A Shell Game of Coal Dust and Green Olympics

There are only 270 days left until the opening ceremony at the Beijing Olympics. Between now and the time the torch is lit and the Green games start, 38 new pulverized-coal fired power plants will open.

Statement after statement about how this Olympiad will be environmentally friendly and the amazing lengths China is going to with regard to alternative energy power generation in Beijing is plastered around the news media daily. That is the truth – well, half of it. Media releases seem to conveniently leave out the other half of the information: While there is tremendous focus on this single city in Green development, the remainder of the country is left behind in a haze of contaminants and smokestack particulates settling on nearly every square centimeter of land except a few isolated pockets in remote mountainous areas.

On one hand, China claims to the world it is going green to help us all against climate change and pollution control. But read the newspapers – for example, “Nation not a Threat to World Energy” in the China Daily. That article boldly claims that coal accounts for 70 per cent of the country’s energy needs and with proven reserves of one trillion tons, these reserves can satisfy Chinese demand for the next 100 years. It also paints a different picture.

We need to look deeper into the mind frame of Chinese society to understand why this is happening and why coal use is set to intensify as our planet experiences a further drop in conventional crude oil production.

Making Face: Chinese society is complex in ways Westerners overlook or do not understand. “Mianzi” or “face”, for example, is the biggest stumbling block to our understanding consumption patterns of commodities and electricity usage in modern China. “Mianzi” is best explained as reputation, social standing or how others see you in their eyes. The Chinese are pre-occupied with “mianzi” to the point that decisions made in life are all about appearance. This includes government and business decisions. In order to continue with a roaring economy that pollutes along the way, China has to “make face” with Western governments showing that they are committed to help solve their own pollution problem from within. This is their front face, what lies behind is the true face. There are always two faces to everything in China.

Construction of hundreds more pulverized-coal-fired power plants assure coal will likely remain the fuel of choice for many decades in China. Despite economic, social, and environmental problems coal creates, it is the fuel that will allow the Chinese energy sector to continue expanding along with coal affiliated mega-corporations involved in power generation, utilities, railroads, mining and all of the jobs in between listed on the Hong Kong, Shenzhen and Shanghai stock markets. Unemployment is the biggest concern for the central government at the moment using an economic growth policy focused on creating as many jobs as possible supersedes environmental protection every day of the week.

Renewable Energy: China’s national renewable-energy law went into effect in January 2006, offering financial incentives for renewable energy development. Chinese authorities want to generate 16 percent of their energy needs from renewables by 2020; this includes small and large scale hydropower, wind, biomass, and solar power. Gargantuan expansions of nuclear power and coal to liquids projects are on the books as well.

Forecast coal output is expected to reach 2.7 billion tons in 2010. In the first half of 2007, China generated 1,122 billion kilowatt hours (kw/h) of electricity, up 13 percent from last year. During the six month period, hydro-electric generators provided a total of 156 billion kw/h, increasing 22 percent year on year; thermal-electric generators provided 940 billion kw/h, up 12 percent; nuclear generators provided 26 billion kw/h, up 15 percent, according to the China Electricity Council (CEC). Even at 16 percent renewable energy generation by 2020 the enormity of coal consumed to generate over 6 billion kW will increase total coal usage exponentially compared with today.

Predictions for substitution levels of hundreds of millions of kilowatt hours to be reached are “mianzi” driven and notoriously uncertain, if not overstated, to “gain face” on the international stage. Feasibility studies of these projections are in question especially with severe water shortages plaguing the country and talk of the country being able to reduce its reliance on coal is disheartening when looking at increases in coal mining, usage and importation in the last two years, which were the highest levels ever.

Lies and Statistics: Half-truths are so common in China that there is no negative stigma attached to lying, especially if it is to “save face” for your family, self or country. For example, six months back China forbade ethanol production using human consumption grain crops because droughts and floods were set to decrease the season’s harvest. Two months back, with food prices becoming too high, the government sold stored grain at auction onto the market to bring down prices.

