Warsaw March 2011

What talents should the What talents should the hydrogeologist of the 2030’s have, hydrogeologist of the 2030’s have,

to be successful, in a rapidly to be successful, in a rapidly changing world?changing world?

Shammy PuriShammy PuriSecretary General, International Association of Secretary General, International Association of

HydrogeologistsHydrogeologistsChair, IAH TARM CommissionChair, IAH TARM Commission

Co Chair UNESCO-ISARM ProgrammeCo Chair UNESCO-ISARM Programme

University of Warsaw Department of Geology

World Water Day Lecture March 2011

Warsaw March 2011

BaselineBaseline Talents…….observation, judgement & observation, judgement &

perceptionperception Hydrogeologists …pure science, pure science,

applied practitioner, policy orientated, applied practitioner, policy orientated, socio-economical, legal..?socio-economical, legal..?

2030’s……only two decades from nowtwo decades from now Success….. Measured in personal Measured in personal

wealth or ability to make a change in wealth or ability to make a change in the world?the world?

Rapidly changing world …. “the class “the class of 1970…”of 1970…”

Warsaw March 2011

Structure of the Structure of the lecturelecture

Three parts:Three parts:

The evolving science & global issuesThe evolving science & global issues Is there a response? … the IAH Is there a response? … the IAH

Krakow Declaration – link to ‘Poland Krakow Declaration – link to ‘Poland 2030’ strategy2030’ strategy

Restructuring the coal sector of Restructuring the coal sector of Ukraine – from hydrogeology to Ukraine – from hydrogeology to hydro-economics .. and beyondhydro-economics .. and beyond

Warsaw March 2011

Changes “the class of Changes “the class of 1970”1970”

Warsaw March 2011

What its about..What its about..

Between 2010 and 2060 the world will change in Between 2010 and 2060 the world will change in some predictable and some unpredictable ways..some predictable and some unpredictable ways..

Social Capacity & Institutional restructuring for Social Capacity & Institutional restructuring for the predictable changes can be envisaged; but the predictable changes can be envisaged; but for the unpredictable, … can we plan? for the unpredictable, … can we plan?

From the practitioners perspective – what kind of From the practitioners perspective – what kind of ‘expert’ do we need to be training & preparing ‘expert’ do we need to be training & preparing for the next decade – two decades., etc?for the next decade – two decades., etc?

Lessons from the study of the Coal Sector of Lessons from the study of the Coal Sector of UkraineUkraine

Some concluding remarksSome concluding remarks

Warsaw March 2011

Present day focus..Present day focus.. Present day focus is on diagnosis, Present day focus is on diagnosis,

categorisation and inventory. categorisation and inventory. We need a dynamic that focuses on We need a dynamic that focuses on problem problem

solving.solving. Past 50 years have shown that the worlds Past 50 years have shown that the worlds

ecological needs have to move from ecological needs have to move from ‘preservation’ to readjustment and adaptation ‘preservation’ to readjustment and adaptation in a rapidly changing environment. in a rapidly changing environment.

Effort has to be directed to build ecological Effort has to be directed to build ecological resilience and to move from ‘knowledge’ to resilience and to move from ‘knowledge’ to wisdom about the ecosystems. wisdom about the ecosystems.

So, a new approach to education and So, a new approach to education and preparation ?? preparation ??

Warsaw March 2011

Past methods & future Past methods & future needsneeds

Warsaw March 2011

Uncertain & complex ?Uncertain & complex ?

Warsaw March 2011

What do we perceive..?What do we perceive..?

Warsaw March 2011

the evidence is therethe evidence is there

Warsaw March 2011

Changes are needed ..Changes are needed .. Perceptions that need to Perceptions that need to

change …. management change …. management of aquifers – both of aquifers – both national and national and transboundary. transboundary.

Aquifers are not just Aquifers are not just sources for sources for ‘groundwaters’ but they ‘groundwaters’ but they constitute ‘sub surface constitute ‘sub surface space’, to be wisely space’, to be wisely managed, as a medium managed, as a medium for several and multiple for several and multiple uses and needs. uses and needs.

Warsaw March 2011

Point of reference..? Point of reference..?

Warsaw March 2011

How could hydro’s fit How could hydro’s fit in?in?

