Thursday, April 07, 2022

This nixed natural-gas project shows you just how absurd Biden’s energy policy is

As gas prices rise and Vladimir Putin escalates his war on Ukraine, Democrats’ political fortunes fall. That’s why President Joe Biden announced last week he’ll increase domestic production to combat what he calls “Putin’s price hike” at the pump by imposing “fees” (read taxes) on US energy companies for unproductive wells leased on public lands.

This political gamesmanship will stop neither soaring gas prices nor the Russian president, however, and may well accelerate Democrats’ death spiral heading into the midterms. Because Biden isn’t at war with Putin, he’s at war with domestic energy production — and has been since Day One of his administration, when he canceled the Keystone pipeline to bring Canadian oil to the United States.

Keystone’s fate sent a chilling message to anyone contemplating a costly infrastructure project: This administration prioritizes a radical green agenda over American energy independence.

But Keystone was only the first Biden action that significantly undermined investments that would have increased both domestic supply and exports abroad. Right now, millions of gallons of natural gas could be streaming out of the central Pennsylvania town of Wyalusing, then shipped out of a new export facility in Gibbstown, NJ. Instead, environmental extremists emboldened by the administration’s heavy-handed regulation spent the last year and a half shutting down this critical project.

Wyalusing is a case study in everything that has gone wrong with US energy policy under Biden. In 2018, New Fortress Energy applied to build a $800 million natural-gas processing plant there to purify and liquefy millions of gallons of gas from the Marcellus Shale, which would then move by rail and truck to the export facility in New Jersey. The target operation date was the first half of 2022.

In other words, Wyalusing should be coming online right now and, through Gibbstown, helping increase US exports to Europe — just when they’re needed most to counter Putin’s iron grip on natural-gas supplies to our NATO allies.

Instead, New Fortress Energy announced last month it will suspend the long-delayed project indefinitely after fanatical environmental groups — including PennFuture, the Clean Air Council and the Sierra Club — obstructed it through repeated legal action against both Wyalusing and Gibbstown. New Fortress decided to cut its losses after a long fight: It was easier to placate these organizations by allowing the necessary permits to expire than risk the ongoing expense and reputational damage they threatened.

Biden policies designed to make getting natural gas to market more difficult also influenced this decision. A key sticking point for the green groups was the proposal to move most of the liquified natural gas from Wyalusing to Gibbstown by rail — necessary thanks to obstructions and legal hurdles that routinely target any pipeline project.

President Donald Trump issued an executive order directing the Department of Transportation to begin the process of allowing natural-gas transport by rail. But Biden rescinded it via his own executive order, putting all LNG-by-rail regulations under review. That considerably complicated the Wyalusing project and gave more legal ammunition to green groups. It’s also depressed demand for the necessary specialized rail cars, which are therefore in short supply.

So rather than having significantly increased energy supplies to boost exports in the Ukraine crisis, Pennsylvania remains limited to current capacity, which clearly won’t be enough to replace Russian supplies. A sad irony is that the same environmental groups making it harder to transport US energy are raising global emissions by forcing European consumers to rely on Russian gas exports — which emit more than 40% more pollution than the cleaner US gas exports to Europe we should be accelerating.

More US natural-gas production is essential to ensuring affordable and reliable fuel during the energy transition, strengthening our allies’ energy security and reducing global greenhouse-gas emissions. The path forward is clear: Biden should immediately release new energy-infrastructure guidelines to include extending permits for projects delayed by legal action, facilitating logistic projects to include both pipelines and rail and expediting export facilities.

In its desperation to lower domestic gas prices, the administration is reportedly considering replacing Keystone by moving the additional Canadian oil that would have come by pipeline by rail — the very means of transportation its environmentalist proxies used to target Wyalusing.

This is verging on the absurd. If Biden is serious about supplying Americans with plentiful, affordable energy and defeating Vladimir Putin in the energy war, he can start in Pennsylvania, where the attrition of energy projects is happening in real-time due to his policies. It’s going to take years to wean Europe off Russian natural gas, making it all the more urgent to expedite — not harass out of existence — projects like Wyalusing.


The 1.5-Degree Goal Is All But Dead

The world’s most ambitious climate goal—to keep the planet’s average temperature from rising more than 1.5 degrees Celsius above its preindustrial level—is still technically feasible. Technically. There is not yet so much greenhouse-gas pollution in the atmosphere that avoiding 1.5 degrees Celsius of warming has become impossible, on paper.

