Fuel for Thought

Context

UN estimates that 60 million people globally are displaced and on average spend 15 years in refugee camps. (Financial Times Wealth 6 March)

Science

After a University decision to cut all its funding, Yale’s Climate & Energy Institute will close by the end of June. (WUWT 2 March)

Emissions

Global energy-related CO₂ emissions – the largest source of man-made greenhouse gas emissions – stayed flat for a second year in a row, the IEAE announced. (WNN 16 March)

The vehicle emission saga continued

VW is back in ‘scandal spotlight’ with story that emissions information was given to CEO in May 2014. But did he read it? Irregularities where first revealed by the International Council on Clean Transportation in March 2014. Illegal defeat devices were admitted to US regulators in September 2015. In April 2016, VW plans to reports the results of its own investigations. (FT 4 March)

Finance

Oil (and iron) showed big gains, with oil ‘jumping’ above £40 a barrel. (FT 8 March)

Policy

UK/DECC promises major changes to the capacity market, to cut electricity supply risks from plant closures, boost investment and avoid short-term outages. (ENDS 8 March)

Green technology

‘Carmakers are striving to create emission-free vehicles that drive on their own just as consumers move from owning cars to sharing them, and automakers are competing with technology companies, according to a voice from within the German car industry’. (P McGee FT 2 March)

Carbon fuels and nuclear

Eon made a loss of €7bn, twice that of 2016. RWE scrapped its dividend. The wholesale price of electricity in Germany has been squeezed by a radical shift to renewables. (FT 10 March)

Vision statements from World Bank and IMF

‘On Thursday, a group of world leaders came forward with an ambitious new vision statement calling for the world to double the extent of global emissions covered under carbon pricing schemes by the year 2020 – and quadruple it within the next decade. The group, known as the Carbon Pricing Panel, was convened by World Bank Group President Jim Yong Kim and International Monetary Fund Managing Director Christine Lagarde. It includes six heads of state – the leaders of Ethiopia, Chile, Canada, France, Germany and Mexico – as well as the governor of California, the mayor of Rio de Janeiro and the secretary general of the UN’s Organization for Economic Cooperation and Development (OECD). The idea of carbon pricing is simple enough: By placing a monetary charge on carbon emissions, we can create an incentive to reduce them. The concept can take two major forms. Cap-and-trade schemes place a limit on the total amount of GHG emissions permitted and allow industries with low emissions to sell their leftover allowances to industries with higher emissions. In this case, the price becomes established by the market. A carbon tax, on the other hand, places a fixed price or tax rate on carbon emissions, which serves as an incentive to keep emissions low. With the carbon tax approach, “you fix the price, and then you let the market respond to that price by adopting new technologies and changes in behavior,” said David Victor, an expert on global policy and strategy at the University of California San Diego.’ (Judith Curry/Washington Post 22 April)

The EU commission seeks a global transition to low-carbon future

On 22 April, there will be a formal signing ceremony of the Paris Agreement on Climate Change at the United Nations in New York. The agreement will enter into force when at least 55 countries representing at least 55% of global emissions have ratified it. On 2 March 2016, the European Commission released a policy paper on the implementation of the Paris Agreement, presenting the Commissions views on the implications for the EU of the Paris deal, and laying out next steps in the process of implementing it. In presenting the strategy, Commissioner for Climate Action Cañete said: “We have the deal. Now we need to make it real. For the EU, this means completing the 2030 climate and energy legislation without delay, signing and ratifying the Agreement as soon as possible, and continuing our leadership in the global transition to a low-carbon future.” This means that the Commission wants to get Paris Agreement approved before national parliaments have expressed their opinions. (Energy Post 29 March)

The promise of Paris: Jump starting the global economy

Christiana Figueres called for investors to take risks that benefit the environment and global poverty at the Grantham Institute annual lecture. Investing in clean technologies and renewable energy will jump start the global economy and pull millions out of poverty, according to Ms. Figueres, who is Executive Secretary of the UNFCCC … There is a global need for finance to help developed nations modernise with clean energy, energy efficient buildings and resilient cities. Meanwhile, developing countries require transport and energy infrastructure to meet the needs of growing populations. The falling cost of low-carbon technologies such as solar panels, are where the opportunities present themselves to savvy investors, Ms. Figueres told the audience. And policies that aim to reduce the greenhouse gas emissions that cause climate change can therefore determine the direction of future economic growth. (Grantham Institute 14 April)

No emission reductions targets for shipping – Yet

In contrast to President Barack Obama’s urgent rhetoric on climate action, the US envoy favoured an incremental approach at the International Maritime Organization in London. There should be no discussion of an emissions goal until data from individual ships have been gathered and analysed, argued one person. China’s delegation agreed it would be “premature”. That stance was at odds with European countries and some island states calling for shipping to do its “fair share” of global efforts to hold warming below 2℃. (M. Darby Climate Change News/J Curry 21 April)

Diverse views of the Paris agreement

Absolute emissions – the actual quantity of GHG – must be distinguished from the carbon intensity of emissions. At Paris, China only promised to reduce carbon intensity. This can be ‘perfectly consistent with unbounded growth in absolute emission … It is time for those committed to environmental intervention to abandon the idea of mitigation in favour of adaptation to climate change’s effects’. (David Campbell LRB 5 November 2015)

EU rubberstamping Paris

‘Upon closer examination, however, the EU’s rush to rubberstamp the (Paris) deal not only requires enormous investments that may turn out to be inefficient, but also aggravates the EU’s democratic deficit, adding to the widespread frustration about Brussels’ unaccountable bureaucracy’. With tensions in the EU already high over the refugee crisis, the upcoming ‘Brexit’ referendum, and the eurocrisis, the EU would do well to avoid this gamble, and involve the national parliaments now in the approval process. The European Commission wants to sign and ratify the Paris Agreement as quickly as possible – i.e. on the basis of decisions made at EU-level by the Commission, the Parliament and the European Council. But according to a Partner at a Brussels-based law firm, this is a bad idea. In a new article for Energy Post, he argues that this will only aggravate the EU’s perceived “democratic deficit”. Moreover, he points out that the EU’s commitment is not clear – for example, it lacks burden-sharing rules – and the Paris Agreement is so far-reaching that it should be discussed in the National Parliaments of the EU member states before it is approved. (Energy Post 8 March)

The EU Contribution to the low-carbon future in doubt

The world may be euphoric about the Paris climate agreement (signed on 22 April by 175 countries, each of which will now pursue ratification domestically), and the EU’s own climate policy is increasingly looking rather unambitious. This is ironical, since the EU has traditionally been the world’s climate leader, and the Paris Agreement is in part a victory of EU diplomacy. Now here’s a cheeky proposal from two analysts at the Berlin-based Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs; lit: Science and Politics), the largest foreign policy think tank in Europe who argue that ‘since EU member states are unlikely to be able to agree on an ambitious domestic climate policy’, the EU should take the climate fight abroad’, and encourage (and fund) other countries to cut their emissions. (Energy Post 29 April)

Call to revitalise the ETS

On 4 February 2016 of this year, at the University of Groningen, A Mulder successfully defended his PhD thesis titled ‘CO₂ Emissions Trading in the EU: Models and Policy Applications’. The study brings out two elements in the current design of the European Union Emissions Trading Scheme (EU ETS) that have undermined its performance. First, the study shows that potential investors face a high level of investment uncertainty, especially for potential investors in technologies with high capital requirements and long construction lead times. This may prevent these investments to come off the ground. Second, the topic of policy interaction is dealt with and it is found that the performance of the EU ETS is seriously undermined via the interaction with ‘parallel instruments’. Here, parallel instruments are other energy and climate instruments (such as subsidies) that operate in parallel to the EU ETS and also have an impact on the CO₂ emission levels of firms covered by the EU ETS. The study finds that adverse interaction with these parallel instruments is strong. In fact, the CO₂ price could double if interaction with parallel instruments were avoided. (JIN 18 March)

The poor are the victims

The poor are the real victims of Europe’s green energy drive: tens of thousands of deaths every year, millions losing their power. The latest story on “green energy” here at the German online FOCUS magazine website actually shocked me. Europe’s energy policy is, under the bottom line, costing the lives of tens of thousands of citizens – all at the holy altar of “climate protection”. The title of the FOCUS article: “The grand electricity lie”: Why electricity is becoming a luxury.” (Pierre Gosselin/GWPF 29 March)

Rising costs of power

Across Europe, the cost of electricity has been rising, thanks to a well-intentioned but mistaken plunge into “renewable energy.” And what’s happening in the EU portends a troubling lesson for the United States. Simply put, green energy is proving to be an expensive failure. Yes, green energy works when heavily subsidized by the taxpayer. But Europe’s taxpayers can no longer afford the experiment. What did our European friends get for their exercise in green energy exploration? Power shortages, job loss, and the bankruptcy of major green energy giants like Spain’s Abengoa, which received more than $2 billion in loan subsidies from the Obama Administration. In fact, Spain is now confronting $27bn in debt from failed wind and solar projects, thanks to a program estimated to have eliminated at least two jobs for every “green” job it created. (Terry Jarrett, Breitbart, 14 April)

Brussel’s global ambitions

… a policy advisor at the research and consulting organisation E3G, draws the connection between energy security, climate change and the current migrant crisis, outlining how these issues can be tackled within the new European Global Strategy, to be adopted in June 2016. (EUCERS – European Centre for Energy and Resource Security 28 April)

EU and renewables: A summing up

‘Liebreich, having described why the push to renewables in the EU has fallen flat on its face, then goes on to say’:

The tragedy of all this is that Europe lost its renewable energy mojo just as costs were plummeting to the point where green power is fully competitive without subsidies in more and more parts of the world. If solar power can be built for 5.85 U.S. cents per kWh in Dubai, or $4.8 cents per kWh in Peru, or 6.4 cents per kWh in India, why not in Italy, Spain, Portugal, Greece or Croatia? If wind power can be delivered for 3 U.S. cents per kWh in Morocco and 4 cents per kWh in the US, why not in France, Spain, Portugal, or, heaven forbid, the U.K.? When British commentators and politicians refer to renewable energy as “ludicrously expensive”, they clearly don’t realize how foolish they sound to anyone acquainted with cost data from around the world; and they have failed to grasp that one of the reasons why costs are higher in the U.K. is because of the policy uncertainty they have themselves helped to create. He fails to explain why, if costs of wind/solar are so low, they need any subsidies at all.

Eclipse of the European clean energy sector

A long but interesting piece from Bloomberg, but this section goes to the heart:

‘The grounding of the good ship Europe has had serious consequences for the clean energy industry. Europe pioneered large-scale wind and solar power. In 2010, despite surging investment in China, Europe accounted for no less than 45% of global clean energy investment. Sadly, since peaking at $131.7 billion in 2011, European investment dropped by more than half to $58.5 billion last year, just 18% of the global total (figures exclude large hydro projects). Last year, Europe’s investment in clean energy was the lowest since 2006. In manufacturing, the solar sector in Europe has been simply brushed aside. Where in 2007, Europe had the world’s largest cell and module maker (Q-Cells), today there are no European players in the top 10, and this despite protectionist measures enacted by the EU to penalize Chinese manufacturers. Even in wind power, where European turbine makers have generally held onto their positions much more successfully, a Chinese company, Goldwind, took over the top spot in the global manufacturing league tables for the first time in 2015. How could this happen? How could Europe, once the clear world leader in all things renewable, have so quickly taken a back seat in this flagship industry? In part, it is a direct consequence of the world’s economic woes, and the particular way in which they played out in Europe, and of Europe’s failure to respond. Global investors, scared about the survival of the euro, have had plenty of reason to hesitate about putting money into euro-denominated clean energy projects. But that is not the whole story. It also resulted from gross errors by Europe’s clean energy industry and its backers at various levels of government. Indeed, Europe’s clean energy story is an object lesson in the dangers of the entrepreneurial state.

