Friday, January 07, 2022

Fusion energy is a reason to be excited about the future

It’s been a long road, but recent advances mean we’re closing in on a game-changing technology.

Fusion energy is perhaps the longest of long shots. To build a fusion reactor is essentially to create an artificial star. Scientists have been studying the physics of fusion for a century and working to harness the process for decades. Yet almost every time researchers make an advance, the goal posts seem to recede even farther in the distance.

Still, the enormous potential of fusion makes it hard to ignore. It’s a technology that could safely provide an immense and steady torrent of electricity, harnessing abundant fuel made from seawater to ignite the same reaction that powers the sun. It would produce no greenhouse gases and minimal waste compared to conventional energy sources.

With global average temperatures rising and energy demands growing, the quest for fusion is timelier than ever: It could help solve both these problems at the same time. But despite its promise, fusion is often treated as a scientific curiosity rather than a must-try moonshot — an actual, world-changing solution to a massive problem.

The latest episode of Unexplainable, Vox’s podcast about unsolved mysteries in science, asks scientists about their decades-long pursuit of a star in a bottle. They talk about their recent progress and why fusion energy remains such a challenge. And they make the case for not only continuing fusion research, but aggressively expanding and investing in it — even if it won’t light up the power grid anytime soon.


With some of the most powerful machines ever built, scientists are trying to refine delicate, subatomic mechanics to achieve a pivotal milestone: getting more energy out of a fusion reaction than they put in. Researchers say they are closer than ever.

Fusion is way more powerful than any other energy source we have

Nuclear fission is what happens when big atoms like uranium and plutonium split apart and release energy. These reactions powered the very first atomic bombs, and today they power conventional nuclear reactors.

Fusion is even more potent. It’s what happens when the nuclei of small atoms stick together, fusing to create a new element and releasing energy. The most common form is two hydrogen atoms fusing to create helium.

The reason that fusion generates so much energy is that the new element weighs a smidgen less than the sum of its parts. That tiny bit of lost matter is converted into energy according to Albert Einstein’s famous formula, E = mc2. “E” stands for energy and “m” stands for mass.

The last part of the formula is “c,” a constant that measures the speed of light — 300,000 kilometers per second, which is then squared. So there’s an enormous multiplier for matter that’s converted into energy, making fusion an extraordinarily powerful reaction.

These basics are well understood, and researchers are confident that it’s possible to harness it in a useful way, but so far, it’s been elusive.

“It’s a weird thing, because we absolutely know that the fundamental theory works. We’ve seen it demonstrated,” said Carolyn Kuranz, a plasma physicist at the University of Michigan. “But trying to do it in a lab has provided us a lot of challenges.”

For a demonstration, one only has to look up at the sun during the day (but not directly, because you’ll hurt your eyes). Even from 93 million miles away, our nearest star generates enough energy to heat up the Earth through the vacuum of space.

Your friendly neighborhood fusion reactor.
 Getty Images

But the sun has an advantage that we don’t have here on Earth: It is very, very big. One of the difficulties with fusion is that atomic nuclei — the positively charged cores of atoms — normally repel each other. To overcome that repulsion and spark fusion, you have to get the atoms moving really fast in a confined space, which makes collisions more likely.

A star like the sun, which is about 333,000 times the mass of Earth, generates gravity that accelerates atoms toward its center — heating them up, confining them, and igniting fusion. The fusion reactions then provide the energy to speed up other atomic nuclei and trigger even more fusion reactions.

What makes fusion energy so tricky

Imitating the sun on Earth is a tall order. Humans have been able to trigger fusion, but in ways that are uncontrolled, like in thermonuclear weapons (sometimes called hydrogen bombs). Fusion has also been demonstrated in laboratories, but under conditions that consume far more energy than the reaction produces. The reaction generally requires creating a high-energy state of matter known as plasma, which has quirks and behaviors that scientists are still trying to understand.

To make fusion useful, scientists need to trigger it in a controlled way that yields far more energy than they put in. That energy can then be used to boil water, spin a turbine, or generate electricity. Teams around the world are studying different ways to accomplish this, but the approaches tend to fall into two broad categories.

One involves using magnets to contain the plasma. This is the approach used by ITER, the world’s largest fusion project, currently under construction in southern France.

The other category involves confining the fusion fuel and compressing it in a tiny space with the aid of lasers. This is the approach used by the National Ignition Facility (NIF) at Lawrence Livermore National Laboratory in California.

The National Ignition Facility at Lawrence Livermore National Laboratory uses 192 lasers converging
 on a fuel pellet to trigger fusion reactions. 
David Butow/Corbis via Getty Images

Replicating a star requires doing this research at massive scales, so fusion experiments often involve the most powerful scientific instruments ever built. ITER’s central solenoid, for example, can generate a magnetic force strong enough to hoist an aircraft carrier 6 feet out of the water.

