Tesla challenger Faraday Future wants to go from 0 to $20B in sales by selling lots of $180K electric cars

Brian Sozzi
·Editor-at-Large
Updated Mon, February 1, 2021

Faraday Future aims to put its checkered past in the rearview mirror, and park some money in the bank accounts of investors over the next five years.

The electric vehicle maker said on Jan. 28 it will do a special purpose acquisition company (aka “SPAC”) deal with blank check company Property Solutions Acquisition Corp.

A total of $1 billion in gross proceeds will be provided to the combined company in a deal expected to close in the second quarter. Faraday Future will count Chinese auto manufacturer Geely as a minority investor, and a partner in making electric vehicles (EVs) in the critical Chinese market.

The funds will be used to help Faraday Future bring its $180,000 electric car — dubbed the FF91 Futurist — to market by the first quarter of 2022, according to an investor presentation on its website. The $100,000 FF91 will follow with an expected launch date in the fourth quarter of that year.

Four other electric vehicle models from Faraday (including a mass market vehicle that starts at $45,000) are planned to launch from the second quarter of 2023 to the second quarter of 2025. If all goes according to plan, Faraday forecasts going from no revenue and a $227 EBITDA (earnings before interest, taxes and depreciation) loss in 2021 to a whopping $21.4 billion in sales, and $2.3 billion in EBITDA by 2025.

In fact, Faraday Future’s CEO Carsten Breitfeld says those estimates may be conservative.

“I personally think we can do more than that. But we start with low volumes, scale by 2025 and given how the markets are developing right now it’s absolutely realistic,” Breitfeld told Yahoo Finance Live.

Faraday Future's product roadmap.

Breitfeld joined Faraday Future in late 2019. He co-founded EV maker Byton, and is the former project manager for the development of BMW’s i8.

To be sure, Faraday’s financial outlook is lofty for at least two reasons.

First is the intense competition in the U.S. electric vehicle market. While Tesla (TSLA) is currently dominating the U.S. EV space, Ford (F) and General Motors (GM) are on the cusp of taking it to the champ with credible offerings of their own.

Meanwhile, the likes of Nio, Xpeng and Li Auto are cleaning up in the Chinese EV market at the moment, and have a clear head-start when compared to Faraday Future.

Secondarily, Faraday Future has a checkered background. The company was founded in 2014 by closely watched Chinese businessman Jia Yueting, who planned to challenge Tesla in the U.S. EV market.

Yet the company never wound up getting cars to market — and instead blew through investor cash amid various operational missteps. Yueting filed for personal bankruptcy in 2019 to deal with a reported $3.6 billion in debt, an issue that has since been resolved. He is now listed as chief product and user officer on Faraday Future’s investor presentation.

“When I came in 16 months ago, we had to do some changes in the company. We focused it more on execution,” Bretfield explained to Yahoo Finance.

“We had to rework the governance and resolve some personnel issues. But now this is all behind us and we are looking forward,” he added.

Exxon’s New Carbon Capture Plan Looks a Lot Like Its Old One
Kevin Crowley
Updated Mon, February 1, 2021


(Bloomberg) -- Exxon Mobil Corp. pledged to spend $3 billion on low-emission technologies through 2025 to address investor concerns over its environmental record, unveiling a plan that comprises several projects that have already been announced.

Exxon said Monday in a statement it will “commercialize” its low-carbon technology initiatives through a new venture called ExxonMobil Low Carbon Solutions.

The announcement, made on the eve of Exxon’s fourth-quarter earnings report, comes as the Irving, Texas-based company faces intense pressure from environmentalists and investors for not moving fast enough on climate change and also for delivering weak financial performance compared with peers. Shareholder D.E. Shaw & Co. is in talks about adding new directors to Exxon’s board, according to people familiar with the matter, and activist investor Engine No. 1 last week revealed its own slate of nomination.

Exxon has sought to fend off some of the criticism with targets to reduce methane leaks and emissions intensity. Its latest response is an increased focus on carbon capture, a technology favored by many other large oil and gas producers.

But investors looking for a meaningful strategic shift may be disappointed. The planned investments announced Tuesday represent less than 5% of the oil giant’s capital budget over the period.

Furthermore, several of the projects touted by Exxon aren’t new. The carbon capture efforts in the Netherlands, Belgium and Qatar are already being developed with partners. Exxon said it has moved ahead with permitting for the expansion of its LaBarge facility in Wyoming, which would be the company’s biggest carbon capture project, but that project is still in doubt after being put on hold.

Government support is needed to make carbon capture more commercially viable, Exxon also said in the statement. The “opportunities can become more commercially attractive through government policy, including the United States tax credit 45Q, which ExxonMobil supports, and other supportive policies in the European Union, Canada and Singapore,” it said.


Bloomberg Green reported in December that oil majors have been unwilling to invest heavily in carbon capture without extra government support or regulation. LaBarge is a case in point: Exxon had planned to build one of the world’s largest carbon capture operations at the natural gas facility, at a cost of $260 million, after working on it for years. Instead the project was paused as crude prices plunged due to Covid-19. A few months later, Exxon announced plans to expand crude operations off the coast of Guyana at a cost $9 billion -- a cost 35 times higher.

