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An unlikely collaboration between a Kentucky coalfield county and Kentucky’s largest city began when a former high school English teacher, Megan Downey, walked into the Lawrence County courthouse in Louisa in August.  

Inspired by a personal desire to find ways to tackle the impacts of climate change, Downey had launched a nonprofit called The Solar Collaborative last year in Virginia dedicated to helping Appalachian communities transition to renewable energy. 

She had been pitching an idea to local governments across Eastern Kentucky: Seek some of the billions in federal funding up for grabs in the Solar for All competition. Through the competition, the U.S. Environmental Protection Agency plans to invest $7 billion through 60 grants to states, local governments, nonprofits and tribal governments to “increase access to affordable, resilient, and clean solar energy for millions of low-income households.” The money comes from the Inflation Reduction Act’s Greenhouse Gas Reduction Fund. 

When Downey talked with Deputy Judge-Executive Vince Doty about the opportunity, he agreed “within minutes” to sign up.

“He’s the biggest advocate, I think, in the whole region for this type of project,” Downey said. “A lot of low-income communities don’t have access to that economic savings that’s associated with solar, and so it’s just one more way in which a wealth gap is continuing to increase.”

Doty brought other Eastern Kentucky counties on board for an application to the competition; judge-executives in Lawrence, Johnson, Martin, Floyd, Pike, Boyd, Greenup counties all wrote letters of support. After learning they had both submitted letters of intent to apply for the federal funding, the mountain counties teamed up with Louisville’s government to submit a unified application that could provide affordable access to solar energy for thousands of low-income homes in Kentucky from its largest cities to its rural Appalachian counties. 

It’s one of two competing applications from Kentucky. The other was submitted by the Kentucky Energy and Environment Cabinet; solar advocates say it could be a significant boost  for the use of residential solar across the state. 

Advocates argue more distributed solar, for example via solar panels on rooftops, could mean utility bill savings for Kentuckians and a curbing of greenhouse gas emissions connected to Kentucky’s fossil fuel-reliant electricity grid. 

For Doty, seeking funding for solar was foremost about easing the financial burden of his constituents in a region that faces continued economic challenges from the decline of the coal industry. Lawrence County is one of 20 Eastern Kentucky counties served by electric utility Kentucky Power, which has the highest monthly residential utility bills in Kentucky, according to a state analysis. 

“We always try to put our citizens first,” Doty said. “If there’s a chance that we can save somebody $300 a month off their electric bill, that’s worth trying for.” 

Both the Louisville-Eastern Kentucky and state government proposals are wide in scope, highlighting specific ideas for how to use tens of millions of dollars in federal funding. Both applications could mean integrating solar energy into thousands of homes, whether through direct ownership of rooftop solar installations or better access to existing or planned community solar projects. 

The Louisville-Eastern Kentucky application is asking for $150 million to be spent over five years, proposing:

A zero to low-cost forgivable loan program geared toward having low-income households own small solar installations or receive energy efficiency upgrades. For example, homeowners applying to the loan program who are below 80% of the area median income could have an entire loan forgiven for a six-kilowatt solar installation; half of the loan could be forgiven for property owners renting to Kentuckians below 80% of the area median income. 
Turn community centers in areas prone to natural disasters into “resilience hubs” equipped with solar power and electric battery storage for times of power outages. 
Build a workforce to deploy residential solar by creating training programs, building on already existing programs in Kentucky’s community and technical college system. 

Downey said Doty had advocated in a number of meetings as the Louisville-Eastern Kentucky application was being developed that it was a “non-negotiable” that Kentuckians should own the solar installations themselves 

The application anticipates, if awarded funding, at least a 20% energy bill reduction for approximately 7,300 households in Kentucky taking part in the proposal. Households that ultimately receive a six-kilowatt solar installation for free could see energy bill reductions up to 50%, according to the application. 

“If you put solar on your home, you immediately have benefits economically from the savings that you garner. It also increases the value of your home,” Downey said. “So this has the potential for a really significant impact if you look at it over 25 years as far as wealth generation goes.” 

