On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss Europe’s energy emergency and a week of crowded headlines.
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Biden Telling “A Flat Out Lie” About US Energy, Tom Pyle on Varney & Co.
November 30, 2022 by Leave a Comment
Monday, November 29, AEA president Tom Pyle joined Ashley Webster on Fox Business to discuss Biden’s latest verbal attacks on American energy producers. Watch the video below to see Tom call out Biden’s lies regarding what is reducing America’s energy output. Read more about the 125 ways Joe Biden and his allies in Congress have made it harder to produce energy in the United States here.
Follow Tom on Twitter for his latest on America’s energy policy.
Biden’s EPA Reveals Astronomical “Social Cost of Carbon” Proposal
November 29, 2022 by Leave a Comment
President Biden’s Environmental Protection Agency (EPA) has proposed a new estimate for the social cost of carbon emissions that nearly quadruples the interim figure from the Obama Administration. The Biden administration has been using the Interagency Working Group’s interim value of $51 per metric ton of carbon dioxide, but EPA has proposed increasing it to $190. Agencies use the number in their analyses of the costs and benefits of climate regulation on sources ranging from power plants and automobiles to the oil and gas sector. The higher the social cost of carbon, the easier it is to reject projects involving natural gas, coal and oil. The Trump Administration used a value between $1 and $7 a metric ton. The interim value of $51 per metric ton has raised legal challenges from several states, including Louisiana and Missouri.
EPA is requesting public comment on the estimate, which it made public when it released its proposed methane standards for the oil and gas sector. The new social cost estimates were not used as part of that analysis, but they were included in a separate 137-page supplemental document dated September 2022. The document estimates the social cost of carbon as $120, $190 or $340 per metric ton of carbon dioxide, using discount rates of 2.5 percent, 2.0 percent and 1.5 percent, respectively. The discount rates reflect the weight given to emissions of carbon dioxide. A higher rate means a lower dollar value is assigned to those emissions; a lower rate assigns more dollar value to them. In addition to carbon, EPA also calculates social cost values for methane and nitrous oxide.
Federal agencies are responsible for incorporating the social cost of carbon in their analysis and evaluating how they would be applied in rulemaking. The Interagency Working Group’s role is to have agencies share resources and streamline the process so that each agency does not recreate the process from scratch. It is unclear whether the figures released by EPA reflect changes the working group is also considering. In the supplemental document, EPA noted that it was participating in the working group’s work and that the process is ongoing. The Interagency Working Group originally planned to release its proposal in April. EPA’s draft technical report is available to the working group as it continues its work. EPA began working on the social cost of methane and integrated it into some rulemaking before the Interagency Working Group undertook the work.
EPA has a new “modular” approach recommended by the National Academy of Sciences to producing the estimates that includes four steps, or modules, of the estimation process: socioeconomics and emissions, climate damages and discounting. The resulting values supposedly represent a range of climate outcomes. EPA had previously used preexisting models for the current interim values. The interim analysis gauged costs at $14, $51 and $76 per metric ton of carbon dioxide, using discount rates of 5 percent, 3 percent and 2.5 percent, respectively. The new EPA figures are $120, $190 and $340 using discount rates of 2.5 percent, 2.0 percent and 1.5 percent, respectively.
The difference between the current interim figures and EPA’s proposal is due mainly to the change in the discount rates used; EPA used a 2 percent discount rate, rather than the 3 percent rate used in calculating the interim value. The updates to the functions, model, socioeconomics, and pricing of risk also increased the value of the social cost of carbon by about one-third.
The firm, Resources for the Future, provides a calculator for obtaining the carbon tax for various types of fossil fuels using different assumed social costs of carbon (SCC). While the SCC is not a direct carbon tax, it acts like one when analyzing fossil fuel projects, elevating their costs against their benefits. The Biden administration will use it to increase the costs of fossil fuel projects in its regulatory analyses and other analyses across the federal government. At $190 per metric ton for the social cost of carbon, the carbon tax for gasoline, which would be added to the cost of gasoline in any federal analysis, would be $1.71 per gallon, making electric vehicles more economic against internal combustion vehicles. In the case of a new 1,000-cubic-foot natural gas project, the carbon tax would be $10.09. For sub-bituminous coal, used in the generation of electricity, the carbon tax would be $320 per ton, most likely making coal plants uneconomic. This gives the government a strong argument to reject fossil fuel projects or to add enormous regulatory costs to them.
