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Briefing date 25.02.2022
European gas prices soar and oil tops $105 after Russia attacks Ukraine

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European gas prices soar and oil tops $105 after Russia attacks Ukraine
Financial Times Read Article

European “natural” gas prices jumped by almost 70% and crude oil exceeded $105 a barrel for the first time since 2014 after Russia’s invasion of Ukraine triggered fresh worries about global energy supplies, reports the Financial Times. Brent crude prices rose as much as 9% to $105.79 a barrel and Europe’s wholesale gas price surged to €141 per megawatt hour, the paper explains, adding: “The European gas price has risen from just €16 a year ago.” Reuters notes that “Russia supplies 10% of global oil, a third of Europe’s gas and, together with Ukraine accounts for 29% of global wheat exports and 80% of sunoil and 19% of maize exports.” It adds that “Russia is also a major aluminium, nickel, platinum, palladium, uranium, titanium, coal, timber and fertilisers producer”. (The Financial Times notes that “titanium is needed by aircraft and aero-engine manufacturers such as Boeing, Airbus and Rolls-Royce, while palladium is used in catalytic converters, electrodes and electronics”.) Russia’s state gas pipeline monopoly Gazprom said supplies through Ukraine were as normal and Ukraine said its energy infrastructure has not been damaged, the newswire says, adding that “Austria also said it was receiving normal gas deliveries” and “there have been no interruptions to Russian oil flows including via the Black Sea”. Reuters also reports that Ukrainian energy firm Naftogas said yesterday that the country’s energy infrastructure has not been the subject of systemic shelling and the “situation is under control”.

In a letter seen by Reuters, Greece has urged France – which holds the rotating European Union presidency – to call an emergency meeting of EU energy ministers to discuss a collective response to surging energy prices. The letter is co-signed by the Bulgarian and Romanian energy ministers. Spanish and Portuguese officials also called for Europe to cooperate more closely on managing energy supplies, says Reuters. While another Reuters article reports that Russia’s invasion of Ukraine could end a joint Finnish-Russian nuclear plant project on the northwest coast of Finland. Bloomberg reports that Europe’s mild winter is set to turn colder in the coming days, reports Bloomberg, “potentially increasing heating demand at a time when gas prices are spiking on the back of the Ukraine crisis”. Reuters has an explainer on “why Russia drives European gas prices”, a “factbox” on “how dependent is Germany on Russian gas?”, and another factbox on why “Ukraine’s energy options limited in event of Russian gas disruption”. Germany’s economy minister Robert Habeck said his country can guarantee security of supply even without Russian gas or oil, reports another Reuters article. Habeck told broadcaster ZDF: “We will have to buy more gas, but also coal from other countries.”

Reuters energy columnist Clyde Russell writes that “Russia’s invasion of Ukraine will disrupt the global movement of energy commodities, even if Western powers don’t impose sanctions on exports from Russia.” Russell notes that “so far none of the retaliatory measures against Moscow have been targeted at exports of crude oil, coal or natural gas, the latter either by pipeline or by ships as liquefied natural gas (LNG). That’s perhaps tacit acknowledgment of Russia’s importance to the global supply of these commodities”. Bloomberg reports that “Russian energy exports escaped sanctions from the US”. In a speech from the White House, US president Joe Biden said: “In our sanctions package, we specifically designed energy payments to continue. We are closely monitoring energy supplies for any disruption…We have been coordinating with major oil-producing and consuming countries toward our common interest to secure global energy supplies.” Politico says that “notably, the president didn’t announce crushing sanctions on Russia’s energy sector, including conglomerates like Rosneft”. A White House statement said that Biden met with other G7 leaders yesterday and agreed to intensify efforts to secure stability in global energy markets, Reuters reports.

