New York Mayor Bloomberg harnessed the green power of Earth Day to unveil a plan that would require NYC buildings - responsible for 80% of the city’s emissions - to undergo regular energy audits and retrofits, as needed, in order to become more energy efficient.

The announcement was made just a couple weeks after Bloomberg and President Clinton announced a $20 million efficiency overhaul of the Empire State Building, and the Mayor called for extensive urban wind power deployment. Two years ago, the Mayor launched PlaNYC, an ambitious, multi-sector policy initiative aimed at bringing greater sustainability to NYC, on Earth Day.

Plan to Include Energy Code, Require Energy Audits & Efficiency Upgrades

Under the new plan, each of the 22,000 buildings in the city with more than 50,000 square feet of floor space would be required to conduct energy audits every 10 years, say city officials. The package also includes a first ever energy code for New York, that would require equipment upgrades, in all of the city’s one million structures, to comply with the latest standards for energy efficiency. The current state code does not prohibit buildings from using older, less efficient equipment in retrofits.

The laws and initiatives in the works, set to take effect by 2013, aim to in reduce the city’s total carbon-dioxide emissions by around 3 million tons a year, helping New York meet the Regional Greenhouse Gas Initiative target of 10% reduction in emissions from the power sector by 2018. …..click here to read more

OPEC and large Asian oil consuming countries led by Japan, India and China met on Sunday for the third Asian Ministerial Energy Roundtable. The group’s goal is to

To foster dialogue between Asia’s resource producers, primarily Middle East countries, and consumers, such as China and India, and to send a message to the world that both sides are cooperating in Asia to stabilize the international energy market.

The group called for greater transparency in oil markets and reductions in price fluctuations. Lofty goals — but the group put forward little policy solutions to meet them. Japanese Trade Minister Toshihiro Nikai comments after the discussions encapsulated the lack of concrete outcomes.

We will take actions to avoid any excessive volatility in commodity futures, and Japan will look into what measures are appropriate

The group hopes that limiting positions speculators can take will reduce volatility in the oil market. Countries, like India, have previously banned some commodities trading and US legislators now are considering different options to police the markets. Countries are reluctant to ban futures trading as those who trade physical oil use these derivative markets to lock-in prices. There is also open debate regarding the extent that futures trading influences the price of the underlying physical product. However, OPEC and others at the meeting believe that such speculative trading “largely contributed to skyrocketing prices, in the past” as Saudi Oil Minister Ali al-Naimi stated.

But separating speculators from traders is a difficult regulatory task that would likely have to be done by individual country. And to date, no country has been able to find an adequate regulatory framework.

The meeting also highlighted the growing concern over a lack of investment in oil infrastructure. Oil companies are finding it difficult to access credit to invest in new production and — due to the fall in oil prices — they also lack their own capital to fund new projects. The Roundtable highlighted the potential for oil to spike, as many others have predicted, if investment in infrastructure continues to flounder. However, other than the Saudis, who stated that they planned to continue to increase output to 12.5 mln barrels per day (up from 8 mln currently), few other nations have the capital to spend. Even Kuwait which plans to reach a goal of 4 mln barrels a day by 2020, up from roughly 3 mln, scrapped plans to build several projects including a refinery.

Florida’s Republican-controlled House of Representatives supported a measure yesterday to allow drilling in state waters. It is a major change in policy as supporting such legislation even just a few years ago would have almost been political suicide as so many citizens in the state feared for the cleanliness of the their beaches. The likelihood that the bill will pass this session, as the Senate has not considered similar legislation, remains remote. But with Florida facing fiscal shortfalls and the opportunity of a windfall estimated at $31 billion over 20 years from offshore revenue, politicians are facing a new reality.

Florida has been the linchpin to maintaining the moratorium on federal offshore drilling in the Atlantic, Pacific and certain areas of the Gulf of Mexico due to the size of its poltical clout, its coastline and the abundance of oil and gas off its shore. While Jeb Bush was governor, his brother supported his anti-drilling stance and ensured no new oil and gas activity would begin in federal waters off the coast of Florida (Federal waters on the outer continental shelf begin roughly ten miles from the coast, while the states control the sea floor until that point). In fact, the federal government bought back leases in federal waters in 2002 to placate Florida’s political leadership.

Now, the winds now appear to be shifting in Florida, and odds are they will eventually blow across the rest of the federal outer continental shelf.