Exxon says LaBarge already captures 7 million tons of carbon dioxide a year, nearly 80% of the company’s total. The project captures very little carbon dioxide from the air, however. Most of the CO2 is pumped up from the ground as a byproduct of natural gas and helium, processed and then sold to nearby crude operators to enhance their oil recovery.

Exxon’s new plan also mentions its venture with Danbury, Connecticut-based FuelCell. Over the past five years, the companies have been working on carbonate fuel-cell technology that captures carbon dioxide spewed from industrial operations and uses it in a chemical process to generate electricity. In 2019, when FuelCell was nearly insolvent, the oil giant threw it a $10 million lifeline for the right to use its technology.

FuelCell hasn’t posted an annual profit since 1997, yet its stock has soared in value since mid-November as interest in hydrogen and fuel cells in general has boomed.

(Updates with projects in fifth paragraph)

©2021 Bloomberg L.P.

Originally published Mon, February 1, 2021, 7:42 PM

Shell targets power trading and hydrogen in climate drive

The company also announced plans to cut its workforce by up to 9,000 employees, or about 10%, by August this year as part of a broad cost-cutting review known as Project Reshape.

Ron Bousso
Updated Mon, February 1, 2021

FILE PHOTO: A Shell oil and gas sign is pictured near Nowshera


By Ron Bousso

LONDON (Reuters) - Royal Dutch Shell is betting on its expertise in power trading and rapid growth in hydrogen and biofuels markets as it shifts away from oil, rather than joining rivals in a scramble for renewable power assets, company sources said.

Shell and its European rivals are seeking new business models to reduce their dependency on fossil fuels and appeal to investors concerned about the long-term outlook for an industry under intense pressure to slash greenhouse gas emissions.

Shell will present its strategy on Feb. 11 and unlike Total and BP the company will focus more on becoming an intermediary between clean power producers and customers than investing billions in renewable projects, the sources said, giving previously unreported details of the plan.

Shell announced in October it would increase its spending on low-carbon energy to 25% of overall capital expenditure by 2025 and the sources said that would translate into more than $5 billion a year, up from $1.5 billion to $2 billion now.

The Anglo-Dutch company will, however, keep its overall oil and gas output largely stable for the next decade to help fund its energy transition, though gas is set to become a bigger part of the mix, the sources told Reuters.

A Shell spokeswoman declined to comment on the details of the company's new strategy ahead of its February announcements. BP, meanwhile, plans to slash its oil output by 40% by 2030 and has swept aside its core oil and gas exploration team to focus on renewables, with spending on low-carbon energy set to rise 10-fold to $5 billion over the coming decade.

While Europe's big oil firms are all rolling out strategies to survive in a low-carbon world, investors and analysts remain sceptical about their ability to transform centuries-old business models and triumph in already crowded power markets.

POWER TRADING

Central to Shell's plans are its experience in trading all types of energy from oil to natural gas to electricity and its vast retail network, which has more outlets than either of the world's two biggest food chains, Subway and McDonald's.

Shell is already the world's leading energy trader, an activity it calls "marketing". It trades about 13 million barrels of oil a day, or 13% of global demand before the pandemic, using one of the biggest fleets of tankers.

It is the top trader of liquefied natural gas (LNG), buys and sells power, biofuels, chemicals and carbon credits, and now aims to use its pole position to snare a large chunk of the fast-growing low-carbon power market.

"The future of energy is particularly bright for our marketing and our customer-facing businesses where we already have scale. So we will accelerate a growth plan which is already underway," Chief Executive Ben van Beurden said in October.

Trading has been key for oil majors for decades, allowing them to use their global operations to quickly take advantage of changes in supply and demand. Shell's trading helped it avoid its first-ever quarterly loss in the second quarter of 2020 even as consumption plummeted due to the coronavirus epidemic.

Nevertheless, analysts say Shell's trading division will face a challenge because it is heavily reliant at the moment on sales of refined fossil fuel products, which also account for a large proportion of its carbon emissions.

"Shell faces difficult choices on how to balance its trading cash flow that leverages oil products while still having carbon-intensive operations," JP Morgan analyst Christyan Malek said. "But because of their scale, customer base and distribution, they can be much more flexible."

HYDROGEN HUBS

At the same time, Shell plans to boost its consumer base by expanding its electricity supply business for homes and its network of electric vehicle charging points, as well as signing long-term corporate power purchase agreements (PPA).

Shell already has 45,000 retail outlets worldwide, far more than its European rivals, and it is planning to add another 10,000 by 2025.

As a major biofuel producer, Shell wants to ramp up its production of fuel made from plants and waste as an alternative source of energy for transportation, the sources said.

Shell's is also betting on future growth in hydrogen, the sources said. While still a niche market, hydrogen has attracted huge interest in recent months as a clean alternative to natural gas for heavy industry and transportation.

