Month: February 2020

New video coming that has bearing on this – but there are increasing questions about the solvency of the global oil industry. The paranoid “peak oil” story of the early 2000s turned out to be overblown, but the new dynamic includes “unconventional” oil ie fracking, on one side, and the emergence of viable alternatives to oil and gas on the transportation side, beginning to squeeze the industry in the middle.

Interested in discussing this, as I think this is an important dynamic that is going to affect us sooner, rather than later.

Vice:

A government research report produced by Finland warns that the increasingly unsustainable economics of the oil industry could derail the global financial system within the next few years.

The new report is published by the Geological Survey of Finland (GTK), which operates under the government’s Ministry of Economic Affairs. GTK is currently the European Commission’s lead coordinator of the EU’s ProMine project, its flagship mineral resources database and modeling system.

The report was produced as an internal research exercise for the Finnish government, which until 2019 held the Presidency of the Council of the European Union. 

Signed off by GTK’s director of scientific research Dr Saku Vuori, the report is written by GTK senior scientist Dr Simon Michaux of the Ore Geology and Mineral Economics Unit. It conducts a comprehensive global assessment of scientific research into the state of the global oil industry with goal of determining how the risks of a global supply gap could impact mining and mineral production. 

The peer-reviewed report calls for the European Commission to consider oil as the world’s most important “critical raw material.” Despite offering a scathing critique of conventional peak oil theory, the report arrives at the shock conclusion that the economic viability of the entire global oil market could come undone within the next few years.

The plateauing of conventional crude oil production in January 2005 was one of the triggers of events leading to the 2008 global financial crash, according to the report. As debt built-up in the subprime mortgage sector, the crude oil plateau drove up the underlying energy costs for the entire economy making that debt more difficult to repay—and eventually resulting in catastrophic defaults. The report warns that “unresolved” dynamics in the global energy system were only temporarily relieved due to “Quantitative Easing”—the creation of new money by central banks. A correction is now overdue, it warns.

The report says we are not running out of oil—vast reserves exist—but says that it is becoming uneconomical to exploit it. The plateauing of crude oil production was “a decisive turning point for the industrial ecosystem,” with demand shortfall being made up from liquid fuels which are far more expensive and difficult to extract—namely, unconventional oil sources like crude oil from deep offshore sources, oil sands, and especially shale oil (also known as “tight oil,” extracted by fracking). 

These sources require far more elaborate and expensive methods of extraction, refining and processing than conventional crude mined onshore, which has driven up costs of production and operations.

Yet the shift to more expensive sources of oil to sustain the global economy, the report finds, is not only already undermining economic growth, but likely to become unsustainable on its own terms. In short, we have entered a new era of expensive energy that is likely to trigger a long-term economic contraction.

Continue reading “The Weekend Wonk: Oil Industry Near Meltdown? No, Really This Time..”

University of New South Wales:

Mass melting of the West Antarctic Ice Sheet was a major cause of high sea levels during a period known as the Last Interglacial (129,000-116,000 years ago), an international team of scientists led by UNSW’s Chris Turney has found. The research was published today in Proceedings of the National Academy of Sciences (PNAS).
 
The extreme ice loss caused a multi-metre rise in global mean sea levels – and it took less than 2˚C of ocean warming for it to occur. 

“Not only did we lose a lot of the West Antarctic Ice Sheet, but this happened very early during the Last Interglacial,” says Chris Turney, Professor in Earth and Climate Science at UNSW Sydney and lead author of the study. 

Fine layers of ancient volcanic ash in the ice helped the team pinpoint when the mass melting took place. Alarmingly, the results indicated that most ice loss occurred within the first millennia, showing how sensitive the Antarctic is to higher temperatures. 

“The melting was likely caused by less than 2°C ocean warming – and that’s something that has major implications for the future, given the ocean temperature increase and West Antarctic melting that’s happening today,” Professor Turney says. 

During the Last Interglacial, polar ocean temperatures were likely less than 2˚C warmer than today, making it a useful period to study how future global warming might affect ice dynamics and sea levels. 

“This study shows that we would lose most of the West Antarctic Ice Sheet in a warmer world,” says Professor Turney. 

In contrast to the East Antarctic Ice Sheet – which mostly sits on high ground – the West Antarctic sheet rests on the seabed. It’s fringed by large areas of floating ice, called ice shelves, that protect the central part of the sheet. 

As warmer ocean water travels into cavities beneath the ice shelves, ice melts from below, thinning the shelves and making the central ice sheet highly vulnerable to warming ocean temperatures. 

Continue reading “More Sea Level Warnings from the Past”

A look at climate change’s threat to one of the pillars of the banking system – home mortgages and insurance.

