Cogeneration, also known as combined heat and power (CHP), refers to a group of proven technologies that operate together for the concurrent generation of electricity and useful heat in a process that is generally much more energy-efficient than the separate generation of electricity and useful heat.
The typical method of separate centralized electricity generation and on-site heat generation has a combined efficiency of about 45 percent whereas cogeneration systems can reach efficiency levels of 80 percent.
In the United States, cogeneration has a long history in the industrial sector. Globally, industry sites in the chemicals, metal, oil refining, pulp and paper, and food processing sectors represent more than 80 percent of total global electric CHP capacity.
Cogeneration is widely deployed outside the United States, with Denmark, the Netherlands, and Finland leading the world in cogeneration deployment as a fraction of total national electricity generation.
In 2008, cogeneration accounted for 9 percent of total U.S. electricity generating capacity. A recent study by the Oak Ridge National Laboratory calculated that increasing that share to 20 percent by 2030 would lower U.S. greenhouse gas emissions by 600 million metric tons of CO2 (equivalent to taking 109 million cars off the road) compared to “business as usual.”
Cogeneration is a system of commercially available technologies that decrease total fuel consumption and related GHG emissions by generating both electricity and useful heat from the same fuel input. Cogeneration is often called combined heat and power (CHP), since most cogeneration systems are used to supply electricity and useful heat. However, the heat energy from electricity production can also be used for cooling and other non-heating purposes, so the term “cogeneration” is more inclusive. Cogeneration is a form of local or distributed generation as heat and power production take place at or near the point of consumption. For the same output of useful energy, cogeneration uses far less fuel than does traditional separate heat and power production, which means lower greenhouse gas (GHG) emissions as fossil fuel use is reduced.
While this document focuses on the GHG emission reductions, cogeneration offers other benefits that include:
Reducing other air pollutants (e.g., SO2, NOX, Hg)
Providing on-site electricity generation that is resilient in the face of grid outages thus providing power for critical services in emergencies and avoiding economic losses
Avoiding or deferring investments in new electricity transmission and distribution infrastructure and relieving congestion constraints on existing infrastructure.
Using existing industrial and commercial sites for incremental power generation rather than building new power plant capacity at greenfield sites
The largest potential for increased utilization of cogeneration is in the industrial sector. In the United States, the industrial sector is responsible for approximately one third of the country’s total energy consumption. The industrial sector’s direct GHG emissions account for 20 percent of the U.S. total, and an additional 9 percent of U.S. GHG emissions come from centrally generated electricity consumed in the industrial sector. Direct industrial emissions come from on-site combustion of fossil fuels and from non-energy related process emissions.
Doing as he pleases has worked out pretty well for him. As a young musician torn between the crunch of the Rolling Stones and the lyricism of Bob Dylan, he avoided the fork altogether and forged his own path. Over the course of more than 40 records and hundreds of performances that date to the mid-’60s, he has backed Rick James, jammed with Willie Nelson, dressed up with Devo, rocked with Pearl Jam and traded licks with Dylan. Some of it has been terrible, much of it remarkable. He has made movies by himself and with Jim Jarmusch and Jonathan Demme. He called out Richard Nixon, praised Ronald Reagan and made fun of the second Bush. And he has little interest in how all of that was received. “I didn’t care and still don’t,” he said, then went on: “I experimented, I tried things, I learned things, I know more about all of that than I did before.”
His longtime manager and friend Elliot Roberts describes Young as “always willing to roll the dice and lose” and says: “He has no problem with failure as long as he is doing work he is happy with. Whether it ends up as a win or loss on a consumer level is not as much of an interest to him as one might think.”
His records don’t sell as much as they used to, but while many of his contemporaries are wanly aping their past, Young takes to the stage surrounded by mystery and expectation. And now he’s doing so again on tour with Crazy Horse, a thunderous, messy concoction of a band that has backed him over the years and been a source of constancy amid all the hard turns in his career. “We’ve got two new albums, so we’re not an oldies act, and we’re relevant because we’re playing these new songs, so that gives us something to stand on,” he said.
It’s safe to predict that people will come, critics will rave and a 66-year-old man afflicted with epilepsy and serious back problems (and who has had polio and suffered an aneurysm) will rock hard enough to become a time machine back to when music was ecstatic and ill considered.
Dylan, in a note his manager passed to me, says it’s clear why Young has not tumbled into musical dotage: “An artist like Neil always has the upper hand,” he says. “It’s the pop world that has to make adjustments. All the conventions of the pop world are only temporary and carry no weight. It’s basically two different things that have nothing to do with each other.”