Hydrogen, and so-called green hydrogen which is made solely with renewable power, comes with high costs and infrastructure challenges though Shell is already investing.

Its push will centre initially on Europe, where it is developing a hydrogen hub in Hamburg, Germany, and it is one of several firms developing a hub in Rotterdam in the Netherlands. It is also looking to expand into the United States and Asia.

The U.S. state of California, for example, is backing the rollout of hydrogen fuel cell vehicles to help achieve its climate goals while countries such South Korea and Japan are betting heavily on hydrogen as an alternative fuel.

The sources did not give any targets for increases in Shell's production of either hydrogen or biofuels.

Like Shell, rivals including BP, Total, Italy's Eni and Spain's Repsol also plan to expand in hydrogen and biofuels markets, as well as add electric vehicle charging points to generate new revenue away from oil.

COMPETITIVE EDGE?

However, Shell won't chase the same ambitious targets some of its European rivals have for adding wind and solar generation capacity and will prioritise trading and selling electricity instead, the sources said.

Shell is wary about investing heavily in renewable projects where it won't have any particular competitive edge over other oil companies or utilities, such as Spain's Iberdrola and Denmark's Orsted that are already becoming significant green energy producers.

Shell will still expand its renewable capacity, especially in offshore wind farms where it believes it has an advantage after years of operating offshore oilfields, but the business will centre on profitability rather than size, the sources said.

"Shell will have some volumetric targets but that is not the focus," a senior company official told Reuters. "A single focus on the volume of renewable energy generating capacity could be dangerous and lead us to some bad deals."

BP wants to boost its renewable generation capacity 20 fold by 2030 while Total is aiming to have 100 gigawatts (GW) of gross renewable energy generation capacity by 2030.

Investors are concerned, however, that they may struggle to hit their profit projections by investing in costly renewable projects which typically have lower rates of return than oil.

Shell provided some details on its new strategy on Oct. 29, including a plan to narrow its oil and gas production to nine hubs, cut the number of refineries to six from 14 and boost its marketing business.

The company also announced plans to cut its workforce by up to 9,000 employees, or about 10%, by August this year as part of a broad cost-cutting review known as Project Reshape.

(Reporting by Ron Bousso; Editing by Simon Webb, Veronica Brown and David Clarke)
Originally published Mon, February 1, 2021, 10:22 AM

THIRD WORLD USA
Poverty levels rose after jobless benefits expired: Study

Poverty increased most in states with poorer unemployment benefit systems

Denitsa Tsekova
·Reporter
Updated Mon, February 1, 2021

Poverty rose at the fastest rate in nearly 60 years in 2020, but the increases were uneven across states.

While some states saw a huge increase, others kept poverty rates at pre-pandemic levels — largely because they provided unemployment benefits to a higher share of their populations.

Poverty grew by 1% last year, meaning 8 million more people entered poverty. In states where at least 35% of jobless workers received unemployment benefits, poverty rose by 0.8%. But in states that doled out benefits to less than 35% of unemployed residents, poverty increased by 1.3% in 2020, a study from the University of Chicago and Notre Dame found.

“It tends to be mostly southern states, and some Plains states, and a few other states that have unemployment insurance systems that are particularly stingy,” Bruce Meyer, a University of Chicago economist and author of the analysis, told Yahoo Money. “In the states where the unemployment insurance systems have not been very good at reaching those out of work, poverty has risen more.”

In the first quarter of 2020, there were 24 states that had less than 35% of their jobless workers on unemployment insurance, including Florida, Arizona, and Mississippi, which have the three lowest recipiency rates of 8.9%, 11.1%, and 12.5%, respectively.

On the other end of the spectrum, 26 states and Washington, D.C., have rates 35% or higher, including Minnesota, North Dakota, and Massachusetts, which have the highest rates of 73.1%, 77.1%, and 80%, respectively.

During the pandemic workers who didn't qualify for regular Unemployment Insurance (UI) could have applied for Pandemic Unemployment Assistance (PUA), a program available to self-employed workers, contractors, and others that is available until March 14. The analysis did not include those on PUA.

In states where the recipiency rate of unemployment benefits is above 35%, poverty rose in 2020 by 0.8% while states that are below that recipiency rate saw a 1.3% increase.( Graphic: David Foster/Yahoo Finance)

With millions of jobs lost in the pandemic and over 18 million people still relying on unemployment benefits, jobless Americans needed that support during the pandemic.

“The principal hardship wreaked by the pandemic, at least on people's incomes, has been job loss,” Meyers said. “In states where the unemployment insurance systems have not been very good about reaching those out of work, poverty has risen more.”

Poverty in the U.S. actually declined at the beginning of the coronavirus pandemic, thanks to the extra $600 in weekly unemployment benefits paid through the summer as well as the $1,200 stimulus checks that were distributed in the spring.

