Honesty in Climate Reporting and Discussion

I am a fan of Edward Tufte’s work. For most of you I suspect that will inspire nothing more than a Huh? But I want to use an example from the global warming debate to show how, by manipulating graphics, you can sell opposing messages with the same set of data. It is this subject (that of graphic manipulation) and the need for honesty in data presentation, about which I feel rather strongly as an academic, that has made me a fan of Edward’s writing.

At the urging of the Advocate, I am going to use a post by Nate Silver (my turn for a Huh?) as my example, and will compare his selected use of segments with, an overall temperature plot from the British Climate Research Unit at Hadley (HadCRU) and with a plot from the Goddard Institute for Space Studies (GISS) in New York., which James Hansen heads. The initial period I am going to look at is from 1940 to 1975. This is the period that initially George Will wrote about, commenting that, in 1975, scientists were looking at the trends and he quoted nine articles from that time with discussions on this trend. So does our friendly critic look at that time period in his commentary – er, well, not exactly!. Here is the GISS plot for about that period:
Source GISS

and this is the more simplified segment of the HadCRU plot.
Source Hadley Climate Research Unit

They’re both small segment of larger plots I will get to in just a minute. And if you look at both you can see (you don’t have to be a rocket scientist) that the trend is down. That was what the scientists were talking about in 1975. So is that what our good friend showed – of course not that wouldn’t allow him to make his point, so he expanded the range, backwards from 1940, into the previous segment of time, including enough points to suggest that the overall plot was upwards (and ergo all those scientists, not to mention George Will, were idiots).

Source FiveThirtyEight

Now you should be able to see that if you knock the data off from before 1940, you will see the same trend as in the earlier graphs.

Now the next bit is a little more interesting, because he pulls back to show that there was a warming trend before 1940, and takes the curve back to about 1860, and, depending on where you define the end points he puts a single warming trend line through the data.


That simplifies what actually went on, looking at both the GISS plot and then HadCRU:

SOURCE GISS

And for the simpler HadCRU



You can see that the way in which the temperature was behaving was not quite the simple plot that has been suggested, but that it fluctuates up and down, and if we break the HadCRU plot into roughly 30-year bits, you can see it drops 1880-1910, then goes up, 1910-1940, then drops 1940 – 1970. So it was really not that easy, back in 1975, to decide where the temperature would go next.

Where it went is now well-publicized, and I will put all three plots up here in full for the next bit.

First the Silver plot:
Source FiveThirtyEight

Now the GISS plot:


and then the HadCRU plot (I showed their entire illustration, lest I be accused of cropping anything):


There are a couple of interesting things to the shape of the lower two curves, that are not clear if you just draw the simple line, that Mr Silver uses, through the data. The first is that it warmed about as much from 1910 to 1940 as it did from 1970 to 2000, in other words the rate of warming was about the same. Not much attention is usually paid to this part of the warming trend – well that is because of this other graph, which is the one that usually gets all the attention.
Source White House Initiative on Climate Change

Now we will forgo for now the discussion about measuring carbon dioxide over an active volcano but you will notice the different slopes for the curve back in the 1910 – 1940 period where we were getting the same rate as we have just recently – curious scientists want to know why? But actually, and more to the point, that graph is a very smooth curve from 1860, as you may note the real temperature data is not.

There are two final points to consider. The first is why I put up the HadCRU and the GISS plots. You may note that at the end of the HadCRU data the curve turns over and starts to go back down. That’s what the data shows. But the GISS plot does not carry the plot that far down. In fact earlier plots of data that just showed the last ten years of data (with 1998 at the peak) disappeared from the GISS site about the end of last year. The differences between the interpretations, and the fact that recent data (in the HadCRU form) does not allow the hysteria about the imminence of doom that comes from the GISS Head, is perhaps why Hadley are now starting utter some words of caution about this whole debate, and that we cannot make misleading claims.

I am going to close with a plot from the 1995 IPCC report that does not get a lot of attention these days, but might explain why the leveling off in global temperature is happening:
Source IPCC 1995 full report

I have written earlier about the Little Ice Age, and will again, and on not only the last warming period, but also the ones before it, for which there is much evidence. It turns out not to be as simple a temperature plot as the IPCC summarized in that plot, but the realities of this cyclic nature of global climate are recorded, not only in books and manuscript, but in archaeological sites, and beneath our feet.

So let's stop with the insults (if you attack a person rather than their science, it concedes the point that their science is stronger than yours) and discuss the volumes of real scientific data that make exactly where we are in the progress of global warming a whole lot more of a question that many people would like you to think.

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Expanding Dr. Chu's Comments

After posting the P41 Pick Points, it was not until this morning, over a quiet cup of tea, that I could sit down and actually listen to what Dr Chu had said during his visit to Platts on Thursday. There were sufficient additional pieces of information (and the comment on OPEC was right at the end and of less significance than has been made) that I thought I would expand a little on what you can hear on the podcast. The prepared remarks, as I mentioned earlier, deal with the loan guarantee program, but the answers to questions were the more informative.

