Green thinktank warns against using tax cuts to stabilise fuel prices
February 8, 2011 by drjohnmcgowan
Filed under Green Energy
Pleas from industry to cut fuel duty will result in rises to other taxes or further spending cuts, Green Alliance says
Pleas from industry to cut petrol duty would cost the government £6bn and lead to a “fiscal black hole” in public finances that would have to be filled by raising other taxes, or by more painful public spending cuts, a green thinktank warned on Tuesday.
Under current plans, taxes on petrol should rise slightly this April, to help the government meet its greenhouse gas targets and encourage energy efficiency.
But the government has come under fierce pressure from industry lobbyists to forego the planned rise, and instead use taxes to help stabilise the price of fuel. That would mean reducing the tax when oil prices are rising, to smooth out spikes.
Petrol prices are at record highs, after a sharp rise in the crude oil price. Fuel duty is now at about 59p a litre, and motorists have also been hit by the rise in VAT rates.
Road haulage companies, vehicle manufacturers and motoring organisations have said that using taxes to stabilise fuel prices would help companies that had been damaged by the recession. Some have suggested that taxes could be adjusted to bring fuel prices down to the levels of December 2009.
Boris Johnson, the mayor of London, has thrown his weight behind price stabilisation, and George Osborne, the chancellor, has indicated that he will consider the argument.
But using tax cuts to smooth out fuel price rises would be a mistake, according to the Green Alliance.
“It’s fiscally irresponsible to think the government can stop the price of fuel from going up,” said Chris Hewett, tax expert for the Green Alliance. “Cutting fuel duty means other taxes have to go up or further spending cuts need to be made.”
He called on the government to hold firm on fuel duty, as using it to try to stabilise prices would end up being both costly and futile.
The clear upward long-term trend in crude oil prices would mean that any fuel price stabiliser would simply allow oil producers and petrol retailers to hike prices at the pump and increase their profits, in the knowledge that the taxpayer would be left to fund the difference.
Instead of trying to hold prices down, he said: “We need to adapt to this world of high oil prices by focusing on modernising our transport system.”
The fuel duty escalator was first introduced by the Conservatives in the early 1990s. Although it was scrapped in early 2000 by the former chancellor Gordon Brown, protesters complaining about the high price of fuel in September 2000 forced an effective cut in fuel duty shortly afterwards. Last year, in the final Labour budget, the then chancellor Alistair Darling pledged to increase the duty by 1% above inflation a year.
Qantas on brink of £200m biojet fuel joint venture
January 2, 2011 by drjohnmcgowan
Filed under Green Energy
• Australian airline hopes to slash carbon emissions
• US partner Solena will also build plant in London for BA
The Australian airline Qantas will this month announce a deal to build the world’s second commercial-scale plant to produce green biojet fuel made from waste for its fleet of aircraft.
Its proposed partner, the US-based fuel producer Solena, is also in negotiations with easyJet, Ryanair and Aer Lingus about building a plant in Dublin, although this project is less advanced.
Airlines are trying to reduce their reliance on fossil fuels ahead of their entry into the EU’s carbon emissions trading scheme in January 2012 and the introduction of other new environmental legislation. Under the scheme, any airline flying in or out of the EU must cut emissions or pay a penalty.
Solena’s joint venture with Qantas – which could be announced within the next fortnight – follows a tie-up with British Airways, signed in February last year, to build the world’s first commercial-scale biojet fuel plant in London, creating up to 1,200 jobs.
Once operational in 2014, the London plant, costing £200m to build, will convert up to 500,000 tonnes of waste a year into 16m gallons of green jet fuel, which BA said would be enough to power 2% of its aircraft at its main base at Heathrow. The waste will come from food scraps and other household material such as grass and tree cuttings, agricultural and industrial waste. It is thought the Qantas plant, to be built in Australia, will be similar.
Solena uses technology based on the Fischer-Tropsch process, which manufactures synthetic liquid fuel using oil substitutes. Germany relied on this technology during the second world war to make fuel for its tanks and planes because it did not have access to oil supplies.
Airlines have been using synthetic fuel made in this way from coal for years, but this results in high carbon emissions.
The use of biomass – which does not produce any extra emissions – as an oil substitute has more recently been pioneered by Solena. The privately owned company says that planes can run on this green synthetic fuel, without it having to be mixed with kerosene-based jet fuel. In the UK and US, regulators allow only a maximum 50% blend, and the fuel was only recently certified for use by the UK authorities. BA is understood to be exploring the possibility of using 100% biojet fuel, once it is approved as expected.