Amazingly, just a few days ago I read that this year’s crop harvest was a bumper harvest and grain production had increased year upon year from 2004. This is considered “saving face” by telling a half-truth. The Chinese government wouldn’t want anyone to think negatively about them since they weren’t able to grow a record harvest, so by the loosest possible definitions of “harvest”, using released stored grain figures added to this year’s harvest, the numbers came up as a bumper year.

Rural electrification is mainly where the use of renewables will be concentrated. Base metals and commodities prices make it un-economical to run electric lines into the countryside throughout the nation. For China this is a win-win situation, first by “gaining face” internationally and secondly by saving money and commodities in the process. The downside is once installed, these devices are non-job creating, they are self functioning.

You can see the “mianzi” card being played with China joining the AP6, Asia Pacific Partnership on Clean Development and Climate. Started in January 2006, the AP6 brings together China, the United States, Australia, India, Japan, and the Republic of Korea in an agreement based on clean energy technology cooperation regarding coal and carbon capture and storage (CCS) technologies. Personally I feel China is unlikely to invest in CCS systems for coal plants or heavy industry in the next decade or two due to the cost and using CCS at the new Coal-to-Liquids (CTL) projects would slow down production, but the partnership strengthens their reputation globally.

Seeking a Balance: Within China there has been a call publicly for a balance between economic growth and environmental protection. One political maneuver is to move polluting industries and antiquated factories out of urban areas. This is coded language for moving the polluters to the countryside, where sulfur dioxide and nitrogen dioxide plus other contaminants can thin out more quickly, but the side effect is coating the food producing areas where most cities rely of for food production with particulate. It is a shell game, when industry pollution is moved out of town to clean the air it is replaced with vehicle exhaust from the 16,000 new cars hitting the roads every day.

Conservation has not been mentioned once in the Five-Year Plans of the central government. Conservation=Non-Consumption. The number one agenda is job creation to keep social stability so it not considered an option, it is not talked about and it will never be discussed. Some of my students who argue for conservation when asked about the possibility of turning off all of the neon lights on building exteriors around the city firmly said it just wouldn’t be China without the lights. They are part of Chinese culture.

Some people have suggested that the Chinese are waiting for world political pressure and trade sanctions before addressing this problem in a meaningful way. It would then appear that by responding to this pressure they were conceding to world demands. My response to this is a resounding “No!” This would involve “losing face” by backing down and doing something that you are told to do by Western governments.

Instead, China makes preemptive decisions that appear to be doing something to help solve the problem with renewable energy, when in actuality they are doing the opposite – increasing their reliance on coal for primary electricity generation. Coal is also used for source heat in smelting and the heavy-manufacturing industries. It is a primary resource for home heat in the country side. Many Chinese also use it for cooking.

Life-giving Force: Coal is by no means the sole cause of China’s pollution. Many other industrial pollutants add to the mix. According to a New York Times article, “Only 1 percent of China’s 560 million city dwellers breathe air considered safe by the European Union, according to a World Bank study of Chinese pollution published in 2007”. I am obviously living in the bad air 99 percent. The energy and life-giving force from the sun is literally blocked out by polluted skies for weeks on end.

Electricity consumption continues to skyrocket even though nearly every resident in China knows there is a problem. Again “mianzi” is at play. Displays of wealth and glitz are considered “face gainers”, showing off the new $500 mobile phone or driving the latest 7 Series black Mercedes are at the top of the list for individuals. Rapid expansion of the economy means taller buildings being built in the cities, which need more elaborate light displays after dark consuming even more electricity. New freeways crisscrossing the country are lined with triple sided billboards displaying endless consumer goods every 500 meters that light the night sky.

“Mianzi” is its own feedback loop. Development needs to be ever bigger and more ostentatious to show progress. This in turn drives the need to build more power plants to satisfy demand for a wealthier population. Take note: wealth generation is in its infancy and credit cards are still considered a new thing.

I sometimes hear the argument that China could effectively leapfrog over the West in developing sustainable energy and growth if its citizens get hooked on renewable power before they join the middle classes, and if its existing middle classes can learn to conserve energy before they can afford two cars. This doesn’t take “mianzi” into account. Money and physical possession are deeply ingrained in culture and religion.