Germany’s feed-in tariffs were certainly effective: they triggered a surge in volume that drove the wind and solar sectors to the point of competitiveness. However, set too high and kept in place too long, they were also inefficient: in the solar sector alone, between 2004 and 2010, the feed-in tariff craze resulted in excessive costs – defined as the market price less the expected price as derived from the experience curve – of $31 billion. But even generous support was not enough to cement Germany’s leadership in solar technology. By 2015, Germany saw only $10.6 billion invested overall in clean energy, the lowest for at least 11 years and 80% down on its 2010 peak.

Spain’s feed-in tariff experiment drove a runaway solar boom in 2008. In one year, the Spanish government’s infatuation with solar added an estimated 8% to the national debt, just at a time when the country’s balance sheet was about to be sorely tested. Think about when you next see figures for Spain’s youth unemployment. When the Zapatero government was kicked out, the new administration imposed retroactive revenue cuts on already-commissioned projects – not only did investment grind to an immediate halt – but it has not restarted since. Italy followed a similar boom-bust route as Spain, with investment crashing almost to zero in the past three years, from $30 billion in 2011, and still showing little sign of bouncing back. In recent years it has been the U.K., despite being seen as a reluctant participant in the European renewable energy love affair that has attracted the most investment – with a boom first in onshore wind, then solar and now offshore wind. However, after winning an absolute majority, unshackled from renewables-friendly Liberal Democrats, the new Conservative government lost no time in dismantling support for renewables and reaffirming its support for gas and nuclear power. Once the world’s most important carbon market, the EU Emission Trading System has become a painful reminder of what happens when politicians design financial instruments. EU Allowances this week were languishing at EUR 4.88 per tonne, far below the €20 or so required to push coal-fired generators out in favour of gas. For all of the excitement around Germany’s Energiewende, it has had little impact on the country’s emissions, as the surge in renewable energy has been matched by reductions in zero-carbon nuclear power, while coal retains its hold on the generating mix, in defiance of trends in the U.S. and China. (PH 23 March) http://about.bnef.com/blog/liebreich-europe-at-a-clean-energy-crossroads/

New research from EUCERS sheds light

Carola Gegenbauer, sheds light onto the European Union’s new sustainable energy security package and on the question whether the supranational focus on natural gas security is a promising strategy. In the second article, an expert on political economy and renewable energy analyses the failure of Desertec, the large-scale energy project that was supposed to supply up to 15% of Europe’s energy demand with renewable energy generated in Northern Africa. Furthermore, the newsletter will inform you about the recent activities at EUCERS, including a report on the event, which marked the publication of Atlantic Council’s report on the prospects of Liquefied Natural Gas. (Selected from EUCERS Newsletter March)

More power and security to the commission: Towards an EU energy union?

On 16th of February 2016, the European Commission presented its sustainable energy security package, a step towards realization of the European Energy Union. The energy package aims at improving energy security, while ensuring sustainability and promoting competitiveness, the three goals of EU energy policy … The EU has positioned itself at the forefront in the fight against climate change. While energy from renewable resources are not able to supply European households around the clock, fossil fuels remain important to bridge the gap … Natural gas is the cleanest of all fossil fuels with 117 pounds of CO₂ emitted per million Btu1 and is therefore of strategic importance for EU’s energy policy … The security of gas is at the centre of the energy security package. While gas is the most sustainable of fossil fuels, due to its comparatively low CO₂ emissions, the two other goals of EU energy policy, competitiveness and security, are more challenging in the case for gas.

First of all, due to its form, gas is traditionally supplied via pipelines. This limits suppliers and routes, which can result in a dependency from few suppliers …, as well as dependency on transit countries. The need for pipelines also allows for large variations in prices. Whereas there is a global index for crude oil prices, gas – although influenced by oil prices – does not have a global price index. In the European Union, import dependency is relatively high. EU imports 66% of gas, which makes the EU the biggest importer of natural gas in the world. A third of all gas imports in the EU come from Russia … The gas crises in 2006 and 2009 have shown the severity of European gas import dependency.

Ever since, Member States have made energy policy a shared competence with the Treaty of Lisbon and the Commission has introduced and subsequently developed a strategy for competitive, sustainable and secure energy. Investments in back-up infrastructure were made obligatory and infrastructures to connect member states’ energy networks have improved cross-border trade of gas. In the event of supply disruption, the EU implemented rules to secure the gas supply to vulnerable customers and emergency response plans in case of supply disruptions are now obligatory to member states. A gas coordination group was established to exchange information and define common actions between member states, the Commission and the gas industry. The union has also been a supporter in the development of the Southern Gas Corridor, which is to diversify gas supply and develop a route for gas from Azerbaijan. Energy efficiency and the reduction of energy demand has become a priority under the strategy. European energy policy has come a long way since the Commission’s green paper on a “European Strategy for Sustainable, Competitive and Secure Energy” in 2006 and the Energy 2020 strategy in 2010. However, stress tests in 2014 showed that Europe is still vulnerable to major gas disruptions. In light of the Russian annexation of Crimea and following political uncertainties, the Commission released an EU energy security strategy, specifically targeted at supply from Russia. Some voices have called for even further integration in the energy sector. Donald Tusk, former Prime Minister of Poland, proposed a European Energy Union in an article for the Financial Times in April 2014. The Juncker Commission has taken up this initiative and adopted its strategy for a European Energy Union in February 2015. A new position within the Commission was created. Maroš Šefčovič became the Vice-President of the European Commission in charge of the Energy Union. A year later, in February 2016, the Commission presented the Energy Security Package, with a focus on gas security. The Commission proposes a supranational approach in security of supply measures by introducing a security of supply regulation. It also addresses the solidarity mechanism in energy, introduced by the Treaty of Lisbon, to counteract gas supply disruptions by offering affected Member States alternative supply routes for gas.’ (Excerpt from paper by Carola Gegenbauer from EUCERS 52)

Energy solution from Brussels

The new initiative Energy Solutions was launched at an event in the European Parliament in Brussels. Under the banner of Energy Solutions, MEPs and industry representatives have teamed up to promote a holistic approach to energy regulation. They would like to develop energy policy based on the energy system as a whole, as opposed to the current focus on individual silos such as wind, coal and nuclear power. The goal of Energy Solutions is to discuss and develop policy options across positions and parties in meeting the EU 2030 energy and climate ambitions with the view to realize the European Energy Union. (EER 7 April)

France import LNG but bans fracking!

France bans the exploitation of shale gas, and the French government is even considering banning all research into hydraulic fracturing. Ni ici, ni ailleurs. Ni aujourd’hui, ni demain – is the idea. But hold on, if that’s the case, says Grealy, how come Engie, the French energy giant in which the State has a share, imports US LNG from Cheniere Energy? And what is EDF, 75% state-owned, doing importing LNG from the US? Don’t they know US LNG comes from shale gas? Note French Policy observation (Energy Post EP 4 April)

Democrats united against fracking

Both Clinton and Saunders oppose fracking in US energy debate, though, says FT the technique is essential for most of the country’s oil and gas production. This is also a break with Obama’s policy who has taken only moderate steps to regulate hydraulic fracturing. At moment, most gas and oil regulation occurs at state level, this may change as a consequence of current election battles. (FT 8 March)

US pays first $500 million to green climate fund without authorisation

The US State Department transferred $500 million to the UN’s green climate fund, the first chunk of the $3 billion pledge made at the Paris climate conference. This upset some members of the Senate’s Foreign Relations Committee, who questioned the Deputy Secretary of State whether Congress had authorized the transfer. After trying to dodge the issue she admitted that there was no authorization. CNS News reported that days after receiving the money, the Fund approved a proposal to hike the number of permanent staff on its secretariat by 150% (from 56 positions to 140). (WUWT 8 March)

Obama signs climate pact with Canada

During a visit to the White House, Prime Minister Trudeau and President Obama announced a pact to reduce methane emissions from oil and gas industry activities by 40–45% below 2012 levels by 2020. The US Environmental Protection Agency will begin developing regulations immediately, and Environment and Climate Change Canada intends to publish an initial phase of proposed regulations by early 2017. (WUWT 10 March)

Trump proposes national carbon tax to fund Mexico wall

A nationwide carbon tax could raise enough revenues to fund the construction of a wall between the US and Mexico, Republican presidential hopeful Donald Trump announced Friday morning in a surprise policy U-turn on the climate change issue. Previously claiming that he was “not a big believer” in man-made global warming, Trump has now embraced a coordinated national approach to reducing US greenhouse gas emissions in a move that he said will also help stop illegal immigration. “Really, it’s a no-brainer. We make the left-wing tree-huggers happy by introducing a price on carbon, and we make my right-wing supporters happy by closing the funding gap for my wall,” he said in a statement. (Benny Peiser GWPF 1 April)

No Atlantic drilling

The Obama administration has dropped plans to permit oil drilling off the Atlantic coast, a backlash to Gulf of Mexico disaster. Offshore drilling and fracking have polarised the presidential election campaign. The republicans are in favour, with Trump lukewarm. The industry is disappointed but does not have much money to spend. The Defence people were also worried about impacts on Navy operations. The American Petroleum Institute, the oil industry’s lobby group accused Obama of giving in to extremists, but Hilary Clinton is relieved. (FT 16 March)

Ted Cruz on energy and markets

US Senator Cruz responded to 10 questions posed by the American Energy Alliance regarding, inter alia: energy subsidies, use of science by federal agencies, regulations under the Clean Air Act, carbon tax, and the “endangerment finding” for CO₂. His answers to all questions are diametrically opposite to those of the Obama administration, in particular the response to No. 10: “Yes, the observed temperature evidence does not support the claims that carbon dioxide is dangerous. More recent scientific developments indicate that a review of the endangerment finding is needed.” (FoS Extracts 6 April) Ian Cameron

‘Oil carnage leaves pipeline operators drained’

This is the headline of an FT report from Cushing where the cost of shipping oil from the Oklahoma oil storage facility has fallen steeply; new contracts are being tested. Market inked pipelines need to reduce capital spending, find new sources of financing, sell assets and cut distributions, but ‘the fundamental outlook for pipeline companies is still contact;, says one portfolio manager. But some defaults are expected. (FT 4 March)

Obama’s clean power plan splits business

The US Government wants US companies to invest more in low ‘carbon sources and has resulted in a business split with ‘high’ tech firms like Google and Amazon on one side, and local power stations and producers of coal on other Obama’s policy is largely opposed by republicans. The aim is to cut 32% of CO₂ from 2005 output by 2025. Some say that their business would be harmed if there were no cuts, including Ikea and Blue Cross. But the US Chamber of Commerce sees an ‘unprecedented takeover of the electricity sector’, already causing much harm. Peabody represented the mining industry. Gas producers could benefit, hence the American Petroleum Institute did not take a view on the proposed legislation. (FT 6 April)

Clean Power Plan – US commitment to Paris ‘stayed’ by Supreme Court

In the US, president Obama’s Clean Power Plan – which from an international perspective may be viewed as the US’s commitment to the Paris Climate Agreement – has also become highly politicised. Opponents have taken their fight against it all the way up to the Supreme Court, which, to the surprise of many, recently issued a “stay” on the plan. There has been a lot of comment on what this means exactly and what we may expect to happen next … If you want to know what may happen to the Clean Power Plan next, surely a highly critical matter for our energy future, don’t miss this excellent interview with Talia Fox, fellow of the Clean Energy Leadership Institute … It would be premature to conclude that the Clean Power Plan is dead.

