Preview Newsletter
ACC PM 04/12/18
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(ACC Blog) ISDS As a Catalyst for Growth: The U.S. Chemical Industry’s Case for Stronger Investment Protections Under the USMCA
Dec 4, 2018 | American Chemistry Matters
By Edward Brzytwa
Recognizing the importance of free trade to the highly-integrated, North American supply chain, U.S. chemicals manufacturers welcomed last Friday’s signing of the U.S.-Mexico-Canada Agreement (USMCA) in Buenos Aires. -
Green Groups Sue EPA for Records of Wheeler Meetings
Dec 4, 2018 | The Hill - E2 Wire
By Miranda Green
Two environmental groups are suing the Environmental Protection Agency (EPA) for records of any meetings that new Administrator Andrew Wheeler may have held with his former employer and several other energy groups. -
EU Publishes Brexit Guidance for Cosmetic Products
Dec 4, 2018 | Chemical Watch
By Clelia Oziel
The European Commission has published guidance on the cosmetics Regulation for manufacturers and importers for when the UK withdraws from the EU and becomes a third country. -
Insight: Extreme Volatility Returns to NYMEX Natural Gas Futures
Dec 4, 2018 | Platts
By Jason Lord
With volatility making a return to the previously calm US natural gas futures market, it’s important to remember that price swings happen in both directions, as individual fundamentals wax and wane in terms of their influence. -
Perry Says Poland, Other European Countries Interested in U.S. LNG
Dec 4, 2018 | Houston Chronicle
By James Osborne
More tankers laden with U.S. liquefied natural gas could soon be headed to Poland and other European countries, Energy Secretary Rick Perry said Tuesday. -
Oil Sector Hangs In Balance as OPEC Meets
Dec 4, 2018 | Houston Chronicle
By Jordan Blum
The health of the U.S. energy sector hangs in the balance as OPEC, Russia and others begin meeting Thursday in Vienna to consider cutting oil production after a recent collapse in crude prices. -
Zinke Bullish on U.S. Crude Production
Dec 4, 2018 | E&E Greenwire
By Jeremy Dillon
Interior Secretary Ryan Zinke predicted today at a meeting of the National Petroleum Council the United States could produce as much as 14 million barrels of oil a day in the next two years. -
Trump Tariffs Are Making Infrastructure More Expensive
Dec 4, 2018 | BNA Daily Environment Report
By Mark Niquette
If Congress approves a national public-works program next year that Democratic and Republican leaders are proposing, President Donald Trump’s trade war could inflate the price tag, costing taxpayers and construction companies many millions of dollars. -
U.S. Freight Rail Industry Outlines Automation Policy Initiatives
Dec 4, 2018 | American Journal of Transportation
The Association of American Railroads (AAR) filed comments with the U.S. Department of Transportation (USDOT) today urging the agency to extend the same pro-innovation regulatory approach to private freight railroads that is afforded to highway vehicles. -
NTSB: Fiber Optic Drilling Led to 2016 Explosion, Killing 1
Dec 4, 2018 | AP (In E&E Greenwire)
Drilling to install a fiber optic conduit likely caused a gas explosion that killed one person and injured 11 more in a central Illinois community, federal investigators said yesterday. -
As Congress Tackles Climate, Markets Are The Engine But Policies Set The Direction
Dec 4, 2018 | Forbes
By Brian Murray
As the 116th Congress nears its debut, efforts by both parties to pursue new climate and energy policies are afoot. -
U.S. Urges China to Suspend Its Waste Import Ban
Dec 4, 2018 | BNA Daily Environment Report
By Bryce Baschuk
The U.S. urged China to immediately suspend its import ban on waste imports or revise its rules to make them less restrictive, according to a document published Dec. 4 by the World Trade Organization. -
Carbon Emissions From Rich Nations Set to Rise in 2018: IEA
Dec 4, 2018 | Reuters (In The New York Times)
By Nina Chestney
Carbon dioxide emissions from the world's advanced economies are set to rise slightly in 2018, breaking a five-year decline, mainly due to higher oil and natural gas use, the International Energy Agency (IEA) says. -
‘A Kind of Dark Realism’: Why the Climate Change Problem is Starting to Look Too Big to Solve
Dec 4, 2018 | The Washington Post
By Steven Mufson
In the daunting math of climate action, individual choices and government policies aren’t adding up.
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Dec 4, 2018 | American Chemistry Matters
By Edward Brzytwa
Recognizing the importance of free trade to the highly-integrated, North American supply chain, U.S. chemicals manufacturers welcomed last Friday’s signing of the U.S.-Mexico-Canada Agreement (USMCA) in Buenos Aires.
However, legitimate concerns remain about insufficient Investor-State Dispute Settlement (ISDS) protections under the newly-inked trade pact – a subject which this post will review in greater depth.
Chemicals industry support for USMCA
As the American Chemistry Council (ACC) wrote in our statement last Friday, the USMCA is poised to support chemical manufacturing growth in many ways.
First, the USMCA is a trilateral agreement between the U.S. and two of our country’s biggest export destinations for chemicals. In 2017, U.S. chemical manufacturers exported approximately $43 billion to Canada and Mexico. That number is expected to grow to $59 billion in 2025.
Second, ACC strongly supports the inclusion of the final Sectoral Annex for Chemical Substances, which embraces the principles the North American chemical industry jointly recommended to enhance Regulatory Cooperation.
Third, USMCA streamlines the Rules of Origin for chemicals and helps facilitate and protect digital trade by making simple yet modern upgrades, such as enabling electronic filing options and digital signatures.
Stakeholders unite around need for greater ISDS protections
ISDS matters to U.S. chemicals manufacturers because it provides an arbitration process that allows a foreign investor in a country to make claims directly against the host government if it feels the government has violated the provisions of the investment chapter of the agreement.
Under the original North American Free Trade Agreement (NAFTA), U.S. chemicals manufacturers could make a full set of claims if Canada and Mexico violated the investment provisions. If the USMCA goes into effect as drafted, that would no longer be the case.
ISDS has been the subject of countless discussions over the past twelve months. Recently, the Washington International Trade Association (WITA) convened a crowd of businesses, law, academia, NGOs, and embassies to discuss the importance and relevance of ISDS, and explore potential changes to the text on ISDS prior to possible ratification of the USMCA by each party next year.
