Friday, November 30, 2007

North Korea Refuses to Disclose Uranium Program

Nuclear proliferation blues....

North Korea has apparently again outsmarted the United States.

The secretive, Stalinist/Kimist state has given up an aged nuclear reactor at Yongbyon--which was approaching the end of its useful life--while refusing to disclose its nuclear proliferation activities and a parallel program for developing nuclear warheads with enriched uranium that has been going on for years, according to the US.

Some analysts assert that North Korea does not need to come clean on proliferation in at least one part of the world--the Middle East--more specifically, Syria. The US has proof, these experts say, that Pyongyang supplied Damascus with radioactive materials--maybe, even, an entire plutonium reactor or, worse, an atomic bomb-making factory--before they were were destroyed by Israel on September 6 in a mysterious air raid.

More About That Diplomatic Slap-in-the-Face

The United States wants China to explain why several US Navy ships were denied entry to Hong Kong Harbor last week.

The request comes after apparently contradictory comments by Chinese officials about the reason for the actions.

At the same time, the US Defense Department says it wants to "move past" the issue.

The Chinese government has denied that a "misunderstanding" led to its refusal to allow US warships to dock in Hong Kong, and has hinted it may be retaliating for recent US actions.

The Pentagon had earlier protested the refusals and said China's explanation was not sufficient.

Tuesday, November 27, 2007

China-EU Summit Set to Open Tomorrow in Beijing

Leaders of China and the European Union are set to open a summit Wednesday in Beijing. The EU's growing trade deficit with China and the safety of Chinese imports are issues that are likely to dominate the talks. Naomi Martig reports from VOA's Asia News Center in Hong Kong....

EU leaders gathering in Beijing are expected to bring up a variety of trade issues with China, many of which have created an increasingly complicated relationship between them.

The safety of Chinese products is likely to be at the top of the agenda. In recent months, China has scrambled to clamp down on poor quality goods to try to build confidence in the "made in China" label. A string of safety scandals involving seafood, car tires, toothpaste and children's toys have led to bans and recalls overseas.

Earlier this year, a leading London toy store pulled two Chinese-made products from its shelves after paint on one type of toy was shown to contain high amounts of lead, which could cause brain damage or even death. The US toy company Mattel has also recalled more than 18 million Chinese-made toys because of unsafe levels of lead.

On Monday in Beijing, EU trade commissioner Peter Mandelson said that ensuring consumer trust and confidence in Chinese products must be China's priority if it wants to maintain the export growth rates of recent years.

"During the summer, some Chinese officials pointed out that less than one percent of China's exports to Europe had alleged health risks," Mandelson said. "But Europe imports half a billion euros worth of goods every day from China. So, even one percent is not acceptable."

His comments drew an icy response from China's top trade official, Vice Premier Wu Yi. She insists China's government has taken unprecedented steps to ensure product quality and food safety.

EU policy makers are also expected to press Chinese officials to increase market access for European goods, and to reform its currency exchange rate.

Last year, the EU's trade deficit with China was about $170 billion. This year, it is expected to approach $230 billion, a record level. EU officials blame the widening gap on what they call China's artificially low currency exchange rates, which they say give the country an unfair trading advantage.

Christer Ljungwall, a China-EU trade expert who is a visiting research fellow at Peking University's China Center for Economic Research, says he does not expect the currency dispute to be resolved anytime soon. "Any major jump in exchange rate policy would be, first of all, very unpredictable, and it would be very difficult to foresee the actual results of that," he says. "And from the Chinese perspective, again, it is not likely to happen."

China is reluctant to allow a rapid fluctuation of its currency, fearing it could cause unemployment and market instability.

After the US, China is the European Union's second-biggest trade partner and its largest source of imports.

Monday, November 26, 2007

Security Services Alert to Possible Terrorist Attack

Early warning.

Amid media reports that Al Qaeda will soon release a new Osama Binladen message, European, US and Israeli security services are on heightened alert for possible terrorist attacks aimed at upstaging this week's US-sponsored Mideast peace conference in Annapolis, Maryland.

Intelligence experts warn that one or more members of the clerical fascist-terrorist rejectionist front--including Iran, Al Qaeda, Hamas, and Hezbollah--may attempt a mega-assault in order to provoke a major reprisal and derail any diplomatic breakthrough.

UN Climate Conference to Address Indonesia's Vanishing Forests, Endangered Orangutans

Indonesia's rapidly disappearing forests are one of the examples of environmental damage to be dealt with at the United Nations climate change conference next month on the island of Bali. The destruction poses a threat to plant and animal life, including the endangered orangutan. Once found throughout Asia, the red ape is now only found on the Indonesian island of Sumatra and the island of Borneo, which is shared by Malaysia and Brunei. VOA's Nancy-Amelia Collins reports....

Greenpeace, other environmental groups and UN statistics say Indonesia rivals Brazil for the world's highest rate of deforestation. They estimate Indonesia loses 300 football fields of forest every hour to palm oil (dubbed "deforestation diesel" by Greenpeace).

In Riau, on Sumatra island, large swathes of forest are being cleared to make way for palm oil plantations.

A protestor says: "Greenpeace is here in Riau to show the destruction to Indonesian forests for palm oil plantations. The damage done not only destroys the forest but also animal habitats and causes greenhouse gas emissions which trigger climate change."

Demand is soaring for palm oil-derived biodiesel, partly because it has been marketed as an environmentally friendly source of power.

But environmentalists say not enough thought has been given to how it is made. They say the burning of carbon-rich peat lands to make way for palm oil plantations causes huge amounts of carbon dioxide to be released into the air, which contributes to global climate change.

The destruction also impacts the vast variety of Indonesia's wildlife, such as the orangutan, once prevalent in Asia, and now only found on Sumatra island and Borneo.

Bustar Maitar, Greenpeace forest solution campaigner, says deforestation also hurts local communities severely.

"The local people still have a relationship with the forest," Bustar says. "So when the palm oil plantation comes, it destroys their way of life."

Indonesia and Malaysia together produce more than 80 percent of the world's palm oil, widely used in consumer products.

Notes on the Myth of Energy Independence

"Energy independence" has become a holier-than-thou cause for crowd-pleasing politicians in the United States, including the Presidential candidates who feel compelled to sacrifice taxpayers' hard earned money to the Idol of Iowa. The cruel Corn God demands government mandates and subsidies in order to feed the giant, water-gulping ethanol plants that threaten a region with environmental destruction, all Americans with food inflation, and their disadvantaged neighbors south of the border ... and people in developing nations across the planet ... with mass hunger.

Criticism of the looming disaster is drowned out or simply ignored in the name of energy independence. Politicians play up popular fears stemming from legitimate concerns, including political instability in the oil-rich Middle East and the fact that more than half the international oil trade passes through a half-dozen maritime choke points, including the Strait of Hormuz leading out of the Persian Gulf and the Strait of Malacca linking the Indian Ocean (and oil coming from the Middle East) with the Pacific Ocean (and major consuming markets in Asia). The vulnerability of these supply zones is real and likely to increase in the coming years.

Unfortunately, however, US energy independence is an unrealistic goal. The gap between domestic energy consumption and production is estimated to be the equivalent of 15 million barrels of oil per day, or 30 percent of Americans’ daily demand for energy from all sources. This gap is mainly met with imports of oil from over 35 countries. No single region, except for North America, accounted for more than 15 percent of US crude oil imports in 2006.

There are ways to cut imports, including continuing to use energy more efficiently, responsibly allowing access to "off-limits" resource-rich areas like the eastern Gulf of Mexico or the Arctic National Wildlife Refuge--and development of next-generation biofuels, or biomass-to-liquid fuels, from sustainable and inedible sources. But the hard truth is that no conceivable combination of demand moderation or domestic supply development in the US can realistically close the gap entirely and eliminate the need for imports.

Moreover, pursuit of US energy independence may be undesirable as well as unrealistic. Like corn-based ethanol, the solution may be worse than the problem. A recent report by the US National Petroleum Council concluded: “Policies espousing ‘energy independence’ may create considerable uncertainty among international trading partners and hinder investment in international energy supply development.”

Calls for energy independence fuel resource nationalism, making it easier for dangerous demagogues to use oil and gas as weapons to advance aggressive policies in opposition to the US and its allies. Americans need only look south--to the likes of Hugo Chavez--for an example. Had the US moved decades ago to forge a hemispheric energy arrangement with Venezuela (and Canada), this tropical Mussolini and friend of oil-rich, nuclearizing Iran might never have come to power.

The energy industry is international to the core; it transcended borders before the advent of the global economy. (The petrochemical industry actually dates to antiquity with the trade in Dead Sea asphalt that was used by Egyptian embalmers.) Energy producers and consumers are connected in clearly complex ways.

The interdependent nature of the relationship was obvious in the aftermath of Hurricanes Katrina and Rita: international markets responded to the temporary disruption in domestic production and distribution, demonstrating that both the US and the world depend on the stability and reliability of the international energy system.

