Energy 2008

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ENERGYENERGYENERGYENERGYPOWERING THE NATION 2008
http://www.phnompenhpost.com/index.php

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2 Phnom Penh Post Energy Supplement May 30 June 12, 2008

Power for the people -- some dayWritten by Kay Kimsong and Brendan Brady

As Cambodia continues to maintain a high economic growth rate the country finds itself struggling to meet itselectricity needs, despite potentially vast natural resources like wind, water and oil. Ith Praing, a secretary of

state at the Ministry of Industry, Mines and Energy for 24 years, speaks with Post reporters Kay Kimsong andBrendan Brady about Cambodias energy situation and what the future holds.

BRENDAN BRADYIth Praing, secretary of state at the Ministry of Industry, Mines and Energy, says Cambodia mightbe self-sufficient in electricity production by 2017, when the government hopes the country will beable to produce 3,000 megawatts equal to estimated consumption.

How is Cambodia developing its powercapacity?First of all lets talk about electricity. We have nonational grid yet ... Cambodia currently has 24isolated systems. There is no interconnection

between the load centers.... Provinces are isolatedand have their own generation and distributionnetworks. The first large-scale hydropower plantunder development is the Kamchay hydro project(in Kampot province) which we expect to becompleted by 2010 with a capacity of 193megawatts. Hydropower potential can be used atfull capacity only during the 6-7 months of the

rainy season. In the dry season, the capacity isreduced to only one-third. Thats why were notonly developing hydropower sources, but werealso diversifying the power supply. For example,

we have coal-fired power plants. Currently all coalis imported from Indonesia or Australia, but weare exploring for coal mines in Cambodia and weexpect to find some indigenous coal.

What is the advantage of interconnection?One system means one price. When you have anational grid, the price for electricity is the same

along the entire grid. Now Banteay Meanchey is priced differently from Battambang, which is different from Phnom Penh. Forexample, when the southern section of the national grid is complete in 2010, from Vietnam to Takeo through to Phnom Penh,the price of electricity along that line will be one price, the same price as Phnom Penh. [Interconnection] is more reliable andprovides more security. You dont need to generate power in every province.

Do you expect the price of electricity will go down once theres a national grid?Yes. Now the price is based on the price of electricity [generated using fuel such as gasoline or diesel]. But we are developingcheaper sources [and connecting them] to the national grid. By 2010 the price should change a little bit. By 2011 there should bea remarkable reduction in price when the coal power plant in Sihanoukville is operating.

Will Cambodia is connected to a regional power grid?We expect to have some regional interconnection in the Greater Mekong Subregion (China, Myanmar, Thailand, Laos,Cambodia, and Vietnam) by 2020 when we develop larger-scale power generation in the northwest, including our hydropowerpotential. Then we can have interconnection with the regional grid and will be able to export and import at the same time.Currently, we only import from Thailand but later on, when we have an excess of power, we will export to Thailand. The samefor Vietnam. It will be a power exchange we will sell to neighbors in one part of the border and buy across another part of the

border. The national grid will be hooked to the regional grid, which will be connected to the Mekong Subregion and ASEANgrids. This is part of the ASEAN policy of power trade.

When do you think Cambodia will be able to meet its own energy needs?We will be able to produce 2,000-3,000 megawatts by 2017 or 2018 but by that point we estimate demand will be about 3,000

megawatts. When we develop the full potential of the northeastern region, the Mekong basin, then we will have excess electricity.

Where does the money come from to develop the master plan?All of the development in generation is private sector. Hydro, coal power plants all private sector. Transmission can betransferred to the private sector, but only through the state-owned utility EDC (Electricite du Cambodge). The operation mustremain under license of the state-owned EDC because its the backbone of power in the country, of the countrys security.

Why did the government decide not to invest in generation?No money. Even the World Bank and ADB when I asked in 97, 98, when we had the plan to develop the hydro generation, theysaid no for generation because they considered it profitable infrastructure that only the private sector should participate in.Cambodia has approved several projects that have been criticized for their impact on the environment and surroundingcommunities. Some claim that a coal power plant or hydro dam can harm the environment, but before developing and signing acontract we carefully perform an environmental impact assessment [which is] complete and comprehensive. The benefit [that

will accrue] to the country from such project is more than the loss of some hectares of the forest.

Is Cambodia pursuing alternative energies? In the frenzy over Cambodias oil industry, are other energy

sectors being ignored?We have done studies for wind power but we werent able to identify areas with enough potential. To use wind power, six metersper second is the minimum speed required. We expected to have good wind in mountain areas and along the coast but our studyshowed we didnt have good enough potential to develop wind power. Everywhere we can develop solar power, but thetechnology is still very costly and is still not reliable. Solar home systems are good, but very expensive. We dont have any plans

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to generate nuclear power yet. That is the idea now, but that could change in two or three years. It depends on the situation. Nowwe are promoting the use of renewable energy for the rural electrification program. We would like to use all of the resources ofthe country for that, including the entire agricultural west, all of the biomass we can use as this could help to reduce fuel imports.

We would like to encourage investment in all new kinds of energy technology.

Do the high costs of electricity in Cambodia hinder foreign investment?Yes, the price of power is a factor that can have a bad impact on investment. We expect to have lower price electricity by the endof 2010. We know for foreign investors, if the price of electricity was cheaper, there would be more investment.

Asian governments forced to actas crude oil prices soar

Written by AFP

Torn between protecting the poor and saving their budgets, governments across Asia are being forced to slash fuel subsidiesas world oil prices settle over $130 a barrel.

Indonesia, Malaysia and Taiwan have decided to wield the axe on multibillion-dollar subsidies despite fears of unrest as inflation

spikes and the region's poor pay more for fuel on top of the surge in food costs.

Even regional giant India, which until recently was happy to see state oil companies lose millions of dollars a day sellingdiscounted fuel, has said a price hike is inevitable.

But while most price-setters could see the writing on the wall, China has dismissed rumors that it would change its centralpricing system as it focuses on containing inflation ahead of the Beijing Olympics.

"In Asia generally, those countries that subsidize oil will be under pressure to remove their subsidies while those that don't willbe under pressure to do something for low-income earners," said Euben Paracuelles, a Singapore-based economist for the RoyalBank of Scotland.

For countries such as Indonesia, an OPEC member which has historically enjoyed some of the lowest fuel prices in the world, thecrude price boom means the days of ultra-cheap petrol may soon be over.

Jakarta hiked the subsidized gasoline price by 33.3 percent to about 6,000 rupiah (65 cents) a litre on May 24, sparkingimmediate and sometimes violent protests by students and hardline Muslim groups.

Analysts however said Jakarta deserved praise for its decision to cut its fuel subsidies as they mounted to an estimated $14billion, or three percent of gross domestic product.

"It looks like that's where most governments are heading right now," Paracuelles said.

Malaysia also appears to be changing its stance on subsidies - approaching $15 billion or a massive seven percent of GDP - and isnow considering a two-tier pricing system to make the rich pay more and cap the subsidy bill at more acceptable levels.

And in Taiwan, the new government of President Ma Ying-jeou has moved quickly to end a freeze on domestic gasoline pricesfrom June. Power prices will also rise from July accordingly, officials said.

China, however, has made it clear fuel costs will remain well below market rates even as its energy needs surge ahead of theOlympics.

Analysts say higher prices in countries such as Indonesia would ease demand for crude, but only action by giants India and

China could take the sting out of the oil markets.

Underpowered energy sectorshifts up a gear

Written by Post Staff

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HENG CHIVOANPeople paddle boats beneath power lines at Boeung Tum Pon lake in PhnomPenh. Cambodia will likely remain without a national grid until 2020 althoughoffshore gas deposits and a series of hydropower projects are set to ramp upthe countrys power production in coming years.

