Green Energy Chronicles
John's weekly update on graft, corruption and waste in the energy sector.
John Kerry used his first major speech as Secretary of State to make that case that failing to confront climate change means missing big economic opportunities — and worse. “If we waste this opportunity, it may be the only thing our generation — generations — are remembered for. We need to find the courage to leave a far different legacy,” Kerry said in a wide-ranging address Wednesday at the University of Virginia.
Kerry again signaled that he hopes to use his role as top diplomat to promote green energy technologies, arguing they can provide a major boost to U.S. industries in the “next great revolution in our marketplace.”
John Kerry on Wednesday ripped his former colleagues in Congress for contributing to public opposition to foreign aid during his first major address as secretary of State. Kerry said many Americans believe that the United States spends 25 percent of its budget on foreign affairs, instead of the real figure of just over 1 percent. He said politicians looking for an applause line have contributed to that misperception.
“Where do you think this idea comes from?” Kerry asked. “Well I'll tell you, it's pretty simple. As a recovering politician, I can tell you that nothing gets a crowd clapping faster in a lot of places than saying: 'I'm going to Washington to get them to stop spending all that money over there.' ”
Police have arrested five people in eastern Sicily suspected of involvement in Mafia corruption over contracts to build wind farms, Italian media report. The mayor and a councillor in the small town of Fondachelli Fantina, in Messina province, were among those detained. The five face charges including extortion, fraud and Mafia association.
The investigation, which began in 2009, is linked to sub-contracts awarded to build energy farms near Agrigento, Palermo and Trapani. A total of 11 people were under investigation, including two managers from a firm that won the main contract to build one of the wind farms, installing 63 turbines. The contract was worth some 120bn euros (£103bn).
In December, police arrested six people and seized 10bn euros (£8.6bn) in assets in an investigation into suspected Mafia infiltration of other renewable energy facilities in western Sicily, Ansa reports. The proceeds from contracts are believed to have been channelled to the fugitive head of the Sicilian Cosa Nostra, Matteo Messina Denaro.
Spain’s biggest power utility by market value says it is a sensible move for a country that has been paying too much for electricity it does not need. “What we were doing was irrational,” says Ignacio Galán, chairman. “It makes no sense. Spain is installing the most expensive technologies in Europe instead of looking for those which are cheapest.” One analyst says they fear retrospective cuts in tariffs from government. Another says a nuclear windfall tax is what they should worry about. As for plans in Britain, Galan says: ”The area that has the most uncertainty is the area of nuclear. We still don’t know how it’s going to be properly paid – what the return will be. The decision to go ahead (in a consortium with GDF Suez) is not going to be taken until the moment the framework is clear and predictable enough, with enough remuneration for those investments.”
After four years of constant aid to the wind energy sector in the US, Obama's administration has decided to end the subsidies to the sector and thus no more new wind farms or solar plants will be constructed. One of the companies most affected is Iberdrola, whose American subsidiary decided to stop the development of all of its projects in the US until the government decides to reinstate its subsidies program. Iberdrola USA said: "If we can't construct in 2012, we will not construct in 2013 either. Not until the government brings back the Production Tax Credit (PTC) for the development of renewable energy.
New Richard Windsor Emails Show EPA’s Transparency Problem More Widespread
(Washington, D.C.) – U.S. Sen. David Vitter (R-La.), the top Republican on the Senate Environment and Public Works Committee (EPW), today released findings from the Environmental Protection Agency’s (EPA) second tranche of Richard Windsor emails. The release shows that acting Administrator Bob Perciasepe used a private email account to conduct official business, similar to Region 8 Administrator, James Martin, who is the subject of an ongoing investigation launched by Vitter and U.S. House Oversight and Government Reform Committee (OGR) Chairman Darrell Issa (R-Calif.).
Sen. Vitter also announced today that he has learned Martin is resigning this week, less than two weeks after hiring legal counsel.