The decision of the Supreme Court to issue a judicial stay of President Obama’s signature climate change policy instrument, the Clean Power Plan halts further implementation of the proposed restrictions on carbon emissions from fossil fuel-fired electric generating units until completion of the expedited, 27-state challenge pending before the DC Circuit Court. While opponents of the CPP are cheering the decision as an indication of the Plan’s ultimate demise, environmentalist and clean energy advocates are concerned about further delays in action to address climate change, as well as the international implications of the decision, given the US’s leadership in the recent COP 21 agreement in Paris. What does the stay mean, practically speaking? How will this affect the timeline for the CPP and the corresponding state plans? How concerned should the environmental community – and the clean energy community – be? And what impact does the tragic death last week of Justice Antonin Scalia, the Supreme Court’s conservative champion, have on the CPP’s prospects? The Court says stunningly little in its order, given the domestic and international significance of its action. For a legal perspective on these and other questions, I sat down with Scott Fulton, former US EPA General Counsel, during the first Obama Administration and current President of the Environmental Law Institute.

Talia (T): For those reading this who may not have a legal background, could you break down what happened in the US Supreme Court’s decision to stay the Clean Power Plan?

Scott (S): When an agency promulgates a regulation, that regulation can be challenged in court through a petition for review. Petitions for review of EPA regulations under the Clean Air Act have to be heard by the DC Circuit Court of Appeals, and the DC Circuit Court of Appeals decisions are then potentially reviewable by the US Supreme Court. In the course of rulemaking litigation, there’s always the question of the legal effect of the rule pending completion of the challenge to the rule. What a motion for stay intends to accomplish is halt compliance with the rule until the courts have considered its legal merits and subsequently issue a decision. Here, a motion for stay pending appeal was filed in the DC Circuit, and the DC Circuit about a month ago ruled against the motion, holding that the rule should not be stayed, based on the legal criteria for issuing a stay.

T: What criteria might cause a court to issue a stay?

S: A stay is considered extraordinary relief that requires the proponent to prove a number of things: likelihood of success on the merits, that is, the person trying to get the stay has to make a preliminary proving that their arguments are strong and will likely succeed; the presence of irreparable harm—that [the petitioners] are going to be harmed or damaged in some significant way if the court doesn’t stay the matter; and that the issuance of the stay would be in the public interest.

Al Gore: Climate skeptics accused of fraud

‘Al Gore at press conference of attorneys accused climate sceptics of fraud and threatened them with the law’. In essence, this is an attempt to ‘save; renewable power investments. Al Gore: ‘They should be held to account. The comparison with tobacco is made again’. He said

I really believe that years from now, this convening (of attorney generals) may well be looked back upon as a real turning point, in the effort to hold to account those commercial interests that have been, according to the best available evidence, deceiving the American people, communicating in a fraudulent way, both about the reality of the climate crisis and the dangers it poses to all of us, and committing fraud in their communications about the viability of renewable energy and efficiency, and energy storage, that together are posing this great competitive challenge to the long reliance on carbon based fuels. (Quoted in WUWT 29 March)

Prosecute climate skeptics?

A California lawmaker wants to change a law to make it easier for state prosecutors to go after companies skeptical of global warming. The proposed bill would punish skeptical companies for “many years of public deception” with regard to global warming science.

“I want to give law enforcement the tools they need to hold people accountable for their actions if that’s where the evidence takes them,” Democratic state Sen. Ben Allen, who proposed legislation targeting skeptics, recently told InsideClimate News. Allen’s proposed legislation would extend the statute of limitations under California’s Unfair Competition Law from four to 30 years specifically for “behavior related to scientific evidence of climate change,” according to a summary of the bill. Allen’s proposal comes as state prosecutors pledged to investigate Exxon Mobil for allegedly misleading the public about global warming. (Daily Caller 31 March)

Final nuclear clean-up cost still undecided

Uncertainty over the nuclear clean-up bills for RWE and Eon continues, in spite of serious financial problems of both. The last power station is to close in 2022. A commission is trying to work out who is to pay and so far there is no agreement on how the costs are to be shared between the utilities and taxpayers. RWE, Eon, EnBW and Vattenfall have provisioned around €38bn, but they may have to pay more if the commission so decides. In particular for interim and final storage. If so, capital markets for the utilities might close. (FT 7 March)

Solar suppliers unhappy

The draft reform bill of the Renewable Energy Act (EEG) submitted by the German government on Thursday massively curtails the green energy transition, the Renewable Energy Federation (BEE) has warned. Five years after Fukushima and only a few months after the Paris climate change agreement, the German government is threatening a massive rollback in climate change policy. According to the BEE, tens of thousands of jobs, especially in the wind and solar industry, are facing disaster. (Solar Server News, 18 April)

An end to wind power expansion?

If the green energy plans by the German Federal Government are implemented, the expansion of onshore wind energy will soon come to a standstill and then go into reverse. In early March, German Economy Minister Sigmar Gabriel presented a draft for the amendment of the Renewable Energies Act (EEG). The new rules regulate the subsidy levels for renewable energy. The new regulations are to be adopted in coming months. A study by consultants ERA on behalf of the Green Party’s parliamentary group concludes that under these provisions the development of wind energy will collapse fairly soon. (Frank-Thomas Wenzel, Berliner Zeitung, 7 April)

The cost of leading the world

The fact that Germany is a world leader in green power is by now familiar. Much less familiar is the price the country is paying for it, not just in cold hard cash, but in growing losses and dislocations across the entire economy. The losers include once-stalwart utility giants like E.ON and RWE that are struggling with rising debt and falling shares. Manufacturing companies, from chemicals maker BASF to carbon fibre producer SGL Carbon, have shifted investments abroad, where energy costs are often a fraction of Germany’s. Losers include laid-off workers in these industries, but also millions of ordinary consumers. Their utility bills have skyrocketed, largely driven by subsidies for eco-friendly fuels. Germany’s ‘green’ revolution has a dark shadow. (G Kreijger, S Theil and A Williams, Handelsblatt, 24 March)

Dumping its energy system?

Germany failed miserably to reduce its coal-fired electricity production. How is that possible?

The answer is: increased exports. Cheap German coal-fired power that’s pushed out of the domestic market finds its way to neighbouring countries. With very detrimental effects, hindering reduction in CO₂-emissions throughout Europe, writes one contributor. If Germany’s is to meet its climate targets, it will have to do something about its coal-fired power plants, that much is clear. This is the reason why Mark Lewis, energy analyst from investment bank Barclays, predicts that the 46 GW of black and brown coal-fired power stations in Germany will be redundant by 2030. The German government will have no choice but to take measures to phase them out. As Giles Parkinson of Reneweconomy.com reports, according to Lewis, by 2030 Germany will have “dumped its energy system… and replaced it with one where renewable generation is backed up by energy storage and sophisticated demand-side responses facilitated by smart-grid technologies.” (EP 25 March)

Climate protection 2050 or return to the Morgenthau plan?

The federal Environment Ministry (Bundesministerium für Umwelt) hopes this summer to turn its ‘Klimaschutzplan 2050’ into legislation. The plan is already law in Land Berlin and claims to implement the will of the people (the Bürgerwillen) which amounts to demanding the almost total decarbonisation of Germany ‘zum Wohle des Weltklimas’ (for the sake of the global climate). The same small number of individuals, institutes and organisations are behind this. Always reappearing in different guises. Their objective is not to protect world climate but to introduce socialism through the backdoor by [wealth] redistribution. They are not bothered that this would mean turning Germany back into an agricultural country. (Transl. from EIKE, Michael Limburg 22 March)

A constitutional complaint against wind power

The first constitutional challenge (Verfassungsbeschwerde) to wind power is reported. ‘We demand that the State intervenes’, said constitutional lawyer Professor Dr. Michael Elicker. He and his colleague Prof. Dr. Rudolf Wendt are advising three families from Schleswig-Holstein, Rheinland-Pfalz und Baden-Württemberg, who are to have large wind parks being erected next to their houses. (EIKE 22 March?)

More coal than ever

There is one big country for which the nuclear issue is not relevant anymore: Germany, which is getting rid of its nuclear power stations, as everyone knows. The Germans are betting heavily on renewable electricity, with some success: last year renewables supplied no less than one-third of the country’s electricity consumption. This is a record and no doubt a historic achievement, writes the economic analyst at RSJ, a Prague-based investment company. Unfortunately, he adds, last year’s numbers also show that Germany failed miserably to reduce its coal-fired electricity production. How is that possible? The answer is – increased exports. Cheap German coal-fired power that is pushed out of the domestic market, finds its way to neighbouring countries, with very detrimental effects, hindering reduction in CO₂-emissions throughout Europe’. (Kucerain in Energy Post 25 March)

Billions at risks – MPs worried

Short-sighted and contradictory policy shifts have put billions of pounds of investment in the UK’s energy system at risk, the all-party Commons Energy and Climate Change committee warned. Investor confidence had been dented, and plans to cut subsidies from renewables had ‘spooked’ investors. The cancelling of tax exemptions for renewables generators and of the money for a Carbon Capture and Storage competition (CCS) was condemned. Even Eon had its complaints reported with sympathy: too many changes in too short a time. Siemens admitted that it was scared by the rational offered for some of the proposed changes ‘because they betray a lack of awareness of what is really going on’. The minister Rudd replied that the cuts were needed to protect hard-working families. The green subsidies that had been paid out had become too high. However, but the ECC Committee questioned, the reliability of the forecast made and urged publication of the data. (FT 3 March)

UK consumers could save money and meet CO₂ target

According to the UK Treasury improved energy storage and demand management could save consumers up to £8bn a year and would also allow the UK to meet its 2050 carbon emission target and secure energy supply for generation. The report comes from the National Infrastructure Commission and reflects growing government anxiety about potential energy shortages. There are also concerns about how the National Grid runs the network. NG could be stripped of its power to ‘run Britain’s electricity supply’. NG countered by saying ‘there was little evidence that an independent system operator model would deliver values to justify the significant consumer costs and risks to security of supply’. (FT 4 March)

NB: Britain has the highest energy costs in Europe, thanks to decisions taken not in Brussels but in Whitehall. (The Spectator 2 April)

UK not likely to meet renewables targets

The baseline for the new targets was 2004 and in that year we achieved a pathetic 1.2% of energy from renewables. After ten years and by 2014 it was 7%. Some simple mathematics puts this into context. We needed an increase of 13.8% in 16 years and we have managed 5.8% in ten years. In over 60% of the time, we have managed 42% of the target. If we carry on at the same rate, we will only hit 10.5% from renewables. In fact, according to leaked internal government correspondence, they privately think we may only get to 11.5%. (Ian Marchant UK Energy Institute, 4 March)

Industry looking to the demand side

The biggest energy policy issue facing us is not the so-called energy trilemma but the various perspectives and drivers of the demand and supply of energy. The demand side involves decisions by millions of different people and businesses all over the country, whereas there are probably only a 100 or so companies involved in the supply side. … For all these reasons and, because supply side energy assets are interesting and give good photo opportunities, it dominates the policy agenda. The supply side is like a black hole which sucks all the life from the energy policy debate into it. The three issues of affordability, security of supply and sustainability are a useful framework for a policy discussion, but it is invariably a supply side discussion with occasional lip service to the demand side. Electricity policy debates quickly descend into who should build what power station, using what technology, where and when. The supply side trilemma is important. But it is only half the story. We need a demand side trilemma. In conjunction with the Centre for Energy Policy at Strathclyde University, here are some suggestions. I ask you to weigh them up and think what yours would be. Flexibility; Meetings of needs; Affordability. (Ian Marchant FEI Immediate Past President of UK Energy Institute, EI Newsletter 8 March)

Zero CO₂ policy?