After suffering heavy damage during decades of civil strife,Cambodia's power supply facilities have been significantlyimproved since the war years, with support from internationalaid and foreign-funded private sector projects.

The country stands on the brink of a power-generationrevolution, driven in part by the discovery of potentially vastundersea oil and gas fields and the start of a series of massive

hydropower projects that it is hoped will bring electricity tomuch of the country.

However, until these come online, Cambodia remains largely inthe dark and reliant on non-sustainable power sources like woodand charcoal.

Rolling blackouts plague the capital, casting wholeneighbourhoods into darkness for hours at a stretch, while vastnumbers of people in the countryside resort to car batteries forelectricity or pay exorbitant fees for locally produced power.

Cambodia's failures so far at mass power generation - apatchwork of private electricity companies and an under-equipped national electric authority bring continuous power toonly 17 percent of the population - have stunted the country's

development, while high electricity costs have driven awaypotential foreign investment.

Cambodian power can cost as much as 2,000 riels more perkilowatt hour (kWh) than in neighboring countries, said IthPraing, secretary of state with the Ministry of Industry, Minesand Energy.

"We have no national grid yet," said Praing, adding that acountrywide power system would not likely exist until 2020.

Cambodia currently limps along on 24 fragmented power systems centered around provincial capitals and towns.

"There is no interconnection" between the far-flung power generation stations, Ith Praing told the Post on May 26.

The result is costly electricity.

"The electricity prices in Cambodia are the highest in the region, and some of the highest in the world, due partly to the large useof old small generators, reliance on fully imported diesel fuel, and large losses in low-quality, medium-voltage distributionsystems," said the website for RECambodia, a renewable energy body under the authority of the government's Electricity

Authority of Cambodia.

Electricity generated by Cambodia's hundreds of private power companies can cost as much as 3,000 riels a kWh, said CheaSinhel, director of the electricity supply department at the state-run Electricite Du Cambodge (EdC), adding that these serviceabout 100,000 people.

EdC power costs only 300 riels per kWh in the country's urban centers that it services, but the enterprise fails to reach a largenumber of people and still cannot generate enough power to light up Cambodia's capital, which alone needs 250 megawatts ofpower.

The EdC's total capacity in Phnom Penh remains only 190 megawatts, forcing it to buy the remainder from two privategeneration companies at higher prices.

"Electricity still costs a lot," Sinhel said.

In a bid to cut power costs, since 1999 Cambodia has bought electricity from its neighbors Vietnam and Thailand, allowing theEdC to lower costs by as much as 250 riels a kWh, according to the EdC.

The country has also begun to explore alternative energy sources such as biofuels, wind or hydropower.

While experts agree that the country could have limited success employing renewable energy - particularly in small-scaleprojects benefiting individual rural households or communities - the key to mass power production lies in the eight large damsgovernment officials say can be built.

Since 2006, senior government officials, including Prime Minister Hun Sen, have urged foreign investors, particularly Chinesecompanies, to back hydropower projects in the Kingdom and further diversify the power supply away from costly gasoline anddiesel generation.

The largest project - the Kamchay dam in Kampot province - is already underway and hopes to provide 190 megawatts ofelectricity by 2010.

Two other large dams in Cambodia's northeast aim to produce a combined total of some 480 megawatts in coming years,according to government officials.

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But Cambodia's electricity supply remains so undeveloped that even after the arrival of hydroelectric power and links with theThai and Vietnamese electrical grids, the government envisages that by 2030 only 70 percent of households in the country willhave power.

High costs of electricity deterring

foreign direct investment Written by Kay Kimsong

Cambodia's electricity prices remain among the highest in the region and present a major obstacle to attracting foreigninvestment to the impoverished country, industry and government officials say, adding that energy costs are also driving up theprice of other crucial utilities.

"This challenges our ability to compete with neighboring countries such as Thailand and Vietnam," said Chan Sophal, director ofthe Cambodian Economic Association, a private industry group.

At the heart of the problem is Cambodia's lack of a national power grid, which puts supply in the hands of dozens of small,private power producers operating in a loosely regulated system.

Because most of these producers rely on diesel-powered generators, spiraling global oil prices are being passed on to Cambodianconsumers through the power companies.

The result is electricity that can be as much as four times as expensive as in Vietnam or Thailand, said economist Sok Sina,adding that the government is in no position to lower its taxes on imported petroleum products - a move that could see fuel andelectricity prices drop.

"Any slowdown in investments is on the back of concerns over high electricity costs ... but if gasoline taxes decrease, the nationalbudget will be affected," he told the Post on May 21.

"The problem will not likely be fixed until 2012" when Cambodia hopes to bring several hydropower projects online, he added.Until then, the country will have to limp along under the current patchwork of independent power suppliers, officials say.

"The electricity supply still does not meet the basic demand for electricity, especially in rural areas, where a 24-hour supply ofelectricity is still not assured, and the quality of electricity is not reliable," the Council for the Development of Cambodia says onits website.

The state-run Electricite du Cambodge (EdC) is only able to provide about three-quarters of the 250 megawatts consumed byPhnom Penh each day, said one EdC official who did not want to be named, explaining the frequent blackouts that blight largeswathes of the capital and force many to resort to expensive diesel fuel generators.

The situation becomes much worse, in the countryside, where regular power is available to only a fraction of the households.

The government has struggled to keep electricity prices in check, spending more than $40 million in subsidies for the EdC,Prime Minister Hun Sen said on May 20.

But spiraling power costs are not likely to ease anytime soon, business officials say, adding that demand for electricity is growingby 15 percent each year, putting further pressure on the country's fragmented power system.

"The investors are going to have to be patient and wait for a few more years to get lower electricity prices," said Nguon MengTech, director general of the Cambodian Chamber of Commerce.

Getting a feel for powerWritten by Susan Postlewaite

Massive hydrocarbon reserves are believed to lie off the Cambodian coast, but just how much there isand when it may be tapped remain the subject of much debate, writes Susan Postlewaite

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Fears of 'oil curse' haunt energysector

Written by Susan Postlewaite

Cambodias discovery of oil has raised both hopes and concerns for the impoverished country, with many observers warningthat the Kingdom could fall victim to the infamous oil curse, an affliction that often strikes resource-rich but underdevelopednations.

Perhaps the most famous example of this phenomenon, and one that is referenced as a worst-case scenario for Cambodia, is theAfrican nation Nigeria, where billions of dollars in oil revenue have simply disappeared.

Cambodias own struggle with rampant corruption it is considered by many to be one of the most graft-prone countries in Asia figured highly in an international oil and gas conference hosted by the Kingdom in March that drew hundreds of diplomats,government officials and development agencies.

During the meeting industry experts bluntly told Cambodia to eradicate corruption or risk losing out on potentially hundredsof millions of dollars in oil and gas revenues.

Luluk Sumiarso, director general of oil and gas for Indonesias Ministry of Energy and Mineral Resources, said that after thearchipelago discovered oil, we had to implement good governance. We had to eradicate corruption, or reduce the practice, inthe government.

He also urged Cambodia to sign the Extractive Industries Transparency Initiative (EITI), which requires governments andcompanies to disclose their financial records relating to oil, gas or mining deals.

ACKNOWLEDGING THE RISKS OF SUDDEN WEALTH

Since energy giant Chevron struck black gold more than three years ago off the countrys coast, Cambodian officials haveacknowledged the potential pitfalls associated with this hydrocarbon windfall.

Prime Minister Hun Sen has repeatedly vowed that any oil wealth would be used to help raise Cambodia out of poverty, but hasalso downplayed potential revenues, saying it would be premature to begin estimating the size of the countrys hydrocarbonreserves.