The boom in the Eagle Ford Shale in South Texas has spawned new business and bolstered a weak economy. But with growth, there are sometimes downsides. Recently, drug smugglers have used private back roads on oil and gas field sites as their paths into the United States, avoiding the ramped up security the U.S. government has put on our borders. Since public roads are heavily monitored, the drug smugglers had to get inventive -- using the private roads oil and gas producers use to maneuver to their sites.
According to a story appearing in the Houston Chronicle, almost 19,000 pounds of marijuana was smuggled in March aboard two trucks driving through the Briscoe Ranch -- on a road that bypasses a Border Patrol checkpoint. The trucks looked like the normal supply vehicles that come and go along these private roads.
With rising electricity demand and untapped wind resources, Morocco is luring developers including Enel Green Power SpA and Xinjiang Goldwind Science & Technology Co. to build clean-energy projects. The North African nation aims to build 2,000 megawatts of wind capacity by 2020 to curb dependence on fossil fuels.
GDF Suez and Nareva have signed a 20-year agreement to sell the power generated at their project in the southern coastal desert to Morocco’s Office National de l’Electricite & de l’Eau Potable. “Optimal” wind conditions will give the site a utilization rate of 45 percent, GDF Suez said.
Illicit drugs: one of the world's largest producers of illicit hashish; shipments of hashish mostly directed to Western Europe; transit point for cocaine from South America destined for Western Europe; significant consumer of cannabis.
Refugees at the camp in Sevare, a dusty town in central Mali, told RIA Novosti late last month that God is French. Such exaltation has been rippling through much of the country, which managed to fight off an Islamist-tinged insurgency thanks to last month’s blitzkrieg intervention by the French Air Force. Red, white and blue French tricolors have been displayed all over Mali – for the first time, locals say, since the West African former colony gained independence in 1960.
As Bamako grew weaker in recent years, the Tuareg elites grew stronger. One important factor has been trans-Saharan trade, which has changed a lot since the time of the medieval Mali and Ghana empires that traded in gold and salt. The modern Sahara thrives on smuggling, with goods such as consumer electronics flowing to Africa from Europe – the city of Gao in Mali’s north is advertised as the best place in the country to buy a satellite dish – and a steady trickle of would-be illegal migrants going the other way in hopes of securing passage to the European Union.
More importantly, the Sahara serves as a vital route for South African cocaine bound for Europe. An estimated 60 tons of drugs, mostly cocaine, pass through the desert every year, the United Nations Office on Drugs and Crime said in 2009. In addition to drug lords, the desert region has started to attract Islamists, who seek to complete an “arc of instability” from the Sahara to Afghanistan, said Korendyasov, the ex-ambassador.
Last year, the Norwegian government, which has the world's largest sovereign wealth fund, divested PotashCorp because of its purchase of Western Saharan phosphate. Several European banks have done the same. And the European Union last year ended a fishing agreement with Morocco, which included Western Sahara waters, because of concerns that it violated international law.
Other resources are still being exploited. Sand is exported to the nearby Canary Islands, owned by Spain, to bolster beaches there. Several international companies are exploring for oil in Western Sahara or off its shores. Activists say the Austin, Tex.-based company Crystal Mountain Sel Sahara is producing salt in Western Sahara. And several European companies as well as American company UPC Renewables are developing wind farms in Western Sahara, with plans to export the energy. Such investments go forward with little controversy, despite the legal gray area.
For an industry all puffed up about its supposed environmental virtue, green energy sure is attracting a dirty crowd. Witness its latest entrant, Italy's Mafia. The mob knows a good fraud when it sees one. Alongside strip joints, drug smuggling, human trafficking, leg-breaking and political shakedowns, Mafia soldiers have moved in on the something-for-nothing world of green energy.
The Washington Post, in a page-one story, reported last week that a major sting operation by Italian authorities yielded a swarm of corrupt front groups run not by green hipsters, but by the Cosa Nostra of Sicily and the Calabrian syndicate known as 'Ndrangheta.