Building hardware to withstand these extreme conditions is its own scientific and engineering challenge. Managing such massive experiments has also been a struggle. ITER started with an initial cost estimate of 6.6 billion euros, which has since more than tripled. It began construction in 2007 and its first experiments are set to begin in 2025.

An upside to the intricacy of fusion reactions is that it is almost impossible to cause a runaway reaction or meltdown of the sort that have devastated fission power plants like Chernobyl. If a fusion reactor is disrupted, the reaction rapidly fizzles out. In addition, the main “waste” product of hydrogen fusion is helium, an inert gas. The process can induce some reactor materials to become radioactive, but the radioactivity is much lower, and the quantity of hazardous waste is far smaller, compared to conventional nuclear power plants. So nuclear fusion energy could become one of the safest sources of electricity.

For policymakers, investing in an expensive research project that may not yield fruit for decades, if at all, is a tough sell. Scientific progress doesn’t always keep up with political timelines: A politician who greenlights a fusion project might not even live to see it become a viable energy source — so they certainly won’t be able to brag about their success by the time the next election rolls around.

In the United States, funding for fusion research has been erratic over the years and far below the levels government analysts say is needed to make the technology a reality. The US Department of Energy currently spends about $500 million on fusion per year, compared to almost $1 billion on fossil fuel energy and $2.7 billion on renewables. Investment in fusion seems even tinier next to other major programs like NASA ($23 billion) or the military ($700 billion).

So from its basic physics to government budgets, fusion energy has a lot working against it.

Fusion energy should be treated as a solution, not just an experiment

Working in fusion’s favor, however, are scientists and engineers who think it’s not just possible, but inevitable.

“I’m a true believer. I do think we can solve this problem,” said Troy Carter, a plasma physicist at the University of California Los Angeles. “It will take time, but the real issue is getting the resources brought to bear on these issues.”

Investors are also getting in the game, placing billion-dollar bets on private startup companies developing their own fusion strategies.

The journey toward fusion has yielded benefits for other fields, particularly in plasma physics, which is used extensively in manufacturing semiconductors for electronics. “Plasma processing is one of the things that make your iPhones possible,” said Kathryn McCarthy, a fusion researcher at Oak Ridge National Laboratory.

And despite the hurdles, there have been some real advances. Researchers at NIF reported last summer that they achieved their best results yet — 1.3 megajoules of output from 1.9 megajoules of input — putting them closer than ever to energy-positive fusion. “We’re on the threshold of ignition,” said Tammy Ma, a plasma physicist at NIF.

To break out of its rut, fusion will need to be more than a science experiment. Just as space exploration is more than astronomy, fusion is much more than physics. It should be a leading tool in the fight against the world’s most urgent problems, from climate change to lifting people out of poverty.

Increasing energy access is closely linked to improving health, economic growth, and social stability. Yet close to a billion people still don’t have electricity and many more only have intermittent power, so there is an urgent humanitarian need for more energy.

At the same time, the window for limiting climate change is slamming shut, and electricity and heat production remain the dominant sources of heat-trapping gases in the atmosphere. To meet one of the goals of the Paris climate agreement — limiting warming to less than 1.5 degrees Celsius this century — the world needs to cut greenhouse gas emissions by half or more by 2030, according to the Intergovernmental Panel on Climate Change. Many of the world’s largest greenhouse gas emitters are also aiming to zero out their contributions to climate change by the middle of the century. Making such drastic cuts in emissions means phasing out fossil fuels as quickly as possible and rapidly deploying much cleaner sources of energy.

The technologies of today may not be up to the task of resolving the tension between the need for more energy and the need to reduce carbon dioxide emissions. A problem like climate change is an argument for placing bets on all kinds of far-reaching energy solutions, but fusion may be the technology with the highest upside. And on longer time scales, closer to the 2040s and 2050s, it could be a real solution.

With more investment from governments and the private sector, scientists could speed up their pace of progress and experiment with even more approaches to fusion. In the US, where much of the research is conducted at national laboratories, this would mean convincing your representatives in Congress to get excited about fusion and ultimately to spend more money. Lawmakers can also encourage private companies to get into the game by, for example, pricing carbon dioxide emissions to create incentives for clean energy research.

The key, according to Carter, is to ensure support for fusion remains steady. “Given the level of importance here and the amount of money invested in energy, the current investment in fusion is a drop in the bucket,” Carter said. “You could imagine ramping it up orders of magnitude to get the job done.”

He added that funding for fusion doesn’t have to cannibalize resources from other clean energy technologies, like wind, solar, and nuclear power. “We need to invest across the board,” Carter said.

For now, the big fusion experiments at NIF and ITER will continue inching forward. At NIF, scientists will continue refining their process and steadily work their way up toward energy-positive fusion. ITER is scheduled to begin operation in 2025 and start hydrogen fusion experiments in 2035.

Artificial star power might not illuminate the world for decades, but the foundations have to be laid now through research, development, and deployment. It may very well become humanity’s crowning achievement, more than a century in the making.