Just when we think the world can’t get any madder, along comes something to show that we haven’t yet seen the half of it (who, three years ago, could have predicted the rise of Isil or Donald Trump? Another such moment came last Monday when our energy minister Andrea Leadsom told MPs that the Government now believes that we should “enshrine” in law the “Paris goal” of cutting our emissions of CO₂ to “zero”. As we know, arguably the greatest collective flight from reality in the history of British politics was that brought about by Ed Miliband’s 2008 Climate Change Act, which committed Britain, alone in the world, to cutting its “carbon emissions” by 80%. Anyone with a shred of common sense would have known that, with fossil fuels still providing (according to the latest government figures) 84% of all our energy – including 70% of our electricity and pretty well 100% of our transport – while renewable wind, sun and hydro supply less than 2%, it was not entirely rational to set ourselves a goal that could only be reached by closing down virtually our entire economy. Yet, this 80% figure was at the last minute plucked from the air by Mr. Miliband, on advice from a previous the climate change campaign director for Friends of the Earth, who had been invited to draft an Act which was then supported by all but five of our MPs. When Mrs. Leadsom (Tory) announced that the Government now wishes to raise that 80% figure to 100%. She was promptly congratulated by the Green MP Caroline Lucas, whose only reservation was that the Government should also commit itself to producing 100% of our electricity from “renewables.” (PH/Booker 20 March)

Fighting Brexit with energy fibs?

Energy Secretary, Amber Rudd, has joined in the Project Fear campaign to dissuade Brexit voters. In a speech she claimed that UK energy costs could rocket by £500 million. Apparently, this is based on a report from the National Grid, which she describes as “neutral in this debate.” She offered no explanation for these extra costs, other than: The European internal energy market is about making sure it is cheaper and easier for us to buy and sell energy. Without barriers – a level playing field. This is Britain’s agenda – trade and liberalisation to drive down prices – which has now been embraced by the rest of Europe.’ And that’s ignoring the benefits of new and tighter product standards in the future … and more.’ (PH 25 March)

Scrap fifth carbon budget call

The Global Warming Policy Forum is calling on the Government to delay the fifth carbon budget and scrap Britain’s unilateral carbon floor price both of which are contributing to the crisis of UK steel and other energy-intensive industries. Britain’s carbon floor price is a unilateral carbon tax at a floor price of £18 per tCO₂. It is more than four times higher than the EU’s current carbon price which is less than £4 (€4.80 on 30 March 2016). The GWPF has been consistently warning about the rising policy cost of electricity prices which are expected to increase by 47% by 2020 for large industrial energy consumers. The UK’s extra-large users of electricity are already paying nearly twice as much for power as the EU average. (GWPF 30 March)

A warning

A Professor of Energy Engineering at the University of Glasgow warned that there is ‘a significant risk in banning all coal-fired power from the UK energy system’. Replacements are available, but they all have their shortcomings, and might not materialise as the government is expecting. Renewables cannot supply all power – and when was the last time a new gas-fired power plant was built in the UK – let alone a nuclear plant? Younger warns that the UK could even see serious, third-world-like, problems with voltage control in the future: prepare for power interruptions and flickering lights! Younger warns that the UK could even see serious, third-world-like, problems with voltage control in the future: prepare for power interruptions and flickering lights! (EP 1 April)

How Britain green is Britain? On steel and energy

… Because let’s get one thing absolutely clear – the decline of the steel industry is no unhappy accident, but happened as a result of deliberate policy dreamt up by eco-loons and adopted by successive governments. Back in 2008, in a fit of environmental zeal, the Labour government, guided by the then Climate Change Secretary, Ed Miliband, decided to make British energy the most expensive in the world. They were explicitly warned at the time that this crazy policy would do little to solve global warming but would completely destroy huge swathes of British heavy industry.

High UK energy costs: Impacts on business

We have seen steel, aluminium, chemicals, fertilisers, glass, ceramics, petroleum refining, all moving systematically abroad, driven primarily by energy prices. So instead of (for example) refining petroleum products in the UK, we are simply importing refined petroleum products (and generating 35% more CO₂ globally than if we did it at home, according to DECC). (Roger Helmer, UKIP)

Tides, British steel and power prices

‘… The doubtful development of power from a tidal lagoon near Swansea, and the very recent demise or at least financial collapse of the Welsh steel industry nearby, link the two, financially. The Indian businessman–cum-Knight who has emerged as likely savour of the steel industry, a Mr. Gupta ‘has many fingers in many other pies!’ According to the South Wales Argos, he has a “substantial” financial stake in the Swansea Bay Tidal Lagoon project, which would like to charge us all four times the going rate for the electricity it may produce. Surely, Mr. Gupta will not propose to buy the power for his arc furnaces from the lagoon! Indeed, it is believed that one of his conditions will be for the government to waive all green levies. And Swansea is not the only project he is involved in. Through another of his companies, SIMEC, he also owns the Uskmouth Power Station, also in South Wales. The coal power plant there shut in 2014, but SIMEC are now planning to convert to biomass. A similar conversion at Lynemouth received a 15-year contract to supply at £105/MWh last year, three times the going rate. It is deeply ironic that Mr. Gupta is so keen to take huge subsidies for providing renewable energy, when they have caused so many problems for the steel industry he now wishes to take over’. (PH 6 April)

Bringing together stakeholders – From an invitation

The British Secretary of State for Energy and Climate Change has set out her vision for an energy system that puts consumers first, delivers more competition, reduces the burden on bill-payers and ensures enough electricity generation to power the nation. The UK are facing urgent challenges concerning securing the supply of energy. Power plants are closing rapidly, and new nuclear plants, shale gas mining and inter-connectors will not be feeding into the UK energy system for at least a decade. At the same time, there is ample potential for optimizing the consumption of energy, spending less and cutting costs. Securing energy supply requires not only political determination, leadership and stable long-term policy. It is also key that all parts of the energy value chain rally to commit to fueling and accelerating the commitments necessary, in order to turn energy security in to tangible opportunities for growth and prosperity for the UK. It is not only a matter of providing reliable, affordable power to British consumers but also about the security of vital infrastructure, creating jobs, and developing knowledge clusters across the country in a key industry. At this Business Summit in April, we bring together key stakeholders from every link of the energy-value chain, to make sure energy-related challenges is connected with proven solutions – and to hopefully ignite the huge potential for turning the pursuit of energy security into a substantial leverage for British prosperity’. (Note absence of any reference here to CO₂ or climate. (Received from the Danish-British Chamber of Commerce in April 2016)

Imitating the human brain?

IBM’s head of advanced micro-integrations thinks that biology holds the key to more energy efficient chips. Computers are still extremely inefficient in terms of power they use and the space they occupy blood vessels supplying energy to the brain are a model. The brain moves vast amounts of energy around. Using only 20 W of power. ‘That makes it roughly 10,000 times more efficient than the best silicon machines invented by human brains. (Economist 12 March/Technology Quarterly)

Poor wind results in UK

SSE’s fleet of onshore wind farms is supported through an older Government scheme, which does not set a guaranteed minimum price for the generated power, unlike the new competitive regime. This means that as more renewables join the national grid, the older wind farms become steadily less profitable.

The end of CCS in UK?

You may remember the glee with which the Guardian, BBC, DECC and others greeted the launch of Canada’s first CCS plant a couple of years ago. They are probably less keen to publicise all of the problems experienced with it since.

SNC-Lavalin had been contracted to engineer, procure, and build the facility, and the documents asserted that it “has neither the will nor the ability to fix some of these fundamental flaws.” The low productivity of the plant had in turn meant that SaskPower was only able to sell half of the 800,000 tonnes of captured CO₂ that it had contracted to sell for use in enhanced oil recovery at a cost of $25 per tonne. In addition to the lost sales, this meant that SaskPower had been forced to pay Cenovus $12 million in penalties.

This a new technology, so there are bound to be some teething problems. However, it all clearly makes a non-sense of original claims that this was in any way viable as a commercial scale operation. Indeed, an independent financial analysis by James Glennie calculated that the CCS plant would lose $1042 million over its life. SaskPower customers will be pleased to know that they will be footing most of this bill. George Osborne was widely criticised for cancelling the £1 billion support for developing CCS technology in the UK, originally put in place by Ed Davey. … I’ll leave the final word to the Grantham Institute: For most backers of CCS, however, the major barrier remains its high price tag. In Europe, for example, it would cost up to a combined $40 billion by 2030 to install the technology to cover 11 gigawatts of fossil fuel generation, or roughly 10 coal or natural gas power plants, according to the Grantham Research Institute on Climate Change and the Environment. The complex infrastructure required to capture carbon from plants, transport the emissions through miles of pipelines, and store the cocktail of gases deep underground also puts the technology beyond the grasp of most utilities. Analysts say, for instance, that capturing carbon can almost double the cost of building a new coal-fired power plant, and can add up to 50% to the price of a natural gas facility. (Paul Homewood PH 26 March)

Solar power plant kills birds to produce expensive electricity

The Ivanpah Solar Electric Generating System in California is a concentrating solar power project with 347,000 mirrors that reflect sunlight to three towers with boilers that are used to generate electricity. The US $2.2 billion project was financed by US$1.6 billion federal loans. The high-temperature solar beams are killing 28,000 birds per year according to an expert for the Center for Biological Diversity, the project is producing only about 2/3 of the power, it was contracted to deliver. California electric utility regulators on March 17 approved a deal between Pacific Gas & Electric and the owners of Ivanpah solar plant that gives plant operators more time to increase electricity production. The capital cost of the electrical power is US$6/W, which is three times the cost of power from recent nuclear power stations. The Daily Caller says the plant electricity charges are US$200/MWh, or nearly six times the cost of power from natural gas-fired plants. Ivanpah would have until the end of July to produce more power or face shut down. (Friends of Science 28 March)

Too much intermittent power in summer

Britain will have too much electricity this summer due to the growth in wind and solar farms, National Grid forecast, warning it could be forced to issue unprecedented emergency orders to power plants to switch off. Businesses will also be paid to shift their power demand to times when there is surplus electricity, as the UK energy system struggles to cope with the huge expansion in subsidised renewable power. National Grid, which is responsible for balancing Britain’s power supply and demand, warned that operating the system at times of low demand was “becoming increasingly challenging”, in part due to the growth of ‘intermittent power capacity’ such as wind and solar farms. (PH Telegraph/8 April)

The problem with large-scale storage

Many countries have committed to filling large percentages of their future electricity demand with intermittent renewable energy, and to do so they will need long-term energy storage in the terawatt-hours range. But the modules they are now installing store only megawatt-hours of energy. Why are they doing this? This post concludes that they are either conveniently ignoring the long-term energy storage problem or are unaware of its magnitude and the near-impossibility of solving it. The graphic below compares some recent Energy Matters estimates of the storage capacity needed to convert intermittent wind and solar generation into usable dispatchable generation over different lengths of time in different places. It’s probably no exaggeration to say that the amount of energy storage capacity needed to support a 100% renewable world exceeds installed energy storage capacity by a factor of many thousands. Another way of looking at it is that installed world battery + CAES + flywheel + thermal + other storage capacity amounts to only about 12 GWh, enough to fill global electricity demand for all of fifteen 15 s. (Euan Mearns 8 April)

China to benefit from renewables in Australia?

