Our lead story this week features a remarkable discovery by NOAA climate scientists. The global warming “pause”, or “hiatus”, that everyone thought had been going on for most of the last 20 years never happened. Global warming has in fact continued unabated:
Sydney Morning Herald: Global warming ‘slow down’ did not happen
A much discussed “slow down” in global warming did not actually happen and the heating up of the planet has continued apace since the turn of the century, a new assessment by the lead United States meteorological body has found. Scientists from the US National Oceanographic and Atmospheric Administration (NOAA) have instead pointed to biases in thousands of global temperature observations as a reason why the rise in global temperatures was thought to have slowed over the past 15 years. Data biases that NOAA says it has now corrected include differences in how temperatures were recorded over the oceans by ships and floating buoys. It has also included newer, more complete temperature records from across land and accounted for incomplete records in the Arctic. NOAA’s new analysis finds a warming trend from 1950 to 1999 of about 0.113 degrees a decade while the warming trend over the period 2000-2014 was 0.116 degrees a decade. In its 2013 major assessment the IPCC observed that global surface temperature had “shown a much smaller increasing linear trend over the past 15 years than over the past 30 to 60 years.” But the latest NOAA paper says that statement is now no longer valid.
More below the “More”, including no change in OPEC output (but North Dakota isn’t worried), low oil prices threaten “big oil”, Libya on the way to becoming a failed state, the UK wind industry threatens the government with legal action, beautiful nukes, German doctors want a moratorium on wind turbines, ex-IPCC chairman Rajendra Pachauri found guilty in sexual harassment case and yet another Antarctic sea ice record.
Wall Street Journal: OPEC Keeps Output Unchanged
OPEC on Friday said the cartel would keep its collective output level unchanged at 30 million barrels a day, the second time in six months it decided to take no action amid a global glut of crude and weak oil prices. The decision amounted to an acknowledgment that the Organization of the Petroleum Exporting Countries’ role had fundamentally changed in the past year with a flood of American oil extracted from shale rock. No longer can the group—which pumps about one in three barrels of oil consumed each day—throttle back on output to support prices that have fallen from $114 a barrel to less than $63 today. “The reality now is that we cannot have this $100 [a barrel] anymore. This is a fact. We have less value for our barrels,” OPEC Secretary General Abdallah Salem el-Badri said at a news conference.
Oil executives in North Dakota, a center of the U.S. shale revolution, say OPEC made a questionable bet when it decided on Friday to stick with a policy that aims to push higher cost American producers out of the market by keeping output high. Here, in the top U.S. oil state after Texas, oil companies have slashed costs over the last seven months to reach fighting weight – one that will allow them to profit despite the more-than 40 percent drop in prices over the past year and solidify the new American role as the world’s swing supplier. The policy OPEC first adopted in November has brought stress, but not catastrophe. Oil companies say they have recalibrated their operations to survive even if prices stay lower for a long while. “High commodity prices hide a lot of inefficiencies in the system,” said Tommy Nusz, chief executive of Oasis Petroleum Inc, which pumps about 58,000 barrels per day in North Dakota. “Most companies will come out of this cycle stronger.”
When OPEC started a price war last November, driving oil down to its current $65 a barrel, U.S. shale drillers looked doomed. Six months later, it’s the world’s largest oil companies that are emerging as the unexpected casualties. The reason: the multibillion-dollar projects at the heart of the oil majors’ strategy need prices closer to $100 to make them economically feasible. “Big Oil is today squeezed by two low-cost producers: OPEC and U.S. shale,” said Michele Della Vigna, the top oil industry analyst at Goldman Sachs Group Inc. “Big Oil needs to re-invent itself.” The new period of cheap oil and ample supplies raises a prospect unthinkable as recently as a few months ago — that the world no longer needs all the big, expensive projects planned by companies such as Royal Dutch Shell Plc, Chevron Corp. and Total SA. Rising supplies from Saudi Arabia, Iraq and perhaps Iran combined with a more efficient shale industry could deliver the bulk of new production. Big Oil will continue to play a significant role, particularly as field developments sanctioned in the era of $100 a barrel come to fruition — but new projects will suffer.
Lenders are preparing to cut the credit lines to a group of junk-rated shale oil companies by as much as 30 percent in the coming days, dealing another blow as they struggle with a slump in crude prices, according to people familiar with the matter. Sabine Oil & Gas Corp. became one of the first companies to warn investors that it faces a cash shortage from a reduced credit line, saying Tuesday that it raises “substantial doubt” about the company’s ability to continue as a going concern. About 10 firms are having trouble finding backup financing, said the people familiar with the matter, who asked not to be named because the information hasn’t been announced. April is a crucial month for the industry because it’s when lenders are due to recalculate the value of properties that energy companies staked as loan collateral. With those assets in decline along with oil prices, banks are preparing to cut the amount they’re willing to lend. And that will only squeeze companies’ ability to produce more oil.
