Ottawa releases long-waited blueprint to usher in open banking in Canada

But the fintech industry and consumers may have to wait years for it to be implemented

Author of the article:Stefanie Marotta

Publishing date:Aug 04, 2021 • 

Finance Minister Chrystia Freeland released the open banking report on Wednesday. PHOTO BY REUTERS/PATRICK DOYLE/FILE PHOTO

The Canadian government released the belaboured final open banking report on Wednesday afternoon after months of delays that drew concern across the financial technology sector.

The advisory committee’s review on opening banking — a regulatory framework that would allow consumers to determine how to share their banking data with financial service providers or move their information from one institution to another — recommends a framework aimed at safeguarding customer banking information. It could also open Canada’s financial services sector to competition from financial technology startups or “fintechs.”

“Consumer-driven finance, or open banking, is already part of Canadians’ lives. Many use digital services every day to manage their money, to budget for expenses, and to make investments,” Finance Minister Chrystia Freeland said in a statement. “Working towards a regulated, made-in-Canada system will make sure that we continue to enjoy a strong, stable, and innovative financial sector that is globally competitive, promotes consumer choice, prioritizes data privacy, and contributes to economic growth.”

The regulatory change could reduce barriers to switching financial institutions, which currently encourages customer loyalty to their current bank, and would allow fintech companies to compete more directly with incumbents — a change that could put pressure on the bottom lines of Canada’s Big Six banks.

The advisory committee’s report recommends that the federal government introduce a “purpose-built governance entity” to oversee the implementation of an open banking framework.

It also outlines three “foundational elements,” including rules that allow open banking industry participants to protect customer data, as well as ensuring liability falls to the right person or entity; a framework and process to allow third party service providers, such as payment processors, to participate in open banking; and technical details on processing safe and efficient data transfers.

Currently, fintech companies use a form of technology known as screen-scraping to access the customer data they need to process transactions. Consumers share usernames and passwords from their financial institutions to allow applications to access their bank transaction history, a process that could put the customer at risk of privacy data breaches.

As many as four million Canadians use data-driven financial service providers that require screen-scraping, according to a 2020 report by the government’s advisory committee.

The final report calls on the federal government to implement an open banking regime that eliminated the use of screen scraping by providing other solutions.

“To date, Canada has been slow to roll out a regime for open banking and has fallen behind other jurisdictions in introducing an agile regulatory framework that allows new entrants and new technologies to safely and securely enter the regulated sector,” said Patrick Searle, director of cyber initiatives at the Council of Canadian Innovators, a lobby group which represents more than 140 Canadian technology companies.

“The last federal budget contained zero references to this important policy initiative of the government. Now is the time for Canada to adopt a consumer-directed framework for our financial system that helps drive Canada’s growing fintech sector while offering consumers modern, innovative, and safe ways of banking.

The report also says that the industry could have to wait multiple years for a formal governance entity and legislative framework to be implemented. Open banking frameworks have already been adopted by the United Kingdom and other global markets.

“Time is of the essence to protect and empower Canadians with access to a wider range of useful, competitive and consumer friendly financial services,” said Blair Wiley, chief legal officer at Toronto fintech Wealthsimple Technologies Inc.

“The Canadian financial sector is undergoing a rapid digital transformation, and we urge the Government of Canada to adopt the recommendations of the Advisory Committee without delay. It is critical that no further time is lost in establishing an open banking framework that will benefit millions of Canadians.”

Open banking has been on the federal government’s radar for years. Prime Minister Justin Trudeau’s government said in its February 2018 budget that it would review the “merits” of open banking. Seven months later, former finance minister Bill Morneau launched a four-person advisory committee to review opportunities and challenges involved with the framework.

In January 2020, Morneau released the group’s initial report, which rebranded the regime as consumer-directed finance and recommended that another report be produced on a proposed regulatory framework. The final review was delayed by pandemic.

FP Explains: What is open banking and why hasn’t it come to Canada yet?

Chrystia Freeland has the blueprint to revolutionize Canadian banking — so let’s use it

Government advisory group on open banking seeks new rules in place by 2023


Wed., August 4, 2021



TORONTO — A government working group on so-called open banking recommends that a regulated system for sharing personal financial data with third parties like robo-advisors and budgeting apps be put in place by 2023.

The report released Wednesday by the Advisory Committee on Open Banking said that the timeline is "ambitious" but that it's important to roll out a system quickly because technology has outstripped regulation in a rapidly changing financial services industry.

More than four million Canadians already use some form of open banking — which involves granting third-parties such as financial technology companies access to bank data — but that some current practices create security and liability risks.

Most third-party apps currently ask a user to input the username and password they use to access their bank account online. In the open banking report, the advisory group says allowing third-party access to banking usernames and passwords may violate service agreements and result in consumers unknowingly bearing the risk of loss.

In order to make the 2023 timeline achievable, the report proposes that third parties be allowed to access. but not change, financial data under initial regulations. The system could then be expanded in the future to allow third parties to complete tasks like payments and account creation.

Minister of Finance Chrystia Freeland welcomed the report, saying in a statement that she looks forward to reviewing the recommendations.

"Working towards a regulated, made-in-Canada system will make sure that we continue to enjoy a strong, stable; and innovative financial sector," she said.

Patrick Searle, director of cyber initiatives at the Council of Canadian Innovators, said in a statement that he hopes the government moves quickly in reviewing the recommendations.

"To date, Canada has been slow to roll out a regime for open banking and has fallen behind other jurisdictions in introducing an agile regulatory framework that allows new entrants and new technologies to safely and securely enter the regulated sector," said Searle.

"The last federal budget contained zero references to this important policy initiative of the government."

The report recommends that all federally regulated banks be required to participate, while it would be optional for provincially-regulated institutions such as credit unions.

