software had to be used and an independent 3rd party had to certify the qualification. For municipal buildings, benefits were passed through to the primary designers/architects in an attempt to encourage innovative municipal design.

The Commercial Buildings Tax Deduction expiration date had been extended twice, last by the Energy Improvement and Extension Act of 2008. With this extension, the CBTD could be claimed for qualifying projects completed before January 1, 2014.

Energy management

The commercial building tax deductions could be used to improve the payback period of a prospective energy improvement investment. The deductions could be combined by participating in demand response programs where building owners agree to curtail usage at peak times for a premium. The most common qualifying projects were in the area of lighting.

Energy savings

Summary of Energy Savings Percentages Provided by IRS Guidance

Percentages permitted under Notice 2006-52 (Effective for property placed in service January 1, 2006 – December 31, 2008)

• Interior Lighting Systems 16⅔%,
• Heating, Cooling, Ventilation, and Hot Water Systems 16⅔%,
• Building Envelope 16⅔%.

Percentages permitted under Notice 2008-40 (Effective for property placed in service January 1, 2006 – December 31, 2013)

• Interior Lighting Systems 20%,
• Heating, Cooling, Ventilation, and Hot Water Systems 20%,
• Building Envelope 10%.

Percentages permitted under Notice 2012-22

• Interior Lighting Systems 25%,
• Heating, Cooling, Ventilation, and Hot Water Systems 15%,
• Building Envelope 10%.

Effective date of Notice 2012-22 – December 31, 2013; if §179D is extended beyond December 31, 2013, is also effective (except as otherwise provided in an amendment of §179D or the guidance thereunder) during the period of the extension.

Cost estimate

The Congressional Budget Office (CBO) review of the conference version of the bill estimated the Act would increase direct spending by $2.2 billion over the 2006-2010 period, and by $1.6 billion over the 2006-2015 period. The CBO did not attempt to estimate additional effects on discretionary spending. The CBO and the Joint Committee on Taxation estimated that the legislation would reduce revenues by $7.9 billion over the 2005-2010 period and by $12.3 billion over the 2005-2015 period.

Support

The collective reduction in national consumption of energy (gas and electricity) is significant for home heating. The Act provided gible financial incentives (tax credits) for average homeowners to make environmentally positive changes to their homes. It made improvements to home energy use more affordable for walls, doors, windows, roofs, water heaters, etc. Consumer spending, and hence the national economy, was abetted. Industry grew for manufacture of these environmentally positive improvements. These positive improvements have been near and long-term in effect.

The collective reduction in national consumption of oil is significant for automotive vehicles. The Act provided tangible financial incentives (tax credits) for operators of hybrid vehicles. It helped fuel competition among auto makers to meet rising demands for fuel-efficient vehicles. Consumer spending, and hence the national economy, was abetted. Dependence on imported oil was reduced. The national trade deficit was improved. Industry grew for manufacture of these environmentally positive improvements. These positive improvements have been near and long-term in effect.

Criticism

• The Washington Post contended that the spending bill was a broad collection of subsidies for United States energy companies; in particular, the nuclear and oil industries.
• Speaking for the National Republicans for Environmental Protection Association, President Martha Marks said that the organization was disappointed in the law because it did not support conservation enough, and continued to subsidize the well-established oil and gas industries that didn't require subsidizing.
• The law did not include provisions for drilling in the Arctic National Wildlife Refuge (ANWR); some Republicans claimed "access to the abundant oil reserves in ANWR would strengthen America's energy independence without harming the environment."
• Senator Hillary Clinton criticized Senator Barack Obama's vote for the bill in the 2008 Democratic Primary.
• The law exempted fluids used in the natural gas extraction process of hydraulic fracturing (fracking) from protections under the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and CERCLA. It created a loophole that exempts companies drilling for natural gas from disclosing the chemicals involved in fracking operations that would normally be required under federal clean water laws. This exclusion has been called the "Halliburton Loophole". Halliburton is the world's largest provider of hydraulic fracturing services. The measure was a response to a recommendation from the Energy Task Force, chaired by Vice President Dick Cheney in 2001. (Cheney had been Chairman and CEO of Halliburton from 1995 to 2000.)

Legislative history

The Act was voted on and passed twice by the United States Senate, once prior to conference committee, and once after. In both cases, there were numerous senators who voted against the bill. John McCain, the Republican Party nominee for President of the United States in the 2008 election voted against the bill. Democrat Barack Obama, President of the United States from January 2009 to January 2017, voted in favor of the bill.

Provisions in the original bill that were not in the act

• Limited liability for producers of MTBE.
• Drilling for oil in the Arctic National Wildlife Refuge (ANWR).
• Increasing vehicle efficiency standards (CAFE).
• Requiring increased reliance on non-greenhouse gas-emitting energy sources similar to the Kyoto Protocol.