 Helion's Founders Say Fusion Reactors Will Provide Clean Energy Within Next Decade



Clearing the air: Decarbonization technologies take a giant step forward

Clearing the air: decarbonization technologies take a giant step forward
Peter Kelemen in Oman. Credit: Kevin Krajick

Carbon dioxide (CO2) levels today are higher than at any point in the past 800,000 years or more.

During a year when terms like carbon neutrality and net zero have become more and more commonly used, it appears the world is waking up to the imperative underscored in every high-level climate assessment—humanity needs to make a drastic change to stem the most catastrophic climate change consequences.

Climate impacts are happening more quickly than many scientists had predicted. Greenhouse gases are making the planet hotter. That rise in temperature is disrupting the weather and climate system in profound and cascading ways.

In its 2020 report, The UN Environmental Programme (UNEP) concluded that despite a slight dip in atmospheric CO2 created by the pandemic lock down in 2019, "the world is still heading for a catastrophic temperature rise in excess of 3°C this century—far beyond the Paris Agreement goals of limiting global warming to well below 2°C and pursuing 1.5°C." It goes on to say, to avoid the worst consequences of , we need to remove 10 billion tons of CO2 from the air by 2050.

In other words, in addition to drastically cutting global fossil fuel emissions, society needs to develop and use technologies to remove the CO2 already in the atmosphere. This is a huge undertaking, but one that scientists at Lamont-Doherty Earth Observatory have been striving toward for more than a decade.

Decarbonization, the process of capturing CO2 from the air and from , has been in various stages of development at Lamont-Doherty for several years. One of many strategies that researchers are developing involves harnessing a  by which the Earth itself takes back CO2 from the air.

Geologist Peter B. Kelemen is a research scientist at Lamont-Doherty Earth Observatory and the Arthur D. Storke Memorial Professor in the Department of Earth and Environmental Sciences. He has been a key architect of the Oman Drilling Project, an initiative involving more than 200 international scientists from disciplines such as geophysics, geochemistry, geology, biology, and physics who are working on research topics related to a unique geological feature in the Oman desert. In this region, the  and its underlying mantle rocks have been thrust up onto the surface, creating the largest on-land exposure of ocean crust and upper mantle in the world.

Atmospheric CO2 spontaneously reacts with rocks from the Earth's interior, the mantle, to form "carbonate" minerals, both removing CO2 from air, and permanently storing it in solid form. This is driven by the  due to disequilibrium between mantle rocks and the atmosphere.

Kelemen studies the chemical and physical processes of reaction between fluids and rocks. His primary focus now is on CO2 removal from air and permanent storage via engineered methods that emulate natural carbon mineralization. While his work in this area began in 2006, during fiscal year 2020, his discoveries have begun to fuel exciting industry investment and commercialization.

Kelemen and co-workers have developed several patents for processes that harness this naturally available chemical energy to yield low cost CO2 removal from air and geological storage.

"We wanted to figure out the cheapest way to take  out of the air and we came up with something very simple: Take limestone, cook it. Now you have CO2, to store or use, and calcium oxide. Put the CaO out in the weather. It will draw down CO2 from air, to make limestone again. Repeat. This is so simple, it is almost stupid. But we are finding that we can convert 75 percent of CaO to limestone in less than two weeks, just reacting with air in the lab. And, because the process is so simple, it currently has the lowest peer-reviewed cost estimate, of any proposed method for direct air capture."

Two start-up companies are putting Kelemen's innovation to work. Heirloom Carbon Technologies based in California is committed to removing one billion tons of CO2 from the air by 2035 by "looping" CaO and CaCO3, as described above.

Meanwhile, 44.01, based in Oman, is focusing on storing CO2 removed from air, by forming solid carbonate minerals below the surface.

Both represent a profound advancement in the practical application of decarbonization science.

"It's the most promising I've seen so far. And so it's very gratifying to finally see these things moving toward tests on the field scale," said KelemenNew report examines key steps in removing carbon dioxide from air

Provided by Earth Institute at Columbia University 

Vattenfall eyes pioneering green hydrogen trial at wind farm Trump tried to stop

Swedish group draws up plans to fit electrolyser to Vestas machine at EOWDC off Aberdeen


First Minister of Scotland, Nicola Sturgeon attends the opening of The European Offshore Wind Deployment Centre located in Aberdeen Bay in 2018 in Aberdeen.
Photo: Jeff J Mitchell/Getty Images/Getty Images

6 January 2022 
By Andrew Lee

Vattenfall could be poised to test on-turbine green hydrogen production at its experimental wind farm off Aberdeen, Scotland.

The Swedish group has drawn up plans to fit an electrolyser and associated equipment such as desalination in containerised modules fitted to the transition piece of one of the 11, 8MW-plus Vestas turbines at the European Offshore Wind Deployment Centre (EOWDC), with the H2 to be sent ashore via a flowline to an offtake point on land.


Cable free: work starts on pipes to ship hydrogen – not power – from Siemens Gamesa wind turbines
Read more

“The project offers a unique opportunity to test the viability of offshore production of green hydrogen and help move towards commercial scale operations and the associated positive environmental benefits that come from this,” Vattenfall said in a scoping report submitted to Scottish authorities.