The plot was "part 'Sopranos,' part 'An Inconvenient Truth,'" the Post noted, with the mob shaking down legitimate farmers for title to their land, and then accepting EU subsidies for windmill construction, paying off political players to ensure the subsidies came.
It's the latest chapter in an ongoing story of corruption continuously surrounding green energy. In 2009, Italy's National Association of Wind Energy boss Oreste Vigorito was busted for building wind farms on public subsidies that sopped up state cash and delivered nothing. In 2010, cops seized $2 billion in 43 solar and wind fronts from "businessman" Vito Nicastri, known as "Lord of the Winds."
Can't happen here? Along with pay-for-play subsidies that have rolled into politically tied companies like Solyndra, green Mafia scams have reached the Netherlands, Britain, Ireland and Spain. Meanwhile, in Germany, carbon trading has drawn corruption of its own.
Italian blogger Pasquale Trivisonne denounced the waste of these scams in Italy — with wasted farmland and noisy windmills, but zero jobs and no energy.
It's money in the pockets of criminals. Green millionaires such as Vigorito got their seed capital from U.S. sources, Trivisonne noted. Vigorito, for one, had ties to Bryan Caffyn, founder of the "Cape Wind Project" in Massachusetts, which has been criticized for giving taxpayers little value for their money.
Note: Market Visual Map
Note: Lawrence Summers involvement.
The majority of production blocks currently under agreement in Romania are held by Romgaz, the state owned national gas company, and Petrom, the Romanian state oil company which was privatised. Petrom is now majority (51%) owned by Austrian oil company, OMV. Romania is the largest natural gas producer in Eastern Europe.
Creat Resources Holdings Limited (CRHL) is a resources investment company. The Company is engaged in minerals exploration and the acquisition, exploration and operation of mineral properties in both Australia and overseas. CRHL, through its two wholly owned subsidiaries holds three exploration licenses, one retention licenses and two retention licenses applications, together they cover a mineralized area of approximately 100 square kilometers near the township of Zeeman in Western Tasmania. As of June 30, 2010, it had two projects: Galaxy Project and Zeehan Project. Its exploration licenses include EL21/2004, EL30/2002, EL20/2002 and EL18/2003. On February 1, 2010, two retention licenses, RL3/2009 and RL4/2009 were granted for an initial period of 2 years. During the fiscal year ended June 30, 2010, CRHL acquired 19.99% interest in Galaxy Resources Limited (Galaxy). In December 2009, CRHL acquired an exploration license EL21/2004 in the Zeehan area near Mount Dundas, Western Tasmania.
Biden caught with hand in cookie jar (Must Read)
BrightSource Is “Sustained By An Impressive Array” Of Subsidies
Brightsource Is “Sustained By An Impressive Array Of Federal, State And Local Subsidies, Including A $1.6 Billion Loan Guarantee From The Department Of Energy.”“Fortunately for BrightSource, its efforts are sustained by an impressive array of federal, state and local subsidies, including a $1.6 billion loan guarantee from the Department of Energy, one of the largest solar guarantees on record. The company notes federal provisions providing solar projects with a 30% investment tax credit through 2016, as well as accelerated depreciations of capital costs for solar entities, among other goodies.” (Editorial, “Secretary Of Subsidy,” The Wall Street Journal, 6/2/11)
The United States said Wednesday that it regrets the Russian government’s decision this week to scrap a decade-old bilateral agreement under which it received financial aid from Washington to fight crime, including drug trafficking.
“We obviously regret this decision because under our agreement we’ve had very fruitful cooperation with Russia on rule of law, counter corruption efforts, preventing trafficking in persons, counternarcotics and strengthening our mutual legal assistance cooperation."
This electronic briefing book is compiled from declassified documents obtained by the National Security Archive, including the notebooks kept by NSC aide and Iran-contra figure Oliver North, electronic mail messages written by high-ranking Reagan administration officials, memos detailing the contra war effort, and FBI and DEA reports. The documents demonstrate official knowledge of drug operations, and collaboration with and protection of known drug traffickers. Court and hearing transcripts are also included.