Warsaw March 2011

In-situ gasification - In-situ gasification - aquifersaquifers

Warsaw March 2011

IAH’s Forward LookIAH’s Forward Look Quote ……… “in 50 years time, the Quote ……… “in 50 years time, the

Hydrogeologist will benefit from the Hydrogeologist will benefit from the unachievable today ability to interpret, unachievable today ability to interpret, visualise, analyse and predict aquifer visualise, analyse and predict aquifer behaviours in the subsurface, and behaviours in the subsurface, and communicate with fellow communicate with fellow hydrogeologists (and others) through hydrogeologists (and others) through holographic virtual meetings and holographic virtual meetings and discussions” discussions”

In many countries thoughtful people In many countries thoughtful people are looking ahead … eg “Poland 2030” are looking ahead … eg “Poland 2030” … preparing for changes…… preparing for changes…

Warsaw March 2011

Krakow Declaration Krakow Declaration follow upfollow up

International Programme for New Dimensions International Programme for New Dimensions in the application of Ecohydrogeologyin the application of Ecohydrogeology

Purpose:Purpose: to resolve forthcoming to resolve forthcoming environmental issues stimulated by climate environmental issues stimulated by climate variability intensificationvariability intensification

How: How: education of experts & technicians education of experts & technicians educated to meet the challenges of the future educated to meet the challenges of the future needs – needs –

Where:Where: in implementing major water & in implementing major water & ecohydrogeological investments ecohydrogeological investments

Why:Why: as a response to the plans in such global as a response to the plans in such global programmes as IHP VIIIth Phase, EU Water programmes as IHP VIIIth Phase, EU Water Initiative & UN ECE Environment for EuropeInitiative & UN ECE Environment for Europe

Warsaw March 2011

New directions…New directions…Krakow Declaration

Follow up

Universities Governmentpartnership

Intnl Prog New Directions in the

application of ECOHYDROGEOLOGY

To resolve forthcoming environmental problems stimulated by global climate variability

Through education of experts to meet the challenges of the future needs – implement major water &

ecohydrogeological investments

Attract trainees from EECCA to undergo a new programme of education

Responding to needs & priorities in

UNESCO IHP VIIth & VIIIth Phase

EU Water Initiative –focus on EECCA

UN ECE’s Environment for Europe Process

Warsaw March 2011

Coal Sector of UkraineCoal Sector of Ukraine

Warsaw March 2011

Conceptual ApproachConceptual Approach

UNDERGROUND MINING

HEATING POWER

spoil tips

fugitive gas emissions - methane

solid waste - tailings

liquid waste – water slurry

sediments

polluted ground water

contaminated soil

blown dust

Aim: Production cost reduction & achieving environmental gains

Warsaw March 2011

Mines in the Donbass Mines in the Donbass regionregion

Warsaw March 2011

Business as Usual analysisBusiness as Usual analysis

Warsaw March 2011

Deconvoluting the Deconvoluting the componentscomponents

Annual Coal production

Annual cost of production (due to by-products)

Market price of coal

Annual mining spoil produced

Annual water pumped

Amount of methane vented

Environmental charges paid

Cost of Spoil Mgmt & disposal

Depth of mine workings

Lost value of vented methane

Cost of pumping & water managment

Warsaw March 2011

BaU AnalyserBaU Analyser

Annual Coal mining from 161 Mines in Donbass & Lviv-Wolin

Market Price of Coal UAH/T

Environment related costs in production & sector management: BaU model will help to identify where savings / optimisation most effective

Costs of Production UAH / T

Analyse & forecast coal demand from 2010 to 2030

Analyse & forecast market price of coal

Analyse & forecast cost of production

Calculate total cost of production

Depending on national & export demand ,

Estimate total value of equity in coal market, home & external

If profit margins become under pressure, what

cost reductions can be made ?

