In this newsletter:
1) Russia’s war is the end of climate policy as we know it
Foreign Policy, 5 June 2022
2) India's coal demand to increase to 1.5 billion tonnes by 2040 as energy demand is set to double
The Hindu, 5 June 2022
BBC News, 6 June 2022
4) The end of energy free trade
The Wall Street Journal, 3 June 2022
Manhattan Contrarian, 3 June 2022
6) South Australia's climate emergency: prepare for carbon footprint tracking
Lincoln Brown, Spectator Australia, 4 June 2022
7) China ruins Antarctic Treaty attempt to enact special protection status for Emperor penguins
Susan Crockford, Polar Bear Science, 5 June 2022
Full details:
1) Russia’s war is the end of climate policy as we know it
Foreign Policy, 5 June 2022
By Ted Nordhaus, the executive director of the Breakthrough Institute.
Energy policy in the wake of the Ukraine invasion is likely to be informed by energy security imperatives similar to those of the Cold War era. Nations will not be constrained by the ostensibly scientific targets that have informed climate policy in recent years but by the energy supplies they have available to them.
Four days after Russian tanks rolled into Ukraine, the U.N. Intergovernmental Panel on Climate Change released its latest assessment of the impacts of global warming. Leading media outlets did their best to pick out the most dire scenarios and findings from the report. But the outbreak of the first major European war since 1945 kept the report off the front page or, at the very least, below the fold. “Climate Change Is Harming the Planet Faster Than We Can Adapt” simply couldn’t compete with “Putin Is Brandishing the Nuclear Option.”
Meanwhile, the headlong rush across Western Europe to replace Russian oil, gas, and coal with alternative sources of these fuels has made a mockery of the net-zero emissions pledges made by the major European economies just three months before the invasion at the U.N. climate summit in Glasgow, Scotland. Instead, questions of energy security have returned with a vengeance as countries already struggling with energy shortages and price spikes now face a fossil fuel superpower gone rogue in Eastern Europe.
In the decades following the end of the Cold War, global stability and easy access to energy led many of us to forget the degree to which abundant energy is existential for modern societies. Growing concern about climate change and the push for renewable fuels also led many to underestimate just how dependent societies still are on fossil fuels. But access to oil, gas, and coal still determines the fate of nations. Two decades of worrying about carbon-fueled catastrophes—and trillions of dollars spent globally on transitioning to renewable power—haven’t changed that basic existential fact.
Virtually overnight, the war in Ukraine has brought the post-Cold War era to a close, not just by ending Europe’s long era of peace, but by bringing basic questions of energy access back to the fore. A new era, marked by geopolitically driven energy insecurity and resource competition, is moving climate concerns down on the list of priorities. If there is a silver lining in any of this, it’s that a shift of focus back to energy security imperatives might not be the worst thing for the climate. Given the scant effect international climate efforts have had on emissions over the past three decades, a turn back toward energy realpolitik—and away from the utopian schemes that have come to define climate advocacy and policymaking worldwide—could actually accelerate the shift to a lower-carbon global economy in the coming decades.
The issue of climate change burst into the global debate just as the Cold War was coming to an end. As one existential threat seemingly receded, another came into view. For much of the international community, particularly the United Nations and its agencies, climate change also became much more than an environmental issue, offering an opportunity to reshape the post-Cold War order to be more equitable, multilateral, and politically integrated.
Nonetheless, when the framework for climate action emerged in the early 1990s, it built on the experience of the Cold War era. U.S.-Soviet arms control agreements became the model for global cooperation on climate change. Just as the superpowers had signed treaties to gradually draw down their nuclear weapons stocks, nations would commit to draw down their emissions. Yet the first major agreement to propose legally binding limits on emissions—the 1997 Kyoto Protocol—was dead from the moment the U.S. Senate unanimously rejected its terms, even before the negotiations had been finalized. Combine U.S. opposition with the understandable reluctance of energy-hungry, fast-developing nations such as China and India to even consider limiting emissions, and the inefficacy of international climate action was set.
Aspirational goals and nonbinding commitments became the currency of negotiations that lacked any real enforcement capability. Like other U.N. initiatives that emerged in the 1990s and early 2000s, such as the Sustainable Development Goals and the Convention on Biological Diversity, the purpose was primarily to exhort and galvanize. Yearly U.N. climate conferences, amplified by the world’s media, became performative theater where the utopian agendas of the global environmental movement—limiting warming to 1.5 degrees Celsius above preindustrial levels, powering the world entirely with renewable energy, switching to organic agriculture, and transferring hundreds of billions of dollars from rich countries to poor ones for mitigation and adaptation—could be talked about as if they were realistic.
Facts on the ground told a different story. The carbon intensity of the global energy system fell faster in the 30 years before the first major U.N. climate conference than after it—a result of rising energy efficiency, the spread of nuclear power, and the changing composition of the global economy. After 1997, when the Kyoto Protocol was adopted, both total and per capita emissions rose faster than before.
The capacity to adapt to rising temperatures and extreme weather events rose significantly as well—as evidenced by the continued decline in weather-related deaths. But this was not due to any U.N.-led efforts to fund climate adaptation, which never materialized. What made people all over the world more resilient to climate extremes was better infrastructure and safer housing—the product of economic growth powered by cheap fossil fuels.
