by wp_sysadmin | Oct 29, 2021 | News
Facts, Not Fear, Should Drive Biden’s Climate Change Policies
Nick Lora, Daniel Negra, The National Interest, October 28, 2021
- Climate change is real and solutions that are used to address it should rely on free enterprise and private sector innovation.
- Degrowth policies that increase government size and reduce economic competitiveness would fail to meaningfully tackle climate change and would hurt human prosperity.
- To truly address climate change we must pursue solutions that are rooted in economic freedom.
“Climate change is a problem that requires prudent management, not society-transforming plans that will create little overall change if developing economies do not follow suit…In their commendable zeal to protect the planet, policymakers must not be overly ambitious that they do not react to the problem in a way that compromises their country’s economic and national security interests.”
Policies to embrace
What should a smart U.S. climate policy look like? It should be organized around a bedrock philosophy that the cure cannot be worse than the disease. Sound climate policies that reduce the risks of climate change, ensure affordable and reliable energy supplies, and raise levels of prosperity around the world are achievable.
The United States already knows how to do this. U.S. emissions fell by 12 percent from 2005-2018, even as our economy grew 25 percent. Meanwhile, global energy-related emissions increased over that span by nearly 24 percent. Onerous regulations aren’t to thank for this improvement–private sector innovation is. Rather than drive conventional fuel prices higher, a better strategy for global decarbonization is to let the market drive down the price of green energy sources and technologies. Climate entrepreneurship will make energy, manufacturing, and agricultural practices more This will not occur on a timeline that satisfies the most ardent net-zero proponents, but policy that unleashes innovation and free enterprise is a good climate policy.
Free enterprise policies include allowing companies to deduct new capital expenses from their taxable income in the year the investments are made, thus encouraging investment in new technologies and equipment, such as HVAC systems that are cleaner and more efficient.
Smart mitigation strategies are essential, too. Even though worst-case temperature forecasts are improbable, science hasn’t completely ruled them out. Carbon capture on the ground and in the atmosphere are sound mitigation policies that reduce the costs of likely climate scenarios and continue to shrink the probability of unlikely but catastrophic warming.
Going hand in hand with mitigation as a near-term solution is adaptation, i.e., the practical steps human beings take to adjust to climate-induced changes already in progress. One flaw in many climate cost projections is the failure to recognize any adaptation. As climate change increases the risk of certain extreme weather events and as the planet warms over time, the availability of air conditioning, stronger dikes and levees, sea walls, and more resilient infrastructure have proven to be cost-effective tools in reducing mortalities and protecting communities from the effects of climate change.
Sound climate policies must also not attempt to wean world economies off fossil fuels too quickly. Leaders who race to end fossil fuel-based power generation will find their citizens unhappy about higher fuel prices, stalled factories, and rolling blackouts. One way to ensure a smooth transition is to ensure an abundance of natural gas—a fuel that burns cleaner than oil or coal. Instead of weaning economies off fossil fuels, policymakers in the United States and around the world should wean companies off fossil fuel subsidies (along with all other energy subsidies) to empower innovative companies to meet our energy needs.
Included in that conversation must be nuclear power. No less a climate advocate than Bill Gates has said, “We need more nuclear power to zero out emissions in America and to prevent a climate disaster.” Nuclear energy is already America’s largest domestic source of clean, emissions-free energy, as well as its most reliable. Modular nuclear reactors deserve serious consideration as a main future power generating source. According to the U.S. Department of Energy, they “offer a lower initial capital investment, greater scalability, and siting flexibility for locations unable to accommodate more traditional larger reactors. They also have the potential for enhanced safety and security compared to earlier designs.” Policymakers must provide a safe, predictable regulatory pathway to build them quickly.
Climate change is a problem that requires prudent management, not society-transforming plans that will create little overall change if developing economies do not follow suit. Policies that respect the private sector’s ability to innovate will produce new technologies that will help mitigate the expected negative consequences of climate change, which are likely to accrue gradually over decades. In their commendable zeal to protect the planet, policymakers must not be overly ambitious that they do not react to the problem in a way that compromises their country’s economic and national security interests.
by wp_sysadmin | Oct 28, 2021 | News
NEWS OF THE DAY:
Biden to Announce Reconciliation Framework in Last-Ditch Effort to Unite Caucus ahead of Foreign Trip
Zachary Evans, National Review, October 28, 2021
President Biden will announce a revised framework for his administration’s reconciliation package on Capitol Hill Thursday after meeting privately with House Democrats, multiple outlets reported.
The move comes as House Democratic leadership attempts to schedule a vote on the $1 trillion bipartisan infrastructure bill that failed to make it across the finish line in August. Biden’s trip to the Hill to announce the reconciliation framework is intended to reassure hesitant progressives who have refused to vote on the infrastructure bill until they’re confident reconciliation will pass.
President Joe Biden campaigns for Democratic candidate for governor of Virginia Terry McAuliffe at a rally in Arlington, Va., October 26, 2021. (Jonathan Ernst/Reuters)
President Biden will announce a revised framework for his administration’s reconciliation package on Capitol Hill Thursday after meeting privately with House Democrats, multiple outlets reported.
The move comes as House Democratic leadership attempts to schedule a vote on the $1 trillion bipartisan infrastructure bill that failed to make it across the finish line in August. Biden’s trip to the Hill to announce the reconciliation framework is intended to reassure hesitant progressives who have refused to vote on the infrastructure bill until they’re confident reconciliation will pass.
However, Biden’s visit may not be enough to persuade hold outs such as House Progressive Caucus head Pramila Jayapal (D., Wash.) and fellow progressive Alexandria Ocasio-Cortez (D., N.Y.), who have said they will not vote in favor of the infrastructure bill based on a reconciliation framework alone and will instead need to see the final language, which is not yet available.
“The President will speak to the House Democratic Caucus this morning to provide an update about the Build Back Better agenda and the bipartisan infrastructure deal,” a White House official told CNN. “Before departing for his foreign trip, he will return to the White House and speak to the American people about the path forward for his economic agenda and the next steps to getting it done.”
“Before departing for his foreign trip, he will return to the White House and speak to the American people about the path forward for his economic agenda and the next steps to getting it done.”
Biden told Democrats last week that the reconciliation package could cost between $1.75 and $1.9 trillion. However, congressional Democrats still have not come to an agreement on the central components of the deal.
Several of Biden’s proposals for the reconciliation package may not be in the final deal due to opposition from Senators Kyrsten Sinema (D., Ariz.) and Joe Manchin (D., W.Va.). At a CNN town hall last week, Biden said an expansion of Medicare to include dental, vision, and hearing services was opposed by Manchin. Biden added that Sinema opposes tax hikes the administration initially sought in order to pay for the package.
The infrastructure bill’s passage would give Biden more leverage heading into an international climate summit in Scotland this week, where he could boast about the $500 billion the bill allocates toward addressing climate change. The bill’s passage would also give a boost to Democrat Terry McAuliffe ahead of Tuesday’s Virginia gubernatorial election.
OIL:
Oil’s Topsy-Turvy Moment
Jinjoo Lee, The Wall Street Journal, October 28, 2021
Eighteen months after the historic moment when crude oil prices briefly went negative, the oil market has turned upside down.
In April 2020, the Covid-19 pandemic triggered such a sharp drop in oil demand in the wake of a Russian-Saudi price war that the world was running out of places to store it. Oil prices briefly dipped below zero, indicating that those holding the contract for the expiring front-month contract at the time had to pay buyers to take oil off their hands.
Today, the opposite dynamic is playing out: The main worry is that the oil inventory level at Cushing, Okla., the pricing hub for the U.S. benchmark West Texas Intermediate crude, is getting too low. Any lower and it could drive WTI prices up dramatically. Last year’s glut that caused oil prices to do the unthinkable seems like a distant memory.
Inventory at Cushing topped out at 65.4 million barrels last year in early May. As of last week, inventories have dropped to 27.3 million barrels, inching closer to the 20 million barrels that Cushing tanks require to maintain normal operations. The landlocked oil-tank capital of the world could be weeks away from being “effectively out of crude,” according to a report last week from JPMorgan Chase.