Part 1 of the WITA ISDS event is embedded below; Parts 2 and 3 are available on WITA’s event page.
https://youtu.be/ooMtVlM8k9w
ACC’s position on ISDS and its importance to our industry
There are 4 core points I think it’s important to share that can help explain why U.S. chemical manufacturers care very much about ISDS protections for their investments in Canada and Mexico.Although some have claimed that ISDS protections may incentivize companies to invest abroad rather than in the U.S., that simply is not the case for the U.S. chemicals industry.Chemical companies do not exclusively invest in foreign markets for the purpose of exporting back to the United States. They invest to be close to their customers for a variety of reasons that are unique to our industry:Proximity of feedstock: these localized investments take advantage of feedstocks available in markets like Mexico and Canada;S. export growth: ACC companies make these investments to create markets and export innovative products from the United States;Minimizing safety risks: building and investing locally helps minimize the need to transport hazardous chemicals across borders, which helps protect people and the environment; plusSeveral other factors that influence ACC members’ decision-making: reliable and inexpensive energy sources, strong rule of law, and access to a skilled and educated workforce.ISDS is a necessary backstop to protect these investments, but ISDS is not the reason our companies make those investments. In fact, ISDS — if drafted appropriately — will serve as an incentive for any government which commits to implement good regulatory practices, such as Mexico has in the USMCA.All of this helps our members grow business that supports further production and job creation, including in the United States.The chemicals industry in the United States has benefited from ISDS tools throughout the history of NAFTA and the US FTA program.FTAs with ISDS have created better climates for investment as well as trade-related economic growth.Since 1997, companies in our sector have made numerous ISDS claims against foreign government actions. According to data from the United Nations Conference on Trade and Development, both Canada and Mexico are tied for third on the most frequent respondent list (after Argentina and the Czech Republic). ISDS is especially valuable there because it gives ACC member companies recourse when local courts have not addressed the problem.It should be noted, however, that most of the benefit of enforcement mechanisms are through the existence of ISDS, not through its use. The existence of ISDS prevents investment barriers from happening, similar to how WTO agreements play a strong role in the prevention of trade barriers.
ACC shares many of our colleagues’ concerns about the USMCA outcomes on ISDS.Although our industry has unique reasons for seeking greater ISDS protections in the USMCA, ACC’s voice is part of a chorus of business and industry associations that share many of the same concerns. For example, we are also concerned that:Canada decided to opt out of ISDS, which is a NAFTA-minus outcome;The USMCA hand picks the sectors that can make the full set of claims. The chemicals sector is not in this select group and can only make claims on post-establishment national treatment and most favored nation violations and direct expropriations;An investor must have a contract with the Mexican government in order to make a claim, which is something our industry would normally never have to do;The USMCA limits ISDS protections from the original NAFTA;The USMCA extends the exhaustion period from 6 months in the original NAFTA to 30 months. This is a disincentive for an investor to make any ISDS claims.There are various ways the U.S can work to resolve concerns over insufficient ISDS protections.Ideally, ACC and many of our fellow business partners would like to see Canada opt back in, and allow all sectors to make claims on the full set of ISDS provisions (e.g., no selected sectors, no contract requirement).If the above proposition is unfeasible, our second choice would be to add chemicals to the list of selected sectors. This would require the elimination of the contract requirement and the addition of more sectors to the list, including the chemicals sector.
USMCA outcome on ISDS should not set a precedent
U.S. investment in Canada and Mexico has enabled America manufacturers to thrive in foreign export markets and in the U.S. domestic market.
We recognize the political priority that the Administration is trying to address with the current USMCA provisions on ISDS. However, if the current text on ISDS under USMCA does not change in order to better protect those investments, we are concerned other countries may default to the agreement as a template for other free trade pacts.
If the goal is reinvigorating manufacturing in the United States, foreign investment can indeed help support that goal, but only if companies have confidence that the rule of law will protect their investments.
https://blog.americanchemistry.com/2018/12/isds-as-a-catalyst-for-growth-the-u-s-chemical-industrys-case-for-stronger-investment-protections-under-the-usmca/
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Green Groups Sue EPA for Records of Wheeler Meetings
Dec 4, 2018 | The Hill - E2 Wire
By Miranda Green
Two environmental groups are suing the Environmental Protection Agency (EPA) for records of any meetings that new Administrator Andrew Wheeler may have held with his former employer and several other energy groups.
The Center for Biological Diversity (CBD) and Friends of the Earth brought the lawsuit on Tuesday, arguing the EPA should release records of any meetings that Wheeler may have had with the communications and lobbying firm Faegre Baker Daniels.
Wheeler worked for nearly a decade at Faegre Baker Daniels, where he lobbied for fossil fuel groups, before joining the EPA.
“Wheeler is crippling environmental protections that inconvenience his old clients,” said Bill Snape, CBD's senior counsel. “The public needs to know what happened between Wheeler’s former employer and the environmental agency he’s now running into the ground.”
Wheeler's history advocating for energy companies was highlighted in his Senate confirmation hearing for deputy administrator last April. He promised senators at the time that he would avoid conflicts of interests with his former clients.
In the lawsuit, the environmental groups challenged that EPA was in violation of the Freedom of Information Act (Act) for failing to release the sought after documents in an appropriate period of time.
"EPA is unlawfully withholding public records, which FOE and the Center requested pursuant to FOIA, by failing to conduct an adequate search for responsive records and by failing to provide FOE and the Center with responsive records, for which there are no applicable FOIA exemptions," the groups wrote in the lawsuit.
The groups first filed the FOIA request seven months ago in the spring.
The EPA said it would not comment on pending litigation
https://thehill.com/policy/energy-environment/419655-green-groups-sue-epa-over-refusal-to-release-proof-of-agency-heads
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EU Publishes Brexit Guidance for Cosmetic Products
Dec 4, 2018 | Chemical Watch
By Clelia Oziel
The European Commission has published guidance on the cosmetics Regulation for manufacturers and importers for when the UK withdraws from the EU and becomes a third country.
Subject to the transition period provided for in the draft withdrawal agreement, as of the withdrawal date of 29 March, EU rules on cosmetic products will no longer apply to the UK.
A major pillar of the Regulation is a requirement that cosmetic products are placed on the single market only through designated 'responsible persons' who are established in the European Union.
Once the UK leaves, established responsible persons in Britain will need to transfer their role either to an importer or another responsible person set up in the EU27, the guidance says.
Another significant change concerns the obligation to notify product information through the Cosmetics Product Notification Portal (CPNP). UK manufacturers and traders will no longer be able use the portal directly, but will need to rely on EU entities to do it for them.
EU27 importers of cosmetic products manufactured in the UK will become responsible persons for these products "by default", the EU guidance says. Alternatively, they can designate in writing another person, also established within the EU, who must accept the new role in writing.
The same rule applies if the product is manufactured in another third country, imported into the UK and subsequently imported into the EU27.
Meanwhile, responsible persons currently established in the UK and that have been designated by companies in the EU27 should take "the necessary measures" to ensure that a responsible person is established in the EU27, the guidance says.Notification portal
UK product notifications to the CPNP will need to be logged by EU27 entities, it adds. But the portal offers the possibility to transfer existing UK notifications to new responsible persons in the EU, who can update the information and product labelling.
However, such transfers are only possible until the withdrawal date, the guidance advises. "As of [this] date, the former UK-based responsible person will no longer have access to the CPNP."
New responsible persons in the EU27 can, however, already indicate that products will be imported from the UK as a country of origin, it adds.PIF and labelling
Under the cosmetics Regulation, responsible persons are also required to keep a product information file (PIF) for ten years. Post Brexit, the PIF has to be made available at the address of the EU27 responsible person and adapted according to the language requirements of its member state.
Additionally UK manufactured cosmetic products will need to be relabelled as imported products with the country of origin specified on the label, as required by the Regulation. The label will need to state the name and address of the new responsible person, the guidance says.Industry reaction
Commenting on the release of the guidance, UK trade body the Cosmetic Toiletry & Perfumery Association (CTPA) said regulations overlap in many areas and companies need to assess the Brexit implications for all of them to ensure compliance.