Status of Litigation
Federal agencies are currently using a social cost of carbon value first developed by the Obama administration, adjusted for inflation. The federal government has already faced strong opposition from several states on its adoption of the interim value of $51 per metric ton, which is far more than the value that the Trump administration used of $1 per metric ton. The states argue that the Biden administration lacks the authority to raise the metric under the Constitution.
In February, Judge James Cain Jr. of the U.S. District Court for the Western District of Louisiana blocked the use of the metric by issuing an injunction, saying it imposed regulatory costs on the states. A federal appeals court rejected that decision, and the Biden administration has received other positive outcomes in court defending the current interim metric of $51 per metric ton.
In March, the 5th U.S. Circuit Court of Appeals overturned the ban, ruling that the states had raised “merely hypothetical” arguments to show that they face immediate harm from the Biden administration’s use of the climate metric. Attempts to reverse the ruling at the Supreme Court did not gain traction later in the spring. The case, however, is not yet fully resolved. The appeals court will hear oral arguments on the challenge on December 7. Last month, the 8th U.S. Circuit Court of Appeals found that another lawsuit failed to show “actual injury” from the administration’s use of the social cost of carbon.
The new EPA figure should not immediately affect regulations or any of the litigation since it has not yet been finalized. The new figure, however, could be indirectly used in litigation because it contains a more detailed analysis of the reasons for looking at carbon emissions, which was the biggest difference between the Obama estimates and those of the Trump Administration, which only included direct impacts in U.S. territory. The Obama and Biden Administrations both used assumptions about international impacts to increase costs of American projects.
Conclusion
The Biden Administration has raised the mythical social cost of carbon estimate from the already high level of $51 per metric ton to $190 per metric ton by decreasing the discount rate and changing the methodology and parameters in its climate model. Because the social cost of carbon is essentially a direct tax leveled on energy usage, almost quadrupling the value will raise energy prices in the federal government’s analyses—prices, which are already 50 to 100 percent higher since President Biden took office in January 2021. The energy crisis will get even more severe if this proposal is finalized, as it will unleash a vast amount of new expensive environmental regulations, the costs of which will be added to consumer prices. Already, blackouts and brownouts are expected in the Northeast if a cold winter occurs and diesel stockpiles there are at very low levels, causing rationing to take place in several areas.
EPA’s proposal will next undergo a peer-review process that should solicit comments that show how dangerous this proposal is to the U.S. energy system and American well-being. The social cost of carbon is simply another front in the war on domestic oil, coal, and natural gas.
*This article was adapted from content originally published by the Institute for Energy Research.
The Unregulated Podcast #109: Honest Liars
November 18, 2022 by Leave a Comment
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the next moves for the Republican majority in the House of Representatives, Biden’s inflation problems, and more headlines from a busy week.
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Staggering Price of Biden’s “Net-Zero” Agenda Passed to Consumers
November 16, 2022 by Leave a Comment
If the United States is to reach President Joe Biden’s 2050 net zero carbon economy goals, it will need to increase its electricity generation capacity by as much as 480 percent to comply with the Paris Climate Accord. According to a recent report, firm capacity should increase by 300 to 400 gigawatts from today’s level of 850 gigawatts and intermittent wind and solar capacity should at least quadruple from the current 200 gigawatts. The study, jointly released by the Electric Power Research Institute and GTI Energy, found that the United States would need to build its firm capacity to between 1,140 gigawatts and 1,450 gigawatts and its wind and solar capacity to between 800 gigawatts and 3,700 gigawatts. The new capacity would, in part, replace existing capacity, which does not need to be retired, but Biden’s net zero carbon goals mean that existing plants will be shuttered and replaced by new politically correct capacity that U.S. consumers and taxpayers would be funding. So, not only are fuel costs going up based on Biden’s energy policies, but electric costs will skyrocket as all the new generating capacity is brought online. Americans will be asked to divert enormous sums to meet Biden’s goals, which have never been legislatively confirmed.
The Study
The study analyzed a number of different scenarios, depending on technology availability and cost. Based on the various scenarios, total new capacity in the electric sector would need to range from 1,650 gigawatts to 4,860 gigawatts (160 percent to 480 percent of today’s levels). According to the study, achieving economy-wide net-zero carbon dioxide emissions while attempting to maintain reliability requires a broad set of low-carbon technologies. Firm capacity resources, which are needed to backup intermittent resources, include nuclear, geothermal, hydrogen, hydroelectricity, bioenergy (with and without carbon capture), natural gas with or without carbon capture, and electricity storage technologies (for example, battery storage, pumped hydro, and compressed air energy storage).