Biden also raised the prospect of the US releasing more oil from its strategic reserves in coordination with other nations, in order to quell rising energy prices, reports the Hill. “We are actively working with countries around the world to elevate collective release from the strategic petroleum reserves of major energy consuming companies, and the US will release additional barrels of oil as conditions warrant,” he said, adding: “I will do everything in my power to limit the pain that people are feeling at the gas pump.“ Reuters also has the story, while a second article notes that Japan and Australia said yesterday that they were prepared to tap their oil reserves, together with other member nations of the International Energy Agency (IEA), if needed. A Reuters “exclusive” reports that “the global oil market was thrown into chaos [yesterday]…with top buyers of Russian oil struggling to secure guarantees at western banks or find ships to take crude from one of the world’s largest producers”.

Ukraine crisis: Warning UK energy bills could top £3,000 a year
BBC News Read Article

A new report warns that household energy bills could top £3,000 a year in England, Wales and Scotland from October, in part due to the Ukraine crisis, BBC News reports. It continues: “The bank Investec said the conflict, along with surging global demand, had made gas and electricity prices soar. It expects the energy price cap, which limits what suppliers can charge, to hit £3,238 a year for the average home when it’s next adjusted in October. The cap is already due to rise by £693 to £1,971 in April.” Nathan Piper, oil and gas analyst at Investec, tells the outlet that “disruption to the flow of gas [from Russia to Europe] would result in extremely high prices with no real alternatives…we were tight in Europe with domestic production declining and the invasion of Ukraine has raised stakes higher.” The Guardian notes that “although UK households are not heavily reliant on Russian gas, concerns that supplies from the country will be disrupted have pushed up prices on the wholesale market”. A second Guardian article says that “less than 5% of our gas comes from Russian imports”. The Times reports that government sources “believe that it is highly probable that the average petrol price will rise above 160p, while diesel could surge to 170p”. In parliament yesterday, prime minister Boris Johnson acknowledged that the invasion would have “global economic consequences”, the paper adds. “The government will do everything possible to safeguard our own people from the repercussions for the cost of living,” he said. The Daily Telegraph notes that “wheat and corn prices have both soared as global agriculture markets prepare for a supply shock that will fuel a worldwide crisis in food prices”. The Daily MirrorDaily MailSun and Bloomberg all carry similar reporting, while the Press Association reports on official statistics for 2020, the most recent year for which figures are available, which show there were an estimated 3.16m English homes in fuel poverty, equivalent to 13.2% of households.

US: Supreme court case could restrict Biden’s effort to tackle climate crisis
The Guardian Read Article

US president Joe Biden’s plans to tackle climate change face a “potentially devastating” blow on Monday, reports the Guardian, “in a supreme court case that experts warn could severely restrict any future US government attempt to limit planet-heating emissions”. The court has agreed to hear a case brought by West Virginia, supported by 18 other Republican-led states and “various fossil fuel firms and rightwing groups”, that “takes aim at the Environmental Protection Agency’s (EPA) ability to issue strict regulations to curb pollution from fossil fuel-fired power stations”, the paper explains. The decision to “even consider an argument about a hypothetical regulation that hasn’t been proposed by the EPA has surprised onlookers”, the paper says, and is an “ominous sign” for Biden’s administration. The lawsuit centres around the Obama-era Clean Power Plan, which was suspended in 2016 by the supreme court before it took effect, Vox explains: “As it turns out, the plan’s original goals were too unambitious to matter. Market forces and other regulations achieved those goals, and they did so much faster than anticipated. Nevertheless, a small army of litigants are now in the supreme court asking the justices to strike down the Clean Power Plan — which, again, is not in effect right now, which never really took effect, and which President Joe Biden’s administration does not plan to reinstate.” While “it’s not at all clear that the Supreme Court has any business hearing this case” as “federal courts do not have jurisdiction to hear lawsuits where there is no live dispute between the two parties”, the outlet says, “the stakes in this case are still quite high”. An eventual ruling restricting EPA authority could “hobble the administration’s ability to curb the power sector’s emissions – representing about a quarter of US greenhouse gases”, says a Reuters analysis piece. John Kerry, the US special envoy on climate change, tells the newswire: “Could it be damaging? If it’s an adverse decision, of course it could be.” The Independent also has the story.