On being asked how the nation could double renewable output in 2 years, he said that wind is most mature technology and thus the most likely, solar thermal would be the next to see growth while photo-voltaics (PV) may also contribute. Numerous wind projects can be expected to go forward . He cited Bonneville Power as one who is capable of putting in lines to connect to turbines, with the system being installed within 2 years. There is Wind available in the Dakotas; and there are power plants capable of using solar thermal in the range of 100’s of Megawatts but those are the areas that he expects to get immediate funding and to meet the targets.


He does not claim that the government has all the answers, but anticipates going out into the market to find what the industry wants to bring forward, transmission isn’t there yet (maybe not until 2014).

He hasn’t reviewed the existing CCS projects yet, nor made any decisions; yes, there is FutureGen, but it needs a technical review before a decision can be made to see if it can progress. He feels that there are gains to be made in pre-combustion separation as well as post combustion separation of pollution. Oxyburn is also to be looked at. It is not a slam dunk which technology is going to prove to be the best, so he wants to carry out a suite of tests on potential solutions. 6 geological sites are going to be tested for CCS, and he wants also to look at EOR but all this has to be tested. The big money will be in capture and in sequestration, though it will be so expensive that the current investment will not go that far.

He sees power transmission as a national issue, combining renewable energy and being able to port it around the country. We have gone from local generation and use to a need to look nationally. Solar, for example, is concentrated in the Southwest. And wind also is focused. We need a national transmission system overlay. We need a discussion over the realization that this is a national issue. Yet while this is a national imperative that we go forward, we need to study this as these are complicated issues.

In regard to feeding the Strategic Petroleum Reserve (SPR) he said that the last thing we want to do is to is to have the 13 million barrels of the current commitment going into the SPR, when there is a tightening of supplies and OPEC cuts, but he is not sure if this is not already a done deal, and since there are complications to the issue – he will have to look into this. Having been dumped deep into the pool, and while he knows the technical issues, he will need to look at other aspects while he gets up to speed, and he was told this was a done deal.

What is the likelihood that the world will get the tipping point when tundra starts emitting carbon dioxide? He said that we don’t know when the tipping point when the tundra thaws, don’t know at what temperature and carbon dioxide concentration this will occur. It would, however, be prudent to stay away from that happening.

His goal is to focus DOE research and make it more results driven. It is the biggest supporter of physical sciences in the US. Many Nobel laureates have been supported by DOE. It is a primary contributor to our current prosperity, and so we cannot not do that, but must fund basic research. But at the same time there is a lot of government research that should be used and passed to the private sector. DOE is not as good at taking great research and transfer into things industry picks up. So he will be spending time trying to find out how to port discoveries over. Wealth creation was effective when Bell Lab results were transferred into industrial products, and our economic future was driven by electronics companies that believed and invested in research. Don’t have this philosophy yet in Energy, and so DOE has to fill the vacuum, National Laboratories and Research Universities will be the key. First priority is the economic recovery and the second is a green industry where US can lead.

If anyone thinks they can predict oil prices, they should be rich. For a long time he was a member of the America’s Energy Future study by the National Academy (the report should be out soon). He can’t predict oil prices, but sees higher demand and hopes they can decrease the rate of demand increase, though it will still go up, the peak of major oil companies, conventional oil production (not tar sands or deep water) is going to be soon. They will have to move to more expensive oil recovery this drives price up, cheap oil production will not increase. Price will go up in the long term, and so we must decrease consumption and use other means. Conventional oil has been increasing but it is now flat, and will have to go to more expensive sources. If we get smarter ways to get oil out it will extend oilfield life. But at some point you reach a limit.
The price of wind energy has gone down by a factor of ten and will go down further, PV is on the learning curve, and hopefully can get down a factor of 5 further, to make it practical. New technologies will come down in price = faster than more mature technologies. It is different because oil has only a finite supply. But with EOR oil may be not last 15-20 years but 50 years.

Asked about an increase in the blending cap for ethanol – he answered that the only issue is the auto industry opinion on harming engine at higher mix. You need to accept that you can’t deteriorate the engines of the present fleet, but we need to increase fraction of E85 vehicles, which means changing the fuel lines, seals etc. We can’t get to target on cellulosic – but this is a challenge, some smart work now being done, looking at bio-producing heavier fuels than ethanol. 3 bioenergy institutes have been started started, and in first 6 months altered yeast and bacteria have been sued to feed and sugars and make gasoline and diesel like fuels. These self-separate from water. These are better than ethanol therefore. Given the caliber of the scientists working on this – some of the best – suddenly the level of activity causes technology to lurch forward. He expects the work to be populated by really top people and students who no longer aspire to a life in finance but want to do science. Don’t need an ethanol pipeline.