To remove from 18 CFR Part 366.1 the definitions of "electric utility company" and exempt wholesale generator (EWG), that an EWG is not an electric utility company.

Preliminary Senate vote

June 28, 2005, 10:00 a.m. Yeas - 85, Nays - 12

Conference committee

The bill's conference committee included 14 Senators and 51 House members. The senators on the committee were: Republicans Domenici, Craig, Thomas, Alexander, Murkowski, Burr, Grassley and Democrats Bingaman, Akaka, Dorgan, Wyden, Johnson, and Baucus.

Final Senate vote

July 29, 2005, 12:50 p.m. Yeas - 74, Nays - 26

Legislative history

Energy Policy Act of 2005

Other short titles	Coal Leasing Amendments Act of 2005 Electricity Modernization Act of 2005 Energy Policy Tax Incentives Act of 2005 Energy Research, Development, Demonstration, and Commercial Application Act of 2005 Energy Tax Incentives Act of 2005 Federal Reformulated Fuels Act of 2005 Indian Tribal Energy Development and Self-Determination Act of 2005 EPAct 2005 John Rishel Geothermal Steam Act Amendments of 2005 National Geological and Geophysical Data Preservation Program Act of 2005 No Oil Producing and Exporting Cartels Act of 2005 NOPEC Oil Shale, Tar Sands, and Other Strategic Unconventional Fuels Act of 2005 Price-Anderson Amendments Act of 2005 Public Utility Holding Company Act of 2005 SAFE Act Set America Free Act of 2005 Spark M. Matsunaga Hydrogen Act of 2005 Underground Storage Tank Compliance Act
Long title	An Act to ensure jobs for our future with secure, affordable, and reliable energy.
Enacted by	the 109th United States Congress
Effective	August 8, 2005
Citations
Public law	109-58
Statutes at Large	119 Stat. 594
Codification
Acts amended	Energy Policy Act of 1992 Public Utility Regulatory Policies Act (PURPA) of 1978
Acts repealed	Public Utility Holding Company Act of 1935
Titles amended	16 U.S.C.: Conservation 42 U.S.C.: Public Health and Social Welfare
U.S.C. sections created	42 U.S.C. ch. 149 § 15801 et seq.
U.S.C. sections amended	16 U.S.C. ch. 46 § 2601 et seq. 42 U.S.C. ch. 134 § 13201 et seq.
Legislative history
Introduced in the House as H.R. 6 by Joe Barton (R–TX) on April 18, 2005 Committee consideration by House Energy and Commerce, House Education and the Workforce, House Financial Services, House Agriculture, House Resources, House Science, House Ways and Means, House Transportation and Infrastructure Passed the House on April 21, 2005 (249-183, Roll call vote 132, via Clerk.House.gov) Passed the Senate on June 28, 2005 (85-12, Roll call vote 158, via Senate.gov) Reported by the joint conference committee on July 27, 2005; agreed to by the House on July 28, 2005 (275-156, Roll call vote 445, via Clerk.House.gov) and by the Senate on July 29, 2005 (74-26, Roll call vote 213, via Senate.gov) Signed into law by President George W. Bush on August 8, 2005
Major amendments
American Recovery and Reinvestment Act of 2009 Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Stage	House of Representatives	Senate
Initial Debate
Introduction	April 18, 2005	June 11
Committed	April 18	June 14
Committee Name(s)	Energy and Commerce Education and the Workforce Financial Services Agriculture Resources Science Ways and Means Transportation and Infrastructure
Committee Stage	April 18 to 19
Committee Report	April 19
Floor Debate	April 19 to 21	June 14 to 23 Cloture invoked June 23
Passage	April 21	June 28
Conference Stage
Conference Demanded/Accepted	July 13	July 1
Conference Meetings	July 14 to 24
Report Filed	July 27
Final Passage
Final Debate	July 28	July 28 to 29 Budget Act waived, July 29
Concurrence and Passage	July 28	July 29
Presented to President	August 4
Signed	August 8

Energy security

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Energy_security 

 

A U.S. Navy F/A-18 Super Hornet displaying an "Energy Security" logo.

Energy security is the association between national security and the availability of natural resources for energy consumption. Access to (relatively) cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led to significant vulnerabilities. International energy relations have contributed to the globalization of the world leading to energy security and energy vulnerability at the same time.

In the context of energy security, security of energy supply is an issue of utmost importance. Moreover, it is time to define "a global energy policy model, which not only aims at ensuring an efficient environmental protection but also at ensuring security of energy supply".