But it is now, in practice, probably impossible to achieve.

On Monday, the Intergovernmental Panel on Climate Change, the United Nations–led panel of scientists and scholars charged with summarizing the world’s understanding of global warming, released its newest report. Unlike its previous reports, which focused on the physical and social consequences of climate change, this missive looks at how humanity can reduce its carbon pollution and avert climate collapse. If most IPCC reports present a warning, this week’s is more of a “how to avoid the apocalypse” guide.

It is also the final report in the IPCC’s current eight-year cycle of consensus reports. After this report (and a final “synthesis” report due later this year), the IPCC will not publish a major new document for years. This is the last report before the 1.5-degree-Celsius scenario becomes completely impossible.

So it’s worth looking at that goal—and how it attained significance. In 2015, as part of negotiations over the Paris Agreement, the world’s countries set a new goal of holding global warming to “well below 2 degrees Celsius” and preferably aiming for 1.5 degrees Celsius. (These translate to 3.6 degrees Fahrenheit and 2.7 degrees Fahrenheit, respectively.) The agreement also asked the IPCC to write a new report on the benefits of the 1.5-degree goal.

Just by itself, enshrining the 1.5-degree goal in international law represented a victory for the small island nations, such as Kiribati and the Solomon Islands, which have historically called for the most aggressive climate policy because rising sea levels could wipe them off the map. But the political potency of the goal exceeded even their dreams. When the IPCC published its 1.5-degree report three years later, it detailed the dire famines, droughts, and disasters that would accompany even that level of warming. It inspired a new round of global climate concern. The aggressive climate action of the past few years—Greta Thunberg’s protests, Wall Street’s calls for corporate sustainability, even Europe’s Green Deal—would have been unimaginable without the 1.5-degree report.

So it is charged, to say the least, to suggest that such a goal may now be impossible. That’s partly because achieving 1.5 degrees has never seemed particularly likely: The 2018 report shocked readers to some extent because it recognized that, in order to avoid climate catastrophe, the world needed to replace its energy system at an unprecedented pace. Decarbonization, too, has always required looking to the fantastic, the miraculous: Phasing out fossil fuels is both so difficult and so non-optional that any savvy realism must more closely resemble Marquez than Mearsheimer.

But while the eyes search for divine assistance, the feet must stay on solid earth. And allowing a fantasy of 1.5 degrees to outlast its feasibility could curdle hope into bad assumptions, foolish thinking, or worse.

“It’s still technically possible to meet the 1.5-degree limit,” Peter Erickson, the climate-policy program director at the Stockholm Environment Institute, told me, but “the window even for technical feasibility is rapidly shrinking.” Since the initial report was published in 2018, global emissions have continued to rise, so it will be harder to achieve 1.5 degrees now than it was even when that report was written. “Even of the scenarios they evaluate, only a third of them are able to limit warming to 1.5 degrees Celsius with any confidence,” he said.

Oliver Geden, a senior fellow at the German Institute for International and Security Affairs and one of the lead authors of the new IPCC report, agreed. “I would say it’s plausible to talk about it. I think it’s not plausible to say that, given what we know right now, we won’t [exceed] it,” he told me.

Even though the goal remains possible, the report makes clear that enough fossil-fuel infrastructure to blow past the goal has already been built. The world can emit as much carbon dioxide as it produced during the 2010s—about 400 gigatons—before it uses up the rest of its 1.5-degree budget, the new report finds. But the world’s existing fossil-fuel infrastructure, as already built and financed, would generate another 660 to 850 gigatons of emissions. Meeting the goal will require taking coal, oil, and natural-gas capacity offline before it was designed to shut down.

The question that really matters, both Erickson and Geden said, is not technical feasibility but political will and institutional capacity. So although the new IPCC report repeatedly finds that the 1.5-degree goal is technically feasible, it also establishes that the pace of institutional change required to achieve such a technical transition would have no historical precedent.

Only a few countries have successfully moved away from a single fossil fuel in a single economic sector at the pace with which the entire world would need to eliminate all fossil fuels in all sectors, Erickson said. And even these examples are not necessarily encouraging. During the 1970s oil crisis, the United States accomplished one of the fastest energy transitions in history when it stopped burning petroleum to generate electricity. But it replaced that oil with domestically mined coal, a far dirtier fuel. More recently, the U.S. rapidly phased out its coal capacity, but it replaced that fuel not with zero-carbon energy, but with climate-polluting natural gas.