On India he was asked how to do tech transfer of nuclear technology to India; reply - there is an understanding and that will go forward.

On how the US and China can they work together in climate change issues, he said that the key was that they do work together and mitigate carbon dioxide, increase the efficiency of their growth and the best choice of new sources of power. There are many opportunities. Building technologies, for example, provide a lot to be gained, since buildings can use 70-80% less energy thann conventional construction affords. We can now build 60% more efficient buildings and we think we can build 70-80% efficiency in ten years. China will build many new buildings so a lot of things can be done, and there are lots of chances for collaboration.

OPEC and his role and his message to them. Stable prices are very important to every country and he will do what he can to encourage stability. Major mission of DOE is to look to ourselves and what we have control over. We are the science house and he is aimed at promoting efficiency, and decreasing our use of oil. If oil is used more efficiently, particularly in personal use by a factor of two, this can have a great effect. He would argue for price stability – do we want OPEC to cut production. He needs to look into it more. No specific plan for doubling renewable power in 3 years, but there are mature renewable technologies, and he cannot divide how to get to the target but has to look at the technologies and how they can be best encouraged to develop the answer. He, personally, is big on energy efficiency in the home , and had a house in California where he paid very little for heating and nothing for air conditioning – through the efficient use of blinds.

P41. Pickpoints

Half-a-dozen or so stories of interest:

The Washington Post has a lead story on the damage that the drop in oil prices has caused to the budgets of nations, and the delays that it is causing to energy projects. Interestingly at the bottom of the article is a note that, as well as Russia (which was a story in P40) Petrobras also got a loan, in this case $10 billion, from China in return for guarantees of supplies. China will get between 100,000 and 160,000 bd this year. The announcement was apparently not supposed to happen until May.


Energy Secretary Chu is having a bit of a rough week.

For the second day in a row he indicated that the activities of the OPEC oil cartel are not one of his — or his department's — priorities. . . . . He said he would look into it "to figure out what the U.S. position should be and what the president's position is." "I'm not the administration, quite frankly," he said.

This has now been followed by

US Energy Secretary Steven Chu said that remark reflected "more of my naivete than anything else" and he would encourage Opec members to promote "stability" in crude oil prices.

There is a podcast and, listening to it, his remarks were more directed toward the loan guarantee program. On being asked how the nation could double renewable output in 2 years, he said that wind is most mature, solar thermal then PV may also contribute. Numerous wind projects can go forward . He cited Bonneville Power as one who will put in lines to connect to turbines being installed within 2 years. There is Wind in Dakotas; solar thermal in 100’s of Megawatts but those are the areas. He anticipates going out into the market to find what the industry wants to bring forward, transmission isn’t there yet (maybe not until 2014). Haven’t reviewed the CCS projects yet, there is FutureGen, but it needs tech review before it can progress. Wants pre-combustion separation and post combustion separation. Oxyburn is also to be looked at. It is not a slam dunk which tech is best, so he wants to carry out a suite of potential solutions. 6 geological sites are going to be tested for CCS, Wants also to look at EOR but all this has to be tested. Money in capture and in sequestration. He sees power transmission as a national issue, combining renewable energy and being able to port it around the country.

Azerbaijan says it has enough natural gas to supply the Nabucco pipeline. One of the most promising of their deposits has been the Azeri-Chirag-Gyuneshi (ACG) deposit, but due to production problems this has not met target, and the country is projecting, after years of growing production, that this year it may only stabilize at last years levels. At the OPEC meeting in December Azerbaijan (who does not belong) offered to cut their production by 300,000 bd from 840,000 bd. Rigzone hears that there is not much enthusiasm for more OPEC cuts at their next meeting, though they think that the market is still oversupplied by about 1.6 mbd.

Exxon has returned 8 leases at Point Thomson to Alaska, just after they agreed to drill on two leases and start production before 2014. There has also been an oil spill up at Prudhoe Bay, but because the spill was under the snow its size is still being determined. Protestors who are arguing that directional drilling should not be used to tap into the oil in ANWAR after Senator Murkowski had suggested the idea will no doubt be rejuvenated.

Iceland thinks that there may be oil in the Dreki area, based on seismic information. The area is offshore and northeast of Iceland.

More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.

Some new vehicle travel numbers

As I sit waiting for “This Week in Petroleum” to update I wandered over to the Federal Highway Administration to see if the latest Traffic Volume data was available. And it is, with the numbers for December 2008 just having been posted. The reason for the interest can be seen in the plot of miles driven, that they provide, and this is the new one:

Source FHWA

It actually looks a little more fearsome than it is.
UPDATE: The TWIP information has been added.

The data plotted above is a 12-month rolling average, and when you look at the individual month data, and use the urban highways plot as representative (the argument also holds for the rural and total) you can see that driving started to drop last December relative to 2006. Through all of last year it has been down relative to 2007, but with the December figures we are starting to stabilize, and come closer to the previous years figures.

