“Golden Rules for a Golden Age of Gas”, new report by IEA

Last year, the International Energy Agency (IEA) released a report with the title "Are we entering a golden age for gas?"  A few days ago, IEA released a follow-up report with the tile “Golden Rules for a Golden Age of Gas".   Even the titles are enough to convey the key messages.  There is no doubt that we are in the golden age of natural gas.  But as it is usually the case (especially with regard to energy supply options), gas has its advantages and disadvantages. The report reviews both in a balanced way and concludes that gas is a desirable energy option, provided that rational and effective regulation is implemented to mitigate the negatives impacts (e.g., water contamination, liquid effluents, methane release, etc.). 

Having a fuel which cuts greenhouse gas emissions in half (relative to coal) is a substantial improvement even if it is looked as a transitional option to more green options which are likely to take some time to be accepted widely.  Also, it is worth pointing out that natural gas could be used in the transport sector too, either in the form of Compressed Natural Gas (CNG) or gas-derived liquid fuels (produced by Gas To Liquid, GTL, processes).

 

The full report is available here:

http://www.worldenergyoutlook.org/media/weowebsite/2012/goldenrules/WEO2012_GoldenRulesReport.pdf

Israeli entrepreneur Shai Agassi's Better Place venture is rolling and it seems worth watching

Four stations, where electric cars can replace their batteries, are now operating in central and northern Israel, and 40 more are planned to be opened before the end of 2012.  The concept of replacing the car battery in a gasoline station or local store is an interesting one, as it reduces the price of the car and the investment requirement for electric car infrastructure; also, reduces the uncertainty of the car owner about recharging the battery.

Better Place has invested more than $400 million in Israel.  Supported by investors such as General Electric Co. and HSBC Holdings, they have been able to raise the capital needed to expand also in Denmark, Australia and Amsterdam (Netherlands).  In the mean time, French automaker Renault customized its sedan Fluence to use Better Place batteries and at least 140 such cars are on the road in Israel.  Leasing companies have ordered more than 1,800, and private customers have ordered several hundred more.

It is certainly worth watching!

Mr. Wulff, Greek politicians and ...lost trust

President of Germany, Christian Wulff, resigned Friday after prosecutors sought removal of immunity over allegations of favors. In Greece, the news was greeted with two different responses. Some people rushed to conclude that corruption is widespread even in Germany; so "who are these Germans to tell us that we are corrupt?" It is a comforting to continue cheating because everybody else around us cheat, too!

Another group, the more rationally thinking individuals, recognized that the German prosecutors requested removal of immunity of one of the highest level politician. This has never happened in Greece! Maybe it is time to start happening.

Mr. Wulff went on to say that he is stepping down "because Germany needed a president who enjoyed the full trust of the people". What a modernity for a politician to care about the trust of the people! This gets me thinking about the Greek politicians. It is beyond any doubt that they share most of the responsibility for the present situation of the country. All political parties have their share of blame, but especially the two parties which governed Greece for the last 35 years.

If I were a Greek politician (even if I belonged to the 10-20% of honest politicians), I would do the following: First of all, I will write a letter of apology to my constituency and in general to the Greek people. I will accept full responsibility for what my party and in general the political elite has done to the country. This is something Mr. George Papandreou does not have the guts to do, even though it is very clear that nepotism, corruption and mismanagement were institutionalized when his father was President. Mr. Samaras will not ask for an apology either, as if his party has not contributed to the problem. This proves, once more, that political parties in Greece are not institutions with principles; they do not act collectively and do not assume responsibility for the party's actions; the leaders act as if they are on their own (after all, Samaras speaks always in singular tense (always "I", never, "we")); the party is used as a platform to pursue personal objectives.

Now back to what I would do if I were a politician: After the letter of apology, I would impose myself a "voluntary public/community service" judgment; since the legal system will not judge me, I will show that I have the guts to judge myself. I will go back to my roots (the people in the village I was born) and put myself in their service. I will clean the streets; I will offer food to the hungry; I will help organize working groups to solve pressing issues; etc. Even if my compatriots greet me with tomatoes, I will endure it, because I know that they are reasonable people and eventually they will see that my regret is sincere. I will spend as many years as needed to help my fellow citizens who are suffering. This is the least I can do. May be this way I will "rehabilitate" my name and I will be proud again to face my friends and the Greek citizens. Maybe I will regain the lost ...trust.

