FEATURE As climate talks heat up experts debate if natural gas fracking

A utility pole supporting electrical wires in Bac Ha, Viet Nam. According to the Millennium Development Goals (MDG) Report, 1.6 billion people the world over, or a quarter of humanity, live without electricity. UN Photo/Kibae Park“It happens most often in places that have not had that before and are not used to it, which has more to do with urban planning, education, and proper infrastructure, than with making sure people have the right valves and are monitoring the air quality properly,” Mr. Levi said.Mr. Levi pointed to evidence that many of the technical claims offered by Ms. Thomas were incorrect. “The telegenic risks are not necessarily the ones for policy makers to confront,” he said, referring to popular videos showing television reporters lighting fire to tap water contaminated by methane gas. Methane is believed to be found in the same area as natural gas and brought to surface in the extraction process. There is one more set of UN talks on the climate scheduled for this year. In early September, the UN will hold in Apia, Samoa, a conference on the challenges and opportunities of partnering with small islands. These sea-locked nations are among the most vulnerable countries to the impacts of climate-change, and also face unique energy challenges. Could fracking be an option for energy production there?“Fracking is not yet at the stage where it is being looked at by small island Governments,” said Ms. Thompson, is the former Minister for Energy and Environment in Barbados.“But it is exactly in places like that and in Africa where I would be very concerned about a raise and a demand or the use or spread of fracking simply because of a lack of capacity to oversee, regulate and supervise, and to deal with the technologies.“Can you imagine a small island developing State like Trinidad and Tobago using fracking? That huge volume of toxic chemicals just being flushed into the water – on the aquiferous, on the ground? It is very high risk for developing countries, particularly for small island developing States, so I would not support it. Not at all.”Yet, while fracking may not have a role in energy production in those countries, the senior UN official interviewed noted that natural gas does hold important possibilities for the future of energy production. Ms. Thomas represents the UN’s Sustainable Energy for All Initiative. Its three goals are to ensure universal access to modern energy services, and double the global rate of improvement in energy efficiency and the share of renewable energy in the global energy mix, all by 2030.“If fracking and natural gas are being used as an end in themselves, then clearly there will be no transition to greener fuels,” said Ms. Thomas. Companies will maintain the status quo, using technology to access larger amounts of natural gas, using it alongside coal. “If, however, the larger policy roulette frames the issue in the context of the need to transition to a greener fuels as alternative technologies because fossil fuels, no matter what technologies we use, are finite,” she added, “then it could be potentially the bridge between the ‘brown’ economy we have now and the green economy of the future.“But we would have to go to the point where the UN is interested in seeing this – increased innovation, new technologies and greater efficiencies that allow energy to reach all people, become empowered, and enjoy an improved quality of life.” Technically recoverable shale gas reserves in trillion cubic metres (tcm) in the top 18 countries. Data source: Royal Society, 2012; cartography by UNEP/GRID-Geneva.In April, the UN Intergovernmental Panel on Climate Change (IPCC) released a long-anticipated report stating that global greenhouse gas emissions are on trajectory to continue rising. To keep global mean temperatures within two degrees Celsius – the benchmark determined in the mid-1990s of what would constitute “dangerous” climate change impacts – the world would need to lower by mid-century global greenhouse gas emissions by 40 to 70 percent compared with 2010 levels. The goal is to achieve near-zero increases by the end of this century, according to the report, which featured input from more than 1,100 leading scientists and economists. According to the reportClimate Change 2014: Mitigation of Climate Change, to aim for that goal, the use of fossil fuels, which is currently at more than 80 per cent, would need to be cut to as little as one-third.“Greenhouse gas emissions from energy supply can be reduced significantly by replacing current world average coal-fired power plants with modern, highly efficient natural gas combined-cycle power plants or combined heat and power plants, provided that natural gas is available and the fugitive emissions associated with extraction and supply are low or mitigated,” according to the report.Unconventional natural gas reserves, the authors added in Chapter 7, are estimated to be larger than conventional reserves and resources combined.The IPCC working group that compiled the survey was not endorsing a fracking boom, as some media sources claimed, but rather highlighting that that it would be possible to limit current warming, through political will and the use of existing technologies.In the same report, the authors noted that there is international opposition to fracking, and expressed concern about its potential risks to local water quality and public health.Fracking technology has developed over the past three decades or so, but moved to commercial scale in the last several years. It involves drilling – vertically