Source FHWA

In fact if you look at the regional plot, the Northeast is slightly up on last year, and most of the other regions are not down much (relative to the previous drops of around 5%).

Source FHWA

So this may mean that for most of us the situation may be stabilizing (sorry West Coast, not you yet). Now this data is still a couple of months old, and it shows that the drop is still going on, but demand for fuel may be leveling off.

Added: A little late today, the TWIP now is up, let me add the two plots from this week that I have been looking for. The first is the demand curve. Now we know from the second figure that driving started its dive last December, so the comparison is with what was already turning into a drop, but if you look at this week’s gasoline demand:
Source EIA TWIP

Then you can see that current demand, which equated to the same number as this time last year last week, has just risen above it this week based on four-week averaging. However if you look at the tabulated numbers the week saw a drop of 100,000 bd on average, which is down 200,000 bd on a year ago.

Source EIA TWIP

Which takes up back to see what is going into the refineries, and this is still paralleling the drop of last year. It is currently about 300,000 bd below last year’s figure.
Source EIA TWIP

Gas prices have now been rising for 3 weeks, while home heating oil prices have been falling for five weeks. But even as refinery input bottomed out at this time last year, so it appears to be doing the same again this year, although we may have to wait a week or two to see a clearer trend.




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P40. Pick Points

Half-a-dozen or so stories of interest:

Just recently it has seemed that the Iran-Pakistan-India pipeline is in trouble again, which has energy supply problems for India and Pakistan (see P39) but it has some unfortunate consequences for Iran also. So Iran is increasing co-operation with Russia, It is also looking to sign a deal with Total for developing the second phase of the South Pars gas field, though the French are a little cagey about when this might happen. Statoil Hydro has been handling Phases 6, 7 & 8, and the drilling platforms are on their way, with 45 days to the start of operations. To date 10 wells have been drilled with the goal being 30, for a total production of 0.1 billion cu m (bcm)/day of natural gas. Plans are just getting started to do the design for phases 22-24. However, following an Iranian official remarking that Iran had sovereignty over Bahrein, the kingdom has stopped further discussions with Iran over the purchase of natural gas, and while the is an MOU in place for Bahrein to buy 1 billion cu ft per day, it is now talking to Qatar (who owns the other half of the South Pars field). Iran, on the other hand, having agreed to help Turkmenistan develop the Yoloten field could also act as a link for Turkmen natural gas, through Turkey to Europe (bypassing Russia). The new agreement calls for the export of 10 bcm to Iran, and there is infrastructure in place that could carry 40 bcm to Turkey. Though some of the gas may be used to supply areas of Iran that are difficult to reach from South Pars. This will be in addition to the 8 bcm that Turkmenistan already exports. How far Europe will move in accepting Iranian gas is still in question.

Unfortunately for President Ahmadinejad, the Iranian oil situation remains a mess and without increases in price, oil subsidies are expensive to the government. And oil is now below $35. Bloomberg also anticipates that tomorrows EIA report will show that gasoline dropped 0.5 mb , while distillate dropped 1.5 mb over the week. By the way the deal I mentioned yesterday for China to loan Rosneft and Transneft money carries with it that the oil that China will get will cost it $20 a barrel.

Indonesia is encouraging the planting of palm oil plantations with a new permitting initiative. Palm oil is also used for cooking and world prices have fallen some 44%, boosting purchases by countries like India who bought 856,690 tons last month (it bought 457,601 tons a year ago). It is hurting Malaysia, however, and Greenpeace is leading protests because of the clearing of rain forests. Yet there is still a significant tonnage available, and domestic prices in India have fallen below import prices. This is hurting domestic production of oil.

In a speech on Wednesday to the regional utility commissioners Energy Secretary Chu said that he will devote more of his time to scientific research and alternative energy, not global oil supply and demand. Because the stimulus authorization for wind is for the amount of loan guarantees, and these loans default at between 3 and 12%, the actual amount that might be supported by the $6 billion program is $60 billion, and if it all goes to wind, then it could underwrite the construction of 30,000 MW of wind power. (But a) where to put it and b) how to move the power to where it is needed). He hopes to cut his first checks in April or May. In regard to cleaning up the regulation to ease power grid construction, Congress is hoping to introduce legislation in April or May.

Bangladesh is still debating the relative benefits of increased coal mining.

The European Commission is also expecting that it can help boost their economies by investing in energy.

More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.

Some historic information on Turkmenistan

Some four years ago I started taking an interest in the evolving gas situation in Turkmenistan. Since then there have been a number of changes, and plans that were being developed back then have either fallen by the wayside or made progress. Since a lot of this historic information often gets lost (and since this also gives me a chance to remember where it is) here is the gist of what I wrote back near the beginning of The Oil Drum.

I am going to begin this with a repeat of a somewhat comprehensive post I made in April 2005. The first thing to do is to find the country, and for those who aren't sure where it is, it lies North of Iran on the Eastern side of the Caspian Sea.