“Waging Heavy Peace” faithfully catalogs the disappointment Young has produced in those around him, but he expresses little regret today. “I work for the muse,” he said. When he swerved into techno and country after Geffen Records signed him in the early ’80s, Young was accused of making “unrepresentative” music. He responded by taking a pay cut of half a million dollars for each of his next three albums. “I’m not here to sell things. That’s what other people do, I’m creating them. If it doesn’t work out, I’m sorry; I’m just doing what I do. You hired me to do what I do, not what you do. As long as people don’t tell me what to do, there will be no problem.”
Ben Young’s Coastside egg farm is a booming success despite his physical limitations. Ben, son of legendary rocker Neil Young, was born with cerebral palsy but started operating a chicken business on his family ranch on Skyline Boulevard in Calif. at age 21. Now, over a decade later, the local farm hero is considering expanding and taking his love for chickens and the eggs they produce to a new level.
Young has 200 hens (all named Georgette) and they lay about 60 eggs per day, which is considered a relatively low production. However, Young and his business manager Dustin Cline are currently looking into ways to increase their productivity, and given all he’s overcome already, we’re not betting against him!
The business has grown at a very fast rate, largely due to sales at the local farmers market. Funky and colorful designed egg cartons have Young’s face up in the top left corner, smiling proudly, as the branded graphic for Ben’s Coastside Farms.
The farm was certified organic in 2002, and Young says he picked chicks because they are fairly low maintenance. “The whole idea of nurturing animals that can give you something in return without having to slaughter them, just works for me. There is a very (strong bond) between people on the farm and the animals on the farm. Baby chicks are so cute and eggs are one of my favorite foods,” he tells Half Moon Bay Review.
He goes on to say, “These are living breathing creatures that are supplying us with sustenance. We should treat them with respect. Small, local farmers take pride in their animals and their crops. They pay more attention to nature and (that) has a positive impact on whatever the end product is. Which is very important, since the end product will end up in your body.”
Ben’s singer/songwriter father is, of course, also supportive of farmers carrying the torch with his longtime involvement with Farm Aid. So, whether Ben has inherited these points of view from his dad, or if the countless benefits of eating farm fresh eggs appeal to him naturally, when it come to minding the farm with reverence, it’s like father, like son.
The slump is surprising in light of the sluggish economy—hot dogs are usually considered the ideal recession foodstuff.
As the U.S. palate broadens. “I would be willing to bet that more Americans, and especially younger Americans, now eat nachos or tacos than hot dogs,” he says. But what about the many outlets that serve nachos on hot dogs? “That’s just proof of the desperate state of the hot dog!” he says. “That’s like a middle-aged actress who gets Botox and breast implants to try to stay relevant.”
Illustration: Jennifer Daniel; Hot Dog: Getty; Guinness World Records
Netflix is the world's largest online movie rental service with more than 23 million service subscribers. The platform offers instant streaming video as well as DVD rentals by mail.
Members largely pay $7.99 for the popular monthly subscription to stream unlimited movies and TV shows. Netflix streaming is also available on Microsoft's Xbox 360, Nintendo Wii and Sony PS3 consoles. The seamless service is also available on more than 700 devices including Blu-ray disc players, Internet-connected televisions, home theater systems, and other Internet-supported video players.
The Internet movie service split its popular $9.99 unlimited streaming and mail-in DVD rental package into two separate services in 2011. The company offered unlimited Internet streaming for $7.99 and DVD rentals for $7.99. This meant a 60% price hike for customers. Netflix rebranded the unlimited DVD service Qwikster. Those plans were quickly called off after Netflix lost 800,000 customers in the immediate quarter. The 50% drop in Netflix stock after the price hike was dramatic from its 52-week high of $304. It currently ranges from $62 to $70.
The company reports recent number gains and overall growth. Netflix was founded in 1997 by current CEO Reed Hastings and Marc Randolph. Its corporate offices are in Los Gatos, Calif.
Source: netflix on Freebase, licensed under CC-BY
UPDATED: There will be no second season of pre-historic drama Terra Novaon Fox. The network’s brass just made the decision after weeks of exploring potential Season 2 tweaks to the series set 85 million years in the past. Fox had to make the decision early so the show could make a fall return if renewed. Despite its pedigree — produced by Steven Spielberg and Peter Chernin – Terra Nova did not become a runaway hit, but its decent ratings, coupled with strong international sales for sibling 20th Century Fox TV, which produces the series, were keeping renewal hopes alive. 20th TV now plans to shop Terra Nova, starring Jason O’Mara and Stephen Lang, to other networks. At TCA in January, Fox entertainment president Kevin Reilly was non-committal when asked about the future of the series. “If this is all we make (of Terra Nova), we made money on it, the studio made money on it, and it seems to have resonated with the family audience,” he said. “There is a show, which if we are to bring back, there’s an audience there. But creatively, the show was hunting (for its identity). If we had more holes in our network, we’d be thrilled to lock that right in.”