Vattenfall switched on the EOWDC in 2018 after a years-long legal battle with former US President Donald Trump, who objected to the impact of the turbines on views from his luxury golf course.

Offshore production of green H2 is a hot topic in the emerging renewable hydrogen sector, with work underway by the likes of Siemens Gamesa to integrate electrolysis with turbines and several initiatives to site production on platforms taking power from nearby wind arrays.

\
Making offshore wind great again
Read more

One of the biggest advantages foreseen is the potential to create self-contained H2 production arrays offshore, with hydrogen rather than electricity shipped ashore – removing the need for costly power infrastructure altogether.

The North Sea off Aberdeen is already home to another green H2 technology initiative in the form of Dolphyn, which eventually hopes to deploy gigawatt-scale green hydrogen production on floating wind platforms off northern Scotland.

Read more
'Our vision is to replace offshore oil & gas': inside the all-Siemens push for the hydrogen wind turbine


Vattenfall Working on Hydrogen Demo Project at Aberdeen Offshore Wind Farm

January 5, 2022, by Adrijana Buljan

Vattenfall is working on a hydrogen demonstrator project named Hydrogen Turbine 1 (HT1), which involves installing hydrogen production equipment on one of the wind turbines at its Aberdeen Offshore Wind Farm (European Offshore Wind Deployment Centre) in Scotland.

The company has already submitted a couple of applications for pipeline route surveys with Marine Scotland, as well as an Environmental Impact Assessment (EIA) Screening Opinion Request accompanied by a report.

As we reported at the beginning of December 2021, Vattenfall contracted Fugro to carry out a geoscience survey and subsequent data processing and reporting for a proposed hydrogen pipeline route connecting its European Offshore Wind Deployment Centre (EOWDC) and Aberdeen Port.

Vattenfall Surveying Hydrogen Pipeline Route at EOWDC

According to the application documents filed with Marine Scotland, the developer submitted its first application for a pipeline route survey in August 2021 and then applied for the same work to be carried out at an additional route on 14 December (application document dated 17 November 2021).

The Hydrogen Turbine 1 Project

The HT1 project would retrofit one of the offshore wind farm’s existing turbines by installing an extended transition piece platform to house hydrogen production equipment. The hydrogen-producing wind turbine would be connected to an onshore storage and offtake facility by a subsea flowline transporting green hydrogen to the shore.
Source: Vattenfall’s EIA Screening Opinion Request Report

The company detailed on the HT1 project in the screening report, saying that the transition piece of the B06 turbine at EOWDC would be fitted with a platform which would provide sufficient area for the installation of an electrolyser, desalination equipment, and compressors, housed in up to seven separate shipping containers with additional cooling where required.

A new J-tube would be installed to route the flowline from the transition piece to the seabed, and extraction and discharge pipes would extend from the equipment into the water column.

The hydrogen transmission system from the B06 offshore wind turbine to the onshore storage facility is expected to consist of a single flexible flowline, from the hang-off location on the turbine foundation to the onshore tie-in location.

Aberdeen Offshore Wind Farm, or the European Offshore Wind Deployment Centre (EOWDC), has been operational since 2018 and it is Scotland’s largest offshore wind test and demonstration facility.

The offshore wind farm comprises eleven Vestas 8.8 MW wind turbines installed on suction bucket foundations.

Hydrogen from plastic waste: Japanese corporations' plan could be boon for resource-constrained nation

Toyota, Iwatani and JGC to work together on a potential new source of the clean gas as Japan attempts to build a hydrogen economy


Bales of crushed plastic waste in Tokyo desitined for recycling or incineration.
Photo: Getty

6 January 2022 
By Leigh Collins

Three major Japanese corporations — car maker Toyota, industrial gases giant Iwatani and engineer JGC Holdings (formerly Japanese Gasoline Co) — are teaming up to produce clean hydrogen from household and industrial plastic waste by 2025, according to Japanese financial newspaper Nikkei.

Producing hydrogen from waste is a fairly new but growing sector that has, so far, mainly been the preserve of start-ups such as California’s Ways2H and SGH2. So the news that major international companies are moving into the field could prove to be a significant development for the sector.

It might also be a boon for Japan’s decarbonisation efforts. Due to the island nation’s lack of fossil fuels and a scarcity of available land to build renewables, it is planning to build a vast hydrogen economy, even though it would have to import most of its H2.

And, according to Ways2H, it is much cheaper to produce hydrogen waste than renewables.


'It's much cheaper to produce green hydrogen from waste than renewables'


‘Greener-than-green hydrogen to be produced at same cost as grey H2 at world’s largest facility’
Read more

The country also has a major problem with plastic waste, producing 9.4 million tonnes of it every year, with the average citizen generating 37kg of single-use plastic waste in 2019. Relatively little plastic is recycled domestically, with 12% exported, 67% incinerated — causing about 13 million tonnes of CO2 equivalent annually — and 8% dumped in landfill.

