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Daily Briefing

20.03.2020
Today's climate and energy headlines
DAILY BRIEFING Coronavirus: Outrage as Trump asks for $3bn to boost oil producers amid stock plunge
Coronavirus: Outrage as Trump asks for $3bn to boost oil producers amid stock plunge

News.

Coronavirus: Outrage as Trump asks for $3bn to boost oil producers amid stock plunge

As the coronavirus continues to dominate the news, there is a flurry of stories on the impacts for the fossil fuel industry, particularly on oil prices. The Independent reports that US president Donald Trump “cosied up to his friends” yesterday as his administration said it was seeking $3bn from Congress to top up the country’s Strategic Petroleum Reserve (SPR), “potentially propping up US oil producers after crude prices crashed globally”. A group of Democrats in the House of Representatives warned Trump in a letter that “diverting public funds to bail out this industry will do nothing to stop the spread of this deadly virus or provide relief to those in need”, the paper adds. The US Department of Energy would buy up to 30m barrels of crude oil for the SPR by the end of June “as a first step in fulfilling president Donald Trump’s directive to fill the emergency stockpile to help domestic crude producers”, explains Reuters. The reserve has a capacity of 77m, and funding to fill it would “have to be mandated by new stimulus legislation”, the newswire says. Treasury secretary Steven Mnuchin said on Fox Business he would tell Trump to take advantage of low oil prices and ask Congress for $10bn to $20bn to fill up the SPR for the long term, Reuters notes. “We should be filling up the reserve for the next 10 years,” Mnuchin said. Energy secretary Dan Brouillette told reporters in a teleconference that the department has asked Congress for about $3bn, the outlet adds. Meanwhile, oil prices rose after Trump indicated he would intervene in the oil price war between Saudi Arabia and Russia at “an appropriate time”, reports Axios. At a White House briefing on the Covid-19 response, Trump said low petrol prices were helpful to consumers, but added that a decline “hurts a great industry and very powerful industry”, the outlet notes. Trump said “we are trying to find some kind of a medium ground”, reports Reuters. Trump added that he had spoken to several people over the dispute and the price war is “very devastating to Russia”. US crude oil prices subsequently spiked by 25%, notes another Reuters piece, making “the largest single-day gain on record, recouping some losses from three days of selling that drove the benchmark to near 20-year lows”. The Financial Times reports on a “trio of specialist energy hedge fund managers in London [that] is chalking up big gains after betting on a plunge in the oil price”. One of these “winners” is Per Lekander, the paper says: “Mr Lekander of Lansdowne Partners, who manages around $1bn and focuses on renewable energy, is up 6% this year following big gains in March. He has been backing wind turbine manufacturers and other greener forms of energy generation while betting against fossil fuel companies. Both groups have been caught up in the market turmoil, but oil companies have fallen far harder, leaving him up overall.” A Reuters column by energy analyst John Kemp urges Saudi Arabia to “call a truce” on the oil price war, warning that “pressing on with such a tactic in the midst of the worst global health emergency since the influenza pandemic of 1918 and one of the deepest global economic downturns in a century would be supremely dangerous”. Elsewhere, the Financial Times reports that independent US energy producers “are restructuring billions of dollars of debt or discussing new ways to stay afloat as collapsing oil prices and soaring bond yields threaten bankruptcies across the beleaguered shale sector”. Finally, two pieces in Reuters report that the oil price crash “triggered the first field shutdowns in the North Sea”, and put “Canada’s crude sector on life support”.

The Independent Read Article
COP26 may be delayed due to Covid-19, Raab warns

UK foreign secretary Dominic Raab has warned that the COP26 climate summit planned for Glasgow in November may have to be delayed due to the coronavirus outbreak, the Press Association reports. Speaking to parliament’s Foreign Affairs Committee, Raab said the government had not given up hope that it could still host the COP26 summit, but warned that it would be a “challenge”, the PA says. “I can’t give you a cast-iron guarantee, things are moving so quickly,” Raab said. “Obviously it is not until November. We will keep it under close review. We would of course want it to go ahead but I can’t give you any guarantee on that.” Raab noted that the government would “rather avoid delay if we possibly can and it “will keep striving to make [the summit] a reality”, adding that “it is still possible of today that it might be doable. As long as that is the case I think we would want to try to give it a go.” The Evening Standard also has the story.

Press Association via the Belfast Telegraph Read Article
Democrats want to include climate action in coronavirus aid

Democrats in both the House of Representatives and Senate “are pushing to add climate change provisions to the third aid package for people and industries affected by the novel coronavirus pandemic”, reports E&E News. It continues: “The Democratic proposals touch on two main areas. Several Senate Democrats want airlines to reduce their carbon emissions in exchange for federal aid that could hit $50bn or more. House Democrats, meanwhile, are looking at clean-tech tax credits. Those include incentives for electric vehicles, battery storage, offshore wind and solar energy that were left out of a December tax extenders package.” However, “it’s unclear whether they have the political leverage to make those ideas stick – at least not yet”, notes the outlet. Reuters reports that a Republican proposal “introduced in the US Senate on Thursday would grant up to $58bn in secured loans to help passenger and cargo airlines hit by the coronavirus crisis, but bar cash grants and could result in the government getting equity stakes”. Airlines are not the only industry hoping for financial help from the US government. In a letter to president Donald Trump and the leaders of Congress, seen by Reuters, the coal industry’s main US lobby group has asked for financial assistance to help mining companies weather the economic fallout of the coronavirus. Wind and solar energy companies wrote their own letter to Congress, reports Reuters. They called for “prompt repair and extension of critically important tax incentives to help the clean energy sector surmount the impacts of the Covid-19 pandemic”, says AxiosInsideClimate News warns that the virus outbreak “may mean [a] halt to global solar gains”.