It is interesting that from what I hear, it was Reilly who made the call to cancel Terra Nova, while it was his boss, Peter Rice, who championed and bought the project exactly two years ago. With House ending its run and Terra Nova gone, Fox has three more dramas on the bubble: two with slim chances of renewal — midseason entries Alcatraz and The Finder — and Fringe, which could clinch a 13-episode pickup if the budget can be pared down significantly. The new Kiefer Sutherland series Touch premieres later this month.
With its elaborate sets (some 259 of them built in Australia) and post-production, it took 16 months for Terra Nova to get on the air after first announced at Fox’s 2010 upfront. It was the first series order for Chernin’s then-recently launched production company, which had several series commitments at Fox built into its deal. (Because of the long lead time for Terra Nova, it got on the air this past fall along with 2 other Chernin Entertainment series, breakout comedy hit New Girl and animated comedy Allen Gregory, which has been canceled). Terra Nova had its share of issues during production of its first 13-episode season. For starters, Craig Silverstein, who co-wrote the pilot script with British scribe Kelly Marcel, was not available because his CW pilot Nikita was picked up to series. Terra Nova recruited Brennan Braga as showrunner. Rene Echevarria was then brought in to run the show with him, the series went through 2 writing staffs and took longer to cast than originally planned, incurring a $660,000 charge for delaying the start of production. In the end, Terra Nova, whose budget was $14 million for the two-hour pilot and about $4 million for the subsequent episodes, not including Australian tax breaks, premiered last fall with one of Fox’s most hyped launches. It was a steady but modestly-rated performer and a big DVR gainer. The series two-hour season finale drew a 2.2/6 in adults 18-49 and 7.2 million viewers, in line with the show’s season average, which wasn’t big enough to seal a renewal but not too small to warrant an automatic cancellation.
Then the waiting game began.
20th TV and the Terra Nova producers proactively began approaching potential showrunner and senior producer level writers about joining the series for next season in order to elevate the writing on the show. The network was pitched several potential new executive producers as well as Season 2 ideas. Reilly, who I hear was never a big fan of Terra Nova, didn’t spark to any of the plans. The studio’s last-ditch effort was on Friday, when another prospective showrunner was taken to the network to meet wit Reilly. Despite the meeting reportedly going well, Reilly today decided to pull the plug. While not unexpected, the cancellation of a series that hails from such big auspices and is a moneymaker for Fox’s sister studio, was a surprise.
A powerful electric motor and the ability to bag or mulch give the Black & Decker Lawn Hog Electric Mower the versatility to match your mowing style. The large cutting deck adjusts easily to your preferred grass height, and a special comfort grip handle can be adjusted to match the perfect mowing posture for you. Very easy to begin to use electric lawn mower. It comes all assembled. Electric lawn mower is environmentally friendly and maintenance free.
Black & Decker MM1800 18-Inch 12 amp Corded Electric Lawn Mower
Last year’s shortage and debate about the growing media’s sustainability focused a lot of attention on peat moss. Paul Short reports on responsible peat management, demanding quality products and what growers can expect this year.
November 2, 2012
Peat bogs provide habitat for a number of unique plants, including the pitcher plant (Sarracenia purpurea).
While unfavorable weather conditions in Europe have affected the peat supply, the U.S. and most of Canada can expect improvements over last year.
In response to the claims that peat is not a sustainable media, more than 75 percent of peat producers are within the VeriFlora Certification Standard for Responsible Peatland Management certification scheme.
GG: What is the state of the peat moss industry right now? Short: I would characterize it as stable. There have been some acquisitions — most notably SunGro’s acquisition of Fafard soilless potting mixes — so there has been a bit of consolidation. I think realistically the industry is a reflection of the health of the horticulture industry over all. I say that in the sense that the same forces that are at play with the economies in Canada and the U.S. also have an effect on the purchasing decisions of consumers. GG: Has the debate about whether peat moss is sustainable continued? Short: The market continues to be interested in the responsible management of the peat lands, not only in Canada but throughout the U.S. and worldwide to some extent. Our industry is engaged with federal-provincial and, where appropriate, state industries to promote and strengthen the management of these resources. Questions still continue to be raised by our purchasers for a greater assurance that we are managing not only our businesses but the resource itself. This is happening less and less because more than 75 percent of our producers are now within the VeriFlora Certification Standard for Responsible Peatland Management certification scheme. This gives greater assurances from an outside agency that we are complying with vigorous, third-party standards. It’s not just our word. Now there is a third party out there looking at our operations and validating them based on what we feel are some very stringent criteria. GG: Do you think the third-party validation is helping to promote the message of peat moss as a sustainable material? Are growers catching on to this message? Short: It’s not just the third party; we are taking some action steps ourselves. The information on our environmental life cycle and our social economic lifecycle assessment to consumers has increased the information about our industry and our products. The distribution of the lifecycle assessment information has also promoted an increased curiosity in the market of the values of other growing media materials related to their environmental, social and economic impact.