The geopolitical, technological, and economic competition that characterized the Cold War had more success in reducing the carbon intensity of the global economy than climate policy efforts have had since. Emissions-free nuclear energy started as a spinoff of the arms race—a demonstration of technological prowess and the peaceful potential of the atom. The 1973 Arab oil embargo, an outgrowth of the superpower proxy war between Israel and the Arab world, sparked two decades of spectacular improvements in energy efficiency, the shift of power generation and heating away from oil, and the rapid build-out of nuclear power. The nuclear champions include France, which today remains the greenest of the G-7 industrial economies by a significant margin. Photovoltaic solar panels were developed for the superpower space race; their commercialization began as part of the Carter administration’s push for energy independence. Radical improvements in vehicle fuel efficiency come from that era as well.
Globally, the share of electricity from clean sources—nuclear, hydropower, and renewable energy—peaked in 1993, just after the Cold War ended. Hopes that the world would turn from brinkmanship to cooperation on the shared goal of reducing emissions proved illusory. Instead, peace, prosperity, and access to plentiful cheap energy in the post-Cold War era dramatically lowered national incentives to make major investments in energy security. In an integrated global economy free of major conflict, the world could run on Russian gas, Middle East oil, and, more recently, Chinese solar panels.
That world ended on Feb. 24.
Much of the climate commentariat — politicians and policymakers, academics and think tank analysts, journalists and activists — appears shellshocked by the violent return of energy geopolitics and fossil fuel shortages. For many, the war has simply provided another opportunity to inveigh against fossil fuels and promote renewable energy. Ukraine and the world, environmentalist Bill McKibben argued in a long New Yorker essay, are burning because we keep burning things.
A switch to solar and wind energy and electric vehicles, McKibben asserted, would free us from dependence on dictators like Russian President Vladimir Putin—a common refrain of the latest climate discourse. What McKibben neglected to mention is that most of the world’s solar panel and battery production is controlled by another dictator—Chinese President Xi Jinping—and that Europe’s headlong rush to shut down fossil fuel production and shift to renewable energy over the last decade substantially increased its dependence on Russian oil and gas.
The facile solutions offered by McKibben and other environmentalists fail to reckon with many things, not least how profoundly the world has changed since Russia’s invasion. Europe’s heavy dependency on Russian oil and gas is just the tip of the iceberg. The world’s renewable energy economy is deeply entangled with geopolitically problematic supply chains. Huge parts of the world’s supplies of silicon, lithium, and rare-earth minerals rely on China, where solar panels are produced by Uyghur slave labor in concentration camps. The idea that the crisis might be resolved by choosing Western dependence on Chinese solar panels and batteries over Western dependence on Russian oil and gas reveals just how unserious the environmental movement’s pretensions to justice, human rights, and democracy really are.
At a moment when democracy and liberalism are once again under threat, questions of energy security can no longer be separated from the question of whom we are doing business with. With Russia and China seeking to delegitimize liberal democratic norms more broadly both at home and abroad—including by waging wars of conquest—energy geopolitics cannot be understood outside broader conflicts over the rules of the global order. Our energy choices will either help or hinder our ability to resist these authoritarian regimes.
With the onset of the Ukraine crisis, the new reality is already evident. Since Feb. 24, the Biden administration has reversed course on its efforts to slow or stop oil and gas production in the United States by restricting access to federal land. Instead, it is now threatening firms that fail to raise production with the cancellation and transfer of their drilling leases. It submitted budget requests to substantially scale up domestic uranium processing and enrichment, where Russia is a major supplier. And it invoked the Defense Production Act in an effort to raise domestic production of critical minerals now supplied by China. The focus is on the entire energy supply chain—fossil and nonfossil fuels, nuclear and renewable energy, supplies from China as well as Russia.
The same story is unfolding in Europe. U.S. climate envoy John Kerry and his counterparts in the European Union, who have led efforts in recent years to choke off international finance for oil and gas development, have made a sudden about-face. The trans-Saharan gas pipeline, which would bring natural gas from Nigeria to Morocco and from there to European markets, is now back on the fast track after languishing due to opposition from European climate policymakers and lack of finance. Now that Europe needs African gas, it seems that Africans are finally deserving of the benefits of their own energy supplies too.
Eastern European countries like Poland, Romania, and the Czech Republic, long wary of relying on Russian gas and ridiculed as paranoid by Germany, are now moving forward with plans to source new nuclear technology from the United States. They might have sourced this technology from Germany had the country not sold its world-leading nuclear technology assets to Russia’s Rosatom during the Merkel administration.
In Asia as well, energy realpolitik has returned. South Korea, after flirting with de-emphasizing nuclear energy in recent years, has just announced plans to scale it up again due to growing concerns about rising fossil fuel prices and the high cost of transitioning to renewable energy. In Japan, for the first time since the Fukushima nuclear accident in 2011, a majority of the public now supports government plans to restart the nation’s reactors.
Energy policy in the wake of the Ukraine invasion is likely to be informed by energy security imperatives similar to those of the Cold War era. Nations will not be constrained by the ostensibly scientific targets that have informed climate policy in recent years but by the energy supplies they have available to them.
In response to the energy crises of the 1970s, the United States, rich in both fossil fuel resources and technological capabilities, invested in almost every energy source imaginable. It accelerated the development of coal deposits across the U.S. West, built rail links to bring coal to the Eastern Seaboard, and invested huge resources in the development of unconventional oil and gas production, including shale gas, oil shales, and coal-based synthetic fuels. It also made foundational investments in the commercialization of solar panels, wind turbines, and energy-efficient technologies ranging from LED lighting to combined-cycle gas turbines to fuel-injection engines.