It says small and medium businesses should also be given initial access along with consumers.

The committee also recommends the government appoint someone responsible for further consultations and seeing the system through a set timeline.

The advisory committee first launched a review of the merits of open banking in 2018 at the request of the Minister of Finance, while this second, more in-depth review was launched in January 2020.

This report by The Canadian Press was first published August 4, 2021.

Ian Bickis, The Canadian Press

Is net-zero concept zeroing in on climate change? A sustainable consumption critique

Increasing demand for resources and energy-intensive lifestyles make it nearly impossible for technological fixes to reduce carbon emissions


By Soumyajit Bhar
Published: Tuesday 03 August 2021

The world has seen a massive surge in voluntary commitment to achieve net-zero targets by governments and corporations to keep global temperature rise under 1.5 degree Celsius.

The strategy has so far managed to draw the attention of the world’s major market players. Naturally, there is a sense of optimism, and many reckon that this could prove to be the ‘magic bullet’ for climate change everyone was desperately waiting for.

In simple words, net-zero refers to the balance between the amount of greenhouse gas (GHG) produced and the amount removed from the atmosphere. We reach net-zero when the amount we add is no more than the amount taken away.

However, there is a temporal lag between the emission and sequestration of GHGs: They are not done by the same actor (be it an industry or individual).

Market-based arrangements connect the dots between emitters and sequesters, as conceptualised through the idea of carbon offsets.

Climate scientists and activists have critiqued the net-zero concept as it relies excessively on nature-based and technological solutions for carbon removal and sequestration. Therefore, it disincentivises solutions that could lower actual carbon emissions through demand-side interventions.

Naturally, the larger socio-cultural critique of various nature-based solutions — particularly their implementation in the global south — are not considered enough.

This burn-now-pay-later strategy, therefore, promotes a reckless dependence on technological salvation, without delineating possible pathways towards lessening demand and consequently, emissions.

In reality, postponing actual reduction in emission makes us vulnerable: By allowing enough time for positive feedback, we tip the climatic balance beyond the threshold of “absolute no return.” By delaying action, we are letting a ticking time bomb explode.

Beyond these pertinent critiques of net-zero, I would pose a borrowed critique from Naomi Klein’s This Changes Everything: Can the prevailing market fundamentalism solve a problem it has given rise to in the first place. Isn’t it a tautology of the highest order that is bound to fail in actuality?

The strategy simply fails to address the root cause of climate crisis; it does not say much on ways to tackle the increasing demand for consumer goods and services and how to address the current dependency of our economies on insatiable consumer demand.

Neo-liberal economic models prevailing across economies are oriented solely towards the notion of ‘growthism’ – a drive towards infinite growth of economies fueled by the ever-increasing consumer want. Consumer demand is considered sacrosanct, which naturally reflects in ways subsequent policies are designed.

The idea of ‘growthism’ is based on a clearly misplaced belief that growth will take care of all concerns regarding just distribution. This belief is oblivious to the fact that infinite growth in a finite planet is a sheer impossibility. Klein rightly says our economic system and planetary system are now at war and clearly, the need of the hour is a radical reorientation of economic system away from this mindless ‘growthism’.

That is a herculean task undoubtedly, and unless a systematic approach — such as doughnut, degrowth or steady-state economic model — is carefully delineated, we may run into a recession.

Growth is the oxygen of the current neo-liberal economic model. It is natural that when faced with any major crisis, individuals are likely to curb their wants and resort only to fulfilling their needs.

This will cut the supply of ‘oxygen’ to the economies, pushing them into recession. We are witnessing precisely this during the ongoing COVID-19 crisis.

Economists across the world have stressed the need to restore consumer demands for economies to get back on their feet. The net-zero strategy, therefore, is a double-whammy, as not only does it shift our attention away from emission reduction, but also uses the same neo-liberal economic arrangement to solve the climate crisis.

Thus, net-zero targets would never allow us to address the root cause and demand a radical economic reorientation.

The net-zero strategy, as discussed, emphasises the use of carbon offsets and large corporations diverting their investments, making carbon offsets a multibillion dollar market. The growth of carbon offsets market would make the use of carbon offsets more popular among individuals.

So the wide use of carbon offsets at the individual level will also have far-reaching and serious consequences. Individuals, through their conception of a good life, appropriate larger macroeconomic priorities and in turn provide feedback to the same system, giving rise to a self-sustaining process.

Although the creation of the idea of a new middle class in India was a political discursive process instituted post economic liberalization, individuals proactively kept appropriating macroeconomic priorities in their good life definitions because they aspired to lead a life of the West or that of material opulence.

Even though only a fraction (2-3 per cent) of India’s current population manages to enjoy such a lifestyle, my research illustrates that changes in socio-culturally held notions of the good life and normalised such excessive consumption choices for the society.

This, in turn, creates points of aspirations for the rest of the population to strive towards an unsustainable standard of living that cannot simply be extended to all. The manufacturing of such aspirations implies that even if the large, impoverished sections of the developing world are provided with an objectively-definable standard of decent living, it may not offer any sense of sustained happiness or well-being.

In short, the ever-increasing demand for resources and energy-intensive lifestyles of a larger share of the world’s population would make it next to impossible for technological fixes to reduce carbon emissions so as to maintain a balance towards the net-zero world.

Now, the increased use of carbon offsets at the personal level will normalise people’s consumption patterns even more conveniently and insulate them from any moral obligation to lower their levels of consumptions. Unless we find a way to effectively reduce the per-capita consumption of the top 10 per cent of the world’s population, we would not be able to address the root cause of the climate crisis and other environmental challenges.

The discussion so far has clearly established the rationale behind the claim that the net-zero may not only be ineffective in lowering the current rate of climate change, it can also be counterproductive in addressing the climate crisis.