Most recently, Hang Chuon Naron, secretary general of the Ministry of Economy and Finance, said that oil can be a sunset or asunrise amid mounting concerns that the sector could overshadow Cambodias other key industries like agriculture or garments,a risk that is known as Dutch Disease.

One suggestion made at the March conference for managing Cambodias new-found oil wealth would be to channel the revenuesinto a special fund to be invested for the long-term benefit of future generations, as Norway and East Timor have done.

Our fund is now $2 billion and we expect it to be $10 billion in a few years, said East Timors secretary of state for naturalresources, Manuel de Lemos, adding that the fund has strict accounting procedures.

Psychological shift pushes oil past

$135Written by AFPOil prices leapfrogged to record highs above $135 on May 22 on runaway fears about strained energy supplies and ferventdemand, analysts said.

Brent North Sea oil struck $135.13 a barrel and New York light sweet crude hit an all-time peak of $135.09.

Analysts said the jump reflected a shift in market psychology rather than a change in the fundamentals of supply and demand,and noted that many investors were reaping hefty returns.

OPEC chief Abdala El-Badri has said the oil cartel is unhappy with the surging prices, which he blamed on speculators and aweak US dollar.

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Overlapping claims complicate

gas huntWritten by Susan PostlewaiteWith large volumes of gas being pumped from the Pattani Basin off the coast of Thailand,Cambodia is expected to some day reap the benefits of its own domestic gas supply from fields lying under the same waters.

But first the country must resolve a contentious, decades-old dispute with Thailand over some 27,000 square kilometers in theGulf known as the Overlapping Claims Area, or OCA.

Although early drilling in Chevron's Block A in Cambodian waters off the coast from Sihanoukville has so far failed to yieldsignificant gas finds, industry officials and geologists agree the prospects for the discovery of large natural gas deposits in thedisputed area are high.

The Pattani Basin across the border in Thailand has been a reliable producer of gas for years and the geology of the basinreaches into the disputed area.

No estimates are available regarding how much gas - or oil for that matter - could be recovered from the OCA.

But Thailand's former Energy Minister Piyasvasti Amranand says Cambodia should be anticipating gas because the companiesworking in the Gulf of Thailand just across the border have been producing "mainly gas for 30 years."

"Although the geology is complex, in the overlapping claims area, that area is mainly gas," he said in an interview with the Postat an oil and gas conference in March.

Gas in the OCA would be a windfall for both countries.

Impoverished Cambodia could use it to generate much-needed power - alleviating chronic blackouts, electrifying rural areas andlowering the price of electricity for large development projects, said Deputy Prime Minister Sok An.

Domestic gas production could also enable Cambodia to replace costly imports of liquefied petroleum gas (LPG) and reduce thecountry's heavy reliance on charcoal for cooking.

Thailand could also boost its production to meet rising domestic demand which requires that it import much of its gas fromneighboring Myanmar, whose shaky political environment makes it a risky supplier, industry sources say.

But talks over the OCA, which resumed in April after years of stalemate, are still in their early stages. The dispute goes back tothe 1970s, but six years ago Cambodia and Thailand negotiated the joint development agreement that was hoped to resolve theproblem.

According to the trade publication Oil & Gas Journal, the original model negotiated by Thailand and Cambodia called for a 50-50 split of resources, while now Phnom Penh authorities are pressing for a 60-40 sharing ratio. Oil & Gas Journal said Thailand

will insist on the original 50-50 split.Sources close to the negotiations say there are two components to the proposal on the table: to demarcate the upper part of theOCA with a border while leaving the lower portion to be jointly developed by Cambodia and Thailand, which would share in thecosts and benefits of production.

One independent oil expert said Cambodia is likely to resist simply splitting the area down the middle since "the better prospects

are on the Thai side," adding that the debate has already become too tangled in politics and nationalism to move forward.

"Keep the two countries out of it, keep the politics out and let the maritime experts and lawyers decide," said the expert, who dueto the sensitive nature of the talks did not want to be named.

Another petroleum consultant warned that the dispute could take years to resolve, and depended heavily on global factors like

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the price of oil and gas, but that Cambodia could have the upper hand at the moment because "Thailand needs [natural gas]more."

Who's got what, and where

BLOCK A:Awarded to Chevrons group, it is the only block where major exploration activity is taking place. Chevron has 55 percent, Mitsui OilExploration Co., Ltd (Moeco) has 30 percent and GS Caltex Corporation has 15 percent.

BLOCK B: Awarded to Singapore Petroleum Company in a joint venture with Malaysias Resourceful Petroleum and Thailands PTTEPInternational. Each holds a one-third stake. Australias Cooper Energy pulled out in October 2007, selling its share to its partners.

BLOCK C: Awarded to Hong Kong firm Polytec, which holds 100 percent. Polytec officials said they hope to drill a first well this year.

BLOCK D: Initially held by Chinas Zhen Rong Cambodia Energy Company but now in the hands of Petrotech Holdings of China, whichbought 48 percent of Zhen Rong.

BLOCK E: Licensed to Indonesias Medco International Petroleum Ltd (41.25 percent), Kuwait Energy Co. KSCC (20.6 percent); Medcospartner JHL Petroleum, Ltd (4.13 percent) and Swedens Lundin Petroleum (34 percent).

BLOCK F: Held by state-run Chinese National Offshore Oil Corp. (CNOOC), one of Chinas largest oil companies.

(Susan Postlewaite)

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High hopes for hydropower Written by Vong Sokheng and Sebastian Strangio

Kamchay project highlights risks and rewards of damming our rivers

KAMPOT - Chinese engineer Hu Nan gazes through a freshlyhewn gap in the hillside toward the distant Kamchay River.Swollen by heavy rains, the river gushes over the rocks below

while fully loaded earthmoving trucks rumble past, slowlycarving a 110-meter-high auditorium out of the densely forestedhills of Bokor National Park.

A recent engineering graduate from Beijing, Hu says he is proudto be involved in the construction of the $280-million Kamchaydam, Cambodia's largest hydropower project to date.

"This will be the Three Gorges Dam of Cambodia," he yells overthe noise of a nearby generator.

The massive dam development in Kampot province broke

ground last September and is the government's most recenteffort to boost Cambodia's electricity output by harnessing oneof the Kingdom's most abundant natural resources: its rivers.

With just 20 percent of Cambodian households enjoying reliableaccess to electricity, the Ministry of Industry, Mines and Energy(MIME) envisions large-scale hydroelectric projects as asolution to the country's chronic power shortages.

In its most recent Power Development Plan, covering the years1999 to 2016, the ministry earmarked 14 potential sites fordevelopment by 2018.

Construction has started at two - including Kamchay - withanother six now undergoing feasibility studies.

Kampot Governor Thach Khon says dams are an important wayof providing cheaper electricity, which he says is crucial toCambodia's economic and social development.

"Electricity is necessary for the development of business andindustry. It means that we will be able to implement our policiesfor poverty reduction. If there is no electricity we cannot developthe country," he said.

Shu Jiang, deputy managing director of Sinohydro Corporation,the Chinese state firm that is constructing the dam, agrees thatthe completed project will be a boon for the local economy.

SEBASTIAN STRANGIOEmployees of Sinohydro Corp. cross a bridge over the Kamchay River built bythe Chinese firm to service a hydropower project it is developing on the river inKampot province.

"The power station will provide cheap power for Cambodia ... and after the construction, I think many tourists will go there toplay in the reservoir," he told the Post at the company's Phnom Penh office.

But as with the controversial Three Gorges project on China's Yangtze River - another Sinohydro project - local and internationalNGOs have expressed concern that large-scale dam developments could have negative impacts on the environment and localcommunities that far outweigh their benefits as a source of cheap power.