It is ranked as having either the fourth or fifth largest reserves of natural gas, with reserves of 2 tcm (trillion cubic meters) (the CIA), 5.5 tcm the Jamestown Foundation, or 8.1 - 8.7 tcm Library of Congress. It exports around 38.6 bcm per year, and uses around 15.5 bcm itself (CIA), for a total production of around 55 bcm.

Historically the natural gas has been sold to Russia, and the Ukraine, but very much under the thumb of the Russian purchasers. As the EIA notes

Prior to 1997, the only option for exporting Caspian region natural gas was via the Russian natural gas pipeline system. Although over 2 trillion cubic feet (Tcf) of Caspian Sea region natural gas was piped via the Central Asia Center gas pipeline in 1990, exports fell to 0.3 Tcf in 1997 when Russia's Gazprom, which is a competitor with Turkmen natural gas and owns the Russian pipelines through which Turkmenistan exports, denied Turkmenistan access to the system over a payment dispute.

(Source EAI)

(For those like me who have problems with conversions, 1 Tcf is roughly 30 bcm). The story from the Research Divn of the Library of Congress is slightly different.

In 1992 gas production accounted for about 60 percent of GDP. As a result of a dispute with Ukraine over payments for gas deliveries, in 1992 gas production fell by 20 billion cubic meters to around 60 billion cubic meters. In the first eight months of 1994, transportation restrictions forced Turkmenistan to cut gas production to 26.6 billion cubic meters, only 57 percent of the production for the same period in 1993. An additional factor in this reduction was the failure of CIS partners, to whom Russia distributes Turkmenistan's gas, to pay their bills.

With limited ways of selling its gas Turkmenistan was stuck with selling it through Russia, with 918 bcf staying in Russia while 117 bcf went on to Ukraine during 2000. Exports continued to rise by about 25% a year. The UNECE continues the story.

In a bid to secure a market for its natural gas, on May 14, 2001, Turkmenistan agreed with Ukraine on a major natural gas export deal. Under terms of the deal, Turkmenistan will provide Ukraine with 8.83 Tcf of natural gas between 2002 and 2006. Turkmenistan will sell Ukraine 1.41 Tcf of natural gas in 2002 and 1.77 Tcf in 2003, with remaining deliveries to be agreed later. Turkmen officials signed the deal on the condition that Ukraine makes timely payments for supplies. Ukrainian officials agreed to pay for the Turkmen natural gas 60% in cash, with the remainder paid for through participation in 20 construction and industrial projects in Turkmenistan worth a total of $412 million.

Unfortunately disagreements over payments have continued. First in the winter of 2004

In December 2004, Turkmenistan halted gas supplies to Russia and reportedly demanded $60 per 1,000 cubic meters (35,300 cubic feet). Turkmenistan presumably expected that the perceived inability of Gazprom to meet its export and domestic commitments without Turkmen gas volumes would force the Russian giant to offer better terms. However, Turkmenistan failed to force Russia to pay more for Turkmen gas, as Gazprom passed through the 2005 winter season of peak demand for natural gas without Turkmen supplies. Subsequently, in April 2005 Russia and Turkmenistan agreed that Gazprom would make all payments in cash instead of the earlier barter arrangements, yet the price remained the same: $44 per 1,000 cubic meters.

The situation deteriorated further with the clash between Ukraine and Russia gaining the attention, among others of The Energy Bulletin as the debate over price escalated. Unfortunately for Turkmenistan, the solution allowed Russia to sell at world price, while using the cheaper Turkmen gas to keep the average price at $95 per 1,000 cu.m.. That debate is not over. The price itself was not actually fixed

The next day, on Feb. 2, RosUkrEnergo agreed to stipulate in a contract that it will supply gas to Ukraine at $95 per 1,000 cubic meters during the next five years. However, RosUkrEnergo reserved the right to boost the prices if Turkmenistan, the main gas source for the company, moves to hike the prices.

The issue is sensitive for Ukraine, whose chemical and steel companies would become unprofitable if gas prices exceed $95, analysts said.

And so the debate continues. Novosti had two stories on this in the past two weeks.

Under a bilateral treaty, Turkmenistan is to ship 40 billion cubic meters of gas at $50 per 1000 cu m in the first half of the year and at $60 per 1000 cu m in the second. Turkmenistan's foreign ministry earlier said that Ukraine was delaying payment for natural gas shipments and threatened to cut off supplies unless the Ukrainian side cleared the outstanding debt. If that were to happen, it would be the second time a supplier had turned off the taps to Ukraine, as Russian energy giant Gazprom cut supplies on January 1 amid a bitter dispute over prices for natural gas supplies. . . . . . According to Turkmenistan, Ukraine's debt stands at $158.9 million and the country's foreign ministry said a failure to settle the debt could place energy cooperation in doubt.