The response also demonstrated the need for energy security, the pursuit of which, in contrast with energy independence, will not do more harm than good. As demand for energy grows and the need to combat climate change becomes more urgent, the case for energy security comes into sharper focus. Most of the future increase in global energy demand and supply will take place in developing countries ... where close to 95 percent of the world’s population growth will occur, where the rate of economic growth will be twice that of the world’s developed countries between now and 2030, and where more than 90 percent of new oil supplies will originate.

In the era of global warming, managing this historic shift in energy markets from developed countries to developing ones, as well as the shift from relatively scarce and inexpensive energy resources to those, such as heavy oil, which are far more abundant but also more costly and difficult to extract, will require enormous intelligence, skill, and experience. The time for empty rhetoric, symbolism over substance, sanctimonious, subsidized silliness ... and mandated madness ... is long gone.

Biofuels and Diet: Recipe for Disaster

Biofuel and diet sow seeds of farm crunch.

That's the headline atop an article by Ambrose Evans- Pritchard in today's Daily Telegraph that confirms reporting and analysis by China Confidential and other media outlets and blogs. Excerpts are set forth below.

"Malthus may have been right after all, though two centuries early and a crank. Mankind is outrunning its food supplies. Hunger-- if not yet famine--is a looming danger for a long list of countries that are both poor and heavily reliant on farm imports, according to the Food Outlook of the UN Food and Agriculture Organisation (FAO).

"The farm crunch has been creeping up on the world for 20 years....

"What has abruptly changed is the twin revolution of biofuel politics and Asia's switch to an animal-protein diet. Together, they have shattered the fragile equilibrium.

"The world's grocery bill has jumped 21pc this year to $745bn (£355bn), hence the food riots ripping through West Africa, Morocco, Yemen, Bengal, and Indonesia.

"Three people were killed this month in China at a cooking oil stampede in Chongqing. Mexico has imposed a ceiling on corn prices to quell a tortilla revolt....

"As so often these days, China is the swing player. It is replicating the switch to a diet of beef, pork, chicken, and fish that occurred in Taiwan and Japan when they became rich.

"The US Department of Agriculture says the Taiwanese eat nine times as much animal protein as the Chinese.

"Why does it matter? Because it takes 16lb or so of animal feed--mostly soya or corn--to produce a single pound of animal flesh. It takes 50 times as much water.

"Until last year, China was able to grow enough grain to supply its ubiquitous poultry and fish farms. It has now become a net importer of corn for the first time in its modern history.

"Urban sprawl across China's eastern seaboard is stealing most the fertile land, and the water tables of northern China are drying up. The same trends are under way in India, Vietnam, and much of emerging Asia.

"Meanwhile, the Bush administration aims to supply 20pc of total US fuel needs from biofuels within a decade, up from 3.5pc today--a ploy to break dependence on oil demagogues and slash the trade deficit....

"The US Department of Agriculture says reserves will reach the lowest in 35 years by 2008. The EU's vast silos are empty....

"Rich countries will not starve. But as Japan's Marubeni Institute warns, they may face a return to post-War food rationing long before the world population peaks in the middle of the century."

Sunday, November 25, 2007

Report: Kim Puts Son in Line as Successor

Dynastic developments in Kimist North Korea.

A published report says North Korean leader Kim Jong Il has appointed his second-eldest son to a top post in the ruling party, putting him in line to eventually run the country.

The Japanese newspaper Mainichi Shimbun says Kim Jong Chol has been named a vice director of the Workers Party of Korea. It is the same post that Kim Jong Il was appointed to by his father, the late Kim Il Sung.

The newspaper cites North Korean sources for its report. They suggest that the younger Kim is following "an orthodox course" mirroring his father's rise to take over as head of the world's only Communist dynasty.

There is no official confirmation of the Japanese newspaper report, either in North or South Korea.

It has been rumored for years that Kim Jong Il passed over his eldest son, Kim Jong Nam, to designate a successor. The second son, Kim Jong Chol, said to be about 26 years old, is the son of the elder Kim's current and third wife, Ko Yong Hee.

North Korea is one of the most secretive societies. The government there keeps tight control over what information is released to the outside world--especially when it involves affairs of state.

Carbon Capture and Storage Study Starts in China

With China's carbon dioxide emissions from burning coal set to double by 2030, many scientists believe that large-scale deployment of carbon capture and storage (CCS) has the potential to significantly reduce future greenhouse gas emissions.

The British Geological Survey, for example, recently attended the launch of the first phase of the "Near Zero Emissions Coal Study" in Beijing, which will examine the feasibility of constructing CCS-fitted coal fired power plants in China.

Dr. Nick Riley, Head of Science for Energy at the Geological Survey, said: "CCS offers the opportunity to reduce emissions per unit of electricity by 85 to 90 percent."

The geotechnical aspects of the research will involve selecting strategic sedimentary basins to be mapped for potential regional CO2 storage assessments (geocapacity), followed by more detailed assessment of sites potentially suitable for a demonstration of CO2 storage in China linked to a demonstration of CO2 capture from a coal-fired power station.

A Geographical Information System linking current and planned large CO2 point sources to potential geological storage options (source-sink matching) will be also be buuilt.

Interest in CCS is global and growing. The United States and other countries are spending millions of dollars to research the feasibility of stuffing carbon dioxide into coal seams and fields of briny water deep beneath the Earth.

CCS supporters say that while improving conversion efficiency and co-firing with biomass can together provide up to a 30 percent reduction in CO2 emissions from coal, CCS is the only technology that can provide a reduction of around 85-90 percent. Given the world's increasing need for energy--and the urgent need to address climate change--CCS could be the way to go.

Friday, November 23, 2007

King Corn: Trailer for Film that Explains Everything

America's ethanol boom, which threatens the world with mass hunger, cannot be understood without first understanding the country's terribly destructive corn monoculture. Ethanol mandates and subsidies essentially constitute a huge transfer of wealth from corn consumers to corn growers, including agribusiness giants like Archer Daniels Midland and a handful of privileged farmers who apparently feel entitled to control and exploit thousands of acres of cropland in ways that are harmful to the environment and the health and well being of the overwhelming majority of Americans.

In 2006, more than a third of the US corn crop went to ethanol, nearly a 50 percent rise in one year alone. The higher price that results from soaring demand is hurting the already beleaguered dairy industry in New England and New York State, affecting affecting milk consumers in the United States.

Biofueld demand for corn is also affecting the price of tortillas in Mexico—making it harder for poor families to survive--and threatening to bring about sharply higher food prices internationally. As the world corn price rises, prices of wheat and rice follow. As a result, mass hunger could result among those populations that are already at the edge of starvation.

Ethanol from corn is inefficient to boot. In contrast with sugarcane-based ethanol, which is made in Brazil, corn-based ethanol may actually use more energy than it produces while making the air dirtier.

The foreign policy implications of US government mandated ethanol madness are plainly disturbing. In the name of energy independence and reducing greenhouse gas emissions, the US taxpayer is funding an industry that is contributing to food inflation and is likely to make life even more miserable than it presently is for the planet's poorest and most vulnerable people.

Understanding the PLA's Thanksgiving Message

China's decision to block a US Navy aircraft carrier from a long-planned Thanksgiving visit to Hong Kong, before relenting 24 hours later "on humanitarian grounds," was a message from China's real rulers--the military--that they intend to vigorously oppose an announced US buildup of Taiwan's antimissile shield.

The $940 million upgrade to the island's Patriot II antimissile shield would help Taiwan resist reunification with the mainland and strengthen "splittist" tendencies, in the view of the People's Liberation Army.

The flip-flop was also directed at the Communist Party, whose power the PLA has supplanted, according to China Confidential analysts. The military engineered an embarrassing diplomatic incident to remind the party that the PLA has its priorities and red lines. (Literally red as well as figuratively. A growing neo-Maoist faction in the military is worried that the inequality caused by the party's continuing commitment to Western-style consumerism, coastal city development at the expense of the restive, left-behind countryside, and massive urbanization is ultimately unsustainable and likely to lead to regime-threatening popular uprisings--perhaps, even, a civil war--which the PLA will have to put down at great cost.)

The PLA believes that a missle defense upgrade would violate a US commitment to reduce weapons transfers to Taiwan. The Patriot upgrades would for the first time enable units to launch either Patriot Guidance Enhanced Missiles or Patriot Advanced Capability-3 missiles. Guidance Enhanced Missiles use blast fragmentation warheads to destroy an incoming missile. The PAC-3 uses a warhead that collides with the target.

China has nearly 1,000 short range ballistic missiles deployed within striking distance of island is adding about 100 missiles a year to this arsenal, and is developing itger capabilities aimed at preventing US military intervention in the early days of a cross-Strait conflict.