Airlines including Virgin Atlantic have also been testing biofuels – made mostly from crops, which are converted into fuel – by blending them with kerosene-based jet fuel. But experts say these blends have to have a low level of biofuels to ensure that engine safety and performance are maintained. In February 2008, Virgin became the first airline in the world to operate a commercial aircraft on a biofuel blend, but this was only 20% and through just one of the plane’s four engines.
The use of conventional, crop-based biofuels is controversial. Some environmentalists are concerned that an increase in the farming of crops and trees for biofuels could take up too much agricultural land and hit food production. But Solena plans to make its biojet fuel using waste, not crops.
Industry experts say that, in the future, biojet fuel will work out cheaper than kerosene-based fuel as oil prices rise. Producers such as Solena could also earn subsidies by using waste materials that may otherwise have to be sent to landfill. The Germany airline Lufthansa is also understood to be interested in a joint venture with Solena. But with each plant costing £200m to build, it will take time to roll out the technology.
One challenge faced by Solena is securing a supply of biomass waste for its new plants. Ideally, facilities will be located in or near cities, where most of the waste will be sourced, and near airlines’ bases. The bioenergy producer will face competition from other companies planning to build incinerators, which also need to use waste to generate subsidised electricity.
Researchers develop reactor to make fuel from sunlight
December 23, 2010 by drjohnmcgowan
Filed under Green Energy
Scientists raise hopes for a large-scale renewable source of liquid fuel with a simple reactor that mimics plants
• Mini nuclear plants to power 20,000 homes
A simple reactor that mimics plants by turning sunlight into fuel has been demonstrated in the laboratory, boosting hopes for a large-scale renewable source of liquid fuel.
“We have a big energy problem and we have to think big,” said Prof Sossina Haile, at the California Institute of Technology, who led the research.
Haile estimates that a rooftop reactor could produce about three gallons of fuel a day. She thinks transport fuels would be the first application of the reactor, if it goes on to commercial use. But she said an equally important use for the renewable fuels would be to store solar energy so it is available at times of peak demand, and overnight. She says the first improvements that will be made to the existing reactor will be to improve the insulation to help stop heat loss, a simple move that she expects to treble the current efficiency.
The key component is made from the metal cerium, which is almost as abundant as copper, unlike other rare and expensive metals frequently used as catalysts, such as platinum. Therefore, said Haile, availability would not limit the use of the device. “There is nothing cost prohibitive in our set-up,” she said. “And there is plenty of cerium for this technology to make a major contribution to global gasoline supplies.”
The fossil fuels used by vehicles, ships and aeroplanes pose the biggest challenge in the search for low-carbon energy, as they are highly energy-dense and portable, unlike alternatives such as batteries or nuclear reactors. An efficient, large-scale way of converting solar energy into a renewable liquid fuel could play a major role in reducing greenhouse gas emissions and tackling climate change.
The device, reported in the journal Science, uses a standard parabolic mirror to focus the sun’s rays into a reaction chamber where the cerium oxide catalyst breaks down water and carbon dioxide. It does this because heating cerium oxide drives oxygen atoms out of its crystal lattice. When cooled the lattice strips oxygen from surrounding chemicals, including water and CO2 in the reactor. That produces hydrogen and carbon monoxide, which can be converted to a liquid fuel.
In the experiments the reactor cycled up to 1,600C then down to 800C over 500 times, without damaging the catalyst. “The trick here is the cerium oxide – it’s very refractory, it’s a rock,” said Haile. “But it still has this incredible ability to release oxygen. It can lose one in eight of its oxygen molecules.” Caltech has filed patents on this use of cerium oxide.
The use of sunlight to make fuel is being explored by groups around the world, such as that lead by Daniel Nocera at Massachussetts Institute of Technology. His group’s technology works at room temperature but is more complex chemically. At the Lawrence Berkeley National Laboratory last year researchers found cobalt oxide could help sunlight create fuels, but only as nano-sized crystals. Imperial College in London is also exploring different catalysts.
Other groups are exploring the use of CO2 from power station flues to create liquid fuels, while a related research effort is testing how algae grown in sunlight can be used to create fuels.
Ugandans turn Kampala’s uncollected garbage into versatile fuel
November 30, 2010 by drjohnmcgowan
Filed under Green Energy
Cement kilns are used to transform waste, which would otherwise pollute the city, into a fuel that suits petrol engines
Fred Kyagulanyi and James Sendikwanawa used to get up in the dark to dump bags of rubbish in Kampala‘s suburbs. Trying not to be spotted, they would sneak past the houses of sleeping neighbours and throw the bags on to the roadside or toss them in drains.
“We would wait several days until we had many bags and then make a trip,” Kyagulanyi says. “We were embarrassed, even if nobody was watching us at the time.”
