The International Renewable Energy Agency (IRENA) sees little future for Canada’s tar sands/oil sands by mid-century, according to the National Observer’s analysis of the Dubai-based agency’s latest forecast of global energy supply and its transition away from carbon.
According to IRENA and the International Energy Agency, which collaborated on the report, the world will need to invest 0.4% of global GDP through 2050 if it wishes to stabilize climate change at less than 2ºC above pre-industrial levels. As the Observer’s Mike De Souza reports, the $29-trillion effort would see governments “‘immediately and comprehensively’ deploy new policies to avoid stranded investments in fossil fuel infrastructure, which could include expensive oil and gas projects or new pipelines that would not be needed in the future.”
IRENA’s report singled out Canada, along with India, Turkey, and the United States, for their unambitious climate plans.
The agency’s outlook anticipates that “by 2050, nearly 95% of electricity would be low-carbon, 70% of new cars would be electric, the entire existing building stock would have been retrofitted, and the CO2 intensity of the industrial sector would be 80% lower than today.” Oil demand would be less than of half today’s level, with the most expensive-to-produce resources “no longer exploited.” Separately, Bloomberg calculates that IRENA’s outlook could force fossil energy producers to abandon reserves currently valued at $10 trillion.
“Such a scenario,” De Souza writes, “could translate into economic trouble for Canada’s oil-rich province of Alberta, which has the planet’s third-largest reserves of crude oil, but some of the highest production costs.”
In what may be bellwethers of the industry’s future, he observes, “in recent months several multinational oil companies, including Royal Dutch Shell, Total, and Statoil have cashed out their investments in Alberta’s oilsands.”
Notwithstanding a flood of upbeat headlines and stories in the last 24 months, chronicling the falling price of clean energy and the rapid expansion of solar and wind generation, “the world is, unfortunately, not moving away from fossil fuels,” researchers Sean Sweeney and John Treat write in a white paper for Trade Unions for Energy Democracy.
Far from it, they say. In fact, “much of the recent optimism is misplaced, misleading, and disarming. It must be rejected and replaced with a more sober perspective.”
Over the months and years, The Energy Mix and the publications we monitor have noted how wind is supplying more than half the power consumed in Texas (home to Houston, capital of the world’s oil business), and how solar is cheaper than natural gas in other parts of the United States and could be the world’s least expensive energy source by 2025 (it’s already undercutting coal in India). We’ve written about data from the U.S. Department of Energy, explaining why clean energy prices will fall in the years to come, and studies that show renewables with enough muscle to perform the economy’s heavy lifting.
Sweeney and Treat are unimpressed. Writing the latest in a series of policy papers for the TEUD, a global initiative to “advance democratic direction and control of energy in a way that promotes solutions to the climate crisis, energy poverty, the degradation of both land and people, and responds to the attacks on workers’ rights and protections,” the researchers give a blunt assessment of the world’s continued primary reliance on fossil fuels.
“The major recent studies,” they contend, “leave little doubt that the world is not moving away from fossil fuels. On the contrary, they show that although there are changes taking place within the overall energy economy, what is happening cannot be considered a full-force transition to a renewables-based energy system. Renewables are today a thorn in the side of major fossil fuel interests (particularly coal companies), but they are not seriously challenging the dominance of fossil-fuel-based power.”
Measured against the targets in the Paris agreement, “the progress in renewable energy deployment to date, while very real, is profoundly inadequate in terms of reducing emissions to levels that are consistent with the ‘well below 2 degrees Celsius’ threshold,” they add.
The two authors concede that optimists have found validation in the decline of the coal industry, falling investment in fossil energy, and rising investment in clean sources, as well as the decoupling of economic growth from energy consumption, slowing energy demand, and the levelling-off greenhouse gas emissions.
However, they unpack several of these apparent trends, noting that energy demand is expected to continue to grow through at least 2040, rising over current levels by somewhere between one-third and half. The fossil industry’s financial woes, they note, have more to do with an oversupply of oil than competition from clean energy providers.
Meanwhile, despite eye-watering rates of growth, “it is highly misleading to suggest that renewable energy is displacing fossil fuel-based power,” the pair asserts. “At the end of 2015, wind and solar PV combined still generated just 4.9% of global electrical power. The percentage of electricity generated by fossil fuels—66% in 2015, according to the IEA—has barely changed since 1990. Other key economic sectors (most obviously transport) continue to be almost entirely dependent on fossil fuels.”
Finding “no basis for the belief that a substantial transition away from fossil fuels is either imminent or inevitable,” the researchers say it is “distracting and politically disarming” for clean energy advocates to pretend that one is under way. “By promoting a false optimism, the advocates of ‘green growth’ have decoupled their own ideologically-driven aspirations from indisputable and genuinely grave realities.”
In response, Treat and Sweeney call for “energy systems controlled by ordinary people, in partnership with well-run and accountable public agencies, to manage and reduce energy demand while providing electrical power to everyone for basic needs and truly sustainable forms of human and social development.”