The PLA regards Taiwan as a renegade province and is determined to take back the island. Sources say the PLA forced passage of the "Anti-Secession" law that authorized--actually, mandated--military force to prevent Taiwan from moving toward "de jure" independence. Taiwan has had de facto independence since 1949; but the PLA is trying to prevent the thriving, self-ruled democracy from gaining international recognition as an independent country that can't be attacked by Beijing without a violation of international law. Hence, China's anger over the Taiwanese government's attempts to appy for United Nations membership and plans for a referendum on joining the world body (to which Taiwan belonged as the Republic of China before its seat was given to the PRC in October 1971).

The PLA is also upset over possible US sales to Taiwan of a dozen P-3C Orion anti-submarine patrol aircraft and SM-2 anti-aircraft missiles worth more than $2.2 billion.

Thursday, November 22, 2007

China Importing, Investing in North Korean Minerals

China is moving in on North Korea's rich mineral resources; and the Kimist regime's corrupt, caviar-consuming elite is eagerly collaborating in the process.

China imported more than $274 million in minerals from its vassal last year. Some 70 percent of Chinese investment in the country is in resource development.

In 2005 China's Jilin province forged a 50-year contract to mine and haul 10 million tons of iron ore every year from the North's largest iron mine in Musan.

In January 2006 a Chinese company signed a 25-year contract for a 50 percent share of operating rights to the North's largest copper mine.

South Korean sources estimate the potential value of uranium, iron ore, magnesium and other minerals at $2.5 trillion.

Analysts Puzzled by Chinese Flip-Flop

China's Foreign Ministry Thursday offered no explanation as to why Chinese authorities initially refused and then allowed a Thanksgiving holiday visit to Hong Kong by the Kitty Hawk aircraft carrier group.

The boats carrying 8,000 sailors to Hong Kong for the US holiday had been scheduled to arrive Wednesday. But shortly before they arrived, the Navy was told the ships would not be allowed to anchor in the harbor, leaving the crew high and dry.

US officials said they were caught by surprise by the cancellation, and had received no explanation from the Foreign Ministry.

China made an abrupt about-face, Thursday. Foreign Ministry spokesman Liu Jianchao said Beijing would allow the ships into Hong Kong after all.

Said Liu: "We have already decided to allow the USS Kitty Hawk aircraft carrier group to stay in Hong Kong for rest and reorganization during Thanksgiving. It is based completely on humanitarianism. China has already informed the US of this decision."

Liu gave no explanation for the delay, saying only that the process for approving port calls was based on the principles of "sovereignty" and the "concrete situation."

US officials had expressed disappointment at the initial refusal, saying that many American families had flown to Hong Kong to spend the Thanksgiving holiday with relatives serving in the Navy.

Analysts struggled for an explanation. David Zweig, a professor of political science at the Hong Kong University of Science and Technology, told VOA: "Everybody's scrambling around Hong Kong today and East Asia trying to explain this, and nobody has any understanding. So, we're groping. It seems quite strange and quite surprising."

The Chinese move comes as military relations with the US seem to be improving following a visit by the US Defense Secretary Robert Gates earlier this month.

During Gates' visit the US and China agreed to set up a hotline to prevent misunderstandings that could lead to conflict.

The two sides also agreed to increase military exchanges.

The Kitty Hawk, which is based in Japan, is due to leave Japan for good and be decommissioned next year.

Wednesday, November 21, 2007

No Thanks for Corn-Based Biofuel

About corn....

It is a gift of the North American Indian people to the world. Corn was unknown to the Europeans before they met the Indians. Indians gave Europeans the seeds and taught them how to grow corn.

Corn orignated somewhere in Central America; but Indian traditions say corn came from the sky, a gift from the Creator.

The gift came with a covenant: Human beings and corn had to work together to feed the nations. Each were to depend on the other for their survival.

Corn is perhaps the only plant whose seeds must be planted by human beings.

The cultivation of corn allowed Native Americans to settle into villages and made them less dependent upon hunting and gathering. The development of corn changed the course of history for these people and suceeding generations.

In 2007, the development of corn is again changing history--this time, however, in ways almost nobody could have predicted just a few years ago....

When Americans sit down to their Thanksgiving dinner today, they will not be expressing gratitude for the shocking price of the food on the table. The price of only one main ingredient in the traditional Thanksgiving meal--the potato--which originated in Peru-- has remained stable over the past year. The turkey, cranberry sauce, green beans, ingredients for pumpkin pie pastry, ice-cream on top, and the cheese to go with crackers, have all soared in price ... thanks to the horrific, US government-subsidized, corn-based ethanol boom that threatens the nation ... and the world ... with mass hunger.

A doubling of the price of corn in the past 12 months has led to a global shortage of dairy produce and pushed inflation to its highest rate in the United States nce the early 1990s.

As usual, the people who can least afford the pain are suffering most ... while smug, self-serving politicians, agri-business giants, and ethanol hucksters benefit mightily.

Corn prices are high because water-gulping, greedy ethanol companies are buying the grain to produce an inferior gasoline additive that actually makes the air dirtier. This year's US subsidized production of some 200 million barrels of ethanol took 10 per cent of supplies from US grain stores.

But corn is not just another commodity; on the contrary, corn is crucial to the US food industry. Half the corn that is sold is used as animal feed--which explains why US dairy farmers hate ethanol. The soaring price of corn has raised the cost of maintaining dairy and beef herds, poultry and pig farms.

Corrn ethanol is the cutting edge of a broader, biofueled assault on humanity. Because food and fuel crops compete for land and resources, both increase the price of land and water.

The International Food Policy Research Institute has estimated that the price of basic staples will increase 20 to 33 percent by 2010 and 26 to 135 percent by 2020. Caloric consumption declines as price rises by a ratio of 1:2.

Post Script: Australian analyst Nick Rose writes: "Government subsidies, incentives and targets have created the global biofuels boom. One of its primary impacts has been a steep rise in the price of basic food staples, some of which have more than doubled in the past 12 months and are predicted to increase further in coming years. This will impact upon every consumer, but most especially the poorest in the Global South who are dependent on basic grains for their subsistence. There have already been food riots in Mexico this year because of a fourfold local rise in the price of corn. Tens of millions of subsistence farmers will be displaced by the push to sow vast acreages of crops for agro-fuels; in the process, world hunger, which already blights the lives of 842 million people, is expected to affect 1.2 billion by 2025."

PPS: The Kansas City Star editorialized on Nov. 19: "The problems of corn-based ethanol are threatening to overshadow its promise to help reduce the nation's addiction to oil.

"In the last few months, plans to construct several ethanol plants around the country have been shelved or challenged in court. Contributing factors include borrowing expenses, the cost of corn and opposition from nearby property owners.

"And a recent report by a research agency of the National Academy of Sciences raises troubling concerns. For instance, plants that produce corn-based ethanol could drain valuable supplies of water now used for drinking, while increased corn production could create more pollution through added use of fertilizers....

"Ethanol also gets an excessive 51 cents-a-gallon federal subsidy, while the US government keeps out cheaper imports of other forms of ethanol with a 54 cents-a-gallon tariff...."

WWF Condemns New Voluntary Carbon Standard

The World Wildlife Fund says a new standard for carbon offsets is essentially a "bottom of the barrel benchmark" that offers the most basic set of rules, and is focused primarily on lowering transaction costs and thus carbon prices to consumers.

The Voluntary Carbon Standard (VCS), launched by the Climate Group, the International Association for Emission Trading, and the World Business Council for Sustainable Development, is meant to set a minimum benchmark for the quality of carbon offsets. The VCS is designed to offer the most basic set of rules, focused primarily on lowering transaction costs and carbon prices to consumers.

WWF argues, however, that the VCS cannot guarantee that accredited projects really reduce climate-damaging emissions. Its verification systems are insufficient. Furthermore, by waiving all environmental and social safeguards as well as requirements for stakeholder consultation, the VCS substantially increases the non-carbon risks of VCS projects.

"This new standard simply lacks credibility," says Julia Langer, Director, Global Threats, WWF-Canada. "Carbon buyers using the VCS will remain exposed to significant risk; the VCS cannot guarantee that credits are real nor projects valuable to host countries. WWF recommends buyers take extra steps to ensure they are acting responsibly."

Foregoing many essential checks and balances in terms of managing both carbon and non-carbon risk, the VCS appears to rely to a considerable degree on the goodwill and integrity of project developers whose commercial success depends on the sales of credits. WWF believes that this approach carries significant potential risk for buyers and the environment.

"The voluntary carbon offset market is becoming like the Wild West. WWF is concerned that bad offset projects will register under the VCS to make a quick buck," says Hans Verolme, Director of WWF's Global Climate Change Programme. "If the VCS Board is serious about its standard they should screen its impact in a very transparent way and show they are ready to make improvements."

Carbon offsetting, if used appropriately, could play a limited part in strategies to reduce carbon emissions and contribute to sustainable development, helping to catalyse the transition globally to a low carbon economy. The voluntary market could also help projects to be undertaken in countries where capacity and expertise in applying Clean Development Mechanism accreditation is lacking; enable small projects to gain access to the carbon markets; and provide a test bed which allows innovation and testing of new technologies and ideas.

