Today’s Key Takeaways: Biden invoking Defense Production Act to enable more critical minerals to be developed in the U.S. Banks are still funding fossil fuels – $741B in 2021. Gas rationing looms in Germany. Kentucky incentives for bitcoin miners bring mining rigs by the truckload. Alaska political recap.
NEWS OF THE DAY:
From the Washington Examiner, Daily on Energy:
BIDEN TO ACT ON DEFENSE PRODUCTION ACT CALLS: President Joe Biden is preparing to invoke the Defense Production Act to enable production of more critical minerals for EV batteries and other green tech, Bloomberg reported this morning. Action could reportedly come as soon as this week.
Lawmakers and interest groups left and right have been pushing Biden to use the DPA in the face of high energy prices, both as a means of deploying more green energy and displacing foreign mineral imports.
Democrats and green groups in particular have asked for Biden to use it to build more renewables and energy efficiency technologies.
“Using the DPA and your other executive powers in this manner won’t just help Ukraine, the rest of Europe, and the U.S. in the short term,” more than 200 environmental and other organizations wrote Biden earlier this month. Doing so will “preempt future crises sparked by oligarchs, strongmen, and the climate emergency, and position the U.S. to be a global leader in the just and renewable energy transition that will leave no worker behind.”
Republican lawmakers have made their own requests, and on mineral production in particular. Sens. Lisa Murkowski, Jim Risch, and Bill Cassidy, joined by Sen. Joe Manchin, told Biden the “time is now” to grow mineral production and asked for the DPA to be used.
Still some lawmakers’ DPA requests have asked for it to be used for enabling more oil and gas production.
OIL:
60 banks provided $741B to fossil companies in 2021
Avery Ellfeldt, Climatewire, March 30, 2022
The world’s largest banks made groundbreaking commitments last year to zero out their contributions to climate change in less than three decades.
But their pledges didn’t stop them from putting more than $741 billion into fossil fuel companies over the course of the year, according to a report released today by a coalition of green groups. That dollar figure flies in the face of the banks’ splashy climate promises and the global fight against rising temperatures, the environmental groups argue.
“2021 was the year of net zero. And while long-term commitments and long-term affirmations of directions of travel are important as far as they go, what we’re seeing in the data is effectively a continuation of business as usual,” said Jason Disterhoft of Rainforest Action Network.
Each year, green groups including Rainforest Action Network, Reclaim Finance, the Sierra Club, and others release a widely cited report that uses data sourced primarily from Bloomberg Finance LP to track the relationship between the banking sector and the fossil fuel industry.
The latest version, dubbed “Banking on Climate Chaos,” found that fossil fuel financing by the world’s 60 largest banks actually dropped by about $8 billion, or 1 percent, in 2021 when compared to the year before. But that didn’t inject optimism into the report’s authors. They pointed to what they described as a small scale of change within the banks, and they concluded that the lending decrease was attributable to the “lagging recovery from the COVID-19 pandemic.”
“Technically speaking, there was a slight drop,” Disterhoft said. But ultimately, he added, “fossil financing was basically flat last year at a time when we need to be ramping way down as quickly as possible.”
The report said fossil fuel financing in 2021 was $33 billion more than in 2016, a year after world leaders adopted the Paris Agreement. In the time since, a growing swath of the global financial sector — and 44 out of the 60 banks included in the report — have said they would eliminate the planet-warming associated with their lending and underwriting portfolios by 2050.
In the run-up to the global climate conference in Glasgow, Scotland, last November, the six largest U.S. investment banks joined a new effort called the Net-Zero Banking Alliance, which aims to streamline finance-sector climate targets. To become members, they signed a letter pledging to eliminate their carbon emissions by 2050, publish their progress annually and set 2030 decarbonization targets (Climatewire, Oct. 27, 2021).
The report also found that the top four fossil fuel financiers since the adoption of the Paris Agreement were U.S.-based banks JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Bank of America Corp. Combined with Goldman Sachs Group Inc. and Morgan Stanley, which fell lower on the list, the six Wall Street giants pumped more than $220 billion into the fossil fuel industry in 2021 — nearly a third of all fossil financing derived from global banks.