Poverty dropped to 9.3% in May, down from its 10.8% pre-pandemic level, but it increased to 11.8% in December as government support decreased or lapsed altogether. The December poverty numbers don't include the effects of the $900 billion stimulus package, which included $600 stimulus checks, an extra $300 in weekly jobless benefits, and the extension of key unemployment programs.

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

Analysis: GameStop saga may provide early test of Biden administration ethics pledges

Trevor Hunnicutt and David Lawder
Updated Mon., February 1, 2021

FILE PHOTO: Yellen holds a news conference in Washington


By Trevor Hunnicutt and David Lawder

WASHINGTON (Reuters) - Arguably the last thing new U.S. Treasury Secretary Janet Yellen wants to take up during her first days in office is a financial market imbroglio involving one of her last private sector business relationships.

But as hedge fund Citadel LLC emerges as one of the key actors in the trading frenzy last week involving GameStop Corp - and questions arise over whether the activity exposes deeper risks for the financial system - Yellen could find herself pulled into the fray.

Citadel, together with another fund, extended a $2.75 billion financial lifeline to hedge fund Melvin Capital Management, which had suffered heavy losses by betting against GameStop. Citadel Securities, a separate trading arm, pays Robinhood to execute its users' trades, a practice that has drawn some concern from investor advocates.

The White House has said Yellen is among a handful of officials monitoring the fracas. As head of the Financial Stability Oversight Council (FSOC), Yellen is broadly responsible for the health of the entire trading and investing system.

A sticking point for her to clear, though, may be $700,000 in speaking fees she accepted from Citadel, as recently as last fall. Yellen has pledged not to involve herself in an official capacity in matters involving the firm without first seeking a written waiver from Treasury ethics officials.

Ethics experts say that pledge is not a hard wall for her to scale should the need arise. After ethics violations dogged the Trump administration, some groups are urging Yellen to pre-emptively seek a waiver, and set a precedent.

"This example is a good test of Biden's ethics executive order and the transparency that follows, but it also highlights the revolving door and why restrictions are necessary to protect the integrity of government missions, policies, and programs," said Scott Amey, general counsel at Project On Government Oversight, a nonpartisan government watchdog group.

The Treasury secretary normally does not get involved in matters involving individual stocks and concentrates instead on broad systemic risks to the financial system, which the department monitors through daily market surveillance.

"Secretary Yellen of course will abide by her ethics agreement and ethics pledge in all instances," Treasury spokesman Calvin Mitchell said. He did not indicate how she would approach the specific Citadel issue.

SPEAKING FEES

Like many former government officials, including https://www.reuters.com/article/usa-fed-bernanke/bernanke-enjoys-fruits-of-free-market-with-first-post-fed-speech-idUSL1N0M11FA20140305 her Federal Reserve chair predecessor Ben Bernanke, Yellen took speaking fees from private companies after she left government.

Yellen filed an ethics agreement https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/18A4D129DD5675888525864F0081071C/$FILE/Yellen,%20Janet%20L.%20final%20EA.pdf 

with the Office of Government Ethics in December saying she would "seek written authorization to participate personally and substantially in any particular matter" related to any companies that paid her speaking fees prior to joining President Joe Biden's administration - for a year after her last speech to each firm.

Yellen spoke several times at Citadel, most recently on an Oct. 27 webinar, according to the filing. She was paid at least $700,000 in speaking fees by the Citadel while she was in private practice at the Brookings Institution think tank, another disclosure 

https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/C22B882BBDC40AC78525864F008106AB/$FILE/Yellen,%20Janet%20L.%20AMENDEDfinal%20278.pdf shows.

These speaking engagements, which also include financial heavyweights such as Barclays, Citigroup, and Goldman Sachs, are not likely to impact her ability to give Biden broad advice on the stock trading matter, government ethics experts say.

"If this becomes a situation where regulators are considering new rulemaking with Citadel as the poster-child, that's different," said Lisa Gilbert, executive vice president of Public Citizen, a group pushing for stronger financial regulation.

SYSTEMIC RISK

A major question is whether volatility from Gamestop and similar retail investor revolts against short-squeezes boil over into a systemic event that sends markets crashing broadly.

Typically a matter involving an individual stock or equity market trading and brokerages would fall to the Securities and Exchange Commission, which has said it is examining the matter.

On Friday, SEC commissioners including acting chair Allison Herren Lee said in a statement https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29 they were closely monitoring the extreme volatility in certain stocks and warned market participants to "uphold their obligations to protect investors and to identify and pursue potential wrongdoing."

Extreme stock price volatility "has the potential to expose investors to rapid and severe losses and undermine market confidence," they added.

Biden's choice to run the SEC, Gary Gensler, awaits Senate hearings.

The FSOC that Yellen chairs is charged with identifying risks and responding to emerging threats to financial stability. It includes the heads of the Federal Reserve and other major U.S. financial regulatory agencies.

It has the authority to designate non-bank financial institutions for consolidated supervision to minimize risk to the financial system or to break up firms that pose a "grave threat."

Distress in individual companies rarely rises to such a level. Treasury maintains daily market surveillance, but it is looking for orderly market functioning and broad systemic threats.

