There is widespread coverage – featuring on many frontpages – of the latest profits posted by major UK energy companies Shell and Centrica. Shell “made record profits of nearly £10bn between April and June”, says the Guardian, as it “benefited from the surge in energy prices prompted by Russia’s invasion of Ukraine”. The profits beat its previous high – set between January and March – by 26%, the paper notes and were “more than double the same period in 2021, and higher than expected by analysts”. Centrica – which owns British Gas – “reported bumper operating profits of £1.3bn during the first half of 2022s”, the paper reports. BBC News notes that the rise in profits – from £262m a year earlier – “came from the company’s nuclear and oil and gas business, rather than from the British Gas energy supply business which performed much worse”. The Times explains that profits at British Gas “actually fell by 43% to £98m in the first half of the year due to the price cap preventing it from recouping all its wholesale energy costs, the fall in usage in the warmer weather and the £27m it repaid in furlough cash”. Centrica also announced it would be reinstating its dividends of 1p per share after these were suspended in 2020, reports ITV News, Reuters and the Press Association. CityAM notes that “this equates to £59m”. The Times reports that Shell is to buy back $6bn of shares on the back of the bumper profits. Reuters notes that French oil major TotalEnergies is also set to buy back shares – amounting to $2bn – over the next quarter. The newswire also reports that Spanish energy group Repsol posted a doubling of its net profit over the first half of the year, and that Shell received a $165m dividend payment in April from the giant Russian Sakhalin-2 oil and gas joint venture in which it holds a 27.5% stake.

The profit “bonanza” has drawn criticism as “soaring energy costs threaten to leave many households unable to pay their bills”, reports Bloomberg. Labour MP Darren Jones, who chairs the committee that scrutinises the Department of Business, Energy and Industrial Strategy, tweeted that “when a company is using its own profits to buy its own shares back, at this scale, something has gone wrong in the way our markets work”, the newswire reports. Centrica’s chief executive Chris O’Shea acknowledged the UK was facing a “difficult winter”, reports the Evening Standard, but he defended the company, saying: “The source of our profits is not rising customer energy bills. I know it’s difficult to see the words ‘dividend’ or ‘profits’ when people are suffering…but we’re paying a windfall tax of well over £600m pounds… so a lot of this is going back into society.” With forecasts that the average annual UK household energy bill could soar towards £4,000 early next year, O’Shea “said he was asking the government to give customers greater support”, reports the Financial Times. In a speech in Birmingham yesterday ahead of the Commonwealth Games, outgoing prime minister Boris Johnson said that “my argument to you would be that sometimes you’ve got to go through periods of difficulty and you’ve got to remember that they are just inevitable”, reports the Press Association. On BBC Radio 4’s Today programme earlier that day, consumer champion Martin Lewis warned that “the problem is we have this zombie government at the moment that can’t make any big decisions”, the outlet reports. Shell CEO Ben van Beurden warned that only a “miracle” can stop household energy bills from soaring this winter, reports the Daily Telegraph. And in an interview with Bloomberg, van Beurden also noted that oil prices are more likely to rise than fall as “demand hasn’t fully recovered yet and supply is definitely tight”. Several newspaper editorials criticise the energy companies for profiteering.

In related news, Centrica’s Rough gas storage site off England’s east coast could reopen in time for winter, reports Bloomberg. It says the company “is still hammering out a deal with the government on details including subsidies for getting the retired storage site back in regular operation”, adding: “Capacity would be brought back gradually, providing further relief for surging gas prices next winter, too.” O’Shea told reporters that “physically it’s possible, but there’s a whole bunch of things that we need to go through and we are working on it right now”. O’Shea also said that had Rough – which previously provided about 70% of Britain’s gas storage capacity – been open last winter, it could have saved households about £100 on their annual energy bills, reports Reuters.

