Science loses in court ruling over power line dispute

Onli in da Pilipins.

 A Makati regional court ordered the National Transmission Corp. to effectively dismantle the 230-kilovolt Sucat-Araneta-Balintawak line, on the strength of a Supreme Court ruling favoring Dasmarinas Village in Makati in its petition against the power transmission lines passing near the village.

 The well-heeled residents of the Village probably saw an eyesore on the overhead lines, but they could not just petition for their removal without an emotional and hopefully convincing reason. They have found it in anecdotal stories of the supposedly harmful effects of electromagnetic fields (others use the dreaded word radiation which is not applicable here) on health which our esteemed judges apparently agree.

The Trade department warned on hurting the country’s attractiveness as a result of the dismantling of the lines which supply power to large portion of the Makati Business District itself, most of Manila and Quezon City, Bulacan, parts of Caloocan City, and the whole of Novaliches, Malabon and Valenzuela. The Energy department meanwhile worries about the effect on the industry and businesses.

 But nobody shows concern regarding a very fundamental worrying trend in local jurisprudence: disregard of science over technicalities, legalities or influence of powerful groups?

 Electromagnetic fields comprise of electric (E) and magnetic (H) waves, traveling together at the speed of light and are characterized by a frequency and a wavelength. The frequency, which is the number of oscillations per second is measured in hertz (1 hertz = I cycle per second) while the wavelength is the distance traveled by the wave in one cycle. What is dealt here is extremely low frequency (ELF) fields which are defined as those having frequencies up to 300 Hz. The electrical cycle we use is 50/60 Hz.

 At these low frequencies, the wavelengths are very long; 6000 km at 50 Hz and 5000 km at 60 Hz. For all intents and purposes, the electric and magnetic fields are independent from each other and can be discussed separately in the present context.

 The electric and field strength is measured in volts per meter (V/m) or kV/m. Magnetic field strength on the other hand is measured in millitesla (mT) or microtesla (uT). The magnetic field itself is created by current flow.

 Naturally occurring 50/60 Hz electromagnetic fields have extremely low values of the order of 0.0001 V/m and 0.00001 uT. Underneath transmission lines, the field can be as high as 12 kV/m and 30 uT and around a generating station the values could reach 16 kV/m and 270 uT.

 After reviewing all available studies, the World Health Organization found no conclusive evidence linking extremely low frequency (ELF) electromagnetic fields which are found in transmission lines, to any of the purported health effects. The Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) is blunter,saying the scientific evidence does not indicate that exposure to 50 Hz EMFs found around the home, the office or near power lines is a hazard to human health.

 Available evidence suggests that the effects electric field strength of up to 20 kV/m are innocuous, while in animals exposed to 100 kV/m over a prolonged time have no deleterious effects on their reproductive cycles. A health effects study on a community which has been in place for at least 10 years under a 400 kV DC Pacific Intertie power line in California shows no significant or consistent relationships between exposure to the high voltage line and the perceived ill health effects (Haupt and Nolte, 1984).

 The line is almost double in voltage than in Dasma, and in addition, the DC line is in corona; which means it is generating ions in the vicinity of the conductors that affect the magnitude of surrounding electric fields and ion concentrations.

On magnetic effects, a WHO study which exposed volunteers for several hours to ELF strength of up to 5000 uT (more than 20 times the value in generating stations) show negligible effect on blood changes, ECG, heart rate, blood pressure and body temperature.

 For a more detailed discussion on health effects of EMFs, see the ARPANSA website.

 The bottom line is the magnitude of the ELF fields in the environment produce current that is less than the currents naturally produced by the body.

 So, our judges and lawyers should at least learn enough science or at least consult those with appropriate knowledge before promulgating far-reaching judicial pronouncements.

Since they are terrified of modern conveniences, the Dasma residents should have their electrical supply disconnected for their peace of mind. Then they could celebrate their court victory around a bonfire, much like the victory celebration of Sitting Bull over General Custer at Little Big Horn.  They could also have their dinner under candle lights, which is far more romantic than under fluorescent lamps.