Thus far, the situation looks contained, Barclays said in a note to clients on Friday. Short positions in stocks favored on the Reddit social media site total about $40 billion, which would limit the pain to a handful of hedge funds.

"The ongoing short squeeze in a few stocks by retail investors has raised concerns of a broader contagion. While we believe there is more pain to come, we remain optimistic that it is likely to remain localized," Barclays said.

YELLEN HAS FEW WALL STREET TIES

Unlike many previous Treasury secretaries, Yellen has only worked as an academic and for the government, not at a bank or trading firm.

Richard Painter, a former top ethics lawyer to President George W. Bush, said many Treasury secretaries had a great deal more entanglements that would raise conflict of interest concerns than Yellen.

Henry Paulson, a Republican who was U.S. Treasury secretary during the 2008 financial meltdown, sold half a billion dollars in stock from his former employer Goldman Sachs Group Inc to satisfy ethics concerns. Paulson later forced Goldman and other major banks to take billions of dollars in taxpayer capital at the depth of the financial crisis.

Steven Mnuchin, Yellen's immediate predecessor, pledged https://www.reuters.com/article/us-usa-trump-mnuchin/trumps-treasury-nominee-mnuchin-pledges-to-divest-assets-worth-millions-idUSKBN14V297 after he was nominated to divest $94 million in investments, and refrain from any decisions involving CIT Group until August 2018, when he was due a payment of $5 million from the company.

"Yellen is going to be about as clean as you can get on this stuff," Painter said.

(This story refiles to add in paragraph 3 full company name for Citadel entity that executes Robinhood trades)

(Reporting by Trevor Hunnicutt and David Lawder; Additional reporting by Nandita Bose; Editing by Heather Timmons, Dan Burns, Edward Tobin and Diane Craft)

Originally published Mon., February 1, 2021, 4:02 a.m.

India budget ignores farmers' plight, protest leaders say

Mayank Bhardwaj
Updated Mon., February 1, 2021, 

Security personnel stand guard next to barricades outside the Parliament 

where annual budget is being presented in New Delhi

By Mayank Bhardwaj

NEW DELHI (Reuters) - Indian farmers angry at agricultural reforms said on Monday the annual budget failed to address their concerns, with no mention of raising incomes or generating jobs, and vowed to press on with their protests.

Tens of thousands of farmers have camped out on the outskirts of New Delhi in protest against the laws introduced by Prime Minister Narendra Modi's government in September.

The government says the new laws will open up opportunities for farmers. Protesters say the laws benefit large private buyers at the expense of growers.

In her annual budget, Finance Minister Nirmala Sitharaman raised healthcare spending by 135% and lifted caps on foreigners investing in the insurance sector.

She raised the target of agricultural credit to 16.5 trillion rupees ($225.74 billion) from 15 trillion rupees and said the government would raise 300 billion rupees in the next fiscal year with a new tax to boost agricultural infrastructure.

"Forget about these targets," protest leader Kirankumar Visa said. "There is not even one measure to either raise farmers' income or generate jobs in the countryside. She didn't talk about her government's promise of doubling farmers' income by 2022."

Police and paramilitary forces dug ditches and spread razor wire across main roads into New Delhi to prevent farmers entering the capital as Sitharaman prepared to deliver the annual budget in parliament.

Internet and messaging services were blocked in several neighbourhoods.

"Although the government has tried to isolate farmers by using barricades, razor wire and shutting down the internet, we are determined to carry out our peaceful protests," said Rakesh Tikait, president of one of the largest farmers' unions, the Bharti Kisan Union.

A farmers' procession turned violent on Republic Day on Jan. 26, when some protesters broke away from a rally of tractors to storm the historic Red Fort complex.

($1 = 73.09 rupees)

(Reporting by Mayank Bhardwaj; additional reporting by Devjyot Ghoshal; Editing by Nick Macfie)
Originally published Sun., January 31, 2021, 11:17 p.m.

Once united in support of Biden, environmentalists and unions clash over pipelines

Laura Sanicola and Nia Williams 
Reuters
Updated Sun., January 31, 2021

FILE PHOTO: Nathan Phillips marches with other protesters out of the main opposition camp against the Dakota Access oil pipeline near Cannon Ball

By Laura Sanicola and Nia Williams

NEW YORK (Reuters) - Environmentalists and labor unions that threw their support behind U.S. President Joseph Biden now find themselves on the opposite sides of a battle over the construction of big pipeline projects between Canada and the United States.

The United States is the world's largest producer of oil and gas. Biden's administration aims to transition the U.S. economy towards net-zero carbon emissions by 2050, and his initial moves towards that goal included cancelling a permit for the Keystone XL crude oil pipeline (KXL) and reducing oil-and-gas leasing.

The reaction from Biden's supporters, however, illustrates the challenge of managing the impact of the energy transition on different communities.

While climate activists celebrated KXL's demise, labor unions, reeling from the global oil downturn, have mobilized to keep ongoing projects from being derailed.