Meanwhile, the Financial Times reports that America’s biggest offshore wind lease sale has attracted record bids of more than $3bn as renewable energy developers compete to secure a prime location to install turbines. The US government auction of 488,000 acres in the Atlantic Ocean near New York and New Jersey had drawn in high bids totalling $3.35bn as of late Thursday, the paper explains: “The sum dwarfed any previous wind sales and was on par with some of the biggest leases for offshore oil and gas production.” The auction began on Wednesday and will continue this morning, notes Reuters.

Finally, the Washington Post reports that the White House Office of Science and Technology Policy yesterday held “a first-of-its-kind roundtable with some of the nation’s leading scientists…to discuss the urgent need to combat the climate crisis and to counter arguments for delaying climate action”.

Chinese buyers hesitate to procure Russian coal amid Ukraine conflict: sources
S&P Global Platts Read Article

Chinese banks and “higher” authorities have advised “some” buyers not to procure Russian coal “due to possible sanctions amid Russia’s invasion of Ukraine”, S&P Global Platts reports, citing “sources”. A South Korea-based trader tells the publications: “It seems like some Chinese state-owned enterprises are staying away from Russian coal for the moment.” A China-based trader says that banks “were heard warning traders” against the move, the article adds. Reuters reports that China’s foreign ministry said yesterday that all countries should work together to jointly protect global energy security. Ministry spokesperson Hua Chunying was responding to a question at a regular daily briefing on whether China would release energy reserves in response to Russia’s attack in Ukraine, which has sent oil prices surging.

Meanwhile, the South China Morning Post reports that China’s top economic planning agency has set a “reasonable” price range for thermal coal. The newspaper says that the price range is set for medium- and long-term trading and aims to “stabilise supply and prevent excess price volatility”. The benchmark for 5,500 kcal thermal coal at Qinhuangdao Port – China’s main coal hub – has been set at 570-770 yuan (US$86.98-US$121.77), the report says, citing an official notice. Separately, an industry “five-year plan” shows that China’s government plans to cut the cost of energy storage systems by 2025, another South China Morning Post article says. The piece states that the cost reduction intends to “help local industries leapfrog the world as the vanguard of novel energy storage technology five years later”.

Elsewhere, a factcheck piece in the Independent asks if the solar panels in China are “made using slave labour”. Moreover, China’s tech giant Tencent “plans to achieve carbon neutrality in its operations and supply chain by the end of the decade”, Reuters reports, citing the firm. Finally, Bloomberg reports that a researcher for China’s top economic planning agency expects the country’s wind and solar additions to “easily outpace” Chinese president Xi Jinping’s clean energy goals. The report writes that – according to the researcher – China “will likely add about 1,200 gigawatts of wind and solar over the decade from 2021 to 2030”.

US seeks to remove ‘losses and damages’ from scientific report on climate impacts
Climate Home News Read Article

The US is pushing back against the use of the term “losses and damages” in the forthcoming Intergovernmental Panel on Climate Change (IPCC) report on climate impacts, sources tell Climate Home News. Over the past two weeks, government delegates have been approving the report’s “summary for policymakers” line by line ahead of the report’s release on Monday. Climate Home News notes that “discussions on ‘loss and damage’ have been extremely contentious at the UN climate talks”, and scientists have instead referred to “losses and damages” in the report in order to disentangle scientific findings from the political discourse. However, during the approval process, the US has pushed for the term “losses and damages” to be replaced with the word “impacts”, the outlet explains. One source said the US had been “playing hard ball” on the issue. “The US is pushing very hard to obscure the underlying science and keep it out of the summary for policymakers,” which it is “trying to shape to its interest”.