An urgent need for Gorvenments around the world: Capacity-building to design, negotiate and implement Private-Public Partnerships

As the world is facing enormous financial challenges, it has become clear that most large projects can only be implemented through joint sector partnerships, commonly referred to as PPPs (Private-Public Partnerships); even when projects are not classified as PPPs, often they are joint sector initiatives. For example, exploration for natural resources and concessions in general are joint sector activities. However, there is a problem: in most cases, the public sector is not prepared to play the role of the equal partner. Lack of expertise or (even worse) lack of understanding and appreciation for the expertise needed puts the public sector at a serious disadvantage and results in a deal which favors (unfairly) the private partner. A similar result is reached when corruption is involved, which is common in many countries.


One-sided PPPs are not sustainable, as it is a matter of time for their biases to become known to the public, a public which becomes more an more active against incompetent governments and unfair situations. An effort is needed worldwide to strengthen the capacity of public organizations to design, negotiate and implement PPPs, which are fair for both sides and protect the interests of the public. Such capacity is essential in Governments of countries, as well as local governments. Similar expertise is needed in Topeka (Kansas, USA), Athens (Greece) and Rangoon (Myanmar).

Holograms to reduce energy use substantially

I read that Forever 21's Hologram Fashion Show Comes to the U.S. This is a show which replaced live models with holograms. It was first presented in Vienna (Austria) in May and then in Brussels and London. Think about the energy which can be saved if 20-30% of the business trips around the world are replaced with holograms. Meeting my Chinese business colleagues could be done initially in a conference room which makes us all feel that we are in this same room, independently if some of the participants are being represented by their holograms. In the future, the technology could be improved and the same could done in the personal computer.

The problem of the West in implementing strategic projects

I read that Mr. Alexei Miller, the Managing Director of Gazprom, declared that “the South Stream pipeline will be operational by December 2015”. Whether this actually happens or not is debatable. However, the important observation which needs to be made relates to how various countries decide and implement projects of strategic importance. When it comes to countries like Russia and China, economics play an important role, but strategic investments are being pursued even if the economics are uncertain or they are not economically viable. Strategy always wins over economics.

In the West, whether a project is recognized as strategic or not, it has to be implemented by the private sector, which needs to be convinced that the project is economically and financially viable. Strategic considerations are not reflected in the balance sheet of the company. Hence, we have important projects which are stuck in the planning stage and may never be implemented. This is a major problem. Public sector participation is essential. Private Public Partnerships (PPP) is one option.

Apple Inc, as a model for western economies

A few days ago (August 24, 2011), Steve Jobs announced his resignation from the position of Apple's Chief Executive. Steve is probably the most legendary business leader of our times often compared to Thomas Edison. He has introduced products which created new industries and literally changed our lives. Most of people associate him with his recent successes (iPad and iPhone), but some of us who have used all his products remember him too for creating the personal computer industry with Apple II and the Macintosh in the early 1980s, setting the stage for future Apple products by developing creative software (through NeXT, Inc.), integrating music-computer-phone with iTunes and revolutionizing film production with Pixar Animation Studios.

In this write-up though, I want to focus on Apple, the organization, rather than Steve Jobs, the business genius. As western economies are struggling to deal with huge deficits and high unemployment, we can learn a lot from Apple as a model for economic revitalization. Let's see some of Apple's characteristics.

Apple has achieved sustainable and often explosive growth through innovation, which propelled it and kept it far ahead of its competitors. In a globalized and highly interconnected world, this is the only way western economies can stay ahead of the emerging economies, which recently have become strong competitors.

Another Apple trademark is its proprietary software/hardware and secrecy culture. While this may sound selfish and undemocratic, close control of Intellectual Property (IP) is an essential element for success. Look what is happening in renewable energy technologies. Venture capital in Silicon Valley is having second thoughts about investing in new technologies after witnessing their inventions fly so quickly to China and other countries.

However, Apple leaders are pragmatists too. The company realizes that you can not compete with low-cost manufacturing countries. So, if you look at the components of the iPhone, you see that Apple’s contribution is the product design, proprietary software, integration of the innovations of others and marketing. Other components are manufactured through an extensive network of suppliers; examples: the screen is mostly from Japan, the flash memory from South Korea, and the final product is assembled in China. So, one could protect certain strategic elements of the product, but needs to accept that we live in a globalized world and we need to have a global strategy.

Above all though, Apple has empowered the individual and put in his/her hands an amazing amount of power, access to information, ability to communicate with others easily and inexpensively, ability to establish and operate businesses with minimal costs, and in general encourage the individual to innovate. Countries need to unleash the creativity of their citizens, too. Empowered individuals will revitalize the lagging economies and create a sustainable growth with opportunities for all.