The reality is that expanded offshore drilling will not be decided on after an exhaustive environmental or energy policy debate, but whether or not the government needs the proceeds from drilling and how it plans to spend them.

Shanghai, often recognized for its free-market tendencies and environmental leadership, is introducing China’s first municipal trading mechanism as a means to curb pollution.

Last Friday, in advance of a major carbon trade industry event taking place in Beijing this week, word began surfacing in the Chinese media that Shanghai plans to pilot an emissions trading scheme that will involve more than 300 companies’ trading “pollution discharge rights.”

The news comes nine months after the launch of China’s first energy and environment exchanges. That announcement – on the eve of the 2008 Beijing Olympic games – coincided with building efforts by leaders in China’s premier cities to promote, at least on a rhetoric level, municipal level policies aimed at reigning in growing energy demand.

Shanghai is doing more than just talking the talk, though. …..click here to read more

Russian Prime Minister Vladimir Putin and his Ukrainian counterpart, Yulia Tymoshenko, are set to meet on 29 April. The meeting comes nearly four months after disagreements over gas prices led to a standoff between the two nations, leaving a good portion of the continent without gas supplies in the dead of winter. Fortunately, the price issue has been resolved. But a conflict still looms.

The agreement between the two nations, not only stipulated price, but quantity. And due to the economic downturn in Europe — Ukraine’s gas export market — and the country’s economic collapse which necesitated IMF help, Ukraine has imported less than half of the 5 billion cubic meters of gas which it had agreed to import in the first quarter. Russian gas giant, Gazprom, has already indicated that it will seek punitive damages of roughly $2.7 billion for the shortfall.

What’s worse for Ukraine is that it is not on pace to purchase the 80% of the 40 billion cubic meters to which it had agreed. It will also have problems paying the roughly $5 billion to fill up its gas reserves this summer, as Ukraine’s gas company, Naftogaz, does not have the cash, nor is it able to borrow from financial markets.

Putin will likely show little sympathy, especially when he has been asked to pony up $5 billion to help with Ukraine’s ailing economy. He is set to seek concessions from Tymoshenko over a planned modernization of Ukraine’s Soviet-era pipeline network. The Russian PM had been upset by previous discussions between the European Commission and Ukraine over declarations on March 23rd that paves the way for EU investment in Ukraine’s infrastructure. He called the deal “unprofessional” and he delayed talks with Tymoshenko to show his dismay.

Putin fears that an alliance between his gas customers would weaken his geopolitical position. Without cash to pay the bills, Tymoshenko is set to give up some control of the modernization effort, a far greater prize for Putin than the cash Ukraine may owe. And that’s a win for Putin.

The Waxman-Markey bill signals Washington’s intentions to pony up to fund deforestation prevention as part of overall climate legislation. But will climate scientists, C-15 negotiators, developing countries and environmental groups agree on an international forest protection program that everyone, including the trees, can live with?

Scientists and climate policy makers now agree that saving forests is one of the most important things we can do to fight climate change. But that has not always been the case.

When the Kyoto Protocol was formulated, only reforestation and afforestation – not deforestation prevention – were deemed eligible carbon offsets. By stripping forest conservation of any functional value, a perverse incentive structure emerged: Cutting and replanting trees provided non-Annex 1 countries an optional revenue stream, but keeping living trees standing did not.

As the next round of negotiations approaches, new scientific findings are challenging the beliefs and motivations that led to the earlier exclusion of forest conservation.

First, a study released last September challenged the assumption that old growth forests cease sequestering carbon from the atmosphere once they reach a certain age.

Second, land use, land use change and the forestry sector now constitute one-fifth of the world’s emissions. Because trees emit carbon once they are felled, an increase in deforestation would mean even greater emissions.

Despite consensus on the importance of deforestation prevention, though, there is little accord on how to achieve it.

The REDD initiative – Reducing Emissions from Deforestation and Degradation – seeks to provide developing countries with a monetary incentive for preventing deforestation. Since 2005, when it was first proposed by the governments of Papua New Guinea and Costa Rica, REDD has become a key element of the UN Framework Convention on Climate Change discussions.

“There is broad consensus now that the post-2012 agreement will include some sort of incentives for tropical countries to reduce their deforestation,” said Steve Schwartzman, Environmental Defense Fund co-director. Already, the UN-REDD policy board has approved $18 million to support pilot programs.

However, considerable controversy still surrounds REDD, with the latest debate centered on the best financing mechanisms.