One of Japan’s most venerable business names may have decided it needs to sacrifice an equally historic American one in order to save itself. Citing unnamed sources, Reuters reports that Toshiba is looking for US$500 million in financing to take Westinghouse Electric LLC, which it bought in 2006 for US$5.4 billion, into bankruptcy.
Westinghouse develops and builds nuclear plants around the world. “Toshiba,” Reuters says, “is reviewing proposals from financial institutions and investment firms about a so-called debtor-in-possession loan, which would carry the company through a potential bankruptcy. The money would allow Westinghouse to continue to build four nuclear power plants in Georgia and South Carolina,” the first new nuclear facilities commissioned in the United States in three decades.
“The sources cautioned that the move is preparatory and that no decision has yet been made for Westinghouse to file for bankruptcy,” the news agency stresses.
However, Toshiba’s fraught investment in the troubled U.S. nuclear builder has already shaken the 79-year-old enterprise to its foundations. The company’s market capitalization fell by half in the weeks leading up to its announcement last month that it would write US$6.3-billion off its balance sheet over the Westinghouse acquisition. Japan’s Nikkei business newspaper reported then that Toshiba faced “material uncertainty” over its chances of remaining in business.
With the U.S. government taking the first steps to turn Donald Trump’s promised “beautiful” wall along America’s border with Mexico into a reality, a New York architect has an idea for clearing the small hurdle that Mexico has so far resisted Trump’s insistence that it pay for the barrier.
“His plan: A 1,000-mile-long border wall equipped with solar panels and wind turbines that will generate more than US$1.2 billion per year in electricity,” the Houston Chronicle reports. “With an estimated US$25-billion cost, the wall would be paid for in 25 years.”
According to the Texas paper, the idea “is the brainchild of Vijay Duggal, a New York architect who has sent the proposal to the White House” and several members of Congress, claiming that such a wall would be “the largest green project of its kind in the world.”
But Duggal’s claim of paternity to the idea may be challenged. Homero Aridjis, a former Mexican ambassador to UNESCO, and James Ramey, a Mexican researcher, have already proposed a similar alternative to Trump’s barrier: a wall of solar panels running just south of the U.S. border, and generating power for export to cities like San Diego, Phoenix, El Paso, and San Antonio.
In its call last week for bids on prototype wall sections, however, the U.S. Customs and Border Protection agency conceived the barrier more prosaically—and passively—as “a 30-foot-high edifice of concrete or some other hard-to-penetrate material.”
The good news for North America’s oil companies: their determined efforts have slashed the cost of producing crude, while the OPEC cartel of oil-producing nations has mostly stuck by a resolution to reduce its output in a bid to trim a global glut and bump up prices. The bad news: it doesn’t seem to matter.
Earlier this year, Canadian Natural Resources Ltd. (CNRL) boasted that operating costs at its Horizon tar sands/oil sands diluted bitumen project would fall to US$20 a barrel before the end of 2017. An industry conference last week in Houston heard similar claims from numerous other producers, Bloomberg reports.
“When companies can lower the price at which they break even, it means they can approve more projects and produce more oil, keeping dividends safe and investors happy,” the outlet observes.
But their efforts may be for naught, Bloomberg cautions. “The risk: they can also end up drilling down the price of oil. At the CERAWeek conference, fears of too much supply were palpable.” Driving the alarm home, “West Texas Intermediate, the U.S. crude benchmark, plunged 9.1% percent [during the] week, closing below the key $50-a-barrel level for the first time this year.”
From the fossils’ point of view, things may soon get worse. Pioneer Natural Resources Co. Chair Scott Sheffield anticipated that “prices could fall to US$40 if OPEC doesn’t extend its existing agreement to cut production.”
That agreement took effect at the beginning of the year, but the cartel has struggled to secure full compliance among its 11 member nations. Meanwhile, OPEC’s cuts have been offset by increased production from outside the group. Libya and Nigeria, who were not part of the production-cutting pact, have ramped up their output, as have Canadian tar sands/oil sands operators.
The “main threat” to oil prices, however, has come from revived U.S. crude production. Emboldened by their lower costs, American companies have been pumping with enthusiasm, with the result that “production surged to the highest in more than a year and U.S. crude stockpiles are at a record-high level,” reports Bloomberg. As a result, “OPEC cuts have had no impact on U.S. stockpiles of crude and refined products.”
The dynamic has left Saudi Arabia, which orchestrated the OPEC plan, with “precisely what it wanted to avoid,” the news agency notes. “Its output cut has left it supporting rival producers, while its sacrifice of volume has yielded little in the way of higher prices.” By this week, the kingdom’s own discipline appeared to ebb, when it revealed that it was reversing a third of its own production cuts. Crude prices fell through US$48 a barrel in the wake of the Saudi disclosure.
The persistent glut and soft prices may also delay the day when tar sands/oil sands producers like CNRL can hope to see a financial return on their investments in cost-cutting, the Conference Board of Canada warned. “The oil industry will continue to lose money for much of this year despite [its] stronger financial conditions and the promise of new pipeline capacity,” the Ottawa-based think tank predicted.
