Archive for the ‘Water’ Category

Oil, ethanol, drought, climate change, government – and the Australian farm

Today’s Sydney Morning Herald is running a very strange story on .. not sure, actually.

NSW has only one ethanol plant – the Manildra facility at Nowra with a capacity of 100 million litres a year – but earlier this year there were proposals and plans for enough plants to increase capacity to well over a billion litres.

When the rural newspaper The Land looked at the predicted biofuels boom six months ago, it noted: “Ethanol plants in NSW are set to consume a massive 4 million tonnes or more of wheat, barley, sorghum and maize annually by 2009 if all the projects approved or on the drawing boards go ahead.

“That’s about half the state’s average production of these grain crops, which averaged about 9 million tonnes annually in the past five years – and is more than the total grain tonnage produced from last season’s drought-depleted 2006-07 harvest. The figures suggest intense competition [for grain] is looming … in good seasons, and serious grain shortages in bad years.”

… which of course is among the reasons why ethanol is such a bloody terrible idea.

I do, truth be told, know why the story is there: because oil is USD90 per barrel, now – a price at which things like this were supposed to become wildly popular, and the Sydney Morning Herald has space to fill and advertising dollars to earn. Only now, really, are editorial pages beginning to get into why ethanol isn’t such a great idea (newspapers are nothing if not late to the game, after all).

The interesting part of the story, for me, was the reaction of the farmers/townships that had seen Big Ethanol as a cash-cow. For example:

At Condobolin, where the company wanted to build a 200 million-litre plant consuming 600,000 tonnes of grain a year, Lachlan Shire Council’s general manager, George Cowan, said the disappointed town had invested a lot of hope in the project.

Somebody will need to explain to me why we revere our “battler” farmers, while they’re going about giving up our food for fuel (no, you don’t: not for nothing do I teach Principles of Economics – that was more a criticism of the reverence itself). These demonstrations of agriculture’s sense of entitlement for a permanent place at the of government welfare stood out:

At Oaklands, near Corowa on the Murray River, grain grower Pat Day offered part of his farmland to Agri Energy to build a plant the same size as Condobolin’s.

“I’m just disappointed. Governments haven’t come up with the necessary mandating to encourage [Agri Energy] to keep going. They have got better opportunities in other parts of the world.”

The Swan Hill operations manager, Stewart Rendell, blames government and oil companies for Agri Energy’s troubles, rather than record-high grain prices.

“You can’t deal with big oil in this country when there’s no mandate,” he says. “Even when you bring the wheat price back to a reasonable level, big oil don’t need to deal with us.” Oil companies were prepared to buy the ethanol, but not at realistic prices.

Rendell says that if every state mandated 2 per cent ethanol, as NSW has, or the price of oil rose above $US100 a barrel, as some are forecasting for next year, Agri Energy would reconsider the viability of its Australian projects.

Yes, the solution to this “problem” is that the government has not passed legislation mandating that a product we don’t want – a product whose development is not profitable, and demands more water than we have to provide, not to mention exhausting food crops in a time when yields are declining – be made compulsory in fuel.

I’ve looked around: there isn’t much on Australia’s transport fuel consumption – almost nothing, in fact. Apparently the data is either commercial-in-confidence, or just not there. Back in 2000/1, though, we were up around 31bn litres:

AIP fuel use

according to the Australian Institute of Petroleum. So 2% of that, right across the country, etc. Irregardless of the cost to government (since they mandate it, they’ll need to subsidise it which is, of course, where a farmer’s ear perk up), hence to tax-payers; irregardless of the burden on the environment (through water use, monocultural agriculture, etc.), the argument is that we have a problem that only government mandating can fix.

Meanwhile, the same government, trying to mandate some manner of intelligent water use, is vilified by the same people.

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About that public money for water infrastructure

Oh, for Cliff’s sake.

An election-year increase in spending from the Government’s $1.6 billion Water Smart Australia Program – set aside to cover large-scale water infrastructure projects – has drained it nearly dry, despite it being meant to last until 2010.

What is it that Billy Bragg sings, about putting smart bombs in the hands of dumb people? Who know water programmes could go the same way?