This was followed by

Ukraine's prime minister said Wednesday his country's debt to Turkmenistan for natural-gas supplies stood at $68 million, and that it would be paid off by supplies of industrial goods.

"As of this moment, Ukraine's debt to Turkmenistan stands at $68 million," Yuriy Yekhanurov told a Cabinet session, adding that Kiev had already ironed out all its problems concerning natural gas supply obligations with Ashgabat. Turkmenistan says Ukraine's debt currently stands at $158.9 million, and President Saparmurat Niyazov has urged Ukraine to pay up.

Unfortunately the attitude of the Ukrainians to such debt is not reassuring to Turkmen

(On) or the issue of 7,8 billions of cubic meters of Russian natural gas, that had allegedly disappeared while being transferred through the Ukrainian territory.

That of course is incorrect. However, the specifics of the gas transit system does not allow refuting this fact easily. Should Ukrainians have dealt with the issue in a more professional manner, the myth would be damaging to Gazprom itself. First of all, if the gas was stolen -- that should have happened before 2005, when other people were governing Ukraine. And let us remind the reader, that Gazprom was supporting these people..

Therefore, the question shall be posed to the great friends of Russia like Kuchma, Yanukhovich and Boiko (former chief of Naftohaz). And there are all reasons to suspect, that like any other transaction in the sphere of fuel and energy the `steeling' of the Russian gas resulted into the personal benefit of the top Russian and Ukrainian government officials.

It is no wonder that Turkmenistan is becoming frustrated with customers to the North and West, and so it is again trying a harder line. From Radio Free Europe

That aim was demonstrated again on 10 February, when Niyazov announced on national television that Turkmenistan intends this autumn to raise the export price of its natural gas from $65 to $100 per 1,000 cubic meters. This gambit comes at a time when Turkmen gas is increasingly tied into a complex international equation, as a deal recently brokered between Ukraine and Russia depends on cheap Turkmen gas. Under the deal, Ukraine would pay an average price of $95 per 1,000 cubic meters in 2006.

Such a price hike would pinch Ukraine's economy painfully. Ukraine is slated to import 17 billion cubic meters of Russian gas and 39 billion cubic meters of Turkmen gas in 2006, according to the news website gazeta.ru. A 53 percent increase in the price of Turkmen gas would raise the average price Ukraine pays for its total imports from Russia and Turkmenistan by 20-25 percent, from $95 to $114-119 per 1,000 cubic meters. Other estimates run higher. An unidentified source in Gazprom, the state-run Russian company that handles gas exports, told the Russian business newspaper "Vedomosti" that if Turkmenistan charges $100, Ukraine would have to pay $130 for imports.

However when the Turkmen tried this before Russia called their bluff, so this time they have a different answer. Two new pipelines are in the works.

The Turkmenistan-Afghanistan-Pakistan Natural Gas Pipeline Project (the Project) is a gas pipeline of about 1,600 kilometers that will transport up to 30 billion cubic meters of natural gas annually from the Dauletabad fields in South East Turkmenistan to consumers in Afghanistan, Pakistan and possibly India. The final cost of the Project is estimated at between $2.0 to $2.5 billion. The Project will take about three years to be implemented after all key decisions are taken by the cooperating countries.

Construction is supposed to start this summer, and it will carry 20 bcm per year. And for the other, there are the Chinese

Since the mid-1990s, experts from the China Petroleum Engineering Construction Corporation have been reviving oil wells in western Turkmenistan with a total output of 2.3 million tons a year. Meanwhile, the China Petrochemical Corporation has been upgrading gas wells in the Shatlyk field with a total annual capacity of 3 billion cubic meters. . . . . . During talks between Kazakh President Nursultan Nazarbayev and his Chinese counterpart Hu Jintao in Astana in early July 2005, Nazarbayev said that constructing a Turkmenistan-China pipeline through Kazakh territory would be beneficial for all three countries.

. The agreement for the pipeline is now in place

Chinese President Hu Jintao signed agreements Monday with the visiting president of Turkmenistan for the Central Asian nation to sell China natural gas to fuel its energy-hungry economy and to build a pipeline to deliver it.

Thus the gas that Ukraine is relying on to keep it out of trouble is going to start heading East instead of North, and, given past practice, that can only bode badly for the reliability of supply to such places as Italy and the United Kingdom.

In the meanwhile, Gazprom continues its heavy hand, this time in a play to control the gas flow from Iran through Armenia.

Armenia will pay $110 per 1,000 cubic meters of gas, or about half the European average, but twice what the country pays now, Gazprom, the Russian monopoly, said in a statement.

Gazprom, in turn, will buy a 24-mile section of pipe connecting Armenia to Iran -- the tiny and energy-poor country's only plausible alternative to Russian energy supplies. Also under the agreement Gazprom, through a joint venture, was granted a concession to build a second larger pipeline along this route.

There is indeed a new Great Game afoot, it's just that, at present, the cast is different this time around. Pity there isn't a Buchan, or a Kipling to keep us up to date in a more dramatic fashion.