India's Tata Chemicals Investing in Sorghum

India is following China's lead in ethanol, avoiding the use of questionable corn as a fuel feedstock in favor of seemingly more sensible sweet sorghum.

Tata Chemicals Limited is investing in research and development of sorghum-based ethanol, which, according to the company, does not compromise food security. The company is building a sorghum ethanol plant in Naded, Maharashtra.

Tata Chemical Limited is a leading manufacturer of inorganic chemicals, fertilizers and food additives. The company has annual revenues of about $ 1.5 billion and is part of the US$ 28.8 billion Tata Group, India's foremost business conglomerate.

India and China are also adopting similar strategies for production of biodiesel. Both countries are relying on jatropha as a feedstock; but China is also using recycled restaurant grease (waste vegetable oil), a lower-grade but useful feedstock.

Jatropha is a drought-resistant, poisonous weed that can be grown on marginal land; hence, the plant's image as an oilseed miracle crop. Critics in India and other countries, however, say jatropha grows best on good cropland and that large-scale commercial cultivation of the hardy perennial is likely to further reduce the amount of land that is available for growing food instead of fuel. Critics are also concerned about the effects of the plant's toxicity on humans and the unknown impact on fertile soil of a jatropha monoculture.

China Confidential has learned that India is also investigating use of sorghum ethanol as a substitute for methanol in biodiesel processing.

Tuesday, November 20, 2007

Ex-IMF Economist Says China Manipulates Yuan

The International Monetary Fund's former chief economist recently said China is keeping its currency artificially undervalued. Barry Wood reports....

Last month in presenting its semi-annual World Economic Outlook, IMF chief economist Simon Johnson said China's currency is undervalued. One of his recent predecessors, Michael Mussa, went further. He said by intervening in markets to hold down the value of the yuan, and because its trade surplus is large and growing, China is in direct violation of IMF rules.

"In China, the current account surplus which used to run at one to two percent of GDP [gross domestic product] in the high growth period of the 1990s has gone from two, to four, to seven, to nine and a half, and this year, to 12 percent of GDP," Mussa said at an IMF seminar. "This is the direct consequence of a Chinese policy that unreasonably and unwisely seeks to resist warranted, substantial nominal appreciation of the Chinese exchange rate."

During the 1990s when China emerged as a major exporter it held its currency fixed to the US dollar. Since 2005, China has allowed the yuan to gradually appreciate, but it has only risen about five percent against the dollar. Many economists say the Chinese currency is undervalued by up to 50 percent.

In its most recent World Economic Outlook, the IMF identified large financial imbalances as a principal risk to global stability. The economies most out of balance are those of the United States and China. The US trade deficit equals five and a half percent of GDP. But the two-year-long decline of the dollar against currencies other than the yuan has brought about a shift in financial flows and the US deficit is narrowing. In contrast, China's surplus is still growing with some experts predicting it will reach 13 percent of GDP in 2008.

Mussa said China must stop manipulating its exchange rate.

"That policy of massive, persistent, sterilized intervention has the direct effect of preventing effective balance of payments adjustment," he said. "It needs to be the central focus of IMF surveillance [oversight] activities."

Mussa was the IMF chief economist from 1991 to 2001. He is now a senior fellow at the Peterson Institute, a Washington economic research agency.

At the IMF seminar, Deutsche Bank economist Peter Garber agreed that the yuan is significantly undervalued. He said because the common European currency, the euro, has risen so steadily against the dollar and the yuan, he expects the European Union will soon be calling for restrictions on imports from China.

"I do think the protectionist pressure is much more likely to come first from Europe rather than the United States, given what has happened to the euro recently," Garber said.

The IMF has this month come under new leadership of managing director, French politician Dominique Strauss-Kahn. Some observers say they expect Strauss-Kahn will increase the pressure on China over exchange rates.

Monday, November 19, 2007

Ethanol Worst Energy Investment of 2007

Boom and bust.

Bloomberg reported Monday that American corn ethanol is this year's worst energy investment.

The alternative fuel fell 57 percent from last year's record of $4.33 a gallon while driving crop prices to a 10-year high. Dairy farmers and other corn consumers suffered as government subsidized ethanol production in the United States tripled after investment banks, hedge funds, Silicon Valley venture capitalist Vinod Khosla, and Microsoft founder Bill Gates helped finance an ethanol building boom.

The economically and environmentally questionable gasoline additive is failing on all fronts. It isn't even reducing oil demand. Scientists say the fuel uses more energy than it creates.

The National Research Council warns ethanol production threatens scarce water supplies.

That's putting matters mildly. A 100 million gallon a year ethanol plant, which has become the norm in the Midwest, consumes at least 400 million gallons a year of water--a staggering amount by any standard. Only paper mills gulp down more water, which is why they have historically been located along rivers.

Fortunately for an increasingly thirsty planet, ethanol plants are closing from Iowa to Germany. More important, new plants are not getting financed as Wall Street wakes up to the disaster.

Bloomberg notes that a sucker (investor) who put $10 million into ethanol on December 31 now has $7.5 million--a loss of 25 percent.

Florida and Georgia have banned sales during the summer, according to the news service, when the fuel may evaporate and create smog.

No, that's not an error. The supposedly green alternative actually makes dirtier air, which could cause more smog-related deaths, according to a recent study by a Stanford University civil and environmental engineering professor. Mark Jacobson says nearly 200 more people would die yearly from respiratory problems if all vehicles in the US ran on a mostly ethanol fuel blend by 2020.

Man-Made Nightmare: China's Expanding Deserts

Large tracts of land in China's arid western provinces are turning from farmlands into deserts.

Environmentalists say desert expansion has accelerated since the 1950s. Deforestation, livestock overgrazing and inefficient water use have all compounded the problem.

In many areas, the desert grows as farmers draw water from underground reserves faster than nature can replenish them.

The process may be irreversible. China's State Forestry Administration says the advance of the desert results in a direct annual loss of billions of dollars, while threatening the livelihoods of some 400 million people.

The problem threatens the capital itself. The Gobi Desert stretches from Mongolia to within 240 kilometers of Beijing.

Starving Tigers Eat Each Other at Chinese Zoo

China's culture of cruelty to animals knows no bounds.

As if to prove that their country is barely civilized, the corrupt tyrants who run the Communist Party have been deliberately curtailing food supplies to China's poorly managed, miserable zoos. Result: a tiger was killed and eaten by four other cats at a zoo in northeast China.

The shocking incident folows the deaths of captive tigers from disease and starvation.

The sickening details: The desperate tigers turned on the 12-year-old, 330-pound tiger and tore off its left leg on Saturday afternoon at the privately-owned Shenyang Glacier Zoo in Shenyang, capital of northeast China's Liaoning Province.

"When the keeper arrived, the four tigers were still eating the dead body on the ground," said Li Wen Shui, deputy director of the zoo's management office.

"I was shocked, particularly as the five tigers, who were the same age, had been living together for five years," he said. "This kind of thing has never happened before."

China's barbaric "animal parks" feed live animals, including chickens and cows, to tigers to entertain paying spectators. Animal rights groups across the world have condemned the practice.

Japanese Biodiesel Firm Investing in Kenya

Japan's largest biodiesel producer, Biwako Bio-Laboratory, is launching Kenya's first large-scale commercial biodiesel project, which plans to grow jatropha on up to 100,000 hectares (247,105 acres) of land.

The project will initially involve planting 30,000 hectares (74,132 acres) of jatropha to produce 220,000 tons of biodiesel annually.

The company plans to hire 10,000 workers for the first phase.

The company says it will expand the plantation to cover 100,000 hectares within a decade.

Brazil's Big Oil Find Challenges Peak Theory

ExxonMobil and other energy majors may be right about peak oil.

As they have long argued, it seems that the world isn't running out of oil; rather, the world is running into the resource, only it's the wrong kind, meaning more costly and difficult to extract than the petroleum that producers have grown accustomed to exploiting.

Brazil apparently proves the point; and we're not referring to the country's embrace of environmentally questionable sugarcane-based ethanol.

State-run Petrobras announced a massive discovery that challenges geologists' notions about peak oil--the theory that we are running out of usable resources--and maybe even the origin of oil.

On November 8, Petrobras announced that it has found between 5 billion and 8 billion barrels of light oil and gas at the Tupi field, 155 miles offshore southern Brazil in the Santos Basin, an area the company shares with Britain's BG Group and Portugal's Galp Energy. Tupi is the world's biggest oil find since a 12 billion-barrel Kazakh field was discovered in 2000, and the largest ever in deep waters.

Petrobras executives say Tupi may be the first of a number of new, Brazilian "elephants," an oil industry term for giant fields containing more than a billion barrels apiece.