The U.S. Dept. of Homeland Security (DHS) is embarking upon a project to offer training in the Kingdom of Morocco in advanced intelligence-analysis techniques, and intends to outsource that training to a private contractor. The aim of this DHS initiative, which the U.S. Customs and Border Protection's (CBP) Office of International Affairs will oversee, is to reverse Morocco’s position as “the third largest producer of cannabis” and as “the major transit country for transnational criminal organizations moving South American cocaine through Northwest Africa to Europe.”
DHS did not disclose the estimated cost of the endeavor.
Iberdrola was notified by Bolivia that the government has nationalized its electricity holdings in the South American country, spokesman Jose Luis Gonzalez Besada said in a telephone interview. He declined to comment further.
The Spanish government was suddenly rocked by scandal Thursday after documents were published that allegedly showed Prime Minister Mariano Rajoy getting €277,000 ($376,000) that had been hidden from tax authorities.
Rajoy denied the allegations after the Madrid newspaper El País published extracts from what it said were secret accounts for his conservative ruling People's Party, the Guardian reported. But opponents demanded his resignation, and ordinary Spaniards asked whether those now imposing draconian austerity had practiced, or tolerated, systematic tax avoidance.
Spain's governing Popular Party was battling Thursday to defend its honor by denying fresh newspaper reports of regular under-the-table payments to leading members, including Prime Minister Mariano Rajoy.
Leading newspaper El Pais published what it called the "secret accounts" of former party treasurer Luis Barcenas, with copies of alleged records from several years ago showing names and amounts received. The money was allegedly paid by businesses, many in the construction sector, via Barcenas.
France’s Electricite de France SA and Iberdrola Renovables SA’s Greek unit, Rokas Renewables, are the top producers in Greece’s wind energy market, which grew 7 percent in 2012, according to the Hellenic Wind Energy Association.
Total installed capacity increased by 115.2 megawatts to 1,749.3 MW last year, compared with a 24 percent advance the year earlier, according to a statement on the Athens-based association’s website today. EDF produced 17 percent of that, or 298.8 megawatts, while Iberdrola accounted for 14 percent.
George Soros' hedge fund firm, Soros Fund Management, have just disclosed a 22% ownership stake in oil and gas exploration company, San Leon Energy (LON: SLE). Due to trading on January 6th, the hedge fund recently crossed the London Stock Exchange's threshold that requires them to disclose the position.
It is likely that Soros acquired shares via San Leon's £59.6m placement on December 31st, 2010. In total, the hedge fund now owns 176,928,520 voting rights. Soros has also been involved in another oil & gas play as we detailed last month as well. There seems to be a common theme here and it will be interesting to watch for potential further investments. In the past, Soros had been a large owner of Petrobras (PBR), Brazil's state-owned oil play.
Two years ago we looked at the claim that wind generation can save money for power pool customers. We found that the supposed savings could be realized only if the elephant in the room – the above-market feed-in tariffs – were ignored.
In other words, the total amount spent on electricity purchases from a power pool was augmented by the additional amounts consumers pay to fund the feed-in-tariff (FIT). As long as wind generators can bid a low price but receive the higher FIT, then they have an incentive to underbid, thereby reducing pool prices, but not overall costs.
In addition, we looked at what an economically least cost system might look like in Germany over the next ten years. We found that it features more coal and lignite, keeps most nuclear plants operating, and builds new gas-fired plants.
The annualized differential in total costs for Germany between the no-nukes, no coal and lots of wind forecast pushed by Germany’s Greens and an economically least cost expansion plan amounts to more than $120 billion over ten years and perhaps as much as $200 billion. A lot of money, in other words.
Since these two posts were published in 2010 Master Resource contributors have made a strong case that Germany’s overinvestment in wind and solar has harmed the nation financially without any compensating improvement in electricity supply. Compounding the overreliance on wind is the planned phase-out of the country’s nuclear power plants – baseload power that will need to be replaced with something other than wind.
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