Mike Knisely, secretary and treasurer of the Ohio State Building and Construction Trades Council, which endorsed Biden, said he has been leaning on state officials to talk to the president about how his rapid-fire climate announcements are affecting his union membership's support.

"I tell them they need to get back with Biden and ask if this all really has to happen on Day Two of the new administration," Knisely said. "I just get so frustrated that there's almost no common ground (on pipelines) with the environmental community."

Climate groups have had successes in recent years, persuading large investors to reduce holdings in fossil fuel industries, as well as lobbying banks to shun investment in Arctic drilling.

But Biden was endorsed by a number of key labor unions that work on pipelines, refineries and other energy installations, including the International Teamsters and North America's Building Trades. Those unions celebrated the victory of a pro-labor president, but opposed the Keystone move, and are lining up against threats to the other pipelines.

Environmentalists see Biden as an ally in the battle to wean the United States off fossil fuels and stymie imports of carbon-intensive heavy crude from Canada's vast oil sands. They are intensifying efforts to shut three other pipelines: Enbridge Inc's Line 3 and Line 5, and Energy Transfer's Dakota Access Pipeline (DAPL).

Unlike KXL, these three lines are all currently in service. The Enbridge lines deliver crude oil and fuels from Canada, while DAPL sends crude from North Dakota to the Midwest and Gulf Coast.

Legal and regulatory battles threaten all three pipelines.

A White House spokesman said the Biden administration is reviewing a court decision last week that upheld orders for a lengthy environmental review for DAPL. He declined to comment on the two Enbridge pipelines.

Enbridge is more than doubling Line 3's capacity to 760,000 barrels per day (bpd), a project supported by Minnesota's Governor Tim Walz, a Democrat.

To be sure, not all unions backed Biden. Phillip Wallace, business representative for Pipeliners Union 798 in Minnesota, said his union, which supported former President Donald Trump, was concerned the new administration may try to stop the project.

"We have got full construction going right now in Minnesota and I am worried that this new administration could throw a monkey wrench in our gears," Wallace said. His union is planning on rallies to support construction once COVID-19 restrictions ease.

On Friday, environmental protesters halted construction on a Line 3 work site in Minnesota by locking themselves to each other between barrels of concrete, one of several disruptions so far this year that has resulted in dozens of arrests.

"If KXL can't pass the climate test for Biden, Line 3 certainly can't," said Winona LaDuke, executive director of Honor the Earth, an indigenous environmental group.

Unions are also ramping up support for Enbridge's Line 5 pipeline, which runs under the Straits of Mackinac, where Lakes Huron and Michigan meet, and ships 540,000 bpd of light crude and propane. Activists want to decommission the 68-year-old line, while Enbridge is trying to upgrade it to protect the straits.

Enbridge last week received a state permit to build a tunnel to house the line; it still needs permission from the U.S. Army Corps of Engineers.

In November, Michigan Governor Gretchen Whitmer revoked the pipeline's easement in the straits and ordered the pipeline shut. The United Steelworkers, who endorsed Biden, have been trying to drum up support with legislators to keep the line running.

"The USW strongly supports both the Line 5 replacement segment project and the continued operation of the existing pipeline," it told Reuters in a statement. "Hundreds of USW members and their communities depend on the good, family-sustaining jobs Line 5 supports."

(Reporting by Nia Wiliams in Calgary and Laura Sanicola in New York; Additional reporting by Valerie Volcovici in Washington and Devika Krishna Kumar in New York; Editing by Marguerita Choy)

Originally published Sun., January 31, 2021, 11:06 p.m.

Climate change disasters in B.C. likely to increase if industrial logging continues unchecked: report

Updated Mon., February 1, 2021

A report commissioned by Sierra Club B.C. says keeping healthy, mature forests safe from industrial logging will help protect the province from catastrophic flooding, wildfires, droughts and heat waves caused by climate change.

The report, released publicly Monday morning and authored by Peter Wood, who holds a PhD in Forestry at the University of Toronto, is the latest push from conservationists to spur the province into swift action in providing increased protection for what remains of B.C.'s biodiverse forests.

"Old intact forests act as a moderating influence on the landscape, supporting ecosystem function and resilience, and lowering risk to surrounding communities," Wood said in a release from Sierra Club B.C.

Wood has built a career working on the impacts of sustainable forest management certification in Canada.
TJ Watt

His report, entitled Intact Forests, Safe Communities, says at least nine of 15 climate risks assessed by the province in 2019 — such as increased wildfires, drought and landslides — are influenced by industrial logging.

It says the province has not considered the ways that logging could worsen catastrophic events from climate change, presenting "a major blind spot that could undermine the effectiveness of the province's response to global heating."

According to the report, forests with large old trees have dense canopies, thick tough bark, extensive roots systems and space between them, which helps prevent the spread of forest fires, landslides, and flooding — along with protecting water sources.

Mya Van Woudenberg/Sierra Club BC

It also says that dead branches and slash materials left in clear-cuts with no canopy can act as fuel for wildfires and that second-growth forests aren't as resilient against wildfires due to the thinner bark on trees and proximity to one another.

