Blowout Week 92

Bankers are in the news this week. We begin with Mark Carney ….

Financial Times:  Mark Carney warns investors face ‘huge’ climate change losses

The governor of the Bank of England has thrown down the gauntlet to the fossil fuel industry with a blunt warning that investors face “potentially huge” losses from climate change action that could make vast reserves of oil, coal and gas “literally unburnable”. In a sweeping assessment of the financial risks posed by global warming, Mark Carney acknowledged there was a danger the assets of fossil fuel companies could be left “stranded” by tougher rules to curb climate change. Mr Carney said scientists had calculated the “carbon budget” the world could afford if it is to meet the 2°C target, and it amounted to between one-fifth and one-third of the world’s proven reserves of oil, gas and coal. “If that estimate is even approximately correct it would render the vast majority of reserves ‘stranded’ — oil, gas and coal that will be literally unburnable without expensive carbon capture technology, which itself alters fossil fuel economics,” he said. “The exposure of UK investors, including insurance companies, to these shifts is potentially huge,” he told a Lloyd’s of London dinner on Tuesday night, explaining 19 per cent of FTSE 100 companies were in the natural resources and extraction industries.“The challenges currently posed by climate change pale in significance compared with what might come,” he said. “Once climate change becomes a defining issue for financial stability, it may already be too late.”

… and follow up below the fold with a plea for climate action from six major US banks. And then the usual mix of stories, including OPEC production up in September, Mexico’s leasing program back on track, Shell pulls the plug in the Arctic, how choking wells will save shale oil, the fusion future, no winter gas shortage in Europe, Japan to restart another reactor, European renewables growth stalls, solar jobs at risk in Aberdeen, volatile organic compounds – a previously unknown source of global cooling, the world’s first potato powered power plant and how turtle-eating sharks are fighting climate change.

International Business Times:  Six major banks urge global leaders to adopt climate change agreement

World Energy Forum:  What is the global economic impact of climate change?

The climate negotiations in December in Paris will be the funeral of the 2°C target. It will be an expensive funeral, with tens of thousands of mourners in attendance. All the big players – China, the EU, India, Japan and the US – have announced their emission reduction targets well in advance of the Paris meeting, leaving little to negotiate over. Adding up these so-called Intended Nationally Determined Contributions confirms that whatever the political rhetoric may be, no country is seriously trying to keep warming to 2°C. How bad is that? Figure 1 shows the 27 published estimates of the total economic impact of climate change. The uncertainty is large. The 95% confidence interval in Figure 1 may be an underestimate of the true uncertainty, as experts tend to be overconfident and also the 27 estimates were derived by a group of researchers who know each other well. Taking the confidence interval at face value, the impact of climate change does not significantly deviate from zero until 3.5°C warming. The uncertainty is right-skewed. Negative surprises are more likely than positive surprises of similar magnitude, but still, a century of climate change is no worse than losing a decade of economic growth.

Figure 1. The global total annual impact of climate change expressed in welfare-equivalent in-come change as a function of the rise in the global annual mean surface air temperature since pre-industrial times

Reuters:  OPEC oil output rises in September, led by Iraq

OPEC oil output has risen in September from the month before, a Reuters survey found on Wednesday, as Iraq’s northern exports recovered from disruption that had halted supply growth from the group’s second-largest producer. Saudi Arabia and other Gulf members of the Organization of the Petroleum Exporting Countries have kept output mostly steady, a further sign they are sticking to their focus on defending market share instead of prices.OPEC supply has increased in September to 31.68 million barrels per day (bpd) from a revised 31.57 million in August, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants. With the increase in supply this month, OPEC has boosted production by almost 1.5 million bpd since it switched in November 2014 to defending market share from its previous policy of cutting output to prop up prices. Oil prices have almost halved in the past year to $48 a barrel because of excess supply, although analysts see signs that OPEC’s strategy to curb growth in higher-cost production by letting prices fall is starting to deliver. “The oversupply is still considerable, but I think it will be less next year as non-OPEC supply is likely to shrink,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt.