2050 Electric Generation Capacity by Resource
The study notes that electricity from existing nuclear provides essential firm capacity in a net-zero energy system. In a scenario in which carbon capture and sequestration (CCS) is restricted, new advanced nuclear technologies, such as small modular reactors, provide about 60 gigawatts of generating capacity as a carbon-free baseload option by 2050.
In all scenarios, new gas- and/or hydrogen-fueled electric generating capacity plays a critical role in providing resource adequacy and flexibility for reliable power generation. New natural gas plants with CCS emerge as a key firm capacity option for the electric sector, providing up to 33 percent of generation, and, potentially, a significant portion of hydrogen and ammonia production.
Natural gas infrastructure plays a crucial role in providing firm capacity for a transitioning power sector and delivering low-carbon fuel to industry and buildings, particularly in colder climates. The composition of delivered gas varies by scenario and may include a blend of fossil, renewable and synthetic natural gas, and hydrogen. U.S. natural gas consumption could remain at levels similar to today, even in a net-zero energy future. With higher natural gas prices, pipeline gas consumption declines to around 15 quadrillion Btu, about half of today’s level. Without CCS, renewable and synthetic natural gas can substitute for fossil supply as the economy-wide emissions target approaches zero; in this case, pipeline gas consumption decreases to around 17 percent of today’s level. Even with lower volumes of delivered gas, pipeline capacity requirements remain to serve peak demands.
Hydrogen’s use as a low-carbon fuel is projected to increase, whether through fuel cell vehicles, blending with the natural gas supply to support needs in buildings, or through direct use for process heating in industries. Some studies suggest the cost of heating a home would double if hydrogen were required instead of natural gas. The roles of hydrogen and hydrogen-derived fuels expand significantly if CCS and forestation are limited, increasing clean electricity generation by around 4,000 Terawatt hours to support production from electrolysis—as much as the total U.S. electricity generation today.
Continued expansion and modernization of electric transmission and distribution (T&D) infrastructure are essential to support increased integration of renewables, electrification, and flexible demand-side resources, as well as enhance reliability and resilience during the energy transition. Electric T&D investments increase over time in all scenarios.
Conclusion
Getting to a net zero economy requires a massive change in the U.S. electric system by both replacing much of our existing generating capacity and building new generating capacity to meet all the new electricity demands from supplying power for electric vehicles to meeting the nation’s heating demands. Along with new generating capacity requirements are additional transmission and distribution requirements as our aging grid will need massive upgrading plus new lines to bring power from remote areas where wind and solar capacity can find the sun and the wind. The undertaking is massive, will be expensive, and likely unreliable as goals are being pushed without much forethought to cost, availability, and feasibility. The massive increase in U.S. generating capacity in less than 3 decades from between 1,940 to 5,150 gigawatts, compared to 1,080 gigawatts today is simply mind-boggling. The costs will be staggering, and paid for by consumers and a diversion of the nation’s wealth.
*This article was adapted from content originally published by the Institute for Energy Research.
Biden Brags About Dismantling Energy Independence
November 15, 2022 by Leave a Comment
“No one is building new coal plants because they can’t rely on it, even if they have all the coal guaranteed for the rest of their existence of the plant,” Biden said at a recent event touting his administration’s economic policies in Carlsbad, California. He continued to tout: “We’re going to be shutting these plants down all across America and having wind and solar.” But, the facts are: In 2021, the United States generated 21 percent of its electricity from coal—almost twice as much as wind and solar combined. Wind and solar power are intermittent sources that cannot compete with coal because they are only available when the wind blows and the sun shines. As inherently part-time energy, renewables require backup power either from coal, natural gas, or nuclear power or from expensive storage batteries that are not included in their cost estimates. The truth is, U.S. residential electricity prices have increased by 27 percent since 2010, as more and more renewable energy has been mandated and subsidized into the system. And, those prices will continue to increase as Biden pushes more wind and solar on the system, requiring all those additional expenditures.