The Japanese corporations plan to pulverize the collected plastic, then burn it in low-temperature and high-temperature gasification furnaces to produce a synthetic gas (syngas) containing carbon monoxide and hydrogen. Water vapour will then be added to the gas to increase the concentration of hydrogen, which will then be removed by an adsorber.

The cost of the hydrogen will be offset by payment for waste disposal collection.

The partners are now looking for a site for a demonstration project.

JGC will be in charge of the plant design, Iwatani will be responsible for transporting hydrogen, while Toyota Tsusho, the trading arm of Toyota — which produces the Mirai hydrogen fuel-cell car — is collaborating on the pilot project.

Japan plans to produce 10% of its electricity from hydrogen and ammonia by 2050, and to have 800,000 fuel-cell cars on the roads, along with five million residential fuel cells, by 2030.
Shell benefits from energy crisis as soaring gas prices lift profits
Company says investors will benefit from continuation ‘at pace’ of $7bn share buyback scheme

Shell expects trading results at its integrated gas business in the fourth quarter to be ‘significantly higher’ year on year. 
Photograph: Kirsty Wigglesworth/AP

Mark Sweney

Guardian Business
Fri 7 Jan 2022 

Shell expects a significant boost in profits in its natural gas division, thanks to soaring prices, when it reports its latest results next month, as the oil and gas company said investors would benefit from the continuation “at pace” of its $7bn share buyback scheme this year.

Shell, the world’s largest producer and trader of liquified natural gas, expects trading results at its integrated gas business in the fourth quarter to be “significantly higher” year on year as the rocketing price of gas outweighs a drop in production volume because of unplanned maintenance works.

Wholesale gas prices continue to break records, with energy suppliers warning of a “national crisis” that has already led to 27 suppliers going bust, and the prospect of bills increasing by more than 50% in April to about £2,000 a year.

Shell, which will report its fourth-quarter results on 3 February, said it intends to pick up the pace of its $7bn (£5.1bn) share buyback scheme, which is being funded using the proceeds of the $9.5bn sale of its US Permian Basin shale oil assets to ConocoPhillips at the start of December.

The company has already returned $1.5bn to investors and said on Friday the remaining $5.5bn “will be distributed in the form of share buybacks at pace”. The remaining $2.5bn from the sale is being used to strengthen Shell’s balance sheet.


While Shell is benefiting from the energy crisis, last week the business secretary, Kwasi Kwarteng, held emergency meetings with the bosses of the UK’s biggest energy suppliers, who are pushing for the government to intervene to alleviate the impact of soaring prices.

Potential interventions being lobbied for include a windfall tax on major oil and gas companies such as Shell, as well as extending fuel grants, moving green levies from household bills into general taxation, and axing the 5% VAT on bills imposed when the UK was part of the EU.

Later this month, Shell will move its headquarters from the Netherlands to the UK and scrap its dual share structure, after shareholders voted to back a proposal to simplify the Anglo-Dutch company’s operation.

Shell pursues $7 billion buyback 'at pace' despite LNG troubles

LONDON (Reuters) -Royal Dutch Shell said it will pursue "at pace" a $7 billion share buyback largely funded from the sale of its U.S. shale business as it faces liquefied natural gas (LNG) outages and slower fuel sales due to the economic hit from Omicron.

Shares in Shell, the world's largest trader of LNG, were down 0.32% on Friday after a trading update ahead of its quarterly results on Feb. 3. This compared with a 0.12% rise in the broader European energy index.

Shell said that its production and liquefaction volumes were impacted in the fourth quarter by unplanned maintenance, mainly in Australia, where its giant Prelude floating LNG https://www.reuters.com/business/energy/shell-halts-prelude-lng-production-loading-after-power-outage-2021-12-03 vessel was hit by a power outage.

LNG liquefaction volumes are expected to be between 7.7 and 8.3 million tonnes, well below a peak of 9.2 million tonnes in the fourth quarter of 2019, Shell said.

Shell's LNG trading results in the fourth quarter of 2021 are, however, set to be "significantly higher" compared to the third quarter.

Natural gas and electricity prices around the world have soared since the middle of last year on tight gas supplies and higher demand as economies rebounded from the COVID-19 pandemic.

Benchmark European gas prices and Asian LNG prices hit all-time highs in the fourth quarter.

Shell will later this month move its head office from The Hague to London, scrap its dual share structure and change its name to Shell Plc as part of a plan to simplify its structure and shift its tax residence from the Netherlands.

Last year Shell sold its Permian Basin shale oil assets to ConocoPhillips for $9.5 billion in cash, an exit from the largest U.S. oilfield as it shifted its focus to a clean energy transition. It said it would return $7 billion of the proceeds to shareholders on top of 20% to 30% of cashflow from operations.

"The remaining $5.5 billion of proceeds from the Permian divestment will be distributed in the form of share buybacks at pace," it said.