The report praises a few examples of successful transitions, citing 24 countries that have successfully reduced their greenhouse-gas pollution for more than 10 years. But they’re almost all wealthy industrialized countries, including the U.S., some Northern European nations, and former Soviet states. “The former Soviet bloc is no model for decarbonization by any stretch,” Erickson said, because the lower emissions of those states accompanied a collapse in economic productivity.

To its credit, the original 1.5-degree report recognized that humanity was unlikely to keep global temperatures below 1.5 degrees Celsius for the entire century. Instead, most of its scenarios envisioned that the world’s temperature would overshoot that goal, and then humanity would bring the temperature back in line by removing massive amounts of carbon dioxide from the atmosphere after 2050.

To attempt anything more ambitious than that baseline, carbon-removal scenario, the countries of the world would have to marshal real political momentum for emissions reduction. “I don’t see political momentum” for that kind of change, Geden said.

But as humanity keeps putting off the task of reducing its emissions, the amount of carbon that needs to be removed keeps growing. That could produce its own political issues, Geden said. The contours of UN climate talks “will change dramatically if you start assuming net negative [emissions] are possible. You could open up a new round of entirely magical thinking,” he said. India, for instance, has already reasonably insisted that the world’s most developed countries go carbon-negative before other countries do. But if you assume truly massive amounts of carbon removal are possible, then countries could simply assume that greater and greater amounts of carbon-dioxide removal will kick in as the century progresses.

At the same time, the structure of international politics has changed since the 1.5-degree report first came out. Russia’s invasion of Ukraine has fractured international economic cooperation in a way that was not expected in 2018, and both the war and the Western response seem likely to alter the fossil-fuel system. The IPCC has modeled dozens of different scenarios of future emissions, Erickson noted, but none that assumes the creation of a new major geopolitical rivalry foresees a path to the 1.5-degree goal.

All of this has made Geden wonder if a more measured goal makes more sense. “Is it 1.5 at any cost?” he asked. “Or do we want to do 1.6? Is that a new aim because it’s also ‘well below 2 degrees Celsius’?”

Erickson said that advocates and politicians should keep the new goal in mind, but not base their entire strategy on it. “‘1.5 or Bust’ is not a recipe for success, or equity, or for frankly reducing the worst impacts of climate change. And maybe that’s a straw man, but you know, there are groups that are building their campaign strategies around that goal,” he said. “It’s a painful conversation. It still seems like we should do everything we can. But to the extent that we foreclose backup strategies in the singular pursuit of 1.5 degrees Celsius, that could be problematic.”


What is carbon capture and storage, and could it help halt the climate crisis?

These new technologies fall into two broad camps. Firstly, through catching concentrated industrial emissions at their source, preventing them from entering the atmosphere at all. This is usually known as carbon capture and storage (CCS).

And secondly, through technologies which suck greenhouse gas emissions directly out of the air, removing them at very low concentrations. This is usually known as greenhouse gas removal (GGR) or carbon dioxide removal (CDR).

There is a consensus that investing and utilising these technologies needs to be rapidly scaled up to have the impact required to keep the targets of the Paris climate agreement in sight - and prevent average temperatures rising 1.5C above what they were in the pre-industrial era.

But there are also widely-held concerns that industries and processes which already emit greenhouse gases could, or already are, using the burgeoning technology as a kind of get-out-of-jail-free card, in which they pin their future carbon reduction targets on installing or investing in GGR or CCS technology.

According to the International Energy Agency the strengthening of climate goals and new investment incentives "are delivering unprecedented momentum for CCS, with plans for more than 100 new facilities announced in 2021".

The agency said these technologies "will play an important role in meeting net zero targets, including as one of few solutions to tackle emissions from heavy industry and to remove carbon from the atmosphere".

But despite being "encouraging", the numbers of projects in the offing are inadequate and "fall well short of delivering the 1.7 billion tonnes of CO2 capture capacity deployed by 2030 in the net zero by 2050 scenario", the IEA said.

Professor Richard Templar, director of innovation at the Grantham Institute for climate change and the environment at Imperial College London, told The Independent new technologies have a long way to go, but he emphasised the important role they will play.

He said: "So far CCS and GGR have contributed very little indeed to tackling climate change. There are a small number of demonstrators for both technologies around the globe, testing the techniques, and informing future development of the approaches.

