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A Fracked Up Policy

“Clean natural gas” from fracking has been touted for years as a cure for global warming. It’s a cornerstone of Obama’s climate plan.

But scientists say that fracking pumps out a lot of methane … into both our drinking water and the environment.

Methane is a powerful greenhouse gas: 72 times more potent as a warming source than CO2. As such, fracking actually increases – rather than decreases – global warming.

Cornell University researchers found in 2011 that – when measured in its entire life cycle – fracked gas emits much MORE greenhouse gas than coal. And see this.

Last year, a study published by Purdue scientists in the Proceedings of the National Academy of Sciences found that fracking puts between 100 and 1,000 times more methane into the atmosphere than the EPA assumed.

And a new scientific paper published at Energy & Science Engineering by expert and gas industry consultant Touché Howard shows that previous studies cited by the EPA and the fracking industry low-balled actual fracking emission rates “by factors of three to five.”

A 2014 study by scientists from Colorado and Brown University found that fracking increases severe birth defects – including congenital heart defects – for families living within 10 miles of fracking sites.

A team of Yale scientists published a study last year in the journal Environmental Health Perspectiveswhich found that people who live near fracking sites have more health problems than those who don’t.

…click on the above link to read the rest of the article…

Pop Goes The Alpha ( Natural Resources)

August 4, 2015

Pop Goes The Alpha ( Natural Resources)

If you want a cogent metaphor for the central bank enabled crack-up boom now underway on a global basis, look no further than today’s scheduled chapter 11 filling of met coal supplier Alpha Natural Resources (ANRZ). After becoming a public company in 2005, its market cap soared from practically nothing to $11 billion exactly four years ago. Now it’s back at the zero bound.

ANRZ Market Cap data by YCharts

Yes, bankruptcies happen, and this is most surely a case of horrendous mismanagement. But the mismanagement at issue is that of the world’s central bank cartel.

The latter have insured that there will be thousands of such filings in the years ahead because since the mid-1990s the central banks has engulfed the global economy in an unsustainable credit based spending boom, while utterly disabling and falsifying the financial system that is supposed to price assets honestly, allocate capital efficiently and keep risk and greed in check.

Accordingly, the ANRZ stock bubble depicted above does not merely show that the boys, girls and robo-traders in the casino got way too rambunctious chasing the “BRICs will grow to the sky” tommyrot fed to them by Goldman Sachs. What was actually happening is that the central banks were feeding the world economy with so much phony liquidity and dirt cheap capital that for a time the physical economy seemed to be doing a veritable jack-and-the-beanstalk number.

In fact, the central banks generated a double-pumped boom——first in the form of a credit-fueled consumption spree in the DM economies that energized the great export machine of China and its satellite suppliers; and then after the DM consumption boom crashed in 2008-2009 and threatened to bring the export-mercantilism of China’s red capitalism crashing down on Beijing’s rulers, the PBOC unleashed an even more fantastic investment and infrastructure boom in China and the rest of the EM.

…click on the above link to read the rest of the article…

Peabody Energy to White House: Greenhouse Gas a ‘Non-Existent Harm’

July 15, 2015

Peabody Energy to White House: Greenhouse Gas a ‘Non-Existent Harm’

In an official submission to the White House earlier this year, U.S. coal giant Peabody Energy claims that greenhouse gas is a “non-existent harm” and a “benign gas that is essential to all life.”

The March 2015 submission from Peabody further claims that “while the benefits of carbon dioxide are proven, the alleged risks of climate change are contrary to observed data, are based on admitted speculation, and lack adequate scientific basis.”

It has become increasingly rare, especially in the last few years as countries and corporations have begun to take the issue of climate change more seriously, to see a publicly traded company like Peabody Energy (NYSE: BTU) making claims that are so contrary to the well-documented scientific consensus that greenhouse gas emissions from the burning of fossil fuels are negatively impacting our climate, health and way of living.

While there are thousands of peer-reviewed scientific documents available on the impacts of climate change and greenhouse gas emissions, the Peabody climate change document relies heavily on claims made in newspaper opinion articles and by organizations with known connections to the fossil fuel industry.