The industry has been working on contingency planning, a spokesperson told Chemical Watch, and "in case of a no deal […] one of the main issues companies will be facing is to be able to have EU compliant cosmetics labelling on day one".
Emma Togen, director of legal affairs at Cosmetics Europe, also said industry is aiming to be complaint on day one. However, she added, the focus on a no-deal scenario instead of regular business has a significant impact on financial and human resources.
Earlier this year, the UK government published a string of technical notices in the event of a no-deal Brexit, including ones on REACH, Classification, Labelling and Packaging (CLP) and prior informed consent (Pic) Regulations.
https://chemicalwatch.com/72522/eu-publishes-brexit-guidance-for-cosmetic-products
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Insight: Extreme Volatility Returns to NYMEX Natural Gas Futures
Dec 4, 2018 | Platts
By Jason Lord
With volatility making a return to the previously calm US natural gas futures market, it’s important to remember that price swings happen in both directions, as individual fundamentals wax and wane in terms of their influence.
November saw notable price volatility in the December Henry Hub prompt-month contract. The December contract settled and expired at $4.715/MMBtu, up $1.53/MMBtu from the November NYMEX settle.
The onset of a cold November with the looming potential for a cold winter, combined with natural gas storage concerns, created a volatile whipsaw of price movements and resulted in the highest settlement for the NYMEX prompt-month contract since 2014.
November’s bullish market developed in spite of rising domestic production, with the Energy Information Agency estimating dry gas output will average 83.2 Bcf/d in 2018, up 8.5 Bcf/d from the previous year. It is precisely this abundance of supply that appears to have encouraged gas utilities to rely more heavily on volumes sourced directly from pipelines, rather than injecting into and then later pulling from gas storage.
US temperatures in November were the coldest for the month going back to 2014, averaging 46.2 degrees Fahrenheit. This in itself was enough to spook gas markets.
Additionally, the US went into winter with gas stocks around 17% lower year on year. Storage concerns raised during the summer injection season continued as the EIA announced the first withdrawal of the season. This amounted to a whopping 134 Bcf drop in the weekly change of US inventories – the largest initial withdrawal in the past eight years and more than double the previous record pull of 53 Bcf in November 2015.
For prompt-month NYMEX, the November 14 settlement at $4.837/MMBtu was the highest price since February 26, 2014.
The arrival of volatility and higher prices now means the market is looking towards new developing fundamentals and weather trends. As the December prompt month rolls off into January, the market will test higher resistance and lower support levels at these $5/MMBtu and $4/MMBtu thresholds.
With recent price gains in November as large as 73.6 cents in a single day, or single-day losses as big as 79.9 cents, participants must not forget how fast the prompt-month contract blew through the $4/MMBtu threshold on the way up. Prices can fall just as quickly.
The 12-month strip shows how much changed from the start of November. Despite the dramatic price increase in winter contracts, further down the curve, as markets enter summer injection season, the balance of the 12-month strip did not change much with all April – October contracts settling in a range of $2.746/MMBtu to $2.894/MMBtu, at the November 29 close.
It is during this summer period that production will dominate from a fundamentals perspective as the burgeoning supply looks for new outlets of demand, such as power burn and exports.
Ultimately, winter weather will drive it from here. A mild winter will test the $4/MMBtu support level, and cold weather could push it above $5/MMBtu.
With gas production records expected to continue, weekly reports of natural gas storage levels will have less influence in the market. Other fundamentals – such as weather, pipeline and LNG exports, and power generation demand – will be more in play.
https://blogs.platts.com/2018/12/04/extreme-volatility-nymex-natural-gas-futures/
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Perry Says Poland, Other European Countries Interested in U.S. LNG
Dec 4, 2018 | Houston Chronicle
By James Osborne
More tankers laden with U.S. liquefied natural gas could soon be headed to Poland and other European countries, Energy Secretary Rick Perry said Tuesday.
"I was over in the Central European region, and there's going to be some countries over there buying our products," he said in a speech to the National Petroleum Council in Washington. "They understand cost is just one factor here, but I talked to them about the diversity of supply and suppliers."Recommended Video
FOREIGN TRAVEL: Perry headed to Europe to boost energy ties
Perry has been travelling the globe trying to expand U.S. LNG exports, as natural gas production continues to grow to record levels. He said during the European trip he visited with officials in Poland, Ukraine, Hungary and the Czech Republic.
Last year the United States exported more than 700 billion cubic feet of LNG, with just 3 billion cubic feet going to Poland and none to the three other European countries Perry listed Tuesday. China, Mexico and South Korea were the largest importers of U.S. LNG, accounting for more than 370 billion cubic feet.
But LNG exporters along the Gulf Coast and the Atlantic coast are competing with gas supplies from Russia, which could expand under the new Nordstream 2 pipeline project running into Europe.
In his speech Perry called out Russia for what it "is doing with the heating fuel supply" in Ukraine, seemingly in reference to Russian gas giant Gazprom's announcement earlier this year it was severing contracts with Ukraine.
"That iron curtain may be gone but in some places transparency, the rule of law, regulatory certainty are lacking," he said.
https://www.chron.com/business/energy/article/Perry-says-Poland-other-European-countries-13441897.php
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Oil Sector Hangs In Balance as OPEC Meets
Dec 4, 2018 | Houston Chronicle
By Jordan Blum
The health of the U.S. energy sector hangs in the balance as OPEC, Russia and others begin meeting Thursday in Vienna to consider cutting oil production after a recent collapse in crude prices.
Driven by Saudi Arabia and non-OPEC ally Russia, the so-called OPEC+ group will determine whether to stabilize the oil sector to avoid a global glut of oil. If no agreement is reached, analysts said, it could potentially trigger another oil bust.Recommended Video'Thank You President T': Trump Thanks Himself For Lower Oil Prices
00:1000:33
"The repercussions will be felt in Houston boardrooms and wallets across America," said Matt Reed, vice president at Foreign Reports, a consulting firm focused on Mideast oil politics.
RELATED: Saudi minister says premature to say if OPEC+ to cut output
"Practically everyone is pumping as much as they can right now," Reed added. "The U.S., Saudi Arabia, Russia and Iraq are producing more than anyone thought possible even a few years ago. Why? Because the price is right and people keep buying it."
But surging worldwide oil production has contributed to the recent plunge in U.S. crude prices, $76 a barrel down to $51 near the end of last month -- a drop of more than 30 percent. Prices recovered to about $53 this week on hopes of a OPEC production cut.
Oil prices also received an extra boost this week from news that Canada will cut production from Alberta to help undo the deep discounts on its crude.
What needs to happen?
Most U.S. energy companies need oil closer to $60 a barrel than $50 to remain healthy. Anything above $60 is a boon for the vast majority of the industry.
Energy analysts believe OPEC and Russia will agree to cut production anywhere from 1 million barrels a day to 1.6 million barrels, with 1.3 million as a possible compromise. Determining how much to cut and which nations will carry the burden is, of course, where the specifics must be worked out. The world consumes nearly 100 million barrels of oil a day.
From HoustonChronicle.com: Trump's lobbying against output cuts could hurt energy sector
At the same time time, the lower oil price has caused Houston-area fuel prices to fall some 20 percent over the past several weeks to a 2018 low of about $2.10 on average for a gallon of regular unleaded.