There is a wave of coverage of a “rapid attribution” analysis of the extreme heat last week that saw UK temperatures surpass 40C for the first time in recorded history. The Guardian, which puts the story on its frontpage, reports that human-caused climate change made the heatwave “10 times more likely”, adding that “the researchers say extreme temperatures in western Europe are rising faster than expected”. It continues: “While models estimate greenhouse gas emissions increased temperatures in this heatwave by 2C, historical weather records suggest the heatwave would have been 4C cooler in a world that had not been warmed by human activities. Climate experts are concerned this means the impacts of global heating will be even more drastic than previously thought.” BBC News says the findings indicate that the record temperatures would have been “almost impossible” without climate change. Dr Fredi Otto, co-lead of the World Weather Attribution group that conducted the study, tells the outlet: “Every little bit of warming really makes these types of events more likely and even hotter. Heatwaves are much more deadly than other extreme weather like floods and climate change is a game-changer for heatwaves.” The analysis is reported by the Independent, Daily Mirror, Reuters, MailOnline, New Scientist, Bloomberg, Washington Post and New York Times. See Carbon Brief‘s coverage for all the details.

Meanwhile, the New Scientist reports on a “first snap analysis” that suggests “about a thousand extra people” died during the recent heatwave. It continues: “Antonio Gasparrini at the London School of Hygiene & Tropical Medicine estimates that 948 people died in England and Wales because of the sweltering conditions between 17 and 19 July. More than half, 495 people, are estimated to have been aged 85 or older.” The findings have been submitted to a peer-reviewed journal, the outlet notes. The Independent also has the story. (Official statistics on excess deaths are due to be released next week.) Finally, BBC News reports that UK weather forecasters have “faced unprecedented levels of trolling during this month’s extreme heat in the UK”. And a separate BBC News news feature speaks to farms affected by the drought conditions.

There is continuing coverage of the “Inflation Reduction Act”, which was agreed by Democrats in the US Senate and announced on Wednesday. President Joe Biden described the deal as “the most signification legislation in history to tackle the climate crisis and improve our energy security right away”. The $739bn package aims to address “healthcare and the climate crisis, raising taxes on high earners and corporations and reducing federal debt”, the paper explains: “The deal, struck between the majority leader, Chuck Schumer, and longtime holdout Senator Joe Manchin of West Virginia, would invest $369bn over the decade in climate change-fighting strategies including investments in renewable energy production and tax rebates for consumers to buy new or used electric vehicles. It includes $60bn for a clean energy manufacturing tax credit and $30bn for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country’s dependence on fossil fuels. At Manchin’s insistence, $306bn is earmarked for debt reduction.” According to a summary released by Schumer’s office, the deal will “cut US emissions 40% by 2030”, the paper notes, and it has earned praise from both Al Gore and Barack Obama. Biden added: “With this legislation, we’re facing up to some of our biggest problems and we’re taking a giant step forward as a nation…This bill is far from perfect, it’s a compromise, but that’s often how progress is made: by compromises.”

The Washington Post notes that, while the deal “could represent the nation’s most consequential climate policy yet”, it “falls short of what the US needs to do to meet its global warming pledge by the end of the decade”. The New York Times says that “Senate Republicans are unanimously opposed to the legislation”. The Guardian, Politico, Atlantic, and the New York Times “Climate Forward” newsletter all look at the measures within the deal in detail, while Bloomberg explains how the deal “could make energy bills cheaper”. The outlet Progressive Farmer notes that the deal “will see an injection of programs and $20bn in funds for climate-smart agricultural practices to help lower emissions from agriculture”. And Bloomberg says the agreement “comes at a cost” as it includes “more oil and gas lease sales on public lands and waters”. The newswire also reports that “renewable stocks notched record gains” after the deal was announced. (See Comment below.)

The Guardian reports that, amid the current gas crisis, Hanover in north-west Germany has become the first large city to announce energy-saving measures, including turning off hot water in the showers and bathrooms of city-run buildings and leisure centres. It adds that municipal buildings in the Lower Saxony state capital “will only be heated from 1 October to 31 March, at no more than 20C room temperature, and ban mobile air-conditioning units and fan heaters”. However, “nurseries, schools, care homes and hospitals are to be exempt from the saving measures”. The paper quotes city’s mayor, Belit Onay of the Green party, calling the situation “unpredictable” and noting that “every kilowatt hour counts, and protecting critical infrastructure has to be a priority”. Other cities – such as Augsburg in Bavaria – have already introduced measures, such as turning off public fountains, reports BBC News.

Meanwhile, Deutsche Welle reports that households using gas for heating “can expect bills to rise by several hundred euros after a levy is introduced in October to help companies replace dwindling Russian gas supplies”, German economy minister Robert Habeck said yesterday. He added that additional annual costs of around €500 could be expected for a household of four. The article explains that the “netted price adjustment mechanism” would be valid until the end of September 2024, the sources said, adding that the levy size would be announced in August based on gas prices. Reuters also has the story.