There are 2300 new coal plants with 1400 GW of capacity planned worldwide. Australia sees its future in importing millions of solar panels and batteries from China to deliver the Turnbull government’s solar and storage revolution. Meanwhile, the Middle Kingdom is planning to keep burning coal and to ship electricity to Germany, where the renewable revolution has made power so expensive it may soon be cheaper to get it from half a world away, from coal. (Graham Lloyd, The Australian, 16 April)

Cobalt supply problem may threaten lithium batteries

Paul Homewood’s thesis is that cobalt is an immense supply chain risk that lithium-ion battery manufacturers and users have ignored in their to build production capacity for markets that may not develop, or may develop more slowly than anyone anticipates. The Cobalt Cliff is upon us, and there is no reasonable probability that the battery industry will have the muscle to outbid other essential industries that must have cobalt to make far more valuable products.

Cobalt is not found as a native metal but in nickel-bearing laterites or nickel and copper sulphide deposits. This means that cobalt is usually produced as a by-product of nickel and copper mining activities … The main reserves are found in the southern part of the Democratic Republic of Congo, an area which currently holds close to half of the world’s cobalt reserves. Australia, Cuba, Zambia, New Caledonia, Canada, Russia, Madagascar and Brazil hold much of the balance. In 2011, global refined cobalt output was estimated at just over 80,000 MT [metric tons], of which approximately 52% was in chemical form and 48% in metallic form. Approximately 49,000 MT or 61% of this global output was originally mined and (semi) refined in the DRC … China’s share in global cobalt production has grown dramatically in recent years, contributing some 33,000 MT or 41% of global refined output in 2011. (PH 17 April)

A dirge for UK renewables

From Ian Cameron summarised the situation regarding renewables thus:

Solar panels, when you put them on a roof, deliver about 20 watts per square meter in England. If you really want to get a lot from solar panels, you need to adopt the traditional Bavarian farming method where you leap off the roof and coat the countryside with solar panels too. Solar parks, because of the gaps between the panels, deliver less. They deliver about 5 watts per square meter of land area. And here’s a solar park in Vermont with real data delivering 4.2 watts per square meter. Remember where we are, 1.25 watts per square meter, wind farms 2.5, and solar parks about five. So, whatever, whichever of those renewables you pick, the message is, whatever mix of those renewables you’re using, if you want to power the U.K. on them, you’re going to need to cover something like 20% or 25% of the country with those renewables. And I’m not saying that’s a bad idea. We just need to understand the numbers. I’m absolutely not anti-renewables. I love renewables. But I’m also pro-arithmetic. (PH 15 April/ FoS Extracts 6 April)

Tesla expects mass market but when and with what effect?

Model 3 has been launched with bigger power pack, larger range … by 2020 Tesla hopes to sell 500,000 electric cars and own a worldwide (!) network of more than 3500 roadside ‘supercharger’ stations. £20,000 cars is more likely by 2020, say critics. Tesla requires lots of cash and is currently worth $29bn, more than GM! Only its cheapest Model 3 car is at all likely to be competitive with battery cars from BMW and GM. (Economist 19 March)

NB: 550,000 pure electric cars were sold last year, 0.007% of % the total. By 2025, a sales are hoped to reach 3% of world market. (FT 2/3 April)

Self-driving cars were first extolled in 1939 at the World Fair. Now we got Tesla Model S, Google prototype and Mercedes-Benz F015. Smarter cars are here, but manufacturers are still cautious. These vehicles rely on cameras, radar, sensors, microphones, ultrasound, and VV (location data beams). The promise is safer, smarter, faster, more comfortable vehicles. Americans will love them. (Time 7 March)

Electric cars: An uncertain future?

The world’s major oil companies, which are highly dependent for their revenues on the transport sector, seem not to be worried at all about the threat of electric competitors. The energy scenarios of companies like BP, ExxonMobil and Chevron, assume very limited uptake of EVs as far in the future as 2040. They have developed a simple model with which they project the most likely trends to take place over the next few decades in EVs – and then calculate what this would mean for global oil demand. Their conclusion: in the mid-term, the impact will be significant. In the longer term, it may be devastating – for the oil industry. If they are right, it will be an example of a policy victory – and possibly some huge business fiascos. (EP 1 April)

The baseline – OPEC’s production freeze

OPEC’s Secretary-General spoke at the conference for industry executives from Texas and North Dakota in Houston, where much of the oil world closely listened to his comments regarding OPEC’s recent production freeze deal announced with Russia. Secretary General El-Badri said that the freeze was the “first step,” which could be followed by “other steps in the future.” He also said that everyone will wait and see how the results of the freeze over the course of the next few months. OPEC recognizes role of shale. El-Badri largely admitted OPEC’s waning influence due to the rise of U.S. shale. “Shale oil in the United States, I don’t know how we are going to live together,” he said in Houston on February 22. “Any increase in price, shale will come immediately and cover any reduction.” (Oilprice.com 23 February)

USA to blame for crash in oil price, the mess in Iraq and Isis?

The United States deserves much of the blame for the crash in oil prices since 2014, as shale drillers brought several million barrels per day of oil capacity online in just a few years. (The top five contributors to liquid supply growth were the USA, (almost 950,000 bad) followed by Iraq (adding 700,000 bad; Saudi Arabia, Brazil and Canada) Even as oil prices crashed in mid-2014, shale drillers continued to ramp-up production, adding 900,000 barrels per day in 2015. However, production peaked and began to decline in the second half of the year. The media’s talk of OPEC “waging a war” on shale is not reflected in the data. Iraq accounted for 75% of OPEC’s production growth in 2015, and that production comes from private international companies that had already made investments in the years leading up to the price crash. (Oilprice.com 23 February)

News from Gulf of Mexico: More oil than wanted

U.S. oil production has been slow to decline, but part of the reason for that is higher production from the Gulf of Mexico which is masking the deeper decline in U.S. shale.

The American shale industry remains ‘beleaguered’

The Saudis have warned America’s shale oil industry to cut costs, borrow money or face liquidation. Oil production is now lower than a year ago for the first time since 2011 and $40 a barrel is not seen as ‘survivable’ by many. A record amount of crude oil is still in storage. While capital expenditure has fallen, this has not been enough to balance the books and only the strongest firms can access capital via the equity market.

Even firms that technically insolvent may not have enough liquidity left to keep them from fire sales. Some have already said they would not pay interest on their debts, others have missed debt repayments. Twenty-six oil-related bond issuers had filed for bankruptcy or had distressed debt exchanges last year. Further strains are expected as borrowing limits are to be assessed. For comfort prices will have to rally above $40. Financial backers are really calling the shots. (Economist 12 March)

The fluctuating oil price

The three main energy bodies – OPEC, IEA, and EIA – released monthly reports this week, and the IEA’s was the most bullish of the bunch. The Paris-based energy agency said that the excess global oil supply may currently stand at around 1.5 million barrels per day (mb/d), but that glut would shrink rapidly to just 0.2 mb/d in the third and fourth quarter of this year. (Oilprice.com 15 March)

More gas than needed?

According to the head of Chevron, big oil has a future, though threatened by frackers and renewables, who see these threats off because of weak balance sheet of the former and the slow shift away from fossil fuels. Its Gorgon LNG project in Western Australia is nearing completion, freeing capital. Big oil is also catching up with shale, emphasising smaller projects. First and foremost the world needs affordable energy. (FT 10 March) The Gorgon project (cost $54bn shared between Chevron, Shell and Exxon Mobil and Japanese utilities) has proved the assumption wrong that large-scale projects would bring down unit costs. However, the first cargo has now been shipped from the world’s largest LNG project, with benefits to Chevron and Australia;80% of the gas are already contracted. Projects like Gorgon need ‘a low cost competitive investment climate’. Australia hopes to overtake Qatar, but demand for LNG is falling. Gorgon also boats the world’s largest CCS project, hoping that gas will replace coal in Australia. Other LNG projects there have been delayed. (FT 17 March)

Oil industry still able to access capital but reports losses

Despite posting record losses in potentially seeing credit lines cut, several oil companies have returned to the equity markets, where they are still being welcomed with open arms. Reuters reports that at least 15 oil companies have announced new offerings in 2016, with minimal damage to their share prices. The companies surveyed have outperformed an oil and producers index by 3% on average. But another way of looking at that statistic is that only well-positioned companies have issued new stock. (Oilprice.com 25 March)

Big oil under attack from green shareholders

Exxon was urged to ‘stress test’ potential risks from climate changes rules (NOT climate change!!) by groups of investors submitting proposal to annual meetings of shareholders, all with reference to the Paris agreement. They ‘show how environmental campaigners have become more adept at working with shareholders’. Similar climate-related resolution was brought by Church of England last year and was supported by the Boards of Dutch Shell, BP and Statoil and carried by majorities of shareholders. Only Exxon and Chevron have so far resisted. (FT 13 April. Note only the three European groups expected to benefit from switching from coal to gas for power generation)

Oil industry pushes back against Exxon climate accusations

The oil industry is coming to the defence of Exxon Mobil Corp. and pushing back against accusations that the company lied to the public and shareholders about climate change. The industry-funded Energy in-depth project is accusing the news organizations behind the allegations of being funded by fossil-fuel opponents and cherry-picking information to back their causes. (Ian Cameron 23 March)

American crude flowing to everywhere

Three months since the U.S. lifted a 40-year ban on oil exports, American crude is flowing to virtually every corner of the market and reshaping the world’s energy map. The “growing volumes of exports” from the U.S. are now “spooking the markets,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd. in London, said in a note. With American stockpiles at unprecedented levels, oil tankers laden with U.S. crude have docked in, or are heading to, countries including France, Germany, the Netherlands, Israel, China and Panama. Oil traders said other destinations are likely, just as supplies in Europe and the Mediterranean region are also increasing. (Javier Blas, Bloomberg, 18 March/GWPF 23 March)

Oil stocks and price moves prior to Doha

The OECD liquid stock level since July 2014 is equivalent to only three days’ supply, hence ‘over-bearishness’ is irresponsible. Tight oil production has already fallen by 20% since peak and about 75% of recent savings (of investment) appear to have come from squeezing the service sector rather than technological efficiency. Demand is not flattening because of price fall. The market is oversupplied, but fundamentals have not moved far enough to support prices at current [low] levels. Over bearishness is irresponsible because it is deflationary and fuelling staggering levels of investment cuts which unless checked, will cause global supply shortages in medium term. (Ch. Furess-Smith Letter FT 2 March)

The worries of the oil industry

the UK Committee of the World Petroleum Council will hold an important workshop, specifically designed to provide those working in finance, financial services, project finance, treasury, insurance, law, accounting and construction with the latest insights, best practice and innovative thinking for developing financing strategies to help companies across the oil and gas sector.

