Energy 2008

ENERGY
POWERING THE NATION 2008

2 Phnom Penh Post Energy Supplement May 30 – June 12, 2008
Power for the people -- some day

Written by Kay Kimsong and Brendan Brady
As Cambodia continues to maintain a high economic growth rate the country finds itself struggling to meet its
electricity needs, despite potentially vast natural resources like wind, water and oil. Ith Praing, a secretary of
state at the Ministry of Industry, Mines and Energy for 24 years, speaks with Post reporters Kay Kimsong and
Brendan Brady about Cambodia’s energy situation and what the future holds.
How is Cambodia developing its power

capacity?
First of all let’s talk about electricity. We have no
national grid yet ... Cambodia currently has 24
isolated systems. There is no interconnection
between the load centers.... Provinces are isolated
and have their own generation and distribution
networks. The first large-scale hydropower plant
under development is the Kamchay hydro project
(in Kampot province) which we expect to be
completed by 2010 with a capacity of 193
megawatts. Hydropower potential can be used at
full capacity only during the 6-7 months of the
rainy season. In the dry season, the capacity is
reduced to only one-third. That’s why we’re not
only developing hydropower sources, but we’re
also diversifying the power supply. For example,
we have coal-fired power plants. Currently all coal
is imported from Indonesia or Australia, but we
are exploring for coal mines in Cambodia and we
expect to find some indigenous coal.
BRENDAN BRADY
What is the advantage of interconnection?
Ith Praing, secretary of state at the Ministry of Industry, Mines and Energy, says Cambodia might
One system means one price. When you have a
be self-sufficient in electricity production by 2017, when the government hopes the country will be
able to produce 3,000 megawatts – equal to estimated consumption. national grid, the price for electricity is the same
along the entire grid. Now Banteay Meanchey is priced differently from Battambang, which is different from Phnom Penh. For
example, when the southern section of the national grid is complete in 2010, from Vietnam to Takeo through to Phnom Penh,
the price of electricity along that line will be one price, the same price as Phnom Penh. [Interconnection] is more reliable and
provides more security. You don’t need to generate power in every province.
Do you expect the price of electricity will go down once there’s a national grid?
Yes. Now the price is based on the price of electricity [generated using fuel such as gasoline or diesel]. But we are developing
cheaper sources [and connecting them] to the national grid. By 2010 the price should change a little bit. By 2011 there should be
a remarkable reduction in price when the coal power plant in Sihanoukville is operating.
Will Cambodia is connected to a regional power grid?

We expect to have some regional interconnection in the Greater Mekong Subregion (China, Myanmar, Thailand, Laos,
Cambodia, and Vietnam) by 2020 when we develop larger-scale power generation in the northwest, including our hydropower
potential. Then we can have interconnection with the regional grid and will be able to export and import at the same time.
Currently, we only import from Thailand but later on, when we have an excess of power, we will export to Thailand. The same
for Vietnam. It will be a power exchange – we will sell to neighbors in one part of the border and buy across another part of the
border. The national grid will be hooked to the regional grid, which will be connected to the Mekong Subregion and ASEAN
grids. This is part of the ASEAN policy of power trade.
When do you think Cambodia will be able to meet its own energy needs?
We will be able to produce 2,000-3,000 megawatts by 2017 or 2018 but by that point we estimate demand will be about 3,000
megawatts. When we develop the full potential of the northeastern region, the Mekong basin, then we will have excess electricity.
Where does the money come from to develop the master plan?
All of the development in generation is private sector. Hydro, coal power plants – all private sector. Transmission can be
transferred to the private sector, but only through the state-owned utility EDC (Electricite du Cambodge). The operation must
remain under license of the state-owned EDC because it’s the backbone of power in the country, of the country’s security.
Why did the government decide not to invest in generation?

No money. Even the World Bank and ADB when I asked in ’97, ’98, when we had the plan to develop the hydro generation, they
said no for generation because they considered it profitable infrastructure that only the private sector should participate in.
Cambodia has approved several projects that have been criticized for their impact on the environment and surrounding
communities. Some claim that a coal power plant or hydro dam can harm the environment, but before developing and signing a
contract we carefully perform an environmental impact assessment [which is] complete and comprehensive. The benefit [that
will accrue] to the country from such project is more than the loss of some hectares of the forest.
Is Cambodia pursuing alternative energies? In the frenzy over Cambodia’s oil industry, are other energy
sectors being ignored?
We have done studies for wind power but we weren’t able to identify areas with enough potential. To use wind power, six meters
per second is the minimum speed required. We expected to have good wind in mountain areas and along the coast but our study
showed we didn’t have good enough potential to develop wind power. Everywhere we can develop solar power, but the
technology is still very costly and is still not reliable. Solar home systems are good, but very expensive. We don’t have any plans
to generate nuclear power yet. That is the idea now, but that could change in two or three years. It depends on the situation. Now
we are promoting the use of renewable energy for the rural electrification program. We would like to use all of the resources of
the country for that, including the entire agricultural west, all of the biomass we can use as this could help to reduce fuel imports.
We would like to encourage investment in all new kinds of energy technology.
Do the high costs of electricity in Cambodia hinder foreign investment?

Yes, the price of power is a factor that can have a bad impact on investment. We expect to have lower price electricity by the end
of 2010. We know for foreign investors, if the price of electricity was cheaper, there would be more investment.
Asian governments forced to act

as crude oil prices soar
Written by AFP
T orn between protecting the poor and saving their budgets, governments across Asia are being forced to slash fuel subsidies
as world oil prices settle over $130 a barrel.
Indonesia, Malaysia and Taiwan have decided to wield the axe on multibillion-dollar subsidies despite fears of unrest as inflation
spikes and the region's poor pay more for fuel on top of the surge in food costs.
Even regional giant India, which until recently was happy to see state oil companies lose millions of dollars a day selling
discounted fuel, has said a price hike is inevitable.
But while most price-setters could see the writing on the wall, China has dismissed rumors that it would change its central
pricing system as it focuses on containing inflation ahead of the Beijing Olympics.
"In Asia generally, those countries that subsidize oil will be under pressure to remove their subsidies while those that don't will
be under pressure to do something for low-income earners," said Euben Paracuelles, a Singapore-based economist for the Royal
Bank of Scotland.
For countries such as Indonesia, an OPEC member which has historically enjoyed some of the lowest fuel prices in the world, the
crude price boom means the days of ultra-cheap petrol may soon be over.
Jakarta hiked the subsidized gasoline price by 33.3 percent to about 6,000 rupiah (65 cents) a litre on May 24, sparking
immediate and sometimes violent protests by students and hardline Muslim groups.
Analysts however said Jakarta deserved praise for its decision to cut its fuel subsidies as they mounted to an estimated $14
billion, or three percent of gross domestic product.
"It looks like that's where most governments are heading right now," Paracuelles said.
Malaysia also appears to be changing its stance on subsidies - approaching $15 billion or a massive seven percent of GDP - and is
now considering a two-tier pricing system to make the rich pay more and cap the subsidy bill at more acceptable levels.
And in Taiwan, the new government of President Ma Ying-jeou has moved quickly to end a freeze on domestic gasoline prices
from June. Power prices will also rise from July accordingly, officials said.
China, however, has made it clear fuel costs will remain well below market rates even as its energy needs surge ahead of the
Olympics.
Analysts say higher prices in countries such as Indonesia would ease demand for crude, but only action by giants India and
China could take the sting out of the oil markets.
Underpowered energy sector

shifts up a gear
Written by Post Staff
A fter suffering heavy damage during decades of civil strife,