Developments in growing media may not be as exciting as, say, those in technology, but growing media plays a significant role in crop production. It is an important purchase for greenhouse operators, and as a result of changing market demands, there are some significant trends for growing media that you should know. Here are the most important ones:
One of the most important trends has been the change to larger-format packaging. Many large and medium-sized growers see the need for labor-saving machinery, reduced worker injuries and faster processing methods. Large, mega-bale packaging reduces handling of materials, storage requirements, labor and plastic waste, which translates to an overall reduction of costs. Whether it is a loose-fill package or compressed bales, growers are moving to larger-size packaging.
For loose fill needs, 60 to 80 cu. ft. bulk bags have replaced the majority of the 2.8 cu. ft. loose-fill bags, except for germination mixes, where growers apply a smaller volume of growing medium. For general-purpose mixes, requests for large 110 to 135 cu. ft. mega bales are on the rise. While there is an investment required for machinery to process and break mega bales, the benefits far outweigh the costs. Small packaging requires workers to pick up, move, handle and clean-up the media. There are more labor costs and a greater potential for lifting injuries.
With a mega-bale breaker, one forklift operator can load the equipment, process the mega bale and clean-up. There is less plastic waste with a mega-bale than with the equivalent volume of smaller, 3.8 cu. ft. bales. Another bonus is that most mega-bale breakers process and fluff growing media faster and more uniformly. Uniform fluffing of growing medium results in consistent yields, consistent filling of pots and trays and uniform physical properties in the media from one container to the next.
When you think of growing your own food, you probably think of endless rows of corn, the middle of nowhere, people in overalls and dial-up internet. You're also probably thinking about hours spent planting seeds, mulching leaves and plowing soil.
But there's a better way to harvest your own crops that works especially well for those of use living in urban areas (with high-speed internet and no room to drive a tractor). It's known as square foot gardening.
Square foot gardening is a variation on what's known as the French Intensive or Biointensive method of farming. Mel Bartholomew helped popularize the "square foot" name and even has a book on the subject.
The concept is pretty simple, and you don't need a book or a change of national status to get a highly productive garden going. We'll walk you through the basic steps to getting started on your own tiny plot of land. This article is a wiki. Got extra advice? Log in and add it.
Leading by Example 2.0: How Information and Communication Technologies Help Achieve Federal Sustainability Goals
Center for Climate and Energy Solutions
Many people contributed to the development of the underlying case studies of federal agencies use of ICT that were published separately in September 2012 and this follow-up report. We want to express our appreciation to the members of our Technical Advisory Panel: Gwen Davidow (World Environment Center), Daniel Fiorino (American University), Neal Elliott and Ethan Rogers (American Council for an Energy-Efficient Economy), Stephen Harper (Intel), Christopher Hankin (Information Technology Industry Council), Larry Plumb (Verizon) and Rodney Sobin (Alliance to Save Energy) for their contributions throughout this project.
In preparing this report, we received input and comments from agency staff and company representatives including: Gavin Bloch (GSA), Marny Burke (GSA), Bart Bush (GSA), David Crane (Autodesk), Edan Dionne (IBM), Anirudhha Deodhar (Autodesk), James Galvin (DoD), Brian Gilligan (GSA), Daniel Gore (Coast Guard), Bill Griffiths (who recently departed the Smithsonian Institution) Rosalind Grymes (NASA Ames), Nate Hurst (HP), Ashley Keating (Defense Connect Online), Karl Kurz (DISA), Jesse Maestas (Coast Guard), Mike Murtha (Defense Connect Online), Giap Ngo (DISA), Robert Obenreder (GSA), Meredith Parker (GSA), Kevin Powell (GSA), Derrick Rogers (GSA), Mark Storay (GSA), Emma Stewart (Autodesk), Michael Terrell (Google), Cargie Vaughn (Smithsonian Institution) Kevin Vaughn (Schneider Electric), and Krisstina Wilmoth
In addition, we would like to thank Jay Dietrich (IBM), Eleni Reed (Public Buildings Service/GSA), and Chris Tremper (Federal Energy Management Program) for their review of relevant sections of this report.
We also want to thank the Digital Energy and Sustainability Solutions Campaign (DESSC) for providing financial support for this project.