"B.C. has entered a new era of climate emergency that is marked by risks to communities, and forest management must be adapted to mitigate these," says the report.

The province is in the middle of a process to better understand climate-related risks in B.C. and develop appropriate measures to address them.

The Preliminary Strategic Climate Risk Assessment for British Columbia has few mentions of logging in it, other than to say the industry, which accounts for around $9 billion in annual revenue, could face significant losses due to climate change.

The province is considering changes to how logging is done following an independent report released in September that outlined 14 recommendations, including short- to long-term goals for revitalizing the forestry sector involving old growth trees over a 36-month timeline.

The new report from the Sierra Club of B.C. calls for the province to move faster in meeting those recommendations, including working in lock-step with First Nations to overhaul forest management, which it says will address the climate risks from logging.

Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs, supports the findings in the Sierra Club report.

He said in a statement that the climate crisis impacts all British Columbians, but particularly marginalized people, including First Nations, who may have few resources to respond to climate disasters.

The union is also calling on the province to move quickly to implement the 14 recommendations from the old growth strategic review, which include involving Indigenous people in decisions related to forestry management.

"As they not only have a vested interest in protecting and stewarding the land that they have maintained spiritual and cultural ties to since time immemorial, but many Nations depend on forestry for their livelihoods and must be able to help guide B.C.'s transition to more sustainable and conservation-based practices," he said.
TJ Watt/Ancient Forest Alliance

The Ministry of Forests, Lands, Natural Resource Operations and Rural Development said in a statement it welcomes the report and is considering its findings.

It said the province is focused on science-based reforestation to ensure sustainable forest management and address climate change. The ministry said 300 million trees were planted in 2020 and it plans to plant 300 million this year.

The ministry also said it is working with First Nations, industry stakeholders and communities "to ensure practices and management in B.C.'s forest sector continue to evolve and reflect the values British Columbians hold today and what they want for the future."

March 11 will mark six months since the old growth strategic review was released and the province deferred the logging of old growth trees for two years in nine different areas across the province as a first step.

Originally published Mon., February 1, 2021

CBC

Changing vehicles to save the planet

Updated Mon., February 1, 2021

The bottom line for the future is to develop new methods to preserve our environment, slow down global change, reduce carbon emissions and drastically reduce our greenhouse gases. Years of scientific studies and research point the finger at humans for being the main contributor, causing greenhouse gas emissions to skyrocket over the past few decades. The pollutants at the top of the list are burning fossil fuels like oil and gas, whether used for electricity, heat or transportation. To preserve our environment and the atmosphere, companies have shifted their focus on reducing their footprint and coming up with new technology that steers away from the need for fossil fuels.

The race was on as researchers and inventors create solutions and develop technology to become a sustainable society. Different ways to reduce greenhouse gases are renewable resources such as wind, geothermal heat, the sun and nuclear power. According to Environment Canada, each of these natural resources can provide electricity, heat and is responsible for approximately 17 percent of gas emissions. The largest emissions producer comes from our transportation at 22 percent, as they burn gasoline and diesel. Six harmful gasses escape through the exhaust pipe of a vehicle and pollute the atmosphere. As of 2019, there were 35,742,412 vehicles on the road in Canada, so combine that with the various gases each one produces, and it’s no wonder it ranks the highest for greenhouse gas emissions. As vehicles are the worst pollutants, vehicle manufacturers have been developing eco-friendly vehicles. The latest one to hit the market is the electric vehicle.

The new electric vehicles come with a hefty price tag of around $42,000 to $60,000, albeit you do get rebates for being environmentally friendly. Ford, Chev, BMW, Nissan and Honda are a few familiar names that have jumped on board to design their own electric vehicle version. There are many options to consider besides the hefty price. Each EV model has its own set maximum speed limit, travel distance and charging time to consider. On average, no matter which EV you choose, it will get you to Edmonton, but it won’t get you all the way home without having to stop and recharge. They may be efficient on the road, environmentally safe, but if there’s nowhere to recharge, you won’t be leaving town anytime soon.

Organizations such as the Community Energy Association (CEA), headquartered in British Columbia, are hoping to change that within the next year. The non-profit has been the facilitator with the B.C. government and other partners to have municipalities host EV charging stations. Regional governments have had great success in setting up a network of stations throughout B.C. As the facilitating organization, Community Energy Association collaborated with several Advisory Committees in southern Alberta, which prompted the Peaks' success to Prairies EV network of charging stations. Acting as a facilitator for the project aims to have all municipalities support recharging stations set along the major traffic routes and tourist destination regions. To make travelling in Alberta possible for electric vehicle owners, stations would need to be set up in the municipalities along highway 43, 40,16, 11, 22, and along highway 1 down south and over to B.C. The estimated budget for Alberta is $3 million. Significant financial contributions have been requested from the Government of Alberta, Natural Resources Canada, Federation of Canadian Municipalities and private industry. To date, both the City of Grande Prairie and the MD of Greenview have approached the CEA and discussions are underway regarding the latest project, EVenture Northwest. The aim is to break ground later this year for the northern part of Alberta with the construction of charging station sites completed by the summer of 2022. The long-term plan is to have all municipalities and through-routes set up with one or more EV charging stations to enable electric vehicle owners to travel throughout Alberta.