I updated those stories in December of 2006, which was when the President of Turkmenistan, Turkmenbashi, died of a heart attack.

"One wonders if the Gazprom plan is therefore to buy and sell gas from Turkmenistan and Uzbekistan first, and run down their supply, while maintaining their own until later. The Turkmen already had large deposits, and have just discovered another very large field. It is interesting to note, however, who their projected partners are planning to be.

A huge natural gas field has been discovered in Turkmenistan, President Saparmurat Niyazov said. A field containing an estimated 7 billion cubic meters has been struck in the southeastern town of Iolotan, Niyazov said in televised remarks Sunday."A mighty fountain (of gas) caught fire," Niyazov said. "It took us three days to put it out." He said a Chinese energy company, which he did not further identify, had shown interest in developing the field with help from a company from the United Arab Emirates.

Perhaps Gazprom may not have it quite as easily their own way as they expect - although perhaps that is one of the things that the Russian PM will be talking about.

Turkmenistan is the second-biggest natural gas producer in the former Soviet Union after Russia. The country's proven commercial reserves amount to 2.8 trillion cubic meters. The Russian gas giant Gazprom controls the only transit route for Turkmen gas exports to other ex-Soviet republics and Europe. Niyazov reiterated his intention to export natural gas to India, China and the United Arab Emirates through pipelines that are still under construction. "Our goal is to lay pipelines to several countries," he said. "We have also pledged to supply 200 billion cubic meters to the world market." In April, Turkmenistan concluded an agreement to build a gas pipeline to China. Beginning in 2007, it will also export 14 billion cubic meters of gas annually to Iran.

As the Russian Institute of Energy Policy reports, however, China is concerned about the security of the energy supply. (And watching what is going on in Georgia who can blame them?)"

Going on to look at other posts that have been made - there are a couple more of interest, The situation is something over which Jerome and I have slightly disagreed. As I noted back then Jerome is much more qualified to comment on this than I, given his knowledge of the pipeline situation . At the time I said

"And this sort of strengthens my case that despite Gazprom's power, China has a strong interest in Turkmenistan. And in regard to the Turkmenistan pipeline, folks are still interested in investing

According to a press release issued on Friday, he said that the government was actively pursuing trans-border gas pipeline projects of Iran, Turkmenistan and Qatar as well as the import of LNG fuel.

However the machinations of Gazprom, in regard to the access of Turkmen gas to the west continue. A pipeline known as the Blue Stream has been built between Russia and Turkey, and is currently carrying less gas, due to lower demand, than it was designed for. As a result it will likely be extended to Italy (where, you may remember, there were shortages earlier this year).

If the agreements are successfully implemented, Gazprom will be able to supply Russian gas directly to Italy, as well as to Spain, Greece and even Israel, while Turkey will acquire the importance of a transit center in the system of energy resources flow in Eurasia.

The Blue Stream has actually reduced to naught the plans for building the Transcaspian pipeline and organizing the export of Turkmenian gas by passing Russia. As a result, in the first place, Russia has got protected itself from a strong competitor on the European market and, in the second, it acquired the opportunity to buy large amounts of Turkmenian gas at an acceptable price. Already in effect is a contract signed by Gazexport and Turkmenneftegaz under which the deliveries of gas from Turkmenistan to Russia are to reach 70-80 billion m3 a year.

And as Jerome pointed out the pipeline also allowed Gazprom to circumvent Ukraine in supplying gas to its Southern regions.

The point, I believe, wherein he and I differ, relates to the influence of the Chinese. Since, as I noted earlier, they are already in Turkmenistan, and do have a need for the gas, they are motivated toward the pipeline. And as you may have noticed from this post and the last, it would appear that the Turkmen have yet to get a decent deal from Gazprom, which would motivate them also to find a better, and more lucrative customer. So I think, in this case, I will stick with my original prediction that the pipeline to China will go forward."

Tom Nichols, writing on the Robert Amsterdam website was commenting about the pipelines in the are the other day, noting that

For now, there is only one realistic source of gas for Nabucco: the South Caucuses Pipeline (SCP). Due to start up around the end of the year, the 690 km pipeline will export gas from Azerbaijan, through Georgia to the Turkish border - along the same corridor as the Baku-Tbilisi-Ceyhan oil pipeline. It will be supplied largely from Azerbaijan's Shah Deniz field, in the Caspian Sea. Flows are expected to be in the region of 7bn cm/y initially, rising to around 16bn cm/y after 2012, says BP, the operator of Shah Deniz. . . . . . . The infrastructure, commercial agreements and political support for flows from other sources, however, remain to be established. Theoretically, says Ruttenstorfer, they include all the countries around Turkey that have sufficient gas to export - Russia, through the under-utilised Blue Stream pipeline, Turkmenistan, Kazakhstan, Iran, Syria and Iraq. But there is no direct infrastructure to tie gas from Turkmenistan and Kazakhstan into Nabucco and there are doubts about how much spare gas Turkmenistan has. There is also no infrastructure to bring gas from Iran, Syria or Iraq to Nabucco and political circumstances are unfavourable in all three cases.