An analysis of the 304 footnote citations in the Peabody document finds that opinion articles published in media outlets, primarily the Wall Street Journal, were cited as supporting evidence 41 times ,and groups with historical ties to the fossil fuel industry (e.g. Cato Institute, American Coalition for Clean Coal Electricity and the Global Warming Policy Foundation) were cited 64 times.

Articles cited from peer-reviewed scientific journals made up only 8% of the evidence cited in Peabody’s arguments:

Here are some of the key quotes from the Peabody climate change document:

“There are no demonstrated foreseeable effects of any GHG emissions.” (pg.3)

…click on the above link to read the rest of the article…

A Clash of Green and Brown: Germany Struggles to End Coal

July 8, 2015

A Clash of Green and Brown: Germany Struggles to End Coal

A recent battle over imposing a “climate fee” on coal-fired power plants highlights Germany’s continuing paradox: Even as the nation aspires to be a renewable energy leader, it is exploiting its vast reserves of dirty brown coal.

The hole in the landscape that opens up in front of the group of visitors is so vast and deep that some of them simply stare, mouths agape. “This mine will be active until 2026 or 2027,” says Barbara Wittig, a guide with a local operator of excursions into one of Germany’s largest open-pit lignite mines.

Down below at the bottom of the mine, workers are busy running gigantic machines to remove the topsoil and dig deep into a layer of brown coal, or lignite. These rich seams of fossil fuel have provided the Lausitz region,

Christian Schwägerl

Welzow-Süd is one of Germany’s largest open-pit mines for lignite, or brown coal.

60 miles southeast of Berlin, with jobs and incomes for more than a century. “We certainly hope that mining will continue after 2027 and we keep producing reliable electricity in our beautiful power plants,” Wittig says, pointing toward large cooling towers on the horizon, which send steam into the atmosphere.

These towers also spew a much more problematic gas: The three regional coal-fired power plants — Jänschwalde, Boxberg, and Schwarze Pumpe — are among the largest point-sources of CO2 emissions in the world. In recent months, Welzow-Süd and other lignite mines have become

Three regional coal-fired German power plants are among the largest point-sources of CO2 emissions in the world.

the subject of heated controversy in Germany as their continuing operations clash with the country’s ambitions of being a green energy powerhouse. That conflict has sparked a battle over imposing a special “climate fee” on coal-fired power plants.

…click on the above link to read the rest of the article…

A Bad Week For Coal Mining Industry, Even Worse for Peabody Energy

July 3, 2015

A Bad Week For Coal Mining Industry, Even Worse for Peabody Energy

It’s been a really bad week for major U.S. coal companies as we head into the July 4th holiday weekend.

St. Louis-based Peabody Energy (NYSE: BTU) closed today at $1.87 a share, down from a high of $84 per share in mid-2008. The company’s chief financial officer Michael C. Crews resigned abruptly on June 28 amidst the freefall.

Another major U.S. coal company, Alpha Natural Resources (NYSE: ANR) hit a new all-time low yesterday at just 27 cents per share, and sank as low as 24 cents that morning.

Arch Coal (NYSE: ACI) also hit its all-time low of 33 cents per share as well, down from its all-time high of $73.42 in 2008.

All three companies’ stock values are down roughly 80% from the beginning of 2015.

2015 year-to-date stock performance on the NYSE for Peabody (BTU), Arch (ACI) and Alpha (ANR). Source: Google Finance.

Arch has received a delisting notice from the New York Stock Exchange for falling below $1 per share, and has only a few months to regain its footing or lose its spot on the NYSE. Alpha received its own delisting notice a month prior.

Given the global nature of the coal industry and the generally complicated world of commodity trading, there are a myriad of influences at play here. But one cannot ignore the fact that these historic lows are coming at a time of historic commitments to renewable energy and carbon reductions by major coal-consuming and producing countries like the United States and China.

According to energy analysts at the Institute for Energy Economics and Financial Analysis (IEEFA), the Stowe Global Coal Index has lost 71% of its value since 2010:

stowe global coal index

IEEFA‘s director of finance, Tom Sanzillo, recently told reporters that, “the coal industry is arguably the poorest-performing sector in today’s global economy and is in a state of structural decline. It is a shrinking industry with little upside potential.”