Disterhoft said those numbers show that “fossil lending and underwriting is first and foremost a U.S. issue,” which he says is “just flatly incompatible with any aspirations the United States has to climate leadership.”
JPMorgan and Wells Fargo were among the banks that provided more money to the industry in 2021 than they did the year prior. JPMorgan, the world’s largest bank, gave the industry more than $61 billion in fossil fuel financing last year, up from roughly $51 billion in 2020, according to the report.
Wells Fargo saw an even larger jump, from $26 billion in 2020 to $46 billion last year. Neither of the two lenders responded to a request for comment.
The report also highlights the lenders’ role in the expansion of fossil fuel production, which, according to the International Energy Agency, is incompatible with achieving net-zero emissions by 2050.
The 60 banks examined in the report provided more than $185 billion in 2021 to 100 companies “doing the most” to expand the fossil fuel sector, the report said.
“This report makes it clear that banks must clean up their act and stop funding the expansion of dirty fossil fuel projects like fracked gas exports, tar sands pipelines and offshore drilling in order to align with what the science demands and what their own commitments require,” said Adele Shraiman, a Sierra Club campaigner.
GAS:
Germany girds for gas rationing, Europe on edge in Russian standoff
Joseph Nasr, Vera Eckert, Reuters, March 30, 2022
- Europe fears Moscow will turn off gas supplies
- Kremlin says rouble payments a good idea for other commodities
- Kremlin says it will not immediately demand roubles for gas
- Economic standoff raises risk of recession in Europe
Germany triggered an emergency plan to manage gas supplies on Wednesday that could see Europe’s largest economy ration power if a standoff over a Russian demand to pay for fuel with roubles disrupts or halts supplies.
Moscow’s insistence on rouble payments for the Russian gas that meets a third of Europe’s annual energy needs has galvanised others in Europe: Greece called an emergency meeting of suppliers, the Dutch government said it would urge consumers to use less gas and the French energy regulator told consumers not to panic. read more
MINING:
Bitcoin miners are dusting off Kentucky coal towns, spurred by state crypto tax incentives
Jacquelyn Melinek, Tech Crunch, March 30, 2022
Bitcoin mining rigs have been arriving in Kentucky by the truckload ever since Governor Andy Beshear passed two laws in March 2021 to incentivize bitcoin miners to establish roots in the southeastern state.
Senate Bill 255 extends the commonwealth’s clean energy-based incentives to miners who provide a minimum capital investment of $1 million, while Kentucky House Bill 230 provides miners a number of tax breaks.
In the year since their passage, Kentucky and mining-focused businesses alike have reaped benefits from the legislation. As of October 2021, Kentucky accounted for 18.7% of the United States’ total Bitcoin hash rate, second to 19.9% in New York, according to data from Foundry Digital, a subsidiary of the crypto giant Digital Currency Group.
Bitcoin mining is a decentralized computational process that allows miners to add new blocks of verified bitcoin transactions to the Bitcoin blockchain. Over the years, bitcoin mining has become more competitive and resulted in miners typically needing expensive equipment and low-cost electricity to profit from their efforts. Out of the 21 million total bitcoin supply, about 90% of bitcoin (about 19 million) has been mined in the past 13 years.
Blockware Solutions, a blockchain infrastructure and cryptocurrency mining firm, announced on Tuesday that it opened its flagship mining facility in Belfry, Kentucky, a town with fewer than 500 people right near the West Virginia border.
“It is my hope that a region known for mining coal will now benefit from this different type of mining,” Kentucky State Representative Angie Hatton said in a statement. “I also hope that its significant electricity needs will help stabilize our steep residential rates. It would mean the world if our families could save money while Blockware Solutions is literally creating it.”
Its Kentucky flagship location is comparable to the size of a Costco and is one of Blockware’s three planned sites in the state, Blockware CEO Mason Jappa told TechCrunch.
