Thursday, January 20, 2022

A hot year in North America ... and the world

What an idiotic article! Is it a joke? They admit that the warming is tiny and very gradual -- 1.1 degrees Celsius higher than at the beginning of the Industrial Revolution -- but portray it as catastrophic. There does appear to be some global warming but it is negligible. Occasional atypical hot or cold extremes in some places are rightly called bad eweather but if we want to make statements about any overall process, it is the average we need to look at

Today, our planet revolves at its hottest levels on record — 1.9 degrees (1.1 Celsius) higher than at the beginning of the Industrial Revolution. The drumbeat has been steady; the past seven years have been the hottest on record. As each year brings unprecedented extreme weather and unfathomable statistics, 2021 was no exception.

Last year, North America was at the epicenter of some of recorded history’s most intense weather and climate extremes, from tremendous heat to brutal cold and from exceptional drought to catastrophic inundation.

Historic U.S. weather events in 2021, by the numbers

Although 2021 tied for the sixth-hottest year on record, it ranked as the warmest La Niña year. La Niña, a phenomenon that slightly cools sea surface temperatures in the eastern Pacific, may have cooled global temperatures by about 0.06 degrees (0.03 degrees Celsius), but human-emitted greenhouse gas effectively masked the impact.

A closer look at 2021 reveals that the Northern Hemisphere also ranked the sixth-hottest on record. The most profound warming has occurred within the Arctic because of a process called Arctic amplification. The Arctic is warming three to four times as fast as the average global warming rate, and this is accelerating ice melt and contributing to sea-level rise.

Last year was no exception, with the high Arctic, Greenland and high latitudes of North America experiencing some of the strongest warm anomalies (relative to the mid-20th-century average).

For instance, warm summer temperatures caused rain to fall for the first time on the summit of Greenland last year. Greenland’s average December temperature was nearly 18 degrees (10 Celsius) higher than typical.

Rain falls at the summit of Greenland Ice Sheet for first time on record

As global temperatures continued to rise last year, thermometers spiked to record highs in pockets around the world. Eleven countries either broke or tied national heat records in 2021.

The most prolific record-breaking heat wave was in the Pacific Northwest and western Canada. Long-standing heat records were obliterated by large margins, including the all-time Canadian heat record.

Besides the swath of extreme heat records, other weather extremes plagued North America, particularly the United States. The freeze from winter storm Uri in mid-February sent deep Arctic cold all the way to Texas, the costliest U.S. winter storm on record.

The country had its warmest June on record, with unprecedented heat waves and wildfires in the summer. Large portions of the western United States suffered in exceptional drought, exacerbating the spread of unusually early- and late-season wildfires, such as in Colorado.

December was record-warm for the United States, while western Canada shivered in extreme cold. The clash of extreme cold in the north and extreme warmth to the south was a key ingredient in the devastating and unprecedented severe weather episodes in December. The heat in the southern United States smashed December records by large margins. Some places beat all-time November records, too.


Biden nominates Greenie for Federal Reserve

President Biden has a chance to remake the Federal Reserve Board of Governors by filling multiple vacancies. This is especially important given inflation’s breakout, yet Mr. Biden’s latest nominees seem less worried about prices than pushing progressive policies that aren’t the Fed’s job.

Mr. Biden on Friday nominated former Treasury official Sarah Bloom Raskin as Fed vice chair for supervision, along with economists Lisa Cook and Philip Jefferson to vacancies on the Board of Governors. All three deserve scrutiny, but especially Ms. Raskin given what would be her regulatory power over banks and finance.


Ms. Raskin previously served as a Fed governor from 2010 to 2014. But her recent public statements have focused on climate change, especially using financial regulation to steer capital from fossil fuels to green energy.

In May 2020, with awful timing, she wrote a New York Times op-ed titled “Why Is the Fed Spending So Much Money on a Dying Industry?” That was amid the government’s pandemic shutdowns, when the Fed was acting to save the economy from collapse. The Fed established broad-based lending programs to prevent businesses that were otherwise sound from failing due to the shutdowns.

Ms. Raskin wanted the Fed to exclude fossil-fuel companies from these facilities. “The Fed is ignoring clear warning signs about the economic repercussions of the impending climate crisis by taking action that will lead to increases in greenhouse gas emissions at a time when even in the short term, fossil fuels are a terrible investment,” she wrote.

This showed colossally bad judgment. The crisis of the hour was Covid and a potential depression, not climate. Yet at that perilous moment Ms. Raskin was urging the Fed to discriminate against an industry that employed hundreds of thousands of people. Had the Fed taken her advice, many more oil and gas producers would have gone bankrupt, and energy prices would be even higher today.

