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Good morning,
In a rare moment of unity, the leaders of the
UK’s three major parties last week agreed to work together on climate change.
They promised
a joint effort to limit temperature rises to 2°C with a legally binding
global deal, agree carbon budgets and end the use of coal without carbon
capture. This is significant, but with just 11 weeks until the general election
it’s important climate change isn’t now simply pushed off the agenda.
The UK is also pushing a relatively positive
agenda in relation to next week’s decision on fixing the broken EU Emissions
Trading System. The reform is intended to make fossil fuels more expensive by
removing surplus carbon allowances from the system and restoring a meaningful
price for carbon. Reuters’ sources suggest a compromise date of December 2018
for the change is likely; the UK, however, is pushing to bring that date
forward.
The pressure on the fossil fuel industry
continues to build from another direction, with the divestment movement
organising protests all around the world on Global Divestment Day last Saturday.
The Fossil Free campaign estimates that $50 billion have been divested since the
movement emerged, and it’s clearly starting to hit a nerve. In a speech to industry leaders Shell boss Ben van
Beurden attacked “naïve” anti-fossil fuel campaigners, but warned delegates that
they had a credibility issue on climate change, the issue which will most shape
their industry in the coming decades. Meanwhile Malcolm Webb, chief executive of
Oil and Gas UK, complained to Energy Secretary Ed Davey of conflicting
government messages on oil and gas investment.
The government’s new Infrastructure Act
mandates maximum economic recovery of petroleum (requiring more fossil fuel
assets), yet Davey recently called for tougher rules of disclosure on “risky”
fossil fuel assets. This basic conflict is obvious to the industry and its
investors, but not, apparently, to the government.
And it’s not only oil fields where the
government appears to be conflicted. Just a fortnight ago it committed to a ban
on fracking for shale gas in National Parks, sites of special scientific
interest and areas of outstanding natural beauty. Since then that commitment has
been watered down by a series of amendments, including one
that allows drilling underneath National Parks from outside their boundaries
in the interest of not “unduly constraining the industry”. All this despite a
consistent lack of public support for fracking (see our chart of the
week).
So while we began this week with a pledge of
unity, we end it with a broken promise. Let’s hope the party leaders’ agreement
lasts longer than a fortnight.
Best wishes,
Simone Osborn
Co-editor, Energy
Crunch
Three things you shouldn't miss this week
- Article: Party
leaders make joint climate commitment - - Three main parties pledge
to end coal burning for power generation in the UK - unless it uses new clean-up
technology.
- Article: Fracking
to be allowed beneath national parks despite ban pledge - Ministers
accused of watering down commitment to ban controversial shale gas exploration
in protected areas.
- Chart: Public consistently
backs solar over shale.
Source: DECC
Energy Transition
EU
politicians edge towards 2018 start date for carbon reform - EU politicians
are expected to agree on a compromise 2018 start date for reforms to the
Emissions Trading System (ETS) to try to bridge divisions over efforts to prop
up the world's biggest carbon market.
EU
on track for green energy goal but UK, Dutch lagging - In Austria, Finland,
Sweden and Latvia, renewable energy made up more than one third of energy
consumption in 2013, while at the other extreme, Britain, Luxembourg, Malta and
the Netherlands got less than 5 percent from green sources.
India’s
solar targets ‘ambitious but achievable’ – Michael Bloomberg, former New
York mayor, hails opportunities created by falling cost of solar in
India.
EU
energy consumption level falls to 20-year low - Energy consumption in the
European Union has fallen to levels last seen more than two decades ago,
statistics published on Monday showed.
Climate
Fossil
fuel lobby goes on the attack against divestment movement - The speed at
which the fossil fuel divestment campaign is growing seems to have rattled its
opponents in the coal and oil lobbies.
Shell
boss calls fossil fuel critics 'naive' but admits Big Oil has 'credibility
issue' - Ben van Beurden urges oil industry to be more assertive, arguing
that debate is about balancing moral obligation of energy access for all with
fighting climate change.
BP:
huge rise in energy demand at odds with climate change fight - Annual
outlook forecasts unsustainable rise in carbon emissions, fuelled by 40% rise in
energy demand that it says can only be met by fossil fuels.
U.S.
EPA chief hints at softening carbon rule interim timeline - The EPA said on
Tuesday that it may ease an interim deadline for states to meet tougher carbon
emission standards after regulators and electric utilities complained a lack of
time may destabilize electricity supplies.
Oil & Gas
Discoveries
of new oil and gas reserves drop to 20-year low - Discoveries of new oil and
gas reserves dropped to their lowest level in at least two decades last year,
pointing to tighter world supplies as energy demand increases in the
future.
IEA's
Birol says Middle East militancy poses "major challenge" for oil - "...if
those investments are not made today we will not see that badly needed
production growth around the 2020s," Birol said.
German
government approves fracking - The German government has tabled a draft law
permitting fracking in the country, with environmental associations criticising
the draft as fragmented and risky...
BP's
2035 outlook sees OPEC oil gaining ground as U.S. shale slows - OPEC will
regain ground and exceed its historic record production levels by 2030 as U.S.
shale oil growth flattens out in the coming years, energy company BP said on
Tuesday.
Nuclear
British
Plans for Nuclear Power Spark European Fight - Austria’s pushback against
British nuclear energy plans casts a shadow over the future of Hinkley Point --
and the common European energy market.
Cracks
in nuclear reactors prompt call for worldwide inspections - The discovery of
thousands of additional cracks in critical components of two Belgian nuclear
reactors prompted Greenpeace to call for immediate checks of nuclear power
plants worldwide.
UK
How
significant is the UK party leaders' joint climate pledge? - There are three
parts to the party leaders' pledge, published on Saturday after months of
behind-the-scenes negotiations brokered by NGOs, including Green Alliance,
Christian Aid and the Women's Institute.
Fossil
fuel industry protests over 'risky' assets warning from energy secretary
-Oil and gas industry expresses concern in a letter to Ed Davey about his
comments on fossil fuel assets becoming unburnable to stop dangerous climate
change.
UK
unveils plans for vast new offshore wind farm - Dogger Bank off UK East
Coast could host 400 turbines, powering up to 2 million homes, say
developers.
Should
the UK frack for gas? - The UK does need to re-think its energy
supplies.
Energy
investigation: 95pc of Big Six dual fuel customers 'pay too much' -
Competition and Markets Authority expected to say that millions of households
have paid between £158 and £234 a year too much for their energy by failing to
switch supplier.
Fossil
fuel industry must take stranded assets seriously, says Tim Yeo - Tory MP
counters position of Shell’s boss, Ben van Beurden, that those who say fossil
fuels should be left in the ground are misguided.
Related Reports and
Commentary
Leaders
Joint Climate Agreement – David Cameron, Nick Clegg, Ed Miliband
BP
Energy Outlook 2035 (2015 edition)
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