France, Sweden, and Japan, almost entirely lacking fossil fuel endowments of their own, invested instead in huge build-outs of nuclear power. Britain initiated a dash for North Sea gas, which broke its dependence on coal and the deeply entrenched labor strife associated with it.
Whatever modest constraints that climate concerns have placed on fossil energy development are likely to be less salient in the face of supply shortages, price spikes, and other energy security concerns in the coming years. But continuing fossil energy development is likely to have only a modest near-term effect on carbon emissions. In part, that’s because there’s very little capacity to quickly ramp up oil and gas production across much of the world. Most of the low-cost, easily accessible oil and gas fields have already been developed, while new production is harder to reach and costlier to extract. Because existing wells naturally decline, any new production is unlikely to translate into significantly increased supply.
Constrained fossil fuel supply and the new energy security imperatives will likely be a boon for the development of nonfossil energy and infrastructure of all sorts. Long-standing green opposition to sensible licensing of new nuclear reactors in the United States, for instance, is far less defensible today than it was before the invasion of Ukraine. Similarly, it will be harder to sustain NIMBY opposition to things like offshore wind farms on the Atlantic seaboard or new long-distance power lines to bring wind energy from Germany’s stormy north to its populous south. Already, Germany and the European Union are leading a push to loosen environmental protections in order to accelerate approvals.
In every case, the post-Ukraine energy emergency is likely to accomplish much that the climate emergency could not. The environmental movement’s fetishizing of regulatory solutions and its arbitrary technology preferences have always hobbled its ability to advocate for effective climate policies at the scale needed to have much effect on warming. Ironically, decentering climate and centering energy security, particularly in the West, is likely to do far more to address climate change than the climate movement could ever have accomplished.
Climate change, though, is simply not going to be the main event. One of the less observed challenges as the United States and Europe have sought to mobilize the international community to isolate Russia politically and economically has been the lack of enthusiasm from China, India, and much of the developing world.
In part, that is pragmatic: Russia is a major supplier of food, fuel, fertilizer, armaments, and other key goods to many regions of the world. In part, it is because Russian-style corruption, illiberalism, and ethnonationalism are common, if not the rule, in many regions of the world. Putin’s war may not be their war. But many national leaders around the world are sympathetic to Putin’s broader rejection of the Western institutions and norms that have shaped the post-Cold War era.
But for some of these pro-Russian sympathies, U.S. and European leaders have their own inconsistent principles to blame. In the name of saving the world from climate change, Western leaders have exhorted developing nations to forgo the development of their oil and gas resources—and the economic growth enabled by access to fossil fuels. African and other developing-world governments rightly see this hypocrisy, given the heavy dependence of the industrial economies on fossil fuels.
Even as Western countries such as Germany continued to build out their coal plants, they advocated for phaseouts of coal-fired power generation in poorer countries. Rich-nation governments have all but cut off most development finance for fossil fuel infrastrucure, despite continuing to exploit their own domestic sources.
Resentment runs deep. For decades, Western environmental and other NGOs, often with the tacit or direct support of governments and international development institutions, have broadly opposed large-scale energy and resource development, from dams to mines to oil and gas extraction.
The NGOs’ environmental and human rights concerns are often real. But the crusading and frequently patronizing nature of Western engagement with these issues, combined with the fact that the NGOs’ local campaigns against major energy projects are mainly financed, staffed, and organized by the West, has tapped into a deep reservoir of anti-Western sentiment going back to the colonial era.
In recent years, Western development assistance has prioritized factors such as transparency, civil society engagement, market liberalization, and climate change. All of this sounds proper and appropriate to Western ears. But the practical result has been the withdrawal of Western governments, development agencies, and financial institutions from virtually all large-scale infrastructure, energy development, and other resource-related projects across the developing world.
China and Russia, by contrast, have no such qualms and have leveraged investments in energy, resource extraction, and infrastructure to advance their geopolitical interests. Their intent is to create dependency in ways that advance Moscow’s and Beijing’s economic priorities while creating international leverage. Since the Ukraine invasion, the efficacy of this strategy is now plain for all to see.
How, then, should the United States and other liberal democracies balance their commitment to democratic and open societies, the imperative to disentangle their own energy economies from China and Russia, and their efforts to counterbalance Russian and Chinese resource diplomacy in the developing world? And how might they advance climate action in an era when other imperatives will almost certainly take precedence?
Doing so will require finding a new course for engaging with the world, rejecting both the preening moral hypocrisy that has characterized the West and the amoral agenda driving China and Russia. In much of the world, Western development institutions need to get back into the game of investing in the proven enablers of economic development: hard infrastructure and the development of energy and other resources.
Insofar as those investments have strings attached, they should support broader efforts toward democratization, transparency, and protection of minority rights rather than conditioning specific projects on a raft of demands associated with local environmental impacts or national action on climate change.
Liberal societies must seek to entangle their allies and suppliers in an ethical, rules-based, multilateral political and economic order while recognizing that democratization, economic development, and environmental progress are always incremental and iterative and that geopolitical competitors will happily step in wherever the West abandons the field. Choosing Western investment and technology must confer benefits in terms of access to markets and supply chains that allow emerging economies to hone some comparative advantage for key sectors of their economies while sidelining Russia and China.