Houston Chronicle:  Mexico imports US oil

The U.S. sent more crude oil and petroleum products to Mexico than it received for the first time in at least two decades in July, according to the latest government data. The switch from net importer to net exporter underlines a new reality for oil markets: After decades of sourcing oil from south of the border, the U.S., and especially Texas, has plenty of oil. Simultaneously, Mexican production has declined even as the country’s need for oil and the products that come from it have risen. U.S. net imports of oil and petroleum products from Mexico peaked in June 2006 at 1.6 million barrels per day. In July, the U.S. sent net exports of about 48,000 barrels per day to Mexico. Many of the exports were refined products, because the United States has banned crude exports since the 1970s, although there are a few exceptions. Mexico’s oil production has tapered off recently from about 3.5 million barrels per day in 2008 to 2.3 million barrels per day this year. The country has launched a massive energy sector overhaul intended to reverse the decline, but any production boost from private investment remains years away. In addition to declining Mexican production, stepped-up production from Canada has made it harder for Mexican oil to find a home in U.S. refineries on the Gulf Coast.

New York Times:  Mexico auctions oil drilling rights

As the price of oil was plummeting in July, the Mexican government auctioned off leases to explore blocks in the Gulf of Mexico. With energy companies retrenching, the auction was a failure. But Mexico’s fortunes changed on Wednesday. In a follow-up auction, the Mexican government put five production blocks up for bid and awarded contracts for three, well above the average for similar auctions in Latin America. Investors were attracted by relaxed rules and by the characteristics of the blocks, which hold probable oil and gas reserves, analysts said. The Italian national oil company Eni International won the block that attracted the most bids, offering more than double the government’s minimum price. An Argentine-led consortium including Pan American Energy, in which BP has a stake, won a second block. The third block had only one bidder, a consortium made up of an American company, Fieldwood Energy, and a Mexican company, Petrobal. Another auction, set for the middle of next year, is likely to attract the most interest. Those are for deepwater areas in the Gulf of Mexico, just south of American waters where international oil companies have found large reserves of oil and gas.

Bloomberg:  Choking Wells Will Keep Shale From Going Bust

Encana Corp. wants to ensure the shale-oil boom keeps booming. The Canadian producer is among a growing number of companies that are restricting initial output — a process known as choking back — in basins from North Dakota to Texas. They’re conceding huge up-front gushers of crude in exchange for smaller production declines over time so that the wells ultimately generate more oil. The strategy sacrifices one of the biggest benefits from shale. The early gushers paid back investments fast, allowing companies to pour capital into new projects. Instead, Encana and others envision a future with a more stable flow from wells, so that they don’t always have to keep drilling simply to maintain output. Choke management is among a number of strategies — including moving to richer parts of fields, completing wells with more sand and water, and refracking — that U.S. drillers have used to stave off a collapse in production. Output has fallen just 5 percent from its peak even though companies have shelved more than half their rigs amid a price slump.

Reuters:  Shell pulls the plug on Arctic exploration

Royal Dutch Shell has abandoned its Arctic search for oil after failing to find enough crude in a move that will appease environmental campaigners and shareholders who said its project was too expensive and risky. The withdrawal came six weeks after the final U.S. clearance and three months after Shell was still defending the project, a rapid change of heart for such a large company that shows it is preparing for a prolonged period of low oil prices while trying to close its $70 billion takeover of rival BG. Shell has spent about $7 billion on exploration in the waters off Alaska so far and said it could take a hit of up to $4.1 billion for pulling out of the treacherous Chukchi Sea, where icebergs can be as large as New York’s Manhattan island.