E&E News via Scientific American Read Article
Locust crisis poses a danger to millions, forecasters warn

Forecasters are warning that the locust crisis that has now reached 10 countries could carry on to endanger millions more people, the Guardian reports. Climate change helped create the “unprecedented conditions” that allowed the locusts to “breed in the usually barren desert of the Arabian gulf”, the paper says, with the resulting swarms endangering the food security of 25 million people. “The current crisis is considered the worst in decades,” the paper adds, and “there are fears it could last longer than previous locust outbreaks”. Dealing with the swarms has been hampered by the civil war in Yemen. The head of the locust programme in Yemen’s capital city of Sana’a tells the Guardian: “Before the war we had a good ability to reach anywhere in Yemen…In current times we’re just able to cover the Red Sea coastal areas – but not all – and some areas in the interior.” Carbon Brief recently published an in-depth Q&A on the links between climate change and the ongoing locust swarms.

The Guardian Read Article
Coronavirus halts street protests, but climate activists have a plan

The coronavirus outbreak has prompted climate activists to “abandon public demonstrations”, reports the New York Times, and “shift to online protests”. Organisers of the “Fridays for Future” protests are “advising people to stay off the streets and post photos and messages on social media in a wave of digital strikes”, the paper notes. Last week, Swedish activist Greta Thunberg encouraged supporters to participate in a “digital strike” instead of gathering in public, reports Politico, and “coalition members have been on wall-to-wall calls this week to figure how to keep up public pressure on governments to fight climate change”. And in the US, “Sierra Club, Greenpeace, Sunrise Movement and other green groups cancelled three days of nationwide protests in April coinciding with the 50th anniversary of Earth Day”, Politico adds. Alternatives “could include digital town halls with appearances from celebrities and politicians being planned to replace the sit-ins at banks, marches and concerts planned for Earth Day”, the outlet says.

The New York Times Read Article

Comment.

The Covid-19 crisis is a chance to do capitalism differently

Writing in the Guardian, Prof Mariana Mazzucato – professor of economics at University College London – says that government intervention to stimulate the economy around the world “requires a very different framing from the one that governments have chosen”. She continues: “Since the 1980s, governments have been told to take a back seat and let business steer and create wealth, intervening only for the purpose of fixing problems when they arise. The result is that governments are not always properly prepared and equipped to deal with crises such as Covid-19 or the climate emergency. By assuming that governments have to wait until the occurrence of a huge systemic shock before they resolve to take action, insufficient preparations are made along the way.” The current crisis offers “an opportunity…to understand how to do capitalism differently”, Mazzucato writes: “This requires a rethink of what governments are for: rather than simply fixing market failures when they arise, they should move towards actively shaping and creating markets that deliver sustainable and inclusive growth. They should also ensure that partnerships with business involving government funds are driven by public interest, not profit.” Finally, says Mazzucato: “As companies, from airlines to retail, come asking for bailouts and other types of assistance, it is important to resist simply handing out money. Conditions can be attached to make sure that bailouts are structured in ways that transform the sectors they’re saving so that they become part of a new economy – one that is focused on the green new deal strategy of lowering carbon emissions while also investing in workers, and making sure they can adapt to new technologies.” Elsewhere, Prof Simone Abram – co-director of the Durham Energy Institute at Durham University – has a piece in the Conversation where she discusses the potential ways to avoid a rebound in CO2 emissions after the coronavirus crisis passes. She writes: “It’s phenomenally important for people to return to social life after ‘social distancing’ ends, but we can do that based on new priorities – socialising and enjoying arts and music locally or through livestreams, and letting go of 20th century visions of the future based on unlimited growth, unlimited travel, and unlimited consumption.”

Mariana Mazzucato, The Guardian Read Article

Science.

Permafrost degradation in the Western Russian Arctic

This paper presents long-term climate and permafrost monitoring data at seven sites representative of diverse climatic and environmental conditions in the western Russian Arctic. The region of interest is experiencing some of the highest rates of permafrost degradation globally. Since 1970, mean annual air temperatures and precipitation have increased at rates from 0.5 to 0.7C per decade and 1-3mm per year, respectively. In response to changing climate, all seven sites examined show evidence of rapid permafrost degradation. Mean annual ground temperatures increases from 0.3-0.6 C per decade at 10–12 metres depth were observed in continuous permafrost zone. The permafrost table at all sites has lowered, up to 8 metres in the discontinuous permafrost zone.

Environmental Research Letters Read Article
The frozen continent

The journal Science has a special issue on Antarctica providing “a window into the physical aspects and fauna of this remarkable part of the world”. The issue includes three review papers, which describe the formation of the ice sheet and the geological processes controlling its existence; the ice sheet’s evolution, as affected by its interaction with the surrounding Southern Ocean; and how the continent’s ice is expected to change as the world warms.

Science Read Article

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