Already, a shift in this direction is apparent. The scaled-back version of the trans-Pacific trade and investment agreement that U.S. President Joe Biden recently traveled to Asia to promote focuses on engaging Asian partners in a shared industrial policy that aims to downsize China’s dominant position in the renewable energy and battery sector.
The broader economy is also likely to enact significant discipline upon the utopian politics that have characterized so much of the post-Cold War response to climate change. A sustained decline in many financial assets—not least the collapse of many high-flying technology stocks and crypto assets—will deflate the endowments and investment accounts of the environmental philanthropies and billionaire donors bankrolling the climate movement. If nothing else, this will reduce the sheer quantity of climate discourse that has so distorted policymaking in recent years.
Inflation, energy shortages, and rising public deficits are also likely to bring an end to the easy money and expansionary fiscal policy of recent decades. The prospect that the generous subsidies driving the energy transition might be scaled back will put to the test claims that wind and solar energy can successfully compete with fossil fuels in many regions.
None of this is inconsistent with various policies to cut emissions and drive green development. But climate and energy policies, especially in the West, may shift significantly from subsidizing demand (for things like solar panels and electric vehicles) to deregulating supply (of things like nuclear power plants and high-voltage transmission lines). A shift of this sort—away from subsidizing specific green technologies favored by activists and lobbyists and toward enabling the broader technological, regulatory, and infrastructural basis for the energy transition—would put clean energy policies on much firmer economic footing. And it would better align climate objectives with energy security imperatives.
If recent months have demonstrated anything, it is that war, insecurity, and economic crisis are merciless teachers. Climate advocates and their political allies have often engaged in the policy equivalent of smoking one’s own supply: They have confused the subsidy-driven growth of renewable energy with evidence that the world is ready to rapidly transition off fossil fuels. Hence, they discouraged the production of oil and gas wherever they could and chronically underinvested in other sources of clean energy, such as nuclear power. But while there has been technological progress, the global economy is still very far away from fully replacing fossil fuels.
The confluence of war in Europe with a global energy security crisis reminds us that the West is not so different from the rest of the world. For better or worse, energy development and security remain the coin of the realm. Any global strategy to build a bulwark against ethnonationalist authoritarianism, achieve economic stability, and transition toward a low-carbon future will need to accommodate itself to that reality.
2) India's coal demand to increase to 1.5 billion tonnes by 2040 as energy demand is set to double
The Hindu, 5 June 2022
The demand for coal in India is set to jump to 1.5 billion tonnes by 2040, according to India's coal minister. This is an increase of 50% from the current demand of 1 billion tonnes.
The thermal coal requirement in India will go up to 1,500 million tonnes (MT) even as the country’s energy demand is set to double by 2040, Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi has said.
He was speaking after inaugurating the renovated Registered Office of NLC India Ltd. (NLCIL) in Chennai through virtual mode from Neyveli on Saturday.
Mr. Joshi stressed the importance of coal in India’s energy security today and said that the country had a balanced energy mix and this was helping it move steadily towards its energy-environmental goals. The expected electricity generation by 2040 would be approximately 3,000 billion units and the energy demand would double by 2040.
“To cater to this requirement, thermal coal demand would increase to 1,500 million tonnes. However, we will also have to be conscious about the environment and keep in mind our sustainable mining goals. Though we are doing our best to balance our dependence on coal and lignite with development of renewables, our transition to renewables will mostly be gradual,” he said.
The Minister also lauded NLCIL’s efforts towards mining lignite and generating power.
Full story
BBC News, 6 June 2022
The US envoy on climate change John Kerry has warned that the war in Ukraine must not be used as an excuse to prolong global reliance on coal.
Speaking to the BBC, Mr Kerry criticised a number of large countries for not living up to the promises they made at the COP26 climate summit.
Climate diplomats meet again today in Bonn amid new, energy security worries.
If countries extend their reliance on coal in response to the war, then "we are cooked," Mr Kerry said.
The fragile unity shown in Glasgow last November is likely to be tested in Bonn as countries deal with the fallout from Russia's invasion of Ukraine and the cost of living crisis.
Mr Kerry told the BBC that despite these drawbacks, "as a world we are still not moving fast enough," to rein in the emissions of warming gases that are driving up temperatures.
"We can still win this battle," the former senator said, but it will require a "wholesale elevation of effort by countries all around the world".
Mr Kerry's call was echoed by a leading Ukrainian scientist who urged delegates to speed up their transition away from fossil fuels.
Dr Svitana Krakovska said oil and gas were the "enablers of war".
Today's meeting in Bonn, which will last until the end of next week, is much smaller than COP26 and is mainly a technical negotiation.
It occurs halfway between the big conferences in Glasgow and COP27, to be held in Egypt.
The talks will be carried out by civil servants with limited political input and will review progress on a host of issues agreed in the Glasgow Climate Pact,
So how much progress on climate has been made since COP26?
Bluntly, not a lot.
A BBC analysis shows that across a range of issues, very little has been achieved.
Full story
4) The end of energy free trade
The Wall Street Journal, 3 June 2022
Russia’s attack on Ukraine is redrawing the world’s energy map, ushering in a new era in which the flow of fossil fuels is influenced by geopolitical rivalries as much as supply and demand.
Over the past half-century, oil and natural gas have moved with relative freedom to the markets where they commanded the highest prices around the world. That ended abruptly when Russian tanks rumbled across the Ukraine border on Feb. 24, triggering a barrage of trade sanctions by the U.S. and Europe targeting Russia that have plunged global commerce into disarray.