Moscow Times : Gazprom Exports to Europe Up 23 Percent

Russian gas giant Gazprom has exported 41.4 billion cubic meters (bcm) of gas to Europe and Turkey in the third quarter, up 23 percent from the year-earlier period, the company’s head Alexei Miller said on Friday. In September, gas exports stood at 13.3 bcm, an increase of 24 percent. European buyers of Russian gas have increased purchases before the cold season and as the price of the commodity, pegged to prices of oil with a lag of six to nine months, fell. Miller said that Germany, the largest buyer of Russian gas, increased purchases by 19 percent to 11.2 bcm in third quarter. Italy boosted intake by 69 percent to 7 bcm.

Bloomberg:  Russia, Ukraine Gas Agreement Warms Europe

It’s going to be a toasty winter in Europe. Ukraine, a dominant gas transit hub, reached a supply agreement Friday with Russia, the European Union’s largest outside supplier of the fuel. The decision ends a disagreement between the two that threatened to disrupt flows into Europe this winter, just as homeowners and businesses start firing up natural gas-powered boilers and other heating units. While the EU-brokered deal will help ensure supply to the 28-nation bloc, its importance has faded. Declining demand, better-connected networks and the potential for the first natural gas imports from the U.S. mean Europe is less vulnerable to the type of cut-offs that led to shortages following similar disputes between Ukraine and Russia during freezing weather in 2006 and 2009. The deal “has undoubtedly eased some tension,” Nick Campbell, an analyst at Inspired Energy Plc, said in an e-mailed statement. “But with the likely arrival of U.S. liquefied natural gas in the fourth quarter this year, the impact of any dispute is likely to be muted compared to past issues.”

Washington Post:  Cheap natural gas thwarts the energy storage revolution

Storage, whether through batteries or other technologies, has often been termed a game changer — if you can save energy and use it at a later time, then you can also use solar energy at night, wind energy when it’s not windy, and much more. But if new research is correct, the installation of energy storage in the United States, especially at the scale of the electricity grid, might already be much further along if not for one major countervailing economic factor. The problem is that energy storage competes quite directly in many cases with natural gas, and in recent years, natural gas prices have been quite low. That’s been thwarting storage adoptions even though, in the long run, and especially from an environmental perspective, more storage would be a desirable option. Such is the result of a new study just out in Energy Policy by Eric Hittinger of the Rochester Institute of Technology and Roger Lueken of the Brattle Group. “Since 2008,the energy storage industry has faced an unfortunate trend: as the new storage technologies have become ready for the market and the more mature technologies have lowered their costs, the decreasing cost of natural gas has been reducing the potential revenue of energy storage,” the authors conclude. Indeed, if you take the logic one step further, what this means is that the so-called “fracking” revolution, which has given us plentiful and affordable natural gas, may have thwarted a very different revolution — in energy storage.

Japan Today:  Japan to restart 2nd nuclear reactor

Kyushu Electric Power Co will restart a nuclear reactor in southwestern Japan on Oct 15, making it the second to return to operation after the government introduced stricter safety regulations following the 2011 triple reactor meltdowns at a power plant in Fukushima. Kyushu Electric reported its plan to reactivate the No. 2 reactor at its Sendai complex to the Nuclear Regulation Authority on Friday. The No. 1 unit at the two-reactor plant resumed operation in August, becoming the first reactor to restart under what the government of Prime Minister Shinzo Abe calls “the world’s toughest” safety rules implemented after the Fukushima disaster. The restart ended a nearly two-year hiatus in the country’s nuclear power generation. The government plans to have nuclear power account for 20% to 22% of Japan’s total electricity supply in 2030, compared with roughly 30% before the disaster at the Fukushima Daiichi complex, despite the majority of the public opposing nuclear plant restarts. The government sees nuclear power as necessary for the country to reduce its greenhouse gas emissions in combating climate change.

