U.S. Treasury to oppose development bank financing for most fossil fuel projects

Author of the article:

Reuters
David Lawder
Publishing date: Aug 16, 2021 • 


WASHINGTON — The U.S. Treasury Department issued new energy financing guidance to multilateral development banks on Monday, saying the United States would oppose their involvement in fossil fuel projects except for some downstream natural gas facilities in poor countries.

The new guidance from the Treasury, the largest shareholder in major development banks including the World Bank Group and the African Development Bank, prioritizes financing for renewable energy options and “to only consider fossil fuels if less carbon-intensive options (are) unfeasible.”

Treasury said in the guidance it would “strongly oppose” coal energy projects across the entire coal value chain from mining, transport to power generation.

But the guidance offered an endorsement of the Asian Development Bank’s work to organize and develop a plan to acquire coal-fired power plants and shut them down early. The effort, first reported by Reuters, includes British insurer Prudential, lenders Citi and HSBC and BlackRock Real Assets, with ambitions for an initial purchase in 2022.

The Treasury said it would support multilateral development bank support for coal decommissioning projects, adding: “We are encouraging the MDBs to explore potential projects for coal decommissioning.”

The new guidance follows a meeting of development bank heads convened by Treasury Secretary Janet Yellen in July, where she asked them to rapidly align MDB portfolios with the 2015 Paris Agreement and develop ambitious plans to mobilize private capital to fight climate change.

The guidance, aimed at helping the banks meet those goals, also said that Treasury will oppose oil energy projects from exploration to the processing of transport fuels. It would make exceptions to this guidance only in “rare circumstances” such as humanitarian crises or as backup generation for clean “off-grid” energy systems.

The Treasury said it would oppose “upstream” natural gas projects, such as exploration, but could support midstream and downstream natural gas projects in poor countries that meet the World Bank’s International Development Association targets if they meet certain other criteria.

These include a credible analysis that there is not an economically or technically feasible renewable energy alternative and that the project has significant positive impact on energy security or development. (Reporting by David Lawder in Washington Editing by Chizu Nomiyama and Matthew Lewis)

Nigeria's New Petroleum Bill Gets Signed Into Law

By Charles Kennedy - Aug 16, 2021


Nigerian President Muhammadu Buhari on Monday signed the country's newly passed petroleum bill into law, marking the end of 20 years of efforts at Africa's top oil producer to overhaul its oil industry.

Last month, Nigeria's House of Representatives voted to approve a new petroleum industry bill in Africa's top oil producer and exporter, putting an end to 20 years of debates and delays.

The House voted in favor of the bill after the Senate had endorsed the new legislation earlier.

The new petroleum bill aims to attract more foreign capital to the country's oil sector, Nigeria says.

The Petroleum Industry Bill (PIB) has been two decades in the making to overhaul the way Nigeria will share its oil resources with international oil companies as the country looks to attract new investment in oil and gas.

International oil majors have not been flocking to Nigerian oil assets now that fossil fuels are even more fiercely competing for Big Oil's capital plans as majors start shifting more funding to low-carbon energy sources.

Oil firms operating in Nigeria, including Chevron, Shell, and TotalEnergies, have received some concessions in the latest version of the bill compared to a previous draft from last year, according to Bloomberg.

Nigeria has agreed to reduce the taxes and royalties and exempted deep offshore oil and gas production from the so-called "hydrocarbons tax."

Nigeria is set to struggle to raise oil output through the middle of this decade, as international majors shift their investment priorities, data and analytics company GlobalData said earlier this month. Lack of sufficient investments and few new projects could derail Sub-Saharan Africa's ambition to increase its crude oil production through 2025 after a difficult pandemic-hit 2020, GlobalData said in its report.

Nigeria has to address the above-ground risks for companies if it wants to attract investment, Conor Ward, Oil and Gas Analyst at GlobalData, said.

By Charles Kennedy for Oilprice.com

Thai coal miner buys gas-fired power plant in US for $430m
 Editorial Asia Nikkei 16/08/2021

The investment for the power plant is a huge expense for Banpu but it is part of its plan to absorb advanced technologies from the U.S. (Photo courtesy of Banpu)

APORNRATH PHOONPHONGPHIPHAT, Nikkei staff writer

August 16, 2021  | Thailand

BANGKOK — Thailand’s biggest coal miner Banpu has invested $430 million to acquire a 100% stake in a large-scale gas-fired power plant in the U.S., hurrying to move away from its main business, which has a large environmental impact, to a green business.

The company acquired the power plant in Texas from Temple Generation I and signed the contract on Aug. 10. The transaction is expected to be complete by the fourth quarter of 2021.