As a society, we need to understand that however difficult it may seem for our economies, we have to collectively chart pathways to reduce our consumption demands and find non-materialistic ways to seek human fulfillment.

This current global pattern of increasingly trying to fulfill needs through material need-satisfiers has left many fundamentally unsatisfied and disillusioned. There is a great deal of discussion around the need to decouple the gross domestic product growth from environmental impacts, but the need of the hour is to decouple wellbeing from material pursuits.

Addressing a problem’s root cause does not have easy fixes that don’t disturb the status quo; a shift towards alternative economic models can be neither quick nor without the active participation of every individual and organisations.

A slowly sustained change in socio-cultural priorities and notions of good life, along with necessary infrastructural changes to support that, is the only way forward to realise a sustainable and just world for all.

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QUESTIONING THE MYTH OF CCS

People need to accept that Canada is the fourth biggest producer of oil in the world:

 Seamus O’Regan

Episode 113 of Down to Business podcast
Author of the article: Gabriel Friedman
Publishing date:Aug 04, 2021 • 

Canada's Minister of Natural Resources Seamus O'Regan. 

PHOTO BY REUTERS/BLAIR GABLE


Carbon Capture, the name for the process of burying CO2 emissions underground so they’re not released into the atmosphere, sounds like it would be good for the environment.

But not everyone thinks so. 

This week, on Down to Business,

 Seamus O’Regan, Minister of Natural Resources, discussed what carbon capture means for Canada’s oilsands and whether the government would consider funding a large portion of the costs of carbon capture in Alberta so the oilsands could reduce the emissions released during mining and processing of oil.

WAIT WHAT

Importantly, in July, about 500 mostly environmental organizations wrote a letter to O’Regan and other federal ministers, saying that if the government were to fund such a project, it would actually make the oilsands more competitive, so more oil could be produced, which would lead to greater emissions.

O’Regan talked about how he feels about the oilsands and why he believes the carbon tax is the “most elegant solution.”

Siemens Gamesa Assembles First Offshore Wind

Turbine Nacelle Outside Europe

August 3, 2021, by Adnan Durakovic

Siemens Gamesa’s offshore wind nacelle assembly facility in Taichung, Taiwan has assembled its first nacelle.

This marks the first time a Siemens Gamesa offshore turbine nacelle has been assembled outside Europe.

The construction work on Siemens Gamesa’s assembly facility in Taichung Harbor started in March 2020.

The parcel of land being developed in Taiwan measures over 30,000 square metres and will support Ørsted’s 900 MW Greater Changhua 1 & 2a project, where SG 8.0-167 DD turbines will be used, Siemens Gamesa said.

The Greater Changhua 1 & 2a wind farm will comprise 111 SG 8.0-167 DD wind turbines installed on jacket foundations in the Taiwan Strait, some 35 to 50 kilometres off the coast of Changhua County.

The offshore construction at the Greater Changhua 1 and 2a sites will be carried out during 2021 and 2022, with the project expected to be fully up and running in 2022.

The wind turbine installation is slated for 2022.

 

Japanese gas-cooled reactor restarts

03 August 2021

The Japan Atomic Energy Agency (JAEA) has resumed operation of the High-Temperature Test Reactor (HTTR) in Oarai, Ibaraki Prefecture. The small prototype reactor becomes the first Japanese gas-cooled reactor to restart following the introduction of new safety regulations.

The HTTR reactor (Image: JAEA)

The 30 MWt graphite-moderated helium gas-cooled reactor achieved first criticality in November 1998 and reached full power operation in 2001. It demonstrated stable heat at 950°C over 50 days in 2010. Its fuel is ceramic-coated particles with low-enriched (average 6%) uranium incorporated into hexagonal graphite prisms, giving it a high level of inherent safety. It is designed to establish a basis for the commercialisation of second-generation helium-cooled plants running at high temperatures for either industrial applications or to drive direct cycle gas turbines. JAEA plans to construct a hydrogen production system linked to the HTTR, which had been idle since February 2011 when it was taken offline for planned inspections.

Revised regulations were announced by the Nuclear Regulation Authority (NRA) in July 2013, which must be met before reactors can receive permission to restart. These set out requirements for plants to be able to respond to a variety of natural phenomena as well as establishing new measures to mitigate the effects of severe accidents, such as reactor core damage caused by beyond design basis events. JAEA applied to the NRA in November 2014 for inspections to verify whether measures taken at the HTTR met the new safety standards.

In June 2020, JAEA received permission from the NRA to make minor changes to the reactor installation of the HTTR in conformity with revised safety requirements. The upgrade work the NRA approved included the installation of systems against internal and external fire.

The HTTR resumed operation on 30 July, JAEA announced.

JAEA said it will now carry out safety demonstration tests by using the HTTR under the framework of an OECD Nuclear Energy Agency project. In addition, JAEA plans to conduct various tests to confirm safety, core physics and thermal-fluid characteristics, and fuel performance. Furthermore, it said the demonstration plan of hydrogen production by the HTTR is under discussion.

"Through those tests utilising the HTTR and the efforts on the establishment of global safety standard, we will make a contribution to the international community," JAEA said.

Researched and written by World Nuclear News

The Real Reason Big Oil Is Betting On The Hydrogen Boom

By Irina Slav - Aug 03, 2021, 

Japan has been making headlines with its plans to significantly increase its reliance on hydrogen to satisfy its energy needs. Right now, it is demonstrating its transformation into a hydrogen economy by showcasing hydrogen buses and cars used in the Olympics. But there is a problem with that for those nit-picky enough to notice. This hydrogen is not green. In a recent article for Forbes, tech journalist James Morris noted that the hydrogen used in Japan right now is made from natural gas rather than through the electrolysis of water. Green hydrogen—the one produced through hydrolysis using electricity from renewable sources—is an ideal case scenario, he said, but it’s still far in the future. So Big Oil is pushing the other kind of hydrogen.