Sam Chanthy, environment project officer at the NGO Forum on Cambodia, said the Kamchay dam highlights what he sees asthe unrestrained nature of Cambodia's hydropower development.

"The government expects this dam to generate more electricity. They think it will industrialize Kampot, bring in moreinvestment, more factories," he said.

"But we can also see some of the downsides. About 2,000 hectares of protected forest will need to be cleared."

A January 2008 report prepared by the US-based watchdog International Rivers and the River Coalition in Cambodia (RCC)concludes that the Kamchay dam project "raises important questions regarding both [Sinohydro] and the Cambodiangovernment's commitment to transparency, accountability, public participation, and the incorporation of adequateenvironmental and social safeguards."

Chanthy said that the initial Environmental Impact Assessment prepared by Sinohydro prior to construction lacked anysignificant public participation, as required by the 1996 Law on Environmental Protection and Natural Resources Management."According to the law, [the project] is not legal at all," Chanthy said.

Central to environmental groups' fears is the risk that the Kamchay dam could create problems similar to those experienced

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downstream of the Yali Falls Dam, built in Vietnam's Central Highlands in 1996.

The RCC said in a report last year that toxic blue-green algae generated by the "nutrient-rich bottom water from the Yalireservoir" was flowing into Cambodia, creating a potential public health risk.

"People are already getting hurt by the [Kamchay] dam in terms of water quality," Chanthy said.

Vendors who work at Teuk Chhu resort, a popular riverside attraction downstream from the Kamchay dam, say they are worriedpollution from the dam could cause visitor numbers to drop.

Muo Sim, 50, who sells food and drinks along the river's bank, said she supported the project but was concerned it would affectthe livelihoods of the 500 or so vendors at Teuk Chhu.

"We support hydropower dams because we hope it means we will get cheaper electricity. But if there is poor management, itmight make the water dirty and that could be the end of the famous resort here," she said

Sinohydro representatives meanwhile have rejected accusations that the company ignored the environmental impacts of theproject, arguing that the Kamchay dam is being built to the same standards as the company's other dams in China.

"During the construction period, some problems can't be avoided," said Li Tao, a Chinese engineer at the dam site. "But we haveconstructed many dams in China, and we will obey the Chinese laws regarding the environment."

Li said the company would do everything it could to prevent a decline in water quality over the long term.

"After we finish the dam, we will cut all the trees and clear all the surrounding areas. So don't worry about the water quality," hesaid.

Ith Praing, secretary of state at the MIME, also defended Sinohydro's environmental assessments, saying that "the process hasbeen normal" and that the impacts of all large hydropower projects are investigated before construction is allowed to start.

Chanthy of the NGO Forum emphasized that pursuing hydropower did not mean making a choice between development andconservation.

"We're not against the dams," he said. "We are only pushing the government to abide by its own laws."

Foreign dam troubles trickling

downstream

Written by Sebastian Strangio

Massive hydroelectric projects in China and Vietnam are threatening to wreak havoc along the lower stretches of the MekongRiver, environmentalists warn, saying foreign dams could do more damage to Cambodia's fragile ecosystem than the Kingdom'sown nascent hydropower sector.

Hydropower development on the upper reaches of the Mekong River in southern China is a particular long-term concern for allthe countries of the lower Mekong basin, according to Carl Middleton of the US-based International Rivers Network.

China's thirst for electricity has led to the planning of eight giant projects on the upper Mekong, two of which are currentlyoperational and three of which are under construction.

"[The planned dams] can be expected to significantly alter the distribution of dry and wet season river flows, as well as result indaily water level changes," Middleton said, adding that "even subtle changes can bring about large and unexpected impacts on

ecosystems."

"Fish are central to both the food security and the national economy of Cambodia. Therefore threats to these fisheries should beconsidered with the seriousness they deserve," he said.

Environmentalists say one major problem is the lack of consultation between the developers and local communities that will beaffected by the projects.

"A public decision-making process about a dam's proposed development is critical," Australian academic Milton Osborne wrotein a 2004 study, Rivers at Risk. "And clearly this public process has not happened in the case of China's mainstream dams."

Environmental groups have also observed problems stemming from the three dams currently operating on the Se San River, amajor Mekong tributary in Vietnam's Central Highlands.

A July 2007 report issued by the Rivers Coalition in Cambodia (RCC) said the Yali Falls dam in Vietnam "has significantlydisrupted the Se San River's flow in downstream Cambodia, where more than 28,000 people depend on the river for theirdrinking water, irrigation, fishing, livestock-watering and transportation."

Roman Mleac, 56, from Pawdal village in Ratanakkiri province, less than 6km from the Vietnamese border, told the RCC that"water levels [on the Se San] are changing every day. The water rises in the morning and at night the water falls.... The change isaround six meters."

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Despite concerns voiced by community leaders in Ratanakkiri and Stung Treng provinces, who have requested they be consultedon any future developments, state-run power supplier Electricity of Vietnam has plans to build two more dams on the Se San.

LPG investment paying off fortaxi driver

Written by Nguon Sovan

TRACEY SHELTONKim Hun shows off the LPG tank thats helping him save money as petrol prices climb to recordhighs.

Fed up with watching the high price of gasolineeat all the profits from his taxi business, Kim Hunconverted his Camry to run on bottled gas.

The 26-year-old has operated a taxi route betweenPhnom Penh and Kampong Thom province forthree years.

"I had my Camry converted in early 2007 becauseI could not make any income with my taxi when Ihad to pay for petrol," said Hun.

He spent $450 on buying a gas tank and $50 onthe conversion service but says it was a worthwhileinvestment.

"When the price of oil got so high, most taxidrivers converted to using gas," said Hun. "Theirprofits increased so I decided to change too."

He estimates that using liquefied petroleum gas (LPG) is 42 percent cheaper than gasoline.

The drive from Phnom Penh to Kampong Thom takes around 20 liters of gasoline, which now costs more than 5,200 riel perliter.

The same trip in a gas-powered taxi uses 20 liters of gas at 2,900 riel per liter.

"If I use petrol, I make a profit of $10 for a single trip between Phnom Penh and Kampong Thom, while using gas, the profitreaches up to $15.50," said another 39-year-old taxi driver, Kuon Poch, who switched to gas three years ago.

Oil explorers closing in on TonleSap lake

Written by Susan Postlewaite Undersea oil and gas off Cambodia's southern coast continue to drive the buzz surroundingthe country's potential hydrocarbon windfall.

But inland petroleum reserves are beginning to also attract the attention of prospectors, as well as environmentalists concerned

over the impact of drilling wells in some of Cambodia's most sensitive eco-systems.

Oil and gas exploration in the Tonle Sap basin, a vast swath of Cambodia surrounding the country's great lake, is in its infancy,with only one company - Medco Energi Global of Indonesia - confirmed as having been licensed for exploration.

Medco's international director, Grant Bowler, confirmed his company has the go ahead to explore in the Tonle Sap in apartnership with the Cambodian National Petroleum Authority, but declined to comment further.

But as energy majors from China, Australia and other countries line up for their shot at striking it rich in Cambodia's unproveninland petroleum fields, some warn of the need for extraordinarily strict policies for companies operating around the lake, whichis home to a number of threatened bird and animal species, as well as the source of most of the country's fish.

The government is just beginning to lease to the companies. [The environment] is not a big concern so far. Neou Bonheur, Ministry of Environment

"Any single environmental violation - one fish dead - and you lose your license," said an independent oil expert familiar withCambodia's fragile ecology, adding that drilling for oil and gas in the Tonle Sap should be based on "the most stringentenvironmental regulations of any basin in the world."

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Others also said they were worried and would be watching progress in this area of Cambodia's energy sector very warily.