Banpu also invested $770 million in December 2019 to acquire a shale gas operation in Texas. It can provide gas to the power plant that the company bought in Texas at competitive prices. https://asia.nikkei.com/Business/Energy/Thai-coal-major-Banpu-buys-US-shale-gas-assets-for-770m

The investment matches the company’s business plan to go greener. Somruedee Chaimongkol, Banpu’s chief executive officer, told Nikkei Asia in an interview in July that the company would gradually cut the role of the coal business and instead shift business resources toward natural gas and renewable energy. The company is aiming to have low-carbon green businesses contribute more than half of overall income by 2025.

An analyst at Kasikorn Research Center, a think-thank unit of Thai Kasikorn Bank, said this acquisition will help the company to immediately gain higher power generating capacity in green business. It will see benefits quicker than by building a new plant and waiting for years to start commercial operations.

Banpu’s power plant in Texas is a combined cycle gas-fired power plant with generating capacity of 768 MW and started commercial operation in July 2014. With the new investment, the company’s total equity-based capacity will total 3,300 MW from 34 gas-fired, co-generation and renewable power plants in Thailand and abroad.

Somruedee said in the statement that the new power plant has one of the most efficient combined-cycle gas turbines, with high flexibility and efficiency and is equipped with advanced emissions-control technology.

The company’s technological capabilities in green business are still relatively low, and this acquisition is also aimed at absorbing advanced technologies from the U.S. company. It has been a huge expense for the company, but shareholder pressure for green commercialization is growing. Banpu is accelerating the response to it, even if it means making some sacrifices.

 

Canadian carbon tax impacts: carbon capture, utilization and storage (CCUS) & environmental, social and governance (ESG) reporting

August 17, 20216:30 AM BOE Report Staff

CANADA’S CLIMATE PLAN

As part of Canada’s plan to reduce emissions and combat climate change, the Pan-Canadian Framework on Clean Growth and Climate Change was developed to meet emission reduction targets, grow provincial economies, and adapt to climate challenges. According to the Government of Canada: “In 2018, the Greenhouse Gas Pollution Pricing Act came into effect, ensuring there is a price on carbon pollution across the country. A well-designed price on carbon pollution provides an incentive for climate action and clean innovation while protecting business competitiveness. It is efficient and cost effective because it allows businesses and households to decide for themselves how best to reduce the emissions that cause climate change.”

Canada has committed to reduce Greenhouse Gas (GHG) emissions by 30% from 2005 levels by 2030. GHG emissions from 1990 to 2019 by economic sector is summarized in Figure 1.

Figure 1: GHG emissions by economic sector, Canada, 1990 to 2019.

As it relates to the oil and gas sector, data from the Government of Canada suggests that GHG emissions from oil and gas production have gone up 23% between 2000 and 2019 (Figure 2), largely from increased oil sands production, particularly in-situ extraction.

Figure 2: Oil and gas sector GHG emissions, Canada, 1990 to 2019.

Over the last 4 years, there have been many changes and updates to the Canadian legislation at the federal and provincial levels, with Canada attempting to achieve emissions neutrality by 2050.

CANADIAN CARBON TAX IMPACT ON COMPLIANCE CREDIT GENERATION

Canada’s Climate Plan includes an Output-Based Pricing System (OBPS) on large industrial emitters and, more recently, the proposed Clean Fuel Regulation (CFR) on primary suppliers of fossil fuels.

Canada’s OBPS and proposed CFR will create an economic opportunity for developing technologies that reduce carbon intensity of liquid fossil fuels. In the oil and gas industry, CCUS is a considerable mitigation option that can be applied to reduce anthropogenic CO2 emissions that offsets other industries where emissions reductions are not cost-effectively achievable. Sequestered CO2 is compressed and transported to be used in enhanced oil recovery (EOR) projects, obtaining incremental oil recovery through an enhanced oil recovery scheme, or through direct injection into deep geological formations (saline aquifers or depleted oil and gas reservoirs). Revenue streams relate directly to CO2 emission reductions that are captured from the point source to the portion that is permanently stored within the geological formations.

These policies will establish and provide a financial incentive for companies to capture, utilize and/or store CO2 while aligning development with a reduction in Canada’s GHG emissions.

OUTPUT-BASED PRICING SYSTEM

According to the Government of Canada: “A price on carbon pollution is an essential part of Canada’s plan to fight climate change and grow the economy. It is one of the most efficient ways to reduce greenhouse gas emissions and stimulate investments in clean innovation. It creates incentives for individuals, households, and businesses to choose cleaner options.”

The Greenhouse Gas Pollution Pricing Act (GGPPA) establishes a carbon pollution pricing system — a regulatory trading system known as the Output-Based Pricing System (OBPS). It will allow for covered facilities who are below their emission limits to receive surplus credits. Those credits can be used as compliance units or sold to other facilities in the OBPS through a public registry. Under this legislation, permanently stored CO2 would be eligible to receive a credit market value of $50/tonne by 2022 and up to $170/tonne by 2030 under the recently proposed accelerated national OBPS.

