US – China Trade War Over Solar Panels

Trade wars initiated by trade sanctions are nothing new. In fact they happen in many industries, especially those that are highly competitive. But it may be a surprise to learn that a trade war over solar panels may be about to begin, over potential sanctions put on China imports. What is already happening in many other industries may bleed over into the renewable energy business, and this could have severe consequences on US customers who want to adopt a green energy system and install solar panels, and may affect a lot of jobs.

It all started when SolarWorld, a German based company operating in the US, filed a complaint with the trade commission on behalf of all the US based solar panel manufacturers. The complaint said that China manufacturers were getting major subsidies from their government and dumping these panels in the US at a much lower price, so that US companies couldn’t compete.

This isn’t a new story, and it’s something that happens all the time in all sorts of industries. Trade is governed by a series of treaties, and one stipulation says that while a manufacturer in one country can sell its goods in another country, if that company gets an unfair advantage, such as having large government grants, then it’s unfair to the companies in the second country who do not have that advantage. That’s when a complaint is made, and when trade tariffs are added. Any time an imported product, such as lumber wood, food, etc, has a special tax added onto it when it comes into the country, it’s usually because of these trade sanctions.

Here, solar panels have so far been clear of sanctions, until now. The government will need to review the complaint and make a decision. Either it’s not true, and everything will stay as it is, or Chinese companies are getting an unfair advantage, in which case the rules of the game may change. But what does it mean for US customers? Well, it means China based solar panels will suddenly raise in price, for a start. So higher prices are clearly on the horizon, which is obviously bad news. However, the reason for these trade sanctions is that without them, US companies couldn’t compete, which means they might go out of business, and a lot of people may lose their jobs. So with these higher prices, you may see companies stay in business. In fact, what often happens is that they now get room to grow, and local employment goes up. So it’s a double edged sword.

As you can imagine, the possibility of trade sanctions is a very hot topic, and a lot of people are upset with what SolarWorld did. There’s people and companies arguing on both sides of the fence, and ultimately it’s the government that will need to make a decision in this case. It could take a while however, a few years in fact, but there’s little doubt that this situation will not go away until a final decision is made.

Jinko Solar Jig

A solar panel maker which was targeted by violent protests over pollution from one of its factories in eastern China recently apologized and says that it will do what is necessary to clean it up. Jinko Solar Holding Co., which is the parent company of the factory in Haining city west of Shanghai, said that the first round of tests showed pollutants could have spilled into a nearby river.

The cops detained some twenty people after hundreds protested last week, some storming the factory compound and turning over cars. The fuzz said that the factory had failed to address other environmental complaints and that the protests followed mass fish deaths in late August.

Jinko Solar, whose shares are listed on the NYSE, says that the factory’s production was suspended though could likely resume within only a few days.

“The company will take all necessary steps to ensure that it is in compliance with all environmental rules and regulations. Any deficiencies in environmental protection uncovered will be immediately remedied…”

The Haining demonstration does well in reflecting the nasty side of clean energy. While the use of solar power may reduce the need for burning heavily polluting coal and other fossil fuels, the process of making photovoltaic cells utilizes various chemicals and materials that can also be toxic. The protests in Haining are the latest increasingly bold public reactions to environmental concerns after three decades of laxly regulated industrialization.

Protests in rural areas and smaller cities are often quashed or ignored. However, those in and near big cities like Shanghai appear to be having influence on leaders who have pledged to deliver an increasingly sustainable, healthy lifestyle along with job-creating growth.

Only last month, a protest by 12,000 residents in the northeastern port city of Dalian against a chemical plant drew a pledge by local officials to relocate the plant. Storm waves breached a dike who was guarding the plant, raising fright in the name of flood waters releasing toxic chemicals. Similar protests in 2007 in Xiamen was also successful. Then, down in Shanghai, the authorities suspended operations at one of the world’s biggest lead-acid battery plants, run by the United States-firm Johnson Controls Inc. after residents living in an industrial zone complained that the lead levels in dozens of children were many times above the legal limit. The firm says that it didn’t believe its factory was the cause of any unsafe lead emissions.

The city government reported on Tuesday that seven of seventeen lead-acid battery plants in the city of 23 million were ordered to stop production due to excessive lead emissions. Lead poisoning may hurt the nervous, muscular and reproductive systems. Children are especially at risk to irreversible damage, especially from low exposure levels. Officials even said that the city was expanding the tests to include even more children.

In the meantime, Shanghai’s Jinshan District, the site of a massive petrochemicals zone, says it had shut down 75 firms because of health risks from dangerous chemicals in a six-month safety campaign.