That’s bad news for coal investors, but frankly it’s a welcome development for anyone concerned about the carbon

Are Coal, Oil and Gas the Subprime Assets of the Future?

June 25, 2015

Are Coal, Oil and Gas the Subprime Assets of the Future?

That question was actually asked by British Secretary of State for Energy and Climate Change Ed Davey last year, and its ramifications are extensively explored in a provocative report released today by the Center for International Environmental Law, a Washington, D.C. think tank.

According to CIEL, the answer to Davey’s question is a resounding “yes.”

The report makes a compelling case that the three big financial rating agencies – Moody’s, Fitch and Standard & Poor – that gave clean bills of health to the toxic financial products that caused the 2008 worldwide financial meltdown are giving similarly bad advice to investors by rating fossil fuel investments without acknowledging climate change-related risk.

Along the way, the report, called “(Mis) Calculated Risk and Climate Change: Are Ratings Agencies Repeating Credit Crisis Mistakes?,” stresses the potentially enormous legal liability for the agencies if their ratings understate the pitfalls of what are likely to be severe climate impacts on oil, gas, and particularly coal companies.

Coal is not only the leading contributor to atmospheric CO2 levels, it is the most financially dangerous investment. Coal prices have plummeted. Between 2010 and 2014, three coal plants were delayed or scrapped for every one built. After being dropped from Standard and Poor’s 500 Index in September, Peabody Energy, the world’s largest private sector coal firm, was dropped from Standard & Poor’s MidCap Index today because its market cap has plunged from $3.9 billion to just $700 million.

Other recent developments have made the idea of stranded fossil fuel assets far more tangible. These have included the G-20 conference asking for an investigation into $6 trillion in planned fossil fuel extraction investments, the wholesale divestment from coal by the Norwegian Pension Fund, and the International Monetary Fund’s repeated calls for an end to fossil fuel subsidies.

…click on the above link to read the rest of the article…

Renewable Energy Will Not Support Economic Growth

June 5, 2015

Renewable Energy Will Not Support Economic Growth

Container terminal image via shutterstock. Reproduced at Resilience.org with permission.

The world needs to end its dependence on fossil fuels as quickly as possible. That’s the only sane response to climate change, and to the economic dilemma of declining oil, coal, and gas resource quality and increasing extraction costs. The nuclear industry is on life support in most countries, so the future appears to lie mostly with solar and wind power. But can we transition to these renewable energy sources and continue using energy the way we do today? And can we maintain our growth-based consumer economy?

The answer to both questions is, probably not. Let’s survey four important sectors of the energy economy and tally up the opportunities and challenges.

The electricity sector: Solar and wind produce electricity, and the fuel is free. Moreover, the cost of electricity from these sources is declining. These are encouraging trends. However, intermittency (the sun doesn’t always shine, the wind doesn’t always blow) still poses barriers to high levels of solar-wind electricity market share. Grid managers can easily integrate small variable inputs; but eventually storage, capacity redundancy, and major grid overhauls will be necessary to balance inputs with loads as higher proportions of electricity come from uncontrollable sources. All of this will be expensive—increasingly so as solar-wind market penetration levels exceed roughly 60 percent. Some of the problems associated with integrating variable renewables into the grid are being worked out over time. But even if all these problems are eventually resolved, only about one-fifth of all final energy is consumed in the form of electricity; how about other forms and ways in which we use energy—will they be easier or harder to transition?

…click on the above link to read the rest of the article…

Revolution? More like a crawl

June 1, 2015

Revolution? More like a crawl

The energy visionary Vaclav Smil — Bill Gates’s favorite author — says that when our leaders promise quick energy transformations, they’re getting it very wrong.

America in 2015 finds itself almost in a new energy reality. It recently became the world’s second–largest extractor of crude oil, and since 2010 has been the leading producer of natural gas, whose abundant and inexpensive supply has been accelerating the retreat from coal as a national source of electric power.

Some see this as the beginning of an even bigger transition, one in which America’s dominant status as a producer of hydrocarbons ends its allies’ dependence on Russian gas and makes OPEC terminally irrelevant, while its entrepreneurial drive helps it quickly advance to harness renewables and reduce greenhouse gas emissions.