Cambodia's power supply facilities have been significantly
improved since the war years, with support from international
aid and foreign-funded private sector projects.
The country stands on the brink of a power-generation

revolution, driven in part by the discovery of potentially vast
undersea oil and gas fields and the start of a series of massive
hydropower projects that it is hoped will bring electricity to
much of the country.
However, until these come online, Cambodia remains largely in

the dark and reliant on non-sustainable power sources like wood
and charcoal.
Rolling blackouts plague the capital, casting whole

neighbourhoods into darkness for hours at a stretch, while vast
numbers of people in the countryside resort to car batteries for
electricity or pay exorbitant fees for locally produced power.
Cambodia's failures so far at mass power generation - a

patchwork of private electricity companies and an under-
equipped national electric authority bring continuous power to
only 17 percent of the population - have stunted the country's
development, while high electricity costs have driven away
potential foreign investment.
Cambodian power can cost as much as 2,000 riels more per

kilowatt hour (kWh) than in neighboring countries, said Ith
Praing, secretary of state with the Ministry of Industry, Mines
and Energy.
HENG CHIVOAN
People paddle boats beneath power lines at Boeung Tum Pon lake in Phnom
Penh. Cambodia will likely remain without a national grid until 2020 although
"We have no national grid yet," said Praing, adding that a
offshore gas deposits and a series of hydropower projects are set to ramp up countrywide power system would not likely exist until 2020.
the country’s power production in coming years.
Cambodia currently limps along on 24 fragmented power systems centered around provincial capitals and towns.
"There is no interconnection" between the far-flung power generation stations, Ith Praing told the Post on May 26.
The result is costly electricity.
"The electricity prices in Cambodia are the highest in the region, and some of the highest in the world, due partly to the large use
of old small generators, reliance on fully imported diesel fuel, and large losses in low-quality, medium-voltage distribution
systems," said the website for RECambodia, a renewable energy body under the authority of the government's Electricity
Authority of Cambodia.
Electricity generated by Cambodia's hundreds of private power companies can cost as much as 3,000 riels a kWh, said Chea
Sinhel, director of the electricity supply department at the state-run Electricite Du Cambodge (EdC), adding that these service
about 100,000 people.
EdC power costs only 300 riels per kWh in the country's urban centers that it services, but the enterprise fails to reach a large
number of people and still cannot generate enough power to light up Cambodia's capital, which alone needs 250 megawatts of
power.
The EdC's total capacity in Phnom Penh remains only 190 megawatts, forcing it to buy the remainder from two private
generation companies at higher prices.
"Electricity still costs a lot," Sinhel said.
In a bid to cut power costs, since 1999 Cambodia has bought electricity from its neighbors Vietnam and Thailand, allowing the
EdC to lower costs by as much as 250 riels a kWh, according to the EdC.
The country has also begun to explore alternative energy sources such as biofuels, wind or hydropower.
While experts agree that the country could have limited success employing renewable energy - particularly in small-scale
projects benefiting individual rural households or communities - the key to mass power production lies in the eight large dams
government officials say can be built.
Since 2006, senior government officials, including Prime Minister Hun Sen, have urged foreign investors, particularly Chinese
companies, to back hydropower projects in the Kingdom and further diversify the power supply away from costly gasoline and
diesel generation.
The largest project - the Kamchay dam in Kampot province - is already underway and hopes to provide 190 megawatts of
electricity by 2010.
Two other large dams in Cambodia's northeast aim to produce a combined total of some 480 megawatts in coming years,
according to government officials.
But Cambodia's electricity supply remains so undeveloped that even after the arrival of hydroelectric power and links with the
Thai and Vietnamese electrical grids, the government envisages that by 2030 only 70 percent of households in the country will
have power.
High costs of electricity deterring

foreign direct investment
Written by Kay Kimsong
C ambodia's electricity prices remain among the highest in the region and present a major obstacle to attracting foreign
investment to the impoverished country, industry and government officials say, adding that energy costs are also driving up the
price of other crucial utilities.
"This challenges our ability to compete with neighboring countries such as Thailand and Vietnam," said Chan Sophal, director of
the Cambodian Economic Association, a private industry group.
At the heart of the problem is Cambodia's lack of a national power grid, which puts supply in the hands of dozens of small,
private power producers operating in a loosely regulated system.
Because most of these producers rely on diesel-powered generators, spiraling global oil prices are being passed on to Cambodian
consumers through the power companies.
The result is electricity that can be as much as four times as expensive as in Vietnam or Thailand, said economist Sok Sina,
adding that the government is in no position to lower its taxes on imported petroleum products - a move that could see fuel and
electricity prices drop.
"Any slowdown in investments is on the back of concerns over high electricity costs ... but if gasoline taxes decrease, the national
budget will be affected," he told the Post on May 21.
"The problem will not likely be fixed until 2012" when Cambodia hopes to bring several hydropower projects online, he added.
Until then, the country will have to limp along under the current patchwork of independent power suppliers, officials say.
"The electricity supply still does not meet the basic demand for electricity, especially in rural areas, where a 24-hour supply of
electricity is still not assured, and the quality of electricity is not reliable," the Council for the Development of Cambodia says on
its website.
The state-run Electricite du Cambodge (EdC) is only able to provide about three-quarters of the 250 megawatts consumed by
Phnom Penh each day, said one EdC official who did not want to be named, explaining the frequent blackouts that blight large
swathes of the capital and force many to resort to expensive diesel fuel generators.
The situation becomes much worse, in the countryside, where regular power is available to only a fraction of the households.
The government has struggled to keep electricity prices in check, spending more than $40 million in subsidies for the EdC,
Prime Minister Hun Sen said on May 20.
But spiraling power costs are not likely to ease anytime soon, business officials say, adding that demand for electricity is growing
by 15 percent each year, putting further pressure on the country's fragmented power system.
"The investors are going to have to be patient and wait for a few more years to get lower electricity prices," said Nguon Meng
Tech, director general of the Cambodian Chamber of Commerce.
Getting a feel for power

Written by Susan Postlewaite
Massive hydrocarbon reserves are believed to lie off the Cambodian coast, but just how much there is
and when it may be tapped remain the subject of much debate, writes Susan Postlewaite
Record high oil prices of $135 a barrel have

added a sense of urgency to Cambodia's efforts to
tap into a potentially huge hydrocarbon bounty
lying under the sea off the country's southern
coast.
But uncertainty still clouds the nascent petroleum

sector, dulling those first twinges of excitement felt
more than three years ago when energy giant
Chevron and its partners announced that they had
struck oil in four test wells about 150 kilometers
(93 miles) off the coast from Sihanoukville.
Since then, predictions over the size and value of

Cambodia's oil and gas fields have varied amid
increasingly cautious statements from government
officials tasked with guiding the country's expected
petroleum boom, while production appears to be
TANG CHHIN SOTHY/ AFP
at least a few years off.
A man prepares to refuel a motorbike with blackmarket petrol on a street in Phnom Penh.
Cambodia expects to begin oil production in 2011, government officials have said amid warnings While the clock ticks, the prospects for an oil
that new-found petroleum reserves did not guarantee instant prosperity for the country.
bonanza may be fading slightly.
After the early discovery of oil in Block A - one of six offshore blocks where exploration licenses have been granted by the
government - economists optimistically estimated revenues in the billions of dollars based on projected reserves of as much as
two billion barrels of oil and 10 trillion cubic feet of natural gas.
But it appears now that there may be less oil under the sea than Chevron, the government and a host of other speculators had
hoped.
In its last public statement on the issue, Chevron - which must come up with an approved development plan by early 2009 or
renew its exploration license with the government - said that the undersea reservoir has a complex design and contains "small
dispersed fields, rather than one core field," making recovery more difficult and costly.
Further dampening the mood, Te Duong Tara, director general of the Cambodian National Petroleum Authority, told reporters
at an oil and gas conference sponsored by the UN Development Program in March that the recovery rate for the estimated 500
million barrels of oil in Block A was "as low as 10 percent."
"We don't know yet [how much oil exists].... We have a schedule with Chevron. We still are working together," he said, adding
that there is no data for the five other blocks.
"These reserve numbers will change," he said.
Adding yet another layer of concern over Cambodia's petroleum prospects, an independent geologist told the Post that undersea
reservoirs in the Khmer trough are rife with fault lines that may have allowed oil and gas that was once there to escape, lowering
estimated oil reserves to fewer than 50 million barrels.
To compare, Vietnam has 600 million barrels of proven oil reserves, while Thailand has 290 million, according to the US-based
Energy Information Administration.
Activity continues in Cambodia's offshore blocks - nearly a dozen companies granted exploration licenses are shooting seismic
surveys, and one, Petrotech of Hong Kong, says it hopes to drill its first well by the end of the year.
But industry analysts say all eyes are on Chevron, which appears to be preparing this year to begin developing an initial small-
scale production plan as it further considers its prospects for profit in these untested fields.
One option, said an analyst who did not want to be named, would be to use the small military base on Poulo Wai island, near the
maritime border with Vietnam, to construct the facilities for offshore drilling and production.
Another option would be to lease a floating production and storage vehicle - much like a converted tanker with a plant for
separating oil and gas on deck - to be moored in the waters over the field in lieu of larger, more expensive traditional drilling
platforms.
In another setting, analysts said, the relatively small pockets of oil discovered so far might not be enough to attract the interests
of an energy giant like Chevron - which recently reported $65 billion in sales during the first quarter of 2008.
Administrative obstacles are also complicating the situation: Chevron and its partners Mitsui Oil Exploration (Moeco) and GS
Caltex have yet to resolve how the government will tax their potentially substantial oil revenues in what one analyst called a
"show stopper." Another analyst said a compromise is expected to be reached.
However, even without the participation of giants like Chevron, Cambodia's hydrocarbon fields might offer up enough promise
to lure smaller producers keen to cash in on rising global oil prices, some observers said.
Under the current concession rules, oil companies have six years for exploration and industry experts say it would not be
surprising to see some licenses being traded to new players in the field.
"They have the data from the 15 new wells and from the old wells in the 1990s," said one petroleum consultant. "As oil prices go
up, more and more of these oil fields will be viable to produce."
Fears of 'oil curse' haunt energy