Forbes:  Bill Gates forges nuclear deal with China

Bill Gates’ nuclear power company, TerraPower, signed an agreement with the China National Nuclear Corporation (CNNC) allowing the two companies to collaborate on advanced nuclear technologies that address safety, environmental and cost issues. Bill Gates has long understood the essential role of reliable power in eradicating global poverty, and its evil stepchildren war and terrorism, and decided that nuclear was the best long-term solution for base load power. What is needed for the next thousand years are new-generation nuclear fast-reactors, a design that gets ten times more energy out of the same amount of fuel as a traditional reactor. The waste is much easier to handle, cannot be used to make weapons, and is only hot for a few hundred years – not thousands. TerraPower’s version of this reactor is called the Traveling Wave Reactor (TWR), a liquid sodium-cooled fast reactor that uses depleted or natural uranium as fuel, and can even burn spent fuel from our old reactors. TerraPower plans to build a 600 MWe plant first by the early 2020s, followed by a larger 1,150 MWe commercial plant. Unfortunately, the regulatory environment in America is so glacial that TerraPower and CNNC will build the first unit in China and then deploy commercial versions of this new reactor to global markets within fifteen years.

Yahoo News:  Fusion reactors hailed as the future of nuclear energy

Fusion reactors could become an economically viable way of generating electricity within decades and replace traditional nuclear power or fossil fuels, scientists have said. Advances in superconductor technology have led researchers from Durham University and the Culham Centre for Fusion Energy in Oxfordshire to re-calculate the costs, previously considered too high for commercial power generation. Professor Damian Hampshire, of the Centre for Material Physics at Durham University, who led the study, said: “Obviously we have had to make assumptions, but what we can say is that our predictions suggest that fusion won’t be vastly more expensive than fission.” The findings, published in Fusion Engineering and Design, support the idea that fusion reactors could offer almost unlimited power without contributing to global warming or producing large amounts of hazardous waste. They work by heating plasma to 100 million degrees centigrade so hydrogen atoms fuse together, releasing energy. Fission reactors work by splitting atoms at much lower temperatures. Fusion reactors are considered safer as there is no high level radioactive material to leak out, meaning disasters like Chernobyl or Fukushima could not happen. Plasma would simply fizzle out if it escaped. Nor do they create weapons grade material as a by-product.

Reuters:  India announces plan to slow rate of greenhouse gas growth

India has promised to shave a third off the rate at which it emits greenhouse gases over the next 15 years, in a long-awaited contribution towards reaching a deal to slow global warming at a U.N. climate summit in December. The world’s third-largest emitter and last major economy to submit plans ahead of the Paris summit did not, however, commit to any absolute cuts in carbon emissions. Environment Minister Prakash Javadekar said New Delhi’s plan balances the need for a low-carbon future with the need to lift millions out of poverty and industrialise quickly. “Although the developed world has polluted the world and we are suffering, India will be part of the solution,” he told journalists after submitting the pledges to the United Nations. New Delhi stressed in its submission that coal would continue to dominate future power generation. Environmentalists fear India’s emissions will jump as the use of cars, air travel and air conditioning grows among its 1.2 billion people. Preliminary estimates indicate India would need to spend around $206 billion between 2015 and 2030 to adapt to the effects of climate change, the submission said.

Breitbart:  RICO20 Instigator Caught in ‘Largest Science Scandal in U.S. History’

The plan by climate alarmists to have other scientists imprisoned for their ‘global warming’ skepticism is backfiring horribly, and the chief alarmist is now facing a House investigation into what has been called “the largest science scandal in US history.” Rep. Lamar Smith (R-TX), Chairman of the House Committee on Space, Science and Technology, has written to Professor Jagadish Shukla of George Mason University, in Virginia, requesting that he release all relevant documents pertaining to his activities as head of a non-profit organization called the Institute of Global Environment And Society. Smith has two main areas of concern.First, the apparent engagement by the institute in “partisan political activity” – which, as a non-profit, it is forbidden by law from doing.Second, what precisely has the IGES institute done with the $63 million in taxpayer grants which it has received since 2001 and which appears to have resulted in remarkably little published research? For example, as Watts Up With That? notes, a $4.2 million grant from the National Science Foundation to one of the institute’s offshoots appears to have resulted in just one published paper.But the amount which has gone into the pockets of Shukla and his cronies runs into the many hundreds of thousands of dollars. In 2013 and 2014, for example, Shukla and his wife enjoyed a combined income in excess of $800,000 a year.