and then horizontally – to create a well, then pumping millions of liters of chemically-infused water, and then sand, through the horizontal well to break fractures in the shale rock layers to release the embedded gas and force it to the surface. The combination of this mixture is considered a trade secret.In 2012, UN Environment Programme (UNEP) compiled a literature review of 353 commonly used chemicals, of which “more than 75 per cent of [which] could affect the skin, eyes, and other sensory organs, and the respiratory and gastrointestinal systems. Approximately, 40-50 per cent could affect the brain/nervous system, immune and cardiovascular systems, and the kidneys; 37 per cent could affect the endocrine system; and 25 per cent could cause cancer and mutations.”On average, Ms. Thomas said, each well that is “fracked” uses up to 8 million gallons of water, and a fracking fluid of 40,000 gallons that uses some 600 volatile organized compounds. The concern is that the concoction can seep into under-ground water supplies, as well as water that is at the surface level when the brine is not properly disposed of.There are also worries about deteriorating air quality because of how technologies are used and managed. The sudden shift underground, sometimes caused by explosives, has also been found to cause earthquakes.In addition to disposal of waste water from the wells and air quality, communities can have a negative reaction to the sudden, intensive industrial development. Schematic representation of infrastructures and potential impacts. Source: UNEP/GRID-Geneva, 2012In the fight against climate change, natural gas is increasingly being eyed as a potential ‘bridge’ fuel to a carbon-free economy. It is believed to be less harmful to the environment than coal or oil because it emits less carbon dioxide. What’s more, it is abundant, especially when fracking provides access to unconventional reserves of gas, particularly in the United States, where the technology has been developed and where it has created about 1.7 million jobs.Opposition around the world to the environmental and health risks associated with fracking has been loud but hardly unanimous. South Africa is currently debating the practice. In a reversal of a ban earlier this year, the European Union approved some fracking activities. China and Russia are supporters, so much so that recent media reports actually accuse Russia of funding anti-fracking campaigns in Europe in order to undercut the competition. Argentina is keen but lacks resources and technology, according to media reports, and in the United States, policies on fracking vary state to state.Given these divides, the UN is proposing to use its reach to develop expertise and literature to educate decision makers. “The UN does not intervene in State or country business. We will wait for countries to make decisions, supporting them in making the correct policy decisions,” Ms. Thomas stressed.Michael Levi, an expert on energy and the environment at the Council on Foreign Relations, who also participated in the panel discussion, said the UN’s role could be to facilitate the spread of technical understanding and regulatory experience, building networks among regulators, rather than promoting its own set of rules.“The best way the UN can play a role here is in helping countries set a direction that allows them to take advantage of a variety of low-carbon energy sources, including natural gas, if that’s what they think is appropriate,” he told the UN News Centre. “And in facilitating the relationships and the connections that allow regulators and planners to better handle development.”The UN is pushing to finalize by next year an international treaty to tackle climate change, in time for a meeting in Paris of States parties to the world body’s framework Convention on climate change. Ahead of those talks, Mr. Ban is hosting a summit this September, and has asked participating world leaders to come with concrete action plans. Could fracking for natural gas be included in those plans? “I don’t think fracking should be the focus of the climate talks, just like nuclear energy or solar power isn’t the focus,” Mr. Levi said. “The focus is on reducing emissions and for a long time, it’s been on setting the right direction, putting the right framework in place and then letting countries figure out the best way to cut emissions.”“So it strikes me that a good outcome to the climate negotiations can help set countries in a lower-carbon direction, which many might decide includes a substantial role for natural gas.” The answer to this question is especially relevant for developing countries. Nearly half the world’s population lacks reliable access to modern energy services and more than 20 per cent of the global population – 1.4 billion people – remains without access to electricity, according to a recent UN Development Programme (UNDP) report. Household air pollution from the use of biomass fuel is expected to cause more than 1.5 million deaths a year by 2030.Could natural gas, whose production is boosted by hydraulic fracturing or “fracking” – the process of drilling and injecting fluid into the ground at a high pressure to fracture shale rocks to release natural gas inside – be a bridge to greener economies and to new, more-efficient energy technologies?“Is fracking, by providing natural gas, giving us a cleaner energy source? The answer is yes, perhaps, if you regard natural gas as a cleaner energy source,” said Elizabeth Thompson, senior advisor for Secretary-General Ban Ki-moon’s Sustainable Energy for All Initiative. She spoke at a panel organized by the UN Academic Impact. “However, if the methodologies used are dirty, or environmentally harmful, then some of the beneficial impacts are significantly eroded.” read more