sector
Written by Susan Postlewaite
Cambodia’s discovery of oil has raised both hopes and concerns for the impoverished country, with many observers warning
that the Kingdom could fall victim to the infamous “oil curse,” an affliction that often strikes resource-rich but underdeveloped
nations.
Perhaps the most famous example of this phenomenon, and one that is referenced as a worst-case scenario for Cambodia, is the
African nation Nigeria, where billions of dollars in oil revenue have simply disappeared.
Cambodia’s own struggle with rampant corruption – it is considered by many to be one of the most graft-prone countries in Asia
– figured highly in an international oil and gas conference hosted by the Kingdom in March that drew hundreds of diplomats,
government officials and development agencies.
During the meeting industry experts bluntly told Cambodia to “eradicate corruption” or risk losing out on potentially hundreds
of millions of dollars in oil and gas revenues.
Luluk Sumiarso, director general of oil and gas for Indonesia’s Ministry of Energy and Mineral Resources, said that after the
archipelago discovered oil, “we had to implement good governance. We had to eradicate corruption, or reduce the practice, in
the government.”
He also urged Cambodia to sign the Extractive Industries Transparency Initiative (EITI), which requires governments and
companies to disclose their financial records relating to oil, gas or mining deals.
ACKNOWLEDGING THE RISKS OF SUDDEN WEA LTH
Since energy giant Chevron struck black gold more than three years ago off the country’s coast, Cambodian officials have
acknowledged the potential pitfalls associated with this hydrocarbon windfall.
Prime Minister Hun Sen has repeatedly vowed that any oil wealth would be used to help raise Cambodia out of poverty, but has
also downplayed potential revenues, saying it would be “premature” to begin estimating the size of the country’s hydrocarbon
reserves.
Most recently, Hang Chuon Naron, secretary general of the Ministry of Economy and Finance, said that “oil can be a sunset or a
sunrise” amid mounting concerns that the sector could overshadow Cambodia’s other key industries like agriculture or garments,
a risk that is known as “Dutch Disease.”
One suggestion made at the March conference for managing Cambodia’s new-found oil wealth would be to channel the revenues
into a special fund to be invested for the long-term benefit of future generations, as Norway and East Timor have done.
“Our fund is now $2 billion and we expect it to be $10 billion in a few years,” said East Timor’s secretary of state for natural
resources, Manuel de Lemos, adding that the fund has strict accounting procedures.
Psychological shift pushes oil past

$135
Written by AFP
Oil prices leapfrogged to record highs above $135 on May 22 on runaway fears about strained energy supplies and fervent
demand, analysts said.
Brent North Sea oil struck $135.13 a barrel and New York light sweet crude hit an all-time peak of $135.09.
Analysts said the jump reflected a shift in market psychology rather than a change in the fundamentals of supply and demand,
and noted that many investors were reaping hefty returns.
OPEC chief Abdala El-Badri has said the oil cartel is unhappy with the surging prices, which he blamed on speculators and a
weak US dollar.
Overlapping claims complicate

gas hunt
Written by Susan Postlewaite W ith large volumes of gas being pumped from the Pattani Basin off the coast of Thailand,
Cambodia is expected to some day reap the benefits of its own domestic gas supply from fields lying under the same waters.
But first the country must resolve a contentious, decades-old dispute with Thailand over some 27,000 square kilometers in the
Gulf known as the Overlapping Claims Area, or OCA.
Although early drilling in Chevron's Block A in Cambodian waters off the coast from Sihanoukville has so far failed to yield
significant gas finds, industry officials and geologists agree the prospects for the discovery of large natural gas deposits in the
disputed area are high.
The Pattani Basin across the border in Thailand has been a reliable producer of gas for years and the geology of the basin
reaches into the disputed area.
No estimates are available regarding how much gas - or oil for that matter - could be recovered from the OCA.
But Thailand's former Energy Minister Piyasvasti Amranand says Cambodia should be anticipating gas because the companies
working in the Gulf of Thailand just across the border have been producing "mainly gas for 30 years."
"Although the geology is complex, in the overlapping claims area, that area is mainly gas," he said in an interview with the Post
at an oil and gas conference in March.
Gas in the OCA would be a windfall for both countries.
Impoverished Cambodia could use it to generate much-needed power - alleviating chronic blackouts, electrifying rural areas and
lowering the price of electricity for large development projects, said Deputy Prime Minister Sok An.
Domestic gas production could also enable Cambodia to replace costly imports of liquefied petroleum gas (LPG) and reduce the
country's heavy reliance on charcoal for cooking.
Thailand could also boost its production to meet rising domestic demand which requires that it import much of its gas from
neighboring Myanmar, whose shaky political environment makes it a risky supplier, industry sources say.
But talks over the OCA, which resumed in April after years of stalemate, are still in their early stages. The dispute goes back to
the 1970s, but six years ago Cambodia and Thailand negotiated the joint development agreement that was hoped to resolve the
problem.
According to the trade publication Oil & Gas Journal, the original model negotiated by Thailand and Cambodia called for a 50-
50 split of resources, while now Phnom Penh authorities are pressing for a 60-40 sharing ratio. Oil & Gas Journal said Thailand
will insist on the original 50-50 split.
Sources close to the negotiations say there are two components to the proposal on the table: to demarcate the upper part of the
OCA with a border while leaving the lower portion to be jointly developed by Cambodia and Thailand, which would share in the
costs and benefits of production.
One independent oil expert said Cambodia is likely to resist simply splitting the area down the middle since "the better prospects
are on the Thai side," adding that the debate has already become too tangled in politics and nationalism to move forward.
"Keep the two countries out of it, keep the politics out and let the maritime experts and lawyers decide," said the expert, who due
to the sensitive nature of the talks did not want to be named.
Another petroleum consultant warned that the dispute could take years to resolve, and depended heavily on global factors like
the price of oil and gas, but that Cambodia could have the upper hand at the moment because "Thailand needs [natural gas]
more."
Who's got what, and where
BLOCK A: Awarded to Chevron’s group, it is the only block where major exploration activity is taking place. Chevron has 55 percent, Mitsui Oil
Exploration Co., Ltd (Moeco) has 30 percent and GS Caltex Corporation has 15 percent.
BLOCK B: Awarded to Singapore Petroleum Company in a joint venture with Malaysia’s Resourceful Petroleum and Thailand’s PTTEP
International. Each holds a one-third stake. Australia’s Cooper Energy pulled out in October 2007, selling its share to its partners.
BLOCK C: Awarded to Hong Kong firm Polytec, which holds 100 percent. Polytec officials said they hope to drill a first well this year.
BLOCK D: Initially held by China’s Zhen Rong Cambodia Energy Company but now in the hands of Petrotech Holdings of China, which
bought 48 percent of Zhen Rong.
BLOCK E: Licensed to Indonesia’s Medco International Petroleum Ltd (41.25 percent), Kuwait Energy Co. KSCC (20.6 percent); Medco’s
partner JHL Petroleum, Ltd (4.13 percent) and Sweden’s Lundin Petroleum (34 percent).
BLOCK F: Held by state-run Chinese National Offshore Oil Corp. (CNOOC), one of China’s largest oil companies.
(Susan Postlewaite)
High hopes for hydropower

Written by Vong Sokheng and Sebastian Strangio
Kamchay project highlights risks and rewards of damming our rivers
KAMPOT - Chinese engineer Hu Nan gazes through a freshly

hewn gap in the hillside toward the distant Kamchay River.
Swollen by heavy rains, the river gushes over the rocks below
while fully loaded earthmoving trucks rumble past, slowly
carving a 110-meter-high auditorium out of the densely forested
hills of Bokor National Park.
A recent engineering graduate from Beijing, Hu says he is proud

to be involved in the construction of the $280-million Kamchay
dam, Cambodia's largest hydropower project to date.
"This will be the Three Gorges Dam of Cambodia," he yells over

the noise of a nearby generator.
The massive dam development in Kampot province broke

ground last September and is the government's most recent
effort to boost Cambodia's electricity output by harnessing one
of the Kingdom's most abundant natural resources: its rivers.
With just 20 percent of Cambodian households enjoying reliable

access to electricity, the Ministry of Industry, Mines and Energy
(MIME) envisions large-scale hydroelectric projects as a
solution to the country's chronic power shortages.
In its most recent Power Development Plan, covering the years