There's the possibility that OPEC could reach a vague deal to reduce output without coming to terms on any specific numbers, and Saudi Arabia and other nations would simply adjust accordingly on a month-to-month basis to help keep supplies in check.
Nervousness over an ambiguous deal, however, could cause oil prices to further crater in the short term.
Saudi Energy Minister Khalid Al-Falih told Bloomberg Tuesday it was still premature to say what kind of cuts OPEC and Russia may or may not agree to later this week.
How did we get here?
The last time a global glut pushed oil prices down - in part because of the U.S. shale boom - was in the fall of 2014. OPEC couldn't reach a deal and the Saudis increased their output, triggering an oil bust that pushed prices to a low of $26 a barrel by early 2016.
Later that year, the world's two biggest producers other than the U.S. - Saudi Arabia and Russia -formed an alliance outside of OPEC, and the burgeoning OPEC+ group was formed. They agreed then to cut production, lifting prices and ending the bust and restoring.
With the market balanced, they again increased production this summer, in part to help offset falling production from struggling Venezuela and from the U.S. sanctions on oil exports from Iran. But the upticks in production have come faster and more furiously than assumed.\
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And the White House unexpectedly issued waivers to several countries, including China and India, to keep buying Iranian oil.
Russia is churning out oil at a post-Soviet record of more than 11 million barrels a day, the Saudis are just below that volume, and the U.S. is pumping oil more quickly than expected at a projected record of 11.7 million barrels daily. Driven by West Texas' booming Permian Basin, U.S. outputs keep surprising on the upside.
At this weekend's Group of 20 meeting in Argentina, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman loosely agreed to keep the alliance going to stabilize prices. But there are no firm numbers. So that's where this week's OPEC meeting comes into play.
And who will join the Saudis and Russia in scaling back? The United Arab Emirates, Iraq, Kuwait and others may also have to agree because the top producers don't want to act on their own.
In fact, the Saudi-Russian alliance has begun to overwhelm OPEC to the point that Qatar, an enemy of Saudi Arabia, said it is pulling out of OPEC. Qatar, however, is primarily a natural gas producer that doesn't pump much oil, so the effect of global supplies should be minimal.
What about the U.S. and President Trump?
Because the U.S. doesn't control its oil companies as is the case in many other countries, the United States can't just decide to scale back production.
President Donald Trump, however, is a working against output cuts, arguing that lower oil prices mean lower fuel prices, which are good for Americans. The counter argument is that low oil prices cripple the energy sector and cost states like Texas many thousands of jobs and the U.S. economy billions of dollars that come into the country from growing crude exports.
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Much to the chagrin of the Houston energy sector, Trump has repeatedly urged the Saudis to increase rather than decrease production.
Some analysts ventured that Trump might stop harping on oil prices after the midterm elections, but he was still bringing it up on Thanksgiving. So the Saudis must weight Trump's reaction into any agreement that is reached.
"Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy!" Trump tweeted. "Thank you to Saudi Arabia, but let's go lower!"
https://www.chron.com/business/energy/article/Oil-sector-hangs-in-balance-as-OPEC-meets-13441428.php
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Zinke Bullish on U.S. Crude Production
Dec 4, 2018 | E&E Greenwire
By Jeremy Dillon
Interior Secretary Ryan Zinke predicted today at a meeting of the National Petroleum Council the United States could produce as much as 14 million barrels of oil a day in the next two years.
That total would represent about a 3-million-barrel increase from the record production underway as the Trump administration looks to better unleash U.S. "energy dominance" on the world stage. It would also mark the latest sign of the United States' ascension as a global leader in oil and natural gas.
Interior Secretary Ryan Zinke spoke this morning at the National Petroleum Council meeting in Washington, D.C. @SecretaryZinke/Twitter
"We are at 11.6 [million barrels a day] today, and I think in the next two years, we are going to be we are going to be real close to 14 [million], if not a little higher than that," Zinke said.
Zinke admitted he was more bullish than others on production projections, citing his perspective of intense industry interest in public land offerings in places like New Mexico, where the Interior Department enjoyed a nearly $1 billion lease offering during an earlier 2018 auction.
The U.S. Energy Information Administration estimates U.S. oil production could reach some 12 million barrels a day in 2019, up nearly a million from its current 10.9 million barrels of average daily production estimate for 2018.
In later comments, Energy Secretary Rick Perry stuck to the EIA estimates, which by themselves, Perry told the National Petroleum Council, would mark a significant uptick in domestic production compared with nearly 15 years ago. Perry said there may be other areas the country can develop even further.
"We have come close to reaching our potential," Perry said. "We have done good work in developing the abundance of the Permian basin and the Gulf of Mexico ... but when I talk about reaching our potential, I'm talking about: Are there places in the United States where we can do even more? And I'm drawn to the Appalachian."
Record production numbers could be upset by stalled infrastructure, Zinke cautioned in his remarks.
"A lot of that is going to depend on the [Federal Energy Regulatory Commission]... and the infrastructure to move us forward," Zinke said.
Production would be further unleashed, Zinke argued, if some form of export facility could be built on the Pacific so as to be located closer to emerging markets in Asia.
Pacific Rim countries have increasingly become the top markets for U.S. energy, mainly drawing on the abundant natural gas produced in the United States.
Export facilities have faced stiff state and environmental group opposition. Greens have looked to block development over concerns about the facilities' potential to contribute more to greenhouse gas emissions.
DOE Undersecretary Mark Menezes stressed the importance of an energy infrastructure buildout to support the increased production.
"Our nation is now the world's leading producer in both oil and natural gas, so it is critical that we are able to build the infrastructure necessary to bring these energy resources to market," Menezes said.
"Bottlenecks in transportation can strand production, deprive consumers of competitive pricing and undermine our ability to export our oil, natural gas, natural gas liquids and related products to global markets."
https://www.eenews.net/greenwire/2018/12/04/stories/1060108705
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Trump Tariffs Are Making Infrastructure More Expensive
Dec 4, 2018 | BNA Daily Environment Report
By Mark Niquette
If Congress approves a national public-works program next year that Democratic and Republican leaders are proposing, President Donald Trump’s trade war could inflate the price tag, costing taxpayers and construction companies many millions of dollars.
Construction of a wall along the Lower Rouge River’s Old Channel at the former Detroit Tar Plant.
Source: Honeywell
A three-quarter-mile stretch of Detroit’s Lower Rouge River illustrates the problem. Known as the Old Channel, it was contaminated from decades of industrial-waste discharges. To clean the waterway, workers are installing a 2,500-foot-long, sheet-pile bulkhead wall to support the riverbanks. Once that’s built, polluted river sediment and debris will be removed starting early next year.
The $10 million cost of the steel for the wall, imported from China, has risen by about $1.3 million because of Trump’s tariffs, potentially raising the project’s overall price, according to the U.S. Environmental Protection Agency. Similar hikes are hitting public-works projects in California, Utah, Virginia, and other states.
A photo from the 1930s looking north along the Old Channel.
Source: EPA
It’s unclear how much Trump’s tariffs will add to the U.S.’s total repair bill, but for every $1 spent on highway and bridge construction, 10¢ goes toward steel-related materials, according to the American Road & Transportation Builders Association. Contractors generally have to absorb price increases unless they’re working in one of 13 states that allows price escalations in contracts, the association says.