"In principle CCS and GGR could make significant contributions to tackling climate change, but we should have been developing these techniques with greater intent 10-20 years ago."

His colleague at Imperial, Dr Piera Patrizio, a research associate at the university’s Centre for Environmental Policy, told The Independent: "CCS is currently underused globally. Just 0.1 per cent of all global emissions are currently captured and stored, and researchers argue that CCS must be rapidly scaled up to mitigate emissions from energy intensive sectors."

She said the effectiveness of the technology had long been proven, pointing out that "in North America several thousand miles of high-pressure CO2 pipeline have been transporting millions of tonnes of CO2 since the 1970s," and that "geological storage has been safely operated in the North Sea by Norway for 20 years".

In both CCS and GGR techniques the CO2 is separated and captured from either the gases generated by a manufacturing process or from the gases in our atmosphere.

This CO2 must then be permanently stored deep underground, where it will mineralise - turn into rock.

An example of this process already successfully in operation is in Iceland, where the world’s largest "direct air-capture" machine, called Orca, takes carbon from the air and turns it into stone in just two years.

According to geological surveys there is plenty of subterranean capacity for injecting carbon, so the limiting factor is the manufacture and operation of such technology.

Even though it is the biggest in the world, Iceland’s Orca machine is capable of sucking up just 4,000 tonnes of CO2 a year – a tiny fraction of global emissions, which totalled 31.5 billion tonnes in 2020.

But experts say incentives must be put in place to expand this kind of technology, as the rate at which humans are causing emissions goes far beyond what can be absorbed through natural processes.

Dr Tilly Collins, a deputy director at the centre for environmental policy at Imperial College London, told The Independent: "A multifaceted approach [including new technology] is critical to addressing climate change as the carbon we have released over the past 150 years exceeds that which biological systems can absorb over the urgent timescale we face.

“Improving biological carbon absorption and storage through planting forests, improving grasslands, and restoring peatlands will also contribute and have the additional benefit of being potential win-wins by supporting biodiversity."

She also said long-term lock-downs of carbon from forest expansions will be enhanced by the growth in timber technologies for building and use as renewable feedstocks for chemical industries.

The IPCC’s report is expected to make a powerful case for strengthening measures to slash emissions from all sources, while also putting forward the best use of technology to remove pollutants.

How this is then interpreted by governments and organisations with historic connections to emissions-intensive commerce and industry remains a significant concern.

Professor Templar said: "We are in the midst of humanity’s biggest, self-inflicted challenge – the most rapid heating that the planet has ever experienced.

"We know that in order to cool the planet down we need to do two things. First and foremost to stop putting greenhouse gases into the atmosphere. Second, to remove CO2 already in the atmosphere and any that we really cannot help releasing. The avoidance of emissions is the single most important thing we need to do, but we now cannot avoid the need to also remove CO2 from the atmosphere. We need both."


Australia: The despised coal is still the lowest cost power source

We are continuously fed the narrative that wind and solar are cheap and reliable when the opposite is true. Their capital costs are enormous and ultimately come out of the pockets of ordinary citizens

There is a transition underway in our electricity sector.

Fundamentally, the people financing, regulating, designing, and operating these systems, are driving a public relations campaign promoting renewables as cheap and effective. Activism disguised as leadership is bringing about significant changes in the electricity system, changes that are having far-reaching consequences on the Australian economy and security.

Until recently, economists, engineers, and CEOs could be relied on to objectively consider all sides of a problem, making fact-based decisions for the best outcomes for their clients and shareholders (and themselves). But the much-vaunted ‘transition’ in the electricity sector has seen the share price of our two ASX-listed electricity retailers (AGL and Origin) shrivel.

In February 2021, AGL announced the write-down of AUD $1.9 billion of wind power contracts. AGL paid too much for long-term fixed-price contracts with wind developers and Origin had a similar write-down for the same reasons in July 2021. Combined, these two companies supply over 50 per cent of the Australian retail electricity market.

Further afield, Germany’s wind and solar gamble is failing too.

As Michael Schellenberger notes, Germany spent US$36 billion on wind and solar in the five years prior to 2019 while emissions flat-lined and prices skyrocketed. The Ukraine situation has exposed the weakness of Germany’s energy security and in the UK, Matt Ridley exposes a similar illogical political love affair with wind turbines.

Domestically, government bureaucrats are amplifying the problem.