1999 to 2016, the ministry earmarked 14 potential sites for
development by 2018.
Construction has started at two - including Kamchay - with

another six now undergoing feasibility studies.
Kampot Governor Thach Khon says dams are an important way

of providing cheaper electricity, which he says is crucial to
Cambodia's economic and social development.
"Electricity is necessary for the development of business and

industry. It means that we will be able to implement our policies
for poverty reduction. If there is no electricity we cannot develop
the country," he said.
Shu Jiang, deputy managing director of Sinohydro Corporation, SEBASTIAN STRANGIO

Employees of Sinohydro Corp. cross a bridge over the Kamchay River built by
the Chinese state firm that is constructing the dam, agrees that the Chinese firm to service a hydropower project it is developing on the river in
the completed project will be a boon for the local economy. Kampot province.
"The power station will provide cheap power for Cambodia ... and after the construction, I think many tourists will go there to
play in the reservoir," he told the Post at the company's Phnom Penh office.
But as with the controversial Three Gorges project on China's Yangtze River - another Sinohydro project - local and international
NGOs have expressed concern that large-scale dam developments could have negative impacts on the environment and local
communities that far outweigh their benefits as a source of cheap power.
Sam Chanthy, environment project officer at the NGO Forum on Cambodia, said the Kamchay dam highlights what he sees as
the unrestrained nature of Cambodia's hydropower development.
"The government expects this dam to generate more electricity. They think it will industrialize Kampot, bring in more
investment, more factories," he said.
"But we can also see some of the downsides. About 2,000 hectares of protected forest will need to be cleared."
A January 2008 report prepared by the US-based watchdog International Rivers and the River Coalition in Cambodia (RCC)
concludes that the Kamchay dam project "raises important questions regarding both [Sinohydro] and the Cambodian
government's commitment to transparency, accountability, public participation, and the incorporation of adequate
environmental and social safeguards."
Chanthy said that the initial Environmental Impact Assessment prepared by Sinohydro prior to construction lacked any
significant public participation, as required by the 1996 Law on Environmental Protection and Natural Resources Management.
"According to the law, [the project] is not legal at all," Chanthy said.
Central to environmental groups' fears is the risk that the Kamchay dam could create problems similar to those experienced
downstream of the Yali Falls Dam, built in Vietnam's Central Highlands in 1996.
The RCC said in a report last year that toxic blue-green algae generated by the "nutrient-rich bottom water from the Yali
reservoir" was flowing into Cambodia, creating a potential public health risk.
"People are already getting hurt by the [Kamchay] dam in terms of water quality," Chanthy said.
Vendors who work at Teuk Chhu resort, a popular riverside attraction downstream from the Kamchay dam, say they are worried
pollution from the dam could cause visitor numbers to drop.
Muo Sim, 50, who sells food and drinks along the river's bank, said she supported the project but was concerned it would affect
the livelihoods of the 500 or so vendors at Teuk Chhu.
"We support hydropower dams because we hope it means we will get cheaper electricity. But if there is poor management, it
might make the water dirty and that could be the end of the famous resort here," she said
Sinohydro representatives meanwhile have rejected accusations that the company ignored the environmental impacts of the
project, arguing that the Kamchay dam is being built to the same standards as the company's other dams in China.
"During the construction period, some problems can't be avoided," said Li Tao, a Chinese engineer at the dam site. "But we have
constructed many dams in China, and we will obey the Chinese laws regarding the environment."
Li said the company would do everything it could to prevent a decline in water quality over the long term.
"After we finish the dam, we will cut all the trees and clear all the surrounding areas. So don't worry about the water quality," he
said.
Ith Praing, secretary of state at the MIME, also defended Sinohydro's environmental assessments, saying that "the process has
been normal" and that the impacts of all large hydropower projects are investigated before construction is allowed to start.
Chanthy of the NGO Forum emphasized that pursuing hydropower did not mean making a choice between development and
conservation.
"We're not against the dams," he said. "We are only pushing the government to abide by its own laws."
Foreign dam troubles trickling

downstream
Written by Sebastian Strangio
Massive hydroelectric projects in China and Vietnam are threatening to wreak havoc along the lower stretches of the Mekong
River, environmentalists warn, saying foreign dams could do more damage to Cambodia's fragile ecosystem than the Kingdom's
own nascent hydropower sector.
Hydropower development on the upper reaches of the Mekong River in southern China is a particular long-term concern for all
the countries of the lower Mekong basin, according to Carl Middleton of the US-based International Rivers Network.
China's thirst for electricity has led to the planning of eight giant projects on the upper Mekong, two of which are currently
operational and three of which are under construction.
"[The planned dams] can be expected to significantly alter the distribution of dry and wet season river flows, as well as result in
daily water level changes," Middleton said, adding that "even subtle changes can bring about large and unexpected impacts on
ecosystems."
"Fish are central to both the food security and the national economy of Cambodia. Therefore threats to these fisheries should be
considered with the seriousness they deserve," he said.
Environmentalists say one major problem is the lack of consultation between the developers and local communities that will be
affected by the projects.
"A public decision-making process about a dam's proposed development is critical," Australian academic Milton Osborne wrote
in a 2004 study, Rivers at Risk. "And clearly this public process has not happened in the case of China's mainstream dams."
Environmental groups have also observed problems stemming from the three dams currently operating on the Se San River, a
major Mekong tributary in Vietnam's Central Highlands.
A July 2007 report issued by the Rivers Coalition in Cambodia (RCC) said the Yali Falls dam in Vietnam "has significantly
disrupted the Se San River's flow in downstream Cambodia, where more than 28,000 people depend on the river for their
drinking water, irrigation, fishing, livestock-watering and transportation."
Roman Mleac, 56, from Pawdal village in Ratanakkiri province, less than 6km from the Vietnamese border, told the RCC that
"water levels [on the Se San] are changing every day. The water rises in the morning and at night the water falls.... The change is
around six meters."
Despite concerns voiced by community leaders in Ratanakkiri and Stung Treng provinces, who have requested they be consulted
on any future developments, state-run power supplier Electricity of Vietnam has plans to build two more dams on the Se San.
LPG investment paying off for

taxi driver
Written by Nguon Sovan
Fed up with watching the high price of gasoline

eat all the profits from his taxi business, Kim Hun
converted his Camry to run on bottled gas.
The 26-year-old has operated a taxi route between

Phnom Penh and Kampong Thom province for
three years.
"I had my Camry converted in early 2007 because

I could not make any income with my taxi when I
had to pay for petrol," said Hun.
He spent $450 on buying a gas tank and $50 on

the conversion service but says it was a worthwhile
investment.
"When the price of oil got so high, most taxi

drivers converted to using gas," said Hun. "Their
TRACEY SHELTON
Kim Hun shows off the LPG tank that’s helping him save money as petrol prices climb to record profits increased so I decided to change too."
highs.
He estimates that using liquefied petroleum gas (LPG) is 42 percent cheaper than gasoline.
The drive from Phnom Penh to Kampong Thom takes around 20 liters of gasoline, which now costs more than 5,200 riel per
liter.
The same trip in a gas-powered taxi uses 20 liters of gas at 2,900 riel per liter.
"If I use petrol, I make a profit of $10 for a single trip between Phnom Penh and Kampong Thom, while using gas, the profit
reaches up to $15.50," said another 39-year-old taxi driver, Kuon Poch, who switched to gas three years ago.
Oil explorers closing in on Tonle

