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TODAY'S CLIMATE AND ENERGY HEADLINES

Briefing date 30.07.2020
Total takes $8bn writedown on carbon-heavy oil assets

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News.

Total takes $8bn writedown on carbon-heavy oil assets
Bloomberg Read Article

French oil giant Total has announced an $8bn writedown, which, Bloomberg reports, comes “after the push to curb carbon emissions and the coronavirus pandemic challenged assumptions about the viability of some oil and gas assets and the timing of peak demand”. Some $7bn of the total applies to assets in Canadian oil sands, Bloomberg explains, noting these are more expensive and higher carbon than conventional production. It adds that BP and Shell have signalled they may write down a combined $40bn as the pandemic and climate action “is shaking the industry’s foundations”. According to Reuters, the Total writedown is due to a “sharp” lowering of the firm’s short-term price outlook and a view that oil demand will have peaked by 2030, as a result of what the firm calls “technological developments, particularly in the transportation sector”. The Wall Street Journal also covers the news from Total, which it says relates to Australian liquified natural gas (LNG) assets in addition to the Canadian oil sands.

In related breaking news today, Shell has reported its earnings for the second quarter of 2020, down 82% year-on-year according to CNBC. According to Reuters, the firm announced a $17bn asset writedown, which was “at the lower end of the range the company indicated in July”. The Financial Times and Bloomberg also report on Shell’s earnings.

In other oil industry news, Reuters reports that Austrian oil firm OMV has set itself a target of net-zero operational emissions by 2050. Reuters also reports that Tullow Oil has also announced a major $1.7bn “impairment” after it “follow[ed] larger rivals in lowering its oil price forecasts”. Separately, Japanese firm Tokyo Gas is to spend $657m buying a US shale gas operator, Castleton Resources, as well as a US solar power development, Reuters reports. Meanwhile, another Reuters article reports that oil producers in the US state of North Dakota “face new pressures to delay bringing back more of their recently curbed output” after a recent court ruling put a pipeline out of the region in doubt. The state is to spend $66m to plug “wells abandoned by oil and gas companies”, says a further Reuters piece.

Finally, Reuters reports on President Trump’s recent reelection campaign visit to Texas, noting: “Trump bragged that he had approved the Keystone XL and Dakota Access oil pipelines. He did not mention that both of the conduits are tied up in court battles…The president is trying to show on the campaign trail that [Democratic rival Joe] Biden would adopt green policies promoted by liberal Democratic lawmakers that would roll back fossil fuel production at the cost of US economic growth.” Axios also reports the campaign stop in Texas, saying Trump’s “energy dominance” policy is “teeter[ing]”.

Australia: New gas-fired power not needed as renewable energy expands, grid operator says
The Guardian Read Article

A number of publications cover new analysis from the Australian Energy Market Operator (Aemo), which looks at the optimal path for the country’s electricity system to 2040. According to the Guardian, the report finds that “[n]ew gas-fired power is not essential for a grid increasingly based on renewable energy, and gas prices will need to stay low if it is to compete with alternatives”. Aemo points instead to other potential sources of “dispatchable” power, the Guardian says, including battery storage, pumped hydro and “demand-side” participation based on payments to reduce demand when needed. Aemo also finds there is “no place for new coal-fired generation”, the Guardian adds. In contrast to Aemo, the Guardian notes, the Australian federal government and others “have said gas generation was a critical part of the future energy supply as renewable energy replaces coal”. The Sydney Morning Herald also covers the Aemo findings, reporting that they “rule out” new coal. It continues: “Investments in new generation capacity will almost entirely be renewable energy, particularly from solar.” Writing at Bloomberg, columnist David Fickling says “[m]ore subsidies for natural gas are not the post-Covid recovery plan that Australia requires”. He points to yesterday’s story from the Sydney Morning Herald, which reported: “A hand-picked coronavirus manufacturing taskforce is urging the federal government to underwrite a dramatic expansion of gas supply through tax incentives and financial support for new projects.” This would be “an extraordinarily bad idea”, Fickling argues. He concludes: “Investors are quite capable of finding the rare fossil fuel projects that are strong enough to make a return in a decarbonising world. The trouble is, it’s not seeing them in Australia. Rather than using taxpayer money to put its thumb on those scales, Australia would be better stepping back and letting the market decide.” Elsewhere, a BBC News report looks at how climate change is worsening coastal erosion in coastal communities in Australia. Finally, the Sydney Morning Herald reports that fire chiefs in Australia have said firefighting tactics will have to change to respond to climate change. And the South China Morning Post reports that Australia has become China’s top source of coking coal, used for steelmaking, as stimulus spending creates a “construction boom” in the country.

