What will all those cancelled flights mean for CO2? JBC Energy has some thoughts. Firstly, on flights (our emphasis):
We estimate that at peak times, 1.3 million b/d of global jet fuel demand was lost in recent days (see chart). Most of the lost flights – 85% based on rough assessments – will not be delayed but simply cancelled. Assuming that the situation is now resolved quickly, some 18,000 b/d of annual demand growth would be permanently lost, bringing this year’s global growth figures from 1.5% to 1.2%. However, part of this demand would simply be shifted to other transportation modes, with many adventurous stories cruising around how Europeans managed to get home on the weekend in 24h+ odysseys, making use of ferries, trains, buses, rented cars and taxis.
But will this substitution wipe out any CO2 savings? Perhaps not:
The shift from coal-fired generation to gas- fired generation sounds like something that would be lengthy and difficult to accomplish. But a new report by PFC Energy, the consultancy, indicates it is anything but. The report says US gas fired power plants average about 25 per cent utilisation, compared with 70-75 per cent for coal.
So operating existing plants at 72 per cent utilisation would theoretically increase gas demand by 30bn cubic feet per day – a rise of about 50 per cent – and displace almost all coal fired capacity. In doing so, carbon dioxide from the power sector would be cut 50 per cent, according to PFC.
This is something that Colorado has adopted enthusiastically.
There have been some good reads on environmental economics of late, notably Paul Krugman’s piece earlier this month which explains externalities, Pigou, and an argument for carbon tariffs.
More recently The Oil Drum summarised an interesting paper by Sussex University senior fellow Steven Sorrell called “Energy, growth and sustainability: Five propositions”.
Sorrell’s propositions are:
- Rebound effects are significant and limit the potential for decoupling energy consumption from economic growth
- The contribution of energy to productivity improvements and economic growth has been greatly
- The pursuit of improved efficiency needs to be complemented by an ethic of sufficiency
- Sustainability is incompatible with continued economic growth in rich countries
- A zero-growth economy is incompatible with a debt-based monetary system
The Major Economies Forum held in Washington on Sunday and Monday doesn’t appear to have moved sentiment ahead dramatically, despite the MEF being touted as one of the potential alternative forums to the UN, which has been looking too big and slow since Copenhagen. And it’s also despite the US asking the 16 other major economies represented at the Forum to put forward ideas, assumptions, and preferences about how to proceed with the next formal round of climate talks Cancun talks later this year.
However US climate envoy Todd Stern at least managed to sound a more positive note than those leading the UN talks have managed of late.
How big will the effect of the Eyjafjallajökull volcano ash be on refined energy products?
Europe’s flight ban has already seen jet fuel prices fall, with Argus reporting them Monday as down about $20 – $25/tonne since Friday, with cargoes priced in the $723 to $732 range. Trade volumes were also up:
The European jet fuel barge market saw a flurry of deals on Monday, with 12,500t of product traded in the MOC window. Some airlines and traders are beginning to offload product before prices fall further. Lufthansa, Statoil, Shell and Glencore were the sellers while Morgan Stanley bough five barges.
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- The contribution of energy to economic growth has been greatly underestimated
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