Conceived of by the Government during the 2004 election as a way to appeal to green and rural voters, the fund had been criticised for being underspent. But the dynamics of another election year have opened the eyes of both sides of politics to its pork-barrelling opportunities.

Government spending from the fund this year doubles total spending in previous years of $500 million.

Labor, without rejecting any of the Government’s projects, has promised an additional sum of nearly $400 million from the fund, also mostly targeted at marginal seats. But with the Government’s spending spree leaving just $81 million in the water kitty, Labor would have to fund most of its promises from elsewhere if elected.

Some of the expenditure listed actually don’t sound too bad – but Eco 1 students will remember the criteria for evaluating government expenditure and intervention: does it do what it was supposed to, and does it do it as efficiently as possible? That money is gone – new/better proposals won’t be built, now.

The Security and Prosperity Partnership: it even sounds nasty

I can’t believe I was fired from my advertising job.

Canada’s water is on the trade negotiating table despite widespread public opposition and assurances by Canadian political leaders, said Adèle Hurley, director of the University of Toronto’s Programme on Water Issues at the Munk Centre for International Studies.

A new report released Sep. 11 by the programme reveals that water transfers from Canada to the United States are emerging as an issue under the auspices of the Security and Prosperity Partnership (SPP). The SPP – sometimes called “NAFTA-plus” – is a forum set up in 2005 in Cancún, by the three partners, Canada, United States and Mexico.

Heh. Widespread public opposition. They should call Australia – we know how far that gets you.

The SPP is comprised of business leaders and government officials who work behind the scenes and are already responsible for changes to border security, easing of pesticide rules, harmonisation of pipeline regulations and plans to prepare for a potential avian flu outbreak, Nikiforuk writes.

“The SPP is run by corporate leaders; governments are irrelevant,” said Ralph Pentland, a water expert and acting chairman of the Canadian Water Issues Council.

Pentland envisions a future where, in response to ongoing drought problems in the United States, the SPP will make arrangements to dole out millions of dollars of public funds for private companies to build pipelines to transfer water from Canada.

Massive water diversions from Canada do not make economic or environmental sense, according to water experts. Far better and cheaper is to improve water efficiency and eliminate waste. The United States and Canada lead the world in water consumption and are extraordinarily wasteful, Pentland says.

Moreover, most of Canada’s water is in the far north, not near its border with the United States. And even the transboundary Great Lakes are at their lowest levels in 100 years due to climate change, notes Nikiforuk.

Also interesting, while we’re busy concerning ourselves with the price of oil and the relative cost-effectiveness of sapping it from moronic sources:

Most of Canada’s oil comes from the tar sands, a 125-billion-dollar capital project in the boreal forest of northern Alberta province. One million barrels of oil flow south each day to the U.S. making Canada its largest supplier.

However, it takes three barrels of freshwater to produce one barrel of oil from the tar sands, says Nikiforuk.

Under NAFTA rules, Canada cannot reduce its energy exports to the United States, according to Gordon Laxer, director of the Parkland Institute, a research network at the University of Alberta. “The U.S. is the most energy wasteful nation on Earth. And Canada is sacrificing its environment to feed America’s addiction to oil,” Laxer said in an interview.

I hate NAFTA. I really do. Sadly, what will be worse is all the protectionist electioneering we can probably expect (on both sides), in the coming year.

How to create mega-farms in 2 easy steps

Crikey has an excellent perspective running on the recently announced plan for our government to under-write, with our money, the getting-out by farmers of a game with moving goalposts.

The Murray River irrigation system was installed to maintain a constant supply of water to a huge agricultural area to maintain crops, orchards, dairies, and to drought proof agriculture in the region. And it worked, up until now.

Initially water quotas were hopelessly over-allocated to everyone in the system by a burgeoning bureaucracy keen for income from each unit traded and in which the bureaucracy determines the costs. The idea is that the “most efficient” would have the capital to buy water in lean times and they would yield the most dollars profit per unit of water.

The corporate sector was drawn to higher catchments in Queensland where allocations could be caught and stored from reliable wet season rain. In dry years this leaves little for downstream, and now every flow is captured by a complicated system of lochs, weirs and dams in an effort to sell water to customers, some of whom also capture water for resale.