The Louisville-Eastern Kentucky application estimates the results of the funding would add another approximate 44 megawatts of distributed solar power onto Kentucky’s grid. That would increase distributed solar in the state by about 70%, with 63.5 megawatts of distributed solar already in Kentucky. 

The application also estimates about 1,300 “green jobs” will be created through the proposed solar investment. Steve Ricketts, the board chair of the advocacy group Kentucky Solar Energy Society, said while construction work associated with larger, utility-scale solar projects is temporary, ending once the project is completed, those workers also can work on installing solar in their own communities. 

“They can be working on homes in their own town, they can be working on businesses and around town. So the two are incredibly complementary, and, frankly, have to go together to make it all work,” Ricketts said. 

Sumedha Rao, the executive director of Louisville Metro Government’s Office of Sustainability, said the estimates of solar power added, households helped and renewable energy jobs created through the funding proposal are somewhat conservative and that the impact of the grant could be even more. 

Given that Kentucky has historically relied on fossil fuels, she said, a transition to renewables can be a “scary proposition” for some Kentuckians. But she believes the Solar for All grant competition has a lot of upside with helping the state transition economically. 

 “We really feel like this is something that can have a massive impact for years to come,” Rao said.

The Solar for All application submitted by state officials leads with its own idea of how residential solar can be deployed across the state, particularly in areas hit by devastating floods and tornadoes in recent years. 

Requesting $100 million from the Solar for All competition, one of the state’s proposals is to put residential solar and an electricity battery storage system on 850 “disaster recovery” homes that could result in 70% utility bill savings for each home — or up to $1,000 in annual bill savings per home — over the course of 20 years. 

For Kenya Stump, the executive director of the state’s Office of Energy Policy, eliminating most of the energy bills is just one way to help people recovering from natural disasters who may have lost every material thing they own. 

“If they can live in a home from here on out that is more resilient, that also has the burden of that kind of cost is no longer there — shouldn’t we kind of strive for that?” Stump said. 

The application also proposes to help increase solar access for low-income Kentuckians, support housing nonprofits in creating energy-efficient housing, develop residential solar in cities and boost the state’s solar deployment workforce in several ways: Create subsidies and carve-outs to help Kentuckians participating in the Low-Income Home Energy Assistance Program, or LIHEAP, take part in existing and planned “community solar” projects to cut residential utility bills by about 20%.
Add solar power and electricity battery storage onto about 1,500 homes that already have energy efficiency upgrades, such as households that have participated in Weatherization Assistance Program. 
Develop “Solarize” campaigns to promote residential solar in Kentucky cities including Paducah, Owensboro, Henderson, Bowling Green, Lexington and Ashland. 
Create 1,500 “work-ready” scholarships and provide funding to community and technical colleges funding to create solar deployment training programs. 

Stump said in many instances low-income Kentuckians live in homes that are old and energy inefficient, leading to higher energy usage and subsequently higher utility bills. She said by enrolling LIHEAP recipients in community solar programs — such as ones offered by East Kentucky Power Cooperative and Louisville Gas and Electric and Kentucky Utilities (LG&E and KU) — they can get a direct credit on their bill and get more value from the utilized renewable energy.

“The energy regardless of the source will just still leak out” of poorly insulated, inefficient homes, Stump said. “We also hope that this will incentivize the growth of more municipal and utility community solar offerings that would be eligible to have LIHEAP carve-outs as well.” 

Some stakeholders involved in the Louisville-Eastern Kentucky application, while supportive of community solar projects in general, were skeptical of using Solar for All funds on such projects out of concerns that some community solar models, specifically LG&E and KU’s “Solar Share” program, subsidize an asset of an investor-owned utility with taxpayer funds. 

Stump said while stakeholders may wish some existing community solar projects were designed differently, it’s what is currently offered by Kentucky utilities and “can provide some benefit” to low-income Kentuckians that haven’t been able to take advantage. 

The two Kentucky applications submitted to Solar for All do align on ways to boost the workforce needed to install residential solar on homes, though Stump added that developing a renewable energy workforce needs to be paced with the deployment of solar. 

