choongyong.koh's clips tagged energy

Liquefied natural gas is at best an interim measure

choongyong.koh — Wed, 06 Sep 2006 03:26:14 -0000

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Sep 6, 2006

Liquefied natural gas is at best an interim measure

I REFER to Ms Choo Wai Chan's letter, 'Alternative fuels won't fully replace fossil ones' (ST, Sept 1). Complementing PNG (piped natural gas) with LNG (liquefied natural gas) is not that much of a diversification. It is the path of least resistance since the existing power plants do not need to be replaced.

It is not a diversification because it is the same fossil fuel, just more expensive, due to the need to freeze it before shipping it and also having to re-gasify it before it can be used. The cost of the LNG infrastructure - terminal and tankers - is in the billion-dollar range, and guess who foots the bill eventually? Besides, we still have to contend with resource depletion. With LNG, we may 'run away' from local resource depletion in Malaysia and Indonesia but nobody can run away from global depletion. The gamble the Government is taking is that global depletion arrives later than local depletion. As for global depletion, the figure of 40 years of reserves left is often quoted but that is misleading. It implies that problems will only occur in the far future but that may not be true. The problem is not running out, the problem is hitting the halfway point, known as Peak Oil (and Peak Gas), where global production starts to decline and can no longer keep up with demand, causing prices to rise dramatically. According to geologist Dr Colin Campbell of the Association for the Study of Peak Oil and Gas, the peak date is due to arrive by 2010. That is two years before Singapore's LNG terminal is even scheduled to start operations.

The Singapore Government deserves credit for pushing ahead with the LNG initiative, though it is hardly an original idea - many countries are also setting up LNG terminals. America is planning 40 terminals. Even Mexico, home to the world's second largest oilfield, has started importing LNG. This tells us something about the sheer level of demand that will be coming up for LNG in the coming years. Singapore is joining a race that has already started.

LNG will be traded just like crude oil is today. Qatar is setting up an energy trading exchange. The natural gas will, quite naturally, go to the highest bidders. What is quite certain is, at the end point, it is not going to get any cheaper. There is nothing cheap about LNG. It is at best an interim measure while society considers other solutions. Although the other alternatives for base-load electrical power - nuclear, coal, geothermal, ocean tidal and thermal - are fraught with all kinds of environmental, political and technical risks, they need to be considered well before the global peak date arrives. While making preparations for the LNG terminal, the Government should also take a close look into alternative energy sources - while there is still time.

Low Ee Mien

Southeast Asia’s resource supply and competition - fuelling insecurity?

choongyong.koh — Tue, 05 Sep 2006 04:55:58 -0000

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Southeast Asia’s resource supply and competition - fuelling insecurity?

The concept of resource security has achieved greater resonance amongst many Southeast Asian nation’s foreign policies and development agendas.

At the regional level, progressive steps are also underway for resource security with ASEAN member states signing an MOU last month at the ASEAN Ministers of Energy Meeting (AMEM) in Vientiane, Laos to develop an ASEAN power grid. The AMEM also witnessed more urgent calls for cooperation in renewable energy use. At the fifth meeting of the SOME (Senior Officials Meeting on Energy) + 3 Energy Policy Governing Group in Singapore this February, improvements were also made in terms of oil stockpiling as well as cooperation in the areas of energy efficiency and conservation.

ASEAN member states appear determined not to be gripped by supply shortages and oil price hikes, and have adopted more sophisticated diversification strategies along the lines of alternative and renewable energy. Plans to adopt biofuels, nuclear energy and LNG (liquefied natural gas) are crowding the headlines.

Southeast Asia is also commanding a stronger market and strategic focus with China and India leading the way of investments. Competition amongst the key energy players in the region ensues.

Malaysia for example, is facing strong competition from Australia over LNG deals with China. While Australia secured its largest single trade deal in exporting LNG to China for 25 years two months ago, Petronas may soon follow in its footsteps by supplying China for the same 25-year term.

New natural gas discoveries in Myanmar – increasing its profile as yielding one of the largest reserves in the region – have opened up more lucrative deals with its neighbours India, China, Malaysia, and Thailand, in spite of the tough stance against the junta during the 39th ASEAN Ministerial Meeting. Even the EU and US oil companies are operating in Myanmar’s gas fields in defiance of economic sanctions imposed on the state.