All of this sounds too good to be true — and it is. Indefensible claims of imminent transformative breakthroughs are an unfortunately chronic ingredient of American energy debates.

When American leaders talk about energy transitions, they tend to sell them as something that can be accomplished in a matter of years. Al Gore, perhaps the country’s most prominent climate activist, proposed to “re-power” America, making its electricity carbon-free, within 10 years, calling the goal “achievable, affordable and transformative.” That was in 2008, when fossil fuels produced 71 percent of American electricity; last year 67 percent still came from burning fossil fuels.

President Barack Obama, who has a strong rhetorical dislike of oil — although kerosene distilled from it fuels the 747 that carries him to play golf in Hawaii — promised in his 2011 State of the Union message that the country would have 1 million electric cars by 2015. That goal was abandoned by the Department of Energy just two years later.

…click on the above link to read the rest of the article…

The senility of elites: coal mining must continue, no matter what the human costs

May 31, 2015

The senility of elites: coal mining must continue, no matter what the human costs

The coal mine of Bihar, India. Photo by Nitin Kirloskar

This post was inspired by a recent article about coal mining in India by David Rose in the Guardian about coal mining. In India, people are dying in the streets because of excessive heat caused by global warming, but Rose reports that “…across a broad range of Delhi politicians and policymakers there is near unanimity. There is, they say, simply no possibility that at this stage in its development India will agree to any form of emissions cap, let alone a cut.” In other words, coal mining must continue in the name of economic growth, no matter what the human costs.

I think it is hard to see a more evident example of the senility of the world’s elites. It is, unfortunately, not something that pertains only to India. Elites all over the world seem to be nearly totally blind to the desperate situation in which we all are.

On this matter, I have a post written on my “Chimeras” blog that describes how the blindness of the elites is not just typical of our times, but was the same at the time of the Roman Empire. It is a discussion of how one of the members of the Roman elite, Rutilius Namatianus, completely misunderstood the situation of the last years of the Empire. It is our plea of human being that we don’t understand collapse, not even when we live it.

The return home of Rutilius Namatianus

The 5th century saw the last gasps of the Western Roman Empire. Of those troubled times, we have only a few documents and images. Above, we can see one of the few surviving portraits of someone who lived in those times; Emperor Honorius, ruler of what was left of the Western Roman Empire from 395 to 423. His expression seems to be one of surprise, as if startled at seeing the disasters taking place during his reign.

At some moment during the first decades of the 5th century C.E., probably in 416, Rutilius Namatianus, a Roman patrician, left Rome – by then a shadow of its former glory – to take refuge in his possessions in Southern France. He left to us a report of his travel titled “De Reditu suo“, meaning “of his return” that we can still read today, almost complete.

Fifteen centuries after the fall of the Western Roman Empire, we have in this document a precious source of information about a world that was ceasing to exist and that left so little to us. It is a report that can only make us wonder at how could it be that Namatianus got everything so badly wrong about what was happening to him and to the Roman Empire.

Continue reading on “Chimeras”

EU May Take Desperate Measures To Ensure Energy Security

May 30, 2015

EU May Take Desperate Measures To Ensure Energy Security

Oft forgotten and on the periphery of the European Union, the Balkans plus Ukraine may have a plan to address the energy needs of the economic bloc. It’s coal-heavy, borderline uneconomic, and arguably counterproductive to respective national agendas, but it does aim to satisfy some particularly topical pan-European goals: greater interconnection and greater energy security, i.e. reduced dependence on Russia.

Together, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, Serbia, and Ukraine are planning to add nearly 15 gigawatts (GW) in coal-fired capacity – a figure equal to roughly 41 percent of the region’s existing capacity. More than 90 percent of the additions will come from Bosnia and Herzegovina, Serbia, and Ukraine, who will add 1.95, 2.85, and 8.9 GW respectively. Added electricity production is estimated at 49,902 gigawatthours (GWh). In 2013, the three countries – already net exporters – sold more than 21,260 GWh abroad.

In 2014, the EU-28 imported 380,234 GWh of electricity, up nearly 9 percent from the year before. So, if we assume all added electricity is exported – disregarding transmission and distribution losses – the Balkan/Ukrainian coal rush would account for just over 13 percent of current EU electric power imports. In terms of natural gas – and specifically gas used for electric power generation – the imports could displace approximately 14 billion cubic meters (bcm). For reference, Russia exported 146.6 bcm to Europe in 2014.