The argument Morris puts forward is that Big Oil is feeling threatened by electric cars, so it is doing whatever it can to keep the world running on its hydrocarbons even if they are used to produce a fuel that could be an alternative to gasoline and diesel. In fact, according to the tech journalist, who is also the editor of a website dedicated to electric cars, hydrogen as a fuel is no viable alternative to either combustion engine cars or EVs. They are still a lot more expensive than either, and fueling stations are few and far between.

That Big Oil is pushing grey hydrogen to keep itself alive is a refreshing argument in a discourse dominated by oppositions like EVs vs Gas Guzzlers and Hydrogen vs Gasoline. Yet this argument misses the point of the bigger hydrogen argument, and that point is that the only hydrogen that will have a place in the net-zero world would be green hydrogen.

Related: Libya: Shell Considers Resuming Activities In Country
That kind of hydrogen is currently a lot more expensive than grey hydrogen, and some argue that it will never become as cheap as the gas-derived version of the gas. Yet dozens of companies are putting together mega-plans for green hydrogen production, confident it will be economically viable within years.

The list of these plans, recently compiled by Recharge News, makes for interesting reading for sure. Take the HyDeal Ambition project, for example. The project envisages building 95 GW of solar power capacity to provide electricity for 67 GW worth of electrolyzers located in Spain, France, and Germany. Plans are to have the green hydrogen produced for 1.50 euro per kg, or about $1.19 before 2030. To compare, a kilo of green hydrogen currently costs about $5 to produce.

Interestingly, the companies involved in the project do not give a cost estimate for it, but those behind another green hydrogen project do: the Australian Western Green Energy Hub that will use 50 GW of wind and solar capacity to power 28 GW of electrolyzers will cost $70 billion to build. That’s about the same as the cost—including delays and overruns—of a large-scale LNG project. Yet the goal is noble: reduce the use of hydrocarbons and switch to clean hydrogen.

Related: Santos, Oil Search Merger Creates $16 Billion Giant

When it comes to cars, EVs are certainly further along in their evolution than fuel-cell cars. And yet, even EVs still need heavy government subsidies to compete on cost with ICE cars. This will need to change if EVs are to become the dominant mode of transportation for humans because heavy subsidies are not a practical long-term strategy. Competition from fuel-cell cars, however, minuscule though their number may be, could be good for the EV industry, where internal competition is heating up too.

Outside EVs, the argument of Big Oil sponsoring hydrogen as a way to stay in the energy game might make sense for those who cheered President Biden killing the Keystone XL pipeline, forgetting that this would have no effect whatsoever on the amount of Canadian oil the U.S. consumes. In fact, exports of Canadian oil to the U.S. rose. The oil was simply transported by train rather than a pipeline.

Those who look beyond the ideology would see that Big Oil might indeed be in favor of hydrogen as long as it’s grey hydrogen since that involves the use of natural gas, but they would also see that it is just one of many uses for natural gas—and crude oil, for that matter. And these uses would be a lot harder to eliminate than by promoting affordable EVs for everyone.

By Irina Slav for Oilprice.com

GREENWASHING

Gas could act as 'second pillar of decarbonisation' alongside renewables: report


Path to decarbonisation: new study claims using gas in 

the near term could help support deeper decarbonisation 

over the long term Photo: REUTERS/SCANPIX

Gas can help bring down emissions in the near term while infrastructure can be repurposed for low-carbon fuels in the future

By Josh Lewis
in Perth


Investment in gas infrastructure in the near term could help support deeper decarbonisation of the energy system over the long term, according to new research by IHS Markit.

The study, titled ‘A Sustainable Flame: The Role of Gas in Net Zero’, claims that replacing older and less efficient power plants with "best-in-class" natural gas generation would reduce emissions by 50% per unit of electricity.

Mubadala cuts emissions by 25% with focus on gasRead more

IHS found that by increasing gas use in Asia to displace coal in power generation could cut emissions by about 1 gigatonne, however this is only equivalent to about 3% of all greenhouse gas emissions from the energy sector, according to the report.

It would also require an increase in global gas production of about 15%, from current levels, in order to meet that rise in demand.

Supporting low-carbon fuels

IHS also noted existing concern that investing in gas could embed or lock in future emissions for several decades, however, its study found that need not be the case as the infrastructure could be repurposed to carry low-carbon fuels.

“The versatility of natural gas infrastructure presents an opportunity to seize the low-hanging fruit of emissions reduction in the near term while also making a down payment for deeper decarbonisation,” said Michael Stoppard, chief strategist, global gas, IHS Markit.

“Switching to natural gas can support vital early action by replacing coal and oil and their associated higher emissions while also acting as a pre-build of energy carriers for a low-carbon future.”

The IHS study claims gas could act as a “second pillar of decarbonisation” over the long term, due to its versatility and the ability of its related infrastructure to be converted to carry low-carbon fuels such as ammonia, hydrogen, synthetic methane and renewable natural gas in the future.


China urges an end to 'whirlwind campaigns' for carbon reductionRead more

The study noted that gas pipelines could ship renewable natural gas, with “green” gases able to be blended in at an early stage to reduce emissions, while over the longer term they could be repurposed for shipping 100% hydrogen.

The study also found that low-carbon gas could be viable with a carbon price of between $40 and $60 per tonne, which it noted was close to levels already found in some markets today.

It also highlighted the fact that gas-fired power plants could be converted to run on hydrogen or sustainable ammonia, while in some circumstances existing plants can also be retrofitted for carbon capture, utilisation and storage to lower emissions.