Additionally, Die Zeit reports that seven mayors from the German island of Rügen have signed a letter to the state and federal government which suggests the use of the “controversial” Nord Stream 2 Baltic Sea gas pipeline. Sassnitz mayor Frank Kracht said that it’s not about reactivating Nord Stream 2 “on cramp”. Rather, it is about permanent energy security. However, Habeck “opposed the idea of putting the Nord Stream 2 Baltic Sea pipeline into operation”, reports Ntv. The vice-chancellor is quoted saying: “That would be raising the white flag in Germany and Europe. We shouldn’t do that under any circumstances.“ Moreover, Bild reports that Habeck accused the Kremlin of “lying in the dispute over a turbine for the Nord Stream 1 gas pipeline”, which has to undergo planned maintenance. The outlet explains that the turbine has been in Germany since Monday last week, but Russia refuses to bring the turbine into its own country. “You lie to your face”, said Habeck. Finally, the Guardian has an analysis piece looking at how, “if Putin is using gas prices to fight Europe, how can it fight back?”

The International Energy Agency (IEA) says it expects global coal demand to rise slightly this year to match a record high reached nearly a decade ago, reports Reuters. The newswire continues: “In a coal market update report, the IEA said global coal consumption is forecast to rise by 0.7% in 2022 to 8bn tonnes, assuming the Chinese economy recovers as expected in the second half of the year. That would match a record high set in 2013 and coal demand is likely to increase further next year to an all-time high.” In the European Union, the IEA predicts that coal consumption will rise by 7% this year as member states save scarce gas supplies “as Russian flows become increasingly uncertain”, Bloomberg reports. It adds: “The power sector will be the biggest contributor to this year’s increase in EU consumption, with the IEA estimating electricity demand for the fuel will jump 16% in 2022. Coal consumption in Europe climbed 14% last year as economies rebounded from Covid-19 lockdowns that cut power demand. The higher consumption comes as coal prices hit record highs, with a looming EU ban on Russian imports set to add to supply pressures.”

“Dangerously high temperatures” have returned to the north-western US, reports Bloomberg, “13 months after unprecedented heat shattered records there”. The outlet explains: “While the heat is not expected to reach last year’s highest peaks – Portland, Oregon, hit 116F (46.4C) in June 2021 – this heatwave may last five or six days, uncommon longevity for a cool part of the country. Portland may near 100F and Seattle will see highs in the 90s.” The National Weather Service has put alerts in effect through Friday or Saturday for most of Washington, northern Idaho and California, and much of Oregon, the outlet says, adding: “Lawmakers in the region have spent much of the past year establishing heat emergency plans so that dangerous heat never again takes people by surprise as it did in late June 2021.” Reuters notes that “the June 2021 heat wave killed more than 100 people in Oregon, in addition to 619 in the western Canadian province of British Columbia”.

Meanwhile, Reuters reports that flooding in eastern Kentucky has caused at least eight deaths. The Washington Post reports that northernmost city in US – Utqiagvik, formerly known as Barrow, in Alaska – had its wettest day on record on Tuesday. And the New York Times reports on how this “miserable summer” of extreme weather “has left many Americans with only one option: surrender”.

Ireland’s coalition government has reached a “bitterly contested deal” to cut carbon emissions from the country’s key agriculture sector by 25% by 2030, reports the Financial Times. The cut is significantly higher than the 22% farmers had hoped for, but below an initial target sought by Dublin of up to 30%, the paper says. Eamon Ryan, environment minister and Green party leader, called it “a significant step in the right direction”, while agriculture minister Charlie McConalogue said the cuts were “challenging”, but achievable. Tim Cullinan, president of the Irish Farmers’ Association, called the 25% cut a “massive, massive ask” that could cost farmers €2bn a year and said the government had outlined no budget to help them achieve it, the paper reports. It adds: “But environmentalists and opposition legislators say anything less than a 30% cut would not be enough to meet the goal of slashing Ireland’s overall greenhouse gas emissions by 51% by the end of the decade compared with 2018 levels. That goal already looks challenging: greenhouse gas emissions rose 4.7% in 2021, and agricultural emissions, which make up nearly 38% of that total, increased 3%, according to official data.” Reuters also has the story.