“The Fed’s unique independence affords it a powerful role,” Ms. Raskin added. “The decisions the Fed makes on our behalf should build toward a stronger economy with more jobs in innovative industries—not prop up and enrich dying ones.” By unique independence, she apparently means it is unaccountable to voters. The Fed won’t pay a price at the ballot box if it destroys jobs.

Ms. Raskin expanded on her views in a June 2020 report “Addressing Climate as a Systemic Risk,” for the liberal investing outfit Ceres. “We must rebuild with an economy where the values of sustainability are explicitly embedded in market valuation,” she wrote. This will require “our financial regulatory bodies to do all they can—which turns out to be a lot—to bring about the adoption of practices and policies that will allocate capital and align portfolios toward sustainable investments that do not depend on carbon and fossil fuels.”

Note that phrase “allocate capital.” Among other things, the report recommended the Fed use climate stress tests to make banks account for the risk of government anti-carbon policies such as electric-car mandates and carbon taxes. It also suggested that the Fed deem fossil fuels risky assets and require banks to calculate the carbon emissions of their loans and investments.

Since this forced climate march will especially hurt lower-income Americans, both through destroyed jobs and higher energy prices, the report suggests the Fed use the “community reinvestment process to bolster the resilience of low-income communities to climate change.” Liberals have long used the Community Reinvestment Act to steer more lending to low-income neighborhoods.

Now Ms. Raskin apparently wants the Fed to use the law to force banks to finance green energy—for instance, electric-vehicle charging stations and rooftop solar panels—in minority communities. None of this is the Fed’s job under the law. The central bank’s regulatory command is financial stability, not making policy judgments that are the province of Congress, and not using regulation to allocate capital based on politics.


The Fed’s vice chair has extraordinary power to set the agenda on bank regulation. Chairman Jay Powell plays a secondary role. Along with the other new Fed Governors, Ms. Raskin would be in a position to steer lending in ways that could undermine financial stability by punishing some industries while favoring others.

It’s no surprise that Ms. Raskin was pushed hard by Sen. Elizabeth Warren and other Democrats who want to use regulation to steer bank lending. This political play to control the Fed is ironic given that Democrats opposed Judy Shelton for a regular Fed governor position because she had written favorably about a price rule for monetary policy.

Ms. Raskin’s views should trouble Senators who care about the Fed’s independence. And they should especially concern Democrats, such as West Virginia’s Joe Manchin and Montana’s Jon Tester, whose state economies depend on fossil fuels.

“The @FederalReserve is no place for someone incapable of making policy decisions independent from political calculations,” Sen. Warren tweeted last November. Do Democrats only care about the Fed’s independence when a Republican is President?


Oil demand to exceed Pre-Covid levels in 2022

Looks like all those electric cars have done nothing

Global oil demand will exceed pre-pandemic levels this year thanks to growing Covid-19 immunisation rates and as recent virus waves haven’t proved severe enough to warrant a return to strict lockdown measures, the International Energy Agency said Wednesday.

In its monthly oil market report, the IEA hiked its oil demand growth forecast for the coming year by 200,000 barrels a day, to 3.3m barrels a day. The Paris-based agency also raised its demand growth forecasts for 2021 by 200,000 barrels a day to 5.5m barrels a day.

Factoring in the IEA’s more optimistic forecasts are signs that recent coronavirus variants have been faster spreading but less fatal, helping boost global economic resilience to the virus, and allowing states to continue on a path of gradually winding down lockdown restrictions.

“The number of Covid cases is exploding worldwide but measures taken by governments to contain the virus are less severe than during earlier waves and their impact on economic activity and oil demand remain relatively subdued,” the IEA said.

While the Omicron variant has seen infection rates surge to record levels, its milder nature should help spread immunity to the virus and aid a faster return to pre-virus oil demand, the agency said.

“At the current speed of transmission, a large part of the population will likely have gained immunity by infection or vaccination by the end of the first quarter,” the group said. “As a result, restrictions to mobility could be minimal in the second half of the year.” Total demand this year should stand at 99.7m barrels a day, around 200,000 barrels a day more than 2019 levels, the IEA said. Last month the IEA was expecting this year’s oil demand to be broadly on par with pre-pandemic levels.