Renewable resources and significant opportunities for energy efficiency and transitions exist over wide geographical areas, in contrast to other energy sources, which are concentrated in a limited number of countries. Rapid deployment of renewable energy and energy efficiency, and technological diversification of energy sources, would result in significant energy security and economic benefits.

Threats

The modern world relies on a vast energy supply to fuel everything from transportation to communication, to security and health delivery systems. Perhaps most alarmingly, peak oil expert Michael Ruppert has claimed that for every calorie of food produced in the industrial world, ten calories of oil and gas energy are invested in the forms of fertilizer, pesticide, packaging, transportation, and running farm equipment. Energy plays an important role in the national security of any given country as a fuel to power the economic engine. Some sectors rely on energy more heavily than others; for example, the Department of Defense relies on petroleum for approximately 77% of its energy needs. Threats to energy security include the political instability of several energy producing countries, the manipulation of energy supplies, the competition over energy sources, attacks on supply infrastructure, as well as accidents, natural disasters, terrorism, and reliance on foreign countries for oil.

Foreign oil supplies are vulnerable to unnatural disruptions from in-state conflict, exporters' interests, and non-state actors targeting the supply and transportation of oil resources. The political and economic instability caused by war or other factors such as strike action can also prevent the proper functioning of the energy industry in a supplier country. For example, the nationalization of oil in Venezuela has triggered strikes and protests in which Venezuela's oil production rates have yet to recover. Exporters may have political or economic incentive to limit their foreign sales or cause disruptions in the supply chain. Since Venezuela's nationalization of oil, anti-American Hugo Chávez threatened to cut off supplies to the United States more than once. The 1973 oil embargo against the United States is a historical example in which oil supplies were cut off to the United States due to U.S. support of Israel during the Yom Kippur War. This has been done to apply pressure during economic negotiations—such as during the 2007 Russia–Belarus energy dispute. Terrorist attacks targeting oil facilities, pipelines, tankers, refineries, and oil fields are so common they are referred to as "industry risks". Infrastructure for producing the resource is extremely vulnerable to sabotage. One of the worst risks to oil transportation is the exposure of the five ocean chokepoints, like the Iranian-controlled Strait of Hormuz. Anthony Cordesman, a scholar at the Center for Strategic and International Studies in Washington, D.C., warns, "It may take only one asymmetric or conventional attack on a Ghawar Saudi oil field or tankers in the Strait of Hormuz to throw the market into a spiral."

New threats to energy security have emerged in the form of the increased world competition for energy resources due to the increased pace of industrialization in countries such as India and China, as well as due to the increasing consequences of climate change. Although still a minority concern, the possibility of price rises resulting from the peaking of world oil production is also starting to attract the attention of at least the French government. Increased competition over energy resources may also lead to the formation of security compacts to enable an equitable distribution of oil and gas between major powers. However, this may happen at the expense of less developed economies. The Group of Five, precursors to the G8, first met in 1975 to coordinate economic and energy policies in the wake of the 1973 Arab oil embargo, a rise in inflation and a global economic slowdown. NATO leaders meeting in Bucharest Romania, in April 2008, may discuss the possibility of using the military alliance "as an instrument of energy security". One of the possibilities include placing troops in the Caucasus region to police oil and gas pipelines.

Long-term security

Long-term measures to increase energy security center on reducing dependence on any one source of imported energy, increasing the number of suppliers, exploiting native fossil fuel or renewable energy resources, and reducing overall demand through energy conservation measures. It can also involve entering into international agreements to underpin international energy trading relationships, such as the Energy Charter Treaty in Europe. All the concern coming from security threats on oil sources long term security measures will help reduce the future cost of importing and exporting fuel into and out of countries without having to worry about harm coming to the goods being transported.

The impact of the 1973 oil crisis and the emergence of the OPEC cartel was a particular milestone that prompted some countries to increase their energy security. Japan, almost totally dependent on imported oil, steadily introduced the use of natural gas, nuclear power, high-speed mass transit systems, and implemented energy conservation measures. The United Kingdom began exploiting North Sea oil and gas reserves, and became a net exporter of energy into the 2000s.

In other countries energy security has historically been a lower priority. The United States, for example, has continued to increase its dependency on imported oil although, following the oil price increases since 2003, the development of biofuels has been suggested as a means of addressing this.

Increasing energy security is also one of the reasons behind a block on the development of natural gas imports in Sweden. Greater investment in native renewable energy technologies and energy conservation is envisaged instead. India is carrying out a major hunt for domestic oil to decrease its dependency on OPEC, while Iceland is well advanced in its plans to become energy independent by 2050 through deploying 100% renewable energy.