Shell, which operates more than 45,000 petrol stations, said that earnings from its marketing division were set to be lower than the third quarter "the demand impact due to the Omicron virus and foreign exchange impacts in Turkey."

(Reporting by Ron Bousso; Editing by Jason Neely and Alexander Smith)


Big Oil splits seem just a question of time
January 7, 2022
in Climate


There is virtue, as every journalist knows, in making predictions or proclamations that have a good chance of coming true at some point, even if they won’t right now. See the calls, at least in Europe, for big oil and gas companies to break themselves up.

The latest to add his voice to the cacophony for division is Lord Browne of Madingley, aka John Browne, the former chief executive of BP. The industry, he wrote in Time magazine, needs to be “bolder in separating low-and zero-carbon activity from their fossil fuels business”.

He joins activist Third Point that last year took aim at Royal Dutch Shell in arguing that big oil and gas companies are trying to achieve the impossible, by investing in high growth renewables businesses that should be well valued in the market while keeping the unloved hydrocarbons ticking over, declining but churning out cash.

Browne’s intervention is notable: he was the “architect of consolidation in the 1990s”, says Alastair Syme at Citi, an era when big names and big balance sheets were needed to secure the world’s most promising resources. The sector isn’t elephant hunting any more, notes Syme: renewables projects, even the biggest ones, are tiny in comparison. Focus may be becoming more important than scale.

Both Shell and BP try to make the case, with debatable success, that integration is intrinsically valuable in the energy transition: the ability to work with customers and to connect generation, with carbon capture or hydrogen infrastructure, and supply and charging. But it is fossil fuels’ role as a “cash machine”, as BP’s Bernand Looney put it, that seems to get greater traction as an argument.

One source of pressure on oil and gas majors has lifted: the cash balancing act between maintenance spending on legacy assets, green investment and returns to shareholders now looks feasible thanks to lower post-pandemic dividends and higher oil prices, notes Martijn Rats at Morgan Stanley.

But companies are using the cash thrown off by legacy assets to try to build out a “green” portfolio, one that is likely to be absorbing rather than producing cash for many years to come.

This is a “not now” answer to calls to split — one given extra credibility by uncertainty over what a standalone GreenCo at Shell or BP might actually look like. European peers such as Total or Equinor have more that could be carved out at present.

To be fair, it also isn’t obvious that the immediate valuation uplift supposedly on offer from a split will make it from the bankers’ anti-conglomerate pitchbook to the market. Syme reckons big oil and gas companies are valued in line with the returns they are offering.

Italy’s Eni, which is listing a stake in renewables business Plenitude, looks like a test case. But the spin-off has some retail assets included to bolster cash flows, so it isn’t for the purists. It also isn’t obviously planning markedly higher investment into renewables than had been promised in its old conglomerated home, so it’s not clear to what extent this accelerates the energy transition.

The more convincing case made by the splitters is that big oil and gas companies are fundamentally trying to bind together two competing constituencies in a way that is inefficient, won’t survive the duration of transition and won’t produce good performance in the meantime.

Companies could and should put more money into renewables and green infrastructure, especially as older fossil fuel assets are sold: a slow swivel from the old world to the new. But that’s something that yield-hungry oil investors, wary of the returns on offer from renewables and burnt by over-investment and poor returns in the past, won’t currently tolerate.

And it’s a strategy where the tipping point into official greenery looks far removed: BP’s ambitious plans to have 50 gigawatts of developed renewables capacity by 2030 caused investors to gulp but still leaves it as a majority oil and gas company in cash flow terms at that point.

No one wins the argument this year. But the oil and gas companies face a challenge. Make a far more robust case for integration. Or see another force join the allied ranks of investor activists, executive alumni and climate agitators who dislike the combination of fossil fuels and new energy assets: an absence of better ideas.

helen.thomas@ft.com
@helentbiz



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The World Is Half-Prepared for a Different Energy Future


Humanity’s energy plans have two giant gaps.

By Robinson Meyer
THE ATLANTIC
Bing Guan / Bloomberg / Getty

JANUARY 5, 2022

Late January of last year, a group of economists, analysts, and financial journalists made an annual wager: How much would a barrel of crude oil cost when the market closed on December 31, 2021? Back then, the United States was only beginning to distribute vaccines, COVID-related hospitalizations were at an all-time high, and a futures contract for a barrel of Brent crude, one of the world’s two benchmark oil prices, cost about $55.

Most of the 29 guesses came in between $50 and $60. But last week, on the final day of the year, the price closed at $77.78. Lang Reynolds, a North Carolina–based electric-vehicle (EV) advocate who placed the highest bet of anyone ($85), won the cycle.

If 2021 taught climate hawks anything, it’s that they still need to care about the oil price—at least for another few months. Last year, as oil kept getting more expensive, the high price of gas began dragging down President Joe Biden’s approval rating right as he tried to pass robust pro-climate policy. (Gas prices were high only in an American context, of course—Europeans regularly pay more for their petrol—but in politics, all prices are relative.)