Activists raise inclusivity concerns for COP27 as Egypt hikes hotel prices
Climate Home News Read Article

Campaigners have warned that the participation of activists and low-income country delegates risks being restricted again at this year’s UN climate talks amid “hiked-up hotel prices and the absence of engagement with green groups”, reports Climate Home News. The COP27 summit is due to be held in Sharm el-Sheikh in Egypt this November, the outlet explains: “A letter from the Egyptian Hotel Association to hotels in Sharm el-Sheikh, seen by Climate Home News, sets a price of at least $500 per night for a room in a five-star hotel – nearly five times the usual cost. Rooms in four-star hotels won’t go for less than $350 per night and $120 per night is the floor rate in two-star institutions.” The letter states that 25% of hotel room revenue after tax will be “allocated to the COP27 conference”, the outlet says, with one hotel manager telling a customer that the government would take about 50% of the price of the room, including tax. Tasneem Essop, executive director of Climate Action Network International, tells Climate Home News that COP27 should not see a repeat of the exclusion civil society participants experienced at COP26 because of logistical challenges. She said: “We do not want a situation where participants, particularly from civil society and those from developing countries, are excluded from being at a UN climate summit simply because of exorbitant costs.”

British Gas doubles profits to £948m
The Times Read Article

Centrica, which owns British Gas – the UK’s largest energy supplier – has reported that its profits more than doubled last year, driven by higher prices for its North Sea oil and gas business, reports the Times. The company’s adjusted operating profits rose by 112% to £948m in 2021, the paper says, “caused by a more than sevenfold increase in profits from its oil and gas business Spirit Energy, which operates in the UK and Norwegian North Sea”. Chief executive Chris O’Shea defended Centrica’s profits, saying that “the vast majority of increased profits will go to the government” in the form of tax and that on a post-tax basis its oil and gas profits had less than doubled, the Times reports. “Our tax bill is up almost half a billion pounds: there has been a huge tax windfall for governments from this, and that’s quite right,” he said. The company also said it was helped by unusually warm weather in the last three months of the year, reports the Financial Times, “which allowed it to sell gas and electricity it had bought in advance and cash in on high energy costs”. Sky News reports that O’Shea waived his £1.1m bonus for last year, saying the award “didn’t feel right” as households grapple unprecedented increases to their energy bills. O’Shea also said that British Gas has guaranteed energy supplies to its 8m customers, despite Russia’s invasion of Ukraine, but declined to comment on what soaring prices might mean for household bills, says the Guardian. The Evening Standard also has the story.

Nuclear waste: Cost of new UK underground storage facility jumps to £53bn
New Scientist Read Article

The cost of a proposed underground storage facility to safely house the UK’s nuclear waste has risen to as much as £53bn – more than double the previous estimate made just four years ago, reports the New Scientist. The UK “currently stores its 133,000 cubic metres of radioactive waste above ground, and the quantity is projected to swell to more than 4m cubic metres in future”, the outlet explains. In 2018, a proposed new underground storage facility was estimated to cost £12-20bn, but last Friday the government’s Nuclear Waste Services agency revised the figure up to £20-53bn, the article says. According to the agency’s John Corderoy, the increase is due to a wider scope of costs and incorporating large uncertainties in where the facility could be sited, including factors such as transport, flooding and geology. But the biggest change is that “we’re counting more things”, says Corderoy, as the site would need to store legacy radioactive material from a fleet of new nuclear plants, as well as uranium and plutonium that in the past were considered an asset and will be now be considered waste.