China Cracking Down on Gutter Oil

Police in China have detained 32 people in a nationwide crackdown on “gutter oil“, or illegally recycled old kitchen oil. The campaign is part of an attempt to clean up China’s food safety record following several scandals, such as the deadly infant formula and pork tainted with clenbuterol, a forbidden chemical used to make pork leaner. The Ministry of Public Security in China said in a statement on its website that police have seized 100 tons of the harmful oil in 14 separate provinces.

Six workshops were closed down including one that was operated by Jinan Green Bio Oil Co., a business which claimed to be turning kitchen oil into fuel but that was actually churning out recycled cooking oil which it passed off as safe and new oil. Recycled oil usually contains carcinogens and small traces of aflatoxin, a deadly mold.

The statement said:

“Not only did we destroy a criminal chain that was illegally turning gutter oil into food oil, we also unveiled the greed of the criminals and pulled back the curtain on the immoral acts of those producing this poisonous and harmful food oil…”

Last year, the State Council, China’s Cabinet, said businesses using recycled oil would be forced to temporarily close or lose their business licenses and that the peddlers who sold the oil are now liable to be criminally prosecuted.

Chinese consumers in recent years are horrified by a series of food safety scandals, such as fish treated with cancer-causing antimicrobials, eggs colored with industrial dye and fake liquor which can cause death or at least blindness. Infant formula and milk and laced with the industrial chemical melamine has reportedly been the cause of death of six Chinese schoolchildren and has sickened 300,000 in 2008. The government has responded by enacting an increasingly tough food safety law in 2009 which promised harsher penalties for makers of tainted products.

Austin Ramzy of Time Magazine writes:

The gutter oil crackdown is just part of a broader effort to control China’s continuing food safety worries. As we wrote earlier this summer, the crackdown has been making headlines with more than 2,000 arrests. But such strike-hard tactics are only part of the equation, and cleaning up the food chain in China will require sustained effort. As food safety expert He Dongping noted last year in an interview with the China Youth Daily, it might take ten years before the country cleans up its gutter oil problem. That’s hardly reassuring for Chinese consumers.

Chinese Oil Spill – Who Will Pay?

China’s oceanic administration says that its getting ready to file a law suit against the local unit of ConocoPhillips for damages to the environment that resulted from offshore oil spills that began in June.

The State Oceanic Administration says that it is recruiting legal advisers for pursuing compensation claims against the company that operates the leaking oil wells in Bohai Bay.

ConocoPhillips says it expects to have mud affected by the oil cleaned up by the end of August. A company spokesman says the process was slowed by concerns for worker safety in the unclear waters affected by the spill.

The spills have added to concerns over damage to the marine environment in Bohai, a major fishery, from agricultural, industrial and other types of pollution.

ConocoPhillips China operates the wells in the Bohai’s Penglai 19-3 oilfield in concert with state-run China National Offshore Oil Corp.

The spills have 324 square miles, according to oceanic administration reports, and have drawn criticism from environmentalists and local media over the delays and damage in alerting the public.

Sunday, oil droplets were reportedly bubbling from the sea floor by the well where mud contaminated by oil was removed. Experts are trying to determine the source of the droplets and seize them before they reach the ocean surface.

According to ConocoPhillips, the current seep is less than 0.26 gallon per day. Resumption of pumping in some wells which had been shut down earlier was helping to reduce pressure and “should help alleviate the seep…”
“We are taking some heat for not cleaning it up faster but as you know Bohai Bay is not the most pristine water to begin with so our 60 plus divers can only see a meter or two in front of their face…ConocoPhillips is not going to be put on a time schedule by anyone that puts workers at risk.”

The company says that so far it has recovered some 2,119 barrels of “mineral oil-based mud” from around the Penglai 19-3 platform and has more than 900 staff and more than 30 vessels working to resolve the problems.

The company says the total amount of oil and drilling fluids leaked in the spills was estimated at around 1,500 barrels. Some of this oil was said to be coming from a seep in the seabed rather than Penglai 19-3 wells.

Legal action over these incidents is complicated by the fact that in China only those affected directly may sue for compensation.

Suing in a U.S. court is yet another option, the financial newspaper China Business Journal says that it is also problematic because of the high costs that are involved.

China – Why So Stingy?

Only days after the World Trade Organization ruled against China on its curbing of raw material exports, Chinese state media insisted it is well within its rights, legally and morally, to limit rare earth exports, as it deems comfortable.