The political leverage gained through new-found economic prowess has led the regime to launch a military offensive to forcefully displace thousands of ethnic Karen from their homes. The refugees are now putting much strain on Thailand, destabilising the region’s political security.

Australia’s recent energy ambitions, even in the form of LNG exports, may not be so clean. An August 24 TODAY article has suggested that Australia’s vested interests in the political security of Timor Leste are actually oriented by the latter’s vast oil deposits valued at over US$30 billion. Citing Australian journalist, John Pilger’s allegation that a leaked Australian Defence Force document revealed that “Australia helped precipitate a rebellion led by Canberra-trained Major Alfredo Peinado” in order to exercise influence over “Timor Leste’s decision making” particularly those relating to its oil and gas.

The article pointed to the fact that former Prime Minister of Timor Leste, Mr Alkatiri, was an anti-imperialist who stood up against the demands of Australia, and alluded to the fact that Australia intervened in Timor’s political crisis in “the nick of time” as “the Alkatiri government was preparing to sign a major oil exploration deal with Petro China which included building an oil refinery in Dili. That would have undermined Australian plans to build a refinery in Darwin to process all Timor Sea oil from both sides of the border”.

Resource security in the region also goes beyond oil and gas. The region’s current alternative energy drive may be playing a major and contradictory role in prompting other environmental and human security issues.

The lucrative slash-and-burn clearing of land for oil palm plantations in Indonesia support in part, the large-scale plans of biofuel conversion. But such practices have also brought about the long-drawn transboundary haze pollution, disrupting economic and social activities of neighbouring states, and heightening political tension in the region. Recent headlines – harshly critical of Indonesia’s political will to curb the forest fires – published in ASEAN’s Haze Action Online would attest to this.

Elsewhere, China’s energy thirst has extended across the Mekong River, such as via a new US$20 billion proposal to build a canal across Thailand's Kra Isthmus to transport petroleum from Thailand to southern China. Concrete plans may be underway in the near future for oil transports to increase all the way through the Mekong to bypass the Strait of Malacca. But should an oil spill come about as Washington CSIS researcher Chietigj Bajpaee insinuates in an August 22 Power and Interests News Report, the entire ecosystem as well as the economies of the Mekong River states would be imperilled. The devastating oil spill crisis currently encountered by the Philippines should provide a sombre reality check.

Sources:

Asean to sign power pact in July (Business Times (Malaysia), 16 May 2006)

China increases its energy stakes in SE Asia (The Business Times, 21 July 2006)

ASEAN calls for more renewable energy use (The Jakarta Post, 28 July 2006)

Singapore stands to gain as regional import hub for LNG (The Straits Times, 5 August 2006)

S'pore opts for LNG to diversify power sources (The Straits Times, 8 August 2006)

China, India duke it out over Myanmar’s natural gas riches (AFP, 14 August 2006)

Singapore Turns to Biodiesel to Fight Rising Fuel Costs (Reuters, 21 August 2006)

ADB funds northern power transmission upgrades (Than Hnien Daily, 22 August 2006)

Asia's Coming Water Wars (Power and Interests News Reports, 22 August 2006)

Oil lures West to troubled Myanmar (AP, 23 August 2006)

Irrawaddy: Karen refugees in Ratchburi pushed closer to Burma border (Burmanet News, 23 August 2006)

Australia ready to mark first LNG shipment to Beijing (Financial Times (England), 23 August 2006)

Timor Leste and the $47b question (TODAY, 24 August 2006)

Summary Record of the 2nd ASEAN+3 New and Renewable Energy (NRE) and Energy Efficiency and Conservation (EEC) Forum (ASEAN Centre for Energy, www.aseanenergy.org)

Summary Record of the 5th Meeting of the SOME + 3 Energy Policy Governing Group (ASEAN Centre for Energy, www.aseanenergy.org)

ASEAN Haze Action Online (http://www.haze-online.or.id/index.php)

Alternative fuels won't fully replace fossil ones

choongyong.koh — Tue, 05 Sep 2006 02:10:39 -0000

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Sep 1, 2006

Alternative fuels won't fully replace fossil ones

MR NG Weng Hoong's commentary, 'S'pore needs to rethink energy policy' (ST, Aug 26), suggested a switch to alternative energy, or reducing or at least maintaining our energy demand in order to reduce Singapore's reliance on fossil fuels for our energy supply.

There is consensus that fossil fuels - oil, natural gas and coal - will continue to be the dominant fuels that will meet the bulk of the world's energy needs.

