NEWS OF THE DAY:
NOAA, Boeing and Alaska Air team up to better measure greenhouse gas levels
Scott Sisek, Q 13 Seattle, June 3, 2021
NOAA, Boeing and Alaska Airlines are teaming up to learn how best to use aircraft for collecting greenhouse gas samples in an effort to better monitor climate change.
Scientists with NOAA’s Global Monitoring Laboratory will be installing air sampling instruments in three different locations and configurations on an Alaska Airlines Boeing 737-9 as part of Boeing’s 2021 ecoDemonstrator flying test bed program.
The goal is to use in-service commercial aircraft as an additional tool to measure greenhouse gases in the atmosphere, while keeping the data free from any emissions from the plane itself that could skew the results.
Air will be collected from a duct that feeds outside air into the airplane’s interior, and from two inlets mounted in a window plug for comparison, according to NOAA.
“Standardizing the location and installation of greenhouse gas monitoring instruments on commercial aircraft will be an important first step in expanding our sampling network to provide data for scientists and policymakers interested in understanding greenhouse gas emissions that are driving climate change,” Colm Sweeney, lead scientist for the NOAA Global Monitoring Laboratory’s aircraft measurements program, said in a news release announcing the partnership.
NOAA keeps tabs on three critical drivers of climate change: carbon dioxide, methane and nitrous oxide, as well as carbon monoxide, which is an indicator of air pollution, NOAA says. The agency has four permanent observatories plus gathers measurements from 50 partner institutions and trained observers around the globe. In addition, NOAA has contracted with some private pilots to take air measurements.
But this new project hopes to inject a new treasure trove of greenhouse gas data via commercial flights that would provide additional information to improve our long-range climate forecast models.
“Greenhouse gas measurements made from U.S. commercial airliners would help scientists verify the effectiveness of mitigation efforts in urban areas near major metropolitan airports, and changes in natural emissions coming from melting permafrost near remote airports in the high Arctic,” said Kathryn McKain, the lead scientist for NOAA’s Commercial Aircraft Sampling Network.
The greenhouse gas measurements are just one of 20 different technologies that will be tested on the Alaska 737 as part of Boeing’s annual ecoDemonstrator program.
OIL:
OPEC leaders mock IEA’s “la-la land” 2050 net zero roadmap
Dina Khrennikova, Olga Tanas, World Oil, June 3, 2021
-The world’s largest petrostates rejected calls for a rapid shift away from oil and gas, warning that starving the industry of investment would harm the global economy.
If the world were to follow the International Energy Agency’s controversial road map, which said investment in new fields would have to stop immediately to achieve net-zero carbon emissions by 2050, “the price for oil will go to, what, $200? Gas prices will skyrocket,” said Russian Deputy Prime Minister Alexander Novak.
His warnings were echoed by the energy ministers of Qatar and Saudi Arabia, who said they will keep expanding their oil and gas facilities and warned others against the consequences of starving the industry cash.
The “euphoria” around the transition to clean energy is “dangerous,” Qatar’s Energy Minister Saad Sherida Al Kaabi said at the St Petersburg International Economic Forum in Russia on Thursday. “When you deprive the business from additional investments, you have big spikes” in prices.
It’s no surprise that top officials from the world’s largest fossil fuel exporters want to see the industry continue for decades to come. Their comments are illustrative of the vast gulf between the world’s current carbon-based energy system and the changes required to prevent damaging climate change.
Saudi Energy Minister Prince Abdulaziz bin Salman has already dismissed the IEA road map, which would limit the average increase in global temperatures to 1.5 Celsius, calling it a “la-la-land” scenario. When asked on Thursday if oil is dead, he responded by saying the kingdom is increasing its production capacity.
Qatar is pushing ahead with its $29 billion expansion of liquefied natural gas facilities and will decide whether to take international partners in the project by the end of this year, Al Kaabi said. Oil and gas will still be around for decades to come, Novak said.
GAS:
From the Washington Examiner, Daily on Energy:
LNG EXPORT TENSIONS: Whether the Biden administration likes it or not, the U.S. solidified its position last year — even amid a pandemic — as a top exporter of natural gas.
The International Gas Union’s World LNG Report, released this morning, finds the U.S. exported 44.8 metric tons of liquified natural gas, or LNG, in 2020, the third most of any country behind Qatar and Australia.