By any measure, the federal government has an enormous impact on the economy and the environment. Federal agencies:
Own or operate 660,000 vehicles;
Own or manage approximately 400,000 buildings; and
Employ 1.8 million workers.
The federal government also paid over $26 billion in fuel and electricity bills in 20111 In 2011, its direct and indirect greenhouse emissions were responsible for 1.8 percent of the nation’s total.2
As the nation’s largest landlord, employer, fleet operator, and purchaser of goods and services, the federal government has the opportunity, if not the responsibility, to lead by example in moving our country in a more economically efficient and environmentally sustainable direction. Faced with tightening budgets, agencies are looking for new ways to reduce costs and increase productivity, while at the same time meeting a growing list of congressional and executive mandates to consume less energy and reduce greenhouse gas emissions.
Cool Site, I hope they can really save us this much money! READ MORE!
we contend that the community garden has never been more important in the Australian city. For those who till the soil within them there is fresh produce to eat as well as a raft of social and physical well-being outcomes. Passers-by benefit, as does the environment at large. In this paper we explore these benefits – initially from the international literature and then using our research on a specific community garden project in a large high-rise public housing estate in Sydney’s inner west. Initiated as part of an urban renewal program designed to ameliorate ongoing social problems on the estate, these community gardens provided an opportunity for residents from diverse cultural backgrounds to come together for the first time. The research explored the impact that the community garden had on the lives of tenants of the estate. Here we focus on the physical and psychological health and well-being benefits. The broader results of the study, including suggestions for better management of community gardens in public housing estates, are presented in Bartolomei et al, 2003.
Gardens are increasingly recognised and valued for their therapeutic and restorative qualities (Gerlach-Spriggs et al, 1998; Kaplan, 1995; Francis, 1987). Patients in health care facilities benefit from participating in gardening activities, even with relatively little physical exertion (Gerlach-Spriggs et al, 1998). The research work of Roger Ulrich has substantiated the physical benefits hospital patients realise from just being able to view garden areas. These outcomes are measurable in reduced blood pressure, diminished requirements for pain relief, fewer complaints to nursing staff and decreased time of recuperation (Ulrich, 1984). Community gardens have also become a means of expressing healing in communities affected by the AIDS epidemic (Cooper Marcus et al, 2001).
"Abstract Community workers, public health officials and urban planners are increasingly concerned about declining levels of physical and psychological health of city dwellers. The reasons behind this alarming trend are complex. Much of the blame is being leveled at factors such as car dependency, long commuter distances, polluted and unsafe environments – all of which make it difficult to undertake the physical exercise needed to combat many serious diseases. Poor nutrition – particularly over consumption of high density foods – is another significant factor in the equation, especially in disadvantaged communities where fresh produce is often hard to find and expensive. Built environment and health professionals are gradually realising that they need to work together to better understand these issues if workable solutions are to be found. This is the background for our paper which discusses the role of community gardens in building healthy and sustainable communities. Focusing on a large high-rise public housing estate in Sydney’s inner west, the community garden scheme studied was part of an urban renewal program designed to ameliorate ongoing social problems on the estate. Our research found that this project resulted in a broad range of positive physical and psychological well-being outcomes for the public housing tenants. These included providing opportunities for individuals to relax, undertake physical activity, socialise and mix with neighbors, sharing across culturally different backgrounds and religions. The gardens also afforded opportunities to learn about horticulture and sustainable environmental practices, such as composting and recycling, as well as being an important source of low-cost fresh produce for a healthy diet.
“Preventing obesity… means making changes in the transport, urban planning, agriculture, education and health sectors…”
This research confirms that community gardens can play a significant role in enhancing the physical, emotional and spiritual well-being necessary to build healthy and socially sustainable communities. The importance of community gardens to Australian city dwellers is likely to grow as the trend for consolidated and densely populated urban areas increases. Introduction Governments are increasingly concerned about rising rates of serious physical and psychological conditions—such as cancer, heart disease, diabetes, asthma, depression and emotional stress—in city populations across the globe. Many of these illnesses are exacerbated by obesity which is, in turn, linked to low levels of physical activity and poor eating habits – particularly the over consumption of fats and sugar and insufficient intake of fresh vegetables and fruit (Begg et al, 2007, pp. 81-83; p. 87). Medical interventions are limited in tackling these issues as they are related to a variety of complex factors (Dixon and Broom, 2007). It has been suggested that such multifaceted problems necessitate “…action in many areas. Preventing obesity… means making changes in the transport, urban planning, agriculture, education and health sectors, for starters” (Sweet, 2007, p. 16). Urban lifestyles with their characteristic car dependency, long commuter distances from home to work and time pressures can make daily healthy habits difficult (Thompson, 2007; Mead et al, 2006; Frumkin et al, 2004). And even where individuals might have the time to undertake exercise, heavily trafficked, polluted and often unsafe and unpleasant environments dissuade many from doing so. Eating fresh food, particularly fruit and vegetables, can also be tricky. It can be difficult to find, is often expensive and then requires cooking skills and preparation time. This is particularly problematic for those from lower socio-economic groups. Urban consolidation is increasingly seen as the best way to overcome the toxic ill-health effects of traditional suburban environments. And while there are significant benefits including ready access to public transport and reduced commuting times, for Australians the loss of the traditional backyard has come at a cost to health. Not only is this a safe place for active childrens play, it is where many families grow fresh fruit and vegetables, as well as ornamental flowers and shrubs. Gardening involves regular and enjoyable physical activity and when the work is done, the area is an ideal place for recreation with friends and relatives. Backyards are also where domestic pets, which bring many recognized health benefits to humans (Jackson, 2007), are kept and nurtured.