Romance, China-style: I will agree with the leapfrog jump, though. As oil reserves worldwide are depleted and as economic hardship sets in, coal will be used as liberally elsewhere as it is here in China. Coal is plan B for our world economy, not solar, not wind but a resource that is plentiful, that requires no new invention or technological breakthrough that will allow a continuation of economic growth. We are all in the fix together. We purchase products manufactured here every day, and I don’t know of any joint venture or production facility that would be established if it was only to be powered with wind or solar. Industry requires a constant, reliable power source and will settle for nothing less. Coal takes the lion’s share in the Land of Dragons, and it will continue to do so.

Everything you have heard about the high levels of pollution is true and becoming worse by the day. Electric demand is insatiable; all of the building is barely able to keep up with demand. Pollution levels are expected to double or possibly triple by 2015, this is truly an un-believable statement, if it is true than there will be nothing left living in this part of the world. As Peak Oil starts to affect our planet’s economy, what I see here right now is what the future holds for us worldwide. No government will let their country crash and burn economically if there is a viable alternative. I present to you a vision of the future: China has already leapfrogged to where we in the West will be within a decade, using coal to power our economies and cities as conventional worldwide oil production continues to decline. The pollution could be the sight and smell of economic growth in such an environment.

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Accommodation Game Changers – The 14 Most Influential of This Decade

1) Free in room Wi-Fi

I’m still amazed at the mid- and upper-level hotels that continue to not offer or, even worse, charge their guests for Wi-Fi. In the very least, hotels should offer free Wi-Fi in a quiet area where guests can go to conduct business, away from the bar. Hotelchatter.com does a thorough study each year and compiles a quick reference chart. We have a direct link on our blog.

2) Online travel agencies

Voyages-sncf.com, Expedia, Inc., Sabre Holdings, Opodo, and Priceline.com have become the elephants in the hotel room booking business. Each with 2008 annual revenue in the billions plus ($USD), they continue to be a saving grace for travelers and a source of frustration for royalty-paying hotels. Only a few niche personal travel agents will survive this paradigm shift of information efficiency. To compete, fare aggregators and metasearch engines like Kayak.com, Cheapflights.com, and SideStep.com continue to stockpile their information offers.

3) Informed Vagabonding

Vagabonding is traveling on the cheap. Those that piggyback for airline points but can’t find a nearby Couchsurfing.com buddy give hotels unique bargaining challenges. Numerous last-minute hotel deals have been found by using sites like Vagabondtraveller.com. Being able to provide non-touristy information to these seasoned (and occasionally smelly) travelers is a challenge front desk or concierge employees must successfully overcome.

4) The Twitter Deal

Aside from the plethora of non-informative or news-repeating tweets available, hotels have made some Twitter progress. The last minute Twitter coupon code has already made it the go-to site for smart travelers. Whether it builds customer loyalty is a matter of execution. Hotels that creatively fulfill their target guests’ needs continue to do well. Have a favorite stay? Always check their twitter feed before booking.

5) TripAdvisor

The one stop shop for hotel and bed & breakfast reviews, Tripadvisor.com now has over 25 million reviews to read and for the most part, trust. It allows travelers to find out if construction on an addition is currently waking guests up at 8 am or if the service staff is exquisitely well trained and motivated.

6) Hotel Alternatives

The 2008/2009 economic downturn was a booming opportunity for those associated with what are typically more frugal accommodation alternatives. I don’t have to look across the street at HomeAway.com’s new office here in downtown Austin to understand the benefits of structured information for deal-seeking travelers and scheduled booking for their home-owning clients. The acquisition of a large competitor secured their spot in the United States at the top of the vacation home food chain. BedandBreakfast.com operates in a similar space for bed and breakfasts while offering a gift card service for travelers to book nights with their clients.

7) Airport, Capsule, or Mini-Hotels

The nap & shower model tries to grab travelers with long layovers or heavy hangovers. Honolulu International Airport tried it but eventually failed, yet the nearby Nimitz Shower Tree Mini-Hotel is picking-up where they left off. The model is not very popular in the States, but Europe and Japan boast a healthy demand for weary travelers looking for a convenient reprieve. A popular capsule hotel near Kabukicho in Tokyo is mostly for recovering businessmen after an evening of drunken debauchery.