Short-term security

Petroleum

A map of world oil reserves according to OPEC, 2013

Petroleum, otherwise known as "crude oil", has become the resource most used by countries all around the world including Russia, China (actually, China is mostly dependent on coal (70.5% in 2010)) and the United States of America. With all the oil wells located around the world energy security has become a main issue to ensure the safety of the petroleum that is being harvested. In the middle east oil fields become main targets for sabotage because of how heavily countries rely on oil. Many countries hold strategic petroleum reserves as a buffer against the economic and political impacts of an energy crisis. All 28 members of the International Energy Agency hold a minimum of 90 days of their oil imports, for example.

The value of such reserves was demonstrated by the relative lack of disruption caused by the 2007 Russia-Belarus energy dispute, when Russia indirectly cut exports to several countries in the European Union.

Due to the theories in peak oil and need to curb demand, the United States military and Department of Defense had made significant cuts, and have been making a number of attempts to come up with more efficient ways to use oil.

Natural gas

Countries by natural gas proven reserves, based on data from The World Factbook, 2014

Compared to petroleum, reliance on imported natural gas creates significant short-term vulnerabilities. The gas conflicts between Ukraine and Russia of 2006 and 2009 serve as vivid examples of this. Many European countries saw an immediate drop in supply when Russian gas supplies were halted during the Russia-Ukraine gas dispute in 2006.

Natural gas has been a viable source of energy in the world. Consisting of mostly methane, natural gas is produced using two methods: biogenic and thermogenic. Biogenic gas comes from methanogenic organisms located in marshes and landfills, whereas thermogenic gas comes from the anaerobic decay of organic matter deep under the Earth's surface. Russia is the current leading country in production of natural gas.

One of the biggest problems currently facing natural gas providers is the ability to store and transport it. With its low density, it is difficult to build enough pipelines in North America to transport sufficient natural gas to match demand. These pipelines are reaching near capacity and even at full capacity do not produce the amount of gas needed.

Nuclear power

Sources of uranium delivered to EU utilities in 2007, from the 2007 Annual report of the Euratom Supply Agency

Uranium for nuclear power is mined and enriched in diverse and "stable" countries. These include Canada (23% of the world's total in 2007), Australia (21%), Kazakhstan (16%) and more than 10 other countries. Uranium is mined and fuel is manufactured significantly in advance of need. Nuclear fuel is considered by some to be a relatively reliable power source, being more common in the Earth's crust than tin, mercury or silver, though a debate over the timing of peak uranium does exist.

Nuclear power reduces carbon emissions. Although a very viable resource, nuclear power can be a controversial solution because of the risks associated with it. Another factor in the debate with nuclear power is that many people or companies simply do not want any nuclear energy plant or radioactive waste near them.

Currently, nuclear power provides 13% of the world's total electricity. The most notable use of nuclear power within the United States is in U.S. Navy aircraft carriers and submarines, which have been exclusively nuclear-powered for several decades. These classes of ship provide the core of the Navy's power, and as such are the single most noteworthy application of nuclear power in that country.

Renewable energy

The deployment of renewable technologies usually increases the diversity of electricity sources and, through local generation, contributes to the flexibility of the system and its resistance to central shocks. For those countries where growing dependence on imported gas is a significant energy security issue, renewable technologies can provide alternative sources of electric power as well as displacing electricity demand through direct heat production. Renewable biofuels for transport represent a key source of diversification from petroleum products.

As the resources that have been so crucial to survival in the world to this day start declining in numbers, countries will begin to realize that the need for renewable fuel sources will be as vital as ever. With the production of new types of energy, including solar, geothermal, hydro-electric, biofuel, and wind power. With the amount of solar energy that hits the world in one hour there is enough energy to power the world for one year. With the addition of solar panels all around the world a little less pressure is taken off the need to produce more oil.

Geothermal can potentially lead to other sources of fuel, if companies would take the heat from the inner core of the earth to heat up water sources we could essentially use the steam creating from the heated water to power machines, this option is one of the cleanest and efficient options. Hydro-electric which has been incorporated into many of the dams around the world, produces a lot of energy, and is very easy to produce the energy as the dams control the water that is allowed through seams which power turbines located inside of the dam. Biofuels have been researched using many different sources including ethanol and algae, these options are substantially cleaner than the consumption of petroleum. "Most life cycle analysis results for perennial and ligno-cellulosic crops conclude that biofuels can supplement anthropogenic energy demands and mitigate green house gas emissions to the atmosphere". Using oil to fuel transportation is a major source of green house gases, any one of these developments could replace the energy we derive from oil. Traditional fossil fuel exporters (e.g. Russia) struggle to diversify away from oil and develop renewable energy.