The move to consolidated cities is well underway in Australia, particularly in Sydney, Melbourne and Brisbane, with this trend increasing (Randolph, 2006). In Sydney, for example, medium density housing is set to be 70 per cent of all new dwelling construction over the next 30 years (Bunker et al, 2005). This has implications for the provision of open space as traditional residential lifestyles undergo a dramatic shift away from the historical focus on, and importance of, the backyard for children’s play and gardening activities. Accordingly, we contend that the community garden has never been more important in the Australian city. For those who till the soil within them there is fresh produce to eat as well as a raft of social and physical well-being outcomes. Passers-by benefit, as does the environment at large. In this paper we explore these benefits – initially from the international literature and then using our research on a specific community garden project in a large high-rise public housing estate in Sydney’s inner west. Initiated as part of an urban renewal program designed to ameliorate ongoing social problems on the estate, these community gardens provided an opportunity for residents from diverse cultural backgrounds to come together for the first time. The research explored the impact that the community garden had on the lives of tenants of the estate. Here we focus on the physical and psychological health and well-being benefits. The broader results of the study, including suggestions for better management of community gardens in public housing estates, are presented in Bartolomei et al, 2003. Origins of Community Gardens Community gardens have a long history dating back as far 100BC in the UK and the small Celtic fields of Lands End, Cornwall, which are still in use today. During the reign of Elizabeth I (1558-1603), the manorial ‘common’ lands were enclosed and ‘commoners’ were compensated with ‘allotments’ of land attached to tenant cottages. But it was not until 1908 that the Allotment Act of Parliament established a legal requirement for local authorities to meet community demand for gardens (Humphreys, 1996). In the USA a program of allotment gardens began in the late 1890s in response to the needs of families devastated by the effects of economic depression. Not long after, John Dewey promoted gardens in schools as part of his educational reforms. It is estimated that by 1910 there were 80,000 such gardens across the USA where academic work was connected with practical experience (Fang, 1995). During World War I, in both the UK and USA, severe food shortages again triggered the need for community gardens. In America this involved some 20 million gardeners and produced 44 per cent of fresh vegetables during the war years (Warner, 1987). Community Gardens: Health and Well-Being Benefits Community gardens around the world have been credited with an array of beneficial outcomes for participants. These include local political activism; environmental education where participants learn about sustainable urban agriculture, biodiversity and improved waste management; and opportunities for training, employment and local economic development in the form of markets and food co- operatives (Keeney, 2000). Nevertheless, the most significant and widely reported benefits are associated with individual and community health and well-being. Gardens require physical exertion, provide relief from stress and engender creativity, participation with nature and a sense of stewardship for the land (Francis and Hester, 1990). Individuals reap direct benefits from the physical activity involved in gardening and having access to fresh, cheap produce on a daily basis. A community garden project in Denver reported health improvements for the more than 25,000 inner-city residents who participate each year. “These urban oases foster neighborhood ties and promote physical, social, and mental well-being. By providing access to fresh organic produce, opportunities for physical activity, contact with nature, and neighborhood meeting places, these gardens promote physical and mental health in communities with diverse residents” (Prevention Institute, 2004, p. 21). Specific health benefits from increased physical activity and consumption of fresh vegetables and fruits have been documented for community gardeners in California (Twiss et al, 2000, in Prevention Institute, 2004, p. 21). Vegetable consumption was shown to be significantly higher for those participating in a garden in Philadelphia when compared with non-gardeners (Blair et al, 1991 in Prevention Institute, 2004, p. 23). Even the promise of better health is a motivation for involvement in community gardening activities (Armstrong, 2000 in Prevention Institute, 2004, p. 21). Psychologically there is satisfaction that comes from the joy of a successful harvest (Kaplan, 1973). Gardeners report decreased stress as well as “the feeling of a spiritual connection with ‘Mother Earth’ ” (Prevention Institute, 2004, p. 23). Sharing of food from the garden, as well as favourite