Proactive Investors: North Sea oil assets put on the auction block
The ‘for sale’ has been put up for a substantial portfolio of North Sea oil and gas assets. Houston based Endeavour International has launched a formal marketing process. The American company entered into Chapter 11 bankruptcy in November, and key North Sea operations suffered downtime. Endeavour’s assets include a 25% stake in Chevron’s Alba field, as well as interests in producing assets operated by Apache, Talisman and Shell. Earlier in 2014 the group had aimed to have production rates of around 11,000 barrels per day. As well as the producing assets, Endeavour also has interests in Columbus, a gas development project, and various exploration assets which amount to around 375mln prospective barrels.
Yahoo News: UN says Libya risks becoming failed state
The UN’s Libya envoy told rival sides attending new peace talks on Wednesday that the North African “country really is at the limit” and risks becoming a failed state. UN Support Mission in Libya chief Bernardino Leon exhorted those attending talks in Algiers to acknowledge their common interests, particularly their fight against the Islamic State group, and to stop demanding new concessions of each other. Economically, he warned that Libya’s institutions are running out of money to pay salaries and that, even if oil production returned to normal, it would not generate enough revenue to sustain public finances. Libya plunged into chaos after a 2011 NATO-backed uprising toppled and killed Kadhafi, with battle-hardened and heavily armed former rebels carving out their own fiefdoms across the country.
Hydraulic fracturing to drill for oil and natural gas has not caused widespread harm to drinking water in the United States, the Environmental Protection Agency said Thursday in a report that also warned of potential contamination of water supplies if safeguards are not maintained. A draft study issued by the agency found specific instances where poorly constructed drilling wells or improper wastewater management affected drinking water, but said the number of cases was small compared to the large number of wells that use hydraulic fracturing, better known as fracking. The EPA assessment tracked water used throughout the fracking process, from acquiring the water to mixing chemicals at the well site and injecting so-called “fracking fluids” into wells, to collection of wastewater, wastewater treatment and disposal. Congress ordered the long-awaited report in 2010, as a surge in fracking fueled a nationwide boom in production of oil and natural gas.
For a while it was just a dream of environmental activists and college student protesters. Then a handful of liberal universities, and financial institutions jumped in. And this week Norway’s $890 billion government pension fund joined the trend, followed by an endorsement by Sir Mark Moody-Stuart himself, the former chairman of oil giant Royal Dutch Shell. We’re talking about divesting from coal investments, and even other fossil fuel funds. According to Bloomberg New Energy Finance, there are as many as 200 organizations that have pledged to cut back or eliminate investments in coal or in fossil fuels more generally. Large universities include Stanford (which took the plunge over a year ago) and Oxford. Large corporations include AXA, France’s largest insurer. Coal is the easy fossil fuel to divest from. In developed nations like the U.S. it’s in decline and beginning to be seen as a risky industry for investors to put money into. And that’s not just because of climate change, though climate change is a massive global risk in itself. Coal plants are being closed all over the U.S., and 23 gigawatts—or 7% of US coal capacity—will be taken offline, says Bloomberg New Energy Finance. The coal plants are being shuttered thanks to a combination of low natural gas prices, aging coal plant infrastructure and new emissions and pollution standards, which older plants can’t meet without expensive upgrades.
The global climate agreement being negotiated this year must be worded in such a way that it doesn’t require approval by the US Congress, the French foreign minister said on Monday. Laurent Fabius told African delegates at UN climate talks in Bonn that “we know the politics in the US. Whether we like it or not, if it comes to the Congress, they will refuse.” If negotiators follow his plan, that would exclude an international treaty that has legally binding limits on greenhouse gas emissions — something some countries still insist on but which would have no chance of being ratified by the Republican-controlled Congress. “We must find a formula which is valuable for everybody and valuable for the US without going to the Congress,” said Fabius, who will host the UN climate summit in Paris in December where the new agreement is supposed to be adopted.
Britain’s new nuclear power stations and other energy infrastructure projects must be designed to look beautiful to garner essential public support, the Energy Secretary, Amber Rudd, has said. The country is set for a complete overhaul of its energy infrastructure in the next decade as new green sources of electricity such as nuclear, wind and solar power stations replace polluting coal and gas plants. With so much costly construction planned it is crucial to make sure the public is on side – by making the projects visually inspiring, the Energy and Climate Change Secretary told The Independent. Britain’s current nuclear power stations, which are all located at coastal sites, are notorious for their ugly functionality. “People in general want public structures to look good, as well as being functional. It’s not a trivial thing, when you have a big infrastructure project that you put time, effort and money into,” Ms Rudd said.
