EV Footprint:  A Tale of Two Countries.

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Today’s Key Takeaways:  First oil for Conoco Phillips at Fiord West! White House LNG task force operating in secrecy? Want a carbon transition? Learn to love mining. U.S. lags behind in global EV supply chain competition. China was responsible for half of all new EV sales globally in the last year – more than Europe and U.S. combined.


From the Washington Examiner, Daily on Energy:

CHINA’S ELECTRIC VEHICLE FOOTPRINT: New data distill the degree to which the world’s leading greenhouse gas emitter is dwarfing its top geopolitical competitors in the rollout of electric vehicles.

China was home to 3.3 million EV sales last year, accounting for half of new sales globally and more than Europe’s and the United States’ total sales combined, according to a new report out today from the International Energy Agency.

China’s combined battery electric and plug-in hybrid electric vehicle stocks also accounted for more than half of all 16.5 million electric vehicles on the world’s roads in 2021.

China’s advantages: For one thing, Chinese EVs are comparatively cheaper than elsewhere, as its large production capacity allows manufacturers to source critical minerals and batteries more cheaply, IEA noted.

A conventional vehicle was only 10% cheaper than an electric vehicle in China last year on a sales-weighted median price basis.

The difference was much larger in other “major markets,” where conventional vehicles were between 45-50% cheaper.

More than half of all electric cars produced globally last year were assembled in China, which “is poised to maintain its manufacturing dominance,” IEA said.

The contrast: Western governments, including the United States, have treated China with a special scrutiny for its top-emitting status, its heavy reliance on coal, and its comparatively less aggressive emissions reduction targets.

President Joe Biden criticized China for not having a larger presence at the COP26 climate change conference in Glasgow last November, and his diplomatic force has pushed the Chinese to do more emissions cutting.

Still, at the same time that China puts up big numbers in new coal capacity — its 25.2 gigawatts of new coal plants were some 56% of the newly commissioned coal capacity worldwide last year — it’s dominating EV production and deployment, as well as new renewable energy capacity installations.

China accounted for more than 80% of the increase in added renewable capacity installations from 2019 to 2020, per IEA.

Back home: Biden wants to see half of all new vehicle sales be electric by 2030, and he’s been trying to enable more growth for EV manufacturing domestically, something some lawmakers have said must happen to avoid continually propping up China’s industry.

Sales are growing, but getting to Biden’s target is going to be a slog at current rates.


ConocoPhillips starts production at new Alpine satellite field – Alaska Beacon
Yereth Rosen, Alaska Beacon, May 21, 2022

ConocoPhillips Alaska Inc. announced Friday that it has started oil production at its Fiord West Kuparuk reservoir, a satellite of its Alpine field.

The start of oil flow followed the drilling of a well that ConocoPhillips said set an extended-reach record. The well was drilled about a month ago by Doyon 26, the largest mobile drill rig in North America and nicknamed “The Beast.”

The rig, owned by Doyon Drilling, is capable of drilling more than 40,000 feet, ConocoPhillips said. For Fiord West Kuparuk, it hit a distance of 35,526 feet, ConocoPhillips said. That is a distance record for a horizontal well drilled on land, the company said.

The well was drilled from the CD2 pad within the existing Colville River Unit, the company said.

“This project opens a new era we call ‘growth without gravel’ where we can use extended reach technology to access 60 percent more acreage from a single pad, dramatically reducing our footprint and enabling us to safely produce from environmentally sensitive areas,” Erec Isaacson, president of ConocoPhillips Alaska, said in the company’s statement. 

Fiord West Kuparuk is located about 12 miles north of the village of Nuiqsut and is on state land just east of the National Petroleum Reserve in Alaska, according to state information.

It is expected to produce 20,000 barrels per day at peak production, ConocoPhillips has said in the past.

Production started on Wednesday, and volume from the single well was already 10,000 barrels a day, the company said in its statement released on Friday.


White House LNG Task Force Compared to Secretive Cheney Oil Group
Jennifer A. Dlouhy, BNN Bloomberg, May 23, 2022

Activists are accusing a White House-backed task force of illegally operating in secrecy as it develops a plan to wean Europe off Russian energy supplies.

The panel’s work has unfolded behind closed doors since late March, when US President Joe Biden and European Commission President Ursula Von de Leyen charged the group with helping Europe diversify its gas supply amid Russia’s war on Ukraine. A lack of transparency violates federal advisory committee law, anti-corruption group Global Witness alleges in a letter being sent to Biden on Monday. Environmentalists have separately filed an open records request seeking more information on the group’s work.

“The task force’s operations have to date been shrouded in secrecy,” said Global Witness senior adviser Zorka Milin. That is stoking fears the natural gas industry will have too much influence over its work, she said.