Any water savings made by piping water do not go back into the river – they have to be traded. That brings us to the package announced by the federal government this week, aimed at buying out “inefficient farmers on marginal land” — it will see even these farms put into more intensive production.

This runs with the same logic that “if you make guns criminal, then only criminals will have guns.”

This, by the by, is another contributor to the crops actually grown – this idea that financial yields are the big payoff. Crikey writer Lionel Elmore comments on the land/water ‘problem’ being a fault of government, rather than farmers. I still think farmers have a responsibility to use resources wisely. Amongst other things, profitable crops do not prepare one for purchasing water during bad times, if those same crops require tonnes of water more than others.

The fault of the government lies in the fact that the current system of water allocation was set up to maximised government revenue, at each level, while taking advantage of the irrationality of individual agents in the market. Eco 1 students, this is Bad Government: government’s intervene to correct irrationality in a market for common resources, not secure money and votes (this is what comes of replacing government with politics).

So to the point of the government’s two recent moves which, embarassingly, I had not connected myself: first, cut off all water allocations to zero – including, along the way, left-over allocations that farmers had thought they’d paid for and secured; second, start offering cash and other incentives to self-identifying ‘inefficient’ farms – those who see into their own future, and see they will not manage to keep their heads above the water they won’t be getting anymore.

Result? Instant horizontal integration. After a fashion. Because ordinary farms will not have the capital, either, to start expanding out over farms far downstream, to which they can apportion the water they’re taking upstream. Who, one wonders, would have that sort of clout? Corporations. The bane of Adam Smith and sensible economic markets everywhere.

With reasonable food prices, it is unlikely that family farmers, with diversified and existing infrastructure, will not be automatically replaced by the corporate sector.

Yet the Victorian and Federal Governments are looking to severely cut water allocations to accelerate this “reform” with zero allocations. It will kill off orchards and vineyards established over decades. This “economic reform” in the form of cash payouts is precisely what taxpayers are being asked to subsidise.

Yes, mega-farm corporations, foreign or existing, or any other corpoation, foreign or existing (or, God help us, Private Equity), can probably anticipate a few deals handing them enormous, horizontally-integrated agri-businesses, in a few months. Economics implications?

First: farms fall into fewer but larger and wealthier hands. Political power also increases. The result will be not less burden of these enterprises on our taxes, but greater. This time, though, our money will given, like the increases in your water and electricity bills this year, to shareholders, banks, etc. Enjoy.

Second: out the other end, will food prices decrease? No. For a start the margins demanded by a family farm are far less than those demanded by fascist suits in air-conditioned offices in Sydney or New York, or their silent partners or shareholders. Half of the reward for a farmer is being on the farm.

Will water allocations become more sensible? Also no. They will appear to become more lucrative, and more efficient, when in fact they will also, like military aid to countries who buy our gunships, be under-written by our tax money. Will ‘the land’ be safer, or used more sustainably? Also, probably, no. Political power of ordinary re-election-chasers, in the face of large agri-businesses, will not be sufficient to halt, or even lessen, the tragedy of our commons (again – this is why Adam Smith did not want corporations ruining his invisible hand).

Which is efficent, if you think about it. Just not, really, in any of the ways we would choose, if given the choice.

Beyond the black stump: more black stumps

smh vines pic
Survival mode … citrus trees like these at Bourke have been cut to the stump. It helps them survive with little water but stops them producing for as long as five years.

What a shame my first mid-terms have been printed, already. From the Sydney Morning Herald:

Irrigation water in the Murray-Darling Basin is selling for up to 10 times the price of a year ago as farmers fight to keep their permanent plantings alive.

Many irrigators growing citrus, stone fruit and wine grapes have less than 10 per cent of their normal allocation – not enough to survive another long, hot summer.

An increasingly common sight across the basin is citrus trees that have been cut back to the stump. It helps them survive with little water but takes them out of production for up to five years.

Continuing dry weather saw the price of wheat reach a new high of $492 a tonne on the Stock Exchange yesterday.

The basin in question (from Wikipedia):

wikipedia murray-darling basin

Which correlates well to a seminar a few CSIRO guys gave back in my Master’s days (the degree, not the golf) about our South-East heading for a dust-bowl in about 50 years.