“That’s our greatest challenge is to make sure we get the timing right so that it aligns with the deployment of projects. We don’t want to give someone hope, and then there not be any work,” Stump said. 

For Stump, the Solar for All competition is just one federal program and incentive among many that will ultimately “shift and transform our energy landscape.” 

Lane Boldman, the executive director of the environmental advocacy group Kentucky Conservation Coalition, believes both applications are “really solid” but points out the federal government is only giving out 60 grants. Competition for the grants is stiff: More than 30 states have submitted notices that they’re applying along with a number of local governments and nonprofits across the country. 

Lawrence County and Louisville decided to collaborate, in part, to increase the chances that their Solar for All application would get awarded. The stakeholders with Lawrence County and Louisville also tried unsuccessfully to unify their application with the state’s proposal. 

Boldman said a big question became if a single grant application could ask for enough funding to cover all of the “great ideas” being proposed for the competition. 

“The decision really was that it was better to keep them as two separate applications,” Boldman said. “I have to say that I think both grants are very strong and deserving, and so we just have to wait and see what the federal government decides.” 

 

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Biking within Black and Brown communities is complicated. 

While non-motorized transportation is an important tactic for reducing emissions, many people still associate biking with something that kids do — or think of it as the last resort for people who can’t afford cars. 

In BIPOC communities, that is compounded by external factors such as perceived or realistic safety issues, police harassment, and lack of access and infrastructure due to decades of disinvestment.  

Olatunji Oboi Reed, president and CEO of the Equiticity Racial Equity Movement in Chicago, aims to change that.

“There are some systemic barriers that keep Black and Brown people driving, that keep Black and Brown people driving by themselves, that push Black and Brown people away from transit or cycling or walking. So, we’ve got to think about this holistically and at the systemic level … some of the systemic barriers that keep us from getting rid of our cars,” Reed said. 

Based in North Lawndale on Chicago’s West Side, Equiticity is a multifaceted, multi-racial organization focused on eliminating racial inequality. Reed, along with his staff and an active board of directors, guides the organization in its pursuit of racial justice — largely pedal-powered by bicycle. 

For Reed and for Equiticity, getting more Black and Brown people on bikes is about more than recreation or even transportation. He sees it as a vehicle for enhanced community cohesion, economic development, and improved health outcomes for Black and Brown residents, whose life expectancy is a full decade lower than that of White residents of the city, in part due to poor air quality generated by fossil fuel combustion.

Reed, along with childhood friend Jamal Julien, launched Slow Roll Chicago — a local outpost of a global bicycle movement — in 2014 as a means of encouraging more Black, Brown and Indigenous people to embrace bicycling for both recreation and transportation. While Reed has stepped away from leadership, Slow Roll Chicago continues to work to strengthen community connections and development.

In 2017, Reed expanded his vision of promoting racial equity beyond Slow Roll Chicago with a well-attended soft open of Equiticity in Chicago’s tony River North neighborhood. A number of delegates from the National Association of City Transportation Officials conference, along with local advocates, supporters and members of the media, were in the audience. The new organization was initially tasked with a plan to establish bike libraries on the city’s predominantly Black and Brown South and West Sides.

Since then, the organization has expanded its programming reach while remaining firmly rooted within a framework of advocating for BIPOC communities. Today, Equiticity encompasses advocacy, social enterprises, and programming, along with “community mobility rituals” where Black, Brown and Indigenous people take to the road on two wheels. 

Three of its major programs — the Mobility Opportunities Fund, GoHub Community Mobility Center and BikeForce Workforce Development Program — are specifically designed to make biking more accessible and affordable for Black and Brown riders by addressing inequities, disinvestment and disparities, along with promoting economic development.

In November 2022, Equiticity launched the Mobility Opportunities Fund, supported by a grant of $448,950 from ComEd. The fund initially provided $350 for the purchase of a conventional bicycle, $750 for the purchase of an electric bicycle, $1,500 for the purchase of an electric cargo bicycle and $3,500 for the purchase of an electric vehicle. (Stipends were later increased to $8,750 for EVs.)