They should also refrain from using their high-end 3G phones which are supposed to emit emf waves at much higher frequencies.

The real loser here is science.

 Reference:

R. C. Haupt & J. R. Nolte. (1984) The effects of high voltage transmission lines on the health of adjacent resident populations. Am. J. Public Health, 74, 76-78.

Aboitiz Power on the prowl; raises P3 billion

 Looks like Aboitiz Power Corporation (PSE:AP) is on the prowl again for more acquisitions after its Board approved the issuance of P3 billion worth of peso-denominated bonds through a private placement. Proceeds of the fund-raising exercise will become part of its war chest for acquisitions of power assets.

 In a disclosure to the Philippine Stock exchange, it said it may increase the issue size depending on the market appetite. The offering is handled by BDO Capital & Investment Corp., BPI Capital Corp., First Metro Investment Corp. and ING Bank N.V. and will run up to the end of the year.

 That such a fund-raising campaign is conducted in the middle of a raging financial crisis speaks well of the company. Lesser companies in times like this would rather seal the hatches and ride the storm rather than venture out into the open capital markets.

 But it is precisely these times when energy demand is expected to slow down that one should start top build up the necessary infrastructure. The best time to invest is when there is so much blood in the streets; just ask Warren Buffett, the legendary investor.

 In the past few years, the Aboitiz group has been actively adding power assets to its portfolio by buying assets from the government or other investors. In July, it bested Energy Development Corporation (PSE:EDC) in acquiring the Tiwi-Makban complex, the first geothermal asset sold by PSALM, the government arm tasked to privatize power assets. It is also the first geothermal asset held by the Aboitiz group.

 In a joint venture with SN Power of Norway, Aboitiz Power has taken over the operations of the Ambuklao and Binga hydro plants in Benguet in the middle of the year. Earlier in 2006, it has acquired a significant chunk of ownership in the 232-MW STEAG coal plant in Mindanao.

 Aboitiz Power has a large pool of government assets it can cast its net into. Among the assets scheduled for disposal by the government in 2009 include: 

• the 116-MW Subic and 620-MW Limay diesel plants, both to be sold in January;
• the 246-MW Angat hydroelectric plant, in February;
• the 310-MW Navotas I and II diesel plants, and the 197.8-MW Naga gas and diesel plants, in April
• the 192.5-MW Palinpinon geothermal plant, in July
• the 850-MW decommissioned Sucat and the 112.5-MW Tongonan geothermal plant, in August
• the 150-MW Bacon-Manito geothermal complex, in September and
• the 54-MW decommissioned Cebu diesel plant, in October

  In the first nine months of the year, the company reported a P3.17 billion net income, a 35% net income growth year-on-year on the back of the continued expansion of its power generation business. However, it is likely that the overall income for the whole year will be tempered owing to the costs in acquiring the new assets Tiwi-Makban and Ambuklao-Binga.

 While the Aboitiz group belongs to an old, well established business clan, its power business is run by a new generation descendant in Luis Miguel Aboitiz, who is young, dynamic and has the required academic and business credentials to run a difficult business in trying times.

 Aboitiz Power is one energy company worth watching by investors, consumers and by the energy community at large.

(Disclaimer: The author does not hold any shares in any of the Aboitiz companies and does not intend to invest in them in the near future. He is not connected with the Aboitiz group, and is not tasked to write about them)

Calculating your carbon emission: aviation travel as an example

Calculating carbon emission is the first step in applying a project as a Clean Development Mechanism (CDM) activity to gain carbon credits. Now that CDM activity has taken root in the country (see previous post), a better understanding of the process of calculating carbon emissions is necessary.

 It is not only CDM projects that make such calculations. In the never-ending search for energy efficiency and in efforts to combat global warming, companies ranging from multinationals to rural piggeries, have launched programs to limit their greenhouse gas (GHG) emissions to the extent of making their operations carbon neutral.

Also, big sporting events like the World Cup and the recently concluded Beijing Olympics, and large international conferences like the gathering of G8 leaders in Japan, have been under severe pressures to limit their GHG emissions and minimize their environmental impacts.