U.S. LNG exports increased 33% from 2019, the largest growth in the world.
Sindre Knutsson, vice president of gas markets at Rystad Energy, a research group, told Josh he expects even more growth in U.S. LNG exports this year, by up to 50%. Rystad expects the U.S. to be the top exporter of LNG globally by 2024.
This could get awkward for Biden: The Trump administration boasted of the U.S.’ emerging status as an LNG export power, and actively promoted sending natural gas to Europe to reduce dependence on Russia.
Knutsson said he hasn’t seen “any change” in the bullish outlook for LNG despite the Biden administration’s murky stance on the role natural gas exports should play in the energy transition.
Most of the growth this year and into the future will come from increasing demand in Asian countries that are looking to diversify off dirtier coal while serving the energy needs of their growing populations. Sindre said he still expects Europe to steadily import LNG from the U.S., even as countries such as France apply more scrutiny to the emissions associated with the shale gas transported through the export facilities.
Where Biden stands: The administration, while not cheering for LNG exports, seems to see its potential, despite criticism from liberal climate activists who want the U.S. to stop sending all fossil fuels overseas.
In a recent briefing with foreign media, Jonathan Pershing, a State Department adviser to climate envoy John Kerry, said U.S. fossil fuel exports were “something that we are discussing,” but added “low carbon doesn’t necessarily mean no fossil fuel.”
“It does not serve anyone to cut things off,” Pershing added, citing a “need to maintain reliability and security in the existing grids.”
Energy Secretary Jennifer Granholm, meanwhile, committed in her confirmation hearing to follow federal law as it relates to approving applications for exporting LNG.
In written responses to the Energy Committee that oversaw her confirmation, Granholm said U.S. LNG exports can play an “important role” in reducing consumption of dirtier fuels, but also said she wants to work with the oil and gas industry to “reduce emissions associated” with LNG.
Granholm’s predecessor, Dan Brouillette, Trump’s last Energy secretary, told Josh the Biden administration should be more forceful in supporting, not just accepting, growth in LNG exports.
“The administration really needs to figure out its position on LNG because the developing world is demanding this clean fuel. It needs to work through that very quickly,” Brouillette said. “Like it or not, natural gas will be a large part of the clean energy transition and global energy demand for decades to come.”
MINING:
Mining industry to continue flying high through 2022 – report
Mining.Com, June 3, 2021
Global miners can continue to expect an “exceptional year of earnings” through 2022 as a broad commodity price rally underpins strong financial results for most actors, according to a new report from Fitch Solutions.
Despite sky-high earnings, Fitch expects miners to maintain restraint over capital expenditure, instead focusing on further debt reduction with the additional profits generated this year and next.
According to the report, the industry is in the age of disruption with technology, changing consumption patterns and environmental, social and governance (ESG) considerations shaping the future of market players and inevitably determining success — or the contrary.
Major mining companies could weather the covid-19 pandemic better, primarily thanks to higher metal prices following the first quarter of 2020. For example, Rio Tinto’s (NYSE: RIO; LSE: RIO; ASX: RIO) net profit grew by 22% year on year in 2020 compared with a 41% year on year decline in 2019, while Anglo American (LSE: AAL), Freeport-McMoRan (NYSE: FCX), Norilsk Nickel (US-OTC: NILSY) and Vale (NYSE: VALE) registered net profits.
Fitch expects these financial results to be even stronger in FY2021-FY2022.
On the back of the performance, the miners had in recent months announced higher guidance for output and capital expenditures in 2021 and 2022 compared with 2020. As of April, Fitch’s bi-annual mining capex outlook was for capex by the top 30 miners to grow by about 23.7% year-on-year in 2021, after it broadly stagnated in 2020.
The updated guidance reflects more robust financials, low base effects, and a general vision to return to pre-planned levels of activity with the assumption that there would be no more lockdowns that could once again hamper miners’ capabilities, Fitch says.
However, in taking a closer look at individual company capex figures, Fitch Solutions says the overall trend remains that companies are investing more in developing their existing assets than in exploring new ones.
Going forward, Fitch expects miners to increase investments in copper, lithium and nickel projects owing to the rising demand for these metals from the renewable energy, battery and electric vehicle sectors.
Trends to watch
Miners and metals companies are also likely to try and extract value out of the sustainability trends, Fitch says, as there will be pressure on mining companies to decarbonise, reduce their environmental impact and improve transparency.
