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Energy and climate policy was scarcely
mentioned during the UK election campaign. With a new government in place much
sooner than expected, what do the next five years hold?
The appointment of Amber Rudd as the new Energy
Secretary was welcomed
by environmentalists, with the Renewable Energy Association hailing her as
“a champion of renewables and low-carbon economy”. But then, as her predecessor
Ed Davey found, policy in this critical area is not exclusively controlled by
the Secretary of State.
On low-carbon policy the Conservative manifesto
is mixed: it pledges to support value for money renewables while simultaneously
promising to abolish financial support for new onshore wind farms – one of the
cheapest low carbon energy options. The new government is also a staunch
supporter of fracking – but those
hoping to replicate US expansion would be wise to notice the tide is turning
(see our chart of the week).
Whether the fall in US shale output is
temporary or terminal remains to be seen, but at least one prominent financier
is scathing
about the industry’s prospects. Shares in drilling companies plunged after
hedge fund manager David Einhorn, famous for predicting the collapse of Lehman
Brothers in 2008, likened the industry’s business model to “using $50 bills to
counterfeit $20s”. Others predict output will recover if the oil price continues
to rise – recently recovering to around $67 per barrel. But geologist David
Hughes points to longer
term output decline, since output per well is falling in key areas where the
best parts have been tapped first. Either way, as the International Energy
Agency noted,
the fall in production brings a multiyear winning streak to a close.
Betting on cheap fossil fuels in the long-term
is always risky. The New Climate Economy’s latest
report makes this point clearly: fluctuations in production and price hurt
investment, growth and jobs. Of course if you factor in climate change then
there’s no such thing as cheap fossil fuels full stop. In the UK, we can only
hope that our new Energy Secretary can build and defend sensible policies,
putting us on the track to a low-carbon economy.
Best wishes,
Griffin Carpenter
Co-editor, Energy
Crunch
Three things you shouldn't miss this week
- Article: What
will a Conservative majority mean for climate and energy? - Carbon
Brief’s essential post-election summary.
- Report: Decarbonizing
Development Three Steps to a Zero-Carbon Future - The aim of this
report is to take this lofty goal of zero emissions by 2100 and examine what it
means in terms of today’s policy making for development.
- Chart: Low oil prices are making their
mark on shale output in the US
Source: Bloomberg
Energy Transition
Lessons
Learned Along Europe’s Road to Renewables - Denmark, Portugal, and Spain
have all made a rapid transition away from fossil fuels for electricity, but
each in a different way.
China's
Revolution In Wind Energy - Back in 2010, China became the world’s largest
wind energy producer and the boom is continuing unabated.
The
rise of green gas: Turning crops into energy - Solar panels and wind
turbines got us used to the idea of green electricity, but what's called "green
gas" is less well-known.
Tesla's
New Battery Doesn't Work That Well With Solar - The Powerwall product that
has captured the public's imagination has a long way to go before it makes sense
for most people.
Japan
aims to harness space solar energy - Orbiting craft will gather energy of
the sun and utilise microwaves to transfer power to Earth.
Oil & Gas
EIA
Predicts Shale Oil Output Cuts to Grow Next Month - The U.S. lost about 1
percent of the oil production flowing from its shale formations this month, and
the decline is just starting.
US
shale has 'blinked' in battle against OPEC: IEA - IEA stated Wednesday that
far from winning the "battle," it had only just begun for OPEC.
Shale
Oil Drillers Plunge After Einhorn Slams Fracking Costs - Money manager David
Einhorn slammed the shale drilling industry that ushered in a new era of U.S.
oil production as wasteful, expensive and a terrible investment.
US
taxpayers subsidising world's biggest fossil fuel companies - Shell,
ExxonMobil and Marathon Petroleum got subsidises granted by politicians who
received significant campaign contributions from the fossil fuel
industry.
Shell
to resume Arctic drilling off Alaska as green groups warn of disaster -
Environmentalists accuse the government of ‘looking the other way’ after US
gives green light for Shell to restart drilling for oil and gas.
Russia
Was Right: Shale in Europe Has Proved a Dud - Difficult geological
conditions, fierce environmental opposition, cumbersome regulations and a bloody
war in Ukraine have conspired to quash investors’ enthusiasm and wear down their
patience.
UK
Beyond
the election — the energy agenda for the new government - A number of
looming issues are already obvious and the government will have no control over
most of them. [sign in required]
Tory
victory a huge blow to UK green energy industry, campaigners warn -
Government prepares to scrap subsidies for renewables, champion fracking, and
make significant cuts to spending.
Boris
Johnson rejects London motion on fossil fuel divestment - Mayor dismisses
call to divest £4.8bn pension fund from oil, coal and gas saying UK needs
fracking to avoid relying on energy imports.
The
uncertain future of Britain’s renewable energy - Many of policies during
their last term have already increased uncertainty for investors in the
sector.
Renewable
energy target still in limbo after Labor rejects biennial reviews - Labor
environment spokesman Mark Butler says two-yearly review of the RET would stifle
investment and create industry uncertainty.
Climate
CO2
levels reach monthly record - Global carbon dioxide (CO2) concentrations
have reached a new monthly record of 400 parts per million, according to
scientists.
EU
agrees 'landmark' carbon market deal - Emissions trading reform expected to
pull the plug on Europe’s carbon credit glut in 2019, but environmentalists warn
of need for long-term solution.
Transport
Cycling
vs. Car Transportation - Lund University study says travelling by car is six
times more expensive for society and individuals.
Related Reports and
Commentary
U.S.
shale oil and gas: Going over the hedge? – Carbon Tracker
Revisiting
the Shale Oil Hype: Technology versus Geology - David Hughes, Post Carbon
Institute
The Energy Crunch team: Sandra Bernick,
Griffin Carpenter, Stephen Devlin, Simone Osborn, David Strahan
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