U.S. Department of Labor data show double-digit price increases for steel-mill products and other construction materials in the past year. The price of U.S. hot-rolled coil, the benchmark for American steel, is up 20 percent in 2018, largely because of the tariffs. The U.S. Midwest aluminum premium, a shipping and handling charge, has more than doubled.
While the EPA is splitting the cost of the Lower Rouge work with Honeywell International Inc., the inflated price tag could mean higher costs for taxpayers as well as less money for cleaning up the river’s main channel and other needed projects, says James Ridgway, executive director of the nonprofit Alliance of Rouge Communities. “It could throw a monkey wrench in this deal, and it will certainly delay other things that we had hoped we’d get done in the near future,’’ he says.
Besides tariffs, labor shortages, fuel prices, and other factors are also driving up construction costs and creating uncertainty in the bidding process as states and localities aim to build roads, bridges, and other public works that the American Society of Civil Engineers estimates require an additional $2 trillion by 2025.
Some state officials aren’t pleased. Washington has been loath to increase infrastructure spending, says Aubrey Layne, Virginia’s secretary of finance and a former secretary of transportation. “And then here we are, making the cost of that much higher.’’
Trump released a plan in February to generate at least $1.5 trillion in infrastructure investment over a decade, but it stalled in Congress. Democrats who are taking control of the U.S. House of Representatives in January are pledging to pursue an infrastructure measure with significant federal spending. Both sides say they think it’s something they can do together in 2019.
The president announced duties of 25 percent on steel imports and 10 percent on aluminum in March on national security grounds. Any short-term pain from the duties will be outweighed by better trade deals, he says.
For the $63.6 million Old Channel project, the higher steel prices for now are being paid by Honeywell, which owns property there. But as the EPA is responsible for 46 percent of the project’s cost, any increase in the company’s share will also affect the government’s final bill, the agency declared in a public filing. Any amount over budget will be paid after a negotiation with Honeywell, the agency said in written responses to questions.
Honeywell has petitioned the U.S. Department of Commerce for an exclusion from tariffs on steel sheeting from China for the project. The company said in a filing the steel was ordered before the tariffs were imposed and that no U.S. producer indicated it was capable of producing the material.
Both Nucor Corp. and Gerdau SA, a Brazilian steelmaker with plants in the U.S., have objected, saying alternative products are available domestically. Honeywell’s request is pending. Spokesmen for Honeywell, Nucor, and Gerdau all declined to comment beyond their public filings.
Other projects are being hit by price increases. In Logan, Utah, the estimated cost to build a new wastewater treatment plant increased by $29 million, to $135 million, in part because of higher steel costs, said Mark Nielsen, senior project engineer.
In Virginia, tariffs are boosting steel costs by as much as 50 percent for some smaller projects, says Layne, but the real concern is the impact duties could have in the next 12 to 18 months on larger ones, such as a $3.7 billion bridge and tunnel project in the Hampton Roads area.
Higher steel prices also played a role in bids to extend the Los Angeles County Metro Gold Line light rail coming in hundreds of millions of dollars above estimates and available funding, according to the Foothill Gold Line Construction Authority. While tariffs weren’t the only factor, they’ve raised the cost of several hundred million dollars’ worth of steel needed for the project, says Habib Balian, the authority’s chief executive officer. —With Joe Deaux
https://bnanews.bna.com/environment-and-energy/trump-tariffs-are-making-infrastructure-more-expensive
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U.S. Freight Rail Industry Outlines Automation Policy Initiatives
Dec 4, 2018 | American Journal of Transportation
The Association of American Railroads (AAR) filed comments with the U.S. Department of Transportation (USDOT) today urging the agency to extend the same pro-innovation regulatory approach to private freight railroads that is afforded to highway vehicles. The filing, which also offers regulatory reform principles and calls for autonomous-vehicle technology to account for highway-rail grade crossings, is in response to USDOT’s request for comment on its recent publication, “Preparing for the Future of Transportation: Automated Vehicles 3.0” (“AV 3.0”).
“Not only will the public benefit from technology-driven safety gains in the rail industry, but it also will benefit if railroads remain a viable, competitive alternative to other transportation modes, thus ensuring the continued diversity and strength of the transportation network in the United States,” reads the filing, stressing the need for a mode-neutral approach. While the rail industry continues to improve safety and invest heavily in its network to serve customers, rapid innovation – facilitated through sensible and performance-based regulation at the federal level – is needed to achieve further advances.
“Increased automation will be key to continued efficiency gains, increased capacity to transport customers’ freight, further reduction of congestion on the highways, and increased fuel efficiency and emissions benefits,” AAR argues. “Autonomous technology has the potential to improve network velocity and fluidity, increasing rail capacity, and promoting the health and growth of the U.S. economy.”
AAR argues that by following a set of clear principles, safety aiding technologies will take greater hold moving forward. These principles include: 1) Barriers to deployment must be overcome outside of waivers; 2) Railroads and railroad equipment manufacturers should be permitted to create voluntary standards; 3) Regulations should be performance-based, rather than prescriptive; 4) Regulations must be federal to avoid a patchwork of state and local rules; and 5) the Federal Railroad Administration (FRA) must engage in the process.
“Safety is at the heart of all that the industry does, and by ensuring that federal policy enables innovation in the rail sector, we will continue to make a safe network safer,” said AAR President and CEO Edward R. Hamberger. “As our filing states, ‘safety is good business, and good business is good for safety.’ We applaud the USDOT for seeking thorough input from the full array of transportation stakeholders and welcome their effort to develop a paradigm most conducive to innovation and growth.”
AAR’s comments lastly address the interaction of autonomous-vehicle technology and automobiles at highway-rail grade crossings, noting that auto systems must be made in a way that will recognize and react to warning devices and approaching trains independently of train control systems. Positive Train Control (PTC), while important in stopping certain rail accidents caused by human error, simply cannot be used to combat incidents at grade crossings involving automobiles or pedestrians.
https://www.ajot.com/news/u.s.-freight-rail-industry-outlines-automation-policy-initiatives
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NTSB: Fiber Optic Drilling Led to 2016 Explosion, Killing 1
Dec 4, 2018 | AP (In E&E Greenwire)
Drilling to install a fiber optic conduit likely caused a gas explosion that killed one person and injured 11 more in a central Illinois community, federal investigators said yesterday.
The National Transportation Safety Board issued a draft report saying the drilling by Sure Shot Communications LLC pierced a 1-inch natural gas line, causing the Nov. 16, 2016, explosion in Canton, 150 miles southwest of Chicago.
The explosion occurred while utility workers were trying to fix the gas leak. The blast killed one Ameren Illinois employee, 38-year-old Arturo Silva Jr. of Mapleton, and injured two others.
The report says Sure Shot's decision not to excavate at the site to visually inspect the work, as required by Illinois law, contributed to the gas line damage.
The explosion at the Opera House Professional Center occurred about 30 minutes after Ameren Illinois workers arrived at the site following a report that Sure Shot had damaged the gas line.
"The crew squeezed off the gas and was in the process of making repairs when the explosion occurred," Ameren Illinois said in a statement at the time.
More than 50 buildings were damaged, including three that were condemned, authorities said.