Only four EVs were purchased using resources from the fund. However, community members bought 111 bikes, 85 electric bikes and 57 electric cargo bikes with their stipends, according to an August 2023 report on the program.

“When I came on board, I was very excited, because I understand being someone who resides in North Lawndale,” said Remel Terry, director of programs at Equiticity. “I understand the benefit of having alternative modes of transportation especially if you can’t afford a bike or even the cost of, as we’ve seen, gas and things of that nature.

“And then the overall climate-friendly aspect is also a big deal, in my opinion, and helping us to understand how to be more environmentally friendly without having to harp on things in the way sometimes it gets communicated.” 

A community bike ride in Chicago’s North Lawndale neighborhood on August 15, 2020. Equiticity sees events like this as “software” that deepens social bonds while encouraging active transportation. Credit: Equiticity

Equiticity is developing the GoHub Community Mobility Center to help address EV charging deserts along with other mobility and transportation needs for residents of North Lawndale. 

“The GoHub would have charging stations accessible to the community who may have electric vehicles,” Terry said. “So, it’s really like a one stop shop bringing all of the various programs into a physical space within the community of North Lawndale.”

But the GoHub is not limited to facilitating EV adaptation. Reed envisions multiple functions to address transportation-related inequities that Black and Brown low- and moderate-income residents experience, some of which may not be readily apparent.

That includes “hardware” — physical infrastructure — and “software,” which Reed describes as “the work we do to socialize people around the act of mobility.”

“For us, that’s our community mobility rituals. We do community bicycle rides, neighborhood walking tours, public transit excursions, group scooter rides, and open streets festivals,” Reed said.

“We also, as a part of the GoHub, want to have a hyper-local advocacy coalition. So, these are people at the neighborhood level who identify the needs to grow our mobility. And then we organize ourselves to move the stakeholders and policy makers in the city to bring the resources to bear that we need to grow our mobility in our neighborhoods,” Reed said.

North Lawndale suffers from a high crime rate, which is highly publicized in local and national media. In acknowledging the prevalence of violence in the neighborhood, Reed also envisions the “software” of the GoHub as a means to reduce the presence of violence that can discourage residents from biking.

“Violence in our neighborhood is not something that we are able to pontificate about often. It is pretty close to us. Trauma is driving our concerns around mobility. So, we want to address trauma. 

“We want mental health services to be a significant part of our work in the GoHub… We want space in the GoHub where that space is dedicated to other forms of healing to help people move through their trauma and begin to consider other modes of travel that, heretofore, they weren’t focused on,” Reed said.

Equiticity launched BikeForce in 2022 as a workforce development program for teens between the ages of 15 and 19 living in North Lawndale and adjacent communities. The apprenticeship program focuses on the emerging electric transportation sector, through the mechanics of e-bicycle construction, along with electric vehicles, e-scooters, battery systems, and electric motors. The Cook County Justice Advisory Council awarded Equiticity a $600,000 grant earlier this year, which allowed the program to expand to serve 60 trainees over 18 months. 

“BikeForce is providing these participants with comprehensive and targeted mentorship, career services and workforce training in an emerging, environmentally sustainable sector — all while increasing access to climate-friendly mobility devices in North Lawndale,” Terry said in an email.

The apprenticeship program also provides networking and opportunities for living-wage jobs to as many as 30 young people each year. Participants who complete the program also receive a cash stipend of $1,100 and a non-electric bicycle, Terry said.

“They’ll be able to leave this program and be hired as a bike mechanic somewhere with the experience of also understanding the battery aspect of the electric bike, which is a very big deal,” Terry told Streetsblog in September.

Equiticity launched the Free 2 Move Coalition during the summer of 2022 to advocate for improvements in biking infrastructure and policy changes, especially around the issue of police harassment of Black and Brown bike riders, including aggressive enforcement of street crossing regulations and prohibitions against riding on the sidewalk. These types of stops increased exponentially as an alternative to stop-and-frisk, saido Jose Manuel Almanza, director of movement and advocacy building at Equiticity.