"We are concerned about it. Our mission is to coordinate the management, the conservation and then the development of theTonle Sap Basin," said Sok Keang, deputy secretary general of the Tonle Sap Basin Authority, which was created last year by theCouncil of Ministers to study the area's "management, conservation and development."

Very little is known about the potential for oil and gas in the Tonle Sap Basin, which is bigger than the lake itself, making it likelythat exploration will also take place on shore as well as under the water.

"The government is just beginning to lease to the companies. [The environment] is not a big concern so far," Neou Bonheur,deputy director of the Ministry of Environment, told the Post, adding that environmental impact studies would be conducted

before each stage of exploration.

Two studies - for Medco and PGS, a global oil services company that focuses on geophysical services such as seismic data - havealready been completed by the Bangkok-based company International Environmental Management (IEM), said the business'spresident and CEO Ron Livingston.

Studies from 2007 and this year showed that "none of the seismic lines are in protected areas," and that the vibrations thatwould be caused by seismic surveys are minimal.

IEM expects to conduct additional environmental studies for other oil companies in Cambodia, where it has worked in the sectorsince 1992, Livingston said.

Surging oil prices could hurtworld economy

Written by AFP

The feared super-spike in crude oil prices that appears to be underway could deal a crippling blow to a global economy alreadyreeling from the US housing slump and tight credit, analysts say.

Yet some argue that the surge may be a speculative bubble, and could end up self-correcting as demand softens from weakereconomic growth and energy efficiency measures.

Crude futures in May soared past the level of $130 a barrel for the first time, having more than doubled in the past year.

The jump appeared to fulfill predictions from some analysts of a super-spike that could take oil up as far as $200 a barrel.

Goldman Sachs analyst Arjun Murti added to the speculative fever earlier this month with a dire prediction of higher prices,citing a lack of adequate supply growth and still-strong demand.

The possibility of $150 to $200 per barrel seems increasingly likely over the next six to 24 months, he said in a research note.

The reality of sky-high energy costs could mean a darker outlook for the US and global economy, by raising the price of a varietyof goods and services.

The notion of a quick recovery in the struggling US economy would likely be put in doubt, and the rest of the world would sufferas well.

A super-super spike would most likely put a stake in the heart of global economic growth, says Ed Yardeni, economist atYardeni Research.

A global economic downturn would be the most likely outcome, led by a longer and deeper recession in the US.

The airline industry, already reeling from the surge in the past year, is feeling even more pain. Several small US carriers havefiled for bankruptcy and American Airlines, the nations largest, announced a capacity reduction of 11 to 12 percent and othersteps to deal with soaring energy costs.

The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not whenrecord fuel expenses are coupled with a weak US economy, said AMR Corporation chairman and chief executive Gerard Arpey.

AMR is Americans parent.

John Kilduff, analyst at MF Global, said the world is consuming 87 million barrels per day of oil while producing only 82.6million barrels.

This is a compelling fundamental factor, Kilduff said.

But some say oil is a bubble waiting to burst and that prices could fall sharply as supply and demand come into balance.

We see many of the essential ingredients for a classic asset bubble, said Edward Morse at Lehman Brothers.

Myles Zyblock of RBC Capital Markets argues that oil could be ready for a classic boom-and-bust cycle.

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I am concerned about the possibility that a euphoric investment mentality is beginning to overtake the oil market, he said.Even so, Zyblock said the spike could do considerable damage.

An oil price mania is a particularly dangerous type of excess since it has the potential to generate severe economic, inflationaryand/or political dislocation, he said.

Oil prices will eventually retreat, analysts say, as the United States and other big consumers curb demand either by voluntarymeans or because of an economic slump.

What should matter and what will matter eventually is the fact that US oil imports are on a downward slope, said Phil Flynn atAlaron Trading, who notes that more fuel-efficient cars and alternative energy are finally denting demand from the worldsbiggest oil consuming country.

The strain on global energy supply appears to be moderating, albeit ever so slightly, adds Zyblock.

Zyblock said that other commodities such as gold have come off their peaks as the dollar has bounced back, but that oilsinexorable rise is more difficult to explain. Based on our analysis, it seems reasonable to conclude that a speculative psychologyis beginning to overtake fundamentals in dictating oil price dynamics, he said.

While all manias are incredibly profitable, they are just as dangerous because their inevitable demise characterized by a pricecrash is always a surprise.

Mmm... light sweet crude

1970: The official price of Saudi crude oil is fixed at $1.80 per barrel.1974: Prices pass $10 a barrel after the first oil shock, sparked by the Oct 1973Arab-Israeli war.1979: The Islamic revolution in Iran causes a new oil shock and prices top $20.1980: The barrel surpasses $30 and hits $39 in early 1981 at the height of theIran-Iraq war.Sept-Oct 1990: Iraq invades Kuwait and prices rise above $40 per barrel.

Aug 2005: Prices rise above $70 when Hurricane Katrina hits the Gulf of Mexico,damaging major offshore oil installations

Price rises gather steam in 2008Jan 2: Prices hit $100 amid concerns over violence in Nigeria, stability in Pakistanand supply problems in the key US market.March 13: Light sweet crude closes above $110 a barrel for the first time amidfevered speculation over the weakening dollar and Chinas and Indias everincreasing demand.May 6: A brighter outlook for the US economy helps push world oil prices over$120 a barrel.May 21: Oil jumps to $135.04 a barrel as official data reveal unexpected declinesin US energy inventories amid increasing Chinese demand.

Asia energy reform could save$700 billion: UN

Written by AFP

But failure to act could cost $9 trillion

Greater use of renewable energy and power conservation could save countries in the Asia-Pacific region $700 billion by 2030,according to a recent United Nations report.

The UN said without reform, energy infrastructure development in the region would cost $9 trillion.

But developing countries have argued in response that savings have not been fully proven and require tradeoffs that will hitpoorer countries hardest.

"Sustainable development of the region requires that we devote attention to our energy resources," Thai Prime Minister SamakSundaravej last month told a summit on the report, which drew delegates from 49 countries, including China, India and SouthKorea.

"Our region urgently and seriously needs to consider energy management reform."

The UN Economic and Social Commission for Asia and the Pacific (ESCAP) is pushing leaders in the region to take cooperativeaction quickly, while keeping the region's poorest residents in mind.

"This is the right time for us all to sit down," said South Korean Trade Minister Kim Jong-Hoon. "We are trying to remodel thewhole picture of our economies."

With government direction, greater energy efficiency in production and consumption around the world could reduce use by 40percent by 2050, according ESCAP.

"We have a dilemma, your excellencies, and the dilemma is fossil fuels," said Noeleen Heyzer, executive secretary of ESCAP."Heavy dependency on fossil fuels is aggravating the Asia-Pacific region's economic vulnerability."

She said rocketing oil prices and the impact of emissions on global warming mean countries urgently need to rethink theirenergy programs.

Without action, she said, the poor would be increasingly unable to afford energy and oil cartels would have growing power overcountries with few resources.

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"This is no longer a hobby," Heyzer said. "It's an essential thing to do."

The report proposes joint Asia-Pacific energy infrastructure and standards as well as tax reform to encourage ecologically-friendly energy resources.

Heyzer said countries needed to coordinate energy and development programs to empower the estimated 1.7 billion people inAsia who still primarily use dirty, inefficient fuel.

However, Mirza Azizul Islam, an advisor to Bangladesh's finance ministry, said the report's proposals would hurt less-developedcountries in the short run.

"The tradeoffs involved in energy management policies have not been adequately considered," he said. "This can be a majorsource of social discontent."

Ministers said they hoped sharing resources and information could help ease the transition for developing countries.Idea of 'gas OPEC' gains currency

Written by AFP

AFPAn undated handout picture shows the Al-Shamal gas field north of Qatar. Qatar is among anumber of natural gas-producing countries considering the formation of an OPEC-style cartel thathas gas importing countries worried.