Without a proper waste collection and management system, such nocturnal enterprises are not unusual in Uganda. These days, however, the two men turn rubbish into fuel. The friends have honed a technique to produce what Kyagulanyi calls “non-fossil fuel”, made from refuse such as plastic bottles, polythene bags and organic waste.
Kyagulanyi and Sendikwanawa, who are from Ndegye, a township about 17km outside the Ugandan capital, were inspired to find a use for rubbish after waking each morning to find piles of garbage thrown by other people.
“We decided that we would try to find a solution to deal with garbage,” says Kyagulanyi. “So we began researching how we could put it to good use.”
The pair had dropped out of school before their final exams, but Sendikwanawa had always had an interest in chemistry. It occurred to him that each year hundreds of thousands of tonnes of waste were piling up in Kampala and around other towns across Uganda and that perhaps he could do something with it all.
The result of their research can be found in a factory, little more than a corrugated iron roof held up with wooden poles. Here they use cement kilns to turn rubbish into fuel.
The men are heroes among the boda boda (motorbike taxi) riders who buy fuel from them at around $ 1 a litre – half the price of the petrol stations. Other customers include local car drivers and the neighbourhood video hall manager.
“We have three types of petrol here,” Kyagulanyi explains. “We have ‘super’, we have ‘premium’ and also we have ‘pure’. This is our factory language but in the language of fossil fuels, it can be called unleaded premium or benzene. But ours is very different so we have different names.”
“We use all types of waste from plants, plastic bottles, shoe soles and all different types of organic waste,” Kyagulanyi says. “We use all that waste to make fuel that runs petrol engines,” adds Sendikwanawa, who is known as “engineer” in Ndegye Township due to his day job: fixing biogas digesters on pit latrines.
He says they had originally tried turning waste into manure and fertilisers, hoping to sell it to farmers, but found there was little demand. However, with fuel prices soaring they knew they would have an eager market if they could power engines. Kyagulanyi found out about biodiesel during a four-year stint working in Germany. When he returned to Uganda he brought back literature on biodiesel, which inspired Sendikwanawa, who, he says, is the brains behind the project.
The men dry and sort the rubbish then heat it in kilns to produce a crude oil. A catalyst is added to produce different types of fuel. It is a process known as catalytic pyrolysis, in which material is heated at high temperatures in the absence of oxygen. Pyrolysis is the basis of several methods being developed around the world as a means of producing fuel from crops or waste products.
The pair admit there were a few hiccups, but they kept experimenting until they had a breakthrough in early 2009. Now they can process up to two tonnes of garbage a day.
Kyagulanyi and Sendikwanawa have formed Lat Photo Energy Uganda Limited and hope to ramp up production, pointing out there is no shortage of raw material for their fuel.
Kampala’s suburbs are choked with tonnes of uncollected waste, with city officials estimating that each person generates 0.2 tonnes of waste annually. Michael Mudanye, a waste engineer for Kampala council, says the city generates an estimated 1,500 tonnes of garbage a day, three-quarters of which rots uncollected on the streets, or gets thrown into in sewerage outlets and water channels, some of which run into Lake Victoria.
“So far we can only produce 100 litres of fuel a day,” says Kyagulanyi. We hope to increase the production if we get partners to expand our kilns. The challenge is that some people are still doubtful that our fuel works. We are now out to show the nation that we can produce enough fuel for everyone to run their vehicles while cleaning up all the rubbish left lying around the country.”
Uganda’s state minister for energy, Simon Du’janga, said he was aware that some gas and fuel could be obtained from garbage but his message to Kyagulanyi and Sendikwanawa was: “Tell those fellows they should not waste their time. It is a very costly process with very little output.”
However, Lat Photo Energy Uganda appears to be proving him wrong. The company may be small but it’s doing steady business.
Raj Kaakeeto is a boda boda rider and one of Kyagulanyi and Sendikwanawa’s regular customers. He says at first he doubted whether the fuel would work. “One day I had no money yet I needed fuel. So I bought some of their fuel and mixed it with the little that I had in the tank. I was surprised – it worked,” he says. He likes it because it’s a lot cheaper than the regular petrol.
Jimmy Lutakome, another resident in the area, testifies that the fuel works well in petrol engine generators. He says: “The fuel lasts longer if you mix it with that from the petrol stations. I have been saving about 2,000 shillings per day [about 90 cents] compared to the past.”
Kyagulanyi and Sendikwanawa have a grander vision than just providing cheaper fuel for their neighbours. “We thought we should be part of the solution to the global demand for environmentally beneficial practice. And I think we are succeeding,” Sendikwanawa says. “We only need to expand the capacity of our kiln and distilleries and we shall clean up the city of waste.”