Production will reportedly begin at a rate of about 100,000 barrels a day. But Petrobras could increase the outpit to as a million barrels a day before 2020—more than the American biggest field in Alaska's Prudhoe Bay.

Petrobras presently pumps 1.8 million barrels daily from its Brazilian fields.

Tapping the Tupi elephant is a truly daunting task. The field lies approximately 4.5 miles beneath the ocean's surface, beneath thousands of feet sand and rock, and a massive layer of sub-surface salt.

Brazil's big oil find not only flies in the face of peak oil theory; the ultra-deep discovery conflicts with the generally accepted idea that petroleum is formed from dead organic matter--the so-called biogenic theory of petroleum formation that was first proposed by a Russian scientist almost 250 years ago.

In the 1950s, a handful of Russian scientists began questioning this traditional view and proposed instead that petroleum could form naturally deep inside the Earth. According to the "abiogenic" theory, petroleum might seep upward through cracks formed by asteroid impacts to form underground pools.

The abiogenic theory could account for the presence in some locations of presumed deep deposits of light, or onventional, crude oil beneath heavy crude deposits. The Dead Sea, for example, a land-locked salt lake separating Israel and Jordan, is believed by some geologists to be sitting atop huge salt domes containing both heavy and conventional crude oil deposits.

G-20 Predicts Downturn Due to Weak Dollar and Rising Commodity Prices; Message Aimed at China

Finance ministers and central bank governors of the world's 20 leading economies ended a meeting in Cape Town, South Africa, saying they expect world economic growth to slow because of rising commodity prices and the weak American dollar. In a final communique, the G-20 said it expects the downturn to be modest, although it could not predict its extent and duration.

The head of the International Monetary Fund, Dominique Strauss-Kahn, told reporters the global community must work together to address the imbalances.

"It's certainly no time for complacency for the industrialized world. And, we have to work a lot to correct what is not going perfectly," he said. "And, again, it's no time for complacency for the emerging world itself [either]."

The G-20 groups the world's most-developed countries and one-dozen emerging nations. which together represent two-thirds of the world's population and 90 percent of its gross domestic product.

The G-20 urged countries with large foreign currency reserves to allow their currencies to float more freely on exchange markets.

The statement was seen as aimed at China, which despite large trade surpluses and foreign reserves, continues to peg its currency to the US dollar. This is causing pressure on free-floating currencies, such as those of Brazil, Canada and the European Union. However, officials say no country was singled out during the meeting.

The communique also urged the United States to boost national savings and the European Union to accelerate growth-enhancing reforms. And, it urged emerging Asian economies to lower their dependence on exports by boosting domestic demand.

South African President Thabo Mbeki voiced a concern of emerging nations by calling for a greater voice for them in the decisions of the World Bank and International Monetary Fund.

"We do need this new model of engagement which actively seeks to break deadlocks, some of which are age-old, which frustrate global economic and social development and the eradication of poverty," said Mbeki.

The recently appointed heads of the World Bank and International Monetary Fund, both attending for the first time, agreed emerging nations should be given greater quotas and more votes in these institutions.

However, they said how many votes would be reallocated and from which countries they would come still must be determined.

China Bans 10 Beauty Products

China has banned 10 domestically made cosmetics that contain a substance that could cause the skin to become discolored and susceptible to disease.

The state-run Xinhua news agency said Sunday that the lotions and masks are produced by two companies in south China's Guangdong province.

Xinhua said the cosmetics contain dexamethasone or "skin opium" that initially makes the skin seem improved, but over time makes it thin and dark.

Dexamethasone is a powerful steroid that has several uses in human medicine and can be used to treat ear infections in dogs.

The news agency did not report whether a recall has been issued for the products or if any of the products have been exported.

In recent months there have been a series of disclosures involving unsafe or substandard China-made products, ranging from pet food to toys.

Saturday, November 17, 2007

Editorial: Corn Ethanol Equals Genocide

When it comes to biofuels--especially corn-based ethanol--the jury is in. What is supposed to be a universally accepted human right--namely, the right to adequate food for the world's 854 million hungry people--is being threatened by the mad conversion of wheat, sugar, soy--and corn--into fuel instead of food.

"It is a crime against humanity to convert agricultural productive soil into soil which produces food stuff that will be burned into biofuel," Jean Ziegler, the UN special rapporteur on the Right to Food, recently told reporters.

"I am gravely concerned that biofuels will bring hunger in their wake," he said, branding the "sudden, ill-conceived dash to convert food" into fuels "is a recipe for disaster."

In a 23-page report to the UN General Assembly, Ziegler called on the 192 member states to establish a five-year moratorium on all initiatives to develop biofuels through conversion of food.

"This should provide time for an assessment of the potential impact on the right to food, as well as on other social, environmental and human rights, and should ensure that biofuels do not produce hunger," he said.

Ziegler asserted that member states should ensure that biofuels are produced from non-food plants, agricultural wastes and crop residues, rather than food crops, in order to avert massive rises in the prices of food, water and land.

According to UN figures, the number of people suffering from hunger has been rising every year since 1996, and is now 854 million.

Ziegler is right--and not alone in his criticism. Peter Brabeck-Letmathe, the CEO of Nestlé, the world's biggest food and beverage company, has condemned the push for increased biofuel production as "ecological insanity." Zeroing in on ethanol, he recently told a German magazine that since one liter of the agro-fuel requires the use of 4,560 liters of water, ethanol is a "waste of our most precious resource--water."

The Nestle CEO said: "Biofuels cause an increase of prices for basic food items. Automobile drivers in the rich industrial nations are being subsidized at the expense of the poorest among the world population."

Tragically, however, the warnings of these experts have for the most part fallen on deaf ears in the industrialized world--especially in the United States, which, incredibly, is embracing ethanol without fully examining the health and economic consequences.

US ethanol proponents have been successful in aggressively promoting the dangerous myth that ethanol (and other biofuels) can lead the way toward energy independence while reducing carbon dioxide that causes global warming. Instead, as anyone who has taken time to study the issue now knows, rapid growth of the heavily subsidized ethanol industry will lead to higher food prices, overuse of water, water pollution and soil erosion.

Moreover, ethanol will not improve air quality. On the contrary; ethanol is likely to increase air pollution, particularly in smog-covered cities in California, i.e. in the Sacramento Valley, the San Joaquin Valley and Los Angeles. A Stanford University study found that ethanol poses the same or worse health risks than gasoline.

But the ethanol lobby, which wields considedrable influence over US lawmakers with campaign contributions, is having its way in Washington. Blind acceptance of biofuels is the order of the day. Every politician and Presidential candidate clearly feels compelled to toe the party line.

There is some consolation, however. It turns out that ethanol-fueled cars actually get poorer mileage than gasoline-powered cars, up to 25 percent worse. Given that a gallon of ethanol costs roughly the same as gasoline, it is possible that more and more drivers will have second thoughts about subsidizing a rise in food prices.

Ethanol Extermination: Rising Corn Prices Mean Mass Hunger for Guatemala's Indigenous People

Journalist Louisa Reynolds reports in Latin America Press that a growing appetite for corn-based biofuel in the United States has pushed up the price of corn on the international market, raising the specter of a serious food crisis in Guatemala.

Corn is a dietary staple for Guatemala’s mainly indigenous and impoverished population. In fact, corn is so vital it is considered sacred--a crucial ally by historically oppressed people struggling to survive.

But US ethanol made from corn could be the ultimate threat.

The United Nations Food and Agriculture Organization (FAO) estimates that US ethanol production has increased four-fold since 2000, and that in 2006, 20 percent of the world’s yellow corn production was used to meet US demands for biofuel, which has pushed up prices on the world market.

China also consumes 3 to 5 million tons of ethanol a year and has recently set up four new processing plants. (But China, in contrast with the US, is basing its ethanol feedstock strategy on sweet sorghum.)

Reynolds reports that corn prices in Guatemala began to soar early this year. Between January and March, the price of white corn shot up from US$180 to $320 per ton--a 78-percent increase in only three months.

She notes that the upward trend reflects a similar shift on the international market from January 2006, when the price of white corn was $134. By February of this year, the price had reached $224, rising 67 percent in just over a year. During the same period, the price of yellow corn also reported a dramatic increase, up 50.5 percent from $125 to $188.

The price of corn is now well above the normal price for this time of year, Reynolds says. Coupled with rising oil prices, the impact on the prices of basic goods has resulted in increasing inflation since October 2006.

According to Reynolds, rising corn prices have placed a heavy strain on the rural population during Guatemala’s annual hunger season, a time when poor households have limited access to food, which began in April.

She writes: "This year, as households ran out of food reserves from the harvest that ended in January, families had to depend on the market to purchase their food. Household cereal reserves from the harvest in early this year have been depleted, and there is a lack of wild fruits and herbs, causing households to depend almost exclusively on markets to purchase their food.

"The rainy season, which normally begins in May, started poorly as a result of the El Niño phenomenon, causing losses and decreased crop yields in the August harvest and affecting food availability for subsistence households.

