Today’s Key Takeaways: Trading reliance on oil for reliance on lithium batteries. Big oil silent no more. Oregon’s gas ban. “Key challenge for the climate community is to affirmatively articulate a socially positive vision for mineral extraction.” AK House majority on carbon credits.
NEWS OF THE DAY:
‘Lithium Batteries Are the New Oil,’ According to Elon Musk — Here Are 2 Stocks to Take Advantage
Yahoo!Finance, February 8, 2023
While oil and its refined derivatives are still the mainstay of our energy economy, their prices are rising – in fact, high prices for gasoline and diesel are major drivers of the current high rates of inflation, and are partly responsible for the strong push to promote electric vehicles (EVs).
But switching to EVs doesn’t end our reliance on energy. It will just make us trade one issue – reliance on oil – for another – reliance on lithium batteries. In this case, as Elon Musk has said, “Lithium batteries are the new oil.”
Canaccord analyst George Gianarikas seems to agree with Musk, noting: “We see multiple parallels between the communications revolution of the late 1990s to 2000s and today’s energy systems revolution. As batteries are the new crude, we see the pioneering, invention, and exploration of new battery technologies as modern wildcatting – high-reward endeavors but not without risk.”
OIL:
Climate Crisis Tide Turns For Big Oil
Irina Slav, OilPrice.Com, February 8, 2023
Constant accusations of knowing the effects of their products on the environment and lawsuits have become constant companions of oil companies in the last few years. The successes that activists have had—such as Friends of the Earth’s court win that obliged Shell to cut its emissions by 45 percent—have been celebrated loudly and globally.
Naturally, Big Oil tends to be the target of choice because of its size, but with governments in Europe and much of North America pledging their total support for an energy transition, the whole industry has become a target. And has been quiet about it all, probably on the assumption that trying to defend itself would make things worse. Until recently.
Perhaps the first highly public retaliatory shot came in 2021 when the chief executive of Liberty Energy made a YouTube video attacking North Face for its refusal to sell branded apparel to an oil company because of what it did. In the video, Chris Wright accused North Face of hypocrisy, noting the fact that the synthetic fibers they used in their products were a product of the oil industry.
The video made quite a splash at the time, with North Face’s defense coming down to an admission that associating with an oil company would make it look bad and a promise to make all its products recyclable by 2030.
GAS:
Oregon sees first-ever gas ban
David Iaconangelo, Energywire, February 8, 2023
The gas prohibition in Eugene put Oregon in line with its deep-blue West Coast neighbors, where similar restrictions on fossil fuel heat are widespread.
Eugene became the first city in Oregon to prohibit fossil fuels in new residences this week, marking the spread of gas bans across the West Coast.
Enacted by a 5-3 vote on the Eugene City Council on Monday, the ban is expected to go into effect in June and outlaws fossil fuel hookups in new single-family homes and apartments three stories or smaller. The plan will make electricity the de facto energy source for space heat, water heat and cooking in the city.
In an email, Eugene Mayor Lucy Vinis said she signed the ordinance Tuesday morning, adding that “burning fossil fuels in homes poses an imminent threat to our health and climate.”
“It’s clear we cannot let this source of pollution grow unchecked,” she said.
The move follows a protracted battle between national environmental groups and the state’s largest gas utility, NW Natural, which called the gas restrictions meaningless for emission reductions. After the vote, the utility said it was evaluating next steps.
Eugene’s ban also comes as the use of gas in buildings is under national scrutiny. The Consumer Product Safety Commission (CPSC) has begun gathering information that could eventually result in new regulations on gas stoves’ emissions. Comments last year from CPSC Commissioner Richard Trumka Jr. that a prohibition on gas stoves might be a positive step for public health became a lightning rod for conservatives (E&E Daily, Jan. 26).
The ban in Eugene, a 175,000-person city located about 110 miles south of Portland, puts Oregon in line with its deep-blue West Coast neighbors, where similar restrictions on fossil fuel heat are widespread. Several dozen cities in California, for example, have banned fossil fuels in new buildings dating back to 2019, when the city of Berkeley enacted the nation’s first such ordinance.
Washington state officials also approved changes last year that position electric heat pumps as the first choice for many new homes and commercial buildings, while allowing gas for backup.
Backers of Eugene’s policy say it could serve as a model for other parts of Oregon. Officials in 800,000-resident Multnomah County — where most of Portland is located — have passed a nonbinding resolution to stop using fossil fuels in new city-owned buildings, and the city of Milwaukie has made a similar pledge for new privately owned properties.
“I am proud of our City’s leadership in paving the way for local governments across Oregon to take this step in transitioning new homes to clean energy,” said Vinis.
Gas interests dig in
On the East Coast, cities like New York and Washington have also passed laws that put an end to fossil fuel heat for most new buildings.
On the other side of the issue, 20 U.S. states controlled by conservative legislatures have made it illegal for cities to restrict fossil fuel use in buildings.
Eugene’s ban was one of the most bitterly contested in recent memory, however.
Consultants for NW Natural, which serves some 2.5 million gas customers across its Pacific Northwest territories, sent letters to the City Council criticizing the idea that indoor gas appliances could have adverse effects on human health — a concept that many air experts say is established in scientific literature (Greenwire, Jan. 18).
NW Natural also pushed back against gas restrictions in Multnomah County, where the utility sent a paid consultant to undermine studies linking gas stoves to health hazards, according to a January article in The New York Times.
In letters to state officials and the public, the company and its allies in real estate trades rejected the notion that eliminating fossil fuels in new buildings would contribute meaningfully to climate action.
