NEWS OF THE DAY:
‘Beyond Oil’ alliance adds members, but shunned by UK climate summit host
Shadia Nasralla, Kate Abnett, Reuters, November 11, 2021
- Beyond Oil and Gas Alliance aims to end fossil fuel supply
- Alliance has yet to include major oil, gas producers
- Member’s countries seek to raise political pressure
GLASGOW, Nov 11 (Reuters) – A fledgling international alliance to halt new oil and gas drilling added six members on Thursday during the U.N. climate conference, but did not get the support of any major fossil fuel producers or the British government, host of the talks.
The absence of more widespread backing reflects the difficulty of imposing blanket policies to end production of fossil fuels even as countries agree that the emissions from burning them must be greatly reduced.
France, Greenland, Ireland, Sweden, Wales and the Canadian province Quebec joined the Beyond Oil and Gas Alliance, formed by Denmark and Costa Rica in September.
None of the members, which pledge to stop handing out drilling permits and eventually to ban oil and gas production in their territories, has substantial production.
Describing itself as a group of “first movers”, BOGA is seeking to ratchet up pressure to end fossil fuel supply and said it hoped the additions to its alliance would open the door to other nations to join.
“It is our ambition that this will be the beginning of the end of oil and gas,” Danish climate minister Dan Jorgensen told Reuters. “We hope that this will inspire others.”
He told reporters he was “in close dialogue” with Scotland, where the U.N. talks are taking place, and in whose waters most of Britain’s oil and gas is concentrated. Britain’s central government is in charge of oil and gas permits.
BOGA does not ban activities such as oil refining, or consumption of oil and gas products, focusing only on upstream production.
Among the major oil and gas producers conspicuous by their absence were Russia, Saudi Arabia, and the United States.
U.S. President Joe Biden’s administration is seeking to claim leadership on combating climate change, but legal wrangling has prevented it so far from achieving Biden’s expressed ambition to end new oil and gas leasing on federal lands.
The United States, the world’s biggest oil and gas producer, and has a target to decarbonise its economy by 2050.
Britain has no plans to stop domestic oil and gas production but is revamping the rules around licensing to reduce emissions associated with upstream production.
“While the UK’s reliance on fossil fuels continues to fall, there will continue to be ongoing but diminishing need for oil and gas over the coming years,” a government spokesperson said.
Many developing countries in Africa, the Middle East and Latin America have said they need the revenue from future oil and gas extraction to lift living standards and pay for their eventual transition to cleaner energy sources.
Greenland, Ireland, France and Denmark have announced legislation to stop handing out new oil and gas licences and the latter two to end extraction of the fuels on their territories by 2040 and 2050, respectively.
Countries can become second-tier BOGA members if they have taken some steps to limit oil and gas output, such as ending public financing of it abroad, or reforming fossil fuel subsidies.
The International Energy Agency has said there should be no investments in new fossil fuel supply projects anywhere, if the world is to limit the global temperature rise to 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial levels. read more
Scientists say keeping to that limit, a target of the international Paris climate deal of 2015, would avoid the worst effects of climate change, but current government climate policies would fall far short the target.
Negotiators at the COP26 summit in Glasgow hope to find ways to keep the 1.5C target within reach.
ExxonMobil pledges $15b for greenhouse gas emissions reduction
Naomi Klinge, Upstream, November 9, 2021
ExxonMobil has said it is on track to meet its 2025 emissions reduction targets by the end of this year — four years earlier than planned — and has vowed to ramp up investments to further cut emissions.
The US supermajor said it is now working on more aggressive reduction plans, which will be accelerated from an increase in the company’s investment into its low-carbon initiatives.
Finding a carbon price
The first project announced by the low-carbon solutions business is a carbon capture and storage (CCS) hub at the Houston Ship Channel.
By 2040, the hub plans to capture and store 100 million tonnes per annum of carbon dioxide from a variety of facilities in the area. Eleven companies have expressed interest in participating in the hub.
During a recent congressional inquiry that put oil and gas executives on the stand, ExxonMobil chief executive Darren Woods said the price on carbon required for the hub is $100 per tonne but may differ project to project.
Earlier this year, a lobbyist for ExxonMobil told Greenpeace activists pretending to be headhunters that the company’s ostensible support for a carbon tax was merely a talking point, but that a policy change in the US would be a “nonstarter”.