Meanwhile, liquefied natural gas plants could be converted in the future to liquefy hydrogen, “likely” at a lower cost than building a new hydrogen liquefaction plant from scratch.

“Repurposing infrastructure has technical challenges but the costs, while significant, are still lower than building entirely new facilities,” said Shankari Srinivasan, vice president, global and renewable gas, IHS Markit.

“And it provides flexibility to policymakers and lenders who could structure authorisations and loans such that any newbuild infrastructure be conversion-ready and have defined performance standards with limits on the life that the asset can operate before being converted.”

Heating dilemma

The study also added fuel to the ongoing debate over the electrification of heating, which could be done using zero emission renewable energy.


Extreme weather unlikely to wash away Chinese appetite for fossil fuels, for nowRead more

However, the study by IHS claims electricity delivered by wire is less suited for meeting the need to produce heat, either for industrial processes or for heating buildings, compared to gas.

Using a case study of New York, IHS noted the US city’s current power system was currently sized at 31 gigawatts.

However, it claims a system sized to more than 150 GW would be required for the full electrification of heating in the Big Apple. Even taking into account the full deployment of air-sourced heat pumps, IHS found the system would still need to be 133 GW, more than four times its current capacity.

“Renewable capacity will continue to grow, electrification will broaden its reach and improvements in battery storage will make a decarbonised grid more reliable,” said Stoppard.

“But the transition to a low-carbon gas supply will also be needed to serve the sectors beyond the reach of electrification and wires.”(Copyright)

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Bipartisan Infrastructure Bill 'Doubling Down on Support for Carbon Polluters' With $25 Billion in Subsidies, Critics Warn

"We need massive investments in proven renewable solutions, not carbon capture fantasies."

Rep. Ilhan Omar (D-Minn.) speaks at an "End Fossil Fuel" rally organized by Our Revolution near the U.S. Capitol on June 29, 2021 in Washington, D.C. Demonstrators called on Congress to take action in ending fossil fuel subsidies. 

(Photo: Anna Moneymaker via Getty Images)

KENNY STANCIL

August 3, 2021

While Democratic leaders have described the Senate's bipartisan infrastructure bill as "a significant down payment" toward addressing the climate emergency, environmental justice advocates are warning that the proposed legislation—which reportedly includes billions of dollars in potential new subsidies for dirty energy projects disguised as solutions—threatens to prolong the life of the planet-wrecking fossil fuel industry.

"The Senate is proposing that we spend tens of billions of dollars propping up fossil fuel corporations."
—Mitch Jones, Food & Water Watch

Citing an analysis by the Center for International Environmental Law, The Intercept reported Tuesday that "the latest draft bill would make fossil fuel companies eligible for at least $25 billion in new subsidies." According to the news outlet, public money would go toward unproven technologies, including carbon capture and so-called clean hydrogen, that are "sold as dream fixes for ending the nightmare of the climate crisis without the colossal political hurdle of dislodging the fossil fuel industry from the U.S. economy."

Given that energy policy experts have called for transitioning as quickly as possible to a completely renewable energy system, critics warn that investments of the kind included in the bipartisan infrastructure bill could exacerbate coal, gas, and oil extraction, condemning vulnerable populations and future generations to the most catastrophic effects of the climate emergency.

"We will never be able to meet the Paris agreement if we fund these kind of programs," Jim Walsh, senior policy analyst at Food & Water Watch, told The Intercept, referring to the international climate accord that seeks to limit global temperature rise this century to 1.5°C above preindustrial levels by cutting the emission of heat-trapping greenhouse gases in half by 2030 on the way to "net-zero" by 2050.

The bipartisan infrastructure bill "would support the development of four petrochemical hubs that would create profit incentives for greenhouse gas emission production and would be focused on finding new ways of integrating fossil fuels into our economy for transportation, energy, petrochemical development, and plastics," according to Walsh. He added that "this deal envisions a world where we will use fossil fuels into perpetuity."

Sen. Joe Manchin (D-W.Va.)—the same lawmaker who has made more than $4.5 million from his family's coal business since joining the Senate in 2010 and received praise from an ExxonMobil lobbyist for weakening the climate provisions in President Joe Biden's infrastructure proposal—is the chief architect of the energy-related measures in the bipartisan infrastructure bill.

An amended version of Manchin's Energy Infrastructure Act—which progressives denounced last month for proposing to spend 70 times more on fossil fuels than renewables—"will serve as the legislative text for key portions" of the bipartisan infrastructure bill, according to the Senate Committee on Energy and Natural Resources that the West Virginia Democrat chairs.

Food & Water Watch policy director Mitch Jones said Tuesday in a statement that the bipartisan infrastructure bill "is not a down payment on real climate action—it is doubling down on support for climate polluters."

"The Senate is proposing that we spend tens of billions of dollars propping up fossil fuel corporations—this is on top of the $15 billion these companies already receive every year from the federal government," said Jones. "A substantial share of this new money—about $12 billion—would go to promoting carbon capture, which does absolutely nothing but extend the life of the fossil fuel era."

Some progressive critics have characterized carbon capture and storage (CCS) and carbon capture, utilization, and storage (CCUS) as polluter-friendly schemes that allow the fossil fuel industry to benefit from additional public subsidies while undermining efforts to slash emissions as thoroughly and rapidly as possible.

In addition to the possibility of leaks and contamination, progressives warn that large-scale sequestration efforts are "false solutions" that could legitimate further fossil fuel extraction and forestall robust climate action. If CCS is treated as an alternative to ambitious mitigation and adaptation policies, critics argue, then it could divert attention from the pressing need for decarbonization.

Other progressives, including Christian Parenti, associate professor of Economics at John Jay College, City University of New York, have argued that even if we stopped emitting carbon dioxide today, the concentration of greenhouse gases in the atmosphere is so high that certain negative consequences can only be avoided if carbon is removed.