Here, however, is a slight breaking point of our sympathy (slight = mine and that of a friend of mine):

The area planted to cotton this summer is expected to be the smallest in 30 years and the area planted to rice the smallest since the industry’s infancy in the first half of last century.

NSW water storage inflows in recent months have continued to be among the lowest on record and there is less water in storage now than at the start of last year’s disastrous irrigation season.

That’s cotton, a kilogram of which requires 7 to 29 kilolitres of water and rice, a kilogram of which requires 5 kilolitres of water. Water use alone, the irrigation mechanisms cock up (a) rivers (as we’ve plainly seen) but also (b) freshwater ecosystems, migration within them and bio-diversity (whether affecting indicator species or not, sadly, I do not know).

Wheat (500 litres per kilogram), potatoes (900 litres per kilogram) and even soy (2 kilolitres per kilogram) come under that (link: .pdf). This also does not include the pesticide use of cotton. I say bring back hemp (and for Australia we just might see such a thing, if you can imagine it).

Don’t forget the truly wonderful water recycling blog, which I’m sure has much more intelligent a review of this sort of thing. Also, if you’re an ethanol believer, the former R-squared energy blog.

Desalination costs expand again – now water prices will double

Sydney Water’s debt is set to double – to $7.5 billion – as its bottom line is hit by borrowing for the proposed desalination plant at Kurnell and plunging revenue caused by water restrictions.

But Sydney Water’s chief, Kerry Schott, defended the debt, saying it “hasn’t got to a level that would make you stay awake at night”. However, she warned she would become very concerned if the independent pricing tribunal did not approve the big rises in household and business water bills she asked for this week.

“We are heading into a lot of debt and we do need some price rises to help us pay the interest on it,” she told the Herald.

Funny – seems only recently they were going to go up by a third. Amazing what borrowing money you don’t want for projects you don’t need can do to your need to raise taxes (and let’s be clear on what this is).

Again – I think water is much too cheap in Australia. However, the prices should increase in a manner that encourages sustainable use – not because our state government of PFI-Third-Way tits decided to load up on debt for an unnecessary infrastructure roll-out.

And this – again – is for a billion-dollar monster than will only, at best, cover some 15% of supply. We’re hardly even investing in our capacity, even removing the extent to which our money (read: taxes, which, again, is what this is) is being used to pay lenders their interest.

I hope the government got our goddamn money’s worth in campaing contributions.

Average household water bills will rise by more than $275 a year

The numbers on desalination start to come in, then.

Average household water bills will rise by more than $275 a year – or 33 per cent – under a plan presented by Sydney Water to the independent pricing tribunal.

Of the rise, $110 will be to fund the Government’s desalination plant, which the head of Sydney Water admitted yesterday could run for 20 years without being needed.

For bigger users (the 12 per cent of households that use between 250 and 500 kilolitres a year), water charges would rise by more than $400 a year over four years (a 36 per cent increase).

The news is even worse for business and is likely to lead to price increases being passed on to consumers.

Told you – remember that name Blue Water Consortium. Wow – that seems expensive relative to, say, recycling. Or almost anything else the state government could have tried. I believe that was the argument made beforehand, now that I think about it.

So what happened? Besides the obvious, of course – that this was a bullshit exercise in PFI corporate money-making.

Sydney Water has laid part of the blame for the rises on the corporation having a poor financial position, because it has to borrow to fund infrastructure such as the desalination plant. It broke up the $275 increase into $100 to $110 for desalination, $80 to $85 for “renewals, growth and operating licence”, $30 to $35 for recycling and demand management and $50 to $55 for financial feasibility.

Again, are we to believe that our water is now in the hands of people who couldn’t even work out the likely borrowing costs? Because the rest of us saw this coming a mile away. Getting back to recycling,

Of the big-ticket item, the desalination plant, which is estimated to cost $1.76 billion to build and more than $1 billion to operate over the next 20 years, Dr Schott admitted the city might never need the water.

If the pricing tribunal did not grant the rises, she said, some projects might need to be dumped. But the desalination plant – which can produce up to 14 per cent of the city’s water supply – would still go ahead.