Sap lake
Written by Susan Postlewaite U
ndersea oil and gas off Cambodia's southern coast continue to drive the buzz surrounding
the country's potential hydrocarbon windfall.
But inland petroleum reserves are beginning to also attract the attention of prospectors, as well as environmentalists concerned
over the impact of drilling wells in some of Cambodia's most sensitive eco-systems.
Oil and gas exploration in the Tonle Sap basin, a vast swath of Cambodia surrounding the country's great lake, is in its infancy,
with only one company - Medco Energi Global of Indonesia - confirmed as having been licensed for exploration.
Medco's international director, Grant Bowler, confirmed his company has the go ahead to explore in the Tonle Sap in a
partnership with the Cambodian National Petroleum Authority, but declined to comment further.
But as energy majors from China, Australia and other countries line up for their shot at striking it rich in Cambodia's unproven
inland petroleum fields, some warn of the need for extraordinarily strict policies for companies operating around the lake, which
is home to a number of threatened bird and animal species, as well as the source of most of the country's fish.
“The government is just beginning to lease to the companies. [The environment] is not a big concern so far.”
– Neou Bonheur, Ministry of Environment
"Any single environmental violation - one fish dead - and you lose your license," said an independent oil expert familiar with
Cambodia's fragile ecology, adding that drilling for oil and gas in the Tonle Sap should be based on "the most stringent
environmental regulations of any basin in the world."
Others also said they were worried and would be watching progress in this area of Cambodia's energy sector very warily.
"We are concerned about it. Our mission is to coordinate the management, the conservation and then the development of the
Tonle Sap Basin," said Sok Keang, deputy secretary general of the Tonle Sap Basin Authority, which was created last year by the
Council of Ministers to study the area's "management, conservation and development."
Very little is known about the potential for oil and gas in the Tonle Sap Basin, which is bigger than the lake itself, making it likely
that exploration will also take place on shore as well as under the water.
"The government is just beginning to lease to the companies. [The environment] is not a big concern so far," Neou Bonheur,
deputy director of the Ministry of Environment, told the Post, adding that environmental impact studies would be conducted
before each stage of exploration.
Two studies - for Medco and PGS, a global oil services company that focuses on geophysical services such as seismic data - have
already been completed by the Bangkok-based company International Environmental Management (IEM), said the business's
president and CEO Ron Livingston.
Studies from 2007 and this year showed that "none of the seismic lines are in protected areas," and that the vibrations that
would be caused by seismic surveys are minimal.
IEM expects to conduct additional environmental studies for other oil companies in Cambodia, where it has worked in the sector
since 1992, Livingston said.
Surging oil prices could hurt

world economy
Written by AFP
The feared super-spike in crude oil prices that appears to be underway could deal a crippling blow to a global economy already
reeling from the US housing slump and tight credit, analysts say.
Yet some argue that the surge may be a speculative bubble, and could end up self-correcting as demand softens from weaker
economic growth and energy efficiency measures.
Crude futures in May soared past the level of $130 a barrel for the first time, having more than doubled in the past year.
The jump appeared to fulfill predictions from some analysts of a super-spike that could take oil up as far as $200 a barrel.
Goldman Sachs analyst Arjun Murti added to the speculative fever earlier this month with a dire prediction of higher prices,
citing “a lack of adequate supply growth” and still-strong demand.
“The possibility of $150 to $200 per barrel seems increasingly likely over the next six to 24 months,” he said in a research note.
The reality of sky-high energy costs could mean a darker outlook for the US and global economy, by raising the price of a variety
of goods and services.
The notion of a quick recovery in the struggling US economy would likely be put in doubt, and the rest of the world would suffer
as well.
“A super-super spike would most likely put a stake in the heart of global economic growth,” says Ed Yardeni, economist at
Yardeni Research.
“A global economic downturn would be the most likely outcome, led by a longer and deeper recession in the US.”
The airline industry, already reeling from the surge in the past year, is feeling even more pain. Several small US carriers have
filed for bankruptcy and American Airlines, the nation’s largest, announced a capacity reduction of 11 to 12 percent and other
steps to deal with soaring energy costs.
“The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when
record fuel expenses are coupled with a weak US economy,” said AMR Corporation chairman and chief executive Gerard Arpey.
AMR is American’s parent.
John Kilduff, analyst at MF Global, said the world is consuming 87 million barrels per day of oil while producing only 82.6
million barrels.
“This is a compelling fundamental factor,” Kilduff said.
But some say oil is a bubble waiting to burst and that prices could fall sharply as supply and demand come into balance.
“We see many of the essential ingredients for a classic asset bubble,” said Edward Morse at Lehman Brothers.
Myles Zyblock of RBC Capital Markets argues that oil could be ready for a classic boom-and-bust cycle.
“I am concerned about the possibility that a euphoric investment mentality is beginning to overtake the oil market,” he said.
Even so, Zyblock said the spike could do considerable damage.
“An oil price mania is a particularly dangerous type of excess since it has the potential to generate severe economic, inflationary
and/or political dislocation,” he said.
Oil prices will eventually retreat, analysts say, as the United States and other big consumers curb demand – either by voluntary
means or because of an economic slump.
“What should matter and what will matter eventually is the fact that US oil imports are on a downward slope,” said Phil Flynn at
Alaron Trading, who notes that more fuel-efficient cars and alternative energy are finally denting demand from the world’s
biggest oil consuming country.
“The strain on global energy supply appears to be moderating, albeit ever so slightly,” adds Zyblock.
Zyblock said that other commodities such as gold have come off their peaks as the dollar has bounced back, but that oil’s
inexorable rise is more difficult to explain. “Based on our analysis, it seems reasonable to conclude that a speculative psychology
is beginning to overtake fundamentals in dictating oil price dynamics,” he said.
“While all manias are incredibly profitable, they are just as dangerous because their inevitable demise – characterized by a price
crash – is always a surprise.”
Mmm... light sweet crude

Price rises gather steam in 2008
1970: The official price of Saudi crude oil is fixed at $1.80 per barrel.
Jan 2: Prices hit $100 amid concerns over violence in Nigeria, stability in Pakistan
1974: Prices pass $10 a barrel after the first oil shock, sparked by the Oct 1973
and supply problems in the key US market.
Arab-Israeli war.
March 13: Light sweet crude closes above $110 a barrel for the first time amid
1979: The Islamic revolution in Iran causes a new oil shock and prices top $20.
fevered speculation over the weakening dollar and China’s and India’s ever
1980: The barrel surpasses $30 and hits $39 in early 1981 at the height of the
increasing demand.
Iran-Iraq war.
May 6: A brighter outlook for the US economy helps push world oil prices over
Sept-Oct 1990: Iraq invades Kuwait and prices rise above $40 per barrel.
$120 a barrel.
Aug 2005: Prices rise above $70 when Hurricane Katrina hits the Gulf of Mexico,
May 21: Oil jumps to $135.04 a barrel as official data reveal unexpected declines
damaging major offshore oil installations
in US energy inventories amid increasing Chinese demand.
Asia energy reform could save

$700 billion: UN
Written by AFP
But failure to act could cost $9 trillion
G reater use of renewable energy and power conservation could save countries in the Asia-Pacific region $700 billion by 2030,
according to a recent United Nations report.
The UN said without reform, energy infrastructure development in the region would cost $9 trillion.
But developing countries have argued in response that savings have not been fully proven and require tradeoffs that will hit
poorer countries hardest.
"Sustainable development of the region requires that we devote attention to our energy resources," Thai Prime Minister Samak
Sundaravej last month told a summit on the report, which drew delegates from 49 countries, including China, India and South
Korea.
"Our region urgently and seriously needs to consider energy management reform."
The UN Economic and Social Commission for Asia and the Pacific (ESCAP) is pushing leaders in the region to take cooperative
action quickly, while keeping the region's poorest residents in mind.
"This is the right time for us all to sit down," said South Korean Trade Minister Kim Jong-Hoon. "We are trying to remodel the
whole picture of our economies."
With government direction, greater energy efficiency in production and consumption around the world could reduce use by 40
percent by 2050, according ESCAP.
"We have a dilemma, your excellencies, and the dilemma is fossil fuels," said Noeleen Heyzer, executive secretary of ESCAP.
"Heavy dependency on fossil fuels is aggravating the Asia-Pacific region's economic vulnerability."
She said rocketing oil prices and the impact of emissions on global warming mean countries urgently need to rethink their
energy programs.
Without action, she said, the poor would be increasingly unable to afford energy and oil cartels would have growing power over
countries with few resources.
"This is no longer a hobby," Heyzer said. "It's an essential thing to do."
The report proposes joint Asia-Pacific energy infrastructure and standards as well as tax reform to encourage ecologically-
friendly energy resources.
Heyzer said countries needed to coordinate energy and development programs to empower the estimated 1.7 billion people in
Asia who still primarily use dirty, inefficient fuel.
However, Mirza Azizul Islam, an advisor to Bangladesh's finance ministry, said the report's proposals would hurt less-developed
countries in the short run.
"The tradeoffs involved in energy management policies have not been adequately considered," he said. "This can be a major
source of social discontent."
Ministers said they hoped sharing resources and information could help ease the transition for developing countries.
Idea of 'gas OPEC' gains currency

Written by AFP
Moves are afoot to set up an OPEC-style cartel

for gas but even though the proposal seems a long
way from reality just yet, consumers are concerned
that exporters will gain a free-hand to set prices.
The world's top gas exporters currently have the