The widening price gap between front-month futures contracts, which are currently more expensive than those for deliveries further in the future, suggests that the market thinks the oil inventory level at Cushing might actually hit the bottom, notes Ilia Bouchouev, managing partner at Pentathlon Investments. The price of WTI oil for December delivery today is $82.11 a barrel, $1.15 more expensive than the oil for January delivery, widening from $1.04 a week earlier.
The difference is even more stark when comparing the price of oil for delivery in December 2021 and 2022; that spread touched $12.50 a barrel Monday and is now about $10.48. Put another way, the market is so desperate for oil today that it is willing to pay a roughly 87 cent premium per barrel for every month of earlier delivery. Mr. Bouchouev dubs this “super-backwardation,” noting that the spread seen Monday was the third widest in WTI’s history. That is the inverse of last year’s situation, when the oil markets saw a super-contango, as prices for future delivery of oil were much costlier than oil delivery in the near term.
Both JPMorgan and Mr. Bouchouev note that it is unlikely for Cushing storage to actually hit bottom, just as the oil glut last year didn’t actually lead to Cushing’s storage reaching tank tops. JPMorgan, for example, said in its report that there is an increasing flow of crude oil from Canada and signs that U.S. oil production will increase in the fourth quarter. In previous bouts of low storage at Cushing, physical traders were nimble enough to react and redirect oil to the depleted hub. Moreover, WTI is now priced at only a small discount to Brent crude, the international benchmark, which should curb further flows of oil abroad. Additional draws at Cushing still could send prices higher, though.
Will there be any pain when that happens? Last year, super-contango and the plunge below zero meant several funds that tracked front-month oil futures—including the popular United States Oil Fund —suffered huge losses, hurting many individual investors. Today, that same strategy would make the same investors a lot of money. Ironically, changes those funds made to mitigate risk have limited their gains. Still, USO has gained 72% year-to-date and has outperformed its benchmark front-month WTI futures by 3.1 percentage points.
While the ride might be smoother for financial investors, motorists won’t be so fortunate.
GAS:
Natural gas prices tumble in Europe after Putin orders Gazprom and others to fill up EU storages
Market Watch, October 28, 2021
European gas prices dropped Thursday after Russian President Vladimir Putin instructed the country’s major natural gas company to pump more gas into EU storages.
Europe’s gas prices have soared in recent weeks amid strong demand in Asia driven by the economic recovery from the pandemic and due to depleted European Union stocks from a cold winter.
During a call with officials late Wednesday, Putin told Alexei Miller, the head of state-controlled gas giant Gazprom, to start pumping gas into the company’s storage facilities in Austria and Germany after it fills domestic depots by Nov. 8. The Russian leader’s direction immediately drove European gas prices down GWMF22, -9.18%.
“This will make it possible to fulfil our contractual commitments in a reliable, stable and consistent manner and to supply our European partners with gas in the autumn and winter,” Putin said. “This will create a favorable situation, at any rate, a better situation in the European energy market in general.”
The 27-country European Union depends on Russia for more than 40% of its gas imports.
While Gazprom RU:SIBN has met its obligations under long-term agreements, it has not sold additional gas on the EU spot market, opting to fill domestic storages. Some European politicians alleged that Russia was withholding gas deliberately to pressure German and EU authorities into speeding final regulatory approval for the recently completed Nord Stream 2 pipeline.
Putin noted last week one of the two links of the new pipeline under the Baltic Sea already has been filled with gas as part of preparations for its launch, adding that supplies could start “the day after” after regulators give their approval.
Nord Stream 2, with an annual capacity of 55 billion cubic meters of gas is designed to deliver gas directly to Germany, bypassing Poland, and Ukraine, which have vehemently opposed the project along with the U.S.
Ukrainian authorities fear the pipeline will deprive the country of $2 billion in annual gas transit fees and erode its international standing amid a tug-of-war with Russia following its 2014 annexation of Ukraine’s Crimean Peninsula and support for separatists’ insurgents in eastern Ukraine.
MINING:
Antofagasta to appeal US plan to block Twin Metals copper mine
Mining.Com, October 27, 2021
Antofagasta Plc said on Wednesday it would ask U.S. officials to reconsider a proposed 20-year ban on mining in Minnesota’s Boundary Waters region, a plan announced last week that would block its Twin Metals copper and nickel project.
The company called the moves by U.S. President Joe Biden’s administration, which also rejected the Chile-based company’s lease applications, politically motivated.
“If we can prove that we can meet or exceed all (environmental) standards in place, we have a right to move this project forward,” said Twin Metals chief regulatory officer Julie Padilla.
The U.S. Forest Service last week proposed the 20-year ban, reversing a decision by former President Donald Trump and setting off a review of how mining could affect the popular outdoor recreational area on the U.S.-Canada border.
The Forest Service, part of the Agriculture Department, controls the surface land at the site. The U.S. Bureau of Land Management, part of the Interior Department, controls the underground copper deposit and must approve plans to extract minerals.
Antofagasta will comment on the proposed ban during the public review period. It is also asking federal regulators to reconsider their rejection of several lease applications, which would give the company exclusive mining rights in the area.
The rejection means the company would lose access to an area it has already paid to explore. The government could let another company mine the area in the future, though such a step is improbable. “We’ve done the work and now they’re taking it away,” Padilla said.
The Interior Department said federal regulations require it to deny pending lease and permit applications because of plans for the 20-year ban.
The company has two other leases in the area, though they are being challenged in court.
The Campaign To Save The Boundary Waters, an environmental group opposed to the Antofagasta project, said the appeal was “unfortunate for Minnesota” and the country.
“It’s very clear that the most toxic industry in America has no place next to the Boundary Waters,” said Becky Rom, the campaign’s national chair.
POLITICS:
Watch live: Exxon, Shell, Chevron executives testify on climate change
The Hill, October 28, 2021
Exxon, Shell, Chevron, and other oil industry executives are scheduled to testify on climate change before the House Oversight Committee on Thursday.
The hearing is slated to begin at 9 a.m. ET.
Watch the live video above.
CLIMATE CHANGE:
Consumer Energy Group Dismayed To See One Federal Agency Thwart U.S. Development of Critical Minerals Needed for Electric Vehicles on Same Day as Another Agency Promotes Electric Vehicles
Consumer Energy Alliance, October 21, 2021
Ahead of COP21, President Biden’s top climate advisor, Gina McCarthy, and Transportation Secretary Pete Buttigieg cheered the accomplishments of America’s nascent electric vehicle industry, encouraging growth and acknowledging that, “One of the key pieces of President Biden’s Build Back Better agenda is supercharging America’s ability to get more EVs on the road, to make them affordable for families and for businesses.”
“Unfortunately, Ms. McCarthy and Secretary Buttigieg failed to check with the U.S. Departments of the Interior and Agriculture who announced minutes later that they plan to bar any development of critical minerals these electric vehicles and clean energy industries need to actually build a cleaner energy future for all Americans,” CEA Director Chris Ventura said.
“America’s auto manufacturers are already suffering from their dependence on overseas supply chains, shutting down production at plants across the country as consumers scramble to find affordable vehicles at dealerships.”
“The International Energy Agency warned earlier this year that governments need to act fast to shore up supplies of minerals essential to clean energy technologies like copper and nickel – two minerals that can be mined more responsibly in Minnesota than in any other country in the world – with greater protections for the environment and worker safety.”
“We encourage the Biden Administration and our government agencies to develop coherent, coordinated plans that would actually accomplish some of their stated goals in the real world. The consequences of these uncoordinated actions will only increase costs, harm U.S. strategic interests, thwart development of job creation. Without these critical minerals those families across the country who are interested in an electric vehicle will not be able to actually find one.”
by wp_sysadmin | Oct 26, 2021 | News
NEWS OF THE DAY:
From the Washington Examiner, Daily on Energy:
NORWAY’S PM SAYS END TO DRILLING WOULD THWART GREEN TRANSITION: Jonas Store, the newly minted Norwegian prime minister, is warning against moving too aggressively to clip the nation’s oil and gas industry.
