Five Energy Stories Worth Reading Today (8/29/14)

August 29th, 2014

Here are five recommended reads for today (8/29/14).

  1. Bloomberg reports: “A government-appointed panel gave Australian Prime Minister Tony Abbott two options to cut emissions more cheaply: either scrap or weaken its main clean-energy program. Accepting either would imperil A$20 billion ($19 billion) of existing projects and shut the door on new investment.”
  2. According to Reuters, “Power company Duke Energy Corp outlined plans to retire the remaining coal-fired stations at its Ohio plant by the end of the month as it looks to cope with tightening power plant emission regulations.”
  3. Greentech Media reports: “When it comes to the aging U.S. grid, ASCE estimates that there’s a $94 billion investment gap on both the distribution system and transmission system. That doesn’t even account for the coming turnover of aging power plants, which are 30 years old on average. However, that gap is beginning to close a bit on the transmission system. “
  4. According to Newsweek, “On the books since the 1960s, long before climate change was ever on the negotiating table, Section 115 is remarkably applicable to the current challenge of climate negotiations, says Ann Carlson, a professor of environmental law at UCLA and a director of the school’s Emmett Institute on Climate Change and the Environment.”
  5. Climate Progress reports, “A fire broke out at BP’s largest U.S. refinery on Wednesday night after a compressor exploded in one of the refinery’s units, sending shakes through local homes and injuring one worker, according to media reports.”

BNEF Does “Thought Experiment” on Fossil Fuel Divestment Achieving “Trillion-Dollar Scale”

August 28th, 2014

The folks at Bloomberg New Energy Finance (BNEF) are out with a fascinating paper, which they call a “thought experiment,” on the fossil fuel divestment movement – of which we’re big supporters – and what it would look like if it achieved “trillion-dollar scale.” Here are a few key points, followed by some thoughts of our own.

  1. Although the fossil fuel divestment movement, led by Bill McKibben, has some momentum, “divestment calls are not enough to move a needle calibrated in the trillions of dollars.”
  2. Fossil fuel divestment is neither imminent nor inevitable. But, neither is it impossible for motivated investors.” But if divestment “were to achieve trillion-dollar scale,  what would it look like?”
  3. Divestment represents both a challenge and an opportunity:Oil and gas divestment will be a challenge;” “Coal divestment could be relatively easy;” “Re-investment in clean energy requires investor appetite and structures for true scale.”
  4. Any large-scale divestment movement beyond campuses, churches, and municipalities will require engaging and persuading firms such as BlackRock, Vanguard, State Street, and Capital Group – each with more $1trn of assets under management – to reconsider their portfolios. Any large-scale divestment movement beyond campuses, churches, and municipalities will require engaging and persuading firms such as BlackRock, Vanguard, State Street, and Capital Group –each with more $1trn of assets under management – to reconsider their portfolios.”
  5. Clean energy has come a long way in the past decade – technologically, financially, and in its business models – does not have the scale of other multi-trillion dollar sectors; its equities are liquid but volatile; and its yield instruments are still very small.” Also, “clean energy as an asset class is simply not large enough to absorb substantial amounts of capital divested from fossil fuels
  6. What could change this paradigm?  1) scale; 2) investment vehicles; 3) perception
  7. There are, however, a number of trillion dollar-plus sectors that could absorb divested dollars. The seven sectors below [IT, Pharmaceuticals, Food & Beverage, Engineering, REITs, Automobiles, Industrials] are highlighted to absorb fossil fuel divested capital not just because of scale, but because each also includes companies where minimizing fossil fuel use, creating greater energy efficiency, or manufacturing and servicing a lower-carbon energy system is part of the growth strategy

Generally speaking, we like this analysis and believe it rings true.  The bottom line is that divestment from fossil fuels is absolutely feasible, the only real question being whether there are attractive – and sufficiently large – alternative investment vehicles for that capital. Fortunately, those vehicles are available, and one of them is clean energy itself.  Even if clean energy isn’t large enough at the moment to absorb every dollar of divested capital from fossil fuels, that could be the case in the future with increased clean energy scaling, investment vehicles, and positive perception — all of which the industry is working on.