Gas Exporting Countries Forum or GECF as their
informal platform for dialogue.
It was set up in 2001 and comprises around 15 gas-

rich countries, including Iran, Russia, Qatar,
Venezuela and Algeria, who control 73 percent of
the world's gas reserves and 42 percent of gas
production.
Nevertheless, "there is a desire" among exporting

countries "to have something more concrete," said
Iranian energy official, Javad Yarjani, speaking on
AFP
An undated handout picture shows the Al-Shamal gas field north of Qatar. Qatar is among a the sidelines of an international energy forum in
number of natural gas-producing countries considering the formation of an OPEC-style cartel that Rome last month.
has gas importing countries worried.
An executive of the Iranian National Oil Company, Akbar Torkan, said that "in the next 20 years, oil's share of fossil fuels will
decrease while gas' share will increase. It is therefore necessary to focus more on gas."
Claude Mandil, former head of the International Energy Agency, suggested the GECF could even set up its own secretariat along
the same lines as the Organization of Petroleum Exporting Countries (OPEC) at a meeting to be held in Moscow in June.
Qatar's Energy Minister Abdallah al-Attiyah had suggested in January that a "gas OPEC" could be set up at the next meeting of
the GEFC.
Nevertheless, the idea is not finding many friends among consumer countries, who fear it would only allow gas exporters the
same leeway as OPEC has on oil.
While OPEC abandoned its price range for a barrel of oil in 2005, it still has a system of quotas, which it can change in response
to market conditions.
The head of the Libya's National Oil Corporation, Shokri Ghanem, sought to downplay such fears, insisting that gas exporters
did not want to set up a cartel.
Instead, they wanted a "structure for cooperation and the exchange of information," much along the same lines as the OPEC's
research and analysis centre, he said.
Iranian delegate Yarjani insisted that such an organization would not run against the interests of consumers because there was a
great deal of interdependence between exporters and consumers of gas.
IEA chief Nobuo Tanaka said that "if gas exporters want to set up an organization, we can't prevent them."
British Energy Minister Malcolm Wicks said he did not like the idea of a gas OPEC.
"We support open markets. We think that there should be competition. We need transparency, we need to know where we stand.
We don't want another cartel."
He continued: "Cartels are there to fix things, often to the detriment of economies and the consumer. We think this is a foolish
proposition."
Biofuels under attack as food

prices soar
Written by AFP
H ailed until only months ago as a silver bullet in the fight

against global warming, biofuels are now accused of snatching
food out of the mouths of the poor.
Billions have been poured into developing sugar- and grain-

based ethanol and biodiesel to help wean rich economies from
their addiction to carbon-belching fossil fuels, the overwhelming
source of man-made global warming.
Heading the rush are the United States, Brazil and Canada,
which are eagerly transforming corn, wheat, soy beans and sugar
cane into cleaner-burning fuel, and the European Union (EU) is
to launch its own ambitious program.
But as soaring prices for staples bring more of the planet's most
vulnerable people face-to-face with starvation, the image of
biofuels has suddenly changed from climate saviour to a horribly
misguided experiment.
The head of the International Monetary Fund (IMF) recently

said biofuels "posed a real moral problem" and called for a
moratorium on using food crops to power cars, trucks and
buses.
The vital problem of global warming "has to be balanced with

the fact that there are people who are going to starve to death,"
said Dominique Strauss-Kahn.
"Producing biofuels is a crime against humanity," the UN's

former special rapporteur for the right to food, Jean Ziegler of
Switzerland, has said.
And on May 22, his replacement, Olivier De Schutter, said new

investments and subsidies favoring the production of biofuels AFP
A US farmer displays an ear of corn and a beaker of 200-proof ethanol.
should be frozen in an effort to curb food price rises.
Biofuels may still be in their infancy but they are growing rapidly, with annual production leaping by double-digit percentages.
US targets for reducing US carbon emissions require American producers to supply at least 136 billion liters of renewable fuel by
2020.
De Schutter described the target and a European Union goal of having biofuels meet ten percent of transport energy demands by
2020 as "unrealistic."
"By abandoning them (the targets), we would send a strong signal to the markets that the price of food crops will not infinitely
rise, thus discouraging speculation on commodity futures," he said.
"I have therefore proposed a freeze on all new investments and subsidies favoring the production of fuel by growing crops on
arable and non-degraded lands, when such lands are suitable for the production of food crops."
In 2007, 20 percent of grain - 81 million tons - produced in the United States was used to make ethanol, according to US think
tank the Earth Policy Institute, which predicts that the percentage will jump to nearly a quarter this year. "We are looking at a
five-fold increase in renewable fuel," said Bush's top climate change advisor, Jim Connaughton.
But more than half of that legislatively-mandated production would come from "second-generation" biofuels made from non-
food sources such as switchgrass and wood byproducts, he said.
EU and Brazilian officials have contested the link between biofuels and the world food crisis.
"This is highly exaggerated," Sergio Serra, Brazil's ambassador for climate change, told AFP.
"There is no real relation of cause and effect between the expansion of the production of biofuels and the raising of food prices.
At least it is not happening in Brazil."
Defenders of biofuels say food shortfalls have multiple causes, including a growing appetite for meat among the burgeoning
middle class in China and India.
On average, it takes more than four kilograms of grain to produce 1kg of pork, and 2kg of grain to yield 1kg of beef.
Climate change may well be a contributing factor.
Some scientists fear rising temperatures and shifting rainfall patterns may be worsening water scarcity in key agriculture areas
such as Australia's wheat belt, and rice-growing deltas may be hit by saline intrusion from rising seas.
In addition, the surging cost of oil has had an indirect impact on many poor people, adding to the pinch caused by rising food
prices.
Biodigesters power up villages as

alternative to national grid
Written by Chrann Chamroeun
AFP
WIND FARMS LOOKING UP OFFSHORE: A boat sails through a wind farm off the southeastern coast of England. The world’s first deepwater floating wind turbine is set
to be built off Norway’s coast next year, Norwegian oil company StatoilHydro announced on May 22. Offshore wind turbines already exist in numerous places around the
world but they have all been stationary turbines planted on the bottom of the seabed. StatoilHydro plans to attach the floating turbine to the top of a buoy, using technology
similar to that of offshore oil and gas platforms. It has several advantages over a stationary turbine – it can be placed in far deeper waters, where winds are often stronger,
and it can be moved. StatoilHydro is investing $80 million in the test project, which will tower some 65 meters above the waves and have a capacity of 2.3 megawatts.
In Cambodia’s rural hinterlands, reliable and affordable electricity from the national grid is a pipedream. The government has
pledged to electrify the whole of the Kingdom by 2021 but in the meantime power-hungry farmers are getting creative.
Diesel generators, car batteries, kerosene lamps and candles are all widely used in rural areas as alternatives to electricity, yet
such methods of powering up are expensive.
“In urban areas we now have reliable and affordable electricity but in the rural areas they do not,” said Sat Samy, minister in
charge of alternative energy. “[Farmers] have no money and no electricity but they need it more than we do in the towns.”
A move is afoot to show farmers how to turn something they have in abundance – animal manure – into something they
desperately need: electricity. Step forward the humble biodigester, a simple contraption that turns pooh into power.
“You need 30 to 40 kilograms of manure per day to get around 1,200 liters of gas, which is enough to run all normal household
appliances – electric cooker, lamps – for a day,” said Son Mao, a manager and technician for the biodigester project of the
Cambodian Rural Development Team (CRDT), a local NGO.
A biodigester is a system of closed containers – either plastic or cement – that help decompose the micro and macro organisms
in manure through a fermentation process to produce biogas and slurry.
The technology is simple but effective: one kilo of manure creates approximately 40 liters of gas. This is more than enough for
the average family, according to Mao; an hour of cooking uses about 450 liters of gas while running a lamp for an hour uses
about 250 liters. And it’s “greener” to cook with biogas than charcoal.
Before installing a biodigester, families should have a reliable supply of manure.
CRDT recommends users have access to the manure from two cows and three pigs or other barnyard animals of comparable size.
They will also need at least 12 square meters of land near the household’s kitchen and water source as well as materials,
equipment and advice on installing the biodigester.
CRDT’s project has been so successful it has been rolled out into a National Biodigester Program, a joint venture between the
Ministry of Agriculture, Forestry and Fisheries and the Netherlands Development Organization.
“You can use them for about 20 years and we have built more than 2,000 across Cambodia,” said Lam Phalleng, a coordinator
for the National Biodigester Program.
It costs about $500 to construct one biodigester but over half the cost is covered by contributions in cash and kind from the
community. Furthermore, loans can be provided through the microfinance organization Prassac.
The project is increasingly well-known and has been featured on Cambodian state television.
“People are very interested in our program because they immediately see the benefits: they don’t need to go to the forest to
collect wood all the time like before and they can use electric cookers and lamps in their houses,” Phalleng said.
High oil prices fuel Phnom Penh