This week, the European Union agreed to its toughest sanctions yet on Russia, banning imports of its oil and blocking insurers from covering its cargoes of crude.
Whatever new order emerges won’t be fully clear for years to come. But traders, diplomats and other experts in energy geopolitics generally agree that it will be more Balkanized, and less free-flowing, than what the world has seen since the end of the Cold War.
Three likely axes of energy influence are emerging: the U.S. and other Western nations, which have used their massive economic and purchasing power as a political weapon; China and large emerging nations such as India, Turkey and Vietnam, which have rebuffed Western pressure and continued doing business with Russia; and Saudi Arabia and other Middle Eastern oil-producing nations, which have sought to maintain neutrality, and may stand to gain market share in the years to come.
“We are in a real hinge of history,” said Chas Freeman, a former U.S. ambassador to Saudi Arabia. Mr. Freeman, who is now a senior fellow at Brown University, said Europe can never again trust Russia to be its primary energy provider, and that even if sanctions are lifted, countries are proposing costly new infrastructure and endorsing long-term alternative supply contracts that will lock in the new energy map.
The new order promises to make the energy trade less efficient and more expensive, potentially putting commodities at the center of the next global economic crisis, said Zoltan Pozsar, a former official at the Treasury Department who now heads short-term interest-rate strategy at Credit Suisse Group AG.
A German embargo of Russian crude would likely mean that instead of Russian oil reaching Hamburg in a week or two, it would take several months to travel to China, he noted. Conversely for Middle Eastern oil, the embargo would trigger a longer voyage to Europe for crude that would have ordinarily gone to Asia. Such inefficiencies will drive up the costs of shipping, insurance, and financing that underpin the energy trade, he said.
Many predict Russia’s energy industry, the backbone of its economy, will contract because the loss of its largest market cannot be completely replaced. Western financial and technological sanctions will undermine Russia’s ability to maintain current revenues and production levels, these people say.
“Russia’s days as an energy superpower are over,” said Daniel Yergin, the vice chairman of S&P Global and a noted oil-industry historian.
But the new map isn’t without risks to American power and the country’s standing as the guarantor of global trade. Since the end of World War II, the dollar has been the default currency for oil transactions, which has helped maintain its centrality to the global economy.
Leveraging the might of the U.S. financial system to muster sanctions against Russia has called into question its reliability as a place to store wealth, Mr. Freeman said.
Now Saudi Arabia, India and other developing countries are exploring conducting energy transactions in non-U.S. dollar currencies. Russia has similarly begun seeking recompense in rubles for its fossil fuels.
“We may have had good reasons, but the U.S. has politicized the trade of energy,” Mr. Freeman said.
‘Friend-shoring’
Geopolitics and energy have always been linked, and U.S. sanctions against Iran and Venezuela have disrupted global oil flows in recent years. But since the end of the Arab oil embargo of the early 1970s, the relatively free trade of commodities, backed by U.S. military and financial might, has been a hallmark of the international system.
That is now changing. During a speech in April, U.S. Treasury Secretary Janet Yellen said that in the wake of Russia’s invasion, it was time to redesign Bretton Woods, the system of trade rules adopted in 1944 that prioritized economic efficiency and international cooperation. Ms. Yellen advocated for “friend-shoring” supply chains of critical raw materials by deepening trade ties with “a group of countries that have strong adherence to a set of norms and values.”
Trade flows are already being redirected as Western energy companies pull out of Russia and shippers, lenders and insurers refuse to touch Russian exports.
The EU, in beginning to implement its embargo on Russian oil exports today, joins the U.S., U.K. Canada and Australia. Following concerns Hungary raised about the economic impact, the embargo will exempt oil delivered from Russia via pipelines. Still, by the end of the year, the embargo would cover 90% of previous Russian oil imports, EU officials said.
Russian oil exports to the EU, the U.S., the U.K., Japan and South Korea have already fallen by 563,000 barrels per day, or 32% from February to April. A full EU ban would mean some 2.8 million barrels per day of crude and 1.1 million barrels per day of products that normally flow into Europe will have to find a new market, according to investment bank Piper Sandler.
European leaders will find it more difficult to wean themselves off Russian natural gas, which typically accounts for more than 30% of the EU’s supply and mostly comes via pipeline. JPMorgan Chase estimates that by the end of the year Europe will still receive between 81% and 94% of the amount of Russian gas it took in 2021. The EU has said it would stop using Russian oil and gas by 2027, but ending its reliance on Russian energy could come at a heavy cost.
Amos Hochstein, President Biden’s coordinator for energy security, has worked with foreign officials and energy executives to bolster alternative supplies of oil and gas to Europe to blunt the pain.
But Europe and the U.S. are operating under an additional constraint: Mr. Hochstein said the U.S. won’t provide incentives for long-term fossil-fuel investments that run counter to its plan to encourage a transition to greener energy sources.
“We’re trying to help Europe, stabilize the market and protect U.S. consumers while making Putin pay the price and do that without cheating our overall goal of reduced fossil-fuel usage,” Mr. Hochstein said.
EU leaders have said they would now accelerate ambitious plans to build out renewable energy projects as a result of the war, but concede Europe will need more fossil fuels in the interim.
Increased demand coupled with Western energy sanctions against Russia that will cut its output may lead to physical shortages of global oil, according to Joseph McMonigle, secretary-general of the Saudi Arabia-based International Energy Forum.