Telegraph: Energy Secretary asks Big Six to cut bills
Energy Secretary Amber Rudd has written to the “Big Six” urging them to ease the pressure on families. Ms Rudd has written to British Gas, npower, EDF, E.on, Scottish Power and SSE telling them to stop keeping prices artificially high. She said: “My focus is to get the best deal for consumers and the Department is working hard to keep energy bills as low as possible. That is why I have written to energy companies asking them what their plans are to lower bills for hardworking British bill payers.” Regulator Ofgem recently revealed the energy firms’ average profits have soared by 32 per cent in a year to £120 per household – an all-time high. The consumer group Which? estimated that the average family has lost out on £145 a year due to the providers’ failure to pass on lower costs. The Competition & Markets Authority has started an inquiry into whether the Big Six have effectively rigged the market by delaying price cuts.
Government plans to curtail onshore wind farm subsidies will raise energy bills, “massively damage” investor confidence and could see hundreds of millions of pounds of investments written off, energy giant ScottishPower has claimed. The plans, expected to be unveiled within days, are designed to implement the Conservatives’ manifesto pledge to end any new public subsidy for onshore wind farms. The wind industry on Sunday stepped up last-ditch lobbying to try to save the subsidies, insisting onshore wind was the cheapest green energy option and popular with the public. “Onshore wind is clearly still the most cost effective large scale way of deploying renewable technology in the UK. Economically, you would therefore question, why in God’s name would you want to bring that to a premature halt? Our calculations are that if you prematurely bring onshore wind to a halt you will end up costing consumers £2bn to £3bn. You will end up having to deploy offshore wind or other more expensive technologies.”
The UK renewable energy industry has warned the government’s new climate secretary that she will face a legal challenge if she oversees the “wilful destruction” of the industry by retrospectively curtailing subsidies. Later this week, the Department of Energy and Climate Change will announce that the existing subsidy scheme for onshore wind power will be closed a year earlier than it was due to, according to a source close to the process. But writing in the Guardian on Monday, a lawyer for the trade body RenewableUK called on Amber Rudd to reconsider – or face legal challenges. “Minister, please talk to us before you act. We recognise the pressures on you. There are solutions which need not damage confidence in the UK or in your government as one for all of us and not just for a few dangerous, ill-informed and visibly rabid party members,” wrote Marcus Trinick QC, a barrister for law firm Partner Eversheds LLP. “Please be aware of the dangers of [EU] state aid discrimination and look at what is happening in international energy arbitration across Europe. In such a position we could not afford not to fight, especially if action is taken to interfere retrospectively,”he added.
The Conservative UK government plans to stop subsidies to onshore wind power – and policy details are expected soon. Prime Minister David Cameron has pledged to consult with Scotland before any change but that has not happened. Scottish Energy Minister Fergus Ewing said he was concerned because onshore wind is so important to the economy. In a letter to the UK Energy Secretary Amber Rudd, Mr Ewing said: “It is disappointing that I have not had the opportunity to engage with you on this ahead of it being a matter for speculation in the press. We have not received any information from your department on the possible options you are considering or what analysis has been done to assess the impact on projects in Scotland.” Mr Ewing warned that changing previously-agreed subsidies would cause a crisis of confidence with business. His letter said: “Any lack of clarity on the UK government’s intentions has the potential to stall a very substantial pipeline of investment in the UK and Scotland and dent (our) reputation with developers and inward investors.”
MSPs have been told there remains a significant risk that Scotland will be left without sufficient electric power, particularly if thermal plants, including Longannet, are closed down before there is sufficient capacity in place to import power from the south. That means that there will be several years when high demand for power will be met with low supply of renewable energy (a cold, windless period in winter, for instance) and there won’t be enough back-up in Scotland. National Grid has modelled around 1,000 scenarios for what could happen if the wind drops, without Longannet or the Cockenzie coal-burning power station and at least one other nuclear generator is out of action. With the results in mind, they’re paying SSE to provide back-up capacity at its gas-burning plant in Peterhead.
Peterhead power station is being funded by the National Grid operator to provide back-up generation. The gas-burner will have 750MW of capacity on stand-by in case other power sources fail. The move follows concerns that there will be insufficient reliable power in Scotland after the shut-down of the vast Longannet coal-burning plant in Fife. The closure is expected to take place within the next nine months. Smaller contracts have been agreed in other parts of the country, including Killingholme in Lincolnshire and Deeside in North Wales. The total cost is £36.5m, according to National Grid, providing up to 2.56GW of power across Britain.Three other SSE sites are to provide a much smaller 90MW total of back-up capacity; Keadby, Fiddler’s Ferry and Ferrybridge. With an increasing share of electricity generated by wind, and limited cable capacity to import power from English power plants, Peterhead has been chosen to provide emergency cover if other sources of power do not meet demand in Scotland. A similar contract was signed to cover last winter.