Store said in an interview published this morning that shutting down domestic drilling in the near term would threaten decarbonization goals, adding that the approach instead is “to develop and transit, not close down.”
A shutdown would “put a stop to an industrial transition that is needed to succeed in the momentum towards net zero,” he told the Financial Times.
Following Russia, Norway is the continent’s second largest provider of gas, and it is the largest producer of oil in western Europe.
OIL:
Alaska’s oil price over $85 a barrel, but industry watchers urge caution in the long term
Sean Maguire, KTUU, October 26, 2021
Alaska’s North Slope crude oil price has recently been at its highest level since October of 2014, a trend that could add hundreds of millions of dollars to the state treasury. But industry watchers are urging caution in the longer term.
For the past two weeks, North Slope crude has been hovering around $85 per barrel and tipped over $86 on Thursday. It was around those prices briefly in the fall of 2018, but it hasn’t been consistently at those levels for seven years.
Alexei Painter, head of the nonpartisan Legislative Finance Division, presented to a House of Representatives committee on Friday, showing how oil prices have averaging around $75 per barrel since the start of the fiscal year on July 1. His data shows that if oil prices stay high, the state could collect $500 million more in oil revenue over the fiscal year that starts next July than it projected in spring.
Over the fiscal year that ends on June 30, the state could see an additional $600 million in oil revenue than expected earlier.
Brad Keithley, managing director of Alaskans for Sustainable Budgets, said oil futures markets are the best way to predict which way prices are going as they show where big-money investors are putting their cash. He said that data shows this trend is transitory and a near-term phenomenon.
In the longer term, futures markets predict oil prices will drop below what the Alaska Department of Revenue forecast for the middle and end of the decade, Keithley said, meaning Alaska would be in a tougher spot for available revenue.
“You really have to look beyond that to understand the full situation,” Keithley said about recent high oil prices.
Larry Persily, a former deputy commissioner of the Department of Revenue, said these prices may be beneficial for state coffers, and tough for consumers, but they won’t help fix an unbalanced budget in the long term.
It relieves some of the pressure, the state doesn’t have to worry about checks bouncing as it would at $30-oil, but it doesn’t solve the fundamental problem that there’s not enough money to pay for all the services that people want plus a big dividend,” he added. “It’s a temporary respite which isn’t going to solve anything permanently.”
The state relies on Permanent Fund earnings to pay for over two-thirds of government spending and Alaska’s oil production has declined since peaking in the late 1980s. Oil prices are also highly volatile, Persily explained, and prices could drop for a number of reasons, including if U.S. shale oil production unexpectedly increases.
But the influx of unexpected revenue does pose questions for legislators who have been trying to end the Permanent Fund dividend debates. A bipartisan legislative working group called for a new 50-50 constitutional dividend formula, perhaps increasing to that figure over several years, and new revenues to pay for it and the budget.
There has been some committee work to discuss fiscal fixes following that framework during the ongoing fourth special session, but no progress in passing bills to make that plan a reality.
Higher oil prices make the fiscal picture look better, but Persily and Keithley say it increases the chances that lawmakers will delay making tough choices, like implementing new taxes, during next year’s regular legislative session that starts in January.
“There was already that risk because we’re in an election year next year, and they were looking for ways to kick the can down the road to avoid making a hard decision during an election year,” Keithley said. “But I think this will certainly add fuel to that fire.”
The Legislature will also have roughly $500 million in federal coronavirus funding to spend next year. When added with the anticipated extra oil revenue, lawmakers could be tempted to spend the next regular session discussing how to appropriate larger dividends or spend more in the annual budget.
“I think that’s what many legislators will be focused on doing,” Keithley said.
GAS:
EIA forecasts U.S. winter natural gas bills will be 30% higher than last winter
Energy Information Administration, October 25, 2021
In our latest Winter Fuels Outlook, we forecast that U.S. households that primarily use natural gas for space heating will spend an average of $746 on heating this winter (October–March), which is $172, or 30%, more than last year.
Natural gas is the primary heating fuel for 48% of U.S. homes, according to the U.S. Census Bureau’s 2019 American Community Survey. Residential spending on winter natural gas bills is largely determined by the retail price of natural gas and the amount of natural gas consumed.
Higher retail natural gas prices are the primary driver for the expected increase in natural gas heating expenditures this winter. On average, retail natural gas prices in the United States are expected to rise from $10.17 per thousand cubic feet (Mcf) last winter to $12.93/Mcf this winter, the highest price since the 2005–06 winter average. We expect the largest increase in retail natural gas prices to occur in the Midwest, where prices rise to $11.28/Mcf, a 45% increase compared with last winter.
The increase in retail prices reflects rising natural gas spot prices over the past year. Changes in natural gas spot prices typically get passed along to retail rates over a period of months because of regulatory rate structures. Utilities generally cannot profit or lose money from natural gas commodity sales, whose costs are passed along directly to the consumer.
In addition to the steady rise in natural gas spot prices over the past year, many utilities had to raise prices for consumers following the February 2021 cold snap that affected most of the country, but particularly Texas and the Midwest. During the cold snap, many utilities had to purchase natural gas at spot prices that were higher than anticipated. However, because retail rates were already set for the month, utilities did not collect enough to cover the cost of the natural gas. To make up for this under collection, many utilities opted to raise prices in subsequent months to spread out the costs to consumers over several months.
Higher-than-expected natural gas expenditures this winter also result from slightly higher-than-expected consumption compared with last year. For households that use natural gas as their primary space heating fuel, we expect average consumption this winter to be 57.7 Mcf, a 2.4% increase from last winter. The higher consumption is driven by a 2.6% forecast increase in the number of heating degree days (a measure of heating demand) compared with last winter. In our October Short-Term Energy Outlook (STEO), we estimate that U.S. natural gas inventories ended September at 3,304 Bcf, which is 5.5% below the five-year average for this time of year.
MINING:
Resource nationalism on the rise in top mining countries — report
Mining.Com, October 25, 2021
The last year has seen a rise in resource nationalism — or the risk of thereof —in an extensive and fast-rising number of countries, including top mining countries, market analyst Fitch Solutions finds in its latest industry report.
While resource nationalism had been relatively contained geographically speaking in the past to Sub Saharan Africa, and localised countries such as Indonesia, it is spreading across the world and is now noticeable in SSA (the DRC, Mali, Zimbabwe, South Africa, Guinea), Latin America (Mexico, Peru, Chile), North America (the US), Europe (Russia) and Asia (Indonesia, Mongolia), Fitch reports.
The analyst has long argued that resource nationalism in the mining sector was going to remain a key feature of the sector. In the wake of covid-19, Fitch raised the probability of a rise in resource nationalism on a global basis.
Over the past 12 months, resource nationalism in top mining players has flared up around the world, mostly in emerging markets. Fitch expects this trend to continue over the coming few years, as underlying drivers of resource nationalism and government intervention will remain in play.
Resource nationalism can take several forms, including renegotiation of existing mining contracts to get better terms (currently witnessed in the DRC and Mongolia), increase in taxes or royalties on the mining sector (Chile, Peru, Russia), asset nationalization (forced equity transfers) or the threat of (Zambia, Mexico, Zimbabwe), in- country beneficiation (Indonesia), or export restrictions.
Drivers of resource nationalism remain in play in 2022
A number of factors will incentivise governments to consider intervening in the mining sector and tightening mining regulations, Fitch says, noting that several of those drivers have been clearly accentuated in recent quarters, mostly by the covid-19 pandemic.
The rally in mineral and metal prices in 2020-2021 has revived the interest in the mining and metals sector and boosted potential tax and royalty returns for governments. Fitch forecasts prices to remain elevated in 2022.
Improved prospects for the Green Energy Transition minerals such as copper, nickel, lithium, cobalt, among others, amidst the ongoing acceleration in decarbonisation efforts at multiple levels.
This is leading to a sharp rise in investment in new projects towards these materials, prompting governments to make sure their countries benefit from these trends, Fitch says.