Say What?

New York Times:

The British oil giant BP set the most ambitious climate change goal of any major oil company on Wednesday, saying that it aimed to eliminate or offset by 2050 all of the planet-warming emissions from its operations — as well as the emissions caused by the burning of the oil and gas it pumps out of the ground.

The company provided few details on how, exactly, it would achieve that difficult feat. But the pledge is another sign that major companies, including fossil-fuel producers, are facing growing pressure from investors and activists to show they are taking global warming seriously.

“We are aiming to earn back the trust of society,” said Bernard Looney, BP’s chief executive, at a news conference in London. “We have got to change, and change profoundly.”

Rising concerns about climate change pose an existential threat for oil and gas companies, since scientists have said that preventing dangerous temperature increases will require steep reductions in the use of fossil fuels. In recent years, shareholders have pressed oil companies to prepare for a future in which countries shift to electric vehicles or enact new regulations to limit carbon dioxide emissions.

Other European oil companies — including Royal Dutch Shell, Total and Equinor — have already adopted targets to curb their emissions. But BP is going further, pledging to also zero out the emissions associated with the oil and gas it pumps out of the ground and sells.

That last step is both the hardest and most significant, since it is where oil companies have an outsize climate impact. BP said that the company emits about 55 million tons of greenhouse gases each year directly from its extraction operations and refineries. But an additional 360 million tons each year are emitted when the oil and gas that BP extracts is sold and eventually burned to fuel vehicles or heat homes.

To put that in context, the entire state of California produced 424 million tons of greenhouse gas emissions in 2017.

To shrink the emissions that come from the use of its products, BP may have to reduce the amount of oil and gas that it extracts, develop lower-carbon fuels such as those made from algae or plants, or offset its fuel emissions through steps like planting trees or investing in still-nascent technology to suck carbon dioxide out of the air.

Of course there is an asterisk. Below.

Continue reading “Oil Giant Vows Zero Emissions by 2050.”

2 degrees above 20th Century average.

Backwards day in Crazy town – “Free marketers” at it again.

Casper Star Tribune:

Wyoming lawmakers proposed a bill this week that could penalize utility companies for using renewable energy sources to supply electricity to ratepayers.

Sponsored by the Senate Appropriations Committee, Senate File 125 would have required energy utilities to provide a vast majority, 95 percent, of their electricity from a restricted list of energy sources by 2021. Eligible generating sources include coal, oil and natural gas — the state’s primary economic engines. By 2022, utilities would be required to procure 100 percent of their electricity from the list of sources.

But utility-scale wind and solar power were glaringly absent from the list. That means, if a utility chooses to invest in renewable energy sources, the state could have penalized the company with a fine for each megawatt of energy not produced from the sources deemed acceptable.

“Essentially there’s a penalty if you’re relying on renewable energy,” said Shannon Anderson, an attorney with Powder River Basin Resource Council, a landowners group supporting the expansion of solar energy in the state.

The bill did not receive sufficient votes Thursday morning to advance. But it’s one of several bills drafted during the first week of the Equality State’s session in an attempt to inject more life into the state’s coal industry and beat back utilities’ steady divestment away from coal.

“The bill is a statement of support for our (coal) industry,” University of Wyoming economist Rob Godby said. “We are now looking at significant disruption of local communities based on coal-fired power plant closures.”

It’s not the first time the bill has been in the spotlight. In 2017, Sen. Larry Hicks, R-Baggs, sponsored a similar bill, but his draft legislation quickly flopped.

In October, the state’s largest utility company forecast a somber future for its two dozen coal units pumping out electricity. The company, PacifiCorp, plans to retire two-thirds of its coal fleet by 2030, including units at Naughton in Kemmerer, Jim Bridger near Rock Springs and Dave Johnston in Glenrock.

“To be honest, the state of Wyoming was kind of caught flat-footed when those closures were announced,” Godby said. “It just hadn’t been something that had ever been imagined here.”

This week’s draft bill attempts to ease the forthcoming economic disruption by subsidizing energy sources integral to Wyoming’s economy, like coal. Setting up financial disincentives for utilities to invest in renewable energy could preserve the state’s dominant fossil fuel market.  

Continue reading “In Wyoming: The Move for Fossil Fuels Forever”

Guardian:

Something you might have missed amid all the horserace and app-failure coverage of the Iowa caucuses: a deep discussion took place over the past year about the climate crisis and agriculture that could change the way our food system operates.

Every leading Democratic campaign now endorses an aggressive approach to conservation that could dramatically reduce greenhouse gases, improve water quality and enhance rural prosperity.