While ExxonMobil did not initially announce what carbon price would be needed for its Houston project, it publicly supported national carbon pricing, and later clarified that there is some market hesitancy to a national carbon tax.
But other carbon-pricing options focus on market-based mechanisms, and ExxonMobil said scaling up low-carbon programmes will give the market a better idea of the costs, and therefore preferred prices of carbon.
Last week, ExxonMobil signed a memorandum of understanding with national oil company Pertamina to evaluate the potential for the large-scale deployment of low-carbon technologies in Indonesia.
Under the MoU, the companies will identify potential subsurface CO2 storage locations and will examine the feasibility of transporting CO2 in Southeast Asia.(Copyright)
- Petronas and ExxonMobil shooting for CO2 solutions in Malaysia
- ExxonMobil weighs up Guyana drilling options as Georgetown hungers for new licensing round
- ExxonMobil books $1 billion from divestment of Black Sea offshore project in Romania
- ExxonMobil, Pertamina move on CCS in Indonesia
EU’s Climate Chief Signals Natural Gas Will Be Included in Green Transition
John Ainer, Ewa Krukowska, Bloomberg, November 11, 2021
European Union climate chief Frans Timmermans gave the clearest signal yet that the bloc is considering a role for natural gas under its green rulebook for investments, setting up a clash with some national governments.
Timmermans said that an exit from coal for some member states, like Poland, would require an “intermediary stage” using natural gas. It would be subject to strict conditions, including pre-fitting pipelines so that they can carry hydrogen and de-carbonized gases after the transition from natural gas.
“We will have to also invest in natural gas infrastructure,” Timmermans said in a press conference at the COP26 climate conference in Glasgow, Scotland. “As long as we do it with an eye of only doing this for a period, then I think this is a justified investment.”
Environmental groups have criticized the potential inclusion of natural gas in the EU’s so-called taxonomy, the set of rules determining whether certain investments can be classified as green. They say that it would result in the bloc avoiding its responsibility to keep global warming below 1.5-degrees Celsius, and that it may open the door to also include nuclear energy.
The EU has touted its green regulation as the “gold standard” globally. While the original plan left out nuclear and gas, some countries such as France are pushing for the inclusion of those sources amid a spike in energy prices.
This sets the scene for a potentially fierce fight between member states. In a joint statement issued during COP26, environment ministers from Germany, Denmark, Portugal, Austria, and Luxembourg warned against classifying nuclear power as green in the EU’s sustainable investment rulebook.
“It’s a bad decision to put nuclear inside European taxonomy,” Portugal Environment Minister Joao Pedro Matos Fernandes said. “It’s not safe, it’s not sustainable and it costs a lot of money. There are many other options, especially wind and solar.”
Mining Tycoon Races to Build World’s First Ammonia-Fueled Cargo Ship
Jack Wittels, Bloomberg, November 10, 2021
Mining billionaire Andrew Forrest said he aims to create the world’s first ammonia-powered ship before the end of next year, part of an ambitious plan to run all his company’s fleet on a carbon-free version of the fuel.
“This is just the first,” Forrest, chairman and founder of Fortescue Metals Group said in an interview. “We have about 100 ships on the water, and we’ll be converting all our own ships over to green ammonia at the earliest possible opportunity, well within this decade.”
The ship itself is tiny, with a transportation capacity that’s less than a 100th of the size of some of the world’s largest bulk commodity carriers. Ammonia is considered a cleaner, possible replacement in the future for the oil-derived marine fuels that almost exclusively power shipping today.
The announcement came on transport day of COP26, the ongoing climate summit being held in Glasgow.
Peak climate hysteria at COP26
George F. Will, The Washington Post, November 11, 2021
Peak oil production has been postponed, again. Peak hysteria about climate change, however, might have been passed.
In 1914, the government said U.S. oil reserves would be exhausted by 1924. In 1939, it said the world’s reserves would last 13 years. Then oil fueled a global war and the post-war economic boom, and in 1951 the government said the world had 13 years of remaining reserves. In 1970, the world’s proven reserves were estimated to be 612 billion barrels. More than 767 billion were pumped by 2006, when proven reserves were 1.2 trillion. In 1977, President Jimmy Carter predicted the exhaustion of the world’s proven reserves “by the end of the next decade.” By 2009, the world had consumed three times more than 1977’s proven 1.2 trillion barrels, and today’s proven reserves are above 1.5 trillion.
