Pachauri and Big Oil - by Richard... Tuesday, December 29, 2009

Pachauri and Big Oil - by Richard... Tuesday, December 29, 2009

The Indian company, Oil and Natural Gas Corporation Limited (ONGC), is ranked 152nd in the Fortune Global 500 list of companies. It contributes 77 percent of India's crude oil production and 81 percent of India's natural gas production. 

The Indian government holds 74.14 percent equity stake in this company which, in the financial year ending 2009, achieved its highest-ever sales revenue of £8.6 billion.

And, for the period of June 2006 to June 2009 it had the good fortune to have as one of its non-executive directors a certain Dr R K Pachauri, also director general of TERI and chairman of the IPCC.

When it comes to "Big Oil", there are bigger but ONGC certainly qualifies as a member of this club. And at the heart of the beast for three years, at a crucial point in the development of the IPCC agenda, was Dr Pachauri.

During that time, though, no one could accuse the good doctor of getting rich out of the deal – not directly at any rate. The company paid its non-executive directors a modest attendance fee only. And for the two years of 2007-08 and 2008-09, such was his pitiful attendance record that he netted only just over £2,000.

However, Dr Pachauri is nothing if not good at multi-tasking and networking. And, while diligently looking after the interests of ONGC he was, of course, looking after his own, setting up an offshoot of his institute TERI as a separate company called TERI-Biotech.

This company had developed a patented process for the biodegradation of oil, which could be used for extending the productivity of oil wells and for cleaning up oil spills. And its first – and main – client became ONGC, which allowed it to test and refine its process.

So successful was the association, we are told, that the two companies, TERI-Biotech and ONGC decided to formalise the relationship, forming on 26 March 2007 a joint venture company called ONGC TERI Biotech Ltd (OTBL). TERI – director general Dr R K Pachauri – holds 47 percent of the equity, while ONGC has 49 percent. The remaining 2 percent is held by financial institutions.

Needless to say, the financial contribution to Dr Pachauri's evident wealth has not been recorded, but his continued partnership with "Big Oil" is now set to yield dividends. Reported in April 2009, two months before Pachauri stepped down from the main board of ONGC, the joint venture company had decided to bid for a share of a $3bn UN-funded contract to clean up the oil pollution in Kuwait, left behind by Saddam's invasion.

That Pachauri just happens to be a senior official of a UN institution is, of course, a complete coincidence. But his joint company seems remarkably confident of getting a sizeable slice of the work, so much so that it was telling the Indian financial press that it has "a plan to clock a top line of $2.1 billion in the next three to four years." 

One can only wish the enterprising Dr Pachauri the best of luck in his venture, but it should be recorded that, while the likes of George Monbiot are quick to associate "climate deniers" with Big Oil, no one is actually closer than his all-time hero, Dr R K Pachauri.

PACHAURI THREAD

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A conspiracy of interests - by Richard... Monday, December 28, 2009

Do environmental journalists sing to the same hymn sheet? Biased BBC offers some evidence to that effect. When you also get BBC journalists such as Nik Gowing involved climate change conferences as paid moderators, you begin to get the picture.

CLIMATE CHANGE – NEW THREAD

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All in your imagination - by Richard...

Temperatures are expected to plunge to minus 3°C in most of England and Wales on Thursday night, New Year's Eve, and minus 8°C in Scotland, with widespread snow showers also predicted. New Year's Day will also be chilly, with the northern half of Britain struggling to get above freezing during the day.

But don't worry boys and girls. The Met Office is on the case (above). It is "... more likely than not that 2010 will be the warmest year in the instrumental record, beating the previous record year which was 1998." So, turn off that central heating, get out there and enjoy yourselves. This cold is all in your imagination.

CLIMATE CHANGE – NEW THREAD

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Economic suicide - by Richard...

Although, as The Daily Telegraphobserves today, there are many dismissing coal as the unwanted black sheep of the fossil fuel family, coal-fired generation still provides 37 percent of our electricity supply. Moreover, unless or until the lunacy of carbon capture takes hold, it is one of the cheapestmeans of generation.

However, because of the high fuel cost, relative to capital outlay, coal fired generation is sensitive to increased coal prices. Doubling the price would force a 66 percent increase in the retail price of electricity.

Yet, it seems, with demand set to rise, price increases are precisely what we are having to confront. Analysts from JP Morgan, we are told, are forecasting that thermal coal, used in power stations, will rise from $70 to $85 per ton next year. And the direct cause of this is "rebounding demand" from China and India. 

Part of this is the result of mine closures in the Shanxi region of China and the rise in electricity generation, factors which are expected to drive world stocks down from their current level of 40 million tons to 22.7 million in 2010. But this is only half the story. 

In the longer term, global coal usage, far from declining, is set to increase substantially. The International Energy Agency believes that coal will account for 29 percent of global energy needs in 2030, compared with 26 percent four years ago, making this rather than "green energy" the key fuel for the future.

And, while the focus has been on the increase demand in China, an increasingly important player in the global market is India, not least through the inability of its own domestic industry efficiently to exploit its own reserves. 

Only this month an Indian parliamentary panel was "shocked" to find "inordinate delays" were slowing development and about 100 coal projects had failed to take off, resulting in a shortfall of domestic coal production.

Thus, to fuel a planned expansion of electricity production from 78 GW in 2006 to 142 GW in 2030 – the bulk of it coal-fired – the state-owned Coal India Limited is rapidly forming strategic partnerships with Australia, the US, South Africa and Indonesia in order to secure future coal supplies.

More recently, the company has secured an agreement with the Mozambique government to exploit two blocks of land totalling over 220 sq km in which high-grade deposits of coal have been found. The Indians won the bid from nine other bidders, while two bids each from the UK and China were disqualified. There were a total of four Indian bidders in the process.

Elsewhere, Indian interests are highly active in Indonesia where India's National Aluminium Co aims to buy at least 200 million metric tons of coal reserves from the eastern Indonesian islands of Kalimantan and Sumatra in order or secure aluminium production in India.

This is in addition to the 4GW Mundra power project in India's Gujarat State which will also be sourcing its 12 million tons of coal each year from Indonesia – and it has eight more such "ultra mega" projects planned with a total combined coal-fired generating capability of 32 GW.

The point, of course, is that India – as with China – is in competition with the UK (and the rest of Europe) for this coal resource. Yet, while we are saddling our own generators with increased costs, supposedly to combat global warming, not only are we providing cheap money for Asian development, in the case of India we are actually subsidising the coal plants by allowing them to claim "carbon credits".

Fair competition is one thing but castrating our own industries while subsidising our competitors, who are then able to outbid us in the same markets from which we source our energy supplies, is little short of economic suicide. And that is real effect of our government's obsession with global warming.