bicycle sales
Written by Mom Kunthear
Sales of bicycles are soaring, with high fuel prices convincing a growing number of people that the time is right to switch to
pedal power and save money.
And consumers who make the change say they also appreciate the health benefits from riding a bicycle.
Chhum Sophorn, 52, who has a bicycle shop at O'Russei market, said he is enjoying the best sales since 1992-1993, when the
country was administered by the United Nations Transitional Authority in Cambodia.
"I've been selling more than 100 bicycles a month since early this year, up from 40 to 60 a month previously," Sophorn said.
"I think more people are making the change to bicycles in order to save money or to better balance their household budget," he
said, adding that his customers come from Phnom Penh and the provinces.
Mey Saray, 31, another bicycle seller at O'Russei market, said he was also achieving sales of more than 100 a month, up about 66
percent from a year ago.
He said that in the past his best months for sales have been September and October, when parents buy bicycles for their children
at the start of new school year.
Saray and Sophorn said they sell bicycles made in Japan which cost between $35 and $60.
"All bicycles are imported from Japan because they are good quality," Saray said.
Sovan Philong, 23, says he is saving about $10 a month - and feeling much fitter - since he began using a bicycle instead of his
motorbike.
"I bought the bicycle last month for $25 because I could not afford to continue using my motorbike with fuel prices so high," said
Philong, a video producer at Catholic Social Communications.
Philong admitted that the transition had been physically challenging.
"The first time it was difficult because riding the bicycle made me tired and I was late for work," he said. "But now I'm more
comfortable with it and I'm healthier."
Security guard Chea Buntheoun, 25, was shopping for a bicycle at O'Russei market last week after high fuel prices forced him to
sell his motorbike.
"I sold my motor to my aunt because I can no longer afford the cost of fuel," said Buntheoun, who earns $60 a month.
"I use a liter a day and now that fuel is more than 5,000 riels a liter I can't afford to buy it any more," he said.
Gasoline prices continue to climb on the back of spiraling global oil costs - topping more than 5,200 riels per liter recently.
But Buntheoun said he intended to buy another motorbike if fuel prices go down.
"Riding a motor is easier and faster than a bicycle," he said.

Hotels, embassies go 'carbon

neutral'
Written by Cat Barton
W hat do the British Embassy and one of the newest

boutique hotels in Phnom Penh have in common? They are both
going green.
While Phnom Penh may seem an unlikely place to witness the

effects of policies devised in London, the British government's
commitment to becoming a low-carbon economy has inspired its
Phnom Penh Embassy to take steps to reduce their own carbon
emissions.
"We volunteered to be one of the first posts to look at how to

improve our carbon footprint," said Rob Bateson, deputy
management officer at the British Embassy.
The Embassy formed a "green team" composed of both local and

British staff and invited French NGO Geres to conduct a carbon
audit. The results showed that air travel was the worst culprit,
accounting for more than 50 percent of their carbon footprint.
Staff are now being discouraged from flying unless strictly

necessary and video conferencing has been installed in an effort
to curb work-related travel.
But the Embassy also looked for simpler changes that could
quickly reduce their output of carbon dioxide, a byproduct of
burning fossil fuels and the main culprit in human-induced
global warming.
Standard light bulbs were changed to low-energy bulbs, air

conditioning use has been limited, printers have been upgraded
to models that print both sides of a page and recycled or
renewable-sourced paper is now being used.
TRACEY SHELTON "We've begun the process of reducing our vehicle fleet and one of
The recently opened Quay hotel on the Phnom Penh riverfront is one of the vehicles is now run entirely on biodiesel," said Bateson.
several operations in the capital working to minimize carbon emissions.
"We know you can't reduce emissions to zero but you can get rid of as much as possible and what we cannot get rid of we will
offset."
The idea is to "spread the word and encourage other firms, businesses and diplomatic missions to take [their carbon footprint]
seriously," said Bateson. And it appears to be working: the Danish Embassy has recently followed suit. .
"It is about changing the way people operate," Bateson said. "You don't have to work in an arctic cold office. It doesn't have to
cost businesses a lot of money - they just have to take a little time to think about how they can do it."
It is about changing the way people operate. You don’t have to work in an arctic cold office.
While the Embassy's efforts were motivated by government policy, one important player in Cambodia's booming tourism
industry - Food and Beverages Solutions (FABS), whose portfolio includes the FCC Phnom Penh, FCC Siem Reap and Spanish
restaurant Pacheran - has gone green with its latest hotel venture.
"We want to set a new benchmark," said Michelle Duncan, group operations manager for the FCC Phnom Penh. "It's definitely a
marketing tool but as long as we can back ourselves up with Geres."
Like the British Embassy, FABS engaged Geres to conduct a carbon audit of all its properties and give recommendations on how
to reduce its carbon footprint. The audit is still in progress and recommendations will be forthcoming when it has concluded
later this year.
Geres is now planning a "carbon friendly rating system for restaurants and hotels [where businesses will be rated] on emissions
and attempts to improve these emissions in Cambodia," said Kimberly Buss, carbon offset analyst at Geres's climate change unit.
While the Quay - FABS' recently opened carbon-friendly hotel - has inbuilt "green" features such as waste water treatment
facilities, energy efficient lighting, solar power to heat water and wood-free paper, the group hopes to "move forward to carbon
neutral" at all of its properties, Duncan said.
But at the moment, much of what can be done is limited.
"Behavioral change is a big part of what you can do here," said Buss. "We are looking for things that are simple to change; turn
off air-conditioning, teach staff to recycle - it's a start."
Biofuel boom over the horizon

Written by Cat Barton
From London to Los Angeles, the post-modern

zeitgeist has gone green. It's now cool to be
conscious of your carbon footprint and swap your
gas-guzzling SUV for a Toyota Pirus hybrid.
But when the price of crude oil hits record highs

over $135 a barrel, the idea of growing your own
fuel is appealing for economic as well as
environmental reasons - especially if you have vast
swathes of arable land, a reservoir of cheap labor
and a pressing need to boost the agricultural
sector's contribution to GDP.
So fasten your seatbelts: Biodiesel is coming to

Cambodia.
"This is going to change everything," said David

Granger, director of Biodiesel Cambodia, a private
company working to promote biofuel use in
Cambodia.
Photo Supplied
Cambodia's government has been championing A man inspects a jatropha curcas field planted for the bushes’ oily nuts, which are becoming an
increasingly popular source of biodiesel. Foreign and local companies are eyeing Cambodia’s vast
biofuels - specifically jatropha - for more than swathes of agricultural land for biofuel production, with the hardy jatropha shrub at the top of the
eight years now. Officials cite potential benefits list of alternatives to crude oil.
ranging from insulating Cambodia from the vagaries of the international oil market to providing rural populations with cheap,
environmentally friendly electricity and a new cash crop which could bolster the agricultural sectors contribution to GDP.
"The time is right for biodiesel in Cambodia," said Sat Samy, minister in charge of alternative energy.
"When we first started looking into jatropha eight years ago biodiesel cost more than regular diesel but now that is not the case
at all."
Biodiesel Cambodia sells their fuel for 85 US cents a liter - significantly less than the 5,000 riels ($1.25) that a liter of regular
diesel now costs at the pumps.
"When we started, diesel was only 70 cents a liter. We've gotten much more competitive," Granger said.
The humble jatropha curcas plant is well-known in rural Cambodia. A cottage industry has long existed converting the oil
harvested from hedgerows into soap and other products.
According to biofuel experts, Cambodia's soil and climate provide ideal conditions for the commercial cultivation of jatropha.
And the government is waiting with open arms.
"Renewable energy has the full support of the government and the Prime Minister," said Samy. "This is for our future: protect
the environment and give electricity to the next generation of Cambodians."
A GLOBAL FOCUS
Cambodia has already caught the attention of major international biofuel companies.
Brian Morgan, marketing and communications manager for D1-BP Fuel Crops, a London-based biofuel company, said they were
"actively looking at potential development opportunities in Cambodia." The company currently has extensive operations in India,
the Philippines, Thailand, Malaysia and Indonesia.
"We have identified Cambodia as an area of interest for our business, predominately because its soil and climate conditions are
ideal for cultivating jatropha," Morgan said.
"We also believe that access to suitable land - i.e. that currently remains idle or is of less arable value - makes this a good
potential choice for future investment."
D1-BP Fuel Crops is confident that biofuels will be a growth market as many governments are actively formulating plans around
sustainable biofuel.
"The cultivation of jatropha will be an attractive proposition to developing countries ‘to grow their own fuel' and, as a world
leader in the commercial planting of jatropha, D1-BP Fuel Crops are well placed to build relationships with governments and
industry customers to build a sustainable future in biofuels," Morgan said.
Many European countries now have biofuel mandates - when the government stipulates that a certain percentage of diesel sold
at the pump must come from renewable sources - and the Kingdom's regional neighbors such as Thailand and South Korea have
recently followed suit, meaning both global and regional demand for biodiesel is only going to increase.
"Korea has 5.0 percent at the moment and that is going up to 20 percent over the next few years and Thailand is on a 2.0 percent
mandate," said Granger.
"They have to find a large land mass with low-priced labor. There are a huge number of investors trying to get it right - to find
the right land and the right deal."
The disadvantage for developed countries now is that they lack land mass and a cheap workforce.
ETHICS OF PRODUCTIO N LEFT UP TO PRIVATE SECTOR
Cambodia currently has no plans for a biofuel mandate as the