 Organizers and environmental critics would dearly love to see these events becoming carbon neutral.

 SAS, an IT vendor for business intelligence, sensing an upcoming opportunity, has already introduced into the country a carbon calculator, a software that determines a company’s or an event’s carbon footprint.

 The first step in hosting a carbon neutral event—say, a conference--is quantifying how much GHG emissions the event would likely generate. The emissions assessment should cover not only during the event itself, but throughout-- from planning, to calculating the two-way travel emissions by the participants, to recycling of materials at the end of the show.

 To do this, one should calculate the total carbon emission or footprint of the event using a carbon calculator.

 Existing carbon calculators range from order-of-magnitude estimates to fairly sophisticated devices that detail every possible source of emission and the methods backed up by reputable data. There are free carbon calculators usually offered by non-governmental organizations concerned with global warming and government institutions such as the US Environmental Protection Agency (EPA) and there are sophisticated commercial calculators used by carbon market traders, renewable energy project developers applying for carbon credits through the Clean Development Mechanism (CDM) developers, and big business carrying out a corporate program towards carbon neutrality.

 Outputs also vary greatly in accuracy depending on the type of event or project being considered, on the assumptions and data used by the calculator developer and on the geographical area where the calculator is to be used.

 There are activities or projects such as aviation travel or driving a car to a given distance, wherein the carbon footprint can be calculated with reasonable accuracy. At the other extreme, there are projects wherein the calculations border on faith and questionable assumptions. These include biomass burning, reforestation and carbon sequestration by soils.

 In order for offsetting to be credible, the GHG emission has to be calculated accurately. Therefore, the most important consideration is to choose carefully the carbon calculator to be used.

 Let us take a fairly simple example relevant to carbon neutral conferences: aviation travel. Jardine (2005, p.2) presented a detailed presentation on how aviation emission per individual is calculated.

 The major assumptions in the calculation include the knowledge of the amount of fuel during the flight, the distance traveled, cruising altitude, weather conditions, the passenger and cargo load, the likely aircraft type used, etc. Even if these are accurately known, one cannot simply arrive at a general impact value per passenger.

 For example, flight distance does not scale linearly because one has to consider the extra burn required during take-off and landing. Needless to say, direct flight is far more efficient than one with a stop-over.

 Different types of aircraft burn fuel at different amount; therefore in Jardine’s (2005, p.3) study, three most likely aircraft types were considered: Boeing 737 for short-haul and Boeing 747 and Airbus 320A for medium and long-haul.

 After the emission is determined, the global warming impact has to be determined using a chosen metric. In aviation, the usual metric is radiative forcing which is defined as “the change in the energy balance of the lower atmosphere by a climate change mechanism” and is measured in units of Watts per square meter (W/m²). The ‘climate change mechanism’ is typically the emission of a greenhouse gas (e.g. CO₂ from human activity), or a collection of different gases (e.g. all greenhouse gases from the agricultural sector).

 Despite a well defined boundaries or conditions for the calculations, different calculators give different answers. For example, six different calculators gave values ranging from 2 to 6 tons CO₂ tons for a 17,900 km flight.

 The differences in the estimates arise from: (a) whether only CO₂ or all GHG gases are considered, (b) including or not non-gas components that could affect the metric used; and (c) setting the boundaries for the calculation—that is, whether the portion of airport services is considered or not.

It is preferable to choose a calculator which is most comprehensive in its calculation.

 It is also crucial to choose a provider accredited with a top accepted standard to ensure getting a comprehensive calculator. Some of the stringent standards include the Gold Standard, the Greenhouse Gases Protocol, the International Organization for Standardization (ISO) ISO14064, The Voluntary Carbon Standard (VCS) and The Climate, Community and Biodiversity Standards (CCBS).

 After going through the rigors of understanding and choosing the most appropriate carbon calculator, one is now poised to offset his event’s carbon emissions.