Last Tuesday, the WTO ruled China had violated its rules when it curbed exports of raw materials like bauxite, coke and magnesium used to produce steel, electronics and medicines. Initiated in 2009 by complaints filed by the United States, the European Union and Mexico was as a possible precedent for a future case on China’s rare earth export quotas. The World Trade Organization said China’s domestic policies didn’t honor its export duties on raw materials were to curtail pollution or conserve exhaustible natural resources.

Meanwhile, the central Chinese government slashed rare earth export quotas by 35 percent for the initial half of 2011, adding to previous quota cuts; a move which curtailed global supplies, boosted prices and angered China’s trading partners.

Besides for reiterating China’s stance, the report referred to experts who highlighted United Nations declarations on sovereignty over resources and World Trade Organization rules allowing China to make exceptions with its rare earth quotas under trade law.

Chinese Pandas

China is about to engage in a once-every-ten-year count of giant pandas living in the wild.

The official China Daily reported that upwards of sixty trackers are being trained at Wanglang National Reserve in the southwestern province of Sichuan – a province that is believed to have the largest number of wild pandas in China.

Here’s what they will do to take their census:

They will start by collecting droppings for a DNA analysis that will allow zoologists to track individual pandas and accurately estimate the population, Chen Youping, the director of the reserve’s administrative department, was quoted as saying by Xinhua News Agency.

Also, the census is expected to bring to light more on living conditions, age structure and changes of habitat of the endangered species.

The last census counted 1,596 wild pandas in China, 1,206 of which were living in Sichuan.

Wild pandas are threatened by a loss of habitat, poaching and that they are poor breeders. Females in the wild normally have a cub once every two or three years.

The trackers will begin a pilot survey at the nature reserve this week which is expected to end by the beginning of the month of July.

Atlas Shrugged

Notwithstanding that China produces 95% of the world’s rare earth minerals, they are home to only 37% of the world’s reserves. Considerable deposits are in the United States, Canada, India, Australia and Brazil.

Let’s focus on mining possibilities in North America, shall we?

In an alarmed response to the recent embargo, countries like Canada and the United States are dashing to develop new mines and renovate old ones.

But according to experts, any new production efforts are five years away at best. Not to mention that it will take an environmental cost calculus of its own – mountaintop removal mining is one example.

“In China, rare earth mines have scarred valleys by stripping topsoil and pumping thousands of gallons of acid into streambeds.”

Reported Keith Bradsher of the New York Times.

The only rare earth metal mine in America, the Molycorp complex at Mountain Pass, California, was once the world’s leading producer. This was before when in the late 1990s it leaked radioactive fluid into the neighboring desert, causing an expensive cleanup.

By the time of Molycorp’s closing in 2002, low Chinese prices made the mine less practicable.

Now, after raising money in a public stock offering last summer, the firm is hoping to re-establish the mine with higher environmental and safety standards.
The metal mines of southern China are free of thorium and have rare earths easily separated from the clay by dumping the ore in acid. Though, this relatively easy process, and financial burden on the world market is leading to the development of countless illegal mines, selling to organized crime syndicates who pay for rare earth concentrate with raw cash.

The Canadian firm, Avalon Rare Metals is developing $899m project in the Northwest Territories of Canada. According to the firm’s CEO, Don Bubar, Avalon is:

“Five years down a 10–year timeline toward getting its rare earth deposit into production.”

Other Canadian companies, like Great Western Minerals Group and Quest Rare Minerals also have domestic projects lined up. With about 70 rare earth exploration companies listed on the Toronto Stock Exchange, there is now scouting happening everywhere from British Columbia to New Brunswick. Meanwhile, in the next three years, Great Western Minerals intends to start production utilizing minerals from a mine in South Africa.

Enjoy the showdown.

Heavy Metal: More Business For China

“Seventeen metals on the periodic table of elements are the commotion from Tokyo to Washington, D.C.”

Writes Catherine Ngai of National Geographic.

Rare-earth metals or REMs are composed of element number 21, scandium; number 39, yttrium; and the 15 lanthanides, numbers 57-71, on the periodic table. They are often found in clusters, but you would not call them rare.

These metals are crucial ingredients in making motors and batteries for hybrid and electric cars, Low energy light bulbs, solar panels and wind turbines.

And outside of the green energy forum, they are crux also in the art of weapons building. “Smart bombs” which use neodymium-iron-boron magnets to control their direction when dropped out of an aircraft, yttrium-aluminum-garnet used in determining the range of enemy targets at far distances, lasers that employ neodymium and neodymium-iron-boron permanent magnets used for sound system components utilized in psychological warfare are among their numerous practical uses.