“Right now, the Chicago Police Department can stop vehicles for a number of reasons, including a busted taillight, no registration or expired registration, [or] no city sticker — stuff that we think that should not be in the hands of the Chicago Police Department” Almanza said.

Equiticity’s research found that between 2014 and 2019, police disproportionately issued citations for bike riding on sidewalks on the West and South Sides, which are predominantly Black and Brown neighborhoods.

“At the same time, those areas have little to no biking infrastructure. So, it makes sense that people just feel safer riding on the sidewalk,” Almanza said. “So, we want to eliminate the CPD’s ability to ticket folks for these offenses, and at the same time invest in these neighborhoods to give them the space and the safety they need to ride their bike safely on the road.”

Like many Black and Brown communities, North Lawndale has suffered the effects of decades of disinvestment. However, dollars intended to mitigate disinvestment frequently don’t make their way to areas where they are most needed. 

At the same time, initiatives to mitigate disparities are sometimes met with pushback — driven by mistrust and anxiety about displacement, and exacerbated by the failure of municipal and other entities to engage community stakeholders, Almanza said. 

“We really want to expand biking infrastructure. However, a lot of people on the West Side and South Side see biking infrastructure as a sign of gentrification. A lot of people think, well, who are these bike lanes really for? It just seems that whenever the city does any kind of improvements in, for example, North Lawndale or Little Village, we get priced out. And I think just seeing that over and over and over again, it just creates suspicion in people that, well, in the past, everything they’ve done was not for me. So why is this for me now?

“Different communities in Chicago have different needs and people who live here know what’s needed, know what’s working, know what isn’t. However, we just keep seeing a lack of engagement from city agencies when it comes to creating a plan around infrastructure. A lot of our communities have been here for a very long time, so there’s a lot of history in it, and it seems like a lot of that history isn’t taken into consideration.” Almanza said.

For Reed, advocacy, education and improving biking infrastructure are all integral to Equiticity’s mission of getting Black and Brown people on bikes — and having them feel safe riding.

“How are we going to convince somebody not to drive and they should walk or bike, and there’s no sidewalk? This is not a rural community. This is the city of Chicago. People consider this the welcome center to the country,” Reed said.

“Corporations are headquartered here. And we’ve got a neighborhood in our city with no sidewalk. And it’s been like that for decades. “The intersection [at] 79th and Stony [Island] is one of the most dangerous intersections in the state of Illinois. It’s been like that for generations. And we’re supposed to convince somebody in that neighborhood to ride a bike. I wouldn’t dare tell somebody to ride a bike on Stony Island. I wouldn’t ride a bike on Stony Island. So, we’ve got to improve the quality of our infrastructure. We’ve got to use infrastructure to reduce all types of violence, interpersonal, police, and vehicular. And this is taking place.”

 

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Yahoo Finance

NEW YORK – Oil prices jumped over 2% on Tuesday on the possibility OPEC+ will extend or deepen supply cuts, a storm-related drop in Kazakh oil output and a weaker U.S. dollar. Brent crude futures were up $1.88, or 2.4%, at $81.86 a barrel by 11:03 a.m. EST (1603 GMT). U.S. West Texas Intermediate (WTI) crude gained $1.84, or 2.5%, to $76.70.

OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is due to hold an online ministerial meeting on Thursday to discuss 2024 production targets.

The talks will be difficult and a rollover of the previous agreement is possible rather than deeper production cuts, four OPEC+ sources said.

The market tumbled last week when OPEC+ pushed back the original date for its meeting to iron out differences on production targets for African producers.

“Even with the disagreement, the possibility of keeping the deal as is for another month remains high,” said Phil Flynn, an analyst at Price Futures Group in Chicago.

One possible compromise could involve Angola and Nigeria accepting reduced production targets for a few months if targets for the other countries were likewise lowered, said Commerzbank’s Carsten Fritsch.

“According to delegates, Saudi Arabia is demanding lower production quotas from the other OPEC+ countries. While Kuwait has signaled that it would be willing to do so, some countries are apparently resisting any such move.”

The United Arab Emirates is likely to oppose this, given that its 2024 production target was increased at its urging when OPEC+ held its previous meeting in early June, he added.