To understand the unreliability of intermittent wind, one only must look at statistics from Alberta, Canada. Alberta has 32 wind farms with 3,076 megawatts of capacity. But, on Tuesday evening, November 7, during the peak supper usage period, Alberta’s 32 wind farms were producing just 15 megawatts of electricity, hovering very close to that level for at least the next eight hours, which is just 0.5 percent of capacity. By 12:30 that night, wind power production across hundreds of wind turbines in an area larger than Belgium, Luxemburg and the Netherlands combined was just three megawatts—0.1 percent of capacity. No nation and particularly no superpower should make wind and solar power the basis for its electricity system if it wants to continue its superpower status. Someone should tell Biden.
China and India Continue to Build Coal Plants
Biden has made shifting the United States out of fossil fuels the centerpiece of his program to reduce carbon emissions. However, as the United States shutters coal plants, China and India are building them. In April, China announced it will increase coal output by 300 million tons this year—that increase alone being about half of total U.S. coal production. China already consumes about 8 times as much coal as the United States. Despite Chinese President Xi Jinping pledging last year that China would start cutting coal consumption in 2026, state think tanks are expecting coal-fired power generation capacity to increase by 150 gigawatts over the 2021-2025 period. These plants easily operate for 4 or 5 decades. The new plants would put China’s known coal-fired generation capacity at 1,230 gigawatts—about 6 times the U.S. coal-fired generating capacity. And increasingly, the U.S.’s plants sit idled since wind and solar have first access to the grid.
India too depends mostly on coal generation and it is preparing to add as much as 56 gigawatts of coal-fired generation capacity to meet growing demand for electricity. The increase in coal-fired capacity would represent about a 25 percent increase in the country’s current 204 gigawatts of coal capacity. Coal-fired generation accounts for about 75 percent of the country’s consumption of coal. According to India’s prime minister, India is prioritizing “reliable” power to further economic growth—something President Biden is not doing for Americans. China has announced the same goals regarding reliability and security. India also intends to import coal as needed to buttress its own domestic supply of coal. India primarily imports coal from Indonesia, but it has also imported coal from Russia despite western sanctions on Russia due to its invasion of Ukraine.
China accounts for over half of all global coal-fired electricity production and India accounts for another 12 percent. China’s coal consumption produced over 70 percent of China’s carbon dioxide emissions in 2021—a growth rate of 2.5 percent from 2020. China’s carbon dioxide emissions in 2021 were over twice those of the United States and are growing. In fact, their 2020 emissions were equal to the emissions of the United States, EU27, Japan and India combined. India’s carbon dioxide emissions in 2021 were 12.5 percent higher than in 2020 and the third largest in the world, behind China and the United States.
Coal Plants Are Efficient and Clean
The coal plants that China is building are state-of-the-art with environmental controls. Research by the National Energy Technology Laboratory (NETL) shows that a new coal plant with environmental controls reduces nitrogen oxides by 83 percent, sulfur dioxide by 98 percent, and particulate matter by 99.8 percent compared to plants without controls. According to NETL, over the next 30 years, new coal production of 145-345 million tons could result in 47,500 coal mining jobs. The carbon products could also result in product value of near $139 billion and 480,000 manufacturing jobs tied directly to carbon products. U.S. air quality has steadily and substantially improved in recent decades because emissions from coal plants have steadily declined. Between 1970 and 2021, the combined emissions of the six common pollutants (PM2.5 and PM10, SO2, NOx, VOCs, CO and Pb) dropped by 78 percent.
Conclusion
President Biden spouts off without knowing the data, particularly when it comes to energy. As Senator Joe Manchin said, Biden’s remarks were “outrageous and divorced from reality” while also dismissing “the severe economic pain the American people are feeling because of rising energy costs.” Manchin also said, “Comments like these are the reason the American people are losing trust in President Biden and instead believe he does not understand the need to have an all-in energy policy that would keep our nation totally energy independent and secure.”
Coal is reliable, efficient, and clean and the preferred choice of China and India. If the United States transitions from fossil fuels to wind and solar power, it will mean no change in global emissions for China and India will be producing more emissions than the United States reduces, negating any effect. Further, it will make our electric system unreliable, place our national security in an increasingly perilous status, and cost Americans more for energy as wind and solar power require backup from expensive storage batteries, for which China dominates the world supply chain. Europeans have found that reliance on wind and solar power is highly correlated with higher prices for energy and electric power. Germany’s energy transition started decades ago and their residential electricity prices escalated to triple U.S. residential electricity prices and the highest in the industrialized world, even prior to Russia’s invasion of Ukraine. That is what Americans can look forward to under Biden’s energy policies.
