With Chavez gone, what will become of his PetroCaribe program? Photo credit: Valter Campanato, Agencia Brasil

Among the questions arising after the death of Venezuelan leader Hugo Chavez is what will become of the PetroCaribe program he started in 2005 and upon which many Caribbean economies have become dependent. Since it began, PetroCaribe has become a much-needed lifeline to countries in the region that are overly reliant on fossil fuel imports to supply their energy and transportation sectors. However, it has also increased the unsustainable debt levels of these countries. What comes next is uncertain as Venezuela prepares to elect Chavez’ successor as president of Venezuela next month.

Chavez started PetroCaribe with the aim of helping neighboring countries bear the burden of oil dependence at a time when oil prices began to rise sharply. Touted on its Web site as a “shield against misery,” the program allows participating Caribbean countries to purchase Venezuelan oil under preferential conditions. At the outset, 50 percent of the payment was due within 90 days with the remainder being financed over an extended period, sometimes up to as long as 25 years. The interest charged on the balance was at 2 percent but fell to 1 percent once oil surpassed US$40 per barrel.

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Caribbean, Caribbean Sustainable Energy, Climate Change, Dominican Republic, fossil fuels, Haiti, Jamaica, Low-Carbon Development, renewable energy, south america, sustainable development, Sustainable Energy Roadmaps, Venezuela

Total subsidies for renewable energy stood at $66 billion in 2010, but are still dwarfed by the total value of global fossil fuel subsidies estimated at between $775 billion and more than $1 trillion in 2012, according to new research conducted for our Vital Signs Online service. Although the total subsidies for renewable energy are significantly lower than those for fossil fuels, they are higher per kilowatt-hour if externalities are not included in the calculations.

Estimates based on 2009 energy production numbers placed renewable energy subsidies between 1.7¢ and 15¢ per kilowatt-hour (kWh) while subsidies for fossil fuels were estimated at around 0.1–0.7¢ per kWh. Unit subsidy costs for renewables are expected to decrease as technologies become more efficient and the prices of wholesale electricity and transport fuels rise.

The production and consumption of fossil fuels add costs to society in the form of detrimental impacts on resource availability, the environment, and human health. The U.S. National Academy of Sciences estimates that fossil fuel subsidies cost the United States $120 billion in pollution and related health care costs every year. But these costs are not reflected in fossil fuel prices.

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developing countries, development, emissions reductions, energy, energy subsidies, fossil fuels, renewable energy, subsidies

At an October 7 Congressional Staff Briefing, panelists discussed a popular question among energy analysts: can oil production meet rising global demand? Participants stressed that the price of oil will necessarily increase as the supply decreases, and that oil security has become an increasing problem for many countries, including the United States. But for many within the energy community, the real question is not about the future of oil, but about how renewable energy can play into our shared energy future.

Robert Hirsch, Senior Advisor at Management Information Services Inc., noted that “world oil production hit a plateau in mid-2004 and stayed in a narrow fluctuation range in spite of the ‘Great Recession.” As of 2010, that plateau will become a decline of 4 percent annually over the next 2–5 years, leading to ‘worldwide crash mitigation,’ or the implementation of large projects at the maximum possible rate to mitigate the peaking oil. However, sufficient research and development will take time, limiting the degree to which this will resolve the coming oil shortage.

U.S. Military use of Solar Panels

Simultaneously, the U.S. Energy Information Administration projects that world liquid fuel demand will surpass 100 million barrels of oil equivalent per day by 2035, up from 84 million barrels a day in 2009. So oil production will go down, oil demand will go up, and there’s not much we can do about it. Or is there?  Instead of focusing on oil depletion, why not work to change U.S. and world oil consumption patterns?

Consider the U.S. military’s transition away from oil. The military, which must be highly mobile on the ground and in the sea and air, is highly reliant on oil. In 2005, the Department of Defense (DOD) consumed approximately 125 million barrels of oil, 74 percent of which was used to power transport vehicles. A military Humvee, for example, has a fuel capacity of 25 gallons and runs at 12 miles per gallon, giving it a range of 300 miles. Just one tank of fuel costs US$939. With 50,000+ humvees in use today, the total cost for fueling these vehicles can be upward of US$46 million annually. In addition, operations in the field, and often entire military camps, are powered by diesel generators that require a continuous and secure supply of fuel.

As oil prices and security risks increase, the U.S. military has become more interested in exploring alternatives. Just recently, 20 U.S. and NATO oil tankers were set afire in Islamabad, the capital of Pakistan, while attempting to cross the Khyber Pass into Afghanistan. The DOD’s total fuel expenditure in 2007 was $13.2 billion, a 41 percent increase from 2005. All of this highlights the need to diversify the energy supply and adopt alternative means, not only for monetary reasons, but also to not waste—and endanger—soldiers during oil transport and protection. Alternative energy would allow the United States to use resources that do not require transport and to use surrounding assets freely without any possible danger. Ray Mabus, the Navy Secretary and former ambassador to Saudi Arabia, stated that he hopes to generate half of all power needed for the U.S. Navy and Marines from renewable energy sources by 2020.

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alternative energy, fossil fuels, Innovation, oil, renewable energy, security, U.S. military

Today is a big day for energy policy and coastal areas in the United States.

What’s really big is the oil slick spreading in the Gulf of Mexico after last week’s BP oil rig explosion.   The Coast Guard has failed to shut an underwater valve from which more than 5,000 barrels of oil have now spewed, allowing the slick to travel within 20 miles of the Louisiana shore and creep closer still (see diagram on the left).

Maps courtesy of NOAA & The Boston Globe

At the same time, the U.S. Department of the Interior approved an offshore wind farm near Cape Cod, Massachusetts today, ending a decade-long stall on the project and making a sizeable splash in the news.  An Interior Department  press release describes the size and significance of the project:

The Cape Wind project would be the first wind farm on the U.S. Outer Continental Shelf, generating enough power to meet 75 percent of the electricity demand for Cape Cod, Martha’s Vineyard and Nantucket Island combined. The project would create several hundred construction jobs and be one of the largest greenhouse gas reduction initiatives in the nation, cutting carbon dioxide emissions from conventional power plants by 700,000 tons annually. That is equivalent to removing 175,000 cars from the road for a year.

The bulk of resistance to Cape Wind has come from residents and even some tribal groups, claiming that the project degrades the historical and cultural value of the area.

Meanwhile offshore drilling plans continue at the federal level, fastening our dependence on fossil fuels and ruining landscapes and wildlife areas elsewhere in the United States. Today the Coast Guard began lighting fire to isolated sections of the Gulf oil spill, and the spilling and burning may continue for days or weeks.  The Coast Guard Rear Admiral Mary Landry admitted in a press conference that they are “possibly 90 days out from securing the source permanently.”

As the Gulf burns, the urgency of transitioning away from non-renewable and polluting energy sources seems clearer than ever. We have the needed renewable energy and energy efficiency technologies ready. Those are the real tools that will preserve the history and cultures we enjoy on this planet.

Cape Wind, fossil fuels, offshore wind, oil