The U.S. climate legislation proposed by Reps. Henry Waxman and Ed Markey would make REDD a key piece of its offsetting strategy. It would do this through three major sources of funding: offsets, a supplemental pollution reduction program, and strategic reserve auctions. …..click here to read more

In one of the most candid assessments of the direction of US energy/environmental policy, Anadarko chief James Hackett blasts the current focus on carbon dioxide reduction. (Financial Times - registration required).

The histrionic and maniacal focus on carbon dioxide is intellectually repugnant to me.

He added that it is “taking the economy into a tailspin.”

Hackett’s comments highlight the battle that the Obama administration and a Democratic-led Congress will face in outlining a new energy framework

The difficulty in changing energy policy - unlike say an equally large concern of health care policy – is the overlapping interests of the economy, the environment and national security.  As to underscore the alliance between economy and energy, Hackett is not only the head of an oil company he is the Chairman of the Dallas Federal Reserve Bank.

To make policy formulation even more complicated, players with divergent views often sit in the same camp. For example, some, including New York Times columnist Thomas Friedman and Senator Richard Lugar, will argue that to improve national security we must tax oil to discourage its use and encourage the development of other energy sources. Others, like Hackett, would argue that such actions make the US less secure by reducing incentives for exploring domestic energy sources and thus making us more reliant on imports. 

The Anadarko chief is coming out swinging. And he has support from other powerful players in the industry.
He also appears to be taking a bullet from the cartridge of the National Rifle Association’s succesful strategy, that any infringement on current regulations will undermine society. Hackett isn’t going to turn into Charlton “from my cold dead hands” Heston as he has a company to run. But his comment that current US policy trends will make the US “the world’s cleanest third world country” is catchy.

Hong Kong magnate Stanley Ho is at it again. Not formulating a “Ho Plan” for Hong Kong energy security that centers around wind power, as the growing similarities between him and T. Boone Pickens might suggest. Stanley Ho’s investment du jour, while on par with his recently established eco-trend, will not be in Asia. Rather, the biofuel play will be located off of the Western coast of Africa.

Geocapital, a Macau-based investment holding company started in 2007 and comprised of partner investors Stanley Ho and Jorge Ferro Ribeiro, is in negotiations with the Government of Cape Verde to install a biofuel research and development center on the African archipelago, Portugal’s Lusa news agency recently reported.

The pair hopes to take advantage of Cape Verde’s experience producing biofuels from jatropha, a crop that yields ten times the output of corn plants. Jatropha-based biofuel is considered one of the best candidates for future biofuel production, and has already been successfully tested as a substitute for jet fuel in commercial airplanes. The poisonous seed has a long history as a fuel source: in the early 1900s, it was exported to France and Portugal for use in streetlamps.

…..click here to read more

The world is swimming in oil. This coming less than one year after record high oil prices and when the world was running very low in spare capacity (the difference between what can be produced and the amount demanded and the linchpin to lower prices). US inventories are at record levels. Tankers are sitting off the coast of England, waiting for the price to rise so they can get more for their cargo. Companies are holding off on investments because of limited cash and the difficulty for borrowing in current tight credit markets. And this past week the International Energy Agency (IEA) released its April Oil Market Report which predicted that consumption this year will remain at depressed levels (83.4 million barrels per day) not seen since 2004. In addition, the IEA’s head oil analyst David Fyfe commented that

any green shoots are signaling recovery developing next year rather than this year

However, investors are looking for signs, any signs of economic growth . Short-term oil prices appear positively correlated with equities. Oil prices have jumped recently with gains in equity markets on the assumption that stock market gains indicate that economic activity is set to resume, increasing demand for oil. But few, including the IEA, predict prices will rise drastically this year due to depressed economic activity, but volatility will likely remain.

Secretary began a four-city tour this week to discuss ideas for harnessing the energy potential of offshore areas. He has made broad claims regarding resources offshore such as windpower off the coasts can produce the energy of 3,000 coal-fired plants as he boasts about offshore’s energy potential.

He is likely to face resistance in opening up more areas to development, whether that be for maritime agriculture or for offshore drilling. A new plan, which will likely come out later this year, will address both issues. This roadshow is part sales job, part temperature check. He needs to show that he has listened to the American public, but he is also checking into specific resistance in changes in policy.

The rub is, we need new energy sources, and if it doesn’t come from offshore, than it must come from onshore or abroad. And those sources often pose far greater challenges.