An Illinois phone number for Sure Shot could not be located.
https://www.eenews.net/greenwire/2018/12/04/stories/1060108673
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As Congress Tackles Climate, Markets Are The Engine But Policies Set The Direction
Dec 4, 2018 | Forbes
By Brian Murray
As the 116th Congress nears its debut, efforts by both parties to pursue new climate and energy policies are afoot. Representative-elect Alexandria Ocasio-Cortez (D-NY) has announced plans to develop a “Green New Deal,” Meanwhile, three Democrats and three Republicans have introduced a bipartisan Energy Innovation and Carbon Dividend Act to enact a federal carbon tax.
Considering the Republican-controlled Senate and the Trump Administration’s opposition to aggressive climate policy to date, the chances that either measure will produce signed legislation and a seismic shift in the US energy system are remote. However, the political environment can change dramatically within two years, and these proposals further stoke the debate about whether and how to pursue federal policy to decarbonize the US energy sector.
Let’s get one thing out of the way: the central question is not whether the US and the rest of the world needs to reduce greenhouse gases (GHGs) to mitigate climate change risks. The scientific evidence, backed recently by the Trump Administration’s own climate assessment report, speaks for itself on that front.
But is policy intervention necessary—or can natural energy market forces organically achieve deep decarbonization? Those favoring the second point of view cite the 14 percent reduction in energy sector CO2 emission in the United States since 2005 as evidence that the market acting alone can achieve substantial emissions reductions. After all, they note, this progress occurred during a period without comprehensive federal climate policy.
I am a big believer in the power of markets to power an energy transition, but current market forces alone cannot achieve the types of deep decarbonization levels called for in the United States and elsewhere to arrest the climate problem. Focusing here on US efforts, here are 4 reasons why:YOU MAY ALSO LIKEGrads of Life BRANDVOICEI Want That Job: WelderCivic Nation BRANDVOICEHow Attorneys Are Helping Create An America Of We, Us, And OursUNICEF USA BRANDVOICEBringing Light To India's Forgotten Children
Current emission reduction rates are not large enough.
Emissions have dropped on average 1.2 percent per year since 2005. Continuing at that rate out to 2050, emissions would drop by another one-third, taking it to 43 percent below 2005 levels. To achieve the 1.5 to 2.0 degree C targets under the Paris Accord, the US contribution to reductions would need to be roughly twice as large. The scale just isn’t there.
Current reductions have been focused almost entirely in one sector – electric power – and there are limits to how much more can be accomplished there on energy prices alone.
Continuing the US emission reduction rates of the the last decade is far from guaranteed under current market conditions. The advent of hydraulic fracturing ushered in a period of abundant and cheap natural gas. Electric power generators switched from coal to natural gas en masse, a move that cuts emissions roughly one-half for each megawatt hour of electricity produced. In 2005, coal accounted for 51 percent of electric power generation and natural gas, 18 percent. Now those numbers are each 31 percent, and emissions have dropped 28 percent.
This fuel-switching has been the dominant source of reductions and has been largely, though not entirely, driven by decentralized energy market forces. With natural gas now the largest source of generation, the scale for further switching of coal to natural gas is diminished. Moreover, if markets push prices of natural gas up to levels seen a decade ago, the switch is not economical. With well-known troubles in opening and operating US nuclear power, the opportunity to shift generation to emissions-free nuclear generation faces major hurdles as well.
The power sector’s reductions have not all been “market-driven”; policies have played a big role.
Twenty-nine states and Washington, D.C. have renewable portfolio standards(RPS) that target the percentage of power generation that must be met by renewable sources. Power producers in ten states currently face a carbon price via cap-and-trade programs, with two more states – New Jersey and Virginia soon to follow. These have all played a role in declining US power sector emissions.
The US Energy Information Administration now estimates that the amount of emission reductions attributable to switching from fossil to non-fossil generation in the power sector equals the reductions attributable to switching fossil generation from coal and oil to natural gas. State RPS and federal tax credits have incentivized the building and operation of wind and solar generation for much of the last decade, with those sources now accounting for 8 percent of total US generation. While the cost of renewables has now come to the point that it can directly compete with fossil generation without subsidies or carbon pricing, early subsidization of renewables and other policy incentives in the US and in Europe have played a large role in kick-starting the scale economies that allowed this to happen.
Looking ahead, electric power can also decarbonize with carbon capture and storage of emissions from fossil generation, now incentivized with a tax credit under Section 45Q of the Internal Revenue Code, passed into law by the current Congress as part of the 2017 budget deal.
Decarbonizing other sectors will likely require extensive electrification of their energy sources.
The general prescription for economy-wide decarbonization is to fully decarbonize the power sector and electrify the other sectors to run on zero-carbon electricity. This would require a massive capital transformation that is unlikely to happen on its own or in a timely manner without enabling policies.
For example, transportation is now this country’s largest source of GHG emissions, with a dominant incumbent technology (the internal combustion engine) that until recently has had few decarbonization options. Electric vehicles now account for about 1.2 percent of all new car sales in the US. While growing rapidly, electric vehicles still pose adoption hurdles of charging infrastructure and affordability, challenges that will require policy inducements for the time being. Electrification of residential and commercial buildings and industrial processes is technically feasible, but has its own adoption hurdles of cost and performance that will require policies to overcome.
What does all this mean?
If deep decarbonization is to happen in the United States, market-driven, profit-seeking behavior will provide the basic mechanism. Natural market incentives can and have moved the needle in this direction. To give just two examples, consider the substitution of natural gas for coal in power generation and investment in cost-saving energy efficiency measures.
But there are limits to the scale and permanence of those incentives. Natural gas is a lower-emitting fuel than coal, but it still emits GHGs. Moreover, what unchained markets can deliver in the form of fuel substitution, they can also take away. Markets have also delivered energy systems in industrial, commercial and residential sectors of the economy that depend heavily on fossil fuels rather than on electricity. Sparking the changes in technology and preferences to electrify those sectors is quite unlikely without policies aimed at achieving that outcome. If the long-term goal is energy decarbonization, market incentives must be intentionally aligned that way by policy, preferably through a direct tax or other price on GHG emissions, perhaps complemented by performance standards that place an implicit price on GHGs and incentivize lower carbon alternatives.
This, of course, is not a new debate. In 2003, Senators John McCain and Joseph Lieberman tried and failed to advance a federal cap-and-trade bill, a market-based approach to limit greenhouse gases (GHGs). In 2009, the Waxman-Markey cap-and-trade bill narrowly passed the House, but stalled in the Senate. More recently, the Obama Administration issued the Clean Power Plan to reduce GHGs from power plants, an effort that was initially stalled by the courts and then rescinded by the Trump Administration when it took office. These and other legislative efforts provide a point of departure for the 116th Congress. The question remains whether there is bipartisan support to depart.
https://www.forbes.com/sites/brianmurray1/2018/12/04/as-congress-tackles-climate-markets-are-the-engine-but-policies-set-the-direction/#126bfa51181e
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U.S. Urges China to Suspend Its Waste Import Ban
Dec 4, 2018 | BNA Daily Environment Report
By Bryce Baschuk
The U.S. urged China to immediately suspend its import ban on waste imports or revise its rules to make them less restrictive, according to a document published Dec. 4 by the World Trade Organization.