Increased economic/fiscal hardships and rising social inequality in the wake of covid-19 are providing strong incentives for a rise in government intervention in the mining sector.
Another key driver of resource nationalism is political risk linked to elections, Fitch notes.
The recent election of left/ social-leaning governments, in the US and Peru for example is a factor behind potential changes to mining regulations in these countries. Sudden changes in governments, which have happened in some countries recently, also usually increase risks of a change in regulation. Mali for example, saw two coups in 2020-2021.
Finally, contested campaigns also increase nationalism rhetoric ahead of the elections in order to gain support, Fitch forecasts.
This happened in Zambia in 2020-2021 for example, when former President Lundu used a nationalistic rhetoric ahead of the August 2021 elections.
While elections happen on a regular basis, their convergence with economic hardships and social tensions over rising inequalities pose an increased risk of resource nationalism, the analyst asserts.
(Read the full report here)
POLITICS:
5 sticking points holding back Democrats’ spending package
Cristina Marcos, Scott Wong, The Hill, October 26, 2021
Democrats say they’re in striking distance of reaching a long-sought deal on expanding social safety net programs, but still need to resolve a handful of key sticking points.
Progressives and key centrist holdouts remain at odds over some top liberal priorities, such as ending America’s status as the only wealthy nation without a national paid parental leave policy and expanding Medicare coverage.
Senate Majority Leader Charles Schumer (D-N.Y.) said Monday that “a lot of the bill is written” but that a handful of items remained unsettled and they “first have to get some kind of agreement on those.”
Asked if Democrats will be able to unveil their plan before President Biden leaves for an international climate summit on Thursday, Schumer said: “That’s our goal.”
Here are five of the biggest issues Democrats would need to address between now and then:
Medicare and Medicaid expansions
Sen. Bernie Sanders (I-Vt.), the progressive Senate Budget Committee chairman, held firm over the weekend that his proposal to expand Medicare would be part of the final package.
“The expansion of Medicare to cover dental, hearing and vision is one of the most popular and important provisions in the entire reconciliation bill. It’s what the American people want. It’s not coming out,” Sanders tweeted
Democrats say they’re in striking distance of reaching a long-sought deal on expanding social safety net programs, but still need to resolve a handful of key sticking points.
Progressives and key centrist holdouts remain at odds over some top liberal priorities, such as ending America’s status as the only wealthy nation without a national paid parental leave policy and expanding Medicare coverage.
Senate Majority Leader Charles Schumer (D-N.Y.) said Monday that “a lot of the bill is written” but that a handful of items remained unsettled and they “first have to get some kind of agreement on those.”
Asked if Democrats will be able to unveil their plan before President Biden leaves for an international climate summit on Thursday, Schumer said: “That’s our goal.”
Here are five of the biggest issues Democrats would need to address between now and then:
West Virginia, most people around the country,” Manchin said. “You’ve got to stabilize that first before you look at basically expansion.”
Democrats say they’re in striking distance of reaching a long-sought deal on expanding social safety net programs, but still need to resolve a handful of key sticking points.
Progressives and key centrist holdouts remain at odds over some top liberal priorities, such as ending America’s status as the only wealthy nation without a national paid parental leave policy and expanding Medicare coverage.
Senate Majority Leader Charles Schumer (D-N.Y.) said Monday that “a lot of the bill is written” but that a handful of items remained unsettled and they “first have to get some kind of agreement on those.”
Asked if Democrats will be able to unveil their plan before President Biden leaves for an international climate summit on Thursday, Schumer said: “That’s our goal.”
Here are five of the biggest issues Democrats would need to address between now and then:
Medicare and Medicaid expansions
Sen. Bernie Sanders (I-Vt.), the progressive Senate Budget Committee chairman, held firm over the weekend that his proposal to expand Medicare would be part of the final package.
“The expansion of Medicare to cover dental, hearing and vision is one of the most popular and important provisions in the entire reconciliation bill. It’s what the American people want. It’s not coming out,” Sanders tweeted on Saturday.
But on Monday, Sen. Joe Manchin (D-W.Va.) shut down that push and argued it wasn’t financially feasible given that Medicare’s board of trustees has warned that its hospital insurance trust fund is estimated to be depleted in 2026.
“My big concern right now is the 2026 deadline [for] Medicare insolvency and if no one’s concerned about that, I’ve got people — that’s a lifeline. Medicare and Social Security is a lifeline for people back in West Virginia, most people around the country,” Manchin said. “You’ve got to stabilize that first before you look at basically expansion.”
Manchin also expressed reservations about a proposal from Georgia Democratic Sens. Raphael Warnock and Jon Ossoff to extend health insurance benefits to low-income people in states that didn’t expand Medicaid under the 2010 health care law. He argued it wasn’t fair for states that previously expanded Medicaid to pay more to prop up states that didn’t.
“I’m trying to understand that better,” Manchin said.
Paid family leave
Democrats’ original proposal would have ensured workers had up to 12 weeks of paid family and medical leave with their usual wages replaced on a sliding scale.
That’s in line with the 12 weeks of paid family leave granted to federal employees, as well as the amount of time allotted for unpaid leave under the Family and Medical Leave Act for certain workers.
Democrats say they’re in striking distance of reaching a long-sought deal on expanding social safety net programs, but still need to resolve a handful of key sticking points.
Progressives and key centrist holdouts remain at odds over some top liberal priorities, such as ending America’s status as the only wealthy nation without a national paid parental leave policy and expanding Medicare coverage.
Senate Majority Leader Charles Schumer (D-N.Y.) said Monday that “a lot of the bill is written” but that a handful of items remained unsettled and they “first have to get some kind of agreement on those.”
Asked if Democrats will be able to unveil their plan before President Biden leaves for an international climate summit on Thursday, Schumer said: “That’s our goal.”
Here are five of the biggest issues Democrats would need to address between now and then:
Medicare and Medicaid expansions
Sen. Bernie Sanders (I-Vt.), the progressive Senate Budget Committee chairman, held firm over the weekend that his proposal to expand Medicare would be part of the final package.
“The expansion of Medicare to cover dental, hearing and vision is one of the most popular and important provisions in the entire reconciliation bill. It’s what the American people want. It’s not coming out,” Sanders tweeted on Saturday.
But on Monday, Sen. Joe Manchin (D-W.Va.) shut down that push and argued it wasn’t financially feasible given that Medicare’s board of trustees has warned that its hospital insurance trust fund is estimated to be depleted in 2026.
“My big concern right now is the 2026 deadline [for] Medicare insolvency and if no one’s concerned about that, I’ve got people — that’s a lifeline. Medicare and Social Security is a lifeline for people back in West Virginia, most people around the country,” Manchin said. “You’ve got to stabilize that first before you look at basically expansion.”
Manchin also expressed reservations about a proposal from Georgia Democratic Sens. Raphael Warnock and Jon Ossoff to extend health insurance benefits to low-income people in states that didn’t expand Medicaid under the 2010 health care law. He argued it wasn’t fair for states that previously expanded Medicaid to pay more to prop up states that didn’t.
“I’m trying to understand that better,” Manchin said.
Paid family leave
Democrats’ original proposal would have ensured workers had up to 12 weeks of paid family and medical leave with their usual wages replaced on a sliding scale.
That’s in line with the 12 weeks of paid family leave granted to federal employees, as well as the amount of time allotted for unpaid leave under the Family and Medical Leave Act for certain workers.
But then Biden said last week that the paid leave plan would likely be cut down to just four weeks. And now, as Democrats try to whittle down the size of their overall package, it’s possible the proposal could be axed altogether.
Manchin declined to specify his concerns about paid family leave on Monday but said broadly that he was concerned about how various programs in the package would be paid for.
Speaker Nancy Pelosi (D-Calif.) isn’t making an ironclad guarantee about paid leave making the cut. Asked on CNN’s “State of the Union” on Sunday if it would make the final bill, Pelosi said: “That’s our hope, yes.”
If the paid leave proposal does survive the negotiations, there’s also the question of how long it would last. Paid leave advocates argue that a temporary program that would need to be renewed by lawmakers three to five years from now is insufficient. But leaving the task of extending it to future sessions of Congress could help bring down the price tag of the overall package.