EuObserver:  Green electricity growth stalling in Europe

Growth of renewable electricity in Europe in the next five years could be almost 30 percent higher if market and policy conditions improve, the International Energy Agency (IEA) said Friday (2 October) in a report. The IEA expects power generation from renewable sources – like wind, solar, and bioenergy – to increase by almost 25 percent between 2014 and 2020, it said in its annual Medium-Term Renewable Energy Market Report. But the agency added that “policy uncertainty” in countries like Poland and the UK over the future of incentives for onshore wind there have stalled growth. The OECD Europe countries added 21 gigawatt (GW) of renewable capacity in 2014, down from over 24 GW in 2013 and the lowest since 2009. “Weak electricity demand growth and decreasing economic incentive levels characterise the slower renewables forecast for OECD Europe”, the report said. “Capacity additions in OECD Europe are expected to dip in 2016, largely due to near-term changes in incentives in the United Kingdom, then to increase modestly thereafter with increased offshore wind installations picking up as cost reductions are seen stronger after 2017”, it added. On an EU level, the report noted that increasing the level of interconnection “is probably the most significant step that could improve the value of renewable generation and facilitate development of a more effective pan-European renewable system”.

BusinessGreen:  Policy uncertainty to halve UK renewables growth

The lack of clear energy policy in the UK will slow the growth of renewables for the next five years, the International Energy Agency (IEA) has warned today in a new report which says “wavering” commitments from ministers are undermining investor confidence in the sector. In the UK – where drastic policy changes to renewables subsidies have been planned in recent months – the amount of renewable capacity added will fall by half, from 4GW in 2015 to less than 2GW in 2016, the report said. Fatih Birol, executive director of the IEA, said governments should focus on delivering policy certainty. “Governments must remove the question marks over renewables if these technologies are to achieve their full potential, and put our energy system on a more secure, sustainable path,” he said in a statement.

Holyrood:  Scottish renewables displace record amount of carbon

Renewables in Scotland are displacing a record level of carbon – the equivalent of re-moving all Scotland’s cars, buses, trains and lorries from our roads and railways. New figures show a total of 12.3 million tonnes of CO2 were displaced in Scotland in 2014 – an increase of 120 per cent increase compared with five years ago. The SNP’s energy and climate change spokesperson Callum McCaig said the figures show just how productive the industry is, but warned “the Tory government fixed on destroying the Scottish re-newable sector”. WWF Scotland director Lang Banks said the news was proof renewables are the foundation of a low carbon economy.

Press & Journal:  Renewable energy firms warn of further Aberdeen job losses

Over 100 jobs could be at risk in Aberdeen due to proposed cuts to the feed-in tariff for solar energy projects, a trade body has warned. The Solar Trade Association warned the jobs of up to 27,000 people employed in the solar energy sector and its supply chain are under threat around the UK, with as many as 2,400 of the 3,000 solar jobs in Scotland at risk. The Department of Energy and Climate Change (Decc) proposed at the end of August to cut the tariff paid for electricity generated by solar rooftop panels by 87% – from 12.4p to 1.6p. John Forster, Chairman of Forster Energy, a solar energy company based in Brechin, said: “The Prime Minister should be backing the hundreds of small and medium sized local solar businesses like mine rather than big state-owned foreign utilities. With a team of 43 people involved in the day to day running of our solar installation business, the impact of the UK Government’s proposed cuts would be devastating to our business, our suppliers and our employees.”