“In the economy and region, we’re in, the fact that an energy grid exists is awesome, but there aren’t many energy consumers like us in the region, so if we can take down large amounts of energy, we’re adding stability to the grid,” Jappa said.
The data center is repurposing a coal mining site that has been abandoned for decades and will launch with 20 megawatts, which is equivalent to powering a small rural town of 5,000 people annually, he added.
“We found the perfect cocktail of everything we needed: political sustainability, low-cost energy and support in the local economy, as well as it being in an environmentally safe, sound and cool environment,” Jappa said.
Abandoned coal mines aren’t the only locations getting a face-lift. Empty real estate across the country, from steel mills in Illinois to forgotten warehouses in Oklahoma and parts of the Midwest, is being utilized, Nick Hansen, CEO of a Bitcoin hashrate management platform Luxor, told TechCrunch.
POLITICS:
An Alaska politics recap, from redistricting lawsuits to a Capitol COVID outbreak
Lori Townsend, Andrew Kitecheman, Alaska Public Media, March 29, 2022
Alaska’s political scene has been busy. TheAlaska Supreme Court ruled on redistricting last week, the House plans to take up the budget in a few days — and there’s yet another conflict about mask-wearing on the House floor. Alaska Public Media and KTOO’s Andrew Kitchenman spoke to Alaska Public Media news director Lori Townsend about the latest developments and what happens next.
Andrew Kitchenman: So first, the biggest consequence is that the court upheld Anchorage Superior Court Judge Thomas Matthews’ finding that the redistricting board had violated the state constitution in how it paired a House district that includes most of Eagle River with a House district that includes the south Muldoon neighborhood to make up one Senate district.
On the other hand, the court rejected Matthews’ finding that there was a problem with the House district Skagway was placed in. Skagway had wanted to be in a district with downtown Juneau, but it will be with Juneau’s Mendenhall Valley area instead.
The only other change is that the court found a problem with which district the community of Cantwell was placed in. It basically said that Cantwell should be in the same House district as the rest of the Denali Borough, and not with the Ahtna villages. The court said that the board’s map for Cantwell wasn’t compact and that the board hadn’t justified it adequately.
So now Judge Matthews will have to give the board an order. The board may have to decide how many Senate districts it wants to rearrange to correct for the issue in Eagle River and south Muldoon. If all of Eagle River is kept in the same Senate district and both major pieces of Muldoon are kept in a Senate district, then at least four Senate districts will have to be rearranged.
The upshot of all of this could increase the number of competitive Anchorage Senate seats. Under the original map, both Eagle River Senate districts were heavily Republican.
Lori Townsend: When will we have a clearer idea about those Senate districts?
AK: First, Judge Matthews has to issue that order to the board. The board will have to meet and take action. And at that point, there could be one or more new lawsuits. But if there aren’t more lawsuits, then all of this could be resolved well ahead of the June 1 deadline for candidates to file for the election.
LT: Andrew, given the fact that a number of other Senate districts could be affected, if lawsuits do come and push past the first of June, what would that mean for candidates who want to get into these races?
AK: Based on what’s happened in the past, the Senate would use the map that was current at that time — that is, the time of the lawsuits. And if there has to be changes to the map later, those will go into effect for the next general election in 2024.
LT: What other state political news has happened recently that people should know about?
AK: Another piece of news is the Anchorage Democratic Representative Ivy Spohnholz has tested positive for COVID-19. Certainly not the first legislator to be in this position. The timing is a little awkward because the House majority only has a one-vote majority, and so any time a member is out, that does affect the House floor sessions. She tested positive on Friday, and she’s isolating and expects to be clear to be back on Thursday of this week. Since the House majority doesn’t have any votes to spare, that’s also when the floor debate on the budget is expected to pick up. House Speaker Louise Stutes reinstituted a mask requirement on the floor on Monday, but some members wouldn’t comply, so she ended the floor session. We’ll see what happens on Tuesday.