MULTI-BILLION DOLLAR OBPS COMPLIANCE CREDIT OPPORTUNITY

Based on the details in Figure 2, even a marginal reduction in greenhouse gas (GHG) emissions from the oil and gas sector has a material compliance credit value potential that companies could achieve through CCUS strategies. This takes the form of reduced operating costs and/or additional revenue through the OBPS credit market. If companies can reduce the 2019 CO2 equivalent emissions of 191Mt by 10% (19.1Mt), a 2022 OBPS market price of $50/tonne equates to $955 million in compliance credits. At an accelerated 2030 OBPS market price of $170/tonne, the same 10% reduction equates to $3.2 billion in compliance credits.

In actuality, Canada has committed to reduce all GHGs by 30% from 2005 levels by 2030. Looking closely at the oil and gas sector in 2005, CO2 equivalent emission levels were approximately 160Mt. A 30% reduction in GHG from this level would lead to an emissions target of 112Mt for 2030, equating to a GHG reduction of 79Mt from 2019 levels. As shown in Figure 3 below, assuming the 79Mt will be reduced linearly over 10 years (7.9Mt/year) from 2021 to 2030, the potential compliance credit value generation could range from $3.9 billion to $8.2 billion under the current and proposed accelerated OBPS market prices, respectively.

Figure 3: Oil and gas sector greenhouse gas emission reductions from 2005 levels by 2030 and associated compliance credit generation.

PROPOSED CLEAN FUEL REGULATIONS

Another leg of Canada’s Climate Plan is the Clean Fuel Regulations (CFR). First proposed in late 2020, the CFR is complementary to the OBPS. According to the Government of Canada: “The goal of the Clean Fuel Standard is to significantly reduce pollution by making the fuels we use everyday cleaner over time. The Clean Fuel Standard will require liquid fuel suppliers to gradually reduce the carbon intensity of the fuels they produce and sell for use in Canada over time, leading to a decrease in the carbon intensity of our liquid fuels used in Canada by 2030.”

The proposed CFR is not yet resolved; however, regulations are expected to be finalized and published in the Canada Gazette, Part II by late 2021. This is another regulatory approach with the aim of reducing Canada’s greenhouse gas (GHG) emissions through increased use of lower-carbon fuel sources.

A new regulatory credit market for compliance credits will be established under the proposed CFR, where producers/importers who surpass the minimum clean fuel standard are rewarded with credits which may then be purchased by other producers/importers to achieve compliance. This regulation works by upping the carbon intensity reduction target every year between 2022 – 2030.29dk2902l

Canadian average lifecycle carbon intensity was defined by using a model developed by Environment and Climate Change Canada (ECCC). In 2016, the Canadian Government’s calculations indicated that GHG emission reductions will be achieved at a central estimated net societal cost of carbon (SCC) of $94/tonne. More recently published literature estimates the net SCC value in 2020 that ranges between $135 and $440/tonne.

Under the proposed CFR, primary suppliers of fossil fuels (including refineries, upgraders, and fuel importers) create or acquire compliance credits to satisfy their emissions reductions. Optionally, primary suppliers can pay into a compliance fund to acquire credits at a price of $350/tonne. Although, credits acquired from the compliance fund can only be used to satisfy a maximum of 10% of their annual reduction obligation. The CFR also considers a credit clearance mechanism (CCM) to assist the exchange of credits whereby a credit seller may pledge their available credits to be sold at or below a price ceiling of $300/tonne pursuant to the CCM.

Given that the CFR is not currently legislated and is not expected to be finalized until late 2021, the CFR compliance credit market value remains uncertain. However, the future market value will be directly correlated to the implementation of projects that generate or utilize these credits, CCUS included, and may mirror the OBPS value to some degree.

CANADIAN CARBON TAX IMPACTS TO RESERVES & ESG REPORTING

In practice, carbon taxes and compliance credits based on existing legislation ought to be included in all economic evaluations to understand the commercial impact on existing and future projects within the energy industry.

In a reserves evaluation report, carbon tax burdens are included as an operating cost ($/boe) within the economic cash flows and is quantified from the carbon taxes defined in the corporate and property lease operating statements. Carbon tax burdens will consider existing legislation surrounding the carbon market value through the OBPS scheme and incorporating the proposed accelerated OBPS and CRF compliance obligations when legislated. Carbon credits associated with approved CCUS projects are determined on a project phase basis, based on the emissions reductions from permanently storing CO2 within geological formations. This is summarized in a reserves report as a reduced operating cost or, in the case of excess compliance credits, as an “Other Income” stream within the economic cash flows related to a CCUS project.