8) Boutique hotels in the U.S.

According to The Independent, the term “boutique hotel” was coined by entrepreneur Steve Rubell when he and Ian Schrager opened Morgans on Madison Avenue in 1984, because, for comparison, it was more like a boutique rather than a department store. The popularity of this experience blossomed with the real estate boom and bust of the past few years. Whether companies trying to differentiate their properties from the norm will continue on this path coming out of this downturn remains to be answered.

9) Green Hotels

The green hotel movement gained momentum this last decade. A percentage of travelers demand they stay in not only a LEED certified structure, but with environmentally conscious services. The hotel’s LEED plaque will state whether the hotel has silver, gold, or platinum status. Sheraton’s Element Hotels is the first hotel chain that requires all properties be LEED certified. At the far end of the spectrum, Maho Bay Camps in the Virgin Islands range from “eco-tents” to rain-collecting cottages.

10) Frequent Visitor Preferences

The last decade have seen guest services launch into a completely new dimension. The Seinfeld episode where George injures his hamstring trying to kick out his tucked-in bedsheets has some truth to it, as the maid actually left the correct bed untucked (George and Jerry were in different beds when the request was made). Some hotel chains now keep track of your favorite soap and shampoo, what radio station to have your alarm dialed to, and yes, whether or not to leave your sheets untucked. Guests have become less paranoid about allowing their hotel to keep this information and the smart managers have taken advantage.

11) The iHome

Speaking of alarm clocks, the growth mp3 popularity from Napster to today’s legal paid services forced many hotels to recognize the antiquated nature of the $10 alarm clock. Enter the iHome. There are many variations, but the iHome became the defacto standard for playing mp3s in your room. And in the future? Bittel Electronics just created an alarm clock/phone/radio/iPod/iPhone/mp3 player interface called the UNO. Nice.

12) HTNG: Hotel Technology Next Generation

Founded in 2002, the association exists to guide the behind-the-scenes technology into some form of sanity. Hotel managers have notoriously fought with multiple booking, room-scheduling, point-of-sale, rate-spreading, appointment-scheduling in the past. HTNG has guided vendors to unify their offerings to work together to meet the accommodation industry’s needs. They’re a “global trade association that fosters, through collaboration and partnership among hoteliers and technology providers, the development of next-generation solutions that will enable them to do business globally in the 21st century.”

These requests have help push toward advanced Property Management Systems (yes, PMS) that can be smarter in ways managers have been table-pounding their fists for years ago. Systems now exist that can handle point-of-sale transactions for multiple locations and still remotely turn-off HVAC systems in an unoccupied room.

13) Hotel and Travel Blogs

I’m sure some people still grab travel guide books like Fodor’s, Lonely Planet, or Frommer’s, but much like the newspaper industry, travel information has migrated online. The people that still do pick-up these books are half “I don’t want to stare at a computer” and half “I want people to see that I’m planning a trip.” Travel is massively broad topic to blog about and as a result, there exists a copious amount of sub-topic travel blogs. Most bloggers get paid by their advertisers, by the hotel or airline industry, or indirectly by both. At Uberoom, we’re no different.

A blog review MIGHT not make or break a hotel or bed & breakfast, but high-traffic blogs like Gadling.com, Deliciousbaby.com, and Jaunted.com sure do command respect.

14) Kiosks: Check-in/Check-out/Concierge

As I wrote in Improved Customer Service: Top 3 Reasons Why, the number of employees in the broader accommodation industry has declined for over a year now. However, the decline in guests has outpaced the lay-offs.

During this downturn, hotels are quickly learning the benefits of automation and affiliation. The very same kiosk technology that helps you check-out at the grocery store or print-out your boarding pass at the airport also arrived in your hotel lobby. Not only are kiosks complimenting front desk employees, but your friendly concierge now has a department trainee as well.

All this automation is great, but in order to improve the quality of their services, hotels are increasingly affiliating with companies to provide everything from airport shuttles to special packages, but that detail is best left for another article!

What will the next decade hold for the accommodation industry? Will the current trend of automation continue or will guests push back and request more personal attention? Let me know what you think.