What’s stood out to me lately is that, because of a couple key mismatches in the energy system, this is only the beginning of such energy-related inflation.

The world has started to reduce its investment in producing fossil fuels. Right now, the world’s investment in oil and gas supply looks to be, somewhat shockingly, on track with a pathway of 1.5 degrees Celsius of global warming, according to the International Energy Agency. At the same time, the world is investing as much as ever in cars, power plants, and other products that use fossil fuels. That is, our investment in oil and gas demand still assumes a more-than-1.5-degree pathway. Consumers, companies, and countries seem to be assuming that oil and gas will be just as plentiful in the future as they are now.

The technical way to say this is that there is a mismatch between future oil supply expectations and future oil demand expectations. Let’s call this Mismatch No. 1.

The other mismatch is between clean energy and fossil fuels. Even as the world ramps down its investment in fossil-fuel supply, it isn’t investing enough in zero-carbon energy. According to the IEA, annual investment in clean-energy supply must triple for humanity to reach net zero by 2050. That’s Mismatch No. 2: The world is preparing for a net-zero world on the fossil-fuel side, but not on the clean-energy side.

Put together, these mismatches suggest that, if nothing changes, we can expect energy costs to go up. In the medium term, companies and consumers are going to want more oil and gas than the market can reasonably provide, and the price of both will increase.

Is that a problem?


From the standpoint of businesses, it is at the very least inconvenient. It suggests that the era of cheap energy that has persisted for the past decade is ending, and energy consumers can expect higher prices going forward even if the United States passes no further climate policy. For me, that suggests that passing policy is important, because the country should get off its current, more volatile energy system as quickly as possible. And from the standpoint of the climate-concerned, the price of fossil fuels really should go up, to reflect the damage carbon does to the atmosphere. The timing matters, though: Soaring energy prices can easily waylay the sort of pro-climate policy that could help make these mismatches better align.

That’s the big picture, at least. It’s important to understand. Now let’s complicate it.

Yes, fossil-fuel investment is falling now, BUT: It’s not mainly because of climate concerns. Global oil-and-gas investment fell by nearly a quarter last year because of the coronavirus pandemic, according to Ben Cahill, a senior fellow at the Center for Strategic and International Studies, a think tank in Washington, D.C. And more broadly, fossil-fuel investment has been down since 2014, when the price of oil crashed. It hasn’t recovered since.

Yes, fossil-fuel investment is in line with a 1.5-degree world now, BUT: It’s about to go up. “Since we’ve had this lower supply for six or seven years now, we’re going to have to step it up,” Cahill told me. The rising oil price worldwide, the spike in energy prices in Europe, and the return of geopolitical anxiety will all induce drillers to invest more next year—and to drill more oil as well.

Yes, we need to invest more in EVs and clean energy, BUT: Even subbing in the same amount of clean energy wouldn’t solve the problem. The IEA has some pretty stark beliefs about how the world can limit warming to 1.5 degrees Celsius. It has published a list of behavioral changes that the world must hit in order to zero out carbon pollution by 2050. For the world to reach net zero, highway driving speeds must be capped to 100 kilometers an hour, or about 62 miles an hour, by 2030 around the world, it prescribes. Buildings cannot be cooled to less than about 75 degrees Fahrenheit in the summer nor warmed past 68 degrees Fahrenheit in the winter. By 2050, neither business nor long-haul leisure air travel must happen at the rate that it’s happening right now.

In other words, the IEA doesn’t see the world reaching net zero by adopting EVs alone. Its “demand” forecast entails both technological and behavioral change—in the short term, millions of people must drive EVs and highway speeds must be reduced. So when the agency says that the world is not on a “demand trajectory” for getting to net zero, that’s part of what it means.

On some level, the scale of change that’s already under way is, in itself, somewhat shocking. It’s easy to miss in the IEA report, but the world’s investment in clean energy is already nearly three times larger than its investment in fossil fuels. That makes a certain amount of sense, of course: Countries can run their fossil-energy system on decades of foundational investment, while to spin up a net-zero energy system, they have to build from scratch. We are living in a world where those investments are happening—we’re already doing a lot to reach net zero. It’s just not nearly enough.

Robinson Meyer is a staff writer at The Atlantic. He is the author of the newsletter The Weekly Planet, and a co-founder of the COVID Tracking Project at The Atlantic.
Canada's Oil Sands Exports to Asia Reach Record With New Link

Author of the article:
Bloomberg News
Devika Krishna Kumar
Publishing date: Jan 07, 2022 

(Bloomberg) — Canada’s oil sands producers were able to export a record amount of crude to overseas markets thanks to a new link to the U.S. Gulf Coast.

The recent reversal of Marathon Pipe Line Inc.’s Capline pipeline is sending oil sands crude produced in landlocked Alberta to export terminals on Gulf Coast where it can be shipped to other countries. Exports to Asia were at their highest ever, with India the leading destination by far, followed by China and then South Korea, according to oil analytics firm Kpler.