 Reference:

Jardine, C.N. (2005). Calculating the environmental input of aviation emission, 14. Retrieved August 18, 2008 from http://www.climatecare.org/media/documents/pdf/        Aviation_Emissions_&_Offsets.pdf

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Note added, November 18, 2008: On Thursday this week President Gloria Macapagal-Arroyo will preside over an important conference billed Carbon-Cutting Congress vs. Climate Change which will showcase this adminstration's "Green Philippines" program. This program should start calculating the emissions of the 54 congressmen and the whole entourage who will be going to Peru with GMA using the procedure above if Congress is serious about its green program. The gentlemen and ladies will be in for a shock at the number that will be arrived at.

Has CDM come of age in the Philippines?

During the recently concluded Carbon Forum Asia 2008 held in Suntec City, Singapore, Michael Dreyer, vice president of Koelnmesse-Asia, co-organizer of the conference together with the International Emissions Trading Association (IETA), noted that “from 2006 to 2007, Asia's CDM market grew by nearly 200 percent, signaling the region's emerging dominance in the global Carbon Market".

The market he is referring to is where carbon credits are traded for projects under the Clean Development Mechanism (CDM) which is under the auspices of the Kyoto Protocol. This market has been growing at a torrid pace in the past three years; from $40.1 billion in 2006 to $66.4 billion in 2007 and should easily top the $100 billion mark by the end of this year. Despite this huge elephant of a market, it is largely invisible in the country.

The Conference noted however, that while China and India lead the pack in the number of CDM projects registered at close to 640, the Philippines, Thailand and Vietnam are not too far behind.

This is welcome news. Has CDM come of age here?

The Philippines is not considered a major contributor to the total greenhouse gas (GHG) emissions worldwide simply because we are not huge consumers of energy on a per capita basis. But we do have a large potential for projects that could generate carbon credits as Carbon Emissions Reduction (CER) certificates that could be traded on the Carbon Market.

 This potential is being watched by mostly foreign vulture investment funds and financing institutions which smell the fragrance of money. That such is the case can be seen by the keen interests of these foreign financiers to ante these projects.

 At the latest count, there are 20 CDM registered projects in the country while much more projects are in the pipeline. Being registered means the project is formally accepted by the Executive Board of the United Nations Framework Convention on Climate Change (UNFCCC), the body in charge of this activity, of a validated project as a CDM project activity. Registration is the prerequisite for the verification, certification and issuance of CERs related to that project activity.

These are, in the order of latest to earliest registered, and the date of registration:

 * First Farmers Holding Corporation (FFHC) Bagasse Cogeneration Plan-10 Sep 08

* Makati South Sewage Treatment Plant Upgrade With on-site powerR-24 Jun 08

* Hedcor Sibulan 42.5 MW Hydroelectric-06 Jun 08

* Laguna de Bay Community Waste Management Project: Avoidance of methane production from biomass decay through composting-16 Mar 08

* Quezon City Controlled Disposal Facility Biogas Emission Reduction Project-01 Feb 08

* The Anaerobic Digestion Swine Wastewater Treatment with On-Site Power Bundled Project-17 Dec 07

* Goldi-Lion Agricultural Development Corporation Methane Recovery and Electricity Generation Project-08 Sep 07

* Bondoc Realty Methane Recovery and Electricity Generation Project-07 Sep 07

* Superior Hog Farms Methane Recovery-07 Sep 07

* D&C Concepcion Farms, Inc. Methane Recovery and Electricity Generation Project-26 Aug 07

* Philippine Sinter Corporation Sinter Cooler Waste Heat Recovery Power Generation Project-05 May 07

* San Carlos Renewable Energy-13 Apr 07

* Paramount Integrated Corporation Methane Recovery and Electricity Generation-31 Jan 07

* 20 MW Nasulo Geothermal Project-10 Dec 06

* Gaya Lim Farm Inc. Methane Recovery-30 Oct 06

* Uni-Rich Agro-Industrial Corporation Methane Recovery and Electricity Generation-28 Oct 06

* Joliza Farms Inc. Methane Recovery-23 Oct 06

* Gold Farm Livestocks Corporation Methane Recovery and Electricity Generation-21 Oct 06

* Wastewater treatment using a Thermophilic Anaerobic Digestor at an ethanol plant in the Philippines-01 Oct 06

* NorthWind Bangui Bay Project-10 Sep 06

 The biggest in terms of carbon dioxide equivalent reduction is the bagasse co-generation plant at close to 120,000 tons/per annum. Other major ones include Hedcor’s Sibulan hydro (95,174 tons), ethanol plant (95,876 tons) and the Bangui Bay wind farm (56,788 tons). Most of the rest are fairly small with reductions in few thousands tons and the credits are better traded in an alternative voluntary carbon market in which smaller players can participate.