Reports cited by environmentalists and public health advocates suggest otherwise. According to a 2021 analysis, eliminating natural gas from new residences and commercial buildings in Eugene would, over the next 15 years, slash the equivalent of 34,000 gas cars’ annual carbon emissions, Eugene officials said in a letter to the City Council last year.
Spokespeople for NW Natural did not rule out a legal challenge against the ban.
In an email, company spokesperson David Roy wrote that the Eugene vote “eliminates energy choice for new homes” despite company-commissioned polls finding that 70 percent of voters in Eugene opposed bans on new gas hookups.
“By being unwilling to put this issue out for a public vote, the council also ignored the thousands of residents, workers and community leaders that registered their opposition in writing and in public comment,” he wrote.
The company has pushed for natural gas on multiple fronts. NW Natural is one of three Oregon utilities that sued the state over its cap-and-invest program, for example.
Its stance has made it a foe of national green groups, which applauded the passage of Eugene’s ban yesterday.
Dylan Plummer, a senior campaign representative with the Sierra Club, credited local leaders for taking “a bold step to achieve [Eugene’s] climate targets and protect the public from air pollution.”
Backers of the plan say they expect the city to expand the restrictions to commercial buildings as well, while sparking similar legislation across the state.
“We’re doing this in stages. We’ll be focusing on Commercial and industrial next,” said Emily Semple, the Eugene city councilor who sponsored the motion to vote on the ban, in an email to E&E News.
MINING:
There Won’t Be More Electric Vehicles Without More Mining
Seaver Wong, The Breakthrough Institute, February 8, 2023
Here’s how to make both work for the environment—and society.
In the future, how many electric cars will roll down our roads? This is an unanswerable question, and not just because the future is hard to predict but also because any prediction is dependent on an answer to a separate question: How many electric cars should we want on our roads in the first place?
As the recent “More Mobility and Less Mining” report, authored by Providence College Professor Thea Riofrancos and fellow scholars at UC Davis, points out, the automobile is intertwined with the climate, health, and social outcomes. While EVs may eliminate tailpipe emissions, they nevertheless interact with urban design, pedestrian safety, and the socioeconomics of mobility in ways that aren’t necessarily beneficial. The report focuses in particular on the upstream mining required to produce a vehicle, the harms that mining inflicts upon local people and the environment, and the ongoing push to increase mining globally for EV minerals.
To start their calculations, Riofrancos and her co-authors estimated future demand for mined lithium with various scenarios for the U.S. transportation system. They calculate that up to 66% of total 2020-2050 lithium demand for U.S. passenger cars could be eliminated by reducing car ownership, improving battery recycling, and shifting to smaller EV batteries. The report articulates a coherent mechanism for change: reduce mining needs by lowering car dependence in wealthy countries and mobilize local and international stakeholders to hold the mining sector accountable for environmental and social harms in lithium mining regions, including Latin America, Portugal, and the American West.
Such recommendations are crucial, and this report adds important context and data to conversations about electric vehicles that have often remained far too conceptual. Yet the study’s findings on the potential extent of lithium savings rely on aggressive assumptions. Upper-bound reductions in future lithium demand require national urban transformation that shifts a full 30-50% of the American population from low-density suburban to medium-density environments within 30 years, while also cutting the size of the prevailing EV battery by half.
The “More Mobility and Less Mining” report thus warrants some pushback on two points. First, by overestimating the near-term rate at which transportation and urban systems can transform, the researchers underestimate near-term lithium demand. In other words, demand-reduction measures that may take a decade or more to manifest will not alleviate supply-side shortages in the 2020s. Second, the report’s condemnation of mining as an inherently socially harmful sector may build intolerance toward EV mineral production rather than promote improved accountability, potentially exacerbating bottlenecks and increasing the cost and time required for global EV adoption.
POLITICS:
AK House Majority prepares to analyze and discuss Carbon Credit initiatives.
(Juneau) – February 9, 2023. As committees begin to discuss bills on carbon capture methods to potentially generate revenue for the state, members of the House Majority Caucus are taking steps to better understand all aspects of the process.
“As my colleagues and I review Governor Dunleavy’s carbon capture proposals, we will use the State Constitution and the long-term well-being of Alaskans as a guide.” Stated LB&A Chair, Rep. Ben Carpenter. “The Alaska Legislature has an obligation to maximize Alaska’s resources, and we will carefully consider future economic growth and resource development opportunities against any short-term gains accordingly. The Legislative Budget & Audit Committee has a responsibility to assist the legislature with a detailed analysis of the proposals and will do so by securing appropriate carbon management policy consultancy. Given the complicated nature of the carbon capture process, it is the duty of the LB&A Committee to empower the legislature with subject matter expertise to answer those questions.”
Rep Carpenter further commented: “I have received carbon policy feedback from concerned Alaskans and would also like to make clear that while not a feature of Governor Dunleavy’s current proposals, I oppose any legislation that taxes businesses for carbon generation that would pass on costs to consumers. I also oppose any effort to assess a tax on an individual or family’s carbon footprint.”
Rep. Tom McKay (Chair) House Resources Committee stated: “The state of Alaska needs more revenue and tackling this problem is a primary goal. Carbon offset projects may just be part of the solution. However, we owe it to the citizens of our state to provide due diligence and explore the effects of the Governor’s proposals.”
The Carbon Credit initiative, HB 50, will be discussed in the House Resources committee on Friday, February 10th, 2023, at 1 p.m.