Oil also found support from a weak dollar, an expected decline in U.S. crude inventories and the drop in Kazakh output.

Kazakhstan’s largest oilfields have cut their combined daily oil output by 56%.

Four analysts polled by Reuters estimated that the latest round of weekly U.S. supply reports will show crude inventories fell by about 2 million barrels.

The first of this week’s two reports is due at 2130 GMT from the American Petroleum Institute.

The U.S. dollar sank to a three-month low on Tuesday after U.S. Federal Reserve Governor Christopher Waller flagged the possibility of lowering the Fed policy rate in the months ahead if inflation declines further.

A weaker dollar typically bolsters oil demand, making dollar-denominated oil less expensive for buyers using other currencies.

In the Middle East. Israeli forces and Hamas fighters held their fire beyond the original deadline of a truce, extended at the last minute by at least two days to let more hostages go free.

(Reporting by Stephanie Kelly; additional reporting by Alex Lawler, Natalie Grover and Sudarshan VaradhanEditing by Kim Coghill, David Goodman and David Gregorio)

 

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Today

LONDON :OPEC+ is looking at deepening oil production cuts despite its policy meeting being postponed to this Thursday amid a quota disagreement between some producers, an OPEC+ source said on Monday.

Several analysts have said they expect OPEC+ to extend or even deepen supply cuts into next year in order to support prices, which on Monday were trading just above US$80 a barrel, down from near US$98 in late September.

An OPEC+ source said he expected there to be an option for a “collective further reduction” on Thursday, without providing details. OPEC+ sources earlier this month said the group was set to consider additional cuts.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known as OPEC+, will begin its online meetings to decide oil output levels at 1300 GMT on Thursday, according to a draft agenda seen by Reuters on Monday.

The meeting was delayed from Nov. 26. OPEC+ sources said this was because of a disagreement over output levels for African producers, although sources have since said the group has moved closer to a compromise on this point.

OPEC member Kuwait is committed to any decisions issued by OPEC, especially those that concern market quotas and oil production, the country’s oil ministry said in a post on social media platform X.

On Thursday at 1300 GMT, ministers on an advisory panel called the Joint Ministerial Monitoring Committee hold talks. This will be followed at 1400 GMT by a meeting of the full policy-making group of OPEC+ ministers, the agenda showed.

Saudi Arabia, Russia and other members of OPEC+ have already pledged total oil output cuts of about 5 million barrels per day (bpd), or about 5per cent of daily global demand, in a series of steps that started in late 2022.

This includes Saudi Arabia’s additional voluntary production cut of 1 million bpd which is due to expire at the end of December, and a Russian export cut of 300,000 bpd also until the end of the year.

(Reporting by Ahmad Ghaddar and Alex Lawler, Editing by Louise Heavens, Dmitry Zhdannikov and Christina Fincher)

 

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The country’s competitiveness as an industrial location has been undermined, Michelin said

 

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Oil Price

Sustainability-linked loans, or SLLs, have only been around for a few years. In that short time, they have ballooned into a market worth $1.5 trillion. But now, as scrutiny comes for sustainability claims with no substance, that market faces a reckoning. And so do the banks that lent those money.

The first sustainability-linked loan was the work of Dutch ING Groep and was closed in 2017. Since then, sustainability-linked loans have become the second-largest ESG market in the world, after so-called green bonds.

The essence of SLLs is that the borrower can benefit from a slightly lower interest rate in exchange for undertaking commitments in the environmental department—a principle that’s pretty similar to how ESG investment funds operate. But just like ESG investment funds, regulators—and investors—have now started to question the validity of sustainability-related claims by bond issuers and bank borrowers.

In a recent article on the issue, Bloomberg noted that the situation has reached a point where banks that provide SLLs are looking for legal cover in anticipation of greenwashing lawsuits. This anticipation could prove legitimate because banks did not check their clients’ ESG commitments in detail before granting loans, nor did they check whether these clients were using the money for environmental, social, or governance improvements.