“If Russia is removed from the export market, there will be a global recession that kills demand,” Mr. McMonigle said.
Saudi comeback
Middle Eastern producers look poised to be winners in the emerging energy map.
Saudi Arabia and other Gulf states had been under pressure to diversify away from fossil fuels in recent years due to growing global concerns about climate change. But President Biden called on the kingdom to drill more in the lead-up to war, a stark turnaround from his presidential campaign, when he called the nation a pariah.
Retired Adm. Dennis Blair, who served as President Barack Obama’s first director of national intelligence, said despite efforts to pivot U.S. foreign policy away from the region, the importance of the Middle East to U.S. interests has been elevated again by the war.
“We need to have a very eyes-open, transactional relationship with Saudi, where we do have to go back to being their ultimate provider of defense until we can electrify our transportation and transition to more diverse energy sources,” Mr. Blair said.
State-owned energy giant Saudi Arabian Oil Co., known as Saudi Aramco, which recently overtook Apple Inc. as the world’s most valuable company, is already receiving more requests for its crude from buyers in Europe. More broadly, Saudi officials say the war has shown that aggressive targets to reduce carbon emissions by rapidly cutting fossil fuel usage were unrealistic.
“The kingdom finds it laughable that last year, several countries, including the United States, have been pressuring them to stick to [plans to zero out carbon emissions by 2050] but now are asking them for more oil,” said a Saudi official.
After rejecting U.S. requests for more production for months, OPEC and its allies agreed Thursday to a bigger-than-expected output increase, allowing Saudi Arabia to potentially pump more crude and paving the way for a potential oil-for-security deal with the U.S. and a visit from President Biden later this month.
“The Russian invasion has taught the world one thing loud and clear: We need more Saudi oil,” another Saudi official said.
Challenge for Russia
Russia’s new imperative is deepening ties with Asia, and especially China, to offset the looming loss of its European market.
Such a pivot is particularly necessary for Russia’s natural-gas exports, which are less fungible than its oil, and will require a massive infrastructure build-out to find a new home. Russia previously exported as much as 200 billion cubic meters of gas a year to Europe, by far its biggest market. It sold about 33 bcm to Asia last year.
Russia has a handful of proposed pipelines and liquefied natural gas projects, which convert the gas to a liquid enabling seaborne trade, that would boost its ability to send gas to Asia, but many of the projects are technically challenging and expensive, and Western sanctions will hamper their progress, say analysts.
The most important planned project is a roughly 1,600-mile pipeline connecting Russia’s Yamal peninsula to China, called Power of Siberia 2. The first Power of Siberia project cost more than $50 billion and took more than five years to build. It will send nearly 40 bcm a year to China at full capacity and the second could send as much as 50 bcm.
When the two countries agreed to terms on the first pipeline in 2014, China extracted relatively cheap gas prices. “Our Chinese friends drive a hard bargain as negotiators,” Russian President Vladimir Putin remarked at the time.
China holds even more negotiating power this go-round, due to Russia’s desperation to offset European lost revenues, said Ed Chow, a senior associate at the Center for Strategic and International Studies. Russia could, at most, sell as much as 120 bcm of gas a year to Asia by 2030, and at a lower price than it fetches in Europe, according to CSIS.
“Everyone will try to take advantage of the fact that Russia needs them more now,” Mr. Chow said.
Russian diplomats are rushing to counter U.S. efforts to deter Russian energy from finding a new home. Russian oil cargoes bound for India, Turkey, China and other “friendly” countries increased by more than 1.2 million barrels per day from February to April, a 146% increase, according to JPMorgan Chase.
Russian state-run natural gas giant Gazprom redirected several LNG tankers from Japan to China and India, an official said in an interview, a pre-emptive move in case Tokyo joins the Western embargo.
But Asian buyers are unlikely to fully supplant Europe as a market for Russian oil and gas over the long term, say analysts and traders. Though India has rebuffed calls to embargo Russian oil, it is buying Russian barrels at a steep discount in the same way China has sought natural-gas discounts.
Losing its nearest and largest market will cost Russia billions of dollars in energy revenues every year. Coupled with biting technological sanctions, this will seriously degrade the country’s ability to sustain its current oil-and-gas production levels. The International Energy Agency estimates the amount of Russian production offline could triple to three million barrels per day by the end of 2022 amid the EU oil sanctions, suggesting a nearly 27% decrease in prewar production levels.
Some Russian energy officials privately concede Russia will be unable to dodge prolonged Western energy sanctions.
“Russia was shocked at how united the West was on sanctions,” the Gazprom official said.
Manhattan Contrarian, 3 June 2022
You may have your own favorite among Biden’s preposterous statements. For me, the very most preposterous is one that he has been making repeatedly for the past several months, namely that his energy plans, including expansion of wind and solar electricity generation together with fossil fuel suppression, will save American families the very specific amount of $500 per year each. This claim has popped up in multiple places and multiple formulations. One example came in the State of the Union speech back in March, where Biden said, “Let’s cut energy costs for families an average of $500 a year by combatting climate change.”
It’s just not possible for anyone who thinks about the subject for even a few minutes to believe that building more and more wind and solar generation facilities as our primary sources of energy will do anything other than vastly increase the costs of energy for the American people. Even in the early phases of the process, where wind and solar generation are well less than half of electricity generation (and electricity is then only about a third of total energy consumption), you obviously need full backup from some dispatchable source, almost always fossil fuels, to make your electricity grid work. That means that you will come to have two fully redundant electricity generation systems, when previously you had only one to produce the same amount of electricity. Two fully redundant systems can’t possibly be cheaper than just one.