*This article was adapted from content originally published by the Institute for Energy Research.
European Climate Hypocrites Confronted By African Delegates At COP 27
November 14, 2022 by Leave a Comment
At the 2022 United Nations Climate Change Conference (COP27), climate issues relating to Africa took center stage. Uganda President Yoweri Museveni noted the “brazen double standards” of Europe’s climate process “hypocrisy.” ”The Ugandan leader characterized the Western nations’ agreement to allow some fossil energy investment while blocking Uganda’s rights to retrieve oil and gas for itself as the “purest hypocrisy.” Europe claims that its recent investments in fossil energy are temporary and brought on by the war in Ukraine, but its investment in African energy is restricted to wind and solar which creates intermittent electricity and not the baseload generation required to power factories and productive employment. According to the Uganda President, European jobs are made possible by diversity in electricity production, while Africans are forced to make life-threatening crossings of the Mediterranean Sea to obtain jobs in Europe. The gathering at the exclusive luxury resort town of Sharma El Sheikh, Egypt, is revealing inconvenient truths about the importance of energy availability and reliability to the developing world.
Europe’s Climate Hypocrisy
Africa sees Germany demolishing a wind farm to make way for a new open-pit coal mine as a reprehensible double standard that Africa has come to expect. One of the farm’s wind turbines was taken down last month, and two others are expected to be taken down next year, with all being dismantled by the end of 2023. Europe is also bringing mothballed coal power plants back online to deal with its energy shortages stemming from less Russian natural gas supply due to sanctions on Russia for its invasion of Ukraine. Museveni noted that while new Western investment in African fossil fuels is possible, it is only available for oil and gas resources that will be piped and shipped to Europe. Uganda President Museveni wrote, “It is morally bankrupt for Europeans to expect to take Africa’s fossil fuels for their own energy production but refuse to countenance African use of those same fuels for theirs.” The European Union called for a delay in the development of an oil pipeline that Uganda was building with Tanzania citing violation of human rights and destruction of the climate.
Museveni continued, “When decisions like these are being made, and without a shred of self-awareness or honor, it is no surprise some of my counterparts call for reparations or handouts. But this is the last thing Africans need or most want. Dialing down the brazen double-standards is what we desire, along with the lifting of the moratorium on fossil fuel investments for Africa herself so we can meet the needs of our own people.” The United States, Canada and 18 other countries committed at the COP26 climate summit to stop public financing for fossil fuel projects abroad, instead steering their spending into renewable energy. That agreement did not include major Asian countries responsible for much of the fossil fuel financing abroad.
Africa Looks Elsewhere for Investment
Africa has turned elsewhere for investment that comes without lectures attached. Africa has turned to China, and more recently to Turkey and India to help build the infrastructure Africans need to raise their continent out of poverty. Even the United Kingdom is taking a more “enlightenment” approach than the rest of Europe.
If Africa increased electricity production by using domestic reserves of natural gas, the continent’s share of global emissions would increase from 3 percent to just 3.5 percent. Instead, Western money poured into wind and solar projects that leave Africans without electricity when the wind does not blow and the sun does not shine. Along with wind and solar power, Africa needs continuous baseload power produced by coal, natural gas, hydroelectricity, and nuclear power as backup to solar and wind and to maintain a solid manufacturing base. Even the International Energy Agency (IEA) is calling for Africa to be empowered to use natural gas and other hydrocarbons for industrialization. According to IEA, $25 billion per year would raise 600 million people out of energy poverty by 2030 through diversification.
COP27 Calls for a Radical Overhaul of the World Bank and International Monetary Fund
There is interest behind a set of ideas that would overhaul the World Bank and the International Monetary Fund, which loan or grant money from industrialized nations to developing countries. If implemented, the reforms being considered would make more money available to developing nations, deploy funds faster, offer countries lower interest rates and allow them to pause debt payments after major disasters. The changes could enable these institutions to attract trillions of dollars in private capital to help nations transition to wind, solar and other “clean” energy. Note that these reform ideas are not in line with the comments from the Uganda President as they are directed to funding only non-carbon energy.