Solar Power Portal:  Nandy labels Tory energy policy ‘a national scandal’

Labour’s shadow energy secretary Lisa Nandy has labelled the Conservative Party’s energy policy a “national scandal” whilst unveiling plans to “democratise” the UK energy supply with community renewable energy plants. Nandy, who was only named as Caroline Flint’s successor earlier this month, delivered a highly-charged speech this morning at Labour’s party conference in Brighton during which she heralded energy as the “backbone” of the UK economy. She went on to label the transition to clean energy as “one of the biggest challenges this country has ever faced” and accused ministers of failing the UK and “trashing our historic legacy of international leadership” on climate change. She accused Osborne of pulling the rug out from under the UK’s solar industry just as it is “on the cusp” of grid parity and “pandering to his backbenchers even when skilled British jobs are on the line”.“The Tories’ energy policy isn’t just putting the security of household budgets at risk, but our economic security too,” Nandy added. “Under David Cameron, Britain’s influence abroad has diminished quicker than at any period in living memory. It’s left us relegated to the margins of the global conversation, while others set the agenda and the pace,” she said.

Renewable Energy From Waste:  UK food manufacturer announces potato-powered factory

Andrew Edlin, group sustainability director for 2 Sisters Food Group, one of the U.K.’s largest food manufacturers, is today starting-up a potato-powered energy plant as a first step in a new sustainability plan which aims to generate 35,000 metric tons of carbon savings a year and slash the Group’s carbon footprint by 20 percent by 2018. The new bio-refinery at 2 Sisters’ Cavaghan and Gray chilled food factory in Carlisle, U.K., is the first waste-powered plant of its kind in the world to be used in food manufacturing, according to the company. It uses four patented anaerobic digestion processes which are linked to extract gas. When fully operational it will produce 3,500 megawatt hours (MWh) per year of electricity, equivalent to the average annual electricity use of around 850 UK homes, and generate around 5,000 MWh/year in steam. The four-story-high biorefinery at Carlisle will be powered using potato waste arising from the plant’s mashed potato and pie manufacturing lines. The residual waste left after the bio-refining process has been completed can also be re-used as fertiliser – completing a circular journey that could take it back to one of 2 Sisters’ 700-farms and away from landfill.

The Register:  Massive global cooling process discovered

A team of top-level atmospheric chemistry boffins from France and Germany say they have identified a new process by which vast amounts of volatile organic compounds (VOCs) are emitted into the atmosphere from the sea – a process which was unknown until now, meaning that existing climate models do not take account of it. The effect of VOCs in the air is to cool the climate down, and thus climate models used today predict more warming than can actually be expected. Indeed, global temperatures have actually been stable for more than fifteen years, a circumstance which was not predicted by climate models and which climate science is still struggling to assimilate. In essence, the new research shows that a key VOC, isoprene, is not only produced by living organisms (for instance plants and trees on land and plankton in the sea) as had previously been assumed. It is also produced in the “microlayer” at the top of the ocean by the action of sunlight on floating chemicals – no life being necessary. And it is produced in this way in very large amounts. According to an announcement just issued by the German government’s Leibniz Institute for Tropospheric Research: Global models at the moment assume total emissions of isoprene from all sources – trees, plants, plankton, the lot – of around 1.9 megatons per year. But, according to the new research, the newly discovered “abiotic” process releases as much as 3.5 megatons on its own – which “could explain the recent disagreements” between models and reality.