China’s leadership has given a “downbeat assessment” of economic growth, but “didn’t announce new stimulus policies” at a “key meeting” of the Politburo, the Communist Party’s “top decision-making body”, reports Bloomberg. The outlet says that the country should achieve “the best outcome” possible for economic growth this year while sticking to a strict zero-Covid policy, according to a statement after a meeting of the Politburo. Reuters also reports on the Politburo’s meeting, “dropping previous calls that it will strive to meet its 2022 growth target”. The state news agency Xinhua notes that the meeting stressed that the country should “improve the ability to guarantee the supply of energy resources” and “ramp up efforts to plan and build a “new energy” supply absorption and digestion system”.

Meanwhile, according to China’s ministry of ecology and environment, the national carbon market that was officially launched on 16 July 2021 has been running “smoothly in general” for one year. As of 15 July 15 2022, the cumulative volume of carbon emission allowances traded reached “194m tonnes” and the cumulative turnover reached 8.492bn yuan($1.26bn), reports the People’s Daily, a state-run newspaper.

Finally, a Global Times’ comment piece by one of its editors, Wang Jianmei, says that US Republican Senator Marco Rubio, “known for his radical anti-China views”, along with fellow Republicans, on Tuesday introduced a bill that is “seeking to sanction China’s purchases of oil and other energy supplies from Russia”, according to a Bloomberg report. The editor of the state-run newspaper says: “With global crude oil still in tight supply, if China’s purchase of Russian oil is hindered, one possible outcome is that the world’s largest crude importer will have to compete with other buyers for oil supplies from the Middle East or elsewhere. This will not only cause huge disruption to global energy supply and demand patterns, but will also drive up oil prices significantly, a disaster for the US economy with its inflation hitting four-decade high.”

A new UK political party committed to tackling climate change is planning to challenge the Conservative MPs in 110 marginal seats at the next election, reports the Guardian. The paper continues: “Launched as a centre-right, single-issue party, the Climate party aims to provide Conservative voters with a business-friendly, climate-serious alternative to the Tories, whose leadership candidates have been reticent over the party’s net-zero commitments as Britain buckled under 40C heat for the first time on record.” Party founder Ed Gemmell – who beat Conservative rivals to become a councillor in Buckinghamshire in May 2019 with a single “climate action now” policy – said “we’ve got one election left to save the planet”. Gemmell also said his party would also target the 19 Tory MPs who are members of the Net-Zero Scrutiny Group, a collection of Conservative backbenchers who opposed the government’s net zero policies. He said: “The Craig Mackinlays, the Steve Bakers – we’ll stand against them in every single place. Any Conservative that tries to join that group and destroy the future of my kids, and lose us this big opportunity, we will put a centre-right candidate against them.”

Meanwhile, Politico notes in its London Playbook email this morning that Onward/Public First polling published today suggests that “ditching the net-zero commitment could cost the Tories one in four of their voters”.

The energy and climate spending provisions in the new spending deal agreed by Democrats in the US Senate are not “perfect”, says an editorial in the Washington Post, but “compared with what Democrats previously believed they’d achieve – nothing – they are welcome”. The tax credits for clean energy at the legislation’s heart are a “respectable route to boosting US manufacturing of solar panels, wind turbines, batteries and more”, the paper says. It notes that “tax credits for the purchasing of electric vehicles are less efficient”, while support for fossil fuels “seems likelier to help [West Virginia senator Joe] Manchin’s coal-rich home state than a rapidly warming world”. Nonetheless, “the bill’s drafters estimate the legislation will result in a 40% decline in greenhouse gas emissions by 2030”, the paper says, adding: “That might be overconfident, but plenty of climate advocates say the proposal keeps the country in the fight against global warming. Democrats can help more by pursuing permitting reform in the coming months, as they’ve promised, to ease regulatory obstacles impeding important projects.”

Also in the Washington Post, columnist Eugene Robinson says the deal is “better late than never” and “represents the nation’s biggest investment ever in the future of our overheating planet”. He urges Congress to “pass it quickly”, before Manchin “changes his mind yet again”. Time senior correspondent Justin Worland writes that the deal “may have saved the climate fight”. In the New York Times “This Morning” newsletter, senior writer David Leonhardt says the deal is “especially significant because congressional Republicans have almost uniformly opposed policies to slow climate change (a contrast with conservatives in many other countries)”. He adds: “And it remains unclear whether Democrats will again control both Congress and the White House anytime soon. If Congress fails to pass a climate bill this summer, it may not do so for years – while the ravages of climate change worsen.”