"There is also a low demand for unskilled labor, which is the main source of income for poor Guatemalans, further limiting food access.

"The purchase of food has been more difficult than normal during this hunger season given the current high food prices.

"The main impact of these high prices has been felt by non-subsistence households with a high dependence on international market prices."

Reynolds explains that some 58 percent of Guatemalan farmers live in extreme poverty and own less than 5 percent of the country’s 5.4 million hectares (13.3 million acres) of arable land.

Subsistence producers account for 35 percent of the Guatemalan rural workforce, according to Reynolds, and own just over a quarter of the country’s arable land. Surplus producers, which account for just over 4 percent of the rural workforce, own 18 percent and large-scale commercial farmers (almost 3 percent of producers), own the remaining 52 percent.

Friday, November 16, 2007

China Vows to Crush Olympic Protests

The iron heel is ready. A Chinese official says security forces are prepared to crush dissenters during the 2008 Beijing Olympic Games.

Liu Shaowu, the deputy director of Beijing's Olympic Security Command Center, told reporters Friday that protesters violating China's sovereignty will not be tolerated.

Liu said activities encouraging separatism or terrorism will be dealt with according to law.

He also noted that Beijing's approach is line with the Olympic charter, which he said forbids any form of political, religious or racial demonstrations at Games.

Earlier this year, five foreign activists were detained after unfurling banners at Mount Everest, calling for Tibetan independence and criticizing the 2008 summer games.

Beijing commonly uses the term "separatists" to refer to those calling for greater autonomy or independence for Tibetans and Uighurs.

OPEC Will Promote Carbon Capture Technology

OPEC leaders have agreed to make carbon capture and storage (CCS) the centerpiece of a new green agenda. OPEC will promote greater use of the emerging technology for curbing carbon emissions.

CCS consists of trapping carbon dioxide (CO2) and storing it long-term underground. Non-OPEC member Norway and ExxonMobil are involved with CCS in the North Sea Sleipner gas field, where over a million metric tons of CO2 have been sequestered each year since 1998.

CCS technology could be applied to large emissions sources (such as coal-fired power plants), which produce nearly 60 percent of the world’s man-made CO2 emissions.

CCS has won support because it potentially offers a partial solution to the climate change problem without reducing dependence on oil--the lifeblood of modern civilization--or curbing consumption. In fact, of all the long-term solutions to the problem of greenhouse gases, CCS is arguably most promising--much more promising, say, than corn-based ethanol and other presently available biofuels that are increasingly seen as actually contributing to global warming and also world hunger by linking food and energy prices for the first time in human history.

Thursday, November 15, 2007

US Panel Accuses China of Aggressive Spying

A US Congressional advisory panel says Chinese espionage poses the single greatest risk to US technology, and has called for efforts to protect industrial secrets and computer networks.

The US-China Economic and Security Review Commission, commonly called the China Commission, issued its assessment in a report to Congress Thursday.

The panel accuses China of carrying out an "aggressive" and "large-scale" campaign to obtain sensitive US information through cyber attacks and other methods.

It also says industrial espionage has enabled China to modernize its military at a faster pace than US officials had expected.

A published report in the Financial Times newspaper earlier this year said China's military had successfully hacked into US Defense Department computers. China has denied any spying activities.

The advisory panel, appointed by Congress in 2000, says US lawmakers should boost funding for counterintelligence work and for enforcing controls on exports of US technologies.

Paper Predicts 'Peak Gold' Prices

First, it was peak oil; then, peak grain and peak water. Now, the era of 'peak gold' has arrived, according to the Daily Telegraph.

The paper predicts a decrease in global mine supply at a much faster rate than people generally believe, with the price of gold moving to $900, $1,000, or beyond.

Data has never been collected for gold, experts say, explaining that the 5 billion ounces of mined over history is still around, with about a billion in central bank vaults. But South Africa's output is down to the lowest since 1932 and much of what remains elsewhere is locked up in so-called no-go countries run by demagogues or "serial expropriators."

Gold reached a 27-year high of $846 an ounce in early November following rate cuts by the US Federal Reserve, though it has fallen back on profit taking.

Hawaii Biofuels Conference: Chinese, Canadian, US Federal and State Experts Explore the Key Drivers

Representatives of China, Canada, the United States and the US state of Hawaii explored the key drivers behind their respective governments’ programs to support research and development of biofuels during Thursday's opening general session of the Pacific Rim Summit on Industrial Biotechnology and Bioenergy.

Jiayang Li, vice president of the Chinese Academy of Sciences, began the session, titled “The Status of Biofuels Development in the Pacific Rim,” by pointing out that resource shortages are the primary reason China is investing in biofuel development. China’s oil consumption is rapidly outpacing its production, due to the growing number of cars in China, Li said. He noted that China’s importation of oil has increased from 45 million tons in 2001 to 140 million tons in 2006. China has set a goal of producing 10,000 kilotons of ethanol by 2030. Unlike the US, which subsidizes corn-based ethanol, China is depending on sorghum as a feedstock for the increasingly controversial gasoline additive.

Dependence on imported oil is also a key driver in Hawaii’s support for biofuel development, according to Maurice Kaya, chief technology officer of the Hawaii Department of Business, Economic Development and Tourism. Kaya emphasized the role that states and local governments can play in supporting the emergence of the biofuel industry.

Philip Schwab, vice president of industry relations for BIOTECanada, highlighted biofuel use targets set both by Canada’s central government and several provincial governments. Canada’s renewable fuel standard was originally envisioned as a means to support agricultural prices in Canada, but it became an urgent national priority due to concerns about global warming. (Canada produces canola oil for biodiesel and is backing away from corn-based ethanol.)

James Spaeth, manager of biomass research at the US Department of Energy (DOE), noted that rapid development of the technology to produce biofuels is pushing the United States to try to set a higher renewable fuel standard. According to Spaeth, the DOE originally set a goal of producing cellulosic ethanol at a competitive cost in a laboratory or demonstration-scale setting by 2012. DOE now believes that commercial production of cellulosic ethanol will be cost efficient before 2012.

The Pacific Rim Summit on Industrial Biotechnology and Bioenergy runs through Friday Nov. 16 at the Hilton Hawaiian Village Beach Resort and Spa in Honolulu and is hosted by the Biotechnology Industry Organization (BIO), the American Chemical Society and the State of Hawaii.

BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the US and 31 other nations.

China Blames Biofuels for Food Inflation

China is blaming the global biofuels boom for food inflation--a major new concern.

Grain traders say China has continued booking large amounts of grains and oilseeds to try to cap food rises. The government reported on Tuesday that consumer price inflation rose to 6.5 percent in October, matching the highest rise in a decade.

Officials point to the unprecedented link between crude oil and soybean prices to make that case that petroleum is setting both the floor and the ceiling of food prices as the food and energy industries compete for the first tiime in history. Oil extracted from soybeans can be used as feedstock for production of biodiesel, a fast growing replacement fuel for petroleum-based diesel.

The price of pam oil, another biodiesel feedstock, is also tracking the price of petroleum.

China is basing its biodeisel feedstock strategy on neither crop. Rather, Chinese producers are looking to jatropha, a hardy, perennially growing poisonous weed that yields high-quality oil and can supposedly be cultivated on marginal land, and recycled restaurant grease (waste vegetable oil) to supply the country's biodiesel processing facilities.

In the United States, where the government is subsidizing environmentally unfriendly and economically questionable corn-based ethanol, higher corn prices are already rippling though the economy, boosting prices for soybeans and other crops, and products like tortillas. Experts say meat, poultry, and even soft drinks could be next.

According to the most optimistic US estimates, replacing the country's consumption of gasoline with biofuels would eat up at least 50 million more acres of American cropland.

The Chinese should be concerned: biofuels threaten to eclipse food, livestock feed, and all other uses as the major driver of American--and global--agriculture.

China Defends Iran's Right to Atomic Power

Energy-starved, rising China is standing by its oil-rich, nuclearizing ally, Iran.

Reuters reported today that Chinese Foreign Minister Yang Jiechi said the Islamist nation has the right to a peaceful nuclear energy program and is not seeking atomic weapons,

Yang Jiechi met Iranian President Mahmoud Ahmadinejad in Tehran earlier this week. They vowed to strengthen ties between China and Iran.

"Yang said China believes that Iran has the right to peaceful use of nuclear energy and appreciated Iran's reiteration that it does not have the intention to develop nuclear weapons," Chinese Foreign Ministry spokesman Liu Jianchao told a news conference.

China has consistently said that sanctions are not the way to resolve the dispute, but has also called on Iran to be more compromising in cooperating with Western powers and the International Atomic Energy Agency.

On Thursday, Liu repeated China's call to Iran to cooperate with the IAEA and to strengthen contact with the European Union.

"Countries must deal with their differences based on mutual respect and equality and following the principle of international law," he said. "I believe the international community must decide the purpose of Iran's nuclear plans through peaceful negotiation."