Kinross expects its gold production to rise by 32 as cost per

first_imgFull-year production for 2009 is expected to be approximately 2.4 to 2.5 Moz gold equivalent, consistent with previously stated guidance for the year, an increase of some 32% over 2008 production As mentioned previously, Kinross is now in the process of assessing goodwill impairment. As a result, Kinross expects to record a goodwill impairment accounting charge in the range of $900 million to $1.2 billion at year end, related primarily to goodwill recorded in the 2007 Bema acquisition. The average cost of sales for 2008 is expected to be in line with the previously stated guidance range of $425 to $445/oz  gold equivalent Highlights of Kinross Gold’s outlook for 2009 and an update on key developments include: The average cost of sales per gold equivalent ounce for 2009 is expected to be in the range of $390-420center_img Production1 for the full year 2008 is expected to be in line with the previously stated guidance range of 1.8 to 1.9 Moz gold equivalent, an increase of approximately 16% over 2007 production Tye Burt, Kinross President and CEO, commented that the company “had a truly outstanding year in 2008. We delivered on our commitments with record production, the successful start-up of our three growth projects, and two major acquisitions. Kinross went against industry trends by growing our production and cash flow while our costs decreased over the year.“In 2009, we will continue to execute on our strategic plan to grow cash flow and continually improve our portfolio of assets. Our three new projects at Paracatu, Kupol and Buckhorn are expected to increase production by approximately 32% compared to 2008, while significantly reducing our overall cost of sales per ounce. As a result, we expect strong cash flow from our operations in 2009.“We will continue to pursue opportunities to optimise Kinross mines and new projects. At current operations, we will be driving improvements and organic growth, including our heap leach project at Fort Knox, as well as potential expansions at Paracatu and Maricunga which are under preliminary review. We will also be preparing the foundations for our next round of new projects, including Lobo Marte and Fruta del Norte. In the third quarter, we also expect to update the market on options for Cerro Casale.The ramp-up in production at the Paracatu expansion is advancing in accordance with the update provided in the third-quarter 2008 release, with mill throughput reaching about 60% of design capacity as of year-end 2008. The project is expected to reach full capacity within the first quarter of 2009. As part of the expansion project, Kinross expects to commence construction of a new tailing impoundment facility at Paracatu in May of 2009, subject to obtaining the requisite construction permit from government authorities. In addition, the company is negotiating with local parties to acquire those land rights for the facility not presently owned by the company, and expects to complete these negotiations before the end of the second quarter of 2009.Construction of the heap leach project at Fort Knox has been concluded for the season and is scheduled to restart in the spring. Construction is complete on some 78% of the leach pad area required for initial ore placement and leaching. Start-up of leaching operations is scheduled to commence in the third quarter of 2009.As previously announced, on December 16, 2008, Kinross acquired a 40% interest in Minera Santa Rosa SCM from certain subsidiaries of Anglo American. On January 7, 2009, Kinross’ previously announced purchase of the remaining 60% interest in Minera from a subsidiary of Teck Cominco was closed in escrow pending registration of the share transfer by Chilean authorities. The share transfer registration was completed on January 7, 2009 and the company expects to clear escrow and complete the transaction on January 8, 2009, at which time Kinross will own 100% of Minera.Minera owns 100% of the Lobo-Marte gold project located in the Maricunga district of northern Chile, roughly midway between Kinross’ Maricunga and La Coipa mines. This acquisition adds approximately 5.9 Moz of gold resources to the front of Kinross’ development pipeline. Kinross has completed due diligence on the project and plans to begin a development program in early 2009. This work will involve drilling, design, engineering, metallurgical testing, with the expectation of upgrading the current resource base to an NI 43-101 compliant reserve.Kinross has substantially completed the integration of Aurelian Resources, following its recent acquisition of the company, and is actively seeking to advance the Fruta del Norte project. Assuming successful passage of new legislation in support of responsible mining in Ecuador, the company plans to invest about $45 million in 2009 to support recommencement of the in-fill drilling program, advancement of project evaluation and environmental permitting, and implementation of an expanded community relations and corporate responsibility program.At Cerro Casale, work is continuing on the update to the project’s technical-economic feasibility. Progress is being made with the project team substantially in place and numerous trade-off studies well underway. A feasibility study is expected to be completed in the third quarter of 2009. Capital expenditures for 2009 are forecast to be approximately $460 millionlast_img read more