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Title Rich in Resources but powerless all the same 2009.10.30

FROM: New York Times Newspaper

Rich in Resources but powerless all the same

ULAN BATOR — Few places on earth have as much energy resource wealth, or as much energy poverty, as Mongolia.
Energy experts say the cold, sparsely populated nation of 2.7 million possesses the largest coal reserves in the world, as yet largely untapped. And it has good conditions to produce wind and solar power.

But look around the capital and little of this abundance is on display. Built for 500,000, Ulan Bator is now home to between 1.5 million and 2.6 million people, and rural migration is driving the population up at a pace of about 5 percent a year.

Many of these new arrivals, and perhaps 60 percent of the city’s inhabitants, live in districts with no paved roads, sanitation or running water. Many are not connected to the electricity or district heating grids.

In winter, tent dwellers in Ulan Bator’s swelling informal settlements burn coal, wood, and cow dung to heat their tents, generating smoke so thick and black that residents say you cannot see to the other side of a crosswalk.

To provide cleaner energy and to rein in pollution require grappling with the problem at both ends — finding ways to offer clean, modern energy to people in the countryside, to stem the tide of migration, as well as to the new arrivals in the city. But the solutions are expensive, and time may be running out as environmental degradation worsens.

A study by Ulan Bator in 2007 showed a $2 billion investment would be needed over 15 years to provide clean energy and clear the air. The report recommended that households switch from raw coal to cleaner briquettes, which would also reduce fire risk, and use cleaner stoves — which would cut fuel use by 40 percent but cost as much as $60, double the price of standard models. It also recommended building well-insulated housing to encourage nomads to abandon their tents, known as gers.

But the city government has little room to maneuver. Unable to tap financial markets, it depends on the state for funding; and the state budget heavily depends on revenue from copper mining. Copper prices, although they have rebounded from the depths of last year, are not expected to rise much more for at least two years. Meanwhile, the economy is faltering. Unemployment is 13 percent and rising.

The national government is searching for ways to exploit clean renewable energies. It proposes to offer power companies a tariff subsidy of 8 to 12 cents a kilowatt-hour to sell energy from renewables. But it has not said where the money will come from, and until it does, the companies are unlikely to invest in new wind and solar generating capacity.

Some foreign energy companies are not waiting. In June, Daesung Group, of South Korea, inaugurated a hybrid photovoltaic and wind power demonstration plant on a windswept plain 50 kilometers, or 31 miles, southeast of Ulan Bator. The plant will drive pumps drawing water from three wells to irrigate an organic farming project.

“The Green Eco-Energy Park project is designed to address three needs at the same time: to provide water, food and energy,” Daesung’s chairman, David Kim, said at an inaugural ceremony. “These needs are interrelated. In this way, we can create a virtuous circle. It starts with energy.”

Daesung sees the project as a test of technology that could lead to the greening of Mongolia’s southern portion of the Gobi Desert — and beyond that, to the reclamation of other parched, energy-starved regions in, for example, Kazakhstan and Papua New Guinea.

‘Mongolia is a microcosm of the desertification and energy poverty we see all over the world,” Mr. Kim said.

Still, the project faces huge uncertainties, including doubts about the adequacy of the aquifer on which it draws and about the viability of an economic model that looks for added revenue from local developments, like an entertainment park and the revival of a former Soviet airport.

(Omission of what is following)

Published: October 20, 2009 in New York Times Newspaper

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