Moves are afoot to set up an OPEC-style cartelfor gas but even though the proposal seems a long

way from reality just yet, consumers are concernedthat exporters will gain a free-hand to set prices.

The world's top gas exporters currently have theGas Exporting Countries Forum or GECF as theirinformal platform for dialogue.

It was set up in 2001 and comprises around 15 gas-rich countries, including Iran, Russia, Qatar,

Venezuela and Algeria, who control 73 percent ofthe world's gas reserves and 42 percent of gasproduction.

Nevertheless, "there is a desire" among exportingcountries "to have something more concrete," saidIranian energy official, Javad Yarjani, speaking on

the sidelines of an international energy forum inRome last month.

An executive of the Iranian National Oil Company, Akbar Torkan, said that "in the next 20 years, oil's share of fossil fuels willdecrease while gas' share will increase. It is therefore necessary to focus more on gas."

Claude Mandil, former head of the International Energy Agency, suggested the GECF could even set up its own secretariat alongthe same lines as the Organization of Petroleum Exporting Countries (OPEC) at a meeting to be held in Moscow in June.

Qatar's Energy Minister Abdallah al-Attiyah had suggested in January that a "gas OPEC" could be set up at the next meeting ofthe GEFC.

Nevertheless, the idea is not finding many friends among consumer countries, who fear it would only allow gas exporters thesame leeway as OPEC has on oil.

While OPEC abandoned its price range for a barrel of oil in 2005, it still has a system of quotas, which it can change in responseto market conditions.

The head of the Libya's National Oil Corporation, Shokri Ghanem, sought to downplay such fears, insisting that gas exportersdid not want to set up a cartel.

Instead, they wanted a "structure for cooperation and the exchange of information," much along the same lines as the OPEC'sresearch and analysis centre, he said.

Iranian delegate Yarjani insisted that such an organization would not run against the interests of consumers because there was agreat deal of interdependence between exporters and consumers of gas.

IEA chief Nobuo Tanaka said that "if gas exporters want to set up an organization, we can't prevent them."

British Energy Minister Malcolm Wicks said he did not like the idea of a gas OPEC.

"We support open markets. We think that there should be competition. We need transparency, we need to know where we stand.

We don't want another cartel."

He continued: "Cartels are there to fix things, often to the detriment of economies and the consumer. We think this is a foolishproposition."

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Biofuels under attack as foodprices soar

Written by AFP

Hailed until only months ago as a silver bullet in the fightagainst global warming, biofuels are now accused of snatchingfood out of the mouths of the poor.

Billions have been poured into developing sugar- and grain-based ethanol and biodiesel to help wean rich economies fromtheir addiction to carbon-belching fossil fuels, the overwhelmingsource of man-made global warming.

Heading the rush are the United States, Brazil and Canada,which are eagerly transforming corn, wheat, soy beans and sugarcane into cleaner-burning fuel, and the European Union (EU) isto launch its own ambitious program.

But as soaring prices for staples bring more of the planet's most

vulnerable people face-to-face with starvation, the image ofbiofuels has suddenly changed from climate saviour to a horriblymisguided experiment.

The head of the International Monetary Fund (IMF) recentlysaid biofuels "posed a real moral problem" and called for amoratorium on using food crops to power cars, trucks and

buses.

The vital problem of global warming "has to be balanced withthe fact that there are people who are going to starve to death,"said Dominique Strauss-Kahn.

"Producing biofuels is a crime against humanity," the UN'sformer special rapporteur for the right to food, Jean Ziegler ofSwitzerland, has said.

And on May 22, his replacement, Olivier De Schutter, said newinvestments and subsidies favoring the production of biofuelsshould be frozen in an effort to curb food price rises. AFPA US farmer displays an ear of corn and a beaker of 200-proof ethanol.Biofuels may still be in their infancy but they are growing rapidly, with annual production leaping by double-digit percentages.

US targets for reducing US carbon emissions require American producers to supply at least 136 billion liters of renewable fuel by2020.

De Schutter described the target and a European Union goal of having biofuels meet ten percent of transport energy demands by2020 as "unrealistic."

"By abandoning them (the targets), we would send a strong signal to the markets that the price of food crops will not infinitelyrise, thus discouraging speculation on commodity futures," he said.

"I have therefore proposed a freeze on all new investments and subsidies favoring the production of fuel by growing crops on

arable and non-degraded lands, when such lands are suitable for the production of food crops."

In 2007, 20 percent of grain - 81 million tons - produced in the United States was used to make ethanol, according to US thinktank the Earth Policy Institute, which predicts that the percentage will jump to nearly a quarter this year. "We are looking at afive-fold increase in renewable fuel," said Bush's top climate change advisor, Jim Connaughton.

But more than half of that legislatively-mandated production would come from "second-generation" biofuels made from non-food sources such as switchgrass and wood byproducts, he said.

EU and Brazilian officials have contested the link between biofuels and the world food crisis.

"This is highly exaggerated," Sergio Serra, Brazil's ambassador for climate change, told AFP.

"There is no real relation of cause and effect between the expansion of the production of biofuels and the raising of food prices.At least it is not happening in Brazil."

Defenders of biofuels say food shortfalls have multiple causes, including a growing appetite for meat among the burgeoningmiddle class in China and India.

On average, it takes more than four kilograms of grain to produce 1kg of pork, and 2kg of grain to yield 1kg of beef.Climate change may well be a contributing factor.

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Some scientists fear rising temperatures and shifting rainfall patterns may be worsening water scarcity in key agriculture areassuch as Australia's wheat belt, and rice-growing deltas may be hit by saline intrusion from rising seas.

In addition, the surging cost of oil has had an indirect impact on many poor people, adding to the pinch caused by rising foodprices.Biodigesters power up villages asalternative to national grid

Written by Chrann Chamroeun

AFPWIND FARMS LOOKING UP OFFSHORE: A boat sails through a wind farm off the southeastern coast of England. The worlds first deepwater floating wind turbine is setto be built off Norways coast next year, Norwegian oil company StatoilHydro announced on May 22. Offshore wind turbines already exist in numerous places around theworld but they have all been stationary turbines planted on the bottom of the seabed. StatoilHydro plans to attach the floating turbine to the top of a buoy, using technologysimilar to that of offshore oil and gas platforms. It has several advantages over a stationary turbine it can be placed in far deeper waters, where winds are often stronger,and it can be moved. StatoilHydro is investing $80 million in the test project, which will tower some 65 meters above the waves and have a capacity of 2.3 megawatts.

In Cambodias rural hinterlands, reliable and affordable electricity from the national grid is a pipedream. The government haspledged to electrify the whole of the Kingdom by 2021 but in the meantime power-hungry farmers are getting creative.

Diesel generators, car batteries, kerosene lamps and candles are all widely used in rural areas as alternatives to electricity, yetsuch methods of powering up are expensive.

In urban areas we now have reliable and affordable electricity but in the rural areas they do not, said Sat Samy, minister incharge of alternative energy. [Farmers] have no money and no electricity but they need it more than we do in the towns.

A move is afoot to show farmers how to turn something they have in abundance animal manure into something theydesperately need: electricity. Step forward the humble biodigester, a simple contraption that turns pooh into power.

You need 30 to 40 kilograms of manure per day to get around 1,200 liters of gas, which is enough to run all normal householdappliances electric cooker, lamps for a day, said Son Mao, a manager and technician for the biodigester project of theCambodian Rural Development Team (CRDT), a local NGO.

A biodigester is a system of closed containers either plastic or cement that help decompose the micro and macro organismsin manure through a fermentation process to produce biogas and slurry.