recipes, contributes to relationship building which in turn, can lead to community cohesion and enhanced levels of acceptance and belonging. The latter is related to social capital, an important aspect of well-being not so widely reported as the more tangible physical health benefits of community gardens. Social capital “relates to the resources available within communities in networks of mutual support, reciprocity, and trust” (Edwards, 2004, p. 5). These networks facilitate cooperation among individuals and groups, which is essential for the functioning of society (Productivity Commission 2003, p. viii). The need to enhance social capital is particularly important in low-income and ethnically diverse neighbourhoods. Community gardens have brought about significant benefits to participants from disadvantaged neighbourhoods. A plentiful harvest of cheap fresh fruit and vegetables meant that poor residents were able to provide for their own needs and those of others in a New York garden (Trust for Public Land, 2001, p. 14). A substantial number of community gardens have been developed in response to the needs of new immigrant families in disadvantaged areas. Often prompted by a desire to grow traditional foods in culturally familiar and appropriate ways, such initiatives have resulted in enhanced social capital for the community. In East London, for example, Bangladeshi women developed plots in the grounds of their housing estate (Forbes, 2001). Other immigrant groups have established community gardens as a way of reconnecting with their cultural heritage, as well as a practical means of supplementing their food supply (Warner, 1987). Community gardens have been beneficial for sharing experiences of upheaval, such as fleeing one’s country as a refugee (Cooper Marcus et al, 2001). In the public housing context of a dense urban neighbourhood, gardens can engender a sense of ownership and connection to what would otherwise be undifferentiated public space (Alexander, 1977; Cooper Marcus et al, 1990)."
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Buying on the margins sets prices in commodities markets.
The margin is the very highest someone is willing to stretch up and pay to get that supply. The last barrel of oil; the final pound of copper. Everyone pays what the marginal buyer will pay.
The U.S. natural gas market may be on the verge of upping its marginal buying—A LOT.
And it’s not Liquid Natural Gas-LNG. It’s to an unexpected source of demand: Mexico.
Mexican imports of U.S. gas have skyrocketed 92% since 2008. And with export capacity projected to grow to over 7 billion cubic feet per day (Bcf/d), Mexico could start taking 10% of U.S. production—in a very short time frame, with very low capital costs compared to the LNG boom unfolding.
There is a lot less risk, and a lot less cost in getting huge natural gas exports to Mexico, compared to LNG—and the volumes may be enough to move margins in the North American market.
At least six new pipeline projects are now on the books, aimed at sending gas southward.
In Part 1 of this two-part series, I’ll explain what’s happening now, and what potential impact this extra demand could have on natural gas prices. In Part II, I And which producers will benefit most?
To find out, we take a look below at exactly what’s happening in Mexico, what’s getting built, and who’s positioned to take advantage.
The Not-So-Slow Death of a Gas Producer
Mexico used to have a pretty decent gas industry.
Between 1990 and 2008, the nation’s natgas production grew steadily, nearly doubling over the two decades.
The bulk of this output comes from national oil and gas company Petroleos Mexicanos, or Pemex. With strong natural gas prices between 2003 and 2008, Pemex stepped up its drilling, growing gas production from 4.5 Bcf/d to nearly 7.5 Bcf/d.
But with the collapse in gas prices in early 2008, that changed. Pemex stopped a lot of its gas drilling activity. Instead, the Mexican government made a strategic decision to meet domestic demand by importing now-cheap gas.
Since that time, Pemex’s gas production has fallen steadily, by about 15% from 2008 levels.
The lack of investment in the gas sector has also had a big effect on Mexican reserves. In the late 1990s, the nation had more than 60 Tcf of proven reserves. Today, gas in the ground has fallen off a cliff, with only about 17 Tcf proven reserves remaining.
At the same time as production has been falling, Mexico’s gas demand is ramping up.
Gas consumption across the country has risen 160% since 1990 to 2.36 Tcf per year. Since 2007—while domestic production has been nose-diving—Mexico’s gas use has jumped 16.7%.
Much of the rise in demand has been driven by fuel-switching. In 2000, only 20% of Mexican power generation was fueled by natural gas. But by 2007, natgas use increased to account for 50% of power output. Largely displacing oil-fired generation.
On the back of this rising demand, Mexico’s natgas supply-demand balance is—for the first-time ever—near deficit. Current gas usage amounts to nearly 6.5 Bcf/d, and Pemex is now producing less than that.