News24:  How turtle-eating sharks slow global warming

Sharks help to reduce global warming by eating sea turtles and other creatures that consume carbon-rich sea grasses, an Australian scientist said on Tuesday. Marine ecologist Peter Macreadie of Deakin University in Melbourne examined the effect on sea grasses in Shark Bay, Western Australia, after an extensive local shark culling programme. Fewer sharks meant their normal prey such as sea turtles flourished, and sea turtles’ favourite food is sea grass. “Sea grass store vast reserves of carbon within sediments and with more sea grass being consumed the carbon is unlocked and can be released into the earth’s atmosphere accelerating climate change,” Macreadie said in a university statement. “If we lost 1 per cent of the ocean’s blue carbon ecosystems it would be the equivalent of releasing 450 million tons of carbon annually, that is the emission of 97 million cars or the annual carbon emission of all of Australia,” Mcreadie told broadcaster ABC on Tuesday.

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15 Responses to Blowout Week 92

  1. Euan Mearns says:

    When senior figures in the UK establishment set out to undermine the nation’s most important companies, industries and the lifeblood of the economy they should be fired on the spot. Can anyone tell me why the UK has a useless sack of Canadian potatoes like Carney as governor of the BOE? (that is Bank of England and not barrel of oil equivalent).

    Incidentally Canada on a per capita basis is one of the most polluting countries on Earth. Send Carney home to deal with that!

    Osborne, who now runs the UK, needs to waken up. Carney, needs to be removed from office without delay.

  2. The Bankers on Climate Change are wrong just like the POPE. Reducing carbon dioxide does little to change the temperature and or the World Climate. For those that think otherwise please read my petitions to the 2016 General Methodist Conference on my web site under news. From my churches standpoint it is a political issue.not a religious issue.

    The facts are the temperature has not gone up for the last 12-18 years depending on whose data you use. Dr. John Christy University of Alabama has reviewed climate change on a world wide basis and has determined that while the climate changes on a daily or yearly basis the change is no more sever today than before the increase in CO2. The Glaciers in the north started melting at the end of the little Ice Age in 1750 long before any increase in CO2 in recent times.
    Lou Powers Author The World Energy Dilemma

    • Euan Mearns says:

      Hi Lou, what is your book about? Did you follow the epic blogging that Stuart Staniford and I did on Saudi oil reserves and production on The Oil Drum many years ago? Its one of many topics I have been meaning to return to.

      Recent history teaches us that if you build more drilling rigs and send more folks to work in the oil patch, that production will rise. Of course there comes a time when that will not be true.

      I’ve also been meaning to write a piece on peak oil. The devil lies in the detail and timing.

      Saudi Arabia – production forecasts and reserves estimates

  3. A C Osborn says:

    Euan, this might explain Carney’s stance along with those other bankers.

    Also note that Carney’s wife is a rabid Green.

    • Euan Mearns says:

      Thanks AC, it always amazed me how those involved in Climate Gate managed to shrug off the slime. Does anyone have the CRU email number so that I can check out the original? Noting also that they never got who dunnit.

      Its hopefully going to be Carney week on Energy Matters.

  4. PhilH says:

    My media highlight of the week was this:
    It had me laughing out loud.

    • Euan Mearns says:

      Phil, its curious how different folks view the world. I look at this beautiful car and I see energy used to create it, most of which would be FF and nuclear. And I see the electricity it runs on. In the UK perhaps 80% FF and nuclear. And then I think about the coal burned. 60% of it goes up in smoke as waste heat.

      To be clear, I think electric cars are a great idea and I am very much in favour of electrifying society – MacKay convinced me of that. Norwegian Teslas will be Green as Green can be. And so will French Teslas. But it wouldn’t surprise me if US and UK Teslas produce more CO2 emissions than a diesel. The emissions controversy, of course, is about NOx and particles.

      • PhilH says:

        I’d agree with all that, except that, if the electricity does come from FF burning, although roughly half the energy is wasted as heat and only half becomes useful electricity, much the same happens in an ICEV, where roughly half the fuel’s energy also gets wasted as heat and only half turned into useful motion. So in the worst case, I guess it’s not (significantly) worse.

        To me the big advantages of EVs are that any pollution that is produced can be more safely vented at the top of a chimney rather than in the faces of other road users, the scope they give for electricity demand shifting, and that they can effectively be run on source(s) of energy other than oil.