Taxes on the wealthy and corporations
Democrats appear to be coalescing around a tax plan to pay for their sweeping social spending and climate package, but Senate negotiators were still huddling Monday to hammer out the fine print.
The two centrist Senate holdouts, Sen. Kyrsten Sinema (D-Ariz.) and Manchin, have signaled they’re open to a tax targeting billionaires, which would affect about 700 of the wealthiest Americans and raise hundreds of billions of dollars in revenue.
The Senate proposal would impose an annual tax on the unrealized capital gains for people with $1 billion in assets or who earn $100 million or more for three consecutive years.
Another big tax question is whether Biden and the Democrats use the reconciliation package to lift a cap that would allow more wealthy families in high-taxing states like New York and New Jersey to deduct their state and local taxes, or SALT.
Rep. Josh Gottheimer (D-N.J.), who met with Biden on Monday as the president touted his infrastructure and social spending packages in New Jersey, has said he’s bullish that changes to SALT will be included.
Child tax credit
Manchin successfully pressured the White House and fellow Democrats to whittle down expanded child tax credits to just a one-year extension.
Now the fiscally conservative West Virginian is trying to require means testing and work requirements to further cut costs.
Manchin’s demands are infuriating Sanders and his liberal allies on the Hill given that they originally wanted to make the child tax credit permanent, with few restrictions, to help defray the high costs of raising children and help reduce child poverty.
A Democratic aide predicted Manchin would not get his way on mandating work requirements, as it would spark “massive opposition” from progressive lawmakers.
But tweaking means testing for the tax credit is a real possibility. Means testing is already in place for the tax credits that were expanded through Biden’s $1.9 trillion COVID-19 relief package earlier this year. The full child tax credit is available to couples who make $150,000 or less a year or individuals who make $112,500 or less.
Manchin has proposed limiting the child tax credit extension to families making under $60,000, something The Washington Post pointed out would cause tens of thousands of West Virginia households to be dropped from the program.
Climate change
Biden’s upcoming climate summit is helping inject urgency into the negotiations that have dragged for months. But Democrats are still struggling to finalize the specific climate change mitigation proposals that Biden can tout in Scotland.
Manchin last week dealt a blow to a $150 billion clean electricity program that was meant to be a centerpiece of Biden’s climate agenda. Democrats are now looking for other ways to still deliver on their campaign promises to address climate change.
A spokesperson for Senate Environment and Public Works Committee Chairman Tom Carper (D-Del.) pushed back on a Reuters report on Monday that a proposal to tax oil and gas producers for methane emissions likely wouldn’t make it into the final bill.
Carper “is working to get robust as possible climate provisions in the reconciliation bill and is in active negotiations trying to ensure that the bill meaningfully reduces greenhouse gas emissions, including with a methane fee,” the spokesperson said.
CLIMATE CHANGE:
Oil to geothermal: Renewable game changer?
Ester Wells, ENERGYWIRE, October 25, 2021
Geothermal power is expected to surge to record levels in the next four years, with the annual number of new wells more than doubling, energy analysts say.
Rystad Energy predicts global investment in geothermal activity to exceed $1 billion in 2021 before spiking to $3 billion in 2026 as oil and gas companies take a renewed interest in geothermal drilling, the consultancy said in an analysis this fall. The number of wells drilled globally for power generation will surpass 200 this year for the first time and rise to around 500 annually in 2025, it said.
“The amount of technical know-how going into the industry now is unmatched in the history of geothermal,” Daniel Holmedal, energy service research analyst at Rystad Energy, said in an emailed statement. “We have seen a strong increase in interest from the industry over the last couple of years, both from startups and companies who historically have had a focus on oil and gas.”
Giorgia Bettin, a geothermal researcher at Sandia National Laboratories in New Mexico, said participation by oil and gas is particularly important in accelerating geothermal.
“The oil and gas industries have a very competent workforce, they have all the tools, and they now have the potential of being more profitable in geothermal,” she said. “It’s an obvious pivot for them. It would benefit their wallet and our energy security.”
Progress in geothermal technology, namely, advanced geothermal systems (AGS) and enhanced geothermal systems (EGS), are expanding opportunities for the technology. Because they use human-made rather than naturally occurring geothermal reservoirs, AGS and EGS are not limited by location and are therefore more accessible and can cut costs, according to the U.S. Department of Energy.
Bettin added that ambitious climate goals from governments, including geothermal targets, and price decreases in adopting new technology are encouraging companies to invest in additional research and development.
“People are very interested in climate change and the effect it has on our planet, and the oil and gas industries are ready to pivot,” she said. “Geothermal seems like the perfect solution because it requires very similar expertise in drilling and developing the installation for these projects.”
According to Rystad, developments in geothermal technology will make it possible to scale up the number of active wells to more than 10,000 globally by the end of the decade and support a total installed capacity of 36 gigawatts in 2030 — more than double the capacity in 2021.
In the U.S., the world’s leading producer of geothermal electricity, generation could increase by 26-fold by 2050 if restricting factors are addressed, according to a 2019 DOE report. The agency said that although geothermal offers “enormous untapped potential” as a renewable energy solution, growth in the industry has been constrained both by conventional technology and by the lack of public support for developing geothermal resources.
Conventional hydrothermal well systems, which extract heat from underground reservoirs of pressurized hot water, are primarily located at sites where those reservoirs are manifested above ground through visible formations such as geysers and hot springs, the report said (Energywire, May 31, 2019).
But the U.S. Geological Survey estimates that there are still 30 gigawatts of undiscovered hydrothermal systems that do not have those visible manifestations —although pre-drilling and exploring new areas to find them can be costly and not always successful. Researchers say that technology advances are helping alleviate that traditional obstacle.
Rystad Energy noted that the geographic conditions required by traditional technologies — reservoir temperatures of more than 400 degrees Fahrenheit located at depths of around 2,000 meters — have also bottlenecked geothermal’s scalability in the past “as the number of countries that have high-temperature reservoirs located at 2,000 meters or below is limited.”
Rystad Energy’s geothermal dashboard tracks more than 1,700 geothermal power generation and direct use projects globally, with their forecast including both announced and unannounced projects. For unannounced projects, the firm predicts the number of wells that countries likely need to drill to achieve government targets on geothermal installed capacity.
Holmedal said whether geothermal targets will be met depends on how actively countries pursue the advancement of geothermal system technology like AGS and EGS. In June, DOE announced $14.5 million to support active field testing of EGS within existing wells through their Wells of Opportunity funding program.
Globally, about 500 megawatts of geothermal capacity were added each year between 2015 and 2020, according to the International Energy Agency — a pace still not fast enough to achieve the agency’s “sustainable development scenario,” which has global carbon dioxide emissions from the energy sector and industrial processes at net zero by 2070.
But given the increase in drilling activity in the last six years and the potential to repurpose some existing oil and gas infrastructure for geothermal power generation, Holmedal said the likelihood of actually meeting those goals is “promising.”
“There is an incredible amount of human know-how and machinery in the drilling industry,” Holmedal said. “With some segments of the oil and gas industry expected to be more stagnant in the decades ahead, spaces like the geothermal industry could provide both workplaces and contribute to solving energy challenges.”
by wp_sysadmin | Oct 25, 2021 | News
NEWS OF THE DAY:
Feds file environmental review for Cook Inlet lease sale
Sabine Poux, KDLL, October 24, 2021
The federal government has filed another draft environmental impact statement for a federal oil and gas lease sale in Cook Inlet and is asking for comments from the public.
It’s the second time in less than a year that the feds have put out an environmental review on a potential Cook Inlet sale, since the Biden administration halted the process leading up to the auction earlier this year. That pause was part of a larger executive order aimed at fighting climate change.
The leasing process resumed this summer when a Louisiana district court judge ordered programs to resume in Cook Inlet and the Gulf of Mexico, following a lawsuit from Alaska and several other states. The states argued the Biden administration’s decision was bad for economic development and that the feds bypassed the public process when they hit pause on the sales.