Board economist Carlos Murillo told the Calgary Herald that “the sector won’t post positive numbers until the fourth quarter of this year” at the earliest. Capital investment in the Canadian industry will fall again this year to $22 billion, from $27 billion in 2016, just over a third of its 2014 peak of $62 billion.
Murillo sees a stronger outlook for the industry over the medium term, forecasting a return to the heady days of 2010 when Canadian fossils took home $13 billion in profit—but not until 2021, and only if benchmark crudes like West Texas Intermediate stay over US$55 per barrel on average this year, and reach US$71 within 48 months.
As Japanese authorities prepare to lift evacuation orders on four towns inside the 12-mile exclusion zone around the Fukushima nuclear plant, they’re running into an emblematic problem: hundreds of toxic wild boars that have been roaming the region since the facility melted down six years ago.
“They descend on towns and villages, plundering crops and rampaging through homes,” the New York Times writes in a suitably ominous news lead. “They occasionally attack humans. But perhaps most dangerous of all, the marauders carry with them highly radioactive material.”
Wild boar meat is considered a delicacy in Japan, but government testing shows these animals are too radioactive to eat, with some of them showing radioactive Cesium-137 levels 300 times above levels considered safe. “Officials have also expressed concern that returning residents may be attacked by the animals, some of which have settled comfortably in abandoned homes and have reportedly lost their shyness to humans,” the Times reports.
Whether or not the government succeeds in a campaign to cull the wild boar population, it remains to be seen whether former residents will be willing to return to Fukushima: in a survey last year, more than half said they would stay away, “citing fears over radiation and the safety of the nuclear plant,” the Times notes.
But evacuees may soon be forced to return, Greenpeace reveals, in one of several recent posts and articles marking the sixth anniversary of the March 11, 2011 disaster.
The environmental NGO has been conducting biweekly radiation surveys through the entire six years, and levels in one decontaminated area located 30 to 50 kilometres from the plant are still the equivalent of a chest x-ray per week. “And that’s assuming [residents] stay in the limited decontaminated areas,” Greenpeace notes, since 76% of the town “has not been touched and remains highly contaminated.”
But even so, the Japanese government “intends to lift evacuation orders from the village and other areas in March and April 2017, and one year later terminate compensation for families from those areas. It will also cancel housing support for those who evacuated outside designated zones. For those dependent on this support, it could mean being forced to return.”
Greenpeace reports that, six years after the disaster, Fukushima survivors “continue to live with fear for their family’s’ health and with uncertainty about their future,” and they “continue to grapple with unanswered questions, unable to relieve a deeply held sense of anger and injustice.”
The post adds that “women and children are the hardest hit by the nuclear disaster. They are physically more vulnerable to impacts of the disaster and radiation exposure. Evacuation broke up communities and families, depriving women and children of social networks and sources of support and protection. Together with a yawning wage gap (Japan has the third highest gender income disparity in the most recent OECD ranking), female evacuees—especially single mothers with dependent children—face far higher poverty risk than men.”
Contamination inside the stricken plant, meanwhile, is still several times too high for repair robots built to operate in highly radioactive environments. “The latest attempt to harvest data on Fukushima failed after a robot designed by Toshiba to withstand high radiation levels died five times faster than expected,” The Independent reports. “The robot was supposed to be able to cope with 73 sieverts of radiation, but the radiation level inside the reactor was recently recorded at 530 sieverts.”
As a point of reference, the paper notes: “A single dose of one sievert is enough to cause radiation sickness and nausea; 5 sieverts would kill half those exposed to it within a month, and a single dose of 10 sieverts would prove fatal within weeks.”
Last week’s visit to Ottawa by European Climate Commissioner Miguel Arias Cañete was part of a wider diplomatic push to bolster the Paris agreement, echoing the EU diplomatic surge the preceded the 2015 conference that concluded that landmark global climate deal.
As several reports described a Trump White House fiercely divided over whether to withdraw from the Paris accord, EU foreign ministers say they will step up their support for the 2015 agreement. The EU joins an increasingly crowded field of candidates for the mantle of global climate leadership the United States appears ready to cast off.
“European foreign ministers agreed to raise climate risk awareness among partners and aid developing countries in gaining access to sustainable energy,” Reuters reports via CNBC. The European ministers nodded—diplomatically—to “the latest developments and changing geopolitical landscape” that had prompted them to “reinvigorate EU climate diplomacy.”
“We are positioning our diplomats in the EU delegations and embassies to do an aggressive outreach so that the Paris agreement be implemented and saved,” the agency quoted an EU official as saying.
The assertive statement follows EU climate commissioner Miguel Arias Cañete’s visit to Canada last week. While here, he urged this country to help Europe fill “a vacuum of leadership in climate change policy.” The EU commissioner will also take his message to Iran, India, and China.
China, in particular, is well positioned to seize the opportunity provided by America’s political distraction with the competence and legitimacy of its own president. China was swift to assert its global climate leadership after Trump gained his narrow Electoral College win. Second-term President Xi Jinping is believed to see climate action as part of his political legacy. And the country’s world-leading investments in renewable infrastructure back up the perception.