These institutions have operated largely unchanged since their establishment after World War II, with wealthy nations essentially financing loans to developing nations and holding much of their debt and thus exercising a large degree of control over their growth and progress. Among the most transformative changes discussed is a new approach to the risk ratings and resulting interest rates developing countries must pay on loans from the World Bank. Currently, some countries can borrow at 3 percent while others borrow at 14 or 15 percent. Paying higher debt is a huge drain on national budgets, leaving governments without needed financial reserves when they face a crisis.
Nearly every country is a member of both the World Bank and I.M.F., but power is distributed through a quota system that gives the United States a dominating position in decision-making and leadership. Janet Yellen, U.S. Secretary of the Treasury, said she would make a formal request to the World Bank that it comes up with an “evolution road map” by the end of the year.
Conclusion
According to Uganda’s President: Europe’s “reprehensible double standard” on energy is something that Africa has “come to expect.” Europe’s re-investment in fossil energy makes a mockery of Western commitments to climate targets and their promises to help speed African development in renewable energy. Europe’s determination to write one set of rules for Europeans and a different set for Africans makes Europe complicit in forcing poverty on Africa and limiting their opportunity.
Africans want to use their own fossil fuel resources to develop their countries, bring electricity to households, provide jobs and move people out of poverty. Europe, however, has agreed with the United States and Canada not to finance fossil fuel projects in Africa. Yet, Europe wants to buy African oil and natural gas for its own use, has brought coal plants back online and is opening new coal mines while destroying a wind farm. That is pure hypocrisy to Africa, and should be to most thinking Americans.
*This article was adapted from content originally published by the Institute for Energy Research.
The Unregulated Podcast #108: Tribes
November 11, 2022 by Leave a Comment
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the midterms and what the pending results mean for the rest of the Biden presidency and 2024.
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Climate Jet-Setters Divvy Up “Aid” Funds At Mediterranean Resort
November 9, 2022 by Leave a Comment
COP27 began in Egypt over the weekend, as about 200 nations meet to supposedly agree on climate policy. The Conference of the Parties of the UNFCCC, or COP27, is the 27th United Nations Climate Change conference and this year is being held in the luxury resort town of Sharm El Sheikh, Egypt. Global greenhouse gas emissions have increased since last year’s Glasgow climate conference, exceeding their pre-pandemic levels. A recently released United Nations report shows global emissions on track to increase by 10.6 percent by 2030 compared with 2010 levels. According to the Paris Climate Agreement of 2015, those emissions need to drop 43 percent by then for temperatures to be 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. For the first time since climate talks began, delegates at the U.N. climate summit have agreed to discuss compensating poor nations for damage that may be linked to global warming, placing the topic on the agenda. The loss and damage funding is to be paid by the world’s largest emitters for ecological reparations to developing countries. One study estimates that funding for loss and damage could run up to $580 billion a year by 2030. This is noteworthy since the U.S. Senate has never bound the United States to the agreement, as is customary in a treaty establishing obligations upon signatories.
Developing countries want wealthier nations to help finance their transitions from fossil fuels. To date, wealthy nations have fallen short of their promises on transition funding and they have not agreed to new funding beyond what they already provide. They failed on a promise to provide $100 billion per year by 2020 to help developing countries cut carbon dioxide emissions. In 2009, developed countries promised that by 2020 they would transfer $100 billion per year to vulnerable countries. In 2020, they provided $83.3 billion – falling $16.7 billion short of the target, according to the Organization for Economic Co-operation and Development. Recently, two small countries have offered funding. Denmark committed 100 million Danish crowns ($13 million), and Scotland pledged £2 million ($2.28 million).
South Africa, for example, wants wealthy countries, along with international development banks, to pay over 400 billion rand ($26.6 billion) to transform its power system out of coal. At COP26, the U.S., Germany, France, the U.K. and the EU said they would mobilize $8.5 billion over the next three to five years to help South Africa quit coal by replacing coal plants with renewable energy and finding new livelihoods for mining communities. Note that the pledge is not enough money to even transition one country — South Africa —out of coal and into renewable energy. South Africa is the fifth largest coal producer in the world.
The International Energy Agency indicated that just two of the 55 components needed for the world to reach net-zero emissions by 2050 are on pace to be achieved. Those two are electric-vehicle deployment and switching to LED lighting. Factors such as shutting down coal plants and capturing carbon dioxide from the atmosphere are lagging behind.