government is still researching the potential problems with such a
policy.
And while Biodiesel Cambodia is already operating in the Kingdom,

albeit still in the early "awareness-raising" stage with a number of
pilot projects underway, the company is not yet licensed to market
their product commercially.
But it is already selling biodiesel - made from recycled cooking oil

since what few jatropha seeds the Kingdom currently produces are
being used to grow more of the plant - to a select band of supporters
including the British Embassy.
Globally, biofuels have come under fire for their impact on food
crops, with critics arguing that turning fertile farmland over to fuel
rather than food production will only cause problems, particularly in
the context of spiraling global commodities prices.
The government says it will not allow jatropha to be planted in the

Kingdom's rice paddies and it is exercising caution in the awarding of
concessions for biofuels, according to Samy.
But with no government regulations currently in place in Cambodia,

whether these guidelines will be observed "comes down to the
company and their ethics," Granger said.
"We are ethical so we do it our way - cutting down rainforests to grow

jatropha is not really what you want to be doing," he said. "We don't
want to use land that could be used to grow food crops. It comes
TRACEY SHELTON down to the company ethos. There is plenty of suitable land
Sat Samy: “Renewable energy has the full support of the government available."
and the Prime Minister.”
D1-BP Fuel Crops say that sustainable development is a key part of its business model, and says that "as the jatropha that we
cultivate is on land that is either idle or of lesser arable value, then we don't believe that this competes with land used for food
crops."
Yet critics argue that to be economical, jatropha must be produced in volume and those who stand to profit most are the
processors, retailers and middlemen.
Moreover, they say, jatropha is toxic to livestock, weedy and not a good species to use in agro forestry systems.
Although the plant may look promising to biofuel companies as a tree for marginal lands, without added nutrients and moisture
only marginal yields can be expected.
"There are valid concerns [but] ethically and effectively done it has the potential to change the face of Cambodia," said Granger.
Local farmer undercuts petro giants

Written by Nguon Sovan
Tham Bunhak, 57, operates a small-scale electricity supply business providing power to households in Battrang commune,
Mongul Borey district, Banteay Meanchey province.
He said the high price of diesel forced him to convert to growing jatropha curcas to produce oil for his own generators.
“I have grown jatropha curcas on six hectares of land since early 2007,” he said.
“I extract about 1,000 liters of jatropha oil to supply my generators each month, which generates between 1,000 to 1,200
kilowatt hours a month. I supply roughly 83 households in my commune with electricity.”
Bunhak said when he started producing jatropha oil a liter of diesel cost 3,200 riels (80 cents). “I set the power price at
2,800 riel per kilowatt hour. Now normal diesel costs 4,800 riels but I still charge the same price for my electricity,” he said.
Bunhak was also said jatropha oil was a much cleaner buring fuel in his generator than regular diesel.
Energy briefs
IEA chief warns of global oil shortfalls

Written by AFP
Global oil supplies could fall far short of need and expectations in the next 20 years, the International Energy Agency is
concluding based on a vast effort of detective work on production prospects. In an interview with the Wall Street Journal
published May 22, IEA chief economist Fatih Birol argued that investment is lagging behind expected growth of demand.
Consuming countries had to take "emergency action" to increase energy efficiency and develop alternative energies, he said. For
several years the IEA had calculated that supplies would increase to exceed 116 million barrels per day by 2030, from about 87
million barrels per day now. But it now estimates that "companies could struggle to break beyond 100 million barrels per day
over the next two decades." This, Birol said, "is a dangerous situation."
Philippines to turn garbage into energy
Written by AFP
The Philippine capital may soon have a power plant that uses thousands of tons of garbage daily as fuel. It will use methane
gas produced by rotting rubbish, reduce the city's volume of waste and lessen its dependence on landfills, Metropolitan Manila
Development Authority chief Bayani Fernando said. "Through this project, we are planning to solve the problem of having huge
amounts of garbage and free up space on landfills," said Fernando. Manila, which generates an estimated 10,000 tons of solid
waste a day, would see its garbage volume reduced by as much as 60 percent once the power plant is operational, Fernando said.
New life form could turn CO2 into fuel
Written by AFP
A n American scientist says he is creating a life form that feeds on climate-ruining carbon dioxide to produce fuel. Geneticist
Craig Venter's potentially world-changing "fourth-generation fuel" project follows his work mapping the genetic diversity of the
oceans. "We have modest goals of replacing the whole petrochemical industry and becoming a major source of energy," Venter
says. "We think we will have fourth-generation fuels in about 18 months, with CO2 as the fuel stock." Simple organisms can be
genetically re-engineered to produce vaccines or octane-based fuels as waste, according to Venter. Biofuel alternatives to oil are
third-generation. The next step is life forms that feed on CO2 and give off fuel such as methane gas as waste, according to Venter.
"We have 20 million genes which I call the design components of the future," Venter said. "We are limited here only by our
imagination."

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ENERGY

POWERING THE NATION 2008

Power for the people -- some day

How is Cambodia developing its power

Will Cambodia is connected to a regional power grid?

Why did the government decide not to invest in generation?

Do the high costs of electricity in Cambodia hinder foreign investment?

Asian governments forced to act

Underpowered energy sector

A fter suffering heavy damage during decades of civil strife,

The country stands on the brink of a power-generation

However, until these come online, Cambodia remains largely in

Rolling blackouts plague the capital, casting whole

Cambodia's failures so far at mass power generation - a

Cambodian power can cost as much as 2,000 riels more per

The result is costly electricity.

"Electricity still costs a lot," Sinhel said.

High costs of electricity deterring

Getting a feel for power

Record high oil prices of $135 a barrel have

But uncertainty still clouds the nascent petroleum

Since then, predictions over the size and value of

"These reserve numbers will change," he said.

Fears of 'oil curse' haunt energy

ACKNOWLEDGING THE RISKS OF SUDDEN WEA LTH

Psychological shift pushes oil past

Overlapping claims complicate

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

Who's got what, and where

High hopes for hydropower

Kamchay project highlights risks and rewards of damming our rivers

KAMPOT - Chinese engineer Hu Nan gazes through a freshly

A recent engineering graduate from Beijing, Hu says he is proud

"This will be the Three Gorges Dam of Cambodia," he yells over

The massive dam development in Kampot province broke

With just 20 percent of Cambodian households enjoying reliable

In its most recent Power Development Plan, covering the years

Construction has started at two - including Kamchay - with

Kampot Governor Thach Khon says dams are an important way

"Electricity is necessary for the development of business and

Shu Jiang, deputy managing director of Sinohydro Corporation, SEBASTIAN STRANGIO

Foreign dam troubles trickling

LPG investment paying off for

Fed up with watching the high price of gasoline

The 26-year-old has operated a taxi route between

"I had my Camry converted in early 2007 because

He spent $450 on buying a gas tank and $50 on

"When the price of oil got so high, most taxi

Oil explorers closing in on Tonle

Surging oil prices could hurt

“This is a compelling fundamental factor,” Kilduff said.

Mmm... light sweet crude

Asia energy reform could save

But failure to act could cost $9 trillion

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

Idea of 'gas OPEC' gains currency

Moves are afoot to set up an OPEC-style cartel

The world's top gas exporters currently have the

It was set up in 2001 and comprises around 15 gas-

Nevertheless, "there is a desire" among exporting

Biofuels under attack as food

H ailed until only months ago as a silver bullet in the fight

Billions have been poured into developing sugar- and grain-