The coal build out won’t happen overnight, if at all, to the extent described above. Agreements and plans exist, but only one of the aforementioned coal-fired generation projects is currently under construction. If ambitions become reality across the board, a wave of stranded assets awaits.

Collectively known as the Energy Community, the contracting parties – the Balkans plus Ukraine and Moldova – have committed themselves to implementing relevant EU energy goals and frameworks. Put another way, it is the import of EU energy policy into non-EU countries.

…click on the above link to read the rest of the article…

Coal Is Doomed Even If It Wins Against EPA In Courts

May 20, 2015

Coal Is Doomed Even If It Wins Against EPA In Courts

The controversy over the Environmental Protection Agency’s Clean Power Plan has become the latest chapter in the chronicle of President Obama’s so-called ‘war on coal’. The plan promises many things, chief among them the health and climate benefits accrued by switching to cleaner burning fuels. But a case before the DC Circuit Court has the potential to derail the plan before it even comes into effect, with implications for US coal producers and the national clean energy debate.

The new regulations have their critics, led by coal companies and Senate Majority Leader Mitch McConnell (R- KY), who has personally urged the nation’s 50 governors to ignore the rules. While this may seem like just another example of partisan politics, the latest case, if successful, could seriously curtail the Environmental Protection Agency’s (EPA) powers. A victory for coal would be a blow for the environmental lobby and the federal government.

The dispute over the Clean Power Plan centers on its proposal to cut pollution from power plants by assigning tough emissions reductions targets on a state-by-state basis. The goal is to reduce carbon pollution from the power sector by 30 percent by 2030 from 2005 levels. Existing coal-fired plants, as the biggest polluters, will be the most affected. Opponents argue that the federal government is overreaching its regulatory authority prescribed under Section 111(d) of the Clean Air Act. The EPA is expected to release the final rules midsummer this year.

…click on the above link to read the rest of the article…

Environmentalists Win Federal Lawsuit Over Colorado Coal Mines

May 19, 2015

Environmentalists Win Federal Lawsuit Over Colorado Coal Mines

Environmentalists won big May 8 in a lawsuit brought against the federal government over two coal mines near the northern Colorado town of Craig.

The nonprofit environmental group WildEarth Guardians sued the U.S. Office of Surface Mining, Reclamation and Enforcement (OSM), a bureau within the U.S.Department of the Interior, over permits granted in 2007 to expand the coal mines, saying OSM failed to seek public input or consider impacts on the environment when it approved expanding the mines. The mines are operated by Colowyo Coal Company and Trapper Mining, Inc.

In his May 8, 2015 ruling, Federal District Judge R. Brooke Jackson agreed with WildEarth Guardians that OSMcited outdated documents from the 1970s in its Finding of No Significant Impact for the mine expansions, and found the agency “did not comply with its most basic NEPA [National Environmental Policy Act] duty of providing public notice” of the mining plan revisions.

The judge awarded WildEarth Guardians reasonable attorney’s fees and expenses incurred in bringing the lawsuit, and gave the two mining companies 120 days to “take a hard look at the direct and indirect environmental effects of the Colowyo mining plan revision,” and “provide public notice and an opportunity for public involvement before reaching its decisions.”

If the companies fail to complete these remedial tasks within the assigned 120-day window, they face closure of the mines.

The ruling follows a similar one in U.S. District Court in June of 2014 in which the Court found the Bureau of Land Management and Forest Service wrongly approved expansion of the West Elk coal mine in Somerset, Colorado, because the company operating the mine, Arch Coal, failed to consider the social and economic impacts of greenhouse gas emissions from the mining.

The Latest Casualty In Energy’s Hardest Hit Industry

May 14, 2015

The Latest Casualty In Energy’s Hardest Hit Industry

Another coal company bites the dust. Again.

Patriot Coal, a miner of coal in several Appalachian states, filed for Chapter 11 bankruptcy on May 12. Patriot said it is “in active negotiations for the sale of substantially all of the Company’s operating assets to a strategic partner.”