In ESG reporting of emissions, both the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB), the two most widely used frameworks for reporting, require reporting gross emissions before any offsets, credits, trades or any other mechanisms that have reduced or compensated for emissions.  A disclosure available in the GRI framework, 305-5, reduction of GHG emissions, requires GHG emissions reduced as a direct result of reduction initiatives, specifically calling for any reduction from carbon offsets to be reported separately.

Where carbon offsets and credits are often discussed in ESG reporting is in scenario analysis, as required for SASB reporting and as part of the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) reporting. SASB specifically requires reporting the sensitivity of hydrocarbon reserve levels to future price projection scenarios that account for a price on carbon emissions. The TCFD recommends undertaking scenario analysis as a method for developing strategic plans and positioning a company to address climate-related risks and opportunities. Companies, as part of their scenario analysis, may consider how they will address increases in carbon price through use of carbon credits and other programs.

For more information, visit our website: www.gljpc.com

GLJ Ltd. is a leading energy resource consulting firm. With comprehensive industry expertise and client-focused philosophy, GLJ provides technical excellence to a global client base. The company’s long-term record of success comes from an experienced team of professionals who have an absolute commitment to delivering high-quality results for their clients. For more information visit www.gljpc.com

WRITTEN BY SCOTT QUINELL, GLJ LTD.

Scott is a Senior Engineer at GLJ and has over fifteen years of experience in reserves evaluations and reservoir studies. He has extensive involvement in oil reservoirs and is one of the leading experts at GLJ in the evaluation of enhanced oil recovery (EOR) projects with a focus on Polymer and CO2 tertiary recovery schemes. More recently he has been involved in providing guidance to GLJ’s clients on the economic impact of carbon taxes and carbon market value surrounding carbon capture, utilization and storage (CCUS) projects in Canada.

FROM THE RIGHT
Opinion: Engine No. 1 is all talk, no strategy with Exxon Mobil

The tell: No specific recommendations on how Exxon should become a leader in profitable clean-energy production

GETTY IMAGES

Last Updated: Aug. 16, 2021 
By Henry N. Butler, and Bernard S. Sharfman

What does Engine No. 1’s recent proxy fight at Exxon Mobil have in common with the insane trading in GameStop and AMC common stock that occurred during the pandemic? The answer is that they all garnered lots of media attention but accomplished nothing.

Engine No. 1, a small hedge fund with less than $40 million worth of Exxon Mobil XOM, -1.17% common stock in hand, amazingly succeeded in getting three of its four nominated directors elected to Exxon’s board. Unfortunately, the hedge-fund activism of Engine No. 1, seeking to enhance shareholder value, reduce Exxon’s carbon emissions, and transition it into a global leader in profitable clean-energy production, was not able to provide specific recommendations on how Exxon Mobil was to accomplish these objectives.

For example, what precisely are the profitable clean-energy opportunities that Engine No. 1 would like to see Exxon Mobil invest in? Engine No. 1 did not provide an answer.

In sum, a lack of specificity indicated that it was not truly informed about the operations of Exxon Mobil or how to manage its long-term future.

Read: Here are the oil and gas companies whose methane emissions intensity is 6 times the national average (hint: it’s not the majors)

Confirmation that Engine No. 1’s activism was not expected to positively impact Exxon Mobil can be found in the lack of an associated upward movement in Exxon’s stock price. As observed by Hemang Desai, Shiva Rajgopal and Sorabh Tomar in June, whatever increase in the stock since Engine No. 1’s activism became public can be attributed to a rise in oil prices that have benefited all oil and gas companies.

However, even without specific recommendations or a positive market price reaction, Engine No. 1 was still able to win its proxy fight. How was it able to do this?

No doubt the timing was right. Exxon Mobil was floundering financially as a result of a high debt load, pandemic-reduced demand for its products, and low oil and gas prices. Yet at the time that Engine No. 1 began its proxy fight in earnest on March 15, Exxon was still a $250 billion company and recognized as one of those small number of top-performing companies, based on decades of capital appreciation and dividend payouts, that have allowed the stock market to significantly outperform U.S. Treasurys over time.

Exxon Mobil was floundering financially as a result of a high debt load, pandemic-reduced demand for its products, and low oil and gas prices

Engine No. 1 succeeded because it focused on gaining the support of the “Big 3” investment advisers to index and ESG funds — BlackRock BLK, -2.40%, Vanguard, and State Street Global Advisors. The Big 3 own approximately 21% of Exxon Mobil’s voting stock. However, that percentage significantly understates their voting power because they will likely vote all their shares while individual investors — those most likely to vote with management — won’t.