The potential auction includes 224 blocks across one million acres in Cook Inlet, from the southern end of Kalgin Island down to Augustine Island.
The department can still decide to cancel a lease sale after an environmental impact statement is filed. The Bureau of Ocean Energy Management, which oversees the offshore leasing program, canceled sales in 2006, 2008 and 2010 in Cook Inlet due to lack of industry interest.
The bureau is accepting public comments on its environmental impact statement from Oct. 29 to Dec. 13. The department is also holding three virtual public hearings next month.
OIL:
Twin peaks: Whether it’s supply or demand, oil era heads for crunch time
Noah Browning, Reuters, October 25, 2021
Energy transition and peak demand predictions have spooked investors in oil, putting the prospect of peak production sooner than anticipated accompanied by wild price spikes.
Key climate talks are set to begin at the end of this month in Glasgow, Scotland to tackle global warming under the 2015 Paris Agreement, with fossil fuel in policy-makers’ crosshairs.
But as it stands now, mobility curbs which hollowed out both spending on upstream oil projects and oil end use may already be set to permanently rein in the growth of both supply and demand.
“On current trends, global oil supply is likely to peak even earlier than demand,” the research department of bank Morgan Stanley said in a note this week.
“The planet puts boundaries on the amount of carbon that can safely be emitted. Therefore, oil consumption needs to peak. However, this is such a well-telegraphed prospect that it has solicited its own counter-response already: low investment.”
Still, with most oil producers and watchdogs putting the peak to the world’s thirst for oil at least several years away, demand is already veering back toward pre-pandemic levels.
The mismatch between demand for oil and other polluting fossil fuels roaring back to normal and output having lagged has helped contribute to an energy crunch in Europe and Asia, with crude prices soaring to multi-year highs.
The medium-term erosion of oil demand supposes that renewable energies like electric cars and wind power gain pace, which the International Energy Agency says needs to pick up fast in order to head off shortages and sky-high prices.
“The amount being spent on oil appears to be geared towards a world of stagnant or falling demand,” the Paris-based agency said in its annual outlook this month. “A surge in spending on clean energy transitions provides the way forward, but this needs to happen quickly, or global energy markets will face a bumpy road ahead.”
The IEA does not predict an immediate peak to oil supply, with producer club OPEC and Russia comprising a rising share of supply in the next decade.
OPEC’s annual outlook last month saw global supply nearing a plateau in 2045 but no clear peak.
Despite the pitfalls to prices and supply, the IEA said current low oil and gas spending was one of the few areas aligned with its most ambitious Net Zero Emissions by 2050 (NZE) scenario in which no new fossil fuel projects should go forward.
In its most conservative status quo, or stated policies scenario (STEPS), however, average annual spending on oil to meet demand would need to rise sharply to above $500 billion – more than at any time in the last five years.
Energy consultancy FGE said in a note the problem was not an immediate one but could come to a crescendo in coming years.
“Although there are huge concerns regarding the state of upstream oil investment i.e., that, as it stands, it is insufficient to meet growing demand in the years ahead, this is a problem for 2023 and beyond not for the next 12 to 18 months.”
GAS:
Tough transition
Craig Medred, October 22, 2021
Before the first great pandemic of the twenty-first century played havoc with life as all have known it in the Information Age, some European countries seemed on the verge of upending the hydrocarbon economy that has powered the world since the beginning of the Industrial Revolution.
And now, as the world that was in lockdown starts to unlock, the Europeans are facing what is touted as an “energy crisis” thanks to a perfect storm of natural and manmade events.
“Resurgent energy demand post-Covid, extreme weather events (unprecedented heatwaves and prolonged winters), supply chain disruptions, and poor regional and global stockpiling have all contributed to Europe’s current crisis,” writes market analyst Ariel Cohen at Forbes. “Russia’s supremo Vladimir Putin may have a reason to pop a champagne bottle in view of the EU’s sanctions on the Kremlin. He says that Europe had created a self-inflicted wound. He may be right.”
Putin was the man in charge of Russia’s zigging toward increased production of natural gas when Europe was zagging toward renewable energy because of concerns about global warming due to an atmospheric carbon-dioxide build-up linked to the burning of fossil fuels – coal, oil, and natural gas.
As a result of this move, Putin now has significant parts of Europe dependent on Russian gas.
“Supplies of natural gas are so tight that prices are up by almost 400 percent since the start of the year. Utilities are switching to power generated from coal and even fuel oil, two of the world’s dirtiest fuels. That has some accusing Russia – which supplies 35 percent of the European Union’s gas imports – of using energy as a weapon,” Foreign Policy reported this week. “It didn’t help calm waters when the Russian ambassador to the European Union, Vladimir Chizhov, recently suggested a linkage between gas supplies and Europe’s behavior, hinting that the gas shortage could get resolved if Europe stopped treating Russia as an ‘adversary.’”
Putin, for his part, called the accusation that Russia is restraining gas supplies “entirely groundless bloviation.”
Storage problems
Whatever the case politically, the physical problem is a simple one: storage.
Wind and sunlight can produce a lot of power, but there are problems storing it, not to mention predictable interruptions like night and dead air. Water can be stored and reused, but hydropower has a somewhat dirty reputation thanks to dams in the U.S. Pacific Northwest that helped make a mess of salmon runs.
France’s response to the problematic problem of dirty fossils versus clean, renewable energy was to go nuclear. About 70 percent of that country’s electricity – necessary to power electric cars, heat homes and power industry in a “clean economy” – is now produced by nuclear power plants.
Most other countries, however, fear the potential for a nuclear disaster more than the threat of climate change and thus the nuclear option remains widely unpopular.
All of which has the Russians gambling fossil fuels are going to be around for a long time still although anyone who has regularly been using cordless power tools for the past decade knows well the slow but steady improvement in batteries.
There are now, too, companies looking at using surplus renewable power – say wind power that isn’t needed in the moment – to split water into oxygen and clean-burning hydrogen, which can be stored like any other gas for future use.
Renewable energy production will continue to grow in the future because the wind and sunlight free, but what Europe is experiencing now is the storage problem destined to plague its growth.
“Renewable energy became the biggest source of electricity in the European Union in 2020, beating fossil fuels for the first time,” The Verge raved as the start of this year. “Germany and Spain also hit that milestone individually last year – so did the UK, which officially left the EU in January 2020.”
Unfortunately, the big growth was in wind and solar which present the biggest storage problems.
“Much like refrigerators enabled food to be stored for days or weeks so it didn’t have to be consumed immediately or thrown away, energy storage lets individuals and communities access electricity when they need it most – like during outages, or when the sun isn’t shining,” notes the Union of Concerned Scientists. “Storage can reduce demand for electricity from inefficient, polluting plants that are often located in low-income and marginalized communities. Storage can also help smooth out demand, avoiding price spikes for electricity customers.”
The Russians
Enter the Russians, who understand state capitalism, recognize the comparatively easy storability of their gas, and have less reason to fear climate change than most any other area of the globe.
The largest country in the world, Russia has the longest Arctic coastline and the largest Arctic landmass, about 5 million square kilometers or approximately 1.9 million square miles.
That’s an area about the size of France, Spain, Germany, Italy and the United Kingdom combined, and yet home to only about 2 million people or about a fifth the population of London.
Credit the long, cold Arctic winters for keeping the population low, if you love the wilderness, or blame it if you prefer the bustle of the cities in which eight out of 10 Americans now live.
“Siberia, like ‘the cold,’ has for centuries been synonymous with the very image of Russia,” Clifford Gaddy and Fiona Hill of the Brookings institute observed almost two decades ago. “From the tsars, who first planted the seeds of cities in Siberia, to the Soviet central planners, who moved masses of people and industry into its vast and remote regions, the exploration and development of Siberia have shaped Russia’s sense of national identity. Siberia’s ‘untamed frontier’ has long promised wealth and opportunity for the rest of Russia.”
They went on to characterize that promise of wealth and opportunity as foolishness.