 Unfortunately, our businessmen, financial institutions, investment banks and entrepreneurs have not taken advantage of such opportunities mainly through lack of understanding or awareness that such opportunities exist.

DOE proposes to raise the biodiesel blend to 3%

Over the weekend, Department of Energy (DOE) director Mario Marasigan announced that his agency may propose to increase the minimum required biodiesel blend to 3% by February 2009 to spur investors to pour in more money to the sector.

 He revealed that there are now 13 accredited biodiesel manufacturers capable of producing up to 326 million liters which is more than what the 2% blend requires.

 “The DOE is studying that with this capacity in place, is it appropriate, rather than two percent mandated blend on February 2009, why don’t we increase it to three percent?,” he said.

 Why not? If the blend is indeed that friendly to the environment and it can compete with the usual diesel, why not make it to 5%. Studies suggest that a blend of 6 to 10% works very well with light cars and vehicles, and other countries are mulling to use up to 20% blend (B20) for large buses. In fact many countries start with a mandated 5% blend (B5) and gradually increasing it to B20. A 2% blend is just too dilute to effectively feel a difference in performance, and its avowed benefit may be hardly felt.

But what we, users, must guard against is substandard fuel introduced into the market by unscrupulous individuals or firms out to make a quick buck. True, the DOE has released its adopted biodiesel standards which is, on paper, quite stringent and appears to have been patterned after the European standards. What is uncertain though is whether the DOE has the know-how or the capability to scientifically monitor the blend already on the market.

We mean the technical capability to verify whether these biodiesel blends passed the technical requirements such as fatty acid content, cetane rating, sulfur limits, heavy metals content and the like. Corollary to this is the question whether there are laboratories which can independently check the quality.

These are not routine inquiries, for what is at stake is the integrity of one’s vehicles, not mentioning the projected impact to the environment.

 There is also a need for more public discussions on the DOE standards. The consumers need to be clarified whether the standards apply to the diluted blend or to the pure biodiesel (B100) which is the starting material for blending.

 As far as I could tell, we are the first and possibly only country to have specified a coco-methyl ester (CME) standard rather than the usual fatty acid methyl ester (FAME) or fatty acid alkyl ester (FAAE) standards. Its formulation smacks of political undertones or lobbying from CME manufacturers in attempts to exclude other biodiesel sources.

 There is nothing wrong with protecting our own native coconut industry. The Malaysians have done it with their palm oil and the Americans with their soya oil. What is objectionable though is a protectionist policy that stretches beyond the boundaries of technology to favor certain interests to the ultimate detriment to the consumers whose choice becomes limited.

 This outlook apparently crept into the formulation of the cetane rating in which the DOE standard pegs it at 55. The cetane rating measures the relative amounts of easily burnt component in a fuel; in this case the molecular weights of fatty esters. The higher the cetane rating, the better the fuel.

 Scientifically, though, the standard vehicle engines work very well with cetane ratings for 46 to 55. This is the reason why the U.S. ASTM standards pegs the cetane rating to only 47—which the soya oil, a major U.S. crop product for biodiesel,  passes easily—while some European countries put the minimum at 51. Incidentally, DOE claims that CME has a higher cetane rating than soya or palm oil.

 The danger is, such exclusive provisions can be twisted to suit one’s selfish interests and mislead the public. For example, a leading CME manufacturer listed at the Philippine Stock Exchange made it appear that only biodiesel conforming to the CME standards are allowed in the market citing the DOE's revised circular that “only CME conforming to PNS/DOE QS 002:2007 shall be manufactured, sold, offered for sale, dispensed or introduced into commerce as biodiesel in the Philippines.” Apparently the manufacturer’s announcement was in reaction to reports that some firms are importing biodiesel which is not CME-based from Korea and other places, and is trying to protect its turf.