Fuel bills: turning up the heat | Editorial
November 26, 2010 by drjohnmcgowan
Filed under Green Energy
New powers to force energy companies to disclose their wholesale trades could give energy regulator Ofgem teeth
And so returns that hardy yuletide perennial: a story about high energy prices and empty threats from the regulator.
Here is this year’s version, as launched yesterday. Annoyed by the rise in energy firms’ profit margins (up 38% over the past two months alone, which makes the mark-up on a standard dual-fuel tariff £90), the gas and electricity watchdog has announced a probe into pricing. Ofgem’s review will be wide-ranging and even quite aggressive, going by the warning from top regulator Alistair Buchanan that he wants to “ask if companies are playing it straight with consumers”.
Promising stuff. There is just one snag: as watchdogs go, Ofgem is among the tamest of the lot. The last time it conducted a big review of the energy market – as fuel prices were soaring in early 2008 – the conclusions could have been filed under T for Timid, revolving around making more information available to the savvy consumer. Former chartered accountant Mr Buchanan makes an unlikely firebrand; up until very recently he made all the leave-it-to-the-market noises conventional among British regulators – at least until the great banking crisis forced them to update their catechisms. And despite all the talk among observers about how Ofgem has been monitoring rising fuel prices with rising alarm, the fact remains that this review has been launched at the back end of November and will not conclude until next spring – by which time all the usual seasonal anger about big bills will have dissipated.
Still, there are some grounds to be more hopeful this time around. The most important is the political climate: fuel bills are going up sharply just as British households enter the age of austerity. VAT rises to 20% just as the new year sales begin – then the sharpest cuts in public spending in decades start. Meanwhile, the Conservatives have been wondering whether to sling Ofgem onto their great bonfire of the quangos. One of the recurrent suggestions is that the coalition could strip Ofgem of its consumer powers and hand them to the Office for Fair Trading. It is in Mr Buchanan’s interest to bare his teeth.
If so, they will be teeth fitted in Brussels. Next March an EU directive comes into force that will enable states to get energy companies to disclose all of their trades in the wholesale market – and by implication how much it costs them to supply fuel to households and businesses. At the moment, Ofgem has to estimate these costs – a tricky job, and one that makes regulatory oversight difficult. These new powers bestowed by Brussels could allow Mr Buchanan’s team to go much further in protecting customers. Let us hope they use them well.
From the archive, 26 November 1973: 007cc – Bond in the fuel crisis
November 26, 2010 by drjohnmcgowan
Filed under Green Energy
Originally published in the Guardian on 26 November 1973
“M paused to fill his pipe and light it. ‘Not a moment to lose, 007,’ he said quietly. ‘Better get your skates on.’
“‘Right, sir,’” said Bond. A few minutes earlier the 1933 gunmetal grey, drophead roller skates (adaptable at the touch of a switch for instant ice-skating with the Amherst Villiers conversion and the flick knife concealed in each wheel) had been brought round from the boot cupboard where he kept them. Within seconds Bond’s powerful, thrusting calf muscles were causing sparks to fly from the pavements of Whitehall as he set off in pursuit of his arch enemy. Somewhere up ahead, he knew, was Goldfinger on his supercharged pogo stick. Bond’s eyes narrowed. Would he be in time? …”
As you can see I’ve been rewriting the James Bond books to bring them into line with the demands of the present fuel crisis, a modest act of patriotism for which I expect no reward. Propaganda of this kind will clearly be necessary in the months ahead and I have plenty of ideas. For instance, “Z Cars” will have to go for a start. Can’t have the BBC wasting petrol by sending toy policemen up and down the streets of Newtown. The only problem is, will “Z Bikes” have quite the same appeal for a mass audience?
Mind you, in the old days, when the world was a well-ordered place, none of this would have been necessary. We’d simply have sent a gunboat and an expeditionary force. We wouldn’t, I can tell you, have sat back gritting our teeth while that Saudi Arabian chappy Sheikh Yamoney swaggered about Europe doing one-night stands on TV and threatening fearful consequences unless Golders Green were handed back to the Yemenis.
Indeed not. We would have been straight up the Suez Canal, across to Cairo, instructing the cringing Sadat to stop behaving like a cad, grab himself a pick and shovel and start digging for oil before we really got cross. Ted thought about it, naturally, but had to abandon the idea because his garage wouldn’t let him have the petrol. After all, how far can a gunboat get on three gallons.
So there we are. The situation is grim and the only source of comfort we can find is in the Government’s forthright statement that petrol rationing will not be introduced until after Christmas, unless of course it’s introduced before Christmas. Either way, an age of austerity looms ahead for us all, or at least for all except those ingenious people who can convert their cars to run on methane gas manufactured from a handful of pig manure. A glimmer of hope there, I suppose, though if the alternative is to go about picking up handfuls of pig manure I think I’d rather walk anyway.