China, the world’s largest importer of recycled goods, roiled the U.S. waste industry last year when it informed the WTO that it would stop accepting imports of 24 categories of solid waste following a rise in reports of environmental contamination.
The Chinese government has since expanded the scope of its restrictions on imported waste materials and proposed a new law that the U.S. said would act as a “blanket import ban on recyclable materials.”
The U.S. raised these concerns in a statement at the Nov. 14-15 meeting of the WTO technical barriers to trade meeting. The U.S. is now circulating that document publicly. Environmental Concerns
U.S. exports of waste and scrap have decreased 51 percent to $5.6 billion between 2011 to 2017, according to the latest report issued by the U.S.-China Economic and Security Review Commission.
China’s crackdown on imports of waste products stems from the Chinese government’s concerns over environmental contamination, the commission report said.
The U.S. said it “recognizes and appreciates” China’s interest in addressing valid environmental concerns and noted that the Chinese Ministry of Environmental Protection has declined to meet with U.S. officials to discuss the matter.
“We urge China to break its silence if it truly wants to address valid environmental concerns,” the U.S. document said.Dispute Case Looming?
The filing could foreshadow a coming dispute settlement proceeding if the U.S. finds that the Chinese measures violate the WTO non-discriminatory treatment standards.
Though the U.S. said China’s waste ban appears to be discriminatory and “may be more trade restrictive than necessary” it’s uncertain if the U.S. would win a dispute case due to WTO exemptions related to environmental protection. The General Agreement on Tariffs and Trade permits WTO members to impose trade restrictions needed to protect human, animal or plant life or health.
https://bnanews.bna.com/environment-and-energy/us-urges-china-to-suspend-its-waste-import-ban
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Carbon Emissions From Rich Nations Set to Rise in 2018: IEA
Dec 4, 2018 | Reuters (In The New York Times)
By Nina Chestney
Carbon dioxide emissions from the world's advanced economies are set to rise slightly in 2018, breaking a five-year decline, mainly due to higher oil and natural gas use, the International Energy Agency (IEA) says.
Based on the latest energy data available, energy-related carbon dioxide (CO2) emissions in North America, the European Union and other advanced economies in Asia Pacific are set to increase by around 0.5 percent in 2018.
This is lower than the 2.4 percent rise in economic growth but ends the declining trend of the past five years, the IEA said in a statement on Tuesday.
This week, talks began in Katowice, Poland, between around 195 countries to work out guidelines for implementing the 2015 Paris Agreement which aimed at limiting a rise in global temperatures to between 1.5 and 2 degrees Celsius.
Global energy-related CO2 emissions need to peak as soon as possible and then enter a steep decline for countries to meet their climate goals under this pact.
Emerging economies are also expected to emit more carbon dioxide this year than in 2017, the IEA said.
The agency will release its final global energy and CO2 data for 2018 next March. Current data suggests emissions growth globally, the IEA said.
Even though renewable energy deployment is growing and coal consumption declining in some parts of the world, oil demand and natural gas use have been growing this year. There are also still a large number of new coal plants being built.
The IEA expects this will lead to a rise in global CO2 emissions in 2018, following last year's 1.6 percent increase, which ended a three-year period of flat emissions between 2014 and 2016.
"This turnaround should be another warning to governments as they meet in Katowice this week," said Fatih Birol, the IEA's executive director.
"Increasing efforts are needed to encourage even more renewables, greater energy efficiency, more nuclear, and more innovation for technologies such as carbon capture, utilization and storage and hydrogen, for instance," he added.
https://www.nytimes.com/reuters/2018/12/04/world/europe/04reuters-climate-change-emissions-iea.html
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‘A Kind of Dark Realism’: Why the Climate Change Problem is Starting to Look Too Big to Solve
Dec 4, 2018 | The Washington Post
By Steven Mufson
In the daunting math of climate action, individual choices and government policies aren’t adding up.
Solar panels are being nailed to rooftops, colossal wind turbines bestride the plains and oceans, and a million electric vehicles are on U.S. roads — and it isn’t enough. Even if the world did an unlikely series of about-faces — halting deforestation, going vegetarian, paying $50 a ton carbon taxes, boosting energy efficiency, doubling car mileage, and more — it would not be enough.
“There’s no silver bullet,” said Andrew Jones, co-founder of the modeling firm Climate Interactive. “There’s silver buckshot: many actions in many domains.”
As the 24th U.N. conference on climate change kicks off this week, a steady drumbeat of scientific reports have sounded warnings about current climate trajectories. One warned of the need to curb global warming to 1.5 degrees Celsius — 2.7 degrees Fahrenheit — over preindustrial levels instead of the widely accepted target of 2 degrees Celsius. Another warned of the growing gap between the commitments made at earlier U.N. conferences and what is needed to steer the planet off its current path to calamitous global warming.
If it sounds downbeat, that’s because it is.
The world has waited so long that preventing disruptive climate change requires action “unprecedented in scale,” the U.N. Intergovernmental Panel on Climate Change said in an October report.
William Nordhaus, the Yale University professor who just won the Nobel Prize for his work on the economics of climate change, recently described his outlook like this: “I never use the word ‘pessimism’; I always use the word ‘realism,’ but I’d say it’s a kind of dark realism today.”
Climate scientists and policy experts realize that they walk a fine line between jolting consumers and policymakers into action and immobilizing them with paralyzing pessimism about the world’s ability to hit climate targets.
“If you’re driving on a highway and the car in front of you stops short, and you slam on brakes and realize that you’re going to hit the guy no matter what, that’s not the time to take your foot off the brake,” said John Sterman, a professor of management at the Massachusetts Institute of Technology’s business school. “And you certainly don’t step on the gas.”
Sterman said that the world has missed the chance to contain warming without huge disruptions. “Now, it’s technically possible to do that, but we don’t have the policies in place,” he said. “That’s discouraging. But that just means we have to redouble our efforts.”
It’s not that corporations and governments haven’t attacked the problem or made breathtaking advances in energy technology. The cost of solar has plunged 78 percent for utility-scale projects since 2010. Over the same period, the cost of wind electricity fell nearly a quarter; the biggest turbines offshore now have arms weighing roughly 35 tons each that stretch nearly two football fields across.
Power-generating windmill turbines occupy a wind park in Moeuvres near Cambrai, France, on Nov. 12. (Pascal Rossignol/Reuters)Even China is making some progress. While its rapidly growing economy keeps emissions rising overall, it is coughing out less carbon dioxide for every unit of economic output.
But effective policy is lacking. Nordhaus advocates a whopping carbon tax, which the Climate Interactive model shows would kill off most coal, sharply reduce driving and boost purchases of more fuel efficient vehicles.
Getting such a carbon tax adopted in the United States, however, is hard to imagine. Washington state voters in November rejected a $15-per-ton carbon “fee” after Big Oil companies poured more than $31 million into the state to block the measure. BP, which had endorsed a $40-per-ton nationwide tax, gave the most to defeat the bill.
Congress hasn’t shown any appetite for a carbon tax, either. A proposal to impose a $40-per-ton carbon tax and return the revenue to people in dividends has not caught fire yet.
In France, President Emmanuel Macron has ignited protests by proposing fuel taxes he says are needed to fight climate change. “One cannot be on Monday for the environment,” Macron said, “and on Tuesday against the increase of fuel prices.”