In case you ever should stop to wonder why your water is so expensive in NSW. It isn’t because a government finally responded sensibly to the fact that fresh water is a scarce resource. It is because a government, as is the fashion, responded to an easily-adjustable problem relating to a public good and constructed the most costly, profit-motive-adherent, inefficient, stupid approach to the otherwise defensible (opinions differ) theory of liberal conservatism.

So, what to do? Nothing. Like all of these idiotic enterprises, it will be ten years before something sensible can be done to undo the damage without monster lawsuit. Which is precisely why an ordinary electorate should respond negatively, tropishly, to the suggestion that a public good should involve profits and shareholders. We just never learn.

Melting ice cap triggering earthquakes

The Greenland ice cap is melting so quickly that it is triggering earthquakes as pieces of ice several cubic kilometres in size break off.

Scientists monitoring events this summer say the acceleration could be catastrophic in terms of sea-level rise and make predictions this February by the Intergovernmental Panel on Climate Change far too low.

Robert Corell, chairman of the Arctic Climate Impact Assessment, said in Ilulissat yesterday: “We have seen a massive acceleration of the speed with which these glaciers are moving into the sea. The ice is moving at 2 metres an hour on a front 5km [3 miles] long and 1,500 metres deep. That means that this one glacier puts enough fresh water into the sea in one year to provide drinking water for a city the size of London for a year.”

The glacier at Ilulissat is down on the Canadian side:

google map greenland

The earthquake angle is, I think, odd more than a real cause for concern. More worrying is the problem of meltwater appearing at the bottom:

This melt water was pouring through to the bottom of the glacier creating a lake 500 metres deep which was causing the glacier “to float on land. These melt-water rivers are lubricating the glacier, like applying oil to a surface and causing it to slide into the sea. It is causing a massive acceleration which could be catastrophic.”

The glacier is now moving at 15km a year into the sea although in surges it moves even faster. He measured one surge at 5km in 90 minutes – an extraordinary event.

As I understand melting ice-caps, this is the proper concern: the ice does not merely melt, in the commonly-perceived sense. Rather, it melts where it meets the rock beneath, such that the entire thing (or, currently, great swathes of it), just flow off. The increasing pace of the advance of glaciers off mountains, ice shelves into the sea, etc. are the results.

Sadly, part of me really is curious to see what would happen in the event of a catastrophic dis-lodging of a glacier such as this. A very stupid part of me (the boy part. I mean, not that boy part). The impact on salt-water ecosystems, the impact on sea levels, particularly the impact on the planet’s reflection-cum-absorption of heat, would not be pleasant.

The question is what to do about it? Very little, actually. This is a signal (I think – opinions differ) that the problem is in fact worse than even people who accept that there is a problem perceive it to be. I don’t know that anything we do (or don’t do, or stop doing) will keep these glaciers on their rock foundations. They are each bells that cannot be un-rung. This, for example:

Yesterday Christian, Shia, Sunni, Hindu, Shinto, Buddhist and Jewish religious leaders took a boat to the tongue of the glacier for a silent prayer for the planet. They were invited by Bartholomew I, the spiritual leader of 250 million Orthodox Christians worldwide.

I don’t see as helping. I’d rather they hit their constituencies with God-based exhortations to respond as a global community.

Turnbull wants river sale cancelled

Don’t tell Bjorn Lomborg.

A huge water auction on the fragile Warrego River should be reviewed in light of a CSIRO report that says climate change and other factors could cut its flows by up to a third, says the federal Environment Minister, Malcolm Turnbull.

The Queensland Premier, Peter Beattie, plans to auction 8000 megalitres of water from Warrego this month despite protests from graziers and environmentalists in NSW who say the auction will affect their properties and harm wetlands south of the border.

Warrego, by the by, is way over here (click all of the images for bigger versions):

Warrego river map

I do love maps.

As with the Murray, below it, farmers downstream are upset – because they want the water. When they’re also in a different state, then there’s a problem (this sort of squabbling is basically a very micro example of what many expect to be the source of future wars. Fortunately no other country is downstream from Australia, but Israel and Jordan, Turkey and Syria? Problem.