The two-day workshop has been created to:

fully brief you on the role that oil and gas will play in the longer term energy transition.

(Marta Kozlowska Energy Institute 19 April)

Longer term impacts of oil price drop on the industry

The impacts of the drop in oil price will last longest for offshore groups, but as many costs have fallen, some offshore project will nevertheless go ahead, e.g. BP’s mad dog project in Gulf of Mexico where a new design was developed, and development costs were halved. Drilling companies, e.g. Transocean, Seadrill, Ensco and Noble have reported large losses. The offshore oil sector appears to be an early major victim of what is described as a battle between USA onshore shale producers and the Saudis. (FT 25 April) Eni will still drill of Ghana, Shell in the Gulf of Mexico and Statoil in the North Sea. The USA will pull out of deepwater exploration altogether. (FT 25 April)

Climate change and shareholders

The U.S. Securities and Exchange Commission has ruled Exxon Mobil Corp must include a climate change resolution on its annual shareholder proxy, a defeat for the world’s largest publicly traded oil producer, which had argued it already provides adequate carbon disclosures. (Oilprice.com 25 March)

Loss-making increases

Chevron announces a loss in a first quarter loss of $725 million, compared with a $2.6 billion profit a year earlier. But the company feels more optimistic because it recently completed several large projects – including the massive $54 billion Gorgon LNG export facility in Australia – which should improve cash flow moving forward. (Oilprice.com 25 March)

(Oilprice.com 25 March)

The tragedy of Brazil

Brazil’s state oil group Petrobras made its ‘pre-salt’ discoveries in 2007. In February 2015, its CEO and five other top executives resigned and the call for the impeachment of Ms. Rousseff followed soon afterwards; da Silva, Brazil’s first working class president was detained for questioning and police raided his house. His party alleged politically motivate selective leaking by prosecutors. Petrobras has started selling assets. (FT 5/6 and 18 March)

Mixed news from Britain

Tax burdens are easing on the oil industry, ending the trend of governments taking ever more from oil companies, via levies, royalties and production – sharing agreements. The average take almost tripled between 2000 and 2014. With drop in oil prices, UK chancellor abolished one tax on oil production in North Sea and halved another. In Australia and Norway, adjustment is automatic as government agreed to share of profits while Brazil and Kazakhstan take a fixed charge per barrel. With oil at $40 ab, Brazil and Angola take more than 100% of gross profits. (Economist 19 March)

Oil production in the UK actually increased a bit in 2015, after about two decades of steady declines. The additional 100,000 barrels per day came from new offshore oil projects that were initiated in 2012 when oil prices were much higher, plus extra oil squeezed out from existing fields. The collapse in oil prices has demolished investment in new projects, the results of which will be felt in the 2018 to 2021 timeframe, due to multiyear lead times. The number of new projects greenlighted in 2015 was less than half of the level seen in 2013 and 2014. (Oil.price.com 29 March)

Saudi Arabia in deeper trouble

The Saudis have misjudged the depth of the oil price collapse they engineered, hoping to drive out shale producing upstarts. They achieved substantial negative impacts on all oil producers and destroyed the limited trust that existed between oil producers. The effect on the Saudi economy will be worse than that on Iran. (Letter FT 14 March)

Will stop pumping only if Iran

Saudi Arabia’s Prince Mohammed bin Salman said in an interview with Bloomberg, this week that his country will only freeze oil production if Iran agrees to do the same, throwing the success of the April 17 Doha meeting into doubt. Iran has already said that it would not participate until it was able to return its oil production to pre-sanctions levels, meaning that it plans on adding at least 1 million barrels per day in additional output. “If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them,” the powerful 30-year-old prince said. “If there is anyone that decides to raise their production, then we will not reject any opportunity that knocks on our door.” (Bloomberg 1 April)

The Doha OPEC meeting and Prince Mohammed bin Salman

Oil producers failed to reach agreement in Doha on 16/17 April) with the Saudis changing their minds at the last minute – a new order has started with Deputy Crown Prince bin Salman, who is also in charge of the defence ministry and the economic council, as new oil minister. The decision was purely political said some, but Saudi’s blamed Iran which refused to participate in a deal meant to stop the slide in oil price. S&P 500 Energy sector dropped by 1.5% but rebounded to a 1% drop later. Steep losses were soon erased. The Saudis said oil price was heading in right direction anyway, but Morgan Stanley predicted a full-scale market share battle ‘that could take a 2017 recovery off the table’. After Doha, the oil price fell and stock markets followed suit. UK Oil groups like Premier Oil and Tullow ‘will have to work ever harder to keep their lenders happy as the year goes on.’ Energy XXI is seeking bankruptcy protection. (FT 19 April) Firmer oil prices continued and meant that ‘Equities remain elevated’. Brent even rose by 2% after Doha. (FT 20 April).

Fears that Saudis and friends increase production

The Crown Prince made this threat ‘to crush rivals’. And while oil prices ‘plummeted’ on Monday after the Doha meeting, there was a rapid and ‘impressive’ recovery to Brent $46 ab. If OPEC turns up their oil amplifies, say some, the market will not rebalance until 2017 at the earliest. Prince Salman has now replaced the more conservative technocrat Naimi as in charge of Saudi oil policy. As the king’s favourite son, he is a new unpredictable factor in the continuing oil price saga. The 13 OPEC members are to meet again in June. (FT 23/24 April)

End ‘addiction to oil’

‘A long awaited plan for radically transforming the Saudi economy is to include ending the addiction to oil, bolster the private sector including the partial listing of Aramco. This is said to be the brainchild of Mohammed bin Salman claimed that all this could be done in four years. Aramco should be transformed into a sovereign wealth funds (valued up to $3tn) with a mandate to kick-start domestic investment. The time frame seems to be the main problem. The editorial stressed the urgency of speed to prevent the disaffected youth from drifting into militancy. Social and political change is needed as well. (FT 26 April)

Saudi Arabia seeks non-oil income

The Saudi government released a blueprint to diversify the economy over the next decade and a half. The plan calls for raising non-oil revenue through a combination of taxes and investments, plus trimming energy subsidies and slashing spending. The plan also calls for the partial IPO of state-owned Saudi Aramco, spinning off assets that the government says could be worth $2 trillion. Over the long term, the Saudis hope to reduce dependence on oil to fund their government. (Oiprice.com 26 April)

NB. However, the Saudi reforms promoted by the deputy crown prince – the power behind the throne – are on collision course with religion. He cannot control the powerful Wahhabi establishment which will oppose his ideas for education reform. (David Gardner FT 28 April)

Iran fights for market share

Iran has already said that it would not participate in the OPEC production freeze deal, arguing that it would not tinker with its output, until it has brought exports back to pre-sanctions levels. Now it is stepping up its efforts to win back market share by undercutting Saudi crude in Asia, discounting its oil for the third consecutive month after seven years of selling at a premium. The National Iranian Oil Company will sell light Iranian crude at 60 cents below the Middle Eastern benchmark price. It will also sell the Forozan Blend to Asia at a $2.43 per barrel discount to the Oman and Dubai benchmarks. Crucially, the discount will be 3 cents per barrel cheaper than Saudi Arabia’s medium variety, a similar blend to the Forozan. “Unquestionably, since the lifting of sanctions, the Iranians have become a force to be reckoned with in global oil markets,” John Driscoll, chief strategist at JTD Energy Services, told Bloomberg. “Their mission is to recapture market share, pure and simple.” (Oilprice.com 8 April) Iran’s oil exports are rising quickly after a slow start. For the first two weeks of April, Iran’s crude exports jumped by 600,000 barrels per day compared to March levels, hitting the two million barrel-per-day mark. (Oilprice.com 15 April)

Iraq and oil

Iraq’s production growth will slow in 2016, however, as the oil price crash hits upstream investment. (Oilprice.com 23 February)

Putin, Syria and the price of oil? London speculations

When Russian warplanes began leaving their base in Syria last week, it was hard not to suspect that there was more to Putin’s claim that it was simply “mission accomplished”. The geopolitics of oil has always been deeply murky. It does not seem outlandish to speculate that part of Russia’s surprise decision to withdraw some military support for President Assad may have been linked to another foreign policy priority – its continuing co-operation with Saudi Arabia and other Gulf nations to shore up the price of oil. (Putin’s Syria Withdrawal Appears To Be Linked To OPEC Oil Price Agenda The Times, 22 March)

Rosneft weathers downturn

Russia’s state-owned oil company Rosneft posted a small increase in net profit for 2015, as the depreciation of the rouble helped offset low oil prices. Net income increased by 2% to 355bn roubles (USD$6.1 billion). All is not well, however. Rosneft stepped up drilling dramatically in 2015, but production remained flat. Rosneft presides over some of Russia’s largest oil fields, but they date back to the Soviet-era and are slowly declining. Rosneft will require ever more investment to stop production from falling. (Oilprice.com 1 April)

A Russian transformed into international businessman

Remember TNK-BP, Browne and Fridman (born in Ukraine)? During an interview with Mikhail Fridman (now a buddy of Lord Browne) who once sold 50% of TNK-BP to Rosneft, he claims that he was never tempted by power; and hence did not fall foul of Putin. As a student he set up, with two others, the Alfa Group which mushroomed into one of Russia’s biggest conglomerated, including oil … amassing a vast fortune by buying up Russian crude and selling it abroad at marked-up prices. In 1991, they set up a bank, Alfa, now Russia’s largest private lender. Fridman recently complied with UK government demands to sell his North Sea gas fields, but ‘we are still considering what could be our approach’… Legal action? ‘No comment’ – was his reply, with a smile. (Interview with Guy Chazan FT 2 April)

Russian responses to low oil price

When GDP shrank by 8% because of drop in oil price, Russia enacted two reforms: it diversified funding sources to attract more institutional investors and, given the loss of the ‘fat’ cushion of international reserves, allowed the rouble to float and hence reduce the purchasing power of ordinary Russians but protecting remaining reserves instead. The fall of the rouble has encouraged inflation and real wages have fallen. Government is also recapitalising well-managed banks and tightened their supervision … both tasks in the hands of a banker now economy minister, Elvira Nabiullina, who is now blamed for crippling investment. However, she (and Putin) appears confident that Russia can manage on low oil prices. (Economist 16 April) [No danger of a Trump challenging Putin]

Shell/Nigeria facing more trouble

Shell production arm in Nigeria is the largest onshore producer and faced new actions demanding compensation for past oil spills in the Niger Delta in the 1990s if other communities there were to take same legal action against the continuing effects of oil pollution on land and water supply, Shell would face serious increased costs. In a similar case last year, Shell paid out £55m compensation and this could be the tip of an iceberg where others to take similar caution. (FT 2 March).

Gas pipeline conflicts in Africa

The route of a proposed gas pipelines to the Indian Ocean from inland gas fields in Sudan, Uganda, Kenya and around Lake Albert is causing arguments between the countries and companies involved. The companies involved are Total, Tullow and Cnoooc. Large investments are needed and a port would have to be constructed. But where? Tullow advocated through Kenya. So far only exploration companies are active. (FT 22 March)

New coal in Japan

The Japanese government has decided to relax its opposition to coal-fired power. The country’s environment ministry issued objections to five new coal-fired stations in 2015, but the industry ministry has persuaded them to accept voluntary steps by power companies to curb emissions. Environmentalists say the change in attitude jeopardises Japan’s pledge to reduce CO₂; however, the ministry stated that it is monitoring stations to ensure enough is being done to meet carbon limits.

