Thursday, February 23, 2017

GWPF Newsletter - G20: Merkel Sets A Climate Ambush For Trump

Scott Pruitt Signals Dramatic Shift in EPA Priorities

In this newsletter:

1) G20: Merkel Sets A Climate Ambush For Trump
National Review Online, 22 February 2017
2) Scott Pruitt Signals Dramatic Shift in EPA Priorities
The Wall Street Journal, 22 February 2017
3) Energy Superpower U.S.: Shale Revolution 2.0
The American Interest, 22 February 2017
4) U.S. Congress Slashes Funding For NASA’s Global Warming Research
The Daily Caller, 20 February 2017
5) Green Fears Donald Trump's Climate Scepticism Could Lead To Britain 'Backsliding' On Climate Policy
The Independent, 22 February 2017

Full details:

1) G20: Merkel Sets A Climate Ambush For Trump
National Review Online, 22 February 2017
Rupert Darwall

German chancellor Angela Merkel is preparing to spring an ambush on President Trump at this year’s G-20 summit in July. And Trump’s response will determine whether his presidency plays out like George W. Bush’s second term or puts America’s energy exceptionalism at the service of reviving American greatness.

Less than two months into his presidency, Bush shocked the world when he announced he was keeping his word: The U.S. would not be implementing the Kyoto Protocol signed by his predecessor. Referring to “the incomplete state of scientific knowledge of the causes of, and solutions to, global climate change and the lack of commercially available technologies for removing and storing carbon dioxide,” Bush declared that he could not sign an agreement that would “harm our economy and hurt our workers.” Instead, America would work with its allies and through international processes to “develop technologies, market-based incentives, and other innovative approaches.”

It was a breath of fresh air in a fug of tired thinking on emissions cuts. But then, a strange thing happened. One by one, innovative approaches were discarded and the Bush administration found itself sucked back into U.N. climate-change negotiations.

At the 2005 Gleneagles G-8, summit host Tony Blair cornered Bush. “All of us agreed that climate change is happening now, that human activity is contributing to it, and that it could affect every part of the globe,” Blair stated in his chairman’s summary. “We know that, globally, emissions must slow, peak and then decline, moving us towards a low-carbon economy.” This position was reflected in the summit communiqué, putting Bush on the hook for economically damaging policies that he would never escape.

His climate-change strategy paved the way for Barack Obama’s. In domestic energy policy too, the final two years of the Bush presidency turned out to be a prelude to President Obama’s eight. They saw the nonsensical call to break America’s addiction to oil. There was the goal of reducing gasoline usage by 20 percent and the alternative-fuel mandates and the aggressive fuel-economy standards embodied in the Energy Independence and Security Act of 2007, a monument to the folly of bipartisan energy policy.

The Bush-Obama climate strategy collapsed at the 2009 Copenhagen climate summit, when China and India successfully opposed any multilateral treaty that would threaten to cap their emissions. After Copenhagen, President Obama’s climate envoy, Todd Stern, crafted a new and, in many ways, ingenious strategy: The Obama administration would get the Chinese on board by exempting them from the emissions-cut obligations borne by other countries in the developed world. Stern’s strategy was to bypass the Senate, an indication of the one-sided nature of the commitments being made by the U.S. and other Western nations.

The risk in such unilateral executive action was always that it could be undone if a Republican won the White House in 2016. Speaking a year ago, after the Supreme Court slapped a stay on the EPA’s Clean Power Plan, Stern explained that a Republican president was unlikely to scrap the Paris deal because of the international outrage such a move would provoke. Evidently the strategy failed to anticipate Trump’s meteoric rise.

At the 2005 summit, Tony Blair had just won a third term. This year, Angela Merkel faces a tougher-than-expected reelection battle and needs a big summit win against Trump. In turn, Trump could shine a spotlight on Germany’s disastrous energy policies, telling it as it is.

No other country in the world is pursuing such a radical course, Germany’s leading energy expert and nature conservationist Fritz Vahrenholt says. Under the Energiewende de-carbonization plan, Germany is aiming to increase its share of renewable energy to between 80 and 95 per cent of total energy supply by 2050. Of all the countries in the world, the U.S. has the most to lose from being bound by the Paris agreement. Already renewables are costing German consumers €25 billion ($26.6 billion) annually.

This year, the extra renewable levy on power bills is rising to 6.88 euro cents (7.31 U.S. cents) per kilowatt hour, compared to the average 12.75 cents per kilowatt hour American households paid in November. Nearly 60 percent of Germany’s wind and solar energy is dumped on neighboring countries. Wind investors are being paid €1 billion ($1.06 billion) a year when there’s too much wind. Without coal-fired power stations, the grid would collapse. Yet, according to Vahrenholt, “the atmosphere has not been spared a single ton of carbon dioxide through German zeal.” Indeed, emissions from the power sector have been flat and even rising and the total CO2 reductions Berlin promises by 2020 will be wiped out by China in a mere three months.