Candidates lined up to tour Matt Russell’s organic farm in central Iowa over the past year to learn about how a diversified cropping system involving livestock can suck carbon out of the air and sequester it in the soil to feed us better. Pete Buttigieg and Elizabeth Warren came up with plans that would restructure farm policy to direct funding away from subsidizing production and toward conservation. Warren would increase funding 15-fold for the Conservation Stewardship Program (CSP), to $45bn. The CSP pays farmers for regenerative agriculture practices – planting soil-saving cover crops, reducing chemical use and tillage, and all the while sequestering carbon in the soil.

Export markets for American ag commodities are falling apart. The world has been telling us through markets for years that we are growing about 30% too much corn and soy. Meanwhile, we are killing the Gulf of Mexico with excessive commercial fertilizer, which washes down the Mississippi River. California and Australia burn in part because we are spewing too much nitrogen – as problematic as CO2 for global warming – from our broken agrichemical system.

Increasing numbers of midwestern farmers who watched their fields wash away in last spring’s scouring torrents are showing up at field days offered by the Practical Farmers of Iowa, which preaches the gospel of making money on the farm by saving soil and reducing chemical costs. They watch the weather closer than anyone, and they’re ready to look into the old way of doing things – grazing in rotation with a diverse series of carbon-capturing crops – to find a way forward.

Candidates started to explore the topic at a rural forum organized in Storm Lake last March by the Iowa Farmers Union. The discussion intensified during the summer as a loose coalition of Iowans, led by the former agriculture secretary Tom Vilsack, pushed candidates to pay farmers for environmental services instead of insuring them for planting in a flood plain.

Bernie Sanders is all-in with the Green New Deal. Joe Biden, advised by Vilsack, came up with his own comprehensive plan. Buttigieg is now conversant in how microbial activity in the soil can reverse nitrogen loss to air and surface water.

Candidates embraced the idea that renewable energy – wind, solar, hydrogen – can not only ameliorate the climate crisis but also create high-paying technical jobs in rural communities hemorrhaging people.

You wouldn’t know it by the non-stop coverage of the percentage fractions separating the leading Democratic campaigns, or whether Sanders insulted Warren, or how Senator Susan Collins equivocated again after lunch. But, as the Amazon shrinks, our quiet revolution in agriculture policy might be the most important story of the news cycle.

Continue reading “Green Ag getting Traction with Farmers, Candidates”

Yet another entrant in the EV cyber trucking sweepstakes.
The Nikola pickups feature hybrid battery/fuel cell power plants, with some eye-popping, if real, performance claims..

The Verge:

Nikola Corporation, an Arizona-based startup that’s working on zero-emission big rigs, just announced that it’s following Tesla, Rivian, Ford, and General Motors into the electric pickup market with a truck called the Badger.

The Badger is a fuel cell vehicle first and foremost, meaning it takes hydrogen from a refillable tank and converts it into electricity to power the motors. But the Badger will also come with an onboard auxiliary battery pack Nikola says will be big enough to power the pickup on its own. 

That’s similar to the approach Nikola is taking with its big rigs; with those, the company is prioritizing hydrogen-powered trucks but will also sell battery-only versions with less overall range for shorter-haul trucking. In fact, the pickup truck is apparently powered by a scaled-down version of the tech that Nikola developed for its big commercial trucks.

“Nikola has billions worth of technology in our semi-truck program, so why not build it into a pickup truck?” Trevor Milton, Nikola’s CEO and founder, said in a statement. “I have been working on this pickup program for years and believe the market is now ready for something that can handle a full day’s worth of work without running out of energy.”

This isn’t the first time Nikola has teased expanding beyond commercial trucks. Just last year, the company announced an electric personal watercraft and an off-road utility vehicle. Milton is promising some eye-popping specs for the Badger, including up to 600 miles of range with a full tank of hydrogen and up to 300 miles of range on battery power alone. The Badger is supposed to be able to generate over 900 horsepower and go from 0 to 60 miles per hour in 2.9 seconds.

A hydrogen-powered truck with a battery that big would help hedge against the most pressing problem facing fuel cell vehicles: there’s currently almost no supporting infrastructure whatsoever. Hydrogen filling stations are extremely rare; in the US, they’re almost exclusively located in California. Having a battery pack that can last for 300 miles would help an owner get by if they’re not located near a hydrogen fueling station or, at worst, until there are more filling stations.

Unsurprisingly, Nikola is planning to build out hundreds of hydrogen stations of its own to help support its big rig business. By the time the Badger hits the road, then, it’s possible that the infrastructure piece of the equation might not look so bleak.

Digging deeper on Australia’s future.

I spoke to more experts for insight, including Linden Ashcroft of University of Melbourne, weather guru Dr. Jeff Masters, and Jonathan Overpeck at the University of Michigan.