However, Parenti, who has long emphasized the need to "euthanize the fossil fuel industry," stresses that the state should only implement CCS or CCUS as public utilities to strip excess carbon from the atmosphere while the rest is kept underground—not to justify a continuation of the status quo.

In addition to carbon capture, the bipartisan infrastructure bill includes billions of dollars in public funding for "hydrogen fuel made from natural gas and 'low emissions buses' that could run on fuels including hydrogen and natural gas," The Intercept reported. "It also encourages subsidies that go unquantified in the legislation, for example urging states to waive property taxes for pipelines to transport captured carbon."

According to The Intercept:

So-called clean or "blue" hydrogen would use carbon capture and storage to neutralize the greenhouse gas emissions associated with the process. Another type of the fuel, called "green" hydrogen, uses electricity drawn from renewables.

Neither "blue" nor "green" means of hydrogen production, however, are widely used. For instance, only two facilities in the world have tried to commercially produce decarbonized "blue" hydrogen. As a result, 96% of hydrogen fuel globally comes from carbon-intensive means of production, according to a 2019 report. Research out of Stanford and Cornell universities indicates hydrogen produces more climate-warming gases than simply using natural gas directly.

At a time when "the survival of the fossil fuel industry depends on its ability to convince the public that corporations are taking steps to address the climate crisis," The Intercept noted, "ExxonMobil, Royal Dutch Shell, and Chevron, just to name a few, have touted their investments in hydrogen and carbon capture."

The irony, as the news outlet pointed out, is that "long-shot, industry-supported 'climate' projects" and "the rapid scale-up of renewable energy sources already proven to meaningfully slow down the spiraling climate crisis" both depend on government subsidies. The key difference, however, is that "wind and solar work as climate fixes right now, while carbon capture and 'decarbonized' hydrogen do not."

Jones emphasized that "while handing money to dirty energy companies might help win votes in the Senate, it fails the only test that matters: Whether or not we are taking meaningful action to address our mounting climate crisis."

"Throwing away money is not going to reduce emissions," he added. "We need massive investments in proven renewable solutions, not carbon capture fantasies. If the Senate cannot manage to get this right, climate champions in the House will need to strip out these wasteful dirty energy subsidies."

BIPARTISAN INFRASTRUCTURE BILL INCLUDES $25 BILLION IN POTENTIAL NEW SUBSIDIES FOR FOSSIL FUELS

Alleen Brown
Aug. 03 2021, 11:00 AM

Photo: Drew Angerer/Getty Images

THE SENATE’S NEW bipartisan infrastructure bill is being sold as a down payment on addressing the climate crisis. But environmental advocates and academics are warning the proposed spending bill is full of new fossil fuel industry subsidies masked as climate solutions. The latest draft bill would make fossil fuel companies eligible for at least $25 billion in new subsidies, according to an analysis by the Center for International Environmental Law.

“This is billions upon billions of dollars in additional fossil fuel industry subsidies in addition to the $15 billion that we already hand out to this industry to support and fund this industry,” said Jim Walsh, Food and Water Watch’s senior policy analyst. Scientists say that to meet the goals of the international Paris climate accord, the U.S would need to reach net-zero emissions by 2050 — and be well on the way there by 2030. With subsidies that keep fossil fuel industries going, Walsh said, “We will never be able to meet the Paris agreement if we fund these kind of programs.”

Just as concerning is the new economy the subsidies could entrench, said Walsh, through the creation of new fossil fuel infrastructure. “This would support the development of four petrochemical hubs that would create profit incentives for greenhouse gas emission production and would be focused on finding new ways of integrating fossil fuels into our economy for transportation, energy, petrochemical development, and plastics.”

In short, he added, “This deal envisions a world where we will use fossil fuels into perpetuity.”

Industry-Backed “Climate” Projects

The subsidies would go toward technologies sold as dream fixes for ending the nightmare of the climate crisis without the colossal political hurdle of dislodging the fossil fuel industry from the U.S. economy. Such technologies include carbon capture and decarbonized hydrogen fuel. Both purported solutions in practice help fossil fuel companies mask the continued release of climate-warming gases. Neither of the technologies are currently commercially viable at a large scale, so the energy industry requires government help to carry out what critics see as a public relations scheme.

The bill includes billions of dollars for carbon capture, utilization, and storage; hydrogen fuel made from natural gas; and “low emissions buses” that could run on fuels including hydrogen and natural gas. It also encourages subsidies that go unquantified in the legislation, for example urging states to waive property taxes for pipelines to transport captured carbon.

The devil is in the details. The vast majority of clean-sounding hydrogen is made from natural gas and produces the greenhouse gas carbon dioxide as a waste product. The process itself requires energy, typically supplied by burning more natural gas, which also produces greenhouse gases. Meanwhile, carbon capture and storage are promoted primarily as a means to clean up continued emissions from fossil fuel processing facilities. Carbon capture would do nothing to resolve the array of severe environmental problems caused upstream by drilling, fracking, and mining — let alone the downstream burning of the fuels for energy.

The survival of the fossil fuel industry depends on its ability to convince the public that corporations are taking steps to address the climate crisis. Hydrogen and carbon capture, utilization, and storage have been two of the industry’s key strategies for achieving that goal. Exxon Mobil, Royal Dutch Shell, and Chevron, just to name a few, have touted their investments in hydrogen and carbon capture.

While long-shot, industry-supported “climate” projects depend on government subsidies, so does the rapid scale-up of renewable energy sources already proven to meaningfully slow down the spiraling climate crisis. Put simply, wind and solar work as climate fixes right now, while carbon capture and “decarbonized” hydrogen do not.