Two interesting pieces to this story. One (Jason, you’ll love this) is the degree of uncertainty:

Mr Turnbull said the CSIRO report, whose authors considered the planned auction, showed that future water availability from the Warrego was unpredictable and could could drop by 30 per cent or increase 47 per cent.

The CSIRO’s best estimate was that climate change could reduce the frequency of flows that would travel over the border to NSW by about 7 per cent, he said.

Specifically, from the report:

CSIRO uncertainty tabulation

They also detail problems with their flow data:

CSIRO flow capture

Although the variance coming out of the modelling doesn’t look too too bad, uncertainy over climate conditions drive the final uncertainty over just what will happen. As per an ongoing argument I have with a colleague, the trouble here (and with environmental economics/climate change generally) is that we have different precautionary principles. Mine, for example, is at opposites to Bjorn Lomborg’s. Here I favour the federal approach; Queenslanders probably do not.

Secondly, there is the political element:

John Cobb, the federal Assistant Minister for Environment and Water Resources, called the auction “ridiculous”.

He was supported by the former deputy prime minister John Anderson who said it was “provocative” and “unhelpful”.

Mr Anderson’s electorate is home to many of the NSW graziers who would be affected by the auction. He conceded that it had been approved by the Prime Minister, John Howard, when Queensland agreed to be part of the $10 billion plan for the Murray-Darling basin, with which the Warrego is linked.

John Anderson is a member of the National party (non-Australians: the Liberals actually govern via a coalition of the Liberal party and the National party. Nationals are mostly rural representatives). What’s interesting, though, is that the Prime Minister approved the sale, even though his argument for nationalisation of the river systems was states over-allocating water to the detriment of other states downstream.

Hypocrisy, or the consequence of political horse-trading to get a policy implemented? Probably the latter. I doubt John Howard expected to be punished for it this quickly, though.

The final word:

The Queensland Minister for Natural Resources and Water, Craig Wallace, was adamant the auction would go ahead. He said the state’s water plan was sustainable. “Even when these water allocations are sold, 89 per cent of the Warrego River’s natural flow will still flow over the border to NSW,” he said.

I think I’ll take the word of our science organisation, which actually seems to understand the true value of a point-estimate (not much, in cases such as this), over Craig Wallace (as though it matters – can you believe the Queensland government never even asked me what I thought? Insensitive).

Green-themed algae blooms not so good

A blue-green algae bloom in Warragamba Dam is still growing but Sydney’s drinking water is not under threat, the climate change, environment and water minister Phil Koperberg stressed today.

The bloom now stretches about 26 kilometres from the dam’s wall but Mr Koperberg said the cooler weather forecast for this week should cause the bloom to start dissipating.

Blue-green algae has forced the Sydney Catchment Authority to draw water from deep below the surface to avoid sucking the bloom into the city’s drinking water.

Warragamba dam, by the by, is just outside Sydney, to the south (bear in mind this is Sydney: “just outside” may not mean what you expect it to mean):

Warragamba wide

Warragamba focussed

So: 26 kilometres of algae bloom, you say. The reaction is also rather interesting:

“This is a mini-product of climate change, the abnormally dry and warm weather,” Mr Koperberg said. “Extended sunlight across that large body of water causes these sort of things to occur.”

Mr Koperberg spelled out the Government’s reasons for being unconcerned about it.

“A, there is nothing we can do about it; B, it’s a perfectly natural phenomenon which is a response of lots of nutrients being washed into the water; C, it’s not toxic,” he said.

His point A reminds of a Clarke and Dawe sketch, recently re-discovered:

Fictional, yet highly accurate, as per John Clarke’s genius. His points B and C don’t really count for much. That it’s due to extended sunny periods? You’re in Australia. I suppose he’s saying we might as well get used to it. That it’s not toxic at the moment may not keep it not toxic.

More importantly, none of this will matter much to Sydneysiders who drink the stuff – surely he was around for the giardia scare. Crayons are non-toxic, but good luck getting adults to eat them.

Sadly, none of the quality concerns are likely to have an appreciable effect on water demand in Sydney. I don’t know that all that much of our use goes to internal consumption. Our ecological footprints ought to really profit from all that bottled water, though.