As more charging stations for electric vehicles are installed, the feasibility of buying a car may be more appealing and predicted to cost near the same as a regular vehicle in the next five years. Researchers for clean energy and advanced transport are predicting by 2030, more than 28 percent of vehicles sold will be electric and reach 80 percent in the next 30 years. Global analysts have added that by 2050 all vehicles must be electric to save our environment and the global crisis; otherwise, it will be too late. Those interested to learn more about the charging station projects can visit https://acceleratekootnays.caor https://peakstopairies.ca

Vicki Winger, 

Local Journalism Initiative Reporter, Whitecourt Press

Originally published Mon., February 1, 2021, .

ITS ALL ABOUT MINING
How growing global electric car sales could be a boon for Alberta

Updated Mon., February 1, 2021

It may sound paradoxical, but electric cars could soon be an economic driver for oil-rich Alberta.

Global sales of electric vehicles grew by 43 per cent in 2020, according to numbers recently released by sales database EV Volumes. A key component of their batteries is lithium, a mineral found in Alberta — if you know where to look.

"There's a lot of opportunities for lithium in Alberta," said Roy Eccles, a senior consultant with Apex Geoscience in Edmonton, in an interview with CBC's Radio Active.

Eccles says exploration in the last decade by companies of the Devonian-aged oil and gas reservoirs — between 1,600 and 3,330 metres below the surface — has confirmed the accompanying salt-water brine is enriched with lithium.

The Leduc Formation, the source of Alberta's first big oil boom, is also a rich lithium deposit. There are about 10.6 million tonnes of lithium carbonate equivalent identified in the province, according to the Canadian Lithium Association, and the potential could be even higher.

LISTEN | Geologist explains the potential for lithium in Alberta:

London-based commodity researcher and market consultant Roskill released an August report that notes demand will grow for the mineral at least until 2030.

Eccles says current major lithium extraction areas in arid climates near the equator use evaporation pods that can take months to years and leave a large environmental footprint.

That's not possible in Canada's climate, he said. Instead, companies are attempting to develop new technology that will rapidly extract lithium from the brine.

CBC

Existing infrastructure

The Alberta advantage is that it can use already existing oil operations and technologies.

"It's essentially using infrastructure that's already in place," Eccles said, adding that petroleum production is measured in short timelines, pumping up hydrocarbons before reinjecting the brine back underground.

There is also an environmental feature to the process, according to University of Alberta associate professor of earth sciences Daniel Alessi.

"They're taking something that's already being produced, essentially, and adding value to that with very little carbon footprint," Alessi said.

"It's exciting because there's certainly a green aspect to it."

Alessi said it would also be advantageous for Canada to have its own internal source of lithium.

The limiting factor is technology to convert the brine into a usable product.

"We're at the point right now where the technology is, I would say, holding back the commercialization of the process," he said. Alessi added that some key players have reached the pilot stage with aims to reach an industrial scale process in two to five years.

Audrey Neveu/Radio-Canada

Canadian companies developing processes

In December, Vancouver-based Lithium Standard announced it had successfully completed a proof-of-concept to extract lithium from a brine in Arkansas.

There are a number of companies in Alberta developing their own processes, including Summit Nanotech.

The Calgary-based startup delayed plans for testing in 2020 due to the pandemic but further developed its process, which CEO Amanda Hall says resulted in improved operating expenses and reduced end-to-end greenhouse gas emissions.

"The opportunity to grow a sector that supports the future of renewable energy storage and electromobility while in parallel continuing efforts to create a low carbon barrel of oil sets Alberta apart in the energy landscape," she said in an email.

"We are excited to be a part of this."

Hall said a pilot is on schedule to be commissioned in Chile this year.

Reducing greenhouse gas output

Calgary-based E3 Metals was founded in 2016 and hopes to run a pilot of its own lithium extraction process by the end of this year. It aims to eventually drill its own project into the Leduc Formation.

CEO Chris Doornbos said the eventual operation's greenhouse gas output will be mitigated by using electricity from its own gas-fired power plant, creating a net zero emission for the product.

He also said that compared to mining a more traditional lithium operation, the model uses only about three per cent of the land use and will not consume fresh water or leave tailings.

"When you look at it from that perspective, producing lithium in Alberta is much more environmentally responsible than most other production of lithium in the world."

Doornbos said lithium extraction presents an opportunity for expertise already present in Alberta's energy sector to be put to a new use.

"At the end of the day, it's still putting Albertans back to work — it's nothing we don't know how to do or haven't done before."

E3 Metals' current roadmap aims for commercial operations by 2024.

Originally published Mon., February 1, 2021, 7:00 a.m.