  5. Joe Public says:

    “Reuters: India announces plan to slow rate of greenhouse gas growth.

    India has promised to shave a third off the rate at which it emits greenhouse gases over the next 15 years …”

    Reuters omits to mention India’s electricity demand will more than triple, from 776 TWh (2012) to 2,499 TWh by 2030.

    It’s worth remembering that India has ~17.5% of the world population and the largest proportion ~24% of the global population without access to electricity (304 million).

  6. Elvis says:

    I don’t understand the opprobrium Carney’s quoted speech has earned him. It is self evident that if (i.e. it is hypothetical) there is agreement to make large parts of FF company reserves un-burnable, the companies are worth less – their value is based on their reserves. I’d expect his statement to be met with, “tell us something we didn’t know” by the finance world at least, if not here. But it is his job to point out things people don’t want to know. Oil/gas investors should be aware of it and try to avoid being hit like coal investors have been.

    If the objection is that it might raise the costs for FF exploration, I’d say that bond prospectuses already have to outline the risks companies face – regulation surely is one of them. If the proposition is that it is better for the economy for investors to be unaware of the risks, then some strong evidence would be needed in support of that.

    • Euan Mearns says:

      Mr Carney said scientists had calculated the “carbon budget” the world could afford if it is to meet the 2°C target, and it amounted to between one-fifth and one-third of the world’s proven reserves of oil, gas and coal. “If that estimate is even approximately correct it would render the vast majority of reserves ‘stranded’ — oil, gas and coal that will be literally unburnable without expensive carbon capture technology, which itself alters fossil fuel economics,” he said.

      There’s three things here. 1) I’m not sure it is Carney’s job to speculate on things such as this, especially when there is so much uncertainty, 2) The vast majority of oil and gas reserves lie in non-OECD countries. The quoted OCED oil and gas companies he refers to have virtually no jurisdiction over these reserves. His comments do undermine OECD oil and gas companies while shutting them down all together won’t make the slightest difference to global emissions (coal is different). This would simply be an act of symbolic suicide on our part. 3) The kind of “scientists” he is referring to have in the past lived in a fantasy world bathed in vast FF reserves. I’m hoping Roger is off researching this, i.e. what proved reserves numbers is Carney contemplating?

      Do you really think the UK, Norwegian, Mexican or US governments are going to declare that they are leaving 60% of remaining oil and gas in the ground? If the answer is no, then Carney should keep his mouth shut. The UK government is in fact going in opposite direction to that seeking to maximise recovery from the N Sea.

      • Elvis says:

        No I doubt they will announce plans to leave stuff in the ground, but that is irrelevant. It is not by government decree that the stuff will remain unburned but by market prices. When it is no longer profitable to extract oil and gas, extraction will cease, first in high price areas controlled by the oil majors in which the financial markets continue to make huge investments. If they cannot make a profit (a global carbon tax, though perhaps unlikely at the moment, would hasten that outcome) their value will fall perhaps precipitously. Saudi oil will likely be the last but that is of no worry to Carney whose concern must be that a large drop in the value of O&G firms could seriously threaten the ability of pension funds etc that own the sector to meet their future liabilities. That seems a legitimate concern.

        • Euan Mearns says:

          A global carbon tax


          Well in Europe we already have hefty carbon taxes called gasoline and diesel tax, electricity taxes and oil and gas production taxes and so on. So the first step must surely be to harmonise these taxes around the world according to ability to pay. I’ll come back in 25 years to see how the negotiations are going 😉 The USA will be on its knees.

          I vote we begin with taxing jet fuel the same as European gasoline 🙂 That should get rid of the pesky airliner construction business and the abhorrent international tourism business.

  7. jacobress says:

    The point is that Carney was hired to deal with real threats to financial stability NOT conjure new, hypothetical, threats. Too bad that he can’t distinguish between the two.

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