To garner the Big 3’s support, Engine No. 1 appealed to their desire to be perceived as investment advisers who are making a difference in mitigating climate change. Such a perception is necessary to attract “millennial” investors, the investor segment that will soon be the dominant investor type in mutual-fund and exchange-traded-fund investing.

So the Big 3 were under a lot of pressure to support Engine No. 1’s efforts or else they would be perceived as not walking the talk on climate change. Based on their voting, it appears that the marketing implications won out over the need to actually implement value-enhancing change at Exxon Mobil. BlackRock ended up supporting three Engine No. 1 director nominees, while Vanguard and State Street Global Investors each supported two.

An impediment to fighting climate change

Perhaps most importantly, Engine No. 1’s hedge-fund activism may be an impediment to the world’s ability to deal with climate change. As observed by Tariq Fancy, BlackRock’s former chief investment officer for sustainable investing, “one lesson COVID-19 has hammered home is that systemic problems—such as a global pandemic or climate change—require systemic solutions. Only governments have the wide-ranging powers, resources and responsibilities that need to be brought to bear on the problem.”

If so, then the Engine No. 1’s successful proxy fight may have caused significant harm to climate change mitigation efforts “by creating a societal placebo that delayed overdue government reforms,” he added. That is, the sustained focus on the proxy fight and the perception that Engine No. 1’s victory represents a victory in the fight against climate change may have reduced our sense of urgency to advocate for strong governmental actions that will have a real impact on mitigating climate change. Fancy, the former BlackRock executive, refers to this as a “deadly distraction.”

Engine No. 1’s activism resulted in Exxon needlessly spending significant resources on defending its director nominees and thereby distracting Exxon Mobil from engaging in its current strategy of focusing on the production of oil and gas, a strategy that Engine No. 1 could not adequately disprove as being the correct one.

Yes, Exxon’s current strategy may result in the company stranding oil and gas assets or the company eventually losing its independent existence if the road to decarbonization speeds up, but until proven otherwise, perhaps a different hedge-fund activist that is more informed will serve that role, its strategy cannot be discounted as the one that will maximize the value of the company’s stock.

Henry N. Butler is executive director of the Law & Economics Center at George Mason University’s Antonin Scalia Law School. Bernard Sharfman is a research fellow at the Law & Economics Center and a senior corporate governance fellow of RealClearFoundation.

 

Why Norwegians Love Both EVs and Oil

By Charles Kennedy - Aug 16, 2021, 

Most Norwegians support their country’s current commitment to continue to search for oil and gas, even though Norway has the highest electric vehicle (EV) penetration anywhere in the world.

Norway is set to hold a parliamentary election on September 13, a few months after the current government of a conservative-led coalition said in June that the Norwegian oil and gas sector will continue to play a major role in long-term job creation, economic growth prospects, and value for the country.

A recent poll of Norstat carried out for Norwegian Broadcasting (NRK) showed on Monday that 55 percent of respondents wanted Norway to continue oil exploration, while 32 percent were against it.

The survey was carried out after the Intergovernmental Panel on Climate Change (IPCC) published on August 9 a report warning that the goal of limiting global warming to 2 degrees Celsius above pre-industrial levels will be beyond reach unless the world makes immediate, rapid, and large-scale reductions in greenhouse gas emissions.

Related: Islamic State Attacks Iraqi Oil Field

According to the latest election polls, the current government coalition in Norway will not be re-elected, Bloomberg notes.

However, a leftist and climate-conscious coalition would face challenges to change the current pro-oil government policy, not least because Norway is one of Europe’s richest countries thanks to the decades of oil revenues amassed in the world’s largest sovereign wealth fund with US$1.3 trillion in assets and holdings of 1.4 percent of all of the world’s listed companies. 

Norway doesn’t have any second thoughts about oil exploration and investment in light of the International Energy Agency’s (IEA) report suggesting that no new fossil fuel exploration would be needed for a net-zero world.

Western Europe’s biggest oil and gas producer is doubling down on oil development and continues to consider oil exploration and production a critical part of its economy and income for the state.

Bu Charles Kennedy for Oilprice.com

IKEA is now selling clean energy to Swedish households (no Allen key needed)

Michelle Lewis
- Aug. 17th 2021 


STRÖMMA is a locality in Stockholm County, Sweden. And it’s also the name Swedish furniture and home goods giant IKEA has given to its new clean energy retail service from next month in its home country.

IKEA’s clean energy – STRÖMMA

IKEA shoppers in Sweden will be able to not only buy everything from lights to appliances in one gargantuan blue building, they can also, from September, buy the clean energy from IKEA to power those items.

IKEA calls STRÖMMA an “electricity subscription,” and says it’s good for the planet and customers’ wallets.