UPDATE
Thanks to Jack Greene for direction to a couple of Radio Free Europe features. The first expands on Gazprom's supply problems, and it's anticipated answer.

Domestic shipments at regulated, reduced prices totaled 258 bcm in 2004 and 325 bcm in 2005, when they generated losses of nearly $1 billion, Prime-TASS reported on 29 November. Exports to the West, which account for the bulk of Gazprom's profits, are planned at 151 bcm in 2006 and set to rise to 163 bcm by 2008, Prime-TASS reported on 23 November. . . . . . . Gazprom plans to buy 9 bcm from Uzbekistan and 30 bcm from Turkmenistan in 2006, ferghana.ru reported on 23 January. Purchases from Turkmenistan are slated to go to 70-80 bcm a year by 2007-08, Prime-TASS reported on 30 November. With these boosts looming on the horizon, Gazprom hopes to expand the capacity of the Central Asia-Center pipeline, which links Turkmenistan and Russia through Uzbekistan and Kazakhstan, from current levels of 42 bcm/year to 55 bcm/year, and is considering another project linking Central Asia and Russia with throughput capacity of 30 bcm/year, Prime-TASS reported.

while the second suggests that Gazprom has reached a peak production at 550 bcm.

And with this as background we'll see if we can update the story fairly soon.!

P39. Pick Points

Half-a-dozen or so stories of interest:

China is going to need a lot of oil, and to ensure it gets it, it has just loaned the Russian oil companies Rosneft and Transneft (who runs the pipelines) $25 billion, and for this they get an annual delivery of 15 million tons of oil (300,000 bd) for 20 years. Of the sum Rosneft will get $15 billion. The first pipeline heading that way will carry up to 0.6 mbd, but needs a spur to carry the oil to China. The oil will likely come from the Vankor field in the Tyumen region of Siberia, with the pipeline running from Taishet in Siberia to Skovorodino, a town of about 10,000 people, on the border, and in Amur province. Overflying part of the route on Google Earth, it doesn’t look quite as uncivilized as the articles make out. There is a Youtube video of the town of Tynda, for example.

Despite the problems that they are having with the California budget, customers of the Southern California Gas Company are getting a 20% drop in their heating bill. The average winter bill of 75 therms per month is expected to be in the $70-80 range. However there is a drive to change the gas hot water heaters to solar heating, given that about 38% of the home power goes to heating water. Unfortunately I suspect that the $250 million price tag will be too much for the state right now, even though it would be through rebates. Oddly Government support for such a move in Australia is meeting some opposition from Greenpeace, on the odd argument that they don’t generate electricity. It was only last week that tentative agreements were signed for solar-thermal power for Southern California Edison, with Brightsource Energy building 7 plants for a total of 1,300 megawatts over the next seven years. though the first 100 MW unit, in the Mojave Desert won’t be ready until 2013. SCE states that it now gets 16% of its energy from renewables. (Though by next year the state target is 20%).

BrightSource CEO John Woolard said the 400-MW Ivanpah project will create about 1,700 full-time jobs in construction and another 3,500 jobs to last the 40-year life of the plants.

The technology uses the tower approach rather than the trough shaped collector idea used by Acciona in Nevada. Israel contrarily has just approved the connection of a photo-voltaic power station to their national grid, though it will take 4 years to install the connection.

Perhaps the money put into the stimulus package for high-speed rail might head toward maglev. China is looking to start a new project next month although there is already one system in operation in Shanghai, that uses German technology. Plans for high speed rail systems in California are being debated even though no-one knows where the stimulus money is going yet.

While recent talk has focused on a gas pipeline from Iran to Pakistan and on to India, and recent reports have been either favorable or discouraging, Bangladesh remains strapped for energy, and so there is now talk of a pipeline from Myanmar, through Bangladesh to India.. However economic reality, and the fact that coal is indigenous to many in the region is causing the countries of South Asia to seriously consider switching to coal. India, for example, is now seeing a gap of some 5.7% between available supply and demand and needed the pipelines that had been planned, since even now gas can only meet 60% of industrial demand.

There have been concerns in the past over the ability of wind turbines to operate in cold climates, but with turbines now working successfully in Alaska those days may be over. It may still take about 17 years to pay for the installation, however, on an expected life of 20-25 years. Yet with that promise there is still uncertainty over the future of wind in Canada. In the UK permission was given to install ten new wind farms around Scotland. Britain currently generates some 3 GW from wind, and these farms may add double that amount.

And the EU has just released the Market Observatory for Energy report looking at energy generation in the EU. However since the range of oil prices assumed go from $61 to $100 per barrel for oil in 2020 it may still be a little unrealistic – but I will take a look!

More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.