New Ideas and Issues Abound
The United States is focusing on a new plan for carbon credits, which the Biden administration is hoping to announce at the summit meeting. John Kerry, President Biden’s climate envoy, is supposedly gathering support for a system in which governments would earn credits for cutting their power sector’s emissions, which companies could then buy to offset their own output. In many ways, it resembles the “Cap and Trade” bill promoted by Congressmen Henry Waxman and Ed Markey in 2010. Kerry’s plan lacks key details, however. Also, centering the plan on credits is contentious, because they do not always result in a reduction of emissions. Despite that, credits have grown in popularity as a way for companies and governments to incentivize reducing carbon output.
Corporate commitments to addressing climate change also appear uncertain. Mark Carney, the former governor of the Bank of England who now leads the Glasgow Financial Alliance for Net Zero, indicated that the group’s members were no longer required to follow a U.N. initiative to phase out fossil fuels. Members of the coalition, which have a combined $150 trillion in assets, raised antitrust concerns. Bank of America and JPMorgan Chase, for example, are worried that they could be sued for following global decarbonization pacts. There has been no major climate-related litigation on antitrust grounds thus far, but a number of regulators and officials are exploring it and it has all the hallmarks of collusion in restraint of trade.
Senators including Tom Cotton and Chuck Grassley have sent letters to 51 major law firms warning them of potential antitrust violations for advising clients on environmental, social and governance (ESG) issues. The letter advises the law firms that they and their clients should preserve documents relevant to the clients’ ESG practices in preparation for Congress’s oversight of antitrust violations due to ESG collusion. The letter stated: “The ESG movement attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box. Of particular concern is the collusive effort to restrict the supply of coal, oil, and gas, which is driving up energy costs across the globe and empowering America’s adversaries abroad.”
The billionaire Mike Bloomberg, a special U.N. envoy on climate change, is focused on reducing coal use. He announced a new international initiative to help 25 developing countries in Africa, Asia, and Latin America phase out coal by 2040 with some wealthier countries ending coal use by 2030. (Bloomberg provided more than $500 million to help green groups phase out coal use in the United States.) Bloomberg’s initiative would include devising business plans, national policies and technical resources to increase the use of renewable energy, but it does not include a new financial commitment.
The alliance of governments — under a partnership with Bloomberg Philanthropies and Sustainable Finance For All, a United Nations body — intend to concentrate on countries where energy demand is projected to grow, and where renewable energy potential is plentiful. Attracting private-sector dollars for wind, solar and other renewable power has been a challenge, particularly in developing countries. Indonesia, for example, is the third-largest coal producer after China and India, and its energy plan foresees coal providing a quarter of its power mix by 2050. Shutting down its 118 coal plants could cost $37 billion, according to a recent report. Many nations in Africa have enormous wind and solar resources but because of potential risks, financing costs may be higher.
Conclusion
Nearly 200 countries are meeting in Egypt as part of COP27 to discuss ways and finances to reduce their greenhouse gas emissions, which are growing globally. European countries have turned to coal as a means to fuel their economies and to keep their residents warm this winter as Russia has drastically reduced its exports of natural gas to them as a means of retaliation against sanctions imposed due to its invasion of Ukraine. Other countries such as China and India have enormous coal potential and use and do not intend to reduce that consumption any time soon as they grow their economies and, in the case of India, electrify its country.
Developing countries want wealthier countries to pay for their transition to renewable energy as reparations for their industrialization. New ideas are coming from John Kerry and Mike Bloomberg for emissions reductions, but the global situation is such that any true and lasting developments are unlikely. U.S. taxpayers should be aware that new obligations may be agreed to at the conference which would seek to raise their tax and energy bills in pursuit of the U.N.’s COP27.
*This article was adapted from content originally published by the Institute for Energy Research.
The Unregulated Podcast #107: Closing Argument
November 4, 2022 by Leave a Comment
On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the final stories shaping the upcoming midterm elections.
Links:
- The Crude Oil Windfall Profit Tax of the 1980s: Implications for Current Energy Policy
- A Windfall Profits Tax: Energy Policy for Dummies
- Eversource CEO seeks emergency order by Biden to ensure gas supplies as New England winter approaches
- How much alcohol is too much? Dr. Narula reports on new study
- Netanyahu on course to lead Israel’s most right-wing government ever, partial Israel results suggest
- Tiffany Smiley Senate Ad
- We would be much safer with lee Zeldin.
- Mark kelly just votes for joe Biden’s agenda.
- American energy scorecard