Could Russian sanctions hobble US clean energy push?
Jael Holzman, Politico Read Article

“Russia’s oil and gas industries have gotten a lot of attention in the ongoing conflict in Ukraine,” writes Politico and E&E News journalist Jael Holzman, “but some experts say Russia’s mining interests could also complicate the US response to the nation’s invasion of its neighbour”. Russia is a “leading producer of copper, nickel, platinum group metals and other minerals considered crucial for building a lower-carbon future”, says Holzman, which “could complicate broad sanctions as the country continues its assault on a US ally”. The transition away from fossil fuels “largely rel[ies] on siting new energy generation sources and producing consumer electric vehicles – activities that will require lots of metal that Russia produces”, Holzman writes: “At a time when metal supply is tight, some watching the chaos unfold in Europe are wondering whether the violence could result in retaliatory measures that wind up shifting the supply of metals away from western manufacturers.” The piece notes that “the White House declined to comment on whether Russian mining companies or executives of those companies would be targeted in future sanctions”. Energy Monitor contributing editor Mark Nicholls writes that Russia’s invasion means the “net-zero transition just got harder – and more urgent”.

In other reaction to the crisis in Ukraine, an editorial in the Sun argues for “ban[ning] all Russian gas exports”, adding: “To replace it, ramp up production in the North Sea and start fracking in the UK.“ Jeremy Warner, assistant editor of the Daily Telegraph, writes: ”[F]orgive my scepticism when the West promises to put up a meaningful fight against Putin’s power play. Even ignoring the threat of nuclear annihilation, the price of defiance will be high. It is not clear that mollycoddled Western voters have the stomach for it. By all means, Europe must scramble to wean itself off dependence on Russian gas, but exactly the same thing was said in 2014 after Putin annexed Crimea. Instead we got Nord Stream 2 and the closure of Germany’s remaining nuclear power stations. Small wonder Putin thinks he can get away with it.“ Ambrose Evans-Pritchard – international business editor of the Daily Telegraph – writes: “The harsh truth is that Europe would spiral into crisis within weeks if flows of Russian gas were cut off – by either side. The short-term loss of revenue for the Kremlin would be a small fraction of Russian gold, euro, and dollar reserves. There is no symmetry in this. Whatever the rhetoric, energy business as usual will proceed.” In contrast, Bloomberg‘s David Fickling says that “Russia needs European cash more than Europe needs Russian gas”. He notes: “While soaring prices of European gas and oil breaking through $100 a barrel may suggest that Moscow holds all the cards, its edge may prove fleeting. That’s because, for all that Europe needs Russian petroleum, Russia is far more dependent on European petroleum customers.” Finally, Martin Vander Weyer – business editor of the Spectator – says that “if Europe temporarily refuses to buy energy from Russia, Germany in particular will have to pray the conflict is very short or scramble for alternative supplies, because as it phases out nuclear and coal, it depends all the more on Russian gas – which is why it’s the wobbliest of western allies”. And the Financial Times Lex column warns that “Putin’s invasion threatens Europe’s economies”.


Climate change-related risks and adaptation potential in Central and South America during the 21st century
Environmental Research Letters Read Article

Central and South America may face “severe levels” of many types of climate-related risks by the end of the century, including water scarcity, vector-borne disease epidemics and “systemic failure due to cascading impacts of hazards and epidemics”, according to a new review paper. Researchers synthesise more than 200 studies published in the last decade on climate change risks and adaptation in Central and South America. They find that the risks associated with the changing climate are not evenly distributed across the region, with already-marginalised groups such as Indigenous people, disabled people and women will bear the brunt of the impact. They also note that the region has “low adaptive capacity” and call for “immediate strengthening of policies” to address the forthcoming risk.

Avian seed dispersal may be insufficient for plants to track future temperature change on tropical mountains
Global Ecology and Biogeography Read Article

A new study finds that trees found in tropical mountain biomes that rely on birds to disperse their seeds may be more vulnerable to climate change than those with other methods of seed dispersal. Researchers model the interactions between birds and plants in a national preserve in southeast Peru, then compare the dispersal patterns to projections of how temperatures will change under several warming scenarios. They find that even under strong mitigation scenarios, avian seed dispersal “appears to be insufficient” for most of the studied plants to be able to migrate upslope to keep pace with the rate of temperature rise.

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