They are more economical than many alternative energy sources, and there are adequate reserves to meet global energy demand for at least the next 40 years (longer for coal).

The US Energy Information Administration has projected that fossil fuels will still account for some 86 per cent of total world energy demand in 2030.

Although renewable energy sources are becoming more economically competitive, their share of total demand is projected to increase by only one percentage point to 9 per cent in 2030.

In Singapore, about 80 per cent of our electricity today is generated from natural gas. This is the cleanest and most energy-efficient option, compared to oil or coal.

We have limited renewable alternatives. Due to our geography, we are unable to tap geothermal or hydro sources. Our wind speed and tidal differences are also not high enough for significant electricity generation.

Electricity from photovoltaic technology still costs more than three times the average Singapore electricity pool price.

Besides, even if we covered most of the available rooftop space in Singapore with solar panels, we would be able to meet only about 3-4 per cent of Singapore's annual electricity consumption, using today's solar technology.

To meet the energy needs of a growing population and economy, we thus have little choice but to import more natural gas. The building of an LNG terminal will allow us to diversify our sources of gas supply and improve energy security.

At the same time, the Energy Market Authority will ensure that our electricity market stays open to alternative technologies as they arise and become viable for Singapore.

We agree with Mr Ng that we should look actively into energy conservation so that we keep demand growth down.

The Building and Construction Authority encourages the construction of energy-efficient buildings, by requiring air-conditioned buildings to comply with the Envelope Thermal Transfer Value. It also awards the Green Mark label to buildings which use energy and water efficiently.

The National Environment Agency has partnered the Singapore Environment Council to launch an Energy Labelling Scheme to educate consumers on efficient air-conditioners and refrigerators.

In addition, the Energy Efficiency Improvement Assistance Scheme helps companies to engage specialists to study their energy consumption and recommend measures to save energy.

Also, domestic consumers are alerted through their utility bills if their electricity consumption exceeds the national average.

Through such programmes, we hope that Singapore households and companies will do more to conserve energy.

Choo Wai Chan (Mrs)
Director
Corporate Communications
Energy Market Authority

Malaysia may go for nuke energy

choongyong.koh — Tue, 05 Sep 2006 02:10:19 -0000

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Malaysia may go for nuke energy

By ROSLINA MOHAMAD

KUANTAN: Malaysia may explore the use of nuclear technology for power if the oil price shoots up to US$100 (RM370) a barrel.

Science, Technology and Innovation Minister Datuk Seri Dr Jamaluddin Jarjis said the country need not venture into nuclear technology at present to generate power.

“However, the world is changing. Who would have thought oil could hit US$70 (RM259) a barrel?,” he told reporters at the 4th Informal Asean Ministerial Meeting on Science and Technology here yesterday.

“There is even the possibility the price could shoot up to US$100 a barrel. When that happens, Tenaga Nasional Bhd will have no choice but to increase its tariff or go bankrupt.”

It would be a matter of national interest and economic survival for the country’s power utility company at that time, he said when asked about Japan being invited to share its experiences in managing nuclear energy.

He said Malaysia wanted to know how Japan, where two major cities – Hiroshima and Nagasaki – were destroyed by atomic bombs during World War II, could convince its people to go along with the use of nuclear technology to generate power and how they build the plants.

Dr Jamaluddin said it would be an issue of economic survival if oil price continued to rise.

“Investors may run away because their products will become too expensive to be made in Malaysia if the cost to generate electricity increases,” he said, adding that the Government wanted to be prepared for the situation in the future.

“We will not be able to draw new investors as well.”

He said some European countries were already moving towards using nuclear technology with the latest being Britain.

Closer to home, Vietnam also has plans to switch to nuclear technology to generate power, he noted.

“We have more than 60 nuclear scientists and we want Japan to share with us their experience,” he added.

S'pore Opts For LNG To Diversify Power Sources

choongyong.koh — Tue, 05 Sep 2006 02:08:43 -0000

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Straits Times (8 August 2006) - Singapore Opts For LNG To Diversify Power Sources

Aug 8, 2006
S'pore Opts For LNG To Diversify Power Sources
It will reduce over-reliance on piped natural gas from Indonesia and Malaysia
By Economics Correspondent, Erica Tay
Straits Times

POWER plants here will be plugged into a new, potentially cheaper source of fuel after a government decision announced yesterday to import liquefied natural gas (LNG) from 2012.