US appoints coordinator for Arctic policy as mineral race heats up
Reuters Read Article

The US is preparing to “compete with Russia and China on resource extraction in a region quickly melting due to climate change” by appointing an Arctic policy coordinator, Reuters reports. The newswire adds: “US interest in the Arctic has grown as climate change raises temperatures and causes sea ice to melt, opening the region to more shipping and exposing critical minerals, uranium and fossil fuels.” In other US news, the Hill reports that green groups have launched a legal challenge against the Trump administration’s efforts to roll back the National Environmental Policy Act, which the website describes as a “bedrock environmental law”. The Hill also reports that the administration is working to expand the scope of its upcoming regulation “that will limit what types of scientific research the [Environmental Protection A]gency can consider”. Separately, the Hill covers a new report finding that hundreds of hazardous waste sites in the US could be at risk of flooding due to sea level rise. And Axios reports that US coal production in 2019 fell to the lowest level since 1978. Meanwhile, a Guardian sponsored feature looks at “Joe Biden’s climate bet” and how the Democratic presidential challenger is “picking a path through the perilous politics of the economy and the climate crisis”.

Comment.

It's time for America to reassert climate leadership. It starts with voting
Prof Michael Mann, The Guardian Read Article

Writing in the Guardian, climate scientist Prof Michael Mann argues that while their efforts are important, individuals alone “cannot solve” climate change. Looking towards the US election in November, he adds: “We need collective action and systemic change. We need policies to incentive the decarbonisation of our society. That requires politicians willing to support climate-friendly policies. And the only way we get them is by voting.” Mann continues: “In the space of a few years [President] Trump has erased America’s leadership and moral standing. His threat to withdraw from the Paris Agreement (which he can’t actually make good on if he loses the upcoming election), has provided an excuse for other major emitters such as China to ease off in their own decarbonisation efforts. The result has been a surge of fossil fuel pollution that will remain in the global atmosphere for thousands of years, impacting everyone on Earth.”

Wildfires, record warmth and rapidly melting ice: Arctic climate goes further off the rails this summer
Andrew Freedman, The Washington Post Read Article

An article by the Washington Post’s Andrew Freedman looks at events in the Arctic so far this year, “marked by raging fires in the far north, with smoke extending more than 1,000 miles downwind, along with alarming new temperature records and ice melt”. He continues: “While rapid Arctic climate change is not exactly news – the region is warming at about three times the rate of the rest of the world – the manifestations of this phenomenon are increasing in severity, scope and societal consequences.” Separately, an article in the Sun reports that sea ice in the Arctic is “retreating further and melting faster every decade and a new study has revealed how it could soon disappear”.

Boris Johnson must focus on the economy and saving jobs – not turning Britain into a nation of cyclists
Editorial, The Sun Read Article

The Sun uses a second editorial in two days to attack the UK government’s plans to support cycling. It says: “Boris Johnson’s fantasy of transforming Britain into a utopia of clean streets thronged by lithe cycling obsessives is a mad distraction from our actual problems. We can see his reasoning. It would get us fitter, cut congestion and clean up the air. That’s a win-triple. It might even work in, say, London. But car use is a must everywhere else…And how will a war on our motors help a UK car industry now on its knees?” Elsewhere in the Sun, the paper’s executive editor Dan Wootton writes in a comment that moves to “ban HGVs and delivery vans from city centres to create even more road space for cycles, well that’s simply a step too far from the nanny state”. He adds: “Yes, we have to gradually and sensibly reduce our carbon emissions, as we are already doing, faster than virtually any other major western democracy. But further trying to marginalise Britain’s great taxi drivers and white van men and women doesn’t feel like the best way to go about it.”

Science.

Twenty-first century-end climate scenario of Jammu and Kashmir Himalaya, India, using ensemble climate models
Climatic Change Read Article

Temperatures in the Jammu and Kashmir Himalaya regions of India are expected to rise by 3.98C and 6.93C by the end of the century, depending on the rate of future climate change, a new study finds. Warming will also influence the spread of the region’s various “climate zones”, the authors say: “The cold desert climate zone in the Ladakh region would shrink by around 22% and correspondingly the subtropical and temperate zones would expand due to the projected climate change.”

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