Today’s Key Takeaways: Tesla recalls almost all electric vehicles on the road. Fossil fuel holdings in largest ESG fund rise after stricter rules enforced. AK natural gas shortage drawing attention. Northwest Alaska needs Ambler. Reality of COP29 “transition away from fossil fuels” depends on investors, consumers and national governments.
NEWS OF THE DAY:
TESLA NEWS – NEARLY ALL MODELS ON THE ROAD IN U.S. RECALLED: Tesla issued a recall for nearly all its electric vehicles on the road because of the Autopilot failing in some circumstances. The recall, disclosed in a letter made public by the National Highway Traffic Safety Administration, affects Tesla models Y, S, 3, and X – more than 2 million vehicles – and will be remedied via a software update that will limit use of the autopilot feature.
The NHTSA, which performed an analysis of 956 crashes in which the Autopilot was supposed to be in use, said that there was an increased risk of crashes in situations in which Autosteer is engaged and the driver isn’t paying attention, or when the driver thinks the feature is engaged and it isn’t.
It’s a notable setback in light of CEO Elon Musk’s statements that Tesla’s advancements in autonomous driving set it apart.
More bad news for Tesla: The carmaker said today that it will lose the entire $7,500 tax credit for Model 3 RWD & Long Range vehicles delivered after Dec. 31. The stricter criteria for the subsidies under the Inflation Reduction Act are set to kick in with the new year.
OIL:
World’s Biggest ESG Fund Class Adds Oil and Cuts Green Exposure
Frances Schwarzkopf, Bloomberg, December 12, 2023
- Fossil fuel holdings rose after stricter ESG rules enforced
- Development coincides with Big Oil dominating COP28 talks
The world’s biggest ESG fund class, which sits on roughly $5 trillion of client assets, has raised its exposure to the oil and gas sector by about two-thirds since stricter regulations were enforced 2 1/2 years ago.
Funds that are registered as “promoting” environmental, social and good governance metrics had about 2.3% of their holdings in fossil fuel assets at the end of the third quarter, up from 1.4% right after Europe introduced a framework for ESG investing in early 2021, according to data provided by Morningstar Inc. Exposure to renewable energy assets slipped to 0.3% of total holdings from 0.4% in the same period, the data show.
GAS:
Alaska’s looming natural gas crisis draws growing attention from mayors, state regulators
Alex DeMarban, Anchorage Daily News, December 12, 2023
Alaska’s looming natural gas shortage is getting increased attention this week along with more talk about negative impacts that might occur as gas supply falls in the coming years.
On Tuesday, Anchorage Mayor Dave Bronson announced that he formed a coalition of Southcentral Alaska mayors to study solutions to the potential shortage.
And in its meeting early Wednesday, the Regulatory Commission of Alaska plans to take steps to seek more disclosure from utilities about the issue, Commissioner Robert Pickett said by phone on Tuesday.
His discussion item on the commission’s agenda mentions “forced outages, curtailment of services and rolling blackouts.” A blackout is a full interruption of power in a given area. A brownout is a partial, temporary reduction in power.
Julie Hasquet, spokeswoman for Chugach Electric Association, the state’s largest electric utility, said it is not looking at brownouts or blackouts.
“Chugach Electric is not talking about brownouts or blackouts as a result of diminishing gas,” Hasquet said. “That’s why we’re pursuing options for the future, to include importing LNG (or liquified natural gas) and renewable and clean energy projects.”
A spokeswoman with the Matanuska Electric Association said they are not discussing brownouts or blackouts, as long as Hilcorp meets its contractual obligations, something they’ve assured they’ll do.
MINING:
OPINION: Ambler project reminds Alaska freedom is indivisible
Bethany Marcum, Anchorage Daily News, December 12, 2023
The thing about any individual freedom is that it relies on all the others. The right to private property depends on the right to self-defense, which depends on the right to vote, which depends on free speech, and on and on. It’s a lesson of history Alaskans must heed this month as the federal Bureau of Land Management fields public comments about the environmental impact of the proposed Ambler Access Project.
The Biden administration will soon decide whether to greenlight the project, which would build a 211-mile road from the Dalton Highway to the south bank of the Ambler River, finally giving Alaska access to the vast resources embedded in the Ambler Mining District.
To call the project a necessity is an understatement.
It is a necessity to Northwest Alaska, without question. The economic life of the entire region is at stake. The Red Dog zinc mine, currently the area’s principal economic engine, will be depleted by 2031. That’s an eight-year doomsday clock already ticking down. Hundreds of jobs, tens of millions of dollars in annual wages, and more than $100 million in local revenue sharing with Alaskan native corporations are at stake. bureau
The project is a national and global necessity, too. Many of the minerals embedded in the Ambler mining district are copper and rare-earth deposits. The Biden administration says we need an energy transition, but that can’t be accomplished without these minerals.
POLITICS:
COP28 Ends With Deal on Transition Away From Fossil Fuels
J.A. Dlouhy, J. Shankleman, L. Millan, Bloomberg/Rigzone, December 13, 2023
The COP28 climate talks in Dubai ended in a deal that saw a commitment to transition away from all fossil fuels for the first time.
The president of this year’s UN-sponsored summit, the UAE’s Sultan Al Jaber, brokered an agreement that was strong enough for the US and European Union on the need to dramatically curb fossil fuel use while keeping Saudi Arabia and other oil producers on board.
The agreement calls for countries to quickly shift energy systems away from fossil fuels in a just and orderly fashion, qualifications that helped convince the skeptics. Under the deal, countries also are called to contribute to a global transition effort — rather than being outright compelled to make that shift on their own.
“Together we have confronted the realities and sent the world in the right direction,” said Al Jaber, who’s also chief executive officer of Abu Dhabi National Oil Co. He brought the gavel down to confirm the deal on Wednesday, a day later than scheduled. It was met with applause and cheers by delegates.
While the outcome falls short of the phase out most countries wanted, it does break new ground: No previous COP text has mentioned moving away from oil and gas, the fuels that have underpinned the global economy for decades.
How quickly that becomes a reality won’t be decided by the diplomatic horsetrading that clinched today’s deal, but by investors, consumers, and national governments. After a pledge to phase down coal in Glasgow two years ago, consumption has continued to rise, and the world remains very unlikely to limit warming to the Paris Agreement’s target of 1.5C.