“Thanks to Soviet industrialization and mass settlement of Siberia, much of Russia’s population today is scattered over a vast landmass in large but isolated cities and towns,” they wrote. “Inadequate road, rail, air, and other communication links hobble efforts to connect those population centers, promote interregional trade, and develop markets. About one in ten Russians live and work in almost impossibly cold Siberian cities, places where average January temperatures range from -15 to -45 degrees Celsius (5 to minus-49 degrees Fahrenheit). Because of their location, these cities still depend heavily, as they did in the Soviet era, on central government subsidies for fuel, food, and transportation. Costs of living are as much as four times higher than elsewhere in the Russian Federation, while costs of industrial production are sometimes higher still.”
The duo pretty thoroughly trashed the Siberian dream of Russians.
“…Pumping large subsidies into Siberia deprives the rest of Russia of the chance for economic growth,” they wrote.
“To become competitive economically and to achieve sustainable growth, Russia must modernize and connect its physically vast but misdeveloped economy,” they wrote.
Fixing Siberia’s infrastructure problems, they wrote, “would simply improve the connections between towns, cities, and enterprises that should never have been where they are. It would make places more livable where, from an economic point of view, most people should not live to begin with.”
Putin’s view
Putin – a product of that old Soviet system and the man who “rears his head” over the Arctic as former Alaska Gov. Sarah Palin once so famously and hysterically observed – clearly had a different view of the situation.
Under his leadership, Russia has aggressively moved to tap oil and natural gas resources in Siberia – global warming be damned – and pioneer the Northern Sea Route along the Arctic coast while at the same time building pipelines to deliver oil and gas to Asia.
“Russia is one of the three biggest oil exporters in the world, alongside Saudi Arabia and the United States,” OilPrice.com noted in May. “It has enough oil to keep producing at current rates at least until 2080, with enough gas reserves to last for another 103 years. And the state is pouring billions – $110 billion to be precise – into the development of new oil reserves in eastern Siberia to tap 100 million tons of new crude annually. That’s about a fifth of the country’s annual output in 2019.”
“In the first eight months of the year, China spent some $837.32 million on Russian gas, which is a 98.94 percent increase compared to the corresponding period last year, the Chinese General Customs Administration said on Monday.”
China, like Russia, publicly proclaims a desire to join the battle to slow global warming, but its action say something else. China more than a decade ago surpassed the U.S. as the world’s largest greenhouse-gas producing country.
And China’s emissions of carbon dioxide, the most common greenhouse gas, continue to creep upward.
In 2020, the International Energy Agency (IEA) reported, “most economies saw a decline of five to 10 percentage points compared to recent rates of emissions growth, with lesser declines in Brazil and most notably, China. The only major economy to record an increase in annual CO2 emissions in 2020, China’s emissions growth slowed by just one percentage point compared with its average rate over the 2015 to 2019 period.”
U.S. emissions dropped 10 percent in the same period, and those in the United Kingdom fell `even more.
The United Kingdom – formerly the British Empire and the dominant world force from the sixteenth into the twentieth centuries – has promised to reach “net zero” carbon emissions by 2050 and was applauded for getting more than halfway there last year.
“The UK’s greenhouse gas emissions in 2020 were 51 percent below 1990 levels, according to new Carbon Brief analysis,” Carbon Brief headlined. “This means the UK is now halfway to meeting its target of ‘net-zero’ emissions by 2050.
“The milestone was reached after a record-breaking 11` percent fall in greenhouse gas emissions in 2020,” Simon Evans wrote in the story below before adding the all-important caveat, “largely due to the coronavirus pandemic.”
The pandemic slowed the carbon-dioxide spewing engines of commerce and significantly altered the way the Brits got about. They started working more from home than driving to offices, and when they did go there or elsewhere, they traveled less by motor vehicle and more on foot or by bicycle because of their government’s encouragement of “active travel” to increase “social distancing.”
“COVID-19 has radically changed our travel habits in just a matter of weeks. Walking and cycling are up, as people enjoy their daily exercise or take essential journeys they might otherwise have made by public transport. Cycle-to-work schemes have seen a 200 percent increase in the number of bicycle orders, while car use is roughly 40 percent of what it was in mid-February as more people work from home. Air pollution in cities has duly fallen rapidly, with nitrogen oxide pollution down 70 percent in Manchester, England,” The Conversation reported in May 2020.
“Transport is the UK’s most polluting sector, so encouraging more people to keep walking and cycling after the pandemic would benefit the environment, as well as make cities healthier for the people who live in them.”
But these weren’t the only reasons for the UK’s drop in production of the gases that power the atmospheric “greenhouse effect” that has kept the planet warm enough to be habitable for humans for 200,000 to 300,000 years, but which many now believe could make it uninhabitable in the near future as the planet steadily warms.
The government backed a plan for a “Green Industrial Revolution” to power the country with wind, water and sunshine to fight “climate change” and to take advantage of, according to a government white paper, the “huge opportunity for both growth and job creation. The global markets for low-carbon technologies, electric vehicles and clean energy are fast growing: zero-emission vehicles could support 40,000 jobs by 2030, with exports of new technologies such as CCUS (carbon capture usage and storage) having the potential to add £3.6 billion GVA (gross value added) by 2030. The time is now to seize these opportunities.”
The time may still be now – some in fossil-fuel short EU countries are arguing the current energy crisis only underlines the need to speed the move to renewables – but the crisis of the moment also makes clear the bumps in the road, more of which can be expected ahead.
Oil and gas are wonderfully convenient sources of power, and there’s nothing much more than convenience that the citizens of the modern world now desire.
MINING:
Challenging quarter slows Pogo gold output
Shane Lasley, North of 60 Mining News, October 21, 2021
Challenged by a spike of COVID cases in Alaska and unplanned downtime due to a failure of the primary conveyor that delivers ore to the mill, Northern Star Resources Ltd.’s Pogo Mine in Alaska produced less gold at higher costs during the first quarter of the Australian miner’s fiscal year 2022, which began on July 1.
These hurdles came at a time when crews were commissioning mill upgrades that will expand production rates to 1.3 million metric tons per year, which is a 30% increase over the current 1-million-metric-ton-per-year capacity.
“We seized the chance to complete other major works, including replacing the primary conveyor belt that transports ore from underground to the processing plant,” said Northern Star Resources Managing Director Stuart Tonkin. “This resulted in 24 days total downtime, which reduced throughput and gold production, in turn increasing costs per ounce.”
The Pogo Mine produced 40,127 ounces of gold during the quarter that ended on Sept. 30, a significant drop from the 60,968 oz of gold produced during the previous quarter.
As a result, the all-in sustaining cost per oz of Pogo gold sold during the September quarter was US$1,751, compared to US$1,347/oz during the July quarter.
In addition to nearly one month of downtime, Northern Star says the average grade of ore processed during the September quarter was 7.1 grams per metric ton gold, significantly less than the 9.1 g/t gold processed during the previous quarter and the average reserve grades at the underground operation.
As of the end of March, Pogo hosted 12.86 million metric tons of indicated resource averaging 9.5 grams per metric ton (3.95 million oz) gold, plus 10.03 million metric tons of inferred resource averaging 9.1 g/t (2.95 million oz) gold.
Of these resources, 5.85 million metric tons averaging 8 g/t (1.5 million oz) gold has been elevated to reserve status.
The lower-than-reserve grades processed during the September quarter are likely related to underground mining during the mill downtime that prioritized waste development with the focus on accelerating access to additional mining fronts. These additional fronts will make it easier for mining to keep pace with the expanded mill capacity.
Now, with the upgrades complete and conveyor repaired, Northern Star expects Pogo gold output to trend higher and costs to trend lower moving forward.
“This work is now finished, and we expect to see a significant benefit for both production and costs from the December quarter onwards,” said Tonkin.
In its guidance published in July, Northern Star forecasts Pogo will produce 220,000 to 250,000 oz of gold at all-in sustaining costs of around US$1,300 per oz of gold during fiscal year 2022.
Despite the slow start, the Australia-based gold miner has not adjusted this gold production outlook.
Once the expanded and upgraded mill is running at full capacity, Northern Star expects Pogo to produce around 300,000 oz of gold per year, or about 75,000 oz per quarter.