IKEA products are named after a Swedish word based on the type of product. So, for example, fabrics are given female names, and bed and bath products are given flower and plant names. Perhaps further clean energy offerings will also be named after locations in Sweden.

The company explains in an announcement today:

The electricity from fossil fuels used at home has an impact on both our health and our planet. One simple action we can all take is switching to more renewable energy at home. IKEA offers more sustainable solutions that can be integrated seamlessly into our everyday lives. In addition to STRÖMMA in Sweden, IKEA offers solar panels to customers in 11 markets, with the ambition to enable customers in all our Ingka Group markets to use and generate more renewable energy through our energy services by 2025.

Through the STRÖMMA offer in Sweden, customers can buy affordable, certified electricity from solar and wind, and use an app to track their own electricity usage. Customers who have already bought solar panels from IKEA can also track their own production in the app and sell back the electricity they don’t use themselves.

Bojan Stupar, sales manager at IKEA Sweden, says:

IKEA is a home furnishing company, and we want to make it easier for more people to live a more sustainable life at home. Today we offer smart and energy efficient products and services that contribute to prolonging the life of products, reducing waste, saving water, and eating more healthily, as well as reducing electricity usage. Providing solar and wind power at a low price to more people feels like the natural next step on our sustainability journey.

The company plans on rolling out the offering to all of its global markets, and intends to source energy from wind and solar farms that are less than five years old to encourage the building of more of them.
Electrek’s Take

Talk about a turn (Allen) key solution. Reuters reports that Svea Solar, which is a partner of IKEA’s parent company Ingka and produces solar panels for IKEA, will buy the electricity on the Nordic power exchange Nord Pool and resell it without a surcharge. Consumers will pay a fixed monthly fee plus a variable rate. Combine that with IKEA’s smart lighting, and voila!



As a fun aside, we also wonder whether the STRÖMMA app features the cartoon “IKEA man”? If it doesn’t, then the instructions to sign up surely must.

Thanks to Marcus Johannson in Sweden!

Read more:
IKEA’s NYC delivery trucks will be fully electric by May 2021
IKEA put 1 million solar panels on 370 of its buildings in 2019

UK can’t fight climate crisis with austerity, warns expert

Author of government study says Treasury resistance to green spending programmes could halt progress to net zero

Nicholas Stern: ‘We mustn’t make the mistake we made a dozen years ago with premature austerity.’ Photograph: David Levenson/Getty Images


Michael Savage
Sat 14 Aug 2021

Imposing “premature austerity” again will undermine the fight against climate change and stop poorer households going green, one of the world’s leading climate economists has warned the government, amid claims that the Treasury is resisting policies to tackle the crisis.

Nicholas Stern, the author of the seminal 2006 government study into the costs of climate change, said comprehensive programmes were needed to help poorer households make the switch to electric cars and away from gas heating, if the government hoped to bring all greenhouse gas emissions to net zero by 2050.

In an interview with the Observer, he joined other prominent figures in calling on Boris Johnson and chancellor Rishi Sunak to invest in the technology needed and adopt policies such as subsidised loans to help all households make the switch.

“It’s going to need determination, some resources and smart design to solve these problems,” he said. “These things have to be made easy for people. Growth has to be driven by innovative investment. And we mustn’t make the mistake that we made a dozen years ago with premature austerity.

“It’s about helping people make the change. You’ve got to have a credible plan to help people with the replacement of boilers, when there are real costs, particularly for the poorest.”

It comes after claims from inside and outside government that the Treasury is resisting expensive programmes to tackle climate change in the run-up to the Cop26 climate summit, such as so-called “green cheques” to help people switch from gas. A string of policies, from home insulation to new infrastructure spending, have been scrapped, watered down or delayed. No 10 is now said to be pushing a bigger scrappage scheme for gas boilers.

On Saturday night, Keir Starmer, the Labour leader, pledged to work with the government on matters of “national and international interest” and back an ambitious plan to tackle climate change. However, he warned that the government’s track record and current plans fell short and that Boris Johnson was failing to convince his party of the urgent need for action.

“The Labour party I lead will always engage with the prime minister on issues of national and international interest,” Starmer said. “We face a climate emergency and the prime minister needs to grasp the opportunity Cop26 presents – and convince his own MPs to do the same.

“The UK needs to lead at home to enable leadership abroad. So far the Tories are falling woefully short of meeting this moment. The government’s greenwashing and delay risks fatally undermining the UK’s credibility as hosts of Cop26 and our ability to build trust and turn up the pressure on major emitters.”

Johnson last week set out his plan to make “coal, cars, cash and trees” the focus of the Glasgow summit. But Labour criticised the government’s record on each count. It attacked the refusal to block the Cambo oil field project in the North Sea, its cut to electric car subsidies, the reduction of aid to help poorer nations deal with climate change and its failure to meet tree-planting targets.