That pressure will increase dramatically in the coming years, as downstream players aim to reduce Scope 3 greenhouse gas (GHG) emissions.
According to McKinsey & Co, mining is responsible for 4% to 7% of global GHG emissions regarding the sector’s Scope 1 and Scope 2 emissions. In comparison, including Scope 3 emissions links the industry to about 28% of total global emissions, according to Fitch.
Therefore, the agency expects first movers in this respect to enjoy a premium for their products in the future as downstream players demand low-carbon metals.
Mining capex will continue to target advanced technology that enables further efficiency gains, as industry leaders prioritise technology to remain competitive and better withstand price volatility.
Fitch expects the acceleration of technological integration in the mining industry will widen the gap between the top low-cost producers and junior miners and improve the competitiveness of developed markets compared with underdeveloped markets.
Fitch asserts that Rio Tinto will remain the leader, as the company has made investments in innovation and cutting-edge technologies in operations that have not been matched by other miners.
Going forward, however, cyber-risks, owing in part to the proliferation of new digital technologies, the increasing degree of connectivity and a material increase in the monetisation of cyber-crime, will become a more prominent cause for mining companies’ concern.
Meanwhile, rising resource nationalism will also be a significant risk to mining companies in the coming years. The regulatory space is ever-changing, with more governments looking to demand greater returns from the natural resources sectors in their jurisdictions.
In 2021, Fitch forecasts that this will accelerate as it expects an uptick in government intervention and resource nationalism amid the race to access critical and strategic minerals for the green and digital economy and as domestic political risk rises in the post-covid-19 world.
POLITICS:
Biden Nixes $35 Billion In Fossil Fuel Tax Benefits
Alex Kimani, OilPrice.Com, June 2, 2021
President Biden’s administration has so far proven to be one of the most aggressive in pursuing climate and clean energy targets. After rejoining the Paris Climate Accord in one of his first pieces of business, Biden, in a virtual climate summit with 41 world leaders last month, unveiled an ambitious 10-year Climate Plan that has proposed cutting U.S. greenhouse gas emissions by 50-52% by 2030. That represents a near-doubling of the U.S. commitment of a 26-28% cut under the Obama administration following the Paris Agreement of 2015.
Last week, president Biden proposed a budget that would entrench the nation’s deficits in excess of $1 trillion for the next decade, marking new record highs.
The blueprint ties together three major spending proposals already unveiled by the Biden administration: the $2.3 trillion American Jobs Plan, the $1.8 trillion American Families Plan, and the $1.5 trillion in discretionary spending for fiscal 2022.
In essence, this means that the 2022 budget—combined with mandatory spending programs—would spend $6 trillion, about $300 billion more than current projections for the year, with the extra cash going into health, education, science research, and infrastructure.
Not a bad start until you get into the nitty-gritty of the proposal. In clarification of the infrastructure plan, Biden’s administration now says it seeks to “eliminate tax preferences for fossil fuels,” in addition to spending an additional $14 billion on tackling climate change.
Biden’s budget proposal released Friday has targeted specific tax provisions that benefit the fossil fuel industry, and aims to eliminate measures that will generate $35 billion over the course of a decade.
Tax preferences for fossil fuels
In its latest proposal, the White House get much more specific in its infrastructure plan, saying:
“These oil, gas, and coal tax preferences distort markets by encouraging more investment in the fossil fuel sector than would occur under a more neutral tax system,” as per a Treasury Department document.
Among those benefits, Biden has proposed to cut tax cut benefits for enhanced oil recovery (read: shale oil).
Another targeted benefit is for “intangible” costs like wages, repairs, supplies, and other expenses for oil and gas drilling.
Biden’s proposal also targets a provision that allows oil and gas companies to deduct as much as 15% of the revenue they receive from a well.
As expected, the oil industry has come out charging, arguing that the new proposal would push production overseas.
“Increased taxes on American energy will only undermine economic recovery and job creation, push natural gas and oil investments overseas and lead to less government revenue, not more,” American Petroleum Institute President and CEO Mike Sommers has told The Hill.
On the opposite side of the spectrum, supporters of the proposal hope it will discourage additional oil and gas development.
“This should bring us a little closer to the true cost of actually developing oil and gas and my hope is that it will decelerate the development of new fossil fuel infrastructure, which is so harmful to our planet and to communities,” said Sujatha Bergen, health campaigns director at the Natural Resources Defense Council.