All this disappointed those who desire scarcity of everything but government, which they think can engineer comprehensive social change by becoming the allocator of scarce resources. Such people filled the Glasgow, Scotland, streets outside the climate summit chanting “System change not climate change.”
The 33-year-old student who told the New York Times “We need a whole system change” was correct: The “system” – industrialism, enterprise, markets, economic development that expands the global middle class, economic growth that funds the social safety nets of developed nations with aging populations – is incompatible with “keep 1.5 alive.” Meaning the goal of limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit).
This limitation will not happen. This nonoccurrence will be tolerable.
Since 2010, the New York Times reports, the great majority of the $1.1 trillion of private equity energy sector investments have been in fossil fuels, just 12 percent in renewables. The stock prices of major U.S. coal-mining companies rose at least 145 percent in the past 12 months. The amount of coal used this year to generate U.S. electricity will be more than 20 percent above last year’s amount. This might be a short-term phenomenon, produced by declining oil prices that cut shale operations and natural gas production. But nothing is more expectable than the regular occurrence of unexpected things, such as the awkward decline of Northern Europe’s power-generating winds as Glasgow drew near. (Fossil fuel-generated electricity kept the lights on for the enlightened.)
The Energy Information Administration projects that fossil fuels, which were 84.2 percent of global energy consumption in 2010, will decline only to 70 percent in 2050. India, which no later than six years hence will have the world’s largest population, and which already is the world’s third-largest source of greenhouse gases, said at Glasgow it will try to achieve net zero carbon emissions – by 2070.
India, with one-thirtieth the U.S per capita gross domestic product, cannot be faulted for barely disguising its Scarlett O’Hara stance regarding climate change: “I’ll think about that tomorrow.” Consider all that was unimaginable about 2021 in 1972: the transformation to a service economy, air conditioning – an adaptation to difficult climate – that enabled the Sun Belt to boom, etc. Now, imagine how remote 2021 will seem in 2070, when the world certainly will have unimagined worries of currently unknowable natures.
The Hoover Institution’s John H. Cochrane, a.k.a. the Grumpy Economist, notes that even with extreme assumptions about increased global temperature and negligible adaptation measures, it is difficult to postulate a cost larger than 5 percent of global GDP by 2100. Even assuming meager 2 percent growth, U.S. GDP in 2100 will be 400 percent larger than now. At 3 percent compounded growth, there will be 1,000 percent more GDP than now. From 1940 to 2000, Cochrane reminds, there was 3.8 percent compound annual growth, and GDP increased 10-fold.
Cochrane says: Suppose, implausibly, that Miami might be six feet below sea level in 2100. Amsterdam has been such for centuries. It built dikes. By hand. There is, he notes, “great disdain for adaptation.” Of course: The disdainers worry that adaptation might obviate the need for radical government micromanagement of life.
Cost-benefit analyses illuminate choices and budget constraints. “Without numbers,” Cochrane warns, “we will follow fashion. Today it’s windmills, solar panels, and electric cars. Yesterday it was high-speed trains. The day before it was corn ethanol and switchgrass.”
Tomorrow? There will be other prospective salvations. But, says Cochrane: “Notice how our policy-makers never tell us how much they think each new policy will reduce year 2100 global temperature or raise year 2100 GDP. The reason is that the numbers are tiny.” The gigantic numbers concern the resources we will squander until we follow numbers rather than fashions.
From the Washington Examiner, Daily on Energy:
WHAT THE US-CHINA AGREEMENT IS MISSING: The new agreement between the U.S. and China to collaborate on curbing climate change by enhancing action reducing emissions this decade lacks concrete pledges, emissions targets, or timeframes.
“There isn’t much new here,” Jane Nakano, a senior fellow in the Energy Security & Climate Change Program at the Center for Strategic and International Studies, told Josh.
Biden administration climate envoy John Kerry failed to persuade China to include a commitment to set a specific year this decade by which Beijing will stop increasing its world-leading emissions.
In a press conference in Glasgow touting the agreement, Kerry said he hopes it “will become evident” to China that it can begin reducing its emissions “much sooner” than its current pledge of before 2030. Kerry even said he believes China’s emissions might have peaked already; a projection analysts disagree with.
China’s emissions are expected to increase this year, Nakano said, given the recent resurgence of coal production and power generation the government ordered in response to an electricity shortage.
China, meanwhile, is resisting a push by COP26 organizers for countries to agree to phase out coal worldwide and speed up their plans to submit new, stronger emissions targets, Bloomberg reports this morning.