The move comes just a year and a half after the company emerged from its previous bankruptcy. At the time, some secured creditors received repayments, but shareholders bore the brunt of the restructuring.

The initial bankruptcy came as Patriot struggled with high costs during a downturn in the coal industry. But after the company came up with a restructuring plan that included a cut in labor costs and the closure of high-cost mines, Patriot thought it would rebound. But it wasn’t to be. As Taylor Kuykendall of SNL Energy notes, “Patriot was plagued by a union strike, infrastructure failures, fatal accidents and persistently weak coal markets that ultimately resulted in the company again filing for Chapter 11 bankruptcy reorganization.”

In one sense, the problems at Patriot Coal were unique to the company. It was originally a spin off from Peabody Energy, which unloaded healthcare liabilities onto the newfound Patriot Coal. That weighed down the company from the start, freeing Peabody from the costs. SNL’s Kuykendall chronicles a series of mishaps in 2014, from lawsuits for environmental damages to a series of safety accidents. Patriot’s CEO called it “one of the worst years in Patriot’s recent history.”

The poor performance affected output. In the first three months of this year, Patriot produced 4.1 million tons of coal, a 15.1 percent decline from the first quarter in 2014.

…click on the above link to read the rest of the article…

How Much Would Zero Emissions Cost?

May 4, 2015

How Much Would Zero Emissions Cost?

In 2014 global carbon emissions totaled 32 gigatonnes (Gt). If you’re counting, that’s roughly 32 Gt too many. Yes, zero, near-zero, or net-zero is what we want, and soon is when we need it. Failure to achieve such goals by the end of the century will irreparably damage our planet and leave us dangerously susceptible to new and harsher climate conditions, at least according to the Intergovernmental Panel on Climate Change (IPCC). The United Nations agrees, though several countries openly reject the target. Paris 2015 should produce some positive momentum, but anything legally binding is unlikely to materialize.

In an effort to better understand the zero goal, let’s try to put a price on it. More specifically – and for simplicity – how much would it cost for the world’s highest per capita emitter, the United States to achieve zero or near-zero emissions? To be clear, the following focuses on energy-related gas emissions, which are mostly CO2 and account for about 84 percent of the country’s total greenhouse gas emissions.

Last year, US energy-related CO2 emissions were 5.4 Gt – relatively unchangedfrom the year before, though up 2.5 percent since 2012. By sector: electric power is responsible for roughly 38 percent of total emissions; transportation is second at 34 percent; and residential, commercial, and industry emissions account for 28 percent. By fuel: Petroleum is tops at 42 percent, followed by coal and natural gas at 32 and 26 percent respectively.

Of course, there is no simple solution to the problem at hand, but there is a simple idea: remove fossil fuels from the picture, and across all sectors. Note: that includes point-source systems equipped with carbon capture and storage, which – while not without their merit – are an unnecessary stopgap. It also means saying goodbye to petroleum-powered transportation as we know it.

…click on the above link to read the rest of the article…

How Much Water Does The Energy Sector Use?

April 14, 2015

How Much Water Does The Energy Sector Use?

Water and energy have a symbiotic relationship. Energy is needed to move water to people and businesses. Water, in turn, is necessary to produce energy.

Of course, different types of energy require varying levels of water use. Take electricity generation as an example. For the United States, electricity generationin 2014 came from the following sources: 38 percent from coal, 27 percent from natural gas, 19.5 percent from nuclear, 6 percent from hydropower, close to 7 percent from non-hydro renewables, and the remainder from a collection of smaller sources.

But those sources of electricity use water at very different rates. The chart below, using data from a new report from the U.S. Geological Survey, details how water intensive electricity generation is, measured in liters of water needed to generate one kilowatt-hour of electricity.

One significant factor that determines the ultimate volume of water a power plant needs is its cooling system. Most conventional power plants use either a “once-through” system or a cooling “tower.” A once-through system pulls water from a river or a lake, cycles the water through the power plant to help generate electricity, and then discharges it back into the environment. In contrast, a tower recirculates the water instead of discharging it. But towers end up using 30 to 70 percent more water because the water ends up being lost through evaporation, whereas the once-through system returns the water to the river or lake.

…click on the above link to read the rest of the article…

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