Then, if you insist on phasing out the fossil fuel backup and replacing it with battery or some other storage, you have to add the cost of that storage to the mix. Readers here know that the cost of backing up wind and solar electricity generation with battery storage is truly monumental, potentially a large multiple of the entire U.S. GDP. For more on that subject, see some of my prior posts, for example here and here.
And this is not just a question of models and projections that can be debated. As more and more wind and solar generation facilities have been added to the electrical grid in various places, the inevitable dramatic rise in cost to the consumer has in fact occurred. Steven Hayward at PowerLine in a post on Wednesday reproduces graphs showing the results for two of the most enthusiastic adopters of the wind and sun for electricity, California and Australia. Here is the chart for California:
And here’s the chart for Australia:
Similar patterns of electricity prices soaring as renewable generation increases can be found in other places with high penetration of renewables, for example Germany and Denmark.
With these data and plenty more like them out there, Biden continues to double down on his assertion of the supposed $500 per family per year “savings” from his plan for green energy transition. In a an op-ed published in the Wall Street Journal on May 30, Biden put it this way:
"A dozen CEOs of America’s largest utility companies told me earlier this year that my plan would reduce the average family’s annual utility bills by $500 and accelerate our transition from energy produced by autocrats."
That line finally got the Washington Post’s “fact checker,” Glenn Kessler, on the job. Kessler’s June 2 piece has the headline “Biden’s fantastical claim of $500 in annual utility savings.” Kessler started by tracking down a White House transcript of the meeting that Biden held in February with the group of utility executives. There was no mention at all of a supposed $500 projected saving in “annual utility bills”:
"But when we located the transcript of Biden’s conversation with utility executives on Feb. 9, we found no reference to $500 in utility savings. The figure was also not mentioned in the White House readout of the meeting."
When Kessler asked the White House for the source of Biden’s number, he was then referred to a report of something called Rhodium Group that projected an approximate $500 per household saving by 2030 not from lower utility bills, but largely from consumers switching to electric cars. Putting aside for a moment whether consumers switching to electric cars could save anybody any money as the government strives to destroy the electrical grid, Kessler points to these obvious flaws in Biden’s statement:
"But he didn’t hear that [$500 figure] from utility executives. And the report he is citing is not about household utility-bill savings. Most of the claimed savings comes from the reduced cost of driving. And the estimate is for 2030 — when he would no longer be president, even if he served a second term."
Kessler then awards Biden four Pinocchios. And that’s without even figuring out that Biden’s plan to add more wind and solar to the grid is guaranteed to make electricity prices soar.
6) South Australia's climate emergency: prepare for carbon footprint tracking
Lincoln Brown, Spectator Australia, 4 June 2022
The new South Australian Labor government has declared a ‘climate emergency’. Climate lockdowns, surveillance of your ‘carbon footprint’, and restrictions on how much fuel and meat you consume might sound like a conspiracy theories now, but the stage is being set for them to appear in the near future.
As historian Dr Stephen Chavura noted in response to Labor’s motion, ‘Emergency is the language that you use when democracy is no longer working for you.’
Declaring an emergency is what tyrants do when they wish to shut down debate, silence their opponents, and ram through legislation that would otherwise be difficult to pass. South Australia’s opposition leader, David Speirs, dismissed Labor’s motion as mere virtue-signalling but, while it is certainly virtue-signalling, it is more concerning than that.
We have seen the passing of coercive, restrictive laws in Australia over the past two years with the frequent declaration of state emergencies due to Covid. One of the first actions of SA’s new Labor government was to make amendments to the South Australian Public Health Act 2011 which allow for those who disobey a public health ‘direction’ to be imprisoned for up to two years or have to pay a fine of $20,000. This would have been unthinkable before Covid, but we accepted such extreme penalties because of an ‘emergency’. The same will happen regarding Climate Change unless we stop letting bureaucrats rule us via draconian edicts.
In the coming years, being a ‘climate denier’ will mean that you are viewed as a threat to society – a threat to our very existence, no less – and get you publicly demonised, just as people who didn’t receive Covid vaccines have been. It will take courage to stand up to the Woke ideologues who are convinced, due to incessant propaganda and with a kind of religious fanaticism, that the end is nigh.
Labor’s motion is notably broad and vague, designed to induce fear rather than meaningfully address an issue. It reads, ‘Around the world, Climate Change impacts are already causing loss of life and destroying vital ecosystems.’ Labor’s proposed solution is committing to ‘restoring a safe climate by transforming the economy to zero net emissions’.
That’s quite a commitment – one that will cost many South Australians their jobs and make them dependent on dodgy, expensive renewable energy sources (which are entirely dependent on the weather). It’s also dangerously ambiguous. Where, exactly, has Climate Change caused loss of lives or destroyed vital ecosystems? How, exactly, will the economy be transformed? These questions remain unasked and unanswered by South Australian parliamentarians.
Utilising nuclear power probably isn’t up for discussion, as that would make sense. As usual, the so-called conservatives in SA’s Parliament hardly protested the blatantly ideological rhetoric of Labor and the Greens.