Stern’s plea for investment was echoed by other senior figures including John Gummer, the former Tory cabinet minister who now chairs the climate change committee that advises the government. “We have so far been very bad at dealing with helping people with the transition,” he said. “What we need to have is an honest national conversation, based upon the principle that we’ve actually got to achieve this. There isn’t an alternative. The price is something that society as a whole can afford. The issue is, how do you protect the vulnerable?


Calls for G7 spending restraint misguided, warns Lord Stern


“One of the issues that the Treasury has to recognise is that the longer it leaves this gap, the longer it gives people who want to make mischief an opportunity to say how very expensive everything is all going to be, and how everybody’s going to be in a terrible state. You mustn’t leave a gap, you’ve actually got to go in and say, these are the possibilities that we could do. We’ve had that vacuum over the past three or four months.”

Sir John Armitt, chair of the National Infrastructure Commission, also called for investment. “We’ve got to find ways in which this can be made affordable,” he said. “This has got to be something which we all, as citizens, can actually live with and recognise we’re going to have to pay for because we pay for it one way or the other – whether we pay through a government subsidy, or whether we pay through the meter.”

The government said £12bn had already been allocated for the prime minister’s 10-point plan for a green industrial revolution, “including billions to decarbonise our homes and vehicles – and a commitment to ensuring that the costs of the transition to net zero are fair and affordable”.

“We are already investing £1.3bn into helping make the homes of low-income families more energy efficient and cheaper to heat, and affordability and fairness will be at the heart of our comprehensive Net Zero Strategy that we’ll publish ahead of Cop26,” they said.

Opinion: Western Canadians are ready for a new economic era

Merran Smith is the executive director and Trevor Melanson is the communications director of Clean Energy Canada, a program at Simon Fraser University’s Centre for

Dialogue.

Author of the article: Calgary Herald
Publishing date: Aug 16, 2021 • 

With an abundance of wind, solar and other power sources, Alberta is set to lead job creation in the energy transition economy, say columnists. The Associated Press file

You’ve probably already heard that the village of Lytton, B.C., broke Canada’s all-time temperature record not once but three days in a row earlier this summer, culminating to an unbelievable 49.6 C before tragically burning to the ground.

What you may have missed: the unprecedented heat dome, which subsequently drifted eastward through the Prairies, was 150 times more likely because of human-caused climate change. For comparison, the Fort McMurray fire of 2016 was up to six times more likely as a result of global warming.

This year’s heatwave could hardly have been more symbolic, and yet it’s joined by a number of other significant recent events that together are imploring Western Canadians to look in the mirror and reassess their climate resilience and, along with it, their economic future.

Climate change threatens many important industries. While a decline in fossil fuel use is well-documented, crops will increasingly be impacted as well, by droughts or unexpected snowstorms. Indeed, climate change is already driving up food prices.

In short, climate change is no longer a distant threat. It’s now our lived reality.

Reality is changing in other ways too.

In the wake of COVID-19, countries around the globe are rebuilding their economies with purpose and climate change top of mind. Likewise, automakers are electrifying their most popular models, including their most popular trucks (even Premier Jason Kenney’s Ram 1500 will soon have an electric version).

There’s no pretending that things aren’t changing, nor is there any denying that global demand for what we produce here in Canada must change with it.

Western Canada has often been oversimplified as cowboys on the Prairies and hippies on the Left Coast, much to the annoyance of the 12 million people who actually live there and know better.

What Western Canada actually has in common is its entrepreneurial spirit.

Looking forward, Canada’s clean energy sector will add 210,000 jobs by 2030, many of them on this side of the country. According to recent modelling from Clean Energy Canada and Navius Research, Alberta will experience the biggest jump of any province: a 164 per cent increase in clean energy jobs over the next decade. In second, third and fourth place for fastest expected job growth: Saskatchewan, B.C. and Manitoba, respectively.

Given the diverse nature of the clean energy sector, growth will take different forms in different provinces. As Alberta updates its fossil-fuel-heavy electricity grid, the province is on track to see a surge in wind power jobs. Clean hydrogen and geothermal also represent opportunities for Alberta. The recent announcement of a $1.3-billion hydrogen facility in Edmonton is but one example that opportunity is rapidly becoming reality.

Additionally, as Alberta’s electricity grid (which is phasing out coal power way ahead of schedule) grows cleaner, so too will the many industries powered by it, giving them a competitive low-carbon advantage as our largest trading partners — the U.S. and the EU — eye carbon tariffs on future imports.

Luckily, Alberta isn’t just rich in oil; the province is generously endowed with renewable energy, with perhaps the best wind and solar resources in the country. It was Alberta wind power that yielded the lowest-ever rate for electricity in Canada, while the province’s solar power potential is roughly on par with Florida’s.