The only U.S. mine, near the Mojave National Preserve in Mountain Pass, California, became inactive in 2002 after 50 years of production, due to economic and environmental issues.

The Chevron-owned mine was taken over in 2008 by Molycorp Minerals LLC. A company that spent more than $400,000 since 2008 lobbying Congress about rare-earth minerals.

In 2009, 90% of the U.S. imports for rare-earth metals were from China, according to data from the U.S. Geological Survey. Though, according to USGS, the figure this year is 9%.

Consumption of the products which use rear-earth metals has decreased radically during the economic downturn, according to a USGS report. A 55% decrease from $186 million imported in 2008, in 2009, the estimated value of these products imported by the United States was $84 million, a 55% decrease from $186 million imported in 2008.

On the other hand, looking toward the future, the demand for rare-earth minerals would rise as electric cars and more alternative energy and efficiency applications comes on the market. There is a rumor that China plans to stop exporting their metals in 2012, reserving them for their own economic exansion, though this stands to be verified.

China now exports roughly 30,000 tons a year; only one-fourth of the world demand.

In order to facilitate the building of more “green” technology, the world will require 200,000 tons of rare earth elements by 2014.

One solution is to offer China an incentive by spawning more imaginative green technology ideas. This is if lobbying Congress to utilize whatever is at America’s disposal proves ineffectual, or if that supply eventually vanishes.

Copenhagen Cop-Out

UPDATE

The EU environment spokesman Andreas Carlgren says informal talks at Copenhagen resolved the impasse. The European Union says poor countries have stopped their boycott of climate change negotiations at Copenhagen and have found a solution to their dispute with rich nations.

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China, India and other developing nations boycotted U.N. climate talks on Monday, actually bringing the negotiations to a halt. Their demand was that wealthy countries discuss much deeper cuts in their greenhouse gas emissions.

AFRICA supportUntil the issue gets resolved, 135 nations are refusing to participate at the 192-nation summit. The African-led movement is a large setback for the Copenhagen Climate Change Conference proceedings – and the discussions were already beginning to limp on faulty relations between rich and poor nations.

Poor countries, supported by China, had raised suspicion that the conference was likely to kill the 1997 Kyoto Protocol, which limited carbon emissions by wealthy countries and imposed penalties for failing to meet those targets.

The poorer nations want to extend that treaty because it commits rich nations to emissions cuts and imposes penalties if they fall short. The United States withdrew from Kyoto over concerns that it would harm the U.S. economy and that China, India and other major greenhouse gas emitters were not required to step in line.

An African delegate said developing countries decided to block the negotiations at another meeting, hours before the conference was to resume. He was speaking on condition of anonymity because the meeting was held behind closed doors. He said applause broke out every time China, India or another country supported the proposal to stall the talks.

Putin Proves That He Is A Real Tiger

In 2008 Vladimir Putin shot a five-year-old female tiger with a tranquilizer gun and helped put a transmitter around her neck. The transmitter allowed people to follow the animal’s perusing through Russia’s Far East.

siberian tigerOn Wednesday Vladimir Krever of the World Wildlife Fund said that the satellite tracking devise has been silent since mid-September; which could be due to battery failure, a broken collar or poachers.

Sadly tigers are becoming an endangered species in the far-eastern region of Russia due to factors such as poaching and the loss of habitat. Since 1997, according to the Wildlife Conservation Society, their number has declined by 40%. They said that only 56 tigers have been spotted in an area of 9,000 square miles (24,000 square kilometers), which is about one-sixth of their known habitat in Russia. The Wildlife Conservation Society estimates the total number remaining in the wild as 300. A similar estimate in 2005 put the number of tigers left in Siberia at 500. These numbers show that the animal could be facing extinction.

Here’s why these tigers are endangered:

Chinese poachers have begun attaching explosives covered with animal fat to tree branches. When tigers or Amur leopards swallow the bait, it explodes in their mouths. The poachers use the animals for hides and bones, prized in traditional Chinese medicine.

Another factor which plays a huge role in Russia’s disappearing wildlife is illegal deforestation in the country’s Far East.
Siberian tigers can weigh up to 600 pounds (272 kilograms) – they are also known as Ussuri, Amur or Manchurian tigers. They prey on wild boars, deer and bears.

At one time, the Siberian tigers freely roamed most of Eurasia, from the Black Sea to Central Asia – however now they are limited to the forests of Far Eastern Russian and the Chinese province of Manchuria. In china the killing of a Siberian tiger is punishable by death.

The Russian government is currently planning to hold a conference regarding the conservation of wildlife, namely the tiger.