The Switch is On
Faced with a supply short-fall, Mexican natgas imports have been on a tear.
Between 2003 and 2007, Mexico was bringing in between 350 and 400 Bcf a year of imported gas. But since gas got cheap in 2008, imports have jumped 92%. Total imports hit 767 Bcf in 2012.
Overall, imported gas now accounts for about 30% of total Mexican supply. The majority coming through pipeline feed from the U.S. Only about 20% is supplied via LNG.
Mexico is now importing about 2.1 Bcf/d. Or about 3% of total U.S. gas production. Numbers that are starting to get significant.
The really interesting part of this story is the growth potential.
The switch from oil- to gas-fired power generation is continuing across Mexico. Just this month, gas infrastructure providers GDF SUEZ Mexico and GE Energy Financial Services announced they will extend their Mayakan pipeline into the Yucatan Peninsula—underpinned by a 300 MMcf/d gas-supply contract with Mexican electric utility CFE, who are switching power plants in the Yucatan to gas generation.
A slate of other gas-fired projects are on the books, particularly in northern Mexico. Overall, the nation is looking to add 28 gigawatts of new generating capacity.
With all this activity, the national Secretaría de Energía forcasts that Mexican gas demand will grow 3.3% annually through 2016.
The Northern Natgas Neighbor
For gas-hungry Mexico, the collapse of U.S. natural gas prices couldn’t have been better-timed.
Cheap natgas from abundant shale production in the southern states has provided a ready source of imports. What’s more, a good deal of pipeline infrastructure is already in place. This pipe used to bring Mexican gas to U.S. consumers—but increasingly flows have been reversed to feed Mexico’s demand.
Mexican purchases of U.S. gas have been driven by pricing. Between 2000 and 2004—with low natgas prices prevailing—Mexico’s imports from the U.S. jumped 10-fold, from 4 Bcf per month to 40 Bcf per month.
Import growth slacked off with the high prices of 2005 through 2008. But as of 2010, imports are on the rise again. In March 2010, Mexco imported 20.7 Bcf. By October 2012, imports hit a record 60.5 Bcf.
The numbers imply that Mexico’s peak demand for U.S. gas is currently something like 1.95 Bcf/d. And there’s room for that to grow. Total U.S. export capacity to Mexico was estimated at 3.8 Bcf/d in 2012.
The really interesting thing is that some of the biggest players in U.S. gas transmission are betting Mexican demand will rise well beyond current export capacity.
Major pipeline operator El Paso Natural Gas recently commissioned an expansion of export capacity at its Wilcox Lateral transmission site at the eastern Arizona/Mexico border. The upgrade added 0.185 Bcf/d of gas throughput.
At least five other similar projects are on the books across Arizona and Texas. All told, these could add up to 3.3 Bcf/d of additional gas export capacity to Mexico. Taking total capacity to more than 7 Bcf/d.
What Does This Mean for Prices?
The question then becomes: what would increased exports mean for gas prices?
At current peak demand levels of 1.95 Bcf/d, Mexico is taking about 3% of total marketed U.S. gas (about 69 Bcf/d as of March 2013).
There is some evidence that this demand is already pushing up prices.
In 2012, Mexican buyers of U.S. gas paid an average of $2.94/Mcf. Considerably higher than the price at many trading hubs near in the southern U.S.
Mexican export prices were 7.3% higher than the average Henry Hub price for 2012. The premium to U.S. hubs near the Mexican border was eve larger. Exported gas prices were 8.9% higher than 2012 average prices at Houston Ship Channel, Texas. And 10.5% higher than the El Paso Permian hub on the Texas/New Mexico border.
It thus appears that Mexican consumers are willing to pay more than U.S. buyers to secure supply—the marginal price is higher in that region.
And that’s at today’s export levels. If existing export capacity of 3.8 Bcf/d is filled as Mexico takes more gas, we’re talking about 5.5% of U.S. production heading south. And if currently-slated expansion projects come online on top of that, we could see over 10% of current U.S. supply going to Mexico. Then the marginal buyer could impact prices outside that region.
All in, Mexico could create an extra 5 bcf/d demand in the coming three years. As context, an extra 5 bcf/d demand from the power sector in 2012 sent natural gas prices doubling in the US from $2-$4/mcf in one year.
Watch for Part II of this article, where I look at which producers are perfectly positioned to sell gas into the Mexican grid and reap the benefits of this surging market. I’ll also reveal my surprising research involving digging into back-room filings on proposed new export projects to Mexico… filings that unmask shell companies and mysterious partners in this multi-billion dollar export opportunity. You won’t want to miss it.
- Dave Forest
Contributing Editor to Oil and Gas Investments Bulletin