The company says mill throughput is increasing in line with expectations and mill availability has returned to normal levels exceeding 90%.
“I extend my thanks to the Pogo team who continue to manage the associated impacts of COVID, whilst adjusting to the challenges to make the growth plan,” said Tonkin.
POLITICS:
First look: Bipartisan buy-in for ESG among voters
Ben Geman, Axios, October 25, 2021
A new poll and analysis finds “surprising evidence” of bipartisan support for corporate environmental, social and governance (ESG) efforts, including climate initiatives.
Why it matters: Penn State business professor Tessa Recendes and the public affairs firm ROKK Solutions find “public opinion on ESG is not nearly as polarized as popular narratives suggest.”
- One key finding: stronger support among voters under 45. This “indicates companies should capitalize on generational trends in the workforce and financial markets as these constituents gain influence.”
Catch up fast: ESG describes initiatives in areas like emissions and water management; diversity and inclusion; shareholder rights, and more.
What they found: Some top-line findings from the poll of 1,240 registered voters include…
- 76% feel companies should be held accountable for making a positive impact where they operate. 79% of Democrats and 54% of Republicans put climate in their top five ESG issues most important to them, and environmental matters overall are a priority.
- Democrats are more likely than Republicans to buy things from companies that speak out on topics they agree with. That’s also one of several places where age matters, with 36% of Republicans over 45 more likely, rising to 51% under 45.
What’s next: It offers recommendations on crafting and communicating ESG policies, such as tailoring social media efforts but also using other channels, noting, for instance, that local TV remains the most popular information source for voters over 45.
The intrigue: The findings are relevant to policymakers, the report finds.
- “Our research absolutely begs the question: are policymakers underestimating support for tackling climate change, and tackling these pervasive social and governance issues,” ROKK Solutions managing director Lindsay Singleton tells Axios.
CLIMATE CHANGE:
Solar’s Growth Stumbles Just as the World Needs It Most
Dan Murtaugh, Maxwell Adler, BNN Bloomberg, October 25, 2021
Cracks are emerging in the global solar industry, threatening to flatten its growth trajectory just as the world needs clean power more than ever.
The sector is being slammed by a barrage of obstacles, with rising materials costs, forced labor accusations and a worsening trade war all hitting at once. As a result, panel prices are rising for the first time in years, and some manufacturers have asked buyers to delay purchases if they can. And although annual installations are still ticking higher, Wall Street warns the pace of expansion may slow sharply if those hurdles continue unchecked.
“The shocks to the system in the last two to three months are more or less unprecedented,” said Jenny Chase, an analyst with BloombergNEF. “We need to get to net zero as soon as possible, and to do that we just need so much solar and wind. We’re not on track; we need to ramp all this stuff up dramatically.”
These setbacks may only be temporary, with delays in installations expected to be largely resolved by the end of 2022 when new solar factories help ease supply chain issues. But any snag in the sector’s rollout will have lasting effects, with the emissions from the fossil fuels burned instead trapping heat in the atmosphere for decades. Solar provided just 3.3% of the world’s electricity in 2020. BloombergNEF estimates that to be on target for net-zero by 2050, the world needs to add 455 gigawatts of solar every year through 2030. Last year was a record—and it only added 144 gigawatts. The recent stumbles are hitting right before the United Nations’ COP26 climate talks begin later this month, viewed by many as a crucial—and last-ditch—effort to curb global warming.
It was easy to be optimistic about solar coming into the year. Joe Biden’s ascendance to the presidency, China’s 2060 net-zero pledge, and Europe’s Green Deal meant that for the first time, all three dominant economies supported an energy transition at the same time. And thanks to decades of painstaking work by researchers and companies, solar can now produce energy cheaper than fossil fuels in most of the world. Even the technology’s Achilles’ heel—the sun doesn’t always shine—was on the way to being solved by improvements in batteries.
by wp_sysadmin | Oct 22, 2021 | News
“The great unknown in climate debates has always been exactly how much voters are willing to bear in pursuit of reduced greenhouse-gas emissions. Mr. Johnson seems determined to force an answer.”
Oops, Boris Johnson Told the Truth About Climate
Joseph Sternberg, The Wall Street Journal, October 21, 2021
Voters are still in the dark about what they have to do to cut emissions. Finally a politician is telling them.
If Prime Minister Boris Johnson didn’t appear to believe so sincerely in the virtues of tackling climate change, you’d assume he was trying to sabotage the crusade against carbon-dioxide emissions. The bold plan he released this week for the U.K. to achieve net-zero carbon emissions by 2050 breaks the cardinal rule of climate activism: Never, ever, under any circumstances whatsoever, tell the public in one go how much they’ll have to pay and how much of their ordinary lives they’ll have to change to rein in emissions.
It’s not so much that this program is quantitatively different from climate-action agendas that other governments have implemented over the years. The British government admits it doesn’t know how much it will spend on the wide range of greenhouse-gas mitigations it proposes. But then neither does anyone else. No one has managed to total Germany’s spending on its long-running energy transition, although one credible guess pegged it at €120 billion for merely the five years leading up to 2018. U.S. Democrats resisted putting a price tag on their climate fever dream, the Green New Deal.
Rather, Mr. Johnson’s plan is qualitatively distinctive in foisting substantial changes on the section of the energy market voters notice most: the proverbial last mile between the national energy system and households.
The centerpiece of his plan is a program to replace home heating systems en masse, pushing homeowners to abandon gas-fired boilers in favor of green heat pumps with some subsidy but at considerable personal expense. There’s also a vague plan to tie preferential mortgage rates to green home improvements, and dozens of other promises (or threats) such as to increase the average occupancy per vehicle on British roads, presumably by encouraging more carpooling or use of buses and the like.
A companion fiscal report from the British Treasury, meanwhile, explains in greater detail than anyone has before exactly how taxation will change in a green economy. Around £37 billion a year will have to be found to replace the fuel taxes that electric-car drivers no longer will pay. That amounts to roughly 1.5% of U.K. gross domestic product a year in lost revenue by the 2040s. This means either cuts on other spending items or alternative taxes such as road-usage charges.
Talk about an experiment. The great unknown in climate debates has always been exactly how much voters are willing to bear in pursuit of reduced greenhouse-gas emissions. Mr. Johnson seems determined to force an answer.
Voters at least in some places—think blue states in America—will tolerate expenditures of abstractly large quantities of taxpayer money to subsidize green energy production. Others in different places will grumble but bear a relatively modest additional amount tacked onto their household energy bills. And a fair number everywhere are willing to adopt modest behavior changes that have as much to do with virtue signaling as with the climate, such as buying more-efficient lightbulbs.
The political Rubicon has been asking households to do things that would make a bigger difference to carbon emissions but also would prove far more disruptive to daily life and the household budget. The transition to electric vehicles has been tackled gingerly, with carrots instead of sticks—generous tax incentives to buy a Tesla, rather than the sort of heavier fuel taxation that triggered the gilets jaunes protests in France when Emmanuel Macron was foolish enough to try it. Governments have tacked small levies onto household fuel bills to fund green priorities, but stopped short of meddling in the sort of heating unit a household might buy.
One consequence is that voters seem to have startlingly little idea about what they will have to do if they want to reduce their emissions. A recent YouGov survey is suggestive: British households understand they should walk or cycle instead of driving, although this isn’t actionable advice if you live outside an urban area. But they overestimate the carbon reductions they can achieve by shifting to an electric vehicle, and underestimate the reductions if they took a bus instead.
They wildly overestimate the carbon benefits of abandoning plastics, and underestimate the relative impact of Britons’ penchant for jetting off on vacations abroad. They also underestimate the carbon gains to be had from reducing the number of children per family—quite possibly because the idea of sacrificing one’s family, literally, for the climate is so preposterous it rarely features in these debates.
These perceptions have persisted because up to now politicians have been highly effective at creating the impression among voters that environmentalism is something someone somewhere else in the economy does. Mr. Johnson is starting to disabuse Britons of that notion with this week’s plan, and he may well discover there’s a reason few others have been willing to try.