Meanwhile, Autumn Hanna, vice president of Taxpayers for Common Sense, wants to see Biden go even deeper, saying “there are a lot of details missing.”
Biden’s budget is a proposal that reflects the administration’s policy priorities and goals, but Congress will enact its own spending plans.
No Carbon Tax?
To be fair, the likes of Mike Sommers should be grateful that Biden has so far not proposed more radical measures—such as the dreaded carbon tax.
According to energy consultant Wood Mackenzie, we must raise carbon prices dramatically to $160 per ton of CO2 by 2030, up from the current global average of $22, if we hope to successfully combat climate change.
WoodMac analyst Tom Heggarty says that higher CO2 prices could encourage companies to lower their carbon footprint through capturing the carbon and recycling into new products, a potentially “trillion-dollar industry.”Related: New Iran Nuclear Deal May Completely Derail Oil Price Rally
Apart from a dying breed of climate deniers who continue believing that global warming is a hoax, the vast majority of Americans agree that the climate emergency is one of the most pressing issues facing the planet today. A 2020 Pew Research study on views on climate change found that nearly two-thirds say protecting the environment and dealing with global climate change should be top priorities for the president and Congress.
Even more revealing: A good 63% of Americans say that stricter environmental regulations are worth the cost.
So it’s clear the vast majority of Americans are aware of climate change and support actions to mitigate the phenomenon. What is not clear is the best way to go about achieving our climate goals, as outlined in the 2015 Paris Accord.
Technological innovations in sectors such as renewable energy are certainly playing a big role in climate mitigation. But technology itself is not a policy; Subsidies, on the other hand, are a policy. Perhaps governments should subsidize research in climate science and other related technologies. There is also a strong case to be made that policymakers should allow free trade in solar panels, wind turbines, and other renewable energy equipment so as to lower the cost of generating renewable energy for domestic taxpayers.
But many experts are now arguing that the one policy that will move us closest to hitting our climate targets, at a relatively modest economic cost, is to raise the price of emitting CO2 and other greenhouse gases.
The price of carbon can be raised either through a carbon tax or a cap-and-trade, i.e., a system of quantitative emission limits with tradable emission permits.
An overriding theme that emerged from the latest CERAWeek by IHS Markit energy conference convened to discuss, among other things, Strategies for the Energy Transition, Climate & ESG, is that Big Oil considers carbon capture technology as being absolutely necessary for our fight against climate change. Exxon Mobil (NYSE:XOM) and Occidental Petroleum (NYSE:OXY) chiefs have said that the world still needs oil and gas, and governments need to focus on mitigating global warming using technologies such as carbon capture and storage (CCS) instead of lowering oil and gas production.
Suddenly, Biden’s latest proposal appears relatively tame.
CLIMATE CHANGE:
5 things to know about the global race to net zero
Sara Schonhardt, E & E News, June 3, 2021
The concept of net zero is increasingly a global phenomenon. It has risen to the top of climate summit agendas, guided presidential campaigns and offered a worldwide rallying cry against climate change.
The idea gained traction after a 2018 report from the Intergovernmental Panel on Climate Change (IPCC) examined what the world would look like if people stopped releasing more emissions than they sequestered. The answer was tantalizing: It could prevent the worst ecological consequences of global warming.
Many of the world’s biggest emitters responded by setting net-zero targets. It didn’t stop there. A coalition of cities, regions, businesses and investors have also joined a United Nations campaign called the Race to Zero.
U.N. Secretary-General António Guterres has called for a “global coalition” for carbon neutrality. At the same time, critics say net-zero targets are hollow, allow too much dependence on offsets and detract from the urgent action that’s needed to transition to clean energy.
So what does it mean to reach net zero? Which countries have set the strongest targets? And if more don’t, is it possible to keep temperatures from rising past the point of no return?
Here are five things to know about net zero based on a discussion with the World Resources Institute (WRI).
It’s a balance
Net zero means more emissions are removed from the atmosphere than expelled into it.
To achieve that target, human-caused emissions need to be reduced as much as possible — but it’s unlikely they can be stopped entirely. Carbon from sectors like agriculture and aviation will be hard to remove completely.
This is where the “net” comes in.
Whatever emissions remain need to be balanced by carbon removals from natural sinks, such as trees or soils, or emerging technical solutions like direct air capture and storage, said Katie Ross, an associate with WRI’s climate program.
