Energy, or the control over it, could lead to a military confrontation in the Asian Pacific wrote Breitbart. Desperate for energy sources to fuel their economies, China, Japan, Taiwan, and South Korea are all claiming ownership of the oil rich Diaoyu/Senkaku Islands in the East China Sea. The Chinese claim the discovery and control of the Diaoyu islands from the 14th Century, but Japan took control of the islands from 1895 and has held it since.  Moreover, Japan has gone so far in the past few years to assert an Air Defense Identification Zone out to 125 miles around the islands. Now China has unilaterally announced the creation of its own East China Sea Air Defense Identification Zone which covers a vast area including the disputed islands. All aircraft must ask China for permission to fly in this zone and abide by Chinese instructions when in the zone. China went so far as to say: “China’s armed forces will adopt defensive emergency measures to respond to aircraft that do not cooperate in the identification or refuse to follow the instructions.”

In response to these new Chinese edits, the U.S. flew two unarmed B-52 bombers from Guam on November 25th without notification. Then on 29th, the People’s Liberation Army Air Force scrambled Su-30 and J-11 warplanes in response to 10 flights of Japanese F-15s, E-767s and P-3s; U.S. P-3s and EP-3s; and South Korean fighter jets flying through the ADIZ….(A)ccording to Stratfor Reports: “Beijing is testing U.S. responses in the Western Pacific, as China attempts to shape a new maritime balance in the area. All sides will use the current standoff to recalibrate the balance of power over energy and maritime geopolitics that, much like during the Cold War.”

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China’s confrontations may not be intended to lead to a clash, but when armed and dangerous nations play chicken with modern weapons, the risk of a military miscalculation and accidental war accelerates.

The Atlantic explained why developing countries will consume 65% of the world’s energy by 2040. This is the finding of the US Energy Information Administration which sees non-OECD nations using energy at a much higher rate than OECD nations over the next 30 years. (see graph below)  Indeed, OECD energy use will essentially be flat.

 

 

Most of the growth in energy consumption will occur in countries like China and India that rely on coal and other fossil fuels to generate electricity.  Most of the increase in the developing world’s energy stems from rapid population growth. India, for example, is expected to add twice the number of people than will be born in the 34 OCED nations between 2010 and 2040. In addition energy consumption per person is predicted to rise in the developing countries as they grow richer and their citizens want the luxuries of cars and air conditioning and advanced consumer electronics.

The great unknown in this energy shift is how successful nations like China and India will be in replacing fossil fuels with renewable sources of power like solar and wind. 

From The Epoch Times we learned about the new trade patterns emerging in world energy. With the US about to become the largest oil producer in the world in a few years (mostly from shale oil), Canada will start exporting more crude oil to Asia instead of to the US.  Meanwhile, with European energy use slowing, Russia will export much of its oil and natural gas to China.

Europe’s energy price headache becoming a migraine posted The Financial Post. The International Energy Agency (IEA) forecasts Europe’s energy prices remain three times higher than in the US for the next 2 decades unless the region can develop domestic supplies and increase efficiency. Many EU nations are already worried about the impact of high energy costs on their increasingly uncompetitive manufacturing industries, with some member countries debating a freeze on energy prices and removing renewable energy subsidies. Electricity prices in Europe are double those of the United States as the latter is increasingly using cheap shale gas to generate power. IEA chief economist Fatih Birol said:

“Competitiveness will be more of a problem for many countries. Today it’s a headache. Tomorrow it will be a migraine for the European economies if no policies are put in place.”

The high and rising cost of renewable energy for European consumers and its economy was addressed by The Telegraph, Green energy: How their green rush is costing us all, Business Insider, Europe’s Electricity Bills Are Skyrocketing, Green Techling, Green Subsidies Feel Heat In UK Energy Cost Crunch, Forbes, Germany’s Renewable Energy Subsidies Could Threaten Economic Growth, and The Christian Science Monitor, Is Energy Dragging Europe Down?

Reuters reported Bulgaria has imposed a tax on wind and solar power revenues to keep electricity prices from rising. Bulgaria, the poorest country in the European Union,  introduced very generous government subsidies to produce green energy and now has a serious budget deficit and high electricity prices. Now it is taking back some of those subsidies by taxing the income of solar and wind companies as well as limiting the amount of renewable energy that can be purchased at preferential prices.  The solar and wind companies responded by saying they will go bankrupt under these changes to their subsidy programs.

Protests over high electricity bills – partly the result of investment in green energy – toppled the previous centre-right cabinet in February…The new government, faced with daily protests over corruption, has pledged to keep power costs low to avoid mass public unrest in a country where energy bills take a big chunk of people’s monthly income, especially during the winter. Countries across Europe have also sought to cut subsidies to wind and solar energy that have pushed up consumer electricity bills.

The article also mentions actions taken or to be taken by Germany, Greece and the Czech Republic to reduce the subsidies going to solar and wind in an effort to stabilize electricity prices and reduce the growing deficits arising from these subsidies.

BDLIVE said electricity price increases are hurting the South African economy. The country’s energy minister said rising electricity prices have negatively affected economic growth, contributed to inflation, may have made some marginal industries economically unviable, and has impacted service delivery by municipalities. South Africa’s electricity prices had soared by more than 170% over the past five years as the country expanded and upgraded its electrical grid. The increases followed a 15 year period where governments kept prices very low.  As a result, as many as 440,000 small businesses may have exited the market in the last couple of years because of the rapid increase in electricity prices.

GiGAOM looked at where we are with battery storage for the electric grid and it appears not very far. Cheap, reliable battery storage of electricity produced by renewable sources such as wind and solar is essential if renewables are to become 24/7 suppliers of electricity. The post looks at the obstacles to be overcome in getting inexpensive battery storage including choosing a standard technology that will work for “supersized” batteries to power a whole economy. Getting bank financing is also a big problem for many companies with ideas but no funds.

FierceEnergy wrote that solar will reach grid cost parity by 2025. Lux Research.says by that time solar will no longer require government subsidies.  Solar’s competitiveness with natural gas will be helped by anti-fracking policies in Europe, high energy costs in South America as well as increasing liquid natural gas (LNG) exports from the US and Canada. The key takeaway from the Lux study is utility-scale solar globally will be only about $0.02/kWh above the price of power produced by combined cycle natural gas turbines by 2025. Lux does predict the transition from subsidized to unsubsidized solar – particularly in the leading markets of China, Japan and the U.S. – will be turbulent, owing to the fact that standalone solar is unlikely to be cost-competitive with gas when the subsidies come to an end. To prepare for this , the research firm says companies should begin developing hybrid systems that are able to take advantage of low gas prices,

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