Wednesday, November 14, 2007

Newspaper: US Developing Space Warplane

The United States is developing a new space vehicle that could attack targets anywhere on earth within minutes, the Daily Telegraph reported Wednesday.

The weapon would be part of a US strategy that looks beyond the present conflicts in Iraq and Afghanistan, in which space warfare is deemed necessary to counter possible missile attacks from enemy nations.

The Falcon, the subject of an ambitious $459 billion project, would be a "hypersonic vehicle" capable of flying at six times the speed of sound. The vehicle could reportedly deliver 12,000lb (5,454 kg) payloads, whose destructive power would be intensified by Earth's gravity while traveling towards their target at up to 25 times the speed of sound.

A spokesman for the Pentagon's Defense Advanced Research Projects Agency (Darpa) told The Daily Telegraph that a first test flight was scheduled for next year.

Loren Thompson, a leading defense analyst in Washington, told the paper that the goal behind the project was to reach potential targets in minutes, not hours, with the focus on "time sensitive targets" in states such as Iran and North Korea. Both countries have either developed nuclear weapons without international approval or are suspected of doing so.

Cell Phone May Have Triggered Manila Bomb

Police in the Philippines said that a bomb at the House of Representatives that killed a Congressman and two other people Tuesday night may have been triggered by a cell phone. At least 11 people, including two legislators, were wounded in the blast.

Police said initial indications are that the bomb was in a motorcycle at an entrance to the building, adding that investigators have found parts of a cell phone that may have been used to trigger the device.

Metro Manila Police Chief Geary Barias told ABS-CBN television that a person at the scene may have detonated the bomb.

"On site," said Barias. "In other words the device was under the control of the suspect. He would say when the bomb gets off."

There was no immediate explanation of how a bomber was able to penetrate security in the building.

Avelino Razon, director-general of the Philippine National Police, said security in the House and Senate has been changed, from one police unit to another, until the authorities have a better idea of what happened.

Members of Congress went back to work Wednesday in a sign that they will not be intimidated by the violence.

President Gloria Macapagal Arroyo has put Manila and the region around the capital on a state of alert.

Tuesday, November 13, 2007

DuPont Investing in Chinese Biofuel Facility

DuPont Co. said it plans to invest about $300 million between 2007 and 2010 in biofuels production and pilot facilities.

The US chemical maker said it expects to start its polymer facility in China and complete an expansion of another facility in the United States (in Kinston, North Carolina) in 2008.

In related news, a United Nations-backed bioenergy group criticized the US and European approaches to biofuels. The controversy over growing crops for fuel instead of food can be resolved if the US, Europe and other rich countries abandon protectionist policies and work with developing nations to increase the use of earth-friendly feedstocks, said Corrado Clini, Chairman of the Global Bioenergy Partnership.

Fears that the rising demand for biofuels is contributing to a global surge in food prices are founded, he said; but such pitfalls can be avoided if top energy consumers invest in efficient crops grown in tropical nations, promote research and encourage the biofuel trade.

Internationally shared rules on production could also ensure that biofuel crops do not damage the environment by substituting forests and other sensitive ecosystems, Clini told reporters at the 20th World Energy Congress in Rome.

China Starts Foreign Press Database for '08 Games

China is defending its decision to collect information on foreign journalists covering the 2008 Beijing Olympics, saying the information will be used to help the media, not to hinder reporting.

A media official for Beijing's Olympic organizing committee, Li Zhanjun, told reporters Tuesday that the database was not created to monitor or threaten journalists.

Li also said it was not a blacklist and stressed that coverage at the Games would be open and transparent.

Meanwhile, Chinese officials denied state-run media reports Monday that the government had created a database of some 30,000 accredited Olympic Games reporters.

A report on Monday quoted China's top media official, Liu Binjie the minister of the General Administration of Press and Publication, as saying the list was made to help clamp down on "fake reporters" and unlicensed publications.

Russian Leaders See Iraq War as US Oil Grab

China Confidential has learned that the Bush administration's efforts to persuade Russia to adopt a harder line on Iran are being hampered by a growing perception among Russian political leaders--and military commanders--that the United States invaded Iraq mainly in order to steal its vast oil reserves.

The Russian view is that the "Great Oil Grab" was the brainchild of the first Bush administration's neo-conservative faction that included deputy defense secretary, Paul Wolfowitz; Douglas Feith, the undersecretary of state for defense; and Lewis Libby, the chief of staff for Vice President Cheney (whom many Russians regard as the de-facto president). As Moscow sees it, the neo-cons planned to first privatize (or "piratize," as some Russian analysts put it) and then substantially increase Iraqi oil production and exploration in order to flood the world oil market and drive prices below $15 a barrel. The Russians speculate that the Americans believed that an oil crash would cause the collapse of OPEC--and the domino-like fall of anti-democratic, oil-rich regimes--while strengthening the economies of the US and its oil-importing allies.

Iraq has approximately 112 billion barrels of proven oil reserves, which could theoretically be doubled or perhaps even tripled through exploration, surpassing Saudi Arabia's proven reserves of 245 billion barrels.

Russia's resurgence is based on escalating energy prices. The country is using its immense oil and gas resources to advance a geopolitical agenda in opposition to the US (which, under President Bush, seems to have gone out of its way to antagonize the Kremlin and push it closer to its former Communist rival, China).

The fact that the alleged neocon oil plot (like the democracy promotion project) obviously backfired--Iraq plunged into anarchy and proved impossible to control, Iranian influence increased, Iraqi oil production decreased, and the price of oil rose instead of fell and is now approaching the $100 landmark--does not make Mosow more inclined to help the US to peacefully resolve the Iranian nuclear issue. Having established itself atop the world's largest pool of oil, in a position to potentially control its exploitation, Russian leaders suspect, the US now plots to put an end to the Islamist regime in Tehran and ultimately win control of Iranian oil reserves. Another "oil war" is in the making, the Russians assert.

They believe that their suspicions have ironically been confirmed by prominent personalities in the US, including former Federal Reserve Chairman Alan Greenspan, whose recently published memoir states: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

Asked to comment, Gen. John Abizaid, former CENTCOM commander who oversaw three and a half years of the US occupation of Iraq, agreed. "Of course it's about oil, we can't really deny that," he said during a discussion at Stanford University.

In this context, the Russian military is in no mood to cooperate with Washington on its plan to station an anti-missile shield in central Europe to defend the region against Iranian missiles.

Chief of Staff Yury Baluyevsky on Tuesday told the Russia Today television audience that the US plan to station a radar facility in the Czech Republic and interceptors in Poland amounted to meddling in Russia's backyard.

"When one of the viewers asked about (Russia) deploying missiles in Venezuela, to defend Venezuela from Iranian and other missiles, I would like to note that our partners from the United States are doing exactly what our viewer suggested us to do," Baluyevsky said.

Sunday, November 11, 2007

Guangdong to Import Indonesian Coal

Three large Chinese power companies from Guangdong province will sign a contract with PT Andaro Indonesia next week to import 32.5 million tons of coal from Indonesia over the next five years.

"Under the contract the Indonesian company would supply 15 million tons of coal to Guangdong Yudean Co.Ltd, nine million tons to Shenzen Energy and 8.5 million tons to Huaneng Power International Inc., between 2008 and 2012," according to China Daily here on Saturday.

This would be the largest contract energy companies of Guangdong have even signed with a foreign company.

In 2006 the province's consumption of coal was recorded at more than 100 million tons which was around eight percent of Chinese total imports of coal and all the coal was from outside the province.

Guangdong is currently also negotiating coal imports from the Philippines. The province is also importing coal from Vietnam, Australia, India and Russia.

The province plans to purchase more than 20 million tons of coal from a number of countries this year--twice last year's purchase.

Essay: Support Taiwan's Democracy By Ian Williams

Journalist, author and television commentator Ian Williams authored the following essay, which originally appeared in Foreign Policy in Focus. He argues that the United States should not abandon Taiwan in its hour of need. Ian is the United Nations correspondent for The Nation. More of his work is available on Deadline Pundit.

Foreign Policy In Focus describes itself as a "Think Tank Without Walls connecting the research and action of more than 600 scholars, advocates, and activists seeking to make the US a more responsible global partner."

Neville Chamberlain famously excused the abandonment of Czechoslovakia at Munich by calling the victim “a faraway country of which we know little.” His infamy is not totally deserved. Britain had no treaty ties to Prague, nor did it have the military capacity to take on Germany at the time, and Chamberlain on his return immediately kick-started British rearmament.

For most Americans, Taiwan is even farther away and even less well known. Probably even less well known still is the US commitment to defend the island against any attack from the Mainland. That commitment, made when Taiwan was an offshore counter-revolutionary base area run by Chiang Kai-shek who had open military ambitions to invade the mainland, now actually has both moral and realistic force. Taiwan is today a thriving democracy and a mid-level economic power in its own right. What is sometimes forgotten, it has voluntarily eschewed nuclear weapons in return for that US military guarantee.