 The mandate to use the biodiesel blend in accordance with Republic Act 9367, otherwise known as the Biofuels Act, starts in February 2009. There is still time to conduct public discussions in media to educate the consumers on the pros and cons of biodiesel, and on how they could be protected from unscrupulous dealers.

Will SMC make a run for Bumi Resources?

Speculation is rife within the energy and investment circles whether San Miguel Corporation (PSE:SMC) is keen on taking a stake at Indonesian coal miner Bumi Resources, by buying the 35% stake owned by PT Bakrie & Brothers, which hopes to raise some $1.3 billion to pay off debts.

 In a disclosure yesterday, SMC said it would bid for 35 percent of Indonesia's largest coal miner rivalling an offer led by private equity firm Indonesian-based Northstar Pacific which is run by by former Goldman Sachs banker Patrick Walujo and has a joint venture with U.S. private equity firm TPG Capital LP. The tone is somewhat different than its earlier disclosure that it will initiate talks with Indonesia’s PT Bakrie & Brothers, for an alliance for its PT Bumi Resources operations.

 Apparently, SMC is dragged into a bidding war when a Bloomberg report said PT Bakrie & Brothers, the investment arm of Indonesia’s richest family has agreed to sell its stake to Northstar Pacific.

 The sources said Indonesian investment bank PT Renaissance Capital might also join the Northstar consortium or bid separately.

 PT Bumi Resources Tbk is an Indonesian-based natural resource company engaged in mining, oil, gas and energy-related activities. It owns the world’s largest export coal mine with operations in East and South Kalimantan with 11 billion tons of coal mineable reserves; about 55 million tons in average sales volumes in the last three years; and, a steady cash flow generation, according to the SMC disclosure. 

SMC will be like a salmon swimming upstream. It is pitted against a deep-pocketed bidder in Northstar consortium. Worse, its main rival is politically highly connected to the powers that be, and in Indonesia, business and politics are inextricably intertwined.

 One of the Bakries, Aburizal Bakrie, is Indonesia's chief social welfare minister and an influential figure in the Golkar Party, which is a key part of President Susilo Bambang Yudhoyono's coalition. Bakrie is considered the country's richest man, with an estimated $9.2 billion fortune.

But will SMC, like the salmon, go against the flow to seed its investment eggs in a fertile new territory?

SMC has declared as far as two years back of its intention to enter into high growth areas which include energy to prop up its bland returns from its food businesses. It has fired an opening salvo by acquiring a 27 percent of the country's largest power distributor Manila Electric Co (PSE:MER) in a cash deal worth 30 billion pesos ($612 million), with payments spread out over three years from the Government Service Insurance System (GSIS).

Indonesia as a target area fits very well into SMC’s sphere of influence. It has a sizable food and beer business there; it can leverage that experience to its new intentions.

Indonesia is also a fertile ground for energy investments as we noted earlier, notwithstanding the difficult environment one has to face.

 In a sense, SMC knows very well where the mother lode is likely to be hidden. SMC may face enormous obstacles in its run for Bumi. It may fail altogether. But one has to give credit for SMC for its tack to grow its business despite the lingering global financial crisis.

 It is boldness, which can be mistaken for brashness, worth emulating by other local big business groups who are merely content to keep their ongoing concerns here. In a highly globalized environment, rules have changed, and only those who are adept at playing by the new rules are bound to survive and prosper.

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UPDATE: November 30, 2008: On November 28, Indonesian private equity firm Northstar Pacific said it will assume  a "significant" chunk of the $1.2 billion owed by the diversified Bakrie group and will convert it into shares in Bakrie's coal firm, Bumi Resources. This could give Northstar a substantial stake in Bumi, Indonesia's biggest coal miner, while providing a much-needed lifeline for the indebted Bakrie & Brothers, the parent firm. No mention of any other interested party on Bumi was made in the report.