Queensland’s state-owned CleanCo rewarded its CEO with $674,000 last year for overseeing a multi-million dollar loss. Queensland has to date guaranteed the income of fifteen wind and solar projects (2,266 MW). That is almost one-third of the state’s coal-fired power capacity contributing less than 10 per cent of the state’s electricity supply. Meanwhile, Queensland’s Stanwell operating over 3,300 MW of coal-fired generators returned a net profit after tax of $375 million (a plant breakdown caused a net loss of $266 million for CS Energy, the other state-owned generation company).

Origin CEO Frank Calabria recently expressed his intention to close Australia’s largest coal-fired generator, Eraring in New South Wales, and replace its 2,800 MW output with gas ‘operating over days and weeks’, batteries, hydro, and virtual power plants. That doesn’t sound cheap to me. Ex-Macquarie Bank chief Nicholas Moore (YouTube 28min), cited Lazard as evidence that wind and solar are cheaper than gas; he did not explain why subsidies remain critical to development of wind and solar projects.

Across Australia, every energy minister is promoting emissions reductions targets, wind and solar targets, or both, all underwritten by taxpayers. Politicians, desperate to bolster woke credentials and shore up falling polls, are eagerly handing over taxpayer dollars to so-called ‘green’ industries on top of the myriad of subsidies still on offer for wind and solar projects.

This casual disregard for our critical infrastructure has been abetted by the bureaucrats appointed to regulate and coordinate the electricity sector.

The previous CEO of the Australian Energy Market Operator (AEMO), Audrey Zibelman, said AEMO staff prioritise decarbonisation over keeping the lights on (podcast 24min). The current CEO, Daniel Westerman, fresh from ramping up wind and solar farms in America, is pushing for the Australian grid to be made ready to accept 100 per cent wind and solar by 2025. The Chair of the Australian Energy Market Commission (AEMC), Anna Collyer, describes her organisation as ‘striving for Net Zero’.

The heads of our mostly foreign-owned electricity network companies encourage the push for more wind and solar, as this requires massive upgrades to the grid. Since they receive a regulated return, more transmission means more guaranteed income, even as network productivity declines year on year. Engineer’s Australia, the peak body overseeing Australian engineering competencies and registrations, had Al Gore as keynote speaker at the Climate Smart Engineering Conference in November 2021. CEO, Bronwyn Evans, is signatory to a IPCC capitulation statement.

Despite the contrived support for all things green, opposition is mounting around Australia to new transmission lines and land-hungry renewables. Even the ABC can’t always ignore the negative impacts and growing ire of those affected by encroaching solar farms, wind farms, and transmission lines. Amongst the ABC’s activist headlines, the occasional piece on environmental destruction makes an unusual appearance alongside quotes from experts opining on the low cost of wind and solar.

The 1,000 MW MacIntyre Wind Farm in Queensland will need 180 towers for $2 billion ($2,000/MW). The 750 MW Kogan Ck coal-fired power station was built in 2007 for $1.2 billion ($1,600/MW). Kogan Ck coal mine is not linked to a port and is therefore not subject to export coal price changes, making its fuel costs amongst the lowest in the country. According to AEMO data, Kogan Ck offers its output in three bands: 300 MW at $36/MWh, 150 MW at $49/MWh, and the rest at $56/MWh.

The low cost of coal-fired generation is confirmed elsewhere. AGL’s FY21 annual report states total fuel costs for coal at $18.3/MWh and running costs at $11.5/MWh for a total of $29.8/MWh – comparable to Kogan Ck. Meanwhile the same annual report shows green compliance costs at $26.4/MWh and renewable Power Purchasing Agreement (PPA) costs at $52.9/MWh. Origin’s FY21 annual report shows renewable PPA costs much higher than coal at $95.3/MWh, and fuel costs (coal and gas) at $47.9/MWh. South Australia, the unashamed leader in shutting down fossil-fuelled electricity, has retail electricity rates 50 per cent higher than Queensland and New South Wales.

Our electricity system is in unchartered territory with wind and solar growth tenfold the global average.

We are continuously fed the narrative that wind and solar are cheap and reliable when the opposite is true.

Wind and solar are forced into the market despite the market desperately signalling oversupply with negative prices. Our industry and political leaders subscribe to every green woke agenda, neatly dovetailing with a lost and confused media, while our critical electricity system requires daily intervention to keep the lights on.

Wishful thinking implies a kind of innocent naivety. Does anybody think this is innocent?




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