Totally revise data collection & management

Review & analyse Production costs e.g. costs due to poor environmental management

Review & improve management of;

SpoilSlurry

Water pumping

Optimise the costs of by-products

Capture & utilisation of methane that is vented

Business as Usual – analysis for the period 2010 - 2030

CAPITAL + LABOUR + TECHNOLOGY = PRODUCTIVITY GROWTH & EFFICIENCY

Warsaw March 2011

Base data from 220 Base data from 220 minesmines

Name of the mine 2010 "initial" 2011 2012 2013 2014 2015 2016 2017

1 Trudovskaya 330.7 327.4 324.1 320.9 317.7 314.5 311.4 308.3

2 Yuzhnodonbasskaya #3 968.1 958.4 948.9 939.4 930.0 920.7 911.5 902.4

3 Lidievka 43.0 42.6 42.2 41.7 41.3 40.9 40.5 40.1 4 Skochinskogo 569.5 563.8 558.2 552.6 547.1 541.6 536.2 530.9 5 Abakumova 211.1 209.0 206.9 204.8 202.8 200.7 198.7 196.8 6 Oktyabrskiy rudnik 190.2 188.3 186.4 184.6 182.7 180.9 179.1 177.3 7 Putilovskaya 16.1 15.9 15.8 15.6 15.5 15.3 15.2 15.0 8 Kalinina 169.7 168.0 166.3 164.7 163.0 161.4 159.8 158.2 9 Mospinskaya 50.7 50.2 49.7 49.2 48.7 48.2 47.7 47.2 10 Cheluskintsev 175.1 173.3 171.6 169.9 168.2 166.5 164.8 163.2 11 #4-21 31.8 31.5 31.2 30.9 30.6 30.2 29.9 29.6 12 #1/3 Novogradovska 423.9 419.6 415.4 411.3 407.2 403.1 399.1 395.1 13 Rossia 725.7 718.5 711.3 704.2 697.1 690.2 683.3 676.4 14 Ukraina 182.5 180.7 178.9 177.1 175.3 173.6 171.8 170.1

Projected

production

Name of the mine 2010 "initial" 2011 2012 2013 2014 2015 2016 2017Trudovskaya 326087.1 329282.8 332509.8 335768.4 339058.9 342381.7 345737.0 349125.2Yuzhnodonbasskaya #3954554.1 963908.8 973355.1 982894.0 992526.3 1002253.1 1012075.2 1021993.5Lidievka 42404.5 42820.1 43239.7 43663.4 44091.3 44523.4 44959.8 45400.4Skochinskogo 561561.3 567064.6 572621.9 578233.6 583900.3 589622.5 595400.8 601235.7Abakumova 208132.4 210172.1 212231.8 214311.7 216411.9 218532.8 220674.4 222837.0Oktyabrskiy rudnik 187556.6 189394.7 191250.7 193125.0 195017.6 196928.8 198858.7 200807.5Putilovskaya 15868.9 16024.4 16181.5 16340.0 16500.2 16661.9 16825.2 16990.0Kalinina 167324.8 168964.5 170620.4 172292.5 173980.9 175685.9 177407.7 179146.3Mospinskaya 49970.5 50460.2 50954.7 51454.0 51958.3 52467.5 52981.7 53500.9Cheluskintsev 172629.5 174321.3 176029.6 177754.7 179496.7 181255.8 183032.1 184825.8#4-21 31361.1 31668.4 31978.8 32292.2 32608.6 32928.2 33250.9 33576.8#1/3 Novogradovska 379219.9 382936.3 386689.1 390478.6 394305.3 398169.5 402071.6 406011.9Rossia 649262.7 655625.4 662050.6 668538.7 675090.3 681706.2 688387.0 695133.1UkrainaKurakhovskaKorotchenkoKarla MarxaBulavinskayaOlkhovatskayaUglegorskayaYenakievskayaPoltavskaya

1 MayaChapayeva17 Part SyezdIlovayskayaKommunistTkachukaЗФ Шахтарська 0.0 0.0 0.0 0.0 0.0 0.0 0.0ProgressLutuginaKiseliovaШ/у ВолинськеZaryaSevernayaUdarnik

Forecast costs of

production

Analysis from 161 mines

Warsaw March 2011

BaU model BaU model parametersparameters

Select the rate of increase of coal production from 2011 to 2030 – 3% per annum assumed

1.03

Adjusted cost of production from 2009 to 2010, as an initial change (2% hike in costs)

1.02

Ann rate of reduction in the cost of production from 2010 to 2030 – production cost in 2030 reduces to 283 UAH / T – 4% per annum assumed