The technology is simple but effective: one kilo of manure creates approximately 40 liters of gas. This is more than enough forthe average family, according to Mao; an hour of cooking uses about 450 liters of gas while running a lamp for an hour usesabout 250 liters. And its greener to cook with biogas than charcoal.

Before installing a biodigester, families should have a reliable supply of manure.

CRDT recommends users have access to the manure from two cows and three pigs or other barnyard animals of comparable size.They will also need at least 12 square meters of land near the households kitchen and water source as well as materials,

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equipment and advice on installing the biodigester.

CRDTs project has been so successful it has been rolled out into a National Biodigester Program, a joint venture between theMinistry of Agriculture, Forestry and Fisheries and the Netherlands Development Organization.

You can use them for about 20 years and we have built more than 2,000 across Cambodia, said Lam Phalleng, a coordinatorfor the National Biodigester Program.

It costs about $500 to construct one biodigester but over half the cost is covered by contributions in cash and kind from thecommunity. Furthermore, loans can be provided through the microfinance organization Prassac.

The project is increasingly well-known and has been featured on Cambodian state television.

People are very interested in our program because they immediately see the benefits: they dont need to go to the forest tocollect wood all the time like before and they can use electric cookers and lamps in their houses, Phalleng said.

High oil prices fuel Phnom Penhbicycle sales

Written by Mom Kunthear

Sales of bicycles are soaring, with high fuel prices convincing a growing number of people that the time is right to switch topedal power and save money.

And consumers who make the change say they also appreciate the health benefits from riding a bicycle.

Chhum Sophorn, 52, who has a bicycle shop at O'Russei market, said he is enjoying the best sales since 1992-1993, when thecountry was administered by the United Nations Transitional Authority in Cambodia.

"I've been selling more than 100 bicycles a month since early this year, up from 40 to 60 a month previously," Sophorn said."I think more people are making the change to bicycles in order to save money or to better balance their household budget," hesaid, adding that his customers come from Phnom Penh and the provinces.

Mey Saray, 31, another bicycle seller at O'Russei market, said he was also achieving sales of more than 100 a month, up about 66percent from a year ago.

He said that in the past his best months for sales have been September and October, when parents buy bicycles for their childrenat the start of new school year.

Saray and Sophorn said they sell bicycles made in Japan which cost between $35 and $60.

"All bicycles are imported from Japan because they are good quality," Saray said.

Sovan Philong, 23, says he is saving about $10 a month - and feeling much fitter - since he began using a bicycle instead of hismotorbike.

"I bought the bicycle last month for $25 because I could not afford to continue using my motorbike with fuel prices so high," saidPhilong, a video producer at Catholic Social Communications.

Philong admitted that the transition had been physically challenging.

"The first time it was difficult because riding the bicycle made me tired and I was late for work," he said. "But now I'm morecomfortable with it and I'm healthier."

Security guard Chea Buntheoun, 25, was shopping for a bicycle at O'Russei market last week after high fuel prices forced him tosell his motorbike.

"I sold my motor to my aunt because I can no longer afford the cost of fuel," said Buntheoun, who earns $60 a month.

"I use a liter a day and now that fuel is more than 5,000 riels a liter I can't afford to buy it any more," he said.

Gasoline prices continue to climb on the back of spiraling global oil costs - topping more than 5,200 riels per liter recently.

But Buntheoun said he intended to buy another motorbike if fuel prices go down.

"Riding a motor is easier and faster than a bicycle," he said.

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Hotels, embassies go 'carbonneutral'

Written by Cat Barton

TRACEY SHELTONThe recently opened Quay hotel on the Phnom Penh riverfront is one ofseveral operations in the capital working to minimize carbon emissions.

What do the British Embassy and one of the newestboutique hotels in Phnom Penh have in common? They are bothgoing green.

While Phnom Penh may seem an unlikely place to witness theeffects of policies devised in London, the British government'scommitment to becoming a low-carbon economy has inspired itsPhnom Penh Embassy to take steps to reduce their own carbonemissions.

"We volunteered to be one of the first posts to look at how toimprove our carbon footprint," said Rob Bateson, deputymanagement officer at the British Embassy.

The Embassy formed a "green team" composed of both local and

British staff and invited French NGO Geres to conduct a carbonaudit. The results showed that air travel was the worst culprit,accounting for more than 50 percent of their carbon footprint.

Staff are now being discouraged from flying unless strictlynecessary and video conferencing has been installed in an effortto curb work-related travel.

But the Embassy also looked for simpler changes that couldquickly reduce their output of carbon dioxide, a byproduct of

burning fossil fuels and the main culprit in human-inducedglobal warming.

Standard light bulbs were changed to low-energy bulbs, airconditioning use has been limited, printers have been upgradedto models that print both sides of a page and recycled orrenewable-sourced paper is now being used.

"We've begun the process of reducing our vehicle fleet and one ofthe vehicles is now run entirely on biodiesel," said Bateson.

"We know you can't reduce emissions to zero but you can get rid of as much as possible and what we cannot get rid of we willoffset."

The idea is to "spread the word and encourage other firms, businesses and diplomatic missions to take [their carbon footprint]seriously," said Bateson. And it appears to be working: the Danish Embassy has recently followed suit. .

"It is about changing the way people operate," Bateson said. "You don't have to work in an arctic cold office. It doesn't have tocost businesses a lot of money - they just have to take a little time to think about how they can do it."

It is about changing the way people operate. You dont have to work in an arctic cold office.

While the Embassy's efforts were motivated by government policy, one important player in Cambodia's booming tourismindustry - Food and Beverages Solutions (FABS), whose portfolio includes the FCC Phnom Penh, FCC Siem Reap and Spanishrestaurant Pacheran - has gone green with its latest hotel venture.

"We want to set a new benchmark," said Michelle Duncan, group operations manager for the FCC Phnom Penh. "It's definitely amarketing tool but as long as we can back ourselves up with Geres."

Like the British Embassy, FABS engaged Geres to conduct a carbon audit of all its properties and give recommendations on howto reduce its carbon footprint. The audit is still in progress and recommendations will be forthcoming when it has concludedlater this year.

Geres is now planning a "carbon friendly rating system for restaurants and hotels [where businesses will be rated] on emissionsand attempts to improve these emissions in Cambodia," said Kimberly Buss, carbon offset analyst at Geres's climate change unit.

While the Quay - FABS' recently opened carbon-friendly hotel - has inbuilt "green" features such as waste water treatmentfacilities, energy efficient lighting, solar power to heat water and wood-free paper, the group hopes to "move forward to carbonneutral" at all of its properties, Duncan said.

But at the moment, much of what can be done is limited.

"Behavioral change is a big part of what you can do here," said Buss. "We are looking for things that are simple to change; turnoff air-conditioning, teach staff to recycle - it's a start."

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Biofuel boom over the horizon Written by Cat Barton

From London to Los Angeles, the post-modernzeitgeist has gone green. It's now cool to beconscious of your carbon footprint and swap yourgas-guzzling SUV for a Toyota Pirus hybrid.

But when the price of crude oil hits record highsover $135 a barrel, the idea of growing your ownfuel is appealing for economic as well asenvironmental reasons - especially if you have vastswathes of arable land, a reservoir of cheap laborand a pressing need to boost the agriculturalsector's contribution to GDP.

So fasten your seatbelts: Biodiesel is coming toCambodia.

"This is going to change everything," said DavidGranger, director of Biodiesel Cambodia, a privatecompany working to promote biofuel use inCambodia.

Cambodia's government has been championingbiofuels - specifically jatropha - for more thaneight years now. Officials cite potential benefits

Photo SuppliedA man inspects a jatropha curcas field planted for the bushes oily nuts, which are becoming anincreasingly popular source of biodiesel. Foreign and local companies are eyeing Cambodias vastswathes of agricultural land for biofuel production, with the hardy jatropha shrub at the top of thelist of alternatives to crude oil.

ranging from insulating Cambodia from the vagaries of the international oil market to providing rural populations with cheap,environmentally friendly electricity and a new cash crop which could bolster the agricultural sectors contribution to GDP.