In an email, Nordhaus said that hitting the 2-degree target would require global carbon dioxide prices of about $250 a ton in 2020, and rising rapidly after that. “This assumes that all major countries are onboard and that economies can handle a large fiscal and trade shock in which energy expenditures rise by about $2 trillion in a few years.”
Nordhaus has blamed the lack of climate policy progress on the strong incentive for what economists call “free-riding.”
“People free-ride when they jump the turnstile on the subway,” he said. “Nations free-ride in military treaties such as NATO when they enjoy the benefits of the strong U.S. military to protect them while doing little to pay for the common defense.”
And when it comes to climate change, he said, free-riding is “particularly pernicious.”
That’s partly because international organizations lack the authority to enforce rules on wayward nations. In Poland, several major countries are expected to admit to missing the targets they agreed to at the Paris conference three years ago. One example is Brazil, whose new president Jair Bolsonaro, the “tropical Trump,” has talked about clearing part of the Amazon for roads and development. That would damage the world’s lungs — the trees that absorb carbon dioxide and pump out oxygen at high rates.
There’s lots of carbon to absorb. The world will need to sustain consumers’ habits and living standards while replacing the energy industry’s massive infrastructure. Every day, the world burns about 100 million barrels, or 4.2 billion gallons, of oil — up about 2 percent from the year before.
Most of that goes into the gasoline tanks of cars and trucks; there are nearly 270 million on the road in the United States alone. The average age of those cars is 11.6 years, according to the Transportation Department, meaning that replacing the fleet with more-efficient or electric vehicles would take a long time.
Vehicles travel along a highway during a polluted day in Beijing on Sunday. (Wu Hong/EPA-EFE/Shutterstock)Chinese women wear masks on Sunday. (Wu Hong/EPA-EFE/Shutterstock)A Chinese migrant worker walks near a power plant on Sunday. (Wu Hong/EPA-EFE/Shutterstock)In November, the number of electric vehicles in the United States hit the 1 million mark. But that was three years later than President Barack Obama’s target, first issued in 2009. And that makes only a small dent in the nation’s greenhouse gas emissions. Thanks to the growth in the car market, in 2016 there were nearly 12 million more cars with internal combustion engines emitting greenhouse gases than there were in 2008.
The math on coal is just as grim. Global coal consumption is running at more than 5 billion tons annually. In the United States alone, coal fills 4.4 million rail cars every year. Closing down U.S. and European coal-fired power plants, which are 40 years old on average, could happen, but the average age of coal plants in Asia is just 11 years.
“Most emissions linked to energy infrastructure are already essentially locked-in,” the International Energy Agency said in its November World Energy Outlook.
A project off the coast of Belgium provides a good example of the need to run to stand still.
In November, Vestas, the world’s largest maker of wind turbines, and MHI, a unit of Mitsubishi, announced it would provide 23 of its new biggest turbines to a project in the Belgian North Sea. The massive turbines can power 137,471 German homes, the company said.
Yet the number of German dwellings grew by 245,000 in 2017.
Royal Dutch Shell chief executive Ben van Beurden noted in 2014 that solar and wind provide about 1 percent of the world’s energy. “How on earth do we think that 1 percent is going to become 90 percent of a system twice as big as what it is by the middle of the century?” he asked. “Whether you like it or not, it won’t happen.”
Even with large advances in renewable energy, he said, the share of world energy met by oil and gas would decline from 85 percent to 75 percent by the middle of the century, a time when the IPCC said net carbon dioxide emissions should drop to zero.
“That might be a gloom-and-doom-type picture,” van Beurden said. “But I think the real challenge is not so much how do we accelerate renewables but more about how do we decarbonize the system we have.”
Yet taking carbon out of the system means coming up with technology — and a carbon price to cover the costs. Companies already know how to take carbon dioxide from the air and stuff it below the earth’s surface. But it’s expensive, and unless it’s used for enhanced oil recovery, it makes no economic sense without a carbon price.
“Like a married couple that has put off saving for the future for too long, at some point it becomes nearly impossible to retire comfortably,” Nigel Purvis, co-founder of the advocacy group Climate Advisers, wrote in 2015. “Given where global emissions are today and the urgency of reducing emissions, we just don’t have time for a system that gradually increases climate ambition every five years — the numbers simply don’t work.”
On Nov. 27, the U.N. Environment Program issued a report saying that the gap between countries’ action pledges and the measures to limit warming is getting larger. While Obama had called the Paris deal “a turning point,” the report says that seven major countries, including the United States, are falling short of the actions they pledged to take.
The UNEP report also says that after three years of relatively stable emissions, global greenhouse emissions were up 1.2 percent in 2017.
Purvis now says his views haven’t changed. But, he pleaded, “Don’t cast me as a pessimist.”
He said: “I am an optimist by nature, and I am blown away by progress in certain sectors. If you had told me 10 years ago that wind or solar would be as cheap as they are, I wouldn’t have believed you.”
Chinese fishermen sit Nov. 14 next to a photovoltaic power station built on top of fish ponds in Yangzhou, in China's eastern Jiangsu province. (AFP/Getty Images)His assessment hasn’t discouraged people who say that the world needs — and will inevitably develop — a breakthrough technology. They fall into a long tradition of people who place their faith in American inventiveness and know-how.
Microsoft co-founder Bill Gates has invested in Breakthrough Energy Ventures, a $1 billion private investment fund, to fund researchers.
“We need the basic research, but we have to pair that with people willing to fund high-risk breakthrough energy companies,” Gates said in a video on the Breakthrough Energy website. He said “that’s what gives us the chance of having a solution that really lets us not having to give up energy usage and yet not damage the environment. I am optimistic.”
One of the earliest climate change models was drawn up in 2004 by a pair of Princeton University professors — Robert Socolow, an engineer, and Stephen Pacala, an ecologist. Their 50-year scenario was optimistic: “Humanity already possesses the fundamental scientific, technical and industrial know-how to solve the carbon and climate problem for the next half-century,” they wrote. They said that no breakthrough was necessary.
In their model, a series of “wedges” could alter the trajectory of rising temperatures. The wedges included things such as: scaling up wind capacity tenfold; covering an area the size of New Jersey with solar panels; doubling the fuel efficiency of all cars; tripling the world’s capacity of nuclear power; halting global deforestation; or planting new forests over an area the size of the Lower 48 United States.
“I like to say that we decomposed a heroic challenge into a limited set of monumental tasks,” Socolow wrote later.
In 2011, Socolow wrote that the number of wedges needed had increased from seven to nine. In an interview, he said it is now approaching 10.
Socolow now prefers to call climate action a horse race. At the moment, wind and solar are running ahead faster than expected, while nuclear power and carbon capture are trailing behind.
He says he worries that the 2-degree target is setting people up for an inevitable letdown. “My worry is that people will start talking about game over and a line being crossed over irreparably,” Socolow said. “Climate change is not like that.”
https://www.washingtonpost.com/national/health-science/a-kind-of-dark-realism-why-the-climate-change-problem-is-starting-to-look-too-big-to-solve/2018/12/03/378e49e4-e75d-11e8-a939-9469f1166f9d_story.html?utm_term=.155a5217ebf6
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