America is being told that if Trump pulls out of the Paris climate agreement, he will be handing leadership on the issue to China. There is a German proverb that nicely explains what an excellent idea that would be: A donkey walks across the ice until it breaks. (Single-minded pursuit of an irrational and self-destructive course of action is scarcely unknown in German history.)

Of all the countries in the world, the U.S. has the most to lose from being bound by the Paris agreement. It has nearly half a trillion metric tons of coal. It has surpassed Saudi Arabia and Russia to become the world’s top energy producer. After decades of futile efforts from presidents of both parties, it has finally broken the OPEC oil cartel thanks to the frackers of the Permian, the Marcellus, the Bakken, and the Barnett.

China, meanwhile, can never hope to equal America’s spectacular energy ascendancy. It can only display climate leadership by torching a couple of trillion dollars on dead-end wind and solar technology. If Beijing follows through on its voluntary commitments under the Paris agreement, by 2020, the Chinese will have installed 200 gigawatts of wind capacity and 100 gigawatts of solar. That’s more wind and solar than the U.S., Germany, Britain, and Spain combined.

Donald Trump won’t need to renegotiate any trade deals with China — or anyone else. Higher energy costs caused by inefficient and expensive renewables will act as a self-imposed energy tariff on China’s manufacturing exports. The U.S.’s leading competitors will hand it the most favorable trade deal imaginable by making their energy more expensive while the American hydrocarbon revolution continues apace, giving American businesses and workers a large and growing competitive advantage.

Americans did not vote in November for climate martyrdom. Naturally, America’s partners and rivals want the U.S. to share in their climate pain and worry that American industry will clean their clocks with its access to the world’s most abundant energy reserves.

There’s more than economics at stake. As Vahrenholt puts it, a serious move by Germany away from its Energiewende “would amount to an admission of a strategic blunder, with unforeseeable consequences for the current political establishment.” Saving face is not a good reason for the United States to follow suit. Indeed, Donald Trump would be doing Germany and Europe a big favor by using the question of American participation in the Paris agreement as a “teaching moment” on the folly of their energy policies

2) Scott Pruitt Signals Dramatic Shift in EPA Priorities
The Wall Street Journal, 22 February 2017
Amy Harder

In speech before employees, the new chief emphasized giving business certainty about rules

Scott Pruitt, administrator of the Environmental Protection Agency, spoke to employees of the agency in Washington on Tuesday

Scott Pruitt, administrator of the Environmental Protection Agency, spoke to employees of the agency in Washington on Tuesday PHOTO:JOSHUA ROBERTS/REUTERS

WASHINGTON—In his first speech as administrator of the Environmental Protection Agency, Scott Pruitt stressed a dramatic change of priorities at the agency, stating the importance of the agency’s communication and relationship with businesses but giving few details about policy changes.

Mr. Pruitt didn’t touch on the hard-fought issues that arose during his confirmation process, including his work as Oklahoma attorney general suing the EPA and comments President Donald Trump has made about nearly eliminating the agency.

The new administrator focused instead on his general aspirations for the agency, such as giving businesses certainty regarding environmental rules and striking an appropriate balance with states when it comes to regulations.

“Regulations ought to make things regular,” said Mr. Pruitt, repeating a line he used at his confirmation hearing in January. “Those that we regulate ought to know what they can expect from us.”

That is a clear difference in message and focus from the EPA under President Barack Obama, which emphasized first what the agency was trying to protect with its regulations on clean air and water.

Mr. Pruitt’s speech at agency headquarters, which went a little over 10 minutes, was aimed at striking a balance between the administrator’s mandate from Mr. Trump to roll back Mr. Obama’s environmental regulations and persistent concerns from inside and outside the agency about that very mandate. It didn’t include questions from either media or the assembled EPA staffers in Washington. EPA employs about 15,000 people across the U.S.; thousands were able to watch the speech online.

“You can’t lead unless you listen. I seek to listen and learn and lead with you to address these issues we face as a nation,” Mr. Pruitt said.

Mr. Trump’s plans for EPA have attracted particular attention, given his stated goal of making wholesale changes at the agency. Current and former officials of the agency had publicly urged the defeat of Mr. Pruitt, saying they were concerned about his close relations with the oil and gas industry in Oklahoma. The Senate narrowly confirmed him on Friday mostly along party lines.

Mr. Pruitt’s comments Tuesday didn’t ease some critics’ concerns.

Full story

3) Energy Superpower U.S.: Shale Revolution 2.0
The American Interest, 22 February 2017

Don’t look now, but the United States is ready to once again pass a major oil supply milestone. After seeing output dip from a June 2015 high of more than 9.6 million barrels per day (bpd) down below 8.5 million bpd in October 2016, American oil production is now knocking at the door of the 9 million bpd range, as the Energy Information Administration (EIA) reports we produced 8.977 million bpd this past week.