Taiwan’s unique anomalous position means that if it is part of the People’s Republic of China (PRC), it is covered by the Nuclear Non-Proliferation Treaty (NPT) and allowed to have nuclear weapons, or it is not part of China and not a signatory to the NPT, and so no treaty obligations prevent it from developing them. It certainly has the expertise to do so. Despite the temptations to go nuclear in the face of the nuclear-armed mainland’s thousand missiles pointed its way, and the massive manpower superiority of the People’s Liberation Army (PLA), it is in everyone’s interest that the island maintains its pledge. On a wider scale, because US guarantees to South Korea and Japan also dissuade them from the nuclear option, Seoul and Tokyo would certainly factor any abandonment of Taiwan into their own long-term military plans.

Bizarrely, however, the Bush administration does not have any serious high-level relations with Taipei, despite the commitment to defend it against another nuclear power. Washington even refuses to allow Taiwan’s senior leaders to visit the United States. Taiwan’s President Chen is restricted to brief stopovers in Alaska or Hawaii when he is in transit across the Pacific.

Bush apparently considers President Chen a troublemaker – but he is after all a democratically elected troublemaker, which rather makes nonsense of the administration’s claims that spreading democracy is a major plank of its foreign policy. The United States seems to share China’s view that a democratic referendum on Taiwan’s future is provocative and unreasonable. However, it is not conducive to reasoned exchange of views when the only meaningful communication between the United States and Taiwan is to restrict or extend how many minutes Chen can stop over at outlying airports.

Cross-strait relations are a major issue in the domestic politics of both sides. In the PRC, in the absence of any ideological cement to bind the Communist Party together, the contenders for position in the leadership play the tough-on-Taiwan card as a trump. Taiwanese officials concerned with cross-strait relations discern a good cop/bad cop routine with their mainland counterparts. Both CPC factions want “reunification.” But while one thinks that open relations and sweet-talking are the way forward, the other has stationed a thousand missiles aimed at the island and passed the PRC’s “Anti-Secession” law, “legalizing” military action against the island.

The present obduracy of the PRC on the issue disguises some earlier wobbles. The constitution of Mao Zedong’s 1931 Chinese Soviet Republic promised the right of self-determination to the peoples of the former Chinese Empire, and Mao himself told Edgar Snow, in Red Star over a China, in a section that was fact-checked by the Chinese Communist Party, that Formosa, as Taiwan was then known, could choose its own fate.

Oddly, the Communist party is happier with the heirs of its old adversary Chiang Kai Shek. Chiang’s Kuomintang (KMT) has maintained a residual claim to the whole of China as the “Republic of China” while the ruling Democratic Progressive Party (DPP) wants to abandon both the title and the grandiose ambitions of the former Republic of China (ROC). “Reunification” with the PRC has infinitesimal support among Taiwanese. So, the KMT’s adherence to “One-China” is based partly upon the residual pan-Chinese politics of its rapidly deceasing members who came over in 1949, but mostly because annoying the mainland is bad for business.

The DPP’s independence position is extremely popular with Taiwanese, which is why President Chen is holding the referendum next March on applying to the UN under the name of Taiwan. The popularity of the issue forces the KMT to be pragmatic, instead posing the question of whether the application should be in any name that can get the island in the organization. Since in any case the UN defers to the unilateral mainland interpretation of the resolution that admitted the PRC to the organization, neither method will lead to Taiwan’s admission. But it will raise political heat on the issue from which the DPP is likely to benefit for both the presidential and legislative elections in the New Year.

Cannily, Chen timed the referendum not only with the elections in view, but also in the run-up to the Beijing Olympics. He is tweaking the dragon’s tail with relative confidence that the Games are too important for China to risk disruption from overt action against Taiwan. Seen as an act of self-determination by the Taiwanese, the referendum plays to their biggest strength. Instead of legalisms about successor states, ROC versus PRC, the best argument for Taiwanese independence is that its 23 million people overwhelmingly want it.

When the United States and the Western powers recognized the PRC, in general they accepted the reality that Beijing represented China. This was made easier because at the time the Chiang Kai-shek regime insisted that the Republic of China based on Taiwan was the legitimate government of all China and indeed of Tibet, Mongolia, Tannu Tuva in the Soviet Union, and the northern part of Burma! It broke off relations with any country that signed up with the PRC, thus setting the conditions for its own isolation.

But the countries that sent ambassadors to Beijing still hedged on the issue of whether Taiwan was part of China. The joint communiqués tended to “note”, “understand,” or “respect” Beijing’s position. The US “acknowledges” China’s position. But its different interpretation is expressed in the Taiwan Relations Act of 1979, which states that “Whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or similar entities, such terms shall include and such laws shall apply with respect to Taiwan.”

While the US has not officially changed its position since, Bush administration officials have done so, in effect kowtowing to Beijing and implicitly accepting the PRC version of the relationship. That sends dangerous signals to the PRC, which may well encourage it to assume that a cross-straits adventure would not invoke the defense that the United States has otherwise pledged. It was the Thatcher government’s insouciance about the British South Atlantic territories that enticed Argentinean President Galtieri to attack the Falkland Islands. That was an expensive and relatively bloody conflict. But it never risked a global or nuclear conflict the way that a PRC invasion of Taiwan would.

Indeed, the eagerness to avoid giving offense to Beijing on issues of protocol is even more puzzling in the light not just of the willingness, but also of the eagerness, of Washington to sell weaponry to Taiwan, which is surely much more substantially provocative. Indeed recently Bush asked indignantly how the Taiwanese expected Americans to put their troops on the line “if they don’t buy our weapons,” according to a anonymous source at the meeting.

In fact, Taiwan celebrated the end of half a century of martial law in the 1990s with a conscious strategy to prioritize health, education and economic progress rather than military spending. This is not a decision that the Bush administration would necessarily understand. While there is a consensus that the Taiwanese military does need to re-equip to face the threat from the PRC, legislators have been haggling about the precise nature of those needs, and there is a strong suspicion that some of the items the United States is hawking are big on bucks and low on bangs. But politically, Taiwan may end up paying the price to ensure support in Washington, where both houses of Congress in bipartisan resolutions have called for Taiwanese officials to have free access to the United States.

Ironically, even as cross-strait political relations have chilled, the economic ties between the two sides are closer than ever. There are a million Taiwanese working in the mainland for Taiwanese companies who have invested billions of dollars there. The island’s businesses specialize in high-tech research and development, but manufacture their products on the mainland. However the relationship does not leave Taiwan totally at the mercy of the mainland. Taiwanese capital, management and technology are essential for the development of China’s high-end electronic export trade, responsible for over 100 million jobs on the Mainland.

Taipei’s plans for the island to become a regional financial center have not prospered. The government has yet to take the risk of opening up its financial markets to mainland companies. Presently, to avoid being snagged by the government’s restrictions on investment, few of the vast revenues of Taiwan’s corporate presence on the mainland are repatriated.

The talks with the mainland are constrained by the PRC’s refusal to accept the legitimacy of the Taipei government and the latter’s understandable suspicion of Beijing. So, Taipei maintains much-evaded restrictions on investment in the mainland as well as a total ban on PRC investment in Taiwan and restrictions on mainland visitors. Talks on scheduled direct flights have also foundered. The PRC side is deliberately stalling in the hope that it will influence the impending election.

The PRC wants victory for Ma Ying-jeou, the KMT candidate for presidency. But the DPP’s Frank Hsieh is the favorite. Hsieh is considered to be more pragmatic that Chen Shui-ban, whose politics were hardened in the long struggle against Chiang’s dictatorship. Many Taiwanese hope that he can deliver some normalization of relations with the mainland while keeping the PRC politically away from the door.

A mutually satisfactory solution, however, is not yet on the horizon. The ham-fisted way in which Beijing abused the Hong Kong “one country two systems” solution for Hong Kong has excluded any such deal. The PRC’s insistence on one China confronts the desire of most Taiwanese to convert their de facto independence into de jure independence, with UN membership being the most tangible symbol.

Since the issue is so prominent in domestic politics on both sides there is an inherent danger of escalation and instability. The stalemate across the straits, with China’s threatened military options facing the promised US defense, has dangerous implications for the region and the world. By its insouciance toward Taipei and its deference to the PRC on what one might call ceremonial issues, Washington has incurred military liabilities to defend a government over whose behavior it has only indirect influence.

The lack of US diplomatic support for Taipei lessens the chance of a negotiated solution. It weakens the Taiwanese hand while encouraging Chinese obstinacy. If the United States has no official relations with the island, then why should Beijing? The recent appearance of President Bush at the presentation of the Congressional Medal of Honor to the Dalai Lama demonstrates that the sky does not fall in when Beijing is displeased. It is time for serious and open relations with Taiwan, predicated on the latter's abdication of any revanchist claims to the Mainland.