The development marks a sea change for Canada’s oil industry. The country holds the third highest crude reserves in the world, but exports to markets beyond the U.S. have been limited due to a lack of infrastructure. Canada has faced severe opposition from activists for building pipelines from the oil sands region to British Columbia’s Pacific Coast. Additionally, the Biden Administration last year blocked the Keystone XL pipeline, effectively shutting Canada’s crude out of the global market.

“Looking ahead, Canadian crude exports out of the U.S. Gulf should continue to show strength,” said Matt Smith, oil analyst at Kpler. “With Venezuelan crude exports having tanked in recent years, and now with the prospect of Mexican crude being taken off the market, Canadian crude appears to be one of the leading beneficiaries of these changing dynamics.”

Shipments of heavy crude jumped to more than 266,000 barrels a day in December after averaging over 180,000 through the year, according to Kpler. Canadian crude exports from the U.S. Gulf Coast averaged just 25,000 barrels a day in 2018, before rising to average around 70,000 in both 2019 and 2020.

In October, overall Canadian shipments of oil to the U.S. jumped to more than 4 million barrels a day, highest volume since the start of the year thanks in part to the startup of a long-delayed Canadian pipeline.

©2022 Bloomberg L.P.

There Was Way Too Much Lightning in the Arctic Last Year

More electric skies at the top of the world are yet another indicator of just how weird things are getting.


By
Brian Kahn
Wednesday 
5/01/2022


Photo: Mladen Antonov/AFP (Getty Images)

That the Arctic is a hot mess due to climate change is well-established at this point. But it’s always nice to have a reminder of just how out of whack things are getting, isn’t it?

A new report provides just such a reminder, showing that lightning is significantly increasing at the highest latitudes, a region more familiar with the Northern Lights than storms lighting up the skies. The trend was particularly acute in 2021, which saw 91% more lightning in the far northern Arctic than in the previous nine years combined.

The shocking findings come courtesy of Vaisala, a meteorology firm with the best lightning detection network on Earth, which released its annual lightning report earlier this week. The whole report is honestly fascinating because, well, it’s about lightning. But the Arctic findings are a sobering reminder of the radical changes happening in the region.

Lightning—or more specifically, the storms that can spawn it—requires warm, moist air and atmospheric instability. That’s usually in short supply in a region dominated by ice and snow. Or, more accurately, formerly dominated by ice and snow. Rising temperatures have helped usher in a new Arctic. Sea ice is disappearing, opening up the tap for more lightning-causing storms.

“Climate is changing faster in the Arctic than elsewhere on the planet,” Chris Vagasky, the lightning applications manager at Vaisala, said in an email. “Lightning indicates very specific changes that are occurring – specifically intrusions of warm, moist air into the region.”

The report breaks down what’s going on at different latitudes above the Arctic Circle, which sits at 65 degrees North. Vaisala’s lightning network uses sensors placed around the world to, in Vagasky’s words, “‘listen’ for the unique signatures produced by lightning” in the form of very low frequency electromagnetic waves associated with the phenomenon. That allows it to detect lightning in far-off places, from the tropics to the Arctic.

The findings show that lightning has stayed relatively constant in the lower reaches of the Arctic. Last year, the region around the Arctic Circle saw 1.9 million lightning detections, roughly in line with where things stood in 2012. But something weird is happening above 80 degrees North.

There, Vaisala’s network has detected a radical uptick in lightning activity. The region saw 7,278 lightning detections in 2021. That’s a relatively small number, especially compared to much lower latitudes—Texas alone, for example, saw nearly 42 million bolts of lightning in 2021—but it’s a sharp rise compared to the previous decade and easily set a record. Most of that activity happened over a three-day period in late July and early August.



A map of global lightning density in 2021. Image: Vaisala

“What we saw was a series of low pressure systems exiting northern Siberia and crossing the Arctic Ocean – that’s the source of lift,” Vagasky said. “High temperatures were approaching or even exceeding 80°F [27 degrees Celsius] on the Arctic coast and very high humidity was funneling northward from central Russia. This created the kind of atmospheric instability typically seen over the Great Plains of the United States during severe weather outbreaks.”

At 85 degrees North, Vaisala detected lightning 634 times. That’s also a record, for a region that’s more accustomed to seeing no lightning at all in some years.

To understand just how weird all this is, consider that the area above 80 degrees North is a stronghold for sea ice. Look at a map of where ice has usually held tight over the past 30 years, and it’s this exact location. But rising land and ocean temperatures eating away at icepack have opened the door for more freak storms and lightning.

Last year’s record amount of lightning is part of a larger trend. In 2019, lightning struck near the North Pole, an event that the National Weather Service said, in typically understated terms, was “certainly unusual.” Research published last year also shows that Arctic is seeing more lightning crisscross the sky, and that it’s likely due to climate change. Yet another study found that lightning-caused wildfires are also increasing. In a region that already has enough to worry about when it comes to climate change, lightning is yet another concern to toss on the pile.