Job seekers are taking note. In a recent poll, seven in 10 Canadian fossil fuel workers said they’re interested in careers in the clean economy.

Western Canadians are looking to the horizon and wanting change.

The alternative — towns burning, streets flooding, missing out on the economic opportunity of a generation — is hardly an appealing proposition.

That’s especially true for a region that already possesses the right skills, the renewable resources, and the good old-fashioned tenacity to push forward.

Foreign ship stranded without refuelling options due to Rio Tinto Kitimat strike


The cargo vessel Indiana is docked in Kitimat but can’t be refueled because of the ongoing Rio Tinto aluminum smelter strike. (Ameblo.jp photo)

As captain calls for kindness, fuel suppliers afraid to cross union picket lines

BINNY PAUL
Aug. 16, 2021 2:00 p.m.

As the Kitimat aluminum smelter strike enters its fourth week, the captain of a Norwegian cargo ship trapped at a dock since July is calling on the the union and Rio Tinto to let it be refuelled.

The master of MV Indiana, berthed at Rio Tinto’s Terminal B wharf since July 17 in anticipation of loading up with aluminum, says the ship will run out of Emission Control Area (ECA) compliant low sulphur marine fuel if not refuelled by the end of the month.

“We ask for your kindness to allow us to replenish fuel in this berth,” said Capt. Roman Vicente Fudolig in a statement sent to Rio Tinto and Unifor Local 2301 on Aug. 15

Federal regulations state that any vessel docked in Canadian waters can only be refuelled with low sulphur marine fuel. The vessel does have high sulphur fuel onboard but switching to it would be in violation of other federal and International Maritime Organization mandates. MV Indiana has requested 100- 170 metric tonnes of low sulphur fuel.

Arbutus Point Marine Ltd. – the sole supplier of low sulphur marine gas oil to foreign flag ships on Canada’s Pacific coast – said their subcontractor, Northwest Fuels, is refusing to cross picket lines fearing social media defamation.

“MV Indiana is the unwitting victim of the Rio Tinto strike in Kitimat,” said Marc Gawthrop, managing director of Arbutus Point Marine.

Contractors fear that people on the picket line will take photographs of the fuel trucks and post them on social media, causing local repercussions for Northwest Fuels employees.

In July after the strike commenced, videos of contractors being heckled by union workers outside the smelter surfaced on social media.

Contractors remarked that getting through the picket line without being heckled by the union workers outside of the smelter was difficult, as videos surfaced on Facebook of an integrated fire and security company Tyco being yelled at and called “scabs” by multiple Unifor members as they drove through the picket lines.

READ MORE: BC Labour Relations Board lay down the law during labour dispute

“Compromising the safety and security of the crew members on board MV Indiana is not advancing their cause,” said Gawthrop and added that his calls and emails to both Unifor Local 2301 and Rio Tinto remain unanswered.

The foreign crew can’t disembark because of ongoing COVID-19 restrictions and the ship cannot be taken out of its berth because tug boat operators won’t cross picket lines either.

Northwest Fuels declined to comment on the situation citing confidentiality reasons with regards to information on customer deliveries.

While most vessels that arrive at the docks in Kitimat usually have enough fuel to turn back after collecting cargo, MV Indiana encountered a delay as the cargo delivery from the aluminum smelter was affected by the strike which began on July 25.

The strike between Rio Tinto and its approximately 900 unionized employees represented by Unifor Local 2301 began after negotiations for a collective agreement fell through and the aluminum giant refused to come back to the table.

While top officials from Rio Tinto and Unifor 2301 president met last week (Aug. 12) in Kitimat to determine if negotiations can be renewed, there have been no updates as to whether negotiations will resume again.

According to Gawthrop there are only three truck-accessible places on the north coast of B.C. for foreign flag ships to refuel – Stewart World Port and two Rio Tinto wharves in Kitimat. Heading to Stewart World Port is not a cost efficient option at this point, said Gawthrop estimating anywhere above $30,000 to take that vessel off the berth to Stewart for fuel, and back.

“Denying fuel to the International Transport Federation (ITF) crew members on board a foreign flag ship in Canada does not advance any labour interests for Unifor and posting photographs of contractors on social media to smear them is also a direct threat to the comfort and security of the ITF workers on board the Motor Vessel Indiana,” said Gawthrop.

In an email statement MV Indiana’s owners – shipping company Saga Welco headquartered in Norway – said their vessel Indiana made a scheduled port call for cargo loading operations in Kitimat and is an “innocent party” to the negotiations.

“We look forward to a quick and amicable resolution so the vessel can complete cargo loading,” said Saga Welco.