This will cut the nation's over-reliance on piped natural gas from Malaysia and Indonesia and will also help meet rising demand for electricity.

An overwhelming 80 per cent of Singapore's electricity is currently powered by piped gas from the two countries, and the rest by oil.

But in about six years' time, Singapore will have a three-million-tonne-a-year terminal costing an expected $800 million to receive shipments of LNG to be processed and sold to power plants.

This terminal will be able to process around one-third of the current level of piped gas imported into Singapore.

LNG is natural gas cooled to liquid form and delivered by tankers from source countries all over the world, including Australia and Qatar.

The new facility will turn LNG back into gaseous form for the power plants.

Two years ago, a disruption in the piped gas supply from Indonesia's West Natuna to Singapore caused a blackout affecting 300,000 homes here, prompting calls to consider LNG imports.

The decision to import LNG was announced by Trade and Industry Minister Lim Hng Kiang at an energy forum organised by industry watchdog, the Energy Market Authority (EMA). 'We need to diversify our energy sources to ensure that we are not over-reliant on a single source for our energy needs,' he said. 'As such, the Government has decided to import LNG to meet future rising demand for energy as our economy expands and our population increases.'

This decision follows a feasibility study by Tokyo Gas Engineering, lasting about a year, which found that LNG is significantly cheaper than piped gas when the price of crude oil is above US$40 a barrel - since the price of piped gas is more closely linked to crude prices.

Crude prices are nearly US$80 a barrel now, but whether LNG will be cheaper than piped gas will depend on factors such as LNG supplies at the time.

The Government said importing LNG is desirable firstly because it reduces Singapore's dependence on oil and piped gas. Secondly, many more countries produce LNG, including Russia, Yemen and Oman, which means Singapore would be less vulnerable to supply disruptions from any one source.

Third, LNG has a more stable price than piped gas as LNG contracts are locked in for very long periods. Piped gas prices tend to be mostly linked to fuel oil prices and are therefore more volatile.

Some time in the second half of next year, the EMA will invite prospective investors to bid to build and operate the LNG terminal.

The $800 million is the sum required to build a typical three-million-tonne facility, and may vary according to investors' plans, Mr Lim said.

'The intention is not for the Government to build the facility, but for the private sector to build, own and operate the facility.'

However, he does not rule out the possibility of the Government co-investing in the project, if needed. 'If the market feels a co-investment is needed from the Government, we will seriously look at it.'

To reassure potential investors, Mr Lim announced a moratorium on new gas import contracts until the LNG terminal's capacity is reached. 'What we are saying is that future demand for energy needs will come from LNG.'

Senoko Power favours further opening up of electricity market

choongyong.koh — Mon, 04 Sep 2006 17:45:43 -0000

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SINGAPORE : Allowing households and smaller businesses to choose their electricity supplier will be a key step in the liberalisation of the energy sector.

This is according to Senoko Power during an energy seminar on Wednesday.

Senoko said that its parent Temasek Holdings is still reviewing plans to sell the three power plants it owns.

According to earlier reports, Temasek Holdings is expected to make a decision about the sale of the three power companies - Senoko Power, PowerSeraya and Tuas Power - by the end of the year.

Senoko - the largest power company in Singapore - says the investment firm is still reviewing its options.

Roy Adair, President and CEO, Senoko Power, said: "Temasek is undertaking a review of the potential divestment of the gencos and that review is continuing. Unfortunately I can't tell you anymore than that at this stage. The timeline doesn't - it's business as usual for us."

The 3 power companies produce nearly 90 percent of Singapore's electricity.

And their sale has been on the agenda since 1999 as part of the effort to liberalise Singapore's electricity market.

At the energy seminar, Senoko Power says a further step to opening up the market is to let smaller businesses and regular household consumers choose their own suppliers.

Roy Adair said: "Full retail contestability is about the opening up of the electricity market to the last tranche of customers who are regarded as franchise customers at the moment. So we're very much in favour. We see this as part and parcel of the liberalisation of the market place and full retail contestability will give people in their homes - whether it be an HDB unit, a condominium or a landed property - it will give them the right to decide who their electricity supplier is."

For now, the gencos can only sell direct to industrial and commercial customers, or about 75 per cent of Singapore's electricity marketplace.

And Singapore Power is the only electricity distributor to some one million households here.

The Energy Market Authority is expected to decide by year-end on opening up the electricity market to more suppliers. - CNA/ch