Only government officials of the EU and the US are on the task force — with no outside representatives of industry or other groups — and the Biden administration does not believe it falls under the Federal Advisory Committee Act, said a person familiar with the matter who asked not to be named describing the panel’s deliberations.

The task force is charting plans to increase liquefied natural gas supplies to Europe by at least 15 billion cubic meters in 2022 — potentially through swift approvals for LNG export and import terminals. LNG exporter Cheniere Energy Inc. has been one of the task force’s “active participants,” Chief Executive Officer Jack Fusco said in a May 4 earnings call. The group has met with other industry members, according to the White House.

That’s inviting comparison to a controversial White House task force headed by former Vice President — and Halliburton Co. executive — Dick Cheney, which huddled behind closed doors with oil and power utility executives to create national energy strategy in 2001. The group’s work was later criticized by good government advocates and Congress’ investigative arm for its secrecy and bias toward industry. Under the 50-year-old Federal Advisory Committee Act, many government panels are required to be accessible to the public and contain a “fairly balanced” roster of members representing many points of view. 

The Biden administration task force is also being headed by a former energy executive, Amos Hochstein, who worked for LNG company Tellurian Inc. before becoming the US senior adviser for energy security. The panel is also helmed by Björn Seibert, head of cabinet of the European Commission president.

LNG industry representatives, community advocates and the makers of smart thermostats, heat pumps and other technology that could be deployed to help Europe reduce energy demand have all met with the group, according to the the person familiar with its work.

The task force is aiming to ensure additional gas volumes to Europe are aligned with US and EU climate targets, in part by decreasing the carbon intensity of American gas that is exported, Melanie Nakagawa, the National Security Council senior director for climate and energy, said last month at a Center for Strategic and International Studies event.

But dozens of US lawmakers and members of the European Parliament on Thursday implored von der Leyen and Biden to keep new gas export and import permits completely out of the task force’s final plan. Instead, they said in a letter to the leaders, the group’s report should focus on moving the EU and US “off fossil fuels and onto clean, renewable energy by 2035.”

Related:  Biden Energy Secretary Affirms Support for U.S. LNG Exports, Contradicting John Kerry’s Purported Warnings to Allies (senate.gov)


Carbon transition means global development must learn to love mining
Daniel Runde, The Hill, May 23, 2022

Decarbonization does not mean de-mineralization. To realize the carbon transition, we are going to have to ramp up mining all around the world.

Over the next few decades, metal outputs for aluminum, copper, lithium, cobalt, nickel, and other metals will have to increase exponentially. As such, by 2050, the world will need 160 million tons of aluminum and 20 million tons of copper to produce the necessary clean energy technologies and batteries for the carbon transition. Given the current technologies, the world will need to mine 40 times the current quantities of metals to phase out internal combustion engines in gas-powered vehicles. Demand for cobalt and lithium — essential ingredients in electric vehicle batteries — are predicted to increase 500 and 900 percent respectively. 

Much of this mining is going to happen in developing countries, which will include mining on Indigenous lands. To mitigate the adverse effects of mining, the global development community is going to have to spend a lot more of its people, time, and money on mining activities or around mining

If the carbon transition is to happen at all, there will need to be ways to support cleaner, better-governed mining extraction activities for the next several decades. 

Given the potential carbon transition, mining will be a critical source of growth and tax revenues for economies of developing countries. Mining projects generate tax revenues for national governments and can provide good livelihoods. Tax revenues generated by mining can be used to finance roads, pay for teachers and other public goods.

However, the global development community so far has not reconciled the necessity of mining for the carbon transition. The aid world has been conflicted at best on the issue. Many development finance institutions and multilateral banks do not finance mining. Some parts of the aid community completely boycott mining projects.

Many avoid the topic of mining because it is considered a “dirty” word. But it is important to acknowledge that all forms of energy have challenges, including what is deemed “clean” energy-things like wind, solar and electric vehicles. After all, everything in modern life comes from the earth in some way; either mined or grown agriculturally. Clean energy is no different. In this way, clean energy raises increased dilemmas over human rights, the environment, governance, and corruption. It evokes questions such as: How are the revenues earned from mining going to be allocated among national and local governments? How can we ensure local communities impacted by mining are also beneficiaries? What sort of infrastructure and power projects need to be built to support mining operations? How can we properly use water? 

There is undoubtedly a question of maintaining human rights when it comes to mining. Take the case study of cobalt. Cobalt is crucial to produce batteries for electric vehicles and other electric devices like phones and computers; 70 percent of the world’s cobalt comes from the Democratic Republic of Congo (DRC), but the cobalt industry has documented and pervasive human rights problems with child labor, few safety standards, and violence between small scale artisanal miners and larger mining companies. If we are to realize a 500 percent increase in cobalt mining to meet the demand for electric vehicles alone, major interventions must occur to address the human rights issue. Stakeholders up and down the cobalt supply chain must ensure that companies are holding cobalt miners to fair and ethical standards, including preventing child labor and ensuring safety protections are in place.