0.96

Adjusted market price from 2009 to 2010, as an initial change (1 = no change)

1

Ann rate of change of the market price from 2010 to 2030 …. Progressively increased to rise at the rate of 1% per annum – market price would rise to 518 UAH / T in 2030

1.01

Warsaw March 2011

Cost reductions for Cost reductions for environmental gainsenvironmental gains

EC Coal Sector Policy Support Programme, Ukraine - Component on Environment

Analysis of "Business as Usual" for environmental managementProjection of Operational Conditions 2010 to 2030

BASIC SECTOR DEVELOPMENT ASSUMPTIONSAnnual rate of change in Coal Production from 2011 is (factor) 1.03Coal Production in 2010 is 45986 (x 1000 T)

2030 is 83055 (x 1000 T)

Factor for adjusting 2010 COST of production, ref to 2008 / 2009 1.02Annual rate of change in cost of production from 2011 is (factor) 0.96Cost of production in 2010 is 640 UAH / Tonne

2030 is 283 UAH / Tonne

Factor for adjusting MARKET PRICE for coal ref to 2008 / 2009 1Annual rate of change in market price from 2011 is (factor) 1.01Market Price for coal in 2010 is 425 UAH / Tonne

2030 is 518 UAH / Tonne

ENVIRONMENTAL MANAGEMENT COSTS

Spoil Cutting, Lifting and ManagementAnnual rate if change in spoil management efficiency in 2011 0.98Unit cost incurred in spoil disposal - in UAH per Tonne of spoil 110 UAH / Tonne

Coal Washing slurry managementFactor for adjusting % of slurry from coal produced 0.94Unit cost of slurry management in UAH per Tonne of slurry 50 UAH / Tonne

Mine water pumping & its manageemntAnnual rate in change of water pumping management from 2011 0.95Unit cost of managing all mine waters - operating & closed but pumping 55 UAH /m3/T of coal

Methane & related gas management Note Methane production is a function of coal production & changes as coal prodcution amount is fixed (above)Methane production of 2008 is used as the base conditionCost of unmanaged methane per tonne of methane released 55 UAH / Tonne

Environmental charges & fines incurredNote Environmnetal charges are a functuon of the annual coal production & change with the rate set aboveEnvironmental chages of 2008 is used as the base conditiion

Summary 2010 2030Production cost of mining coal Bn UAH 29.44 23.51Costs attributed to poor environmental mgmt Bn UAH 13.15 21.46Sum of Unit Env costs (exc Env Charges) as % of Cost 42%Market value of the sale of coal Bn UAH 19.52 43.02

Costs in Mining Sector from Environmental Management

0.0

0.1

1.0

10.0

100.0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Business as Usual 2010 - 2030

Bn

UA

H /

yr

(lo

g s

ca

le)

Annual Cost of Production Market Value of Coal

Costs arising from spoil production" Costs arising from discharge of mine water

Costs arising from coal washing slurry Cost arising from unmanaged methane release

Costs of environmental charges & fines Costs due to mine water discharge

Warsaw March 2011

Chaotic investments Chaotic investments give no benefitsgive no benefits

Costs in Mining Sector from Environmental Management

0.0

0.1

1.0

10.0

100.0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Business as Usual 2010 - 2030

Bn

UA

H /

yr

(lo

g s

ca

le)

Annual Cost of Production Market Value of Coal

Costs arising from spoil production" Costs arising from discharge of mine water

Costs arising from coal washing slurry Cost arising from unmanaged methane release

Costs of environmental charges & fines Costs due to mine water discharge

Costs in Mining Sector from Environmental Management

0.0

0.1

1.0

10.0

100.020

10

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Business as Usual 2010 - 2030

Bn

UA

H /

yr

(lo

g s

ca

le)

Annual Cost of Production Market Value of Coal

Costs arising from spoil production" Costs arising from discharge of mine water

Costs arising from coal washing slurry Cost arising from unmanaged methane release

Costs of environmental charges & fines Costs due to mine water discharge

Warsaw March 2011

Transformation is Transformation is possible !!possible !!