Image result for shale revolution 2.0

That’s a big turnaround—producers have succeeded not only in halting a slide predicted by a corresponding fall in global oil prices, but they’ve also been able to once again use unconventional drilling in shale fields to kickstart U.S. production. Now, as the EIA reports, we’re not just adding more rigs, we’re also adding more barrels of crude:

Increased drilling in the Permian region responded relatively quickly to a rise in the West Texas Intermediate (WTI) crude oil price, which increased from an average of near $30 per barrel (b) in the first quarter of 2016 to $45/b or higher beginning in the second quarter of 2016. In the [Gulf of Mexico (GOM)], the new projects that came online in the last quarter of 2016 were planned and approved during the 2012–14 period.

Shale is catching its second wind in large part thanks to drilling in West Texas’s Permian basin:

The Permian region was the only area covered in EIA’s Drilling Productivity Report (DPR) that did not experience a month with a year-over-year production decline throughout 2014–16. This region benefits from a number of highly productive formations located within what is an established oil-producing region that allows producers to continue operations despite low prices…

Production from formations elsewhere in the United States hasn’t started to surge yet, but the EIA expects that might change soon:

In contrast to the Permian, other onshore regions in the United States experienced year-over-year production declines in November. However, recent drilling activity suggests that production may be increasing in these areas as well. According to Baker Hughes, the total U.S. oil-directed rig count increased by 123 rigs since November 2016, with 39% of the increase occurring in regions outside of the Permian.

Rig count is an imperfect metric, as the number of active rigs in operation doesn’t directly correlate with total output. As we noted almost exactly two years ago, when rig counts were starting a precipitous slide as companies sought to right their balance sheets in the face of a bearish oil market, the first rigs to go were necessarily the least productive and the most expensive to operate. Low prices forced the U.S. oil industry to cull the herd, so to speak, and the rigs that survived those difficult months were best in class.

But firms are now adding rigs, and in this market environment, we can reasonably expect production will soon creep upward as a result—both inside and out of the Permian basin. And, according to the latest data, it only has to rise 23,000 bpd before the U.S. is once again pumping more than 9 million bpd. If OPEC and the rest of the world’s petrostates continue to constrain their own supplies in order to inflate prices, we can expect our own output to rise well past that 9 million mark. Welcome to the shale revolution, 2.0.

4) U.S. Congress Slashes Funding For NASA’s Global Warming Research
The Daily Caller, 20 February 2017
Andrew Follett

The U.S. Senate passed legislation recently cutting funding for NASA’s global warming research.

The House is expected to pass the bill, and President Trump will likely sign it. Supporters say it “re-balances” NASA’s budget back toward space exploration and away from global warming and earth science research. Republicans plan to end the more than $2 billion NASA spends on its Earth Science Mission Directorate.

“By rebalancing, I’d like for more funds to go into space exploration; we’re not going to zero out earth sciences,” Texas Republican Rep. Lamar Smith, who chairs the House Committee on Science, Space and Technology, told E&E News. “I’d like for us to remember what our priorities are, and there are another dozen agencies that study earth science and climate change, and they can continue to do that.”

NASA’s spending on earth and global warming science increased by 63 percent over the last eight years, making it the largest and fastest growing budget of any NASA science program. The agency now spends more on environmental research than many of its other science functions, including astrophysics and space technology. Those programs only get $781.5 million and $826.7 million, respectively.

“We only have one agency that engages in space exploration, and they need every dollar they can muster for space exploration,” Smith continued.

Trump tapped former Republican Pennsylvania Rep. Bob Walker as a senior adviser to his NASA transition team — a man who thinks NASA should do less “politically correct environmental monitoring” and more space exploration.

“NASA should be focused primarily on deep-space activities rather than Earth-centric work that is better handled by other agencies,” Walker and Peter Navarro, another senior adviser to the Trump campaign, wrote in an October opinion piece. “Human exploration of our entire solar system by the end of this century should be NASA’s focus and goal.”

Full post

5) Green Fears Donald Trump's Climate Scepticism Could Lead To Britain 'Backsliding' On Climate Policy
The Independent, 22 February 2017
Jon Stone

Theresa May must not use Donald Trump’s climate change denial as an excuse to “backslide” on environmental commitments, the Liberal Democrats have said.
In a speech today to the think-tank Policy Exchange Tim Farron accused the Government of being  “blinkered by right-wing climate change-sceptics who put warped ideology before common sense”.

Mr Trump has said he is minded to pull the US out of the Paris international climate change agreement. The treaty, signed under President Obama, cemented global emissions cuts.

He has also said that he believes that global warning is a Chinese conspiracy to hobble US manufacturing.

Ms May has held Mr Trump close since his inauguration, inviting him on a state visit and appearing reticent to disagree with his right wing policy stances in public.

Mr Farron said on Wednesday: “The consensus is unravelling. We have a climate change denier in the White House; which provides a reason or an excuse for other countries to backslide a little too.

“We have a Tory Government that went from hugging huskies to dismissing intelligent environmental policies as ‘green crap’, and a Labour Party that has no coherent vision for the environment, industry or the economy.

“The Prime Minister choosing to pander to President Trump hardly makes us any more optimistic that her next choices on climate change will be wisdom over transparent political short-termism.”

Full story

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at

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