On the environmental side, mining can have an impact on soil, water, and air quality. Mining is often a very water intensive endeavor and often happens near water sources, including rivers, streams, and groundwater. If waste left behind from mining is not properly disposed of, metals and chemicals can pollute the nearby water and damage ecosystems. In addition, substandard smelting operations can release gases and particulate matter that are harmful to the environment and local communities. Again, the global development community should play a constructive role to promote responsible mining. With today’s technologies, mining does not have to be pollution heavy. There are ways to mitigate and dispose of mining pollution properly. 

There are significant issues around mining and governance. When there is a lack of proper governance and regulations there can be human rights issues and environmental problems. How monies are managed matters. Corruption and bribery often prevent governments at the national, state, and local level from enforcing safety and ethical policies at mining sites. To address problems in mining, international organizations, aid agencies, and multilateral banks should work together to raise standards. This can help encourage better governance by holding companies accountable on how they are implementing local workforces and mining operations. This will can also support local regulators in cracking down on unsafe and unhealthy practices.

Many companies are sensitized to these issues and follow ESG principles, which is influencing them to restructure portfolios, commit to carbon reduction, and promote better governance.  

China is becoming a major leader in mining. China is already a major player in processing minerals and is in the process of aggressively buying up mineral deposits around the world. It’s environmental record is not the best. If the U.S. and our allies do not engage more actively on mining — including in developing countries — the U.S. could switch from being largely beholden to the OPEC cartel to a cartel made up of China and Russia.

All the dilemmas presented above can be mitigated — not necessarily solved — by various forms of development assistance, including foreign aid and development finance. Governments, starting with the United States, need to signal their commitments to work more intensively around mining and with mining companies given the changes in the world today.

Daniel F. Runde is a senior vice president and William A. Schreyer chair in Global Analysis at CSIS. He previously worked for the U.S. Agency for International Development, the World Bank Group, and in investment banking, with experience in Africa, Asia, Europe, Latin America, and the Middle East.


U.S. playing catch-up on electric vehicles
Ben Geman, Axios, May 23, 2022

President Biden tooka victory lap in South Korea over Hyundai’s big U.S. new electric vehicle investments, but fresh analysis shows how far the U.S. lags behind in the global EV supply chain competition.

Driving the news: “Electric vehicles are good for our climate goals, but they’re also good for jobs, and they’re good for business,” Biden said in Seoul Sunday alongside Hyundai chairman Euisun Chung.

  • Biden’s remarks came two days after Hyundai unveiled $5.4 billion plans to build EVs and batteries in Georgia.

The big picture: The South Korean auto giant is the latest of many automakers and battery producers to unveil U.S. investments recently.

  • General Motors in January announced a multibillion-dollar plan to build battery cells and electric pickups in Michigan, one of several states where it’s boosting capacity.
  • Ford, SK Innovation, Rivian, Stellantis, Toyota and others are developing large battery and EV manufacturing projects.

Yes, but: An International Energy Agency report Monday morning starkly captures something Axios’ Joann Muller recently explored: The U.S. is playing catch-up behind China and Europe.

  • The chart above offers key parts of a more granular IEA analysis of the global supply chain — spanning raw materials, processing, manufacturing and more — for batteries and EVs.

What we’re watching: How that chart will look in 5, 10 and 15 years — and how U.S. policy affects it.

  • The Energy Department is offering new funding via the bipartisan infrastructure law to boost U.S. battery and component manufacturing and recycling.
  • The administration has also set aggressive EV deployment targets, but a key policy goal — a huge expansion of buyer subsidies — has stalled in Congress.

The bottom line: Cars with plugs and the batteries that run them are becoming a major 21st-century industry — and a tool against global warming. But which nations will benefit the most is up for grabs.

Global electric car sales reached 2 million in the first quarter of 2022, up 75% from the same stretch in 2021, the new IEA report shows.

Why it matters: EV sales had already doubled in 2021 over the prior year, capturing about 10% of the new vehicle market, the report points out.

  • While they remain a tiny share of the global fleet, 2021 sales boosted the total number of EVs on global roads to 16.5 million at year’s end, and that’s rising significantly higher this year.

Yes, but: Growth still lags what’s envisioned in IEA’s hypothetical pathway to net-zero global greenhouse gas emissions in 2050.

  • And the commodity cost surge is putting upward pressure on battery prices after years of declines.