Japan is readying to open up its power retail market in April, and companies are rushing to build 43 coal-fired plants or 20.5 gigawatt of capacity in coming years, about a 50% increase.

As part of the agreement, the Ministry of Economy, Trade and Industry is set to tighten its rules over coal-fired power stations from April 1, including issuing new non-binding requirements on the heat efficiency of new and existing plants to curb emissions. (PH 25 February)

Sharp drop in coal use in UK

Electricity generation from coal has fallen sharply from 101 to 76 TWh, with the nuclear, wind, solar and bio all helping to fill the gap. Nuclear generation is basically back to where it was in 2013, following plant shutdowns for maintenance in 2014. Total generation is effectively unchanged. The main sources of primary energy are gas (35%, gas (34%) and coal 13%, wind/solar/hydro 2%, according to official statistics. (PH 31 March)

Peabody must innovate

The coal industry has been in trouble for years, as evidenced by the recent announcement by Peabody Energy BTU – 0.48%, the world’s largest private sector coal company, that it may have to file for Chapter 11 bankruptcy protection. There are a number of reasons behind the demise of the U.S. coal industry, but the biggest factor is displacement of coal by natural gas in the power generation sector. This week the Energy Information Administration published a graphic that highlighted the role of natural gas in displacing coal. (Judith Curry/Forbes 1 March)

China bans new coal plants in some areas

The Chinese government announced a ban on new coal-fired power plants in regions that already have a surplus of electricity capacity. The move is intended to address China’s problem of excess capacity that often goes unused, and at the same time crack down on air pollution. The decision could further drag down international coal markets, pushing down prices and putting coal producers in a deeper bind. China is the largest consumer of coal in the world but in a shocking turn of events, it has managed to decrease its coal consumption in the past two years. (Oilprice.com 26 April)

Bad news elsewhere

Coal producers have been under relentless pressure from falling demand, depressed prices, and environmental regulation. A warm winter added more pain to the sector.

The end of nuclear in Sweden??

Vattenfall threat to shut down its entire nuclear generating capacity could have highly harmful consequences: grid instability, price hikes, and worst of all much higher greenhouse gas emissions. And this would affect not just Sweden, but the entire Nordic and even European energy market. Sweden, currently net exporter of electricity, would need to start importing from neighbouring countries, such as Poland, the Baltic states, Germany and Russia. Most of these countries have dirtier electricity mixes than Sweden, writes Rauli Partanen. He argues that nuclear power in Sweden has become uneconomical. Wholesale prices have been much lower than the breakeven price for nuclear generation. Electricity has been sold at a record low price of €20 per MWh, while the cost of generating nuclear power has been in the same ballpark, or even slightly higher. In addition, the Swedish government has set a tax on nuclear power, which has been steadily rising. After the latest hike, it amounts to about a third of the wholesale price, roughly €7 per MWh.

The publicly owned utility Vattenfall, which owns and operates seven reactors in Sweden, announced recently that if the government does not remove the nuclear tax, it would close down all of its reactors by 2020. This, in addition to the earlier announcements by the German utility Uniper (the company was created when E.On split its business; Uniper got the nuclear and fossil fuels part) to close down two of its three reactors prematurely, would mean a massive loss of generating capacity in Sweden and in the common Nordic electricity market. The ramifications would be huge. How did this situation arise? To put it frankly, Swedish energy policy has been messy when it comes to nuclear power. After the oil crises in the 1970s Sweden moved away from fossil-based electricity production with record speed. In addition to its existing hydropower fleet, the country built 12 nuclear reactors, commissioned between 1972 and 1985, but three plants have since been closed: current operational capacity is around 9000 MW. Nuclear power has produced between 40 and 50% of Sweden’s electricity. (Excerpt from EP 11 March; See Partanen, Paloheimo and Waris The World After Cheap Oil, Routledge in 2015)

UK weapons-grade uranium shipped to USA

The world’s largest shipment of weapons-grade uranium 700 kg was shipped to USA for treatment in an attempt to remove this material from Scotland. More remains at Sellafield, but Dounreay in Scotland is to be cleared by 2030. The US will not charge but return the uranium in other forms to France for transformation to medical use. The UK is still looking for disposal sites for high-level wastes since Cumbria rejected plans for underground storage there. But the matter is not closed with financial incentives added and geological surveys continuing. A nuclear summit was held in Washington with what to do about North Korea on the agenda. (FT 31 March)

The Hinkley saga in summary

The head of Hitachi has warned that the debacle surrounding the construction of Hinkley Point nuclear plant throws up “very serious concerns” about its own investment in the UK. Labour calls for a back-up plan in case Hinkley gets never build. (FT 3 March)

The end of nuclear power in Europe??

Nuclear power seems to be on the brink of an existential crisis, at least in Europe. Construction of the much-trumpeted new Aveva EPR reactor at Olkiluoto (Finland) began in mid-2005. Originally scheduled to be connected to the grid in 2010, it is now at least eight years late, and the estimated cost has escalated from €3 billion (the fixed construction price due to Areva, the main contractor) to €8.5bn currently. Meanwhile, the same company embarked on building France’s first EPR on the existing Flamanville site at the end of 2007, for a projected cost of €3.3bn. By April last year, the estimated total cost had risen to €10.5bn and the start of operations had moved from 2012 to the end of 2018. With these disastrous projects compounded by loss in confidence in new nuclear following the Fukushima meltdown, the majority state-owned Areva was driven deep into the red. A government-led rescue package is imminent, and the company has sold a majority stake in its reactor business to EDF, also state-owned.

The Flamanville and Olkiluoto reactors are first-of-kind and, as such, are inevitably more expensive than later versions, as teething problems are ironed out. However, in this case, these are not just teething problems; there is real concern that the design is overly complex and in effect unbuildable. To make matters worse, following Germany’s knee-jerk abandonment of support for its nuclear fleet following the tsunami that overwhelmed Fukushima, even France – the European standard-bearer of nuclear energy and a country that has benefitted greatly from it – is now committed to a smaller nuclear fleet in future. … Problems do not end with the UK government apparently still committed to an expensive and, frankly, unproven design built by a struggling foreign-owned company, partly financed by the Chinese. The EDF board is itself divided on whether or not it should go ahead with the project (after all, the company is also a major supplier of energy from other sources and some directors clearly do not want to compromise the future of the entire operation on the basis of a single nuclear plant). But both the British and French governments appear to view this as a project which they cannot drop. Abandonment of the project would be a major embarrassment for both countries. (Excerpt Scientific Alliance 1 April)

Regulatory uncertainty and the advanced Small Modular Reactor

The Nuclear Regulatory Commission’s head of operations tried to sell lawmakers on a strategy to license the latest nuclear technology, but had to contend with lawmakers who have their own plan to lay the groundwork for advanced reactors, and it goes beyond the administration’s comfort zone. “I worry that we have technologies that are effectively smothered in the crib because [companies] can’t figure out what their regulatory process is going to look like, and therefore they can’t raise capital and they can’t proceed,” Sen. Sheldon Whitehouse (D-R.I.) said during a Senate Environment and Public Works subcommittee hearing. “There’s a big X-factor, a big question mark around the process, if you’re not a traditional light-water reactor,” Whitehouse said. Eight days ago, EPW Chairman Jim Inhofe (R-Okla.) teamed up with several other senators to introduce legislation to reform the licensing process and restructure how NRC is funded. Critics warn that lawmakers didn’t properly explain those terms, which could lead to less rigorous standards for the approval of novel nuclear power technologies.

At Obama administration’s request, NRC earmarked $5 million for work on advancing small modular reactor (SMR) licensing practices in its fiscal 2017 budget proposal. Both House and Senate proposed spending bills include language to address this issue. Yesterday’s hearing also showed the opposing motivations that drew climate change skeptics and some of the chamber’s most vocal environmentalists to support the same energy legislation … licensing advanced reactors would bring the US closer to meeting the ambitious targets for cutting greenhouse gas emissions in accordance with the Paris climate agreement. Inhofe responded: “This has nothing to do with global warming.”

One thing senators and the nuclear industry agree on is that the commission’s current licensing process, with a design and certification that can cost billions of dollars and stretch for up to a decade, is one of the biggest obstacles for SMRs and advanced reactor designs that use coolants other than water. “The investors and innovators have made it very clear that their most immediate and pressing concern is regulatory uncertainty,” Finan said. “Climate change is urgent, the private sector is engaged and eager, and the time to fix this is really right now.” However, a hearing of the Clean Air and Nuclear Safety Subcommittee revealed concerns about safety and security, including NRC’s own fears that the legislation could handcuff regulators. (Excerpt E&E Daily, 14 April). http://www.eenews.net/eedaily/2016/04/14/stories/1060035588

‘Obstructive climate policy lobbying’ spreads

A new report from a climate-focused advocacy group attempts to quantify spending on “obstructive climate policy lobbying,” estimating that fossil fuel companies may be spending upwards of $500 million per year to “influence” the debate. But a review of the group’s calculations and methods suggests that much of what the group defines as climate-related advocacy actually encourages emissions reductions, or has nothing to do with climate change. The report, authored by the British group InfluenceMap, is also part of a broader, well-funded political campaign to label fossil fuel companies “deniers” in the press, based upon dubious and even contradictory assumptions that receive little if any scrutiny. In a press release announcing its report, InfluenceMap accused two oil and natural gas companies (ExxonMobil and Shell) of “systematically trying to stall progress” on climate change. The group goes on to accuse these companies of “manipulating the public discourse,” using a quote from the radical environmentalist Bill McKibben (founder of 350.org) to support its claim. InfluenceMap claims to have conducted a “forensic analysis” of internal revenue service filings and “careful study” of other public advocacy to arrive at its conclusions. All told, it estimates that these companies, with support from the American Petroleum Institute, spend over $100 million every year on “climate lobbying.” (WUWT 7 April)

Funders DO NOT publish disappointing findings

A three-year study by the University of Cincinnati and surrounding counties found that hydraulic fracturing, or fracking, has no effect on groundwater in the Utica shale region. It is not being released to the public, however. A lead researcher for the University of Cincinnati’s Dept. of Geology, released the results during a meeting of the Carroll County Concerned Citizens in Carrollton and stated: “We haven’t seen anything to show that wells have been contaminated by fracking.” The university had no plans to publicize the results.