Nestled in the hills of northern Bavaria, residents of Pegnitz once enthusiastically embraced Germany’s green energy programme. Now they are pushing back, upset that high voltage cables and pylons are planned across their tiny town. It is a crucial phase in Chancellor Angela Merkel’s “Energiewende”, or shift from nuclear power and fossil fuels towards renewable energy sources — a policy that has put Germany on the map as a leader on green issues before a G7 meeting on June 7-8 and a climate summit at the end of the year. But the resistance is developing into a major headache for Merkel. It is dividing her coalition, undermining her most ambitious domestic policy, creating uncertainty for some of Germany’s biggest companies, and threatening the goal of producing nearly half of all power from renewable sources by 2025 while remaining Europe’s economic powerhouse. One of three main power lines carrying wind power from the breezy north to the industrial south would cut through Pegnitz. Many of its 14,000 residents worry that it will destroy the landscape, devalue property and bring unknown health risks. “We are absolutely in favour of the Energiewende, but the power lines are the wrong way to implement it,” Uwe Raab, the mayor of Pegnitz told Reuters. “The people in Pegnitz are frightened and upset.”
The “parliament” of Germany’s medical profession has called on its leaders to support a halt to further wind farm developments near housing until more research has been undertaken into the possible health impacts of low-frequency noise from wind turbines. It said the health effects of infra¬sound (below 20 Hz) and low-frequency sound (below 100 Hz) in relation to emissions from wind turbines were “still open questions’’, as were “the effects of noise below the hearing threshold or lower frequencies with increasing exposure duration”. The assembly said the erection of more turbines close to settlements should be stopped until there was reliable data to exclude a safety hazard.
Wall Street Journal: EU Moves Against Three Chinese Solar Panel Makers
European authorities imposed sharp tariffs on three large Chinese solar-panel manufacturers, kicking them out of a pact signed with the Chinese industry that allows them to export to Europe with minimal tariffs. The European Commission, the European Union’s executive arm, said on Friday that Canadian Solar, ET Solar and ReneSola Ltd. are violating an agreement signed in 2013 with the Chinese solar panel industry that allows them to avoid import tariffs of up to 70%; the pact requires the Chinese producers to export their panels above a minimum price and abide by several other conditions. The commission warned five other Chinese producers that they need to shore up their compliance with the solar-panel agreement, people familiar with the investigation said, but decided against imposing full tariffs. The commission also concluded that dozens of other Chinese producers are complying.
Deccan Chronicle: Ex-IPCC chairman Pachauri found guilty in sexual harassment case
An internal committee of The Energy and Resources Institute (TERI) found its director general RK Pachauri guilty in a sexual harassment case. Reportedly, the three-member panel of Internal Complaints Committee (ICC) found that Pachauri made repeated at-tempts at establishing a personal bond with the young woman colleague, which caused her “harassment”. The panel also noted that when the woman resisted, Pachauri retaliated by ‘taking away her work’. TERI committee recommended disciplinary action against the accused. Last week, the Delhi High Court refused to cancel immediately the anticipatory bail granted by a trial court to Pachauri. The matter has been posted for July 16 after the counsel for Pachauri sought more time to file response to the application move by the 29-year-old woman, who has alleged that “free and fair investigation” cannot be carried out if Pachauri is “allowed to roam around freely.”
Reporting Climate Science: Antarctic sea ice sets new record:
Sea ice extent in Antarctica last month set a new record high for the month of May, ac-cording to data from the US National Snow and Ice Data Center (NSIDC). NSIDC data shows average sea ice extent around Antarctica reached 12.10 million sq. km. in May – some 12 per cent above the long term average for the period from 1981 to 2010 of 10.79 million sq.km. May sea ice extent in Antarctica is growing at a rate of 2.9 per cent per decade, according to NSIDC data. Meanwhile Arctic sea ice extent in May was 12.65 million sq. km, some 5 per cent below the long-term average for the period from 1981 to 2010 of 13.38 million sq. km. but broadly in line with the sea ice extent reported a decade ago and just 2 per cent below the average over the period from 2005 to 2015.
Live Science: Solar Plane’s Ocean-Crossing Voyage Aborted
The pilot of a solar-powered airplane had to abort his planned flight across the Pacific Ocean and land in Japan due to bad weather, officials said. Swiss pilot André Borschberg took off in the ultra-lightweight aircraft, called Solar Impulse 2, from Nanjing, China, on Sunday (May 31), en route to Hawaii. The voyage across the ocean, which is part of an attempt to fly around the world in the solar-powered craft, was expected to last six days. However, Borschberg was forced to land the aircraft at Japan’s Nagoya Airfield this morning (June 1) because of poor weather conditions. “Unfortunately, the current weather window to reach Hawaii has closed. The cold front is too dangerous to cross,” officials said in an update.