Less keen is Washington Post columnist Henry Olsen, who writes that “Republicans are right to oppose the new tax hike and climate spending deal”, adding: “The deal appears to be yet another liberal bait-and-switch. It pledges to raise more revenue than it spends for climate and energy programs, but the scant details on the package do not inspire confidence.”

There is further reaction in a Wall Street Journal editorial and a comment piece by Prof Jason Furman, professor of practice at Harvard, in the same paper.

In an editorial, the Daily Telegraph warns that “Britain is too reliant on foreign energy”, noting that “the reality is that we are in this mess because of a shameful failure of politicians over decades to adopt a long-term energy strategy”. The paper says the government is “distracted by the leadership contest” and “has failed to level with the public about what is looming, or present serious ideas for dealing with it”. It adds: “The consequences are already clear, with households warned their energy bills could hit £500 for a single month by next year. This will be disastrous for the finances of families across the country, and whoever is the next prime minister will need to add to the measures that have already been put in place to try to ease the pain.” The paper says it is “striking” that talk of long-term policies for restoring self-reliance from leadership hopefuls Liz Truss and Rishi Sunak “has been minimal”. It adds: “The candidates should be offering plans for using our own natural resources in place of imports and for the expansion of home-grown nuclear power.”

An editorial in the Spectator makes a similar point, noting that “energy diversification is our best insurance”. It explains: “That means fully exploiting North Sea gas and oil as well as fracking. We cannot be reliant on intermittent solar and wind power until there are adequate ways to store renewable energy. While we await technology to cut carbon emissions, we need more reliable sources of fossil fuels – fuels that in some cases are sitting below our feet. We need to access these not just for the sake of energy security but, as Germany has demonstrated, for our political security. Reliance on oil- and gas-rich rotten regimes is no way to ensure the safety of your citizens.”

In a column for the Times, James Forsyth – political editor of the Spectator – looks at “five big arguments the Tories need to have”. One of these is energy, Forsyth says: “In the debates both Sunak and Truss have declared they are in favour of fracking where there is local consent. But there doesn’t appear to be anywhere where locals are in favour, in spite of the jobs and money it would bring. So, what to do? If fracking won’t be part of the UK energy mix, how would either candidate fill the gaps?” Forsyth warns that “rocket[ing” gas prices will not be resolved after this winter, adding: “No democracy will want to go back to relying on Russian gas. This will put more pressure on those energy sources, such as Norwegian gas, that Britain uses at present. Sunak has spoken about wanting Britain to be energy independent by 2045. Given the need for resilience, there is a strong case for this. But it requires much more discussion about the trade-offs involved. For example, should we build more nuclear capacity, even though it is traditionally more expensive? This should be a pressing conversation. Energy prices will be sky-high in the winter of 2023-24 too. We need to boost home-grown supplies, everything from solar panels on public buildings to floating wind farms.”

Finally in UK comment, Ambrose Evans-Pritchard – world economy editor of the Daily Telegraph – writes that “Britain will soon have a glut of cheap power, and world-leading batteries to store it”.

A new study finds that rewetting wetlands could allow them to take up enough CO2 to offset the methane and nitrous oxide they emit. Researchers use global data of greenhouse gas fluxes from wetlands, then project how these fluxes will change under different wetland degradation scenarios. They find that on the world’s current trajectory, wetland degradation could result in emissions equivalent to 408bn tonnes of CO2 between now and the end of the century. They conclude that “the resulting impact on climate from wetlands will depend on the balance between future degradation and restoration”.

Visits to Hong Kong’s accident and emergency departments (AED) increase significantly on days with strong or very strong heat stress, according to a new study. Researchers analyse data from more than 13m AED visits ranging from May 2000 to September 2016 and link hospital visits to a heat stress indicator that includes both ambient temperature and other meteorological data, such as relative humidity and wind speed. On “strong heat stress” days, the visit rate per 100,000 people increased by nearly 5 for both men and women aged 65 and older, with smaller increases found for people aged 19-64. The authors call for more widespread use of metrics that incorporate a range of meteorological data into weather warning systems.