In addition, there are many industries out there, as BNEF points out, that are integrating cleantech into their cost-reduction and sustainability planning. For instance, high-tech firms like Google require enormous amounts of reliable, sustainable, economically attractive energy, which is one big reason why they are shooting to go 100% renewable. And most firms these days realize that cutting energy waste – in their buildings, manufacturing processes, transportation fleets, etc. – is a smart thing to do for their bottom line. All of those areas offer attractive possibilities for investors moving their money out of fossil fuels and looking for alternatives. They also offer the potential for the “trillion-dollar scale” needed to defund dirty energy for good.

Five Energy Stories Worth Reading Today (8/28/14)

August 28th, 2014

Here are five recommended reads for today (8/28/14).

  1. The Sydney Morning Herald reports, “Investments in new clean-energy capacity will total $USUS1.61 trillion ($1.72 trillion) through 2020 even as the expansion of renewables is expected to slow, the International Energy Agency said.”
  2. Media Matters writes: “Charles and David Koch, brothers and the oil barons who are already shaping the 2014 midterm elections according to recently leaked audio recordings, are often portrayed as environmentally responsible advocates of the free-market that are unfairly targeted by Democrats. However, their political influence, which benefits the fossil fuel industry and their own bottom line, is unparalleled.”
  3. Reuters reports: “A U.S. State Department lawyer who played a key role in the Keystone XL pipeline review is moving on, sources said on Wednesday, the latest departure of a senior official involved with the long-delayed project. Keith Benes helped produce the government’s two environmental impact reviews on Keystone, which concluded that the 1,200-mile (1,900-km) pipeline might encourage Canadian oil sands development, but would not meaningfully worsen global climate change.”
  4. A new report by Oil Change International “outlines billions of dollars of annual subsidies from the seven richest countries in the world to expand fossil fuel reserves, despite repeated commitments from those same countries to phase them out.”
  5. Climate Progress reports, “Existing power plants across the globe will emit over 300 billion tons of carbon dioxide into the atmosphere before they retire, according to a new study published Tuesday.”

Sen. Lamar Alexander: Taxpayer-Funded Corporate Welfare Bad, Except When It’s For Fossil Fuels

August 27th, 2014

See below for the latest example of Sen. Lamar Alexander’s relentless push for continued, even increased, taxpayer-funded corporate welfare to the fossil fuel industry.

Sen. Lamar Alexander (R-Tenn.) called on the administration to expand oil and gas drilling in the Outer Continental Shelf.

“There is no reason we shouldn’t be using all the resources we have available to increase our energy security, create more jobs at home and reduce our reliance on oil from countries that want to do us harm,” Alexander said Tuesday.

He made the comments after he and 20 other Republicans sent a letter to Interior Secretary Sally Jewell. Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) led the letter. The lawmakers asked that the department make all offshore oil and gas resources in the Outer Continental Shelf available for development.

Now, contrast that with Alexander’s opposition to popular, effective pro-wind policies, which he calls a…yes, you guessed it, “wasteful taxpayer subsidy.” Even more internally inconsistent and illogical, Sen. Alexander claims that we shouldn’t be subsidizing a “mature technology,” which he argues “should stand on its own in the marketplace.”  Yet here he is again, pushing to do exactly that: subsidize one of the most mature technologies known to man — drilling holes in the ground and pumping out oil, something we’ve been doing for well over a century now, and something that certainly doesn’t require government tilting the playing field in its favor at this point.

Five Energy Stories Worth Reading Today (8/27/14)

August 27th, 2014

Here are five recommended reads for today (8/27/14).

  1. The New York Times reports, “Runaway growth in the emission of greenhouse gases is swamping all political efforts to deal with the problem, raising the risk of ’severe, pervasive and irreversible impacts’ over the coming decades, according to a draft of a major new United Nations report.”
  2. According to DeSmogBlog: “Governor Scott recently met with prominent climate scientists from universities with the expressed goal of learning all that he could about climate change.  The truth, however, is that the entire experience was more of a publicity stunt than a science lesson.”
  3. The Hill reports, “A government probe into the metric used by federal agencies to measure the ’social cost of carbon’ found no evidence that it was improperly developed, investigators said Monday.”
  4. According to the New York Times, “The Obama administration is working to forge a sweeping international climate change agreement to compel nations to cut their planet-warming fossil fuel emissions, but without ratification from Congress.”
  5. Greentech Media reports: “Vivint Solar’s $200 million IPO registration document appeared in the wee hours this morning and gave a little bit of background on the fast-growing solar installer and financier. Second only to SolarCity as an installer, Vivint Solar could also benefit from the increased access to capital afforded by going public.”