Settling basins Storage and transport of tailings Area for re-vegetationWater management into vegetated area

Water features

Warsaw March 2011

Sector reform processSector reform process

Restructuring of the Coal Sector of

Ukraine – transformation

from loss making State owned agencies to a

Regulatory Agency & independent

economic operators involved in mining,

& its service industry

Wind down the operation of the Ministry* – Three new independent Agencies with separate responsibilities established by Presidential Decree

Regulator; Self governing Coal Authority reporting to the Cabinet of Ministers

Coal Development Fund (CDF)– financed through concessional funds (e.g. IBRD / EBRD), with all usual safeguards

Mine Closure & Environmental Remediation Agency

All subordinate Agencies of former Ministry to be hived off or made into 100% commercial companies – includes Mining Associations, Design Institutes & quasi regulatory bodies eg RESPIRATOR, etc

Licensing & audit functions only

Loans to viable enterprises and profitable Mine IEO

Redundant mines transferred to MCER for closure

All Mine Associations converted to IEO with 51% shares with government; 49% with the Association –transparent Annual Reporting ; coal mining will be in response to Sector strategies & licensing requirements analysed through tools such as the Business as Usual approach – (see Vol. IV, Comp E). Eventually majority ownership transferred to IEO.

Existing, viable Mine Associations re-licensed automatically for 1st 2 years, then re-apply for a new term, based on compliance to licensing requirements

18 months 12 months 10 year operational programme for mining & remediation24 months

All research institutes, design institutes, etc operating as independent institutes servicing the Coal Sector, on open competitive basis

* NOTE On the 9th Dec 2010 by Order no 1085/2010, the MoCI was transferred to the Ministry of Fuel & Energy – as a Department responsible for coal mining. However, the key changes suggested in this diagram still apply to the Sector.

A 10 year programme of mine closure & remediation implemented according to set standards as recommended in Comp E, Volume IV; financing through Concessional loan funds, commercialised operations & trading the spent assets of bought closed mines; orderly disposal of assets or divestments to interested & viable operators

Warsaw March 2011

Summary: what to doSummary: what to do Cost reductions are possible, Cost reductions are possible, but only effective if a well planned and suitably but only effective if a well planned and suitably

programmed approach is adoptedprogrammed approach is adopted Modest improvements in Modest improvements in

management of the mining spoil, the management of the mining spoil, the improved management of the volume and rate of improved management of the volume and rate of

mine dewatering, mine dewatering, capture and the utilisation of the vented methane capture and the utilisation of the vented methane

lead to making coal competitive to the market price lead to making coal competitive to the market price and this could be achieved within 5 to 7 years. and this could be achieved within 5 to 7 years.

Beyond this, even with modest increase in Beyond this, even with modest increase in production of coal, the costs would be below the production of coal, the costs would be below the market price, the impact on the environmental market price, the impact on the environmental would ameliorated and the potential for a profitable would ameliorated and the potential for a profitable sector would appear to be good through to 2030.sector would appear to be good through to 2030.

Warsaw March 2011

In the future….In the future…. The hydrogeologist of the future will The hydrogeologist of the future will

need need something old, something something old, something new, something borrowed and new, something borrowed and something elsesomething else.... .... (Devlin 2004)(Devlin 2004)

…… …… working in an Agency that will working in an Agency that will suit his / her ability to solve the suit his / her ability to solve the contemporaneous problems ….of the contemporaneous problems ….of the day … including lack of funding………..day … including lack of funding………..

So, the hydrogeologist will have to rely So, the hydrogeologist will have to rely on “man’s best friend” for data on “man’s best friend” for data collection and field observations…collection and field observations…

Warsaw March 2011

Concluding remarksConcluding remarks

Change is afoot….. new style of Change is afoot….. new style of education & preparation is required education & preparation is required for those who will be in the field by for those who will be in the field by 2020 & beyond 2020 & beyond

Institutions will react sporadically – Institutions will react sporadically – experts will need to be in place & experts will need to be in place & ready to assist decision makersready to assist decision makers

Technology & science alone will be Technology & science alone will be insufficient – convincing argument insufficient – convincing argument will give support to innovationwill give support to innovation

The needs of the future start today…!The needs of the future start today…!

Warsaw March 2011

Thanks you for your attention !Questions? Contact: ShammyPuri@aol.comwww.unesco.org/water/isarm www.iah.org/isarm