Not all gases are treated equally. Scientific modelling by IPCC considered the cost and difficulty of abating different gases, and it found that carbon dioxide emissions would need to reach zero by 2052 — at the latest. The remaining greenhouse gases need to get there between 2063 and 2068.
Major change is key
Achieving net zero will require “fundamental and unprecedented transformations” across all sectors of the economy, said Ross.
A recent net-zero report from the International Energy Agency illustrates the extent of those shifts. According to its projections, by 2035, sales of gasoline- and diesel-powered cars will need to cease; coal plants without carbon capture will need to be phased out by 2040; and nearly 90% of electricity will need to come from renewables by midcentury.
Significant changes will be needed in the land sector, too, such as halting deforestation and restoring degraded lands. A report by WRI shows that the pace of change needs to be far greater than it is currently, with renewables ramped up six times faster and coal power phased out five times more quickly.
There’s something else. All scenarios for reaching net zero require a lot of carbon removal.
Momentum is growing
Fifty-nine countries representing 54% of global emissions have communicated net-zero targets, according to WRI’s Climate Watch database. That’s different from the U.N.’s calculation, which shows that at least 110 countries have committed to that goal.
Either way, it accounts for a vast majority of global carbon output — but still not enough. IEA says current net-zero pledges cover 70% of global emissions. That’s short of what’s needed to limit worldwide temperature increases to the pathways modeled by IPCC (Climatewire, May 18).
Most of the 59 pledges identified by Climate Watch aim for 2050. Some countries, like Sweden, want to reach net zero earlier. Germany recently moved up its end date from 2050 to 2045. China, the world’s largest current emitter, has set its target for 2060.
About half have put those targets in a policy document, but few have set them into law. Around 35% of global emissions are covered by pledges that are not formally adopted, said Mengpin Ge, with WRI’s climate program.
Momentum for net zero has grown quickly. Before 2020, fewer than 20 countries had set net-zero targets, according to Climate Watch. Bhutan was the first — with a trend-setting 2015 commitment. It is the only country to have already reached net zero and says it will remain there in perpetuity.
There are valid concerns
A growing chorus of critics have raised concerns about the credibility of the target — since reaching net zero will require technologies currently in development and the balancing of carbon sinks, which have limits.
A study published in Nature found that nature-based solutions, such as forest planting, shouldn’t be implemented at the expense of other measures.
Ross of WRI also expressed concerns about political accountability. Because many of the targets are set for 30 years in the future, it raises questions about whether they’re a distraction from the change required now, since the politicians setting them today won’t be responsible for meeting them in 2050.
Robust net-zero pledges should have clear targets and pathways for achieving them, Ross said. They should cover all greenhouse gases and sectors; explain how much of the target is met by domestic emissions reductions; and avoid or limit the use of international carbon offsets, particularly because by midcentury, when most countries will be approaching target deadlines, there will be limits on how many international offsets are available, she said.
While most net-zero pledges cover all greenhouse gases and sectors, very few countries have specified whether they will meet them using international offsets.
“Where the rubber really hits the road is the importance of net-zero targets informing near-term milestones,” Ross said.
Climate goals are attainable
The world has already warmed by more than 1 degree Celsius compared to preindustrial levels, but research shows that rising temperatures can be stopped before reaching 1.5 C.
International finance will be crucial for helping developing countries make the transition to clean energy, but the economics of doing so are making more sense as the costs of solar and wind fall below those of fossil fuels.
Also promising to observers is the range of economies at different stages of development that are setting net-zero targets. They include small island states like the Marshall Islands and Fiji as well as the U.S. and Canada.
Offsets will continue to be problematic, but Ross of WRI said a country’s ability to achieve net zero will depend on how much land is available to sequester carbon and what technologies are available to it. An island state like Singapore, for example, has limited land resources and will be constrained without the use of offsets.
“We’re seeing lots of countries talk about net zero, and some begin to set some concrete goals around it, but there’s a huge range,” said Thomas Hale, public policy professor at Oxford University’s Blavatnick School of Government and co-author of a global assessment of net-zero targets.
“What we need to see is countries begin moving from aspirational or soft commitments to actually putting it into their planning documents and NDCs, into long-term strategies, and ultimately into laws and policies,” he added, referring to a county’s nationally determined contribution under the Paris Agreement.