Yet the Democrats and Republicans pushing the infrastructure compromise are choosing to give the fossil fuel industry a lifeline instead of providing funding for proven renewable energy technology. Even bill provisions that facilitate renewable energy development contain language that could allow funds to go instead to fossil fuel industry “solutions.”

“Any legislation funding carbon capture and storage or use or direct air capture is legalizing the funding of scam technologies that merely increase air pollution death and illness, mining and its damage, and fossil-fuel infrastructure, and they have no provable carbon benefit,” said Mark Jacobson, a professor of civil and environmental engineering at Stanford University. “By far, the best thing to do with the subsidy money for this is to purchase wind, solar, and storage to eliminate fossil fuels.”
Little-Understood Technologies

Senate Majority Leader Chuck Schumer, D-N.Y., hopes to finalize the latest $550 billion bipartisan iteration of the infrastructure bill by the end of the week. The legislation will also have to make it through the House and will ultimately be complimented by hundreds of billions in additional provisions to be hammered out though a separate process called reconciliation, which requires no Republican support.

President Joe Biden kicked off the process with his own blueprint, the $2.5 trillion American Jobs Plan. Republicans, however, didn’t come up with the carbon capture and hydrogen spending: Many of the industry-friendly proposals were part of Biden’s plan from the start. “It’s truly bipartisan, which makes me cringe,” said Walsh.

The bill is moving fast, and the billions in funding are set to become law at a time when policymakers and the public still lack a firm grasp on how the technologies work.

Hydrogen has become the latest darling of the fossil fuel industry. So-called clean or “blue” hydrogen would use carbon capture and storage to neutralize the greenhouse gas emissions associated with the process. Another type of the fuel, called “green” hydrogen, uses electricity drawn from renewables.

Neither “blue” nor “green” means of hydrogen production, however, are widely used. For instance, only two facilities in the world have tried to commercially produce decarbonized “blue” hydrogen. As a result, 96 percent of hydrogen fuel globally comes from carbon-intensive means of production, according to a 2019 report. Research out of Stanford and Cornell Universities indicates hydrogen produces more climate-warming gases than simply using natural gas directly.

The infrastructure bill calls for a national strategy to put “clean hydrogen” into action, including four regional hydrogen hubs. The provision explicitly ties one hub to fossil fuels and calls for two others to be near natural gas resources.

Likewise, the carbon capture measure in the bill ties government investment to areas “with high levels of coal, oil, or natural gas resources.”

Existing carbon capture projects have repeatedly run into problems, including a heavily subsidized Chevron facility dubbed the largest carbon capture project in the world, which was attached to a liquid natural gas export facility in Australia and recently deemed a technological failure. Exacerbating the problem is that there is no real market for captured carbon — except to use captured gases to produce even more oil from old wells. While the legislation puts money toward creating new uses for the trapped gases, large-scale markets are a far-off prospect.

Some proponents argue that carbon capture and hydrogen fuels could ultimately be beneficial for the climate if used for narrow purposes, like capturing carbon from steel production. But there is nothing in the bill preventing the fossil fuel industry from using the purportedly climate-friendly technologies to shore up its image while continuing to release emissions — a tactic known as “greenwashing.”

Environmental justice groups are clear about where they stand. Biden’s Environmental Justice Advisory Council issued a report in May that included carbon capture and storage among a list of technologies that will not benefit communities. Separately, a group of hundreds of organizations, ranging from Ben & Jerry’s to 350.org, sent a letter to Democratic leaders on July 19 urging them to resist energy strategies reliant on carbon capture, utilization, and storage.

The letter reads, “Investing in carbon capture delays the needed transition away from fossil fuels and other combustible energy sources, and poses significant new environmental, health, and safety risks, particularly to Black, Brown, and Indigenous communities already overburdened by industrial pollution, dispossession, and the impacts of climate change.”

Congress proposes "clean hydrogen" production hubs—with coal as a potential source

 STEPHEN EDELSTEIN 

AUGUST 3, 2021

The bipartisan infrastructure bill headed for a Senate vote includes provisions for "clean hydrogen" hubs that would use fossil fuels, Bloomberg reported Monday.

The bill earmarks $8 billion to build at least four "regional clean hydrogen hubs" that would produce hydrogen for uses such as heating, manufacturing and transportation.

At least two of these hubs would be located in regions "with the greatest natural gas resources," according to the bill, and renewable energy, nuclear energy, and biomass are discussed as potential energy sources. However, so is coal.


Toyota 'Project Portal' proof-of-concept hydrogen fuel-cell powered semi tractor, for Port of LA

As Bloomberg points out, hydrogen can be stripped from water using electrolyzer devices, which seems to be the plan here, as the bill also includes $1 billion for grants to improve the efficiency of these devices. But that requires a lot of electricity, and the source of that electricity can affect the overall environmental impact of hydrogen production.

If the electricity comes from renewable sources, the hydrogen-production process does not generate greenhouse-gas emissions, Bloomberg noted. This so-called "green hydrogen" is currently more expensive than hydrogen produced using natural gas, but costs are expected to fall within a decade, to the point where green sources cost less than fossil fuels, according to Bloomberg. That in turn could make coal-powered hydrogen hubs uncompetitive.

A 2020 IHS Markit study predicted that green hydrogen produced using renewable energy could be cost-competitive with hydrogen made from natural gas by 2030. The California Energy Commission came to a similar conclusion, saying in its own 2020 report that hydrogen fuel-cell cars could reach price parity with gasoline by 2025.


2021 Hyundai Nexo

That's a more encouraging picture than just a few years ago. A 2014 University of California-Davis study predicted that cheap natural gas would be needed to make hydrogen cost competitive with gasoline.

Hyundai has been one of the biggest cheerleaders for a big-picture hydrogen policy, and has cited a McKinsey analysis suggesting hydrogen (assumed to be green in this analysis) could make up 18% of global "final energy demand" by 2050.