A global energy crunch that has seen natural-gas prices soar was another factor supporting the IEA’s forecasts for oil demand. Rocketing prices for natural gas were prompting greater demand for cheaper oil as an energy source, a trend which added 100,000 barrels a day of additional oil demand last month, the IEA said.

While the IEA’s view on demand has grown stronger, the body still expects supply to exceed demand by a narrow margin throughout 2022, despite signs that major producers were struggling to increase their output at agreed-upon levels.

An alliance of the Organisation of the Petroleum Producing Countries and a collection of other major producers including Russia — known collectively as OPEC+--missed their planned production targets by 790,000 barrels a day last month.

Global oil supply rose by a modest 130,000 barrels a day last month to 98.6m barrels a day.

The combination of robust demand and tepid supply hikes are helping to push crude stockpiles lower, something which analysts broadly think will keep oil prices supported this year.

The IEA said that stocks in the wealthier nations that make up the Organisation for Economic Cooperation and Development fell by 6.1 million barrels in November to a seven-year low of 2.76bn barrels. Preliminary data showed a further decline of 45m barrels in December.

Oil prices this week have risen to their highest levels since October 2014. West Texas Intermediate, the US crude benchmark, added $US1.53 on Wednesday to close at $US86.96 a barrel. Brent, the main international price, rose 1.1 per cent to end at $US88.44.

In its own report issued Tuesday, OPEC offered a similar view that recent virus variants had not weighed heavily on demand, but kept its demand growth forecasts for 2021 and 2022 unchanged.


Europe's wind energy falters (again)

One of the countless ironies running through current climate policies is that progress may be about to go into reverse, not because of climate change, but because of policies designed to combat it.

One of mankind’s great achievements has been the way that, across an ever-increasing part of the planet, we have reached a level of technological sophistication that has meant that we can go about our business without, extreme events aside, having to worry too much about what the weather is doing.

One of the countless ironies running through current climate policies is that that progress may be about to go into reverse, not because of climate change, but because of policies designed to combat it, and, more specifically, what looks more and more like a premature dash into wind energy. One of the triggers of the prolonged energy-price squeeze in the U.K. was the failure of winds over the North Sea to do what was expected of them in the late summer/early fall.

I wrote a bit about this in mid September, and here’s Joe Wallace in the Wall Street Journal, on September 13:

"Natural gas and electricity markets were already surging in Europe when a fresh catalyst emerged: The wind in the stormy North Sea stopped blowing.

The sudden slowdown in wind-driven electricity production off the coast of the U.K. in recent weeks whipsawed through regional energy markets. Gas and coal-fired electricity plants were called in to make up the shortfall from wind.

Natural-gas prices, already boosted by the pandemic recovery and a lack of fuel in storage caverns and tanks, hit all-time highs. Thermal coal, long shunned for its carbon emissions, has emerged from a long price slump as utilities are forced to turn on backup power sources.

The episode underscored the precarious state the region’s energy markets face heading into the long European winter. The electricity price shock was most acute in the U.K., which has leaned on wind farms to eradicate net carbon emissions by 2050. Prices for carbon credits, which electricity producers need to burn fossil fuels, are at records, too"

Perhaps “leaning on wind farms” to the extent that the U.K.’s ruling establishment (this is more than a matter of Tory incompetence, although the Conservative Party deserves a great deal of the blame) has decided to do was not the wisest course of action, particularly when combined with — and even more of the blame rests with the Tories for this — moving to a more or less just-in-time supply arrangement for gas.

But that failure by the wind to do what it should was a rarity, a one-off, right?


Now may be a moment to be start thinking of that Anakin/Padme meme.

The Daily Telegraph today:

"Power prices have surged to their highest level in a month as an extreme lull in wind threatens to hit supply.
Prices for Monday evening jumped to £1,161 a megawatt-hour – the highest since December 16. At the same time, wind output is set to slide below 1.5 gigawatts, compared to a 10-day average of 6.3 gigawatts.

The surge in prices highlights the pressure on the UK power market as ageing nuclear reactors are shut down and aren’t immediately replaced."


Nasdaq (also today):

"PARIS, Jan 17 (Reuters) – The German spot price jumped on Monday as wind supply was predicted to fall sharply on Tuesday.

Broker Marex said in a short-term comment that power supply would be lower than expected this week.
Wind supply is significantly reduced day on day and residual load is seen up throughout the region, Refinitiv analyst said, adding that residual load is down compared to last week.

The German Tuesday baseload TRDEBD1 stood at 232 euros ($265.01) per megawatt hour (MWh) at 0956 GMT, 58.6% above the price paid last Friday for Monday delivery."




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