"The time is right for biodiesel in Cambodia," said Sat Samy, minister in charge of alternative energy.

"When we first started looking into jatropha eight years ago biodiesel cost more than regular diesel but now that is not the caseat all."

Biodiesel Cambodia sells their fuel for 85 US cents a liter - significantly less than the 5,000 riels ($1.25) that a liter of regulardiesel now costs at the pumps.

"When we started, diesel was only 70 cents a liter. We've gotten much more competitive," Granger said.

The humble jatropha curcas plant is well-known in rural Cambodia. A cottage industry has long existed converting the oilharvested from hedgerows into soap and other products.

According to biofuel experts, Cambodia's soil and climate provide ideal conditions for the commercial cultivation of jatropha.And the government is waiting with open arms.

"Renewable energy has the full support of the government and the Prime Minister," said Samy. "This is for our future: protectthe environment and give electricity to the next generation of Cambodians."

A GLOBAL FOCUS

Cambodia has already caught the attention of major international biofuel companies.

Brian Morgan, marketing and communications manager for D1-BP Fuel Crops, a London-based biofuel company, said they were"actively looking at potential development opportunities in Cambodia." The company currently has extensive operations in India,the Philippines, Thailand, Malaysia and Indonesia.

"We have identified Cambodia as an area of interest for our business, predominately because its soil and climate conditions areideal for cultivating jatropha," Morgan said.

"We also believe that access to suitable land - i.e. that currently remains idle or is of less arable value - makes this a goodpotential choice for future investment."

D1-BP Fuel Crops is confident that biofuels will be a growth market as many governments are actively formulating plans aroundsustainable biofuel.

"The cultivation of jatropha will be an attractive proposition to developing countries to grow their own fuel' and, as a worldleader in the commercial planting of jatropha, D1-BP Fuel Crops are well placed to build relationships with governments and

industry customers to build a sustainable future in biofuels," Morgan said.

Many European countries now have biofuel mandates - when the government stipulates that a certain percentage of diesel soldat the pump must come from renewable sources - and the Kingdom's regional neighbors such as Thailand and South Korea haverecently followed suit, meaning both global and regional demand for biodiesel is only going to increase.

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"Korea has 5.0 percent at the moment and that is going up to 20 percent over the next few years and Thailand is on a 2.0 percentmandate," said Granger.

"They have to find a large land mass with low-priced labor. There are a huge number of investors trying to get it right - to findthe right land and the right deal."

The disadvantage for developed countries now is that they lack land mass and a cheap workforce.

ETHICS OF PRODUCTION LEFT UP TO PRIVATE SECTOR

TRACEY SHELTONSat Samy: Renewable energy has the full support of the governmentand the Prime Minister.

Cambodia currently has no plans for a biofuel mandate as thegovernment is still researching the potential problems with such apolicy.

And while Biodiesel Cambodia is already operating in the Kingdom,albeit still in the early "awareness-raising" stage with a number ofpilot projects underway, the company is not yet licensed to markettheir product commercially.

But it is already selling biodiesel - made from recycled cooking oilsince what few jatropha seeds the Kingdom currently produces are

being used to grow more of the plant - to a select band of supportersincluding the British Embassy.

Globally, biofuels have come under fire for their impact on foodcrops, with critics arguing that turning fertile farmland over to fuelrather than food production will only cause problems, particularly inthe context of spiraling global commodities prices.

The government says it will not allow jatropha to be planted in theKingdom's rice paddies and it is exercising caution in the awarding ofconcessions for biofuels, according to Samy.

But with no government regulations currently in place in Cambodia,whether these guidelines will be observed "comes down to thecompany and their ethics," Granger said.

"We are ethical so we do it our way - cutting down rainforests to growjatropha is not really what you want to be doing," he said. "We don'twant to use land that could be used to grow food crops. It comes

down to the company ethos. There is plenty of suitable landavailable."

D1-BP Fuel Crops say that sustainable development is a key part of its business model, and says that "as the jatropha that wecultivate is on land that is either idle or of lesser arable value, then we don't believe that this competes with land used for foodcrops."

Yet critics argue that to be economical, jatropha must be produced in volume and those who stand to profit most are theprocessors, retailers and middlemen.

Moreover, they say, jatropha is toxic to livestock, weedy and not a good species to use in agro forestry systems.

Although the plant may look promising to biofuel companies as a tree for marginal lands, without added nutrients and moistureonly marginal yields can be expected.

"There are valid concerns [but] ethically and effectively done it has the potential to change the face of Cambodia," said Granger.

Local farmer undercuts petro giantsWritten by Nguon Sovan

Tham Bunhak, 57, operates a small-scale electricity supply business providing power to households in Battrang commune,Mongul Borey district, Banteay Meanchey province.

He said the high price of diesel forced him to convert to growing jatropha curcas to produce oil for his own generators.I have grown jatropha curcas on six hectares of land since early 2007, he said.

I extract about 1,000 liters of jatropha oil to supply my generators each month, which generates between 1,000 to 1,200kilowatt hours a month. I supply roughly 83 households in my commune with electricity.

Bunhak said when he started producing jatropha oil a liter of diesel cost 3,200 riels (80 cents). I set the power price at2,800 riel per kilowatt hour. Now normal diesel costs 4,800 riels but I still charge the same price for my electricity, he said.

Bunhak was also said jatropha oil was a much cleaner buring fuel in his generator than regular diesel.

Energy briefs

8/14/2019 Energy 2008

22/22


IEA chief warns of global oil shortfalls

Written by AFP

Global oil supplies could fall far short of need and expectations in the next 20 years, the International Energy Agency isconcluding based on a vast effort of detective work on production prospects. In an interview with the Wall Street Journalpublished May 22, IEA chief economist Fatih Birol argued that investment is lagging behind expected growth of demand.Consuming countries had to take "emergency action" to increase energy efficiency and develop alternative energies, he said. For

several years the IEA had calculated that supplies would increase to exceed 116 million barrels per day by 2030, from about 87million barrels per day now. But it now estimates that "companies could struggle to break beyond 100 million barrels per dayover the next two decades." This, Birol said, "is a dangerous situation."

Philippines to turn garbage into energy

Written by AFP

The Philippine capital may soon have a power plant that uses thousands of tons of garbage daily as fuel. It will use methanegas produced by rotting rubbish, reduce the city's volume of waste and lessen its dependence on landfills, Metropolitan ManilaDevelopment Authority chief Bayani Fernando said. "Through this project, we are planning to solve the problem of having hugeamounts of garbage and free up space on landfills," said Fernando. Manila, which generates an estimated 10,000 tons of solid

waste a day, would see its garbage volume reduced by as much as 60 percent once the power plant is operational, Fernando said.New life form could turn CO2 into fuel

Written by AFP

An American scientist says he is creating a life form that feeds on climate-ruining carbon dioxide to produce fuel. GeneticistCraig Venter's potentially world-changing "fourth-generation fuel" project follows his work mapping the genetic diversity of theoceans. "We have modest goals of replacing the whole petrochemical industry and becoming a major source of energy," Ventersays. "We think we will have fourth-generation fuels in about 18 months, with CO2 as the fuel stock." Simple organisms can begenetically re-engineered to produce vaccines or octane-based fuels as waste, according to Venter. Biofuel alternatives to oil arethird-generation. The next step is life forms that feed on CO2 and give off fuel such as methane gas as waste, according to Venter."We have 20 million genes which I call the design components of the future," Venter said. "We are limited here only by ourimagination."

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