I am really sad to say this, but some of our funders, the groups that had given us funding in the past, were a little disappointed in our results. They feel that fracking is scary and so they were hoping this data could to a reason to ban it

Brexit threat to climate accord

As fear mongering grows in the UK with the approaching vote about whether to stay in EU or get out, former UK environment minister John Gummer now, Conservative Peer Lord Deben pronounced Brexit to be ‘a real threat to Paris’. [Perhaps he noted that climate skeptics (or rather deniers as he calls them) also tend to be more critical of the Brussels.]. However, the government rejected the noble Lord’s fears, saying according to Pilita Clark, having said repeatedly that it backs the main aims of the Paris agreement. (FT 19/20 March)

The rapid response community

Matt Ridley writes: The editor of this newspaper [Times 25 April] received a private letter last week from Lord Krebs and 12 other members of the House of Lords expressing unhappiness with two articles by its environment correspondent. Conceding that The Times’s reporting of the Paris climate conference had been balanced and comprehensive, it denounced the two articles about studies by mainstream academics in the scientific literature, which provided less than alarming assessments of climate change. The letter was simultaneously leaked to The Guardian. The episode gives a rare glimpse into the world of “climate change communications,” a branch of heavily funded spin-doctoring that is keen to shut down debate about the science of climate change. The letter was not entirely the work of the peers but, I understand, involved Richard Black, once a BBC environment correspondent and now director of the Energy and Climate Intelligence Unit, an organisation that spends more than £500,000 a year, largely trying to influence the media. The ECIU is part of a self-described “climate change rapid response community,” which jumps on newspapers that publish anything skeptical about global warming. Another £330,000 was spent by Carbon Brief, led by another ex-journalist … of The Guardian. (There’s a revolving door between environmental journalism and Big Green.) Then there’s the Climate Coalition, the Campaign against Climate Change, various publicly funded climate-communications groups inside universities, plus the green multinationals, such as Greenpeace, Friends of the Earth and WWF, with their nine-figure budgets. And so on. Against this Goliath, one little David stands alone: the Global Warming Policy Foundation, with its budget of about £300,000, all privately donated and none from the fossil fuel industry. (I am on its academic advisory council, but receive no pay and make no donations. I have income indirectly from unsubsidised coal, and have refused income from subsidised solar and wind power.)” (PH 25 April)

NB: A major new and serious complaint has been sent to the Director General of the BBC, regarding the Corporation’s persistent bias in reporting of climate change issues. The complaint is a massive 163 pages long and is a joint submission from ten complainants. In addition, there are several technical annexes, totalling 125 pages. For the letter see PH 24 April, signed by Piers Corbyn, Richard Courtney, David T C Davies MP, Philip Foster, Roger Helmer MEP ,Alex Henney, Paul Homewood, Lord Christopher Monckton of Brenchley, John Whitfield and Rupert Wyndham.

Canada joins more climate ‘activism’

There is such a thing as compliance with regulations established by a duly constituted authority. And there is such a thing as acceptance in a competitive market by customers who are willing to pay for the product. And yet, well-intentioned people have come to think more is needed, namely approval from the self-appointed activists at the Social Licence Bureau. And thus has begun one of the costliest fool’s errands of modern times. Alberta’s NDP government found itself goaded into an international snipe hunt for a social licence to operate its oil industry and get the product to market. Bear in mind that the industry complies with all available social, economic and environmental regulations, and that its product is desired by consumers across Canada and around the world. Yet Premier Notley became convinced that Alberta’s oil still lacked legitimacy because it was missing a so-called social licence. Unfortunately, the same folks who convinced him of this also set themselves up as the arbiters of who gets a licence and who doesn’t. Climate activists hung out a shingle as the Social Licensing Bureau, and the Premier played along. (Ross McKitrick Financial Post 21 April)

US democrats want to prosecute skeptics

In the hours before they took the stage for their March 29 press conference, Democratic attorneys general received a secret briefing from two top environmentalists on pursuing climate change dissenters. Speakers for the Union of Concerned Scientists and the Climate Accountability Institute spent 45 min each providing talking points behind the scenes on “the imperative of taking action now” and “climate change litigation,” according to a cache of emails released over the weekend by the free market Energy & Environmental Legal Institute. For climate change groups, the New York press event was the culmination of four years of planning and advocacy in support of an explosive proposition: using the legal system to link fossil fuel firms and others challenging the catastrophic global warming consensus to fraud and even racketeering, the emails and other documents show. The effort paid off. (V. Richardson, Washington Times, 17 April/GWPF 18 April)

Deben links Paris to Brexit

Lord Deben, Chairman of the UK government’s Committee on Climate Change, thinks the imminent likely exit of Britain from the European Union poses a risk to the Paris Climate Treaty. A British vote to exit the EU in June would represent a blow to the 2015 Paris climate deal, the country’s top climate advisor warned. The former Conservative environment minister, who now chairs the UK Committee on Climate Change, made the comments during a talk hosted by a think tank in London. “Brexit is a threat to Paris,” said Deben, who is a vocal campaigner for Britain to maintain its links with Brussels. “I’m optimistic about the EU because I think the British people aren’t so stupid to go out …” he added. The referendum is slated for 23 June and has already caused significant splits within the ruling Tory party. Lord Deben’s tenure as an independent climate advisor to the UK government has attracted accusations of conflict of interest, due to Lord Deben’s substantial personal investments in green businesses. (Excerpt Guest essay by Eric Worrall, WUWT 20 March)

Energy shock

‘The latest story on “green energy” at the German online FOCUS magazine actually shocked me’. Europe’s energy policy is, under the bottom line, costing the lives of tens of thousands of citizens – all at the holy altar of “climate protection”. FOCUS reports:

In 2014 in Europe there were about 40,000 winter deaths because millions of people were unable to pay for their electric bills – the so-called energy poverty currently impacts about ten percent of all Europeans. In the past 8 years the price of electricity in Europe has climbed by an average of 42%. The consequences of energy poverty are profound: tens of thousands of deaths every year, millions losing their power. (Pierre Gosselin, No Tricks Zone, 29 March)

Tapping the power of faith activists: Can Imams drive action in Pakistan?

Intolerance (religious) is deeply embedded in Pakistan’s society and is breeding violence. The Barelvis, a the majority of Pakistan’s Sunni supported and kept restrained so far by the Saudis, as well as the population as a whole, are ‘furious’ with both the Muslim-League and the army and are in danger of becoming ‘radicalised’. The hanging of one Belvis male for murdering the Punjab’s liberal governor for being critical of prevailing blasphemy law, led to major disturbances in favour of the hanged man. (Economist 2 and 6 April)

Big green appeals to ‘the world’s biggest publicly listed fossil fuel companies’

Big Green (e.g. Forum for the Future, New Economics Foundation, WWG UK, The Climate Coalition, the Sierra Club and more) as well as many little Green pressure or interests groups (e.g. Walden Asset Management, People and Planet, Carbon Tracker, Laird Norton Family Foundation, Operation Noah, Jesuits in Britain, Jupiter Investment Trust, Solar Aid and the WEB Asset Management, to mention about one third of the signatories) published a one page advertisement in the Financial Times to tell the financial world that ‘ the science was as resolute as science can be’ [an interesting term!] and that we had little time left to save the planet, i.e. ‘reach the Paris goal of a zero carbon economy’. The transition must be accelerated to reducing temperature rise, ideally by limiting it to 1.5℃. This should be at the heart of their business plans. (Open Letter FT 26 April p. 5)

Editorial Comment: It seems that the British Greens (or fossil fuel haters) have taken over from the Germans are the greenest of them all. I wonder why.

Why this growing fixation on climate change?

So how do White House, EPA, UN, EU, Big Green, Big Wind, liberal media, and even Google, GE and Defense Department officials justify their fixation on climate change as the greatest crisis facing humanity? How do they excuse saying government must control our energy system, our economy and nearly every aspect of our lives – deciding which jobs will be protected and which ones destroyed, even who will live and who will die – in the name of saving the planet? What drives their intense ideology? The answer is simple. The Climate Crisis & Renewable Energy Industry has become a $1.5-trillion-a-year business! That’s equal to the annual economic activity generated by the entire US non-profit sector, or all savings over the past 10 years from consumers switching to generic drugs. By comparison, annual revenues for much-vilified Koch Industries are about $115 billion, for ExxonMobil around $365 billion. (Paul Driessen August 2015) Paul Driessen

International agreements

Leaders pledge to build on security summit series 4 April. World leaders attending the last in the current series of Nuclear Security Summits on 1 April pledged to establish a high-level group to sustain and take forward work to build a strengthened and comprehensive global nuclear security architecture.

Europe, Russia and Middle East

European Commission clears EDF, CGN partnership 11 March

Approval was given to the partnership between EDF and China General Nuclear for the development, construction and operation of three new nuclear power plants in the UK complying with EU merger regulations.

Asia

USA and Canada

Southern hemisphere

Aspirations: The UK’s commitment to new nuclear

UK legislation aimed at curbing CO₂ emissions is likely to have committed the country to a large expansion of nuclear power, according to a new book on nuclear power …, writes Stephen Tarlton. Successive UK governments over the last decade have been implementing measures to ensure that the country is, as the UK Nuclear Industry Association puts it, “one of the most desirable worldwide markets in which to develop new nuclear power.” Getting to this point has been arduous and, with no nuclear concrete poured this century despite credible plans for around 18 GWe of new build, there is clearly still much to be done. The journey from the high point of the first Magnox power reactors starting up in 1956 at Calder Hall, through to the cost and schedule overruns that characterized the AGR programme along with the PWR at Sizewell B, and then back to the recent renewal of optimism in nuclear, is described in The Fall and Rise of Nuclear Power in Britain by Simon Taylor, director of the Master of Finance Program at Cambridge University’s Judge Business School. Although the book is subtitled “a history”, the author’s principal interest is on the economics of nuclear, in particular the financing of new plant. The book’s main focus is on the Hinkley Point C project, particularly the agreement between EDF Energy and the government for a contract for difference (CfD) guaranteeing a price of £92.50/MWh (about $132/MWh) over 35 years. The UK has long recognized the environmental benefits of nuclear: over 25 years ago, on 8 November 1989, prime minister Margaret Thatcher gave a speech to the United Nations General Assembly where she emphasized that the problem of global climate change could be addressed through “the use of nuclear power which – despite the attitude of so-called greens – is the most environmentally safe form of energy”. And more recently, when the Labour government of Tony Blair rejected new nuclear build in its 2003 energy white paper, it nevertheless acknowledged “the possibility that at some point in the future new nuclear build might be necessary if we are to meet our carbon targets”. Not long after, PM Blair realized that, without new nuclear build, the country’s emissions targets may indeed not be met – particularly as it was looking likely that the AGR fleet would eventually be replaced mainly by gas generation. Nuclear was back on the agenda. While it is easy for governments to pay lip-service to reducing carbon emissions, Blair’s administration genuinely appeared to take seriously what it initially referred to as its “aspiration” to cut emissions. This aspiration resulted in the Climate Change Act of 2008, passed with overwhelming public and political support, which binds the country to carbon emissions reductions of 80% (from 1990 levels) by 2050. In summarizing the situation, Taylor states:

The ambitious decarbonization targets, combined with the imminent closure of older nuclear stations and the difficulty of increasing the scale of onshore wind, left the government with little choice but to do whatever it took to bring private nuclear investment to the UK.

The impact of the US electricity market

Unless the deregulated US electricity markets recognize the carbon-free attributes of nuclear plants, there will be a substantial number of nuclear plant closures in the country, writes Bradley Fewell. Despite performing at exceptional efficiency, many US nuclear facilities do not receive fair consideration for producing both clean and reliable electricity. As a result, the nuclear fleet is at risk of early retirement, jeopardizing the country’s ability to reduce carbon emissions, as well as increasing the likelihood of greater price volatility and power outages. Although nuclear power accounts for about 20% of the USA’s overall electricity generation, it provides more than 60% of the country’s carbon-free electricity – more than wind, solar and hydro combined. In 2014, over 595 million tonnes of CO₂ emissions were avoided due to nuclear electricity, the equivalent of taking 135 million cars off the road. (Excerpt WNN 25 April)

Signs of scientific literacy

Recognize that scientific concepts (e.g. velocity, acceleration, force, energy, electric charge, gravitational and inertial mass) are invented (or created) by acts of human imagination and intelligence and are not tangible objects or substances accidentally discovered, like a fossil, or a new plant or mineral.