Climate catastrophism has a stranglehold over Australia’s state Parliaments because Climate Change is one of the most powerful shibboleths in Australian politics. Anyone who questions it is immediately dismissed as an extremist and ignoramus, meaning those making the claims go unchallenged. There is no contest of ideas in the South Australian Parliament, just people on ‘both sides’ of politics agreeing that the government needs even more control over our lives.
Speaking of control, at the World Economic Forum’s recent annual meeting in Davos, Switzerland, J. Michael Evans – the president of the Chinese e-commerce company Alibaba – said something alarming:
‘We’re developing, through technology, an ability for consumers to measure their own carbon footprint. What does that mean? Where are they travelling? How are they travelling? What are they eating? What are they consuming on the platform? Individual carbon footprint tracker. Stay tuned, we don’t have it operational yet, but this is something that we’re working on.’
Evans presented this tech as being voluntary but, clearly, it would be very appealing to a state that wishes its citizens to believe that there is a climate emergency and that we have to get emissions down to literally zero.
Over the past two years, Australians have accepted many authoritarian actions from state governments without realising the significance of what they’ve conceded, and it looks like Climate Change will be the next ‘emergency’ used to justify further government control. We’ve accepted mandatory vaccinations, medical discrimination, border closures, mask mandates, and even prolonged lockdowns to slow the spread of a virus with an over 99 cent survival rate. Will we accept governments tracking our carbon footprint (how much petrol, electricity, gas, and meat we consume) and penalising you if you exceed your prescribed weekly limit to save the planet? Time will tell.
Climate Change is nothing but an excuse for more government control. It’s promoted either by people who wrongly believe that humans are changing the weather and that a cataclysmic climate apocalypse awaits us all if we don’t act now, or by globalist authoritarians who want to use Climate Change as a Trojan horse for draconian restrictions and comprehensive surveillance. We need to stop assuming that Climate Change is important because people in authority tell us it is. It’s their interest for it to be important, not yours.
Conservatives cannot pretend that Climate Change is a serious issue that must be addressed while also advocating a moderate response to it. The Liberal Party’s policy on Climate Change appears to be, ‘Yes, humans are changing the climate and this will lead to our extinction if we don’t act quickly, but let’s be a little more cautious than Labor about it.’
This is not a viable policy. Either Climate Change is a threat or it isn’t. The Liberals must find the courage to state the obvious: despite decades of wild predictions about the ozone layer (remember that?), and melting ice-caps, the world is still here. The predictions haven’t come true. They never do.
Australians have become complacent with broad, sweeping restrictions on our movements and decisions due to the apparent emergency presented by Covid. While Labor’s motion is virtue-signalling for now, we can expect to see more draconian legislation rushed through Parliament without proper scrutiny under the guise of an emergency, as happened with the recent amendments to SA’s Public Health Act. Hopefully, the past two years will motivate us not to allow governments to control us further before we’re all eating crickets.
7) China ruins Antarctic Treaty attempt to enact special protection status for Emperor penguins
Susan Crockford, Polar Bear Science, 5 June 2022
China has thwarted an attempt by members of the Antarctic Treaty organization to enact special protection status for the Emperor penguin, which would have generated a ‘Species Action Plan’. Apparently, such a proposal required a consensus of all parties and China wouldn’t go along.
But as we know from past actions by the IUCN Polar Bear Specialists Group against former member Mitch Taylor, such impediments are easily sidestepped when a decision requiring consensus doesn’t go your way.
Hyping the Demise of Emperor Penguins
Over the last few years, a few scientists see here and here – have used totally implausible climate models (those that use ‘worst case’ or ‘unmitigated’ scenarios, see graphic below) to predict the future near-extinction of Emperor penguins due to sea ice loss. I commented on this issue two years ago in detail (with references).
“I’d suggest that using far-fetched ‘worse case’ scenario predictions to propose an unlikely but scary-sounding future catastrophe isn’t likely to work any better for emperor penguins than it has done for polar bears, especially when the animals keep thriving.” Crockford, 2020.
These ‘worst case’ scenario models to project future climate have been deemed totally inappropriate by respected scientists (e.g. Burgess et al. 2021; Hausfather and Peters 2020; O’Neil et al. 2020; Spencer 2021) but activist conservation specialists studying polar bears and penguins continue to use them to press for special protection status for their beloved species. In recent years, both polar bears (Crockford 2022) and Emperor penguins (Fretwell et al. 2012; Fretwell and Trathan 2020; Trathan et al. 2020) have documented slight increases in overall population size.
Pointing this out has gotten me ‘climate mauled’ by the scientific community–see my length response to the 2018 BioScience attack on my reputation and integrity–and cancelled by the academic community (Laframboise and Crockford 2020). But I digress…
Antarctic Treaty Thwarted
With China obstinately standing in their way, the other members of the Antarctic Treaty organization intends to do what they want regardless, according to a report by PBS (3 June 2022):
“An overwhelming majority of parties held the opinion that there is sufficient scientific evidence for the species to be put under the special protection,” the German government, which hosted the May 22-June 2 meeting, said in a statement Friday.
While a formal decision was “blocked by one party,” it said that most countries attending the meeting planned nevertheless to put in place national measures to protect emperor penguins. --PBS, 3 June 2022
However, the lack of consensus means they didn’t get the ‘Species Action Plan’ they were really after: having failed to achieve their objective, they are trying to spin it into a positive result.
Full post
The London-based Net Zero Watch is a campaign group set up to highlight and discuss the serious implications of expensive and poorly considered climate change policies. The Net Zero Watch newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.netzerowatch.com.
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