However, infrastructure remains a big barrier— and that's led to some very creative proposals on how to transport hydrogen from clean energy sources to end points—including using the existing fossil-fuel infrastructure.

INFRASTRUCTURE
Billions for carbon capture, hydrogen, advanced nuclear included in bipartisan infrastructure plan

Dave Gribble of TDA Research gives a tour of the first carbon capture research project on the ground at the Integrated Test Center outside Gillette in August 2020. The infrastructure package now in the Senate includes money for emerging energy technologies. Cayla Nimmo, Star-Tribune▲


Nicole Pollack 
Aug 3, 2021


The $1 trillion bipartisan infrastructure package completed over the weekend includes billions in funding for three emerging energy technologies that Wyoming is already exploring: clean hydrogen, carbon capture and advanced nuclear power.

After a precarious, monthslong negotiation process that saw the bipartisan deal nearly fall through, the Senate voted Wednesday to open debate on the infrastructure plan by a margin of 67-32. Wyoming Sens. John Barrasso and Cynthia Lummis both voted against advancing the bill.

In a statement, Barrasso characterized the legislation as governmental overreach — calling it “the Biden administration’s takeover of America’s electric system” — and expressed concern about where the funding would come from.

“We should be investing in our infrastructure responsibly. Instead, this bill spends too much and mandates policies that are bad for Wyoming,” he said.

Despite the senators’ misgivings about the infrastructure plan, some of the programs covered under its hefty price tag would support the development of advanced energy sources, which many in Wyoming say are key to revitalizing the state’s economy as natural resource revenue continues to decline.

According to a summary of the 2,700-page bill, the package would allocate more than $8 billion toward carbon capture efforts through 2026, including $100 million for the Department of Energy’s Carbon Capture Technology Program, $300 million for the development of carbon oxide products, $2 billion for carbon dioxide transport infrastructure, $2.5 billion for the commercialization of carbon sequestration projects and $3.5 billion for four regional direct air capture hubs.

The influx of federal spending could boost Wyoming’s existing carbon capture, utilization and storage efforts, including the University of Wyoming’s CarbonSAFE sequestration project and other initiatives at UW and throughout the state.

For hydrogen, the bill would reestablish and expand the DOE Hydrogen Program to include additional clean hydrogen programs as well as a national strategy for advancing clean hydrogen.

It authorizes $500 million to support a domestic clean hydrogen supply chain, $1 billion for a hydrogen commercialization program and $8 billion for four clean hydrogen hubs that “demonstrate the production, processing, delivery, storage, and end-use of clean hydrogen” and “can be developed into a national clean hydrogen network to facilitate a clean hydrogen economy.”

Under the bill, both blue and green hydrogen qualify as clean, though there is some disagreement about whether blue hydrogen — a classification for hydrogen generated using natural gas that requires that the carbon released as a byproduct be sequestered — can be considered as clean as green hydrogen, which is produced using renewable energy.

Many in Wyoming, including the oil and gas industry, see blue hydrogen as a way to keep the state’s gas production competitive as power plants’ demand for natural gas wanes. Several energy companies received grants last month from the Wyoming Energy Authority to support feasibility studies on the production and use of both blue and green hydrogen.

The bill also directs the DOE to conduct a report on the feasibility of using advanced nuclear technologies to meet U.S. climate goals, and introduces a $6 billion civil nuclear credit program to help keep existing nuclear reactors operating.

That expanded federal support for nuclear power would come as nuclear design company TerraPower begins the permitting process for the advanced reactor it plans to build at one of four retiring Wyoming coal plants.

Majority Leader Chuck Schumer has said he hopes to finalize amendments to the bill and pass it through the Senate before the monthlong August recess starts next week.

 NATO'S OIL WAR

Spanish Oil Major Repsol May Resume Oil Exploration In Libya

By Charles Kennedy - Aug 04, 2021, 3:30 PM CDT

Spain’s Repsol is willing to resume oil exploration activities in Libya in light of the improved security situation in the African OPEC member, Libya’s National Oil Corporation (NOC) said on Wednesday after a meeting between Repsol representatives and NOC chairman Mustafa Sanalla in Tripoli.

Repsol is a joint venture partner in the company Akakus Oil—along with NOC, France’s TotalEnergies, Norway’s Equinor, and Austria’s OMV—which operates the largest oilfield in Libya, Sharara, with a capacity to pump more than 300,000 barrels per day (bpd).   

Repsol, which started oil exploration activities in Libya in the 1970s, suspended exploration of oil blocks in 2011 during the uprising that toppled Muammar Gaddafi.

Repsol and NOC discussed at the meeting this week the need to carry out regular maintenance work on the surface equipment at the Sharara oilfield, which has stopped operations too many times in recent years because of port or oilfield blockades.

The possible return of Repsol to Libya’s upstream could be another oil major resuming operations in the country.

Earlier this week, Libya Herald reported, citing NOC, that Shell is considering resuming operations in Libya by contributing to oilfield developments and increasing marketing and refining activities.

Shell had suspended its upstream operations in Libya in 2012, abandoning exploration activities in two blocks in the country because of disappointing results. At the time, NOC said that Shell’s negative assessment of the blocks’ prospects did not reflect reality.

Now Shell, whose representatives visited Libya, discussed the possibility to help oilfield development in the African OPEC member, NOC said, as quoted by Libya Herald.

At the end of last year, NOC said that another European major, France’s TotalEnergies, planned to increase its investments in Libya’s oil industry.

NOC added it had discussed with the company raising Libya’s production to “the highest levels.”

TotalEnergies, the new name of Total, has stakes in several Libyan oil fields, including Sharara.  

By Charles Kennedy for Oilprice.com