They were not meant to check, and they did not need to—or so they thought. The great attraction of sustainability-linked loans lies in the fact that the borrower, as Reuters notes in a recent article, can use the money for pretty much whatever they want—because the bank classifies the loan as part of its own ESG efforts and does not seem to be too bothered whether the ESG claims of the borrower have substance or not. Did anyone say greenwashing?

Bloomberg noted in its article that sustainability claims made by borrowers are not made publicly available, and the market for sustainability-linked loans is not regulated. In other words, a company could take out a sustainability-linked loan and pay an interest rate that’s between 2.5 and 10 basis points lower than a regular loan, swearing it will use the money to sustainable ends. Then, it can take the money home and do anything it wants with it, even if it has nothing to do with sustainability.

The bank, meanwhile, does not care what the borrower would use the money for because it has already filed the loan under its own sustainability targets, and considered it a step in the right direction of hitting these targets. It seems these SLLs have been as popular with lenders as they have been with borrowers.

So, in a matter of six short years, a market that went from zero to $1.5 trillion is about to suffer some tremors as banks’ lawyers warn the reputational risks have become too great to ignore. The situation smacks a bit of the subprime mortgage crisis from 2007. A market for obscure financial products getting out of regulatory hand is always a dangerous situation.

Perhaps nobody could have predicted the questions that would start popping up about the actual substance of ESG claims made by companies. Perhaps nobody anticipated the political backlash in conservative U.S. states. Yet both these things are happening and are shaking the very foundations of the whole ESG market.

Reuters recently did a survey among banks and found that only one of the 14 did not file the SSLs it provided under its own sustainability efforts. All the rest did just that, essentially assuming that the borrower would use the loan as promised. It really is no wonder that scrutiny is tightening up, and as a result, SLLs are on the decline.

Bloomberg reported earlier this month that sustainability-linked loan issuance in the United States has dropped by as much as 80% amid growing concerns about greenwashing and higher interest rates. Issuance is down in other regions, too, as regulators start to pay attention to these loans, just as they started paying attention to other green claims made by companies eager to benefit from the ESG investment trend.

With investment funds now rebranding and dropping words like “sustainable” from their names amid growing investor caution, it was only a matter of time before banks started paying attention, too. Per Bloomberg, this attention has taken the form of seeking help from legal professionals and devising cover in the contracts for SLLs.

The cover appears to be a loophole allowing banks to reclassify SSLs as ordinary loans should the borrower not use the money to advance its ESG goals as promised. In other words, banks are admitting they have no way of enforcing the terms of the loan contract on the borrower and are looking for a way out of potential greenwashing accusations by changing these terms.

By Irina Slav for Oilprice.com

 

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(Bloomberg) – Oil executives are flocking to Venezuela to take advantage of lighter U.S. sanctions, even though there’s a risk that access to the world’s largest oil reserves might snap shut as quickly as it opened.

Companies including Shell Plc., Repsol SA, Hungary’s Mol Nyrt, Sweden’s Maha Energy AB, the National Gas Company of Trinidad and Tobago and Bolivia’s state gas company YPFB have sent delegations to Caracas since the U.S. lifted curbs on Venezuela’s oil sector last month, according to four people with knowledge of the situation.

The companies are generally trying either to secure access to oil and gas fields, rewrite contracts or recover old debts, the people said. They are effectively betting that the government of U.S. President Joe Biden won’t follow through on its threat to reimpose sanctions against companies that operate in Venezuela, which would stop the party just as it’s getting started.

Washington gave the government of President Nicolás Maduro until the end of November to make significant advances toward holding fair elections, including defining a process for disqualified candidates to participate in next year’s vote. Maduro has yet to do this, bringing a risk of “snapback sanctions” that would reimpose tight curbs on Venezuela’s oil sector, making it nearly impossible for foreign drillers to operate there.

“If they don’t take the agreed steps, we will remove the licenses we’ve awarded,” U.S. Assistant Secretary of State for Western Hemisphere Affairs Brian Nichols said this month.

However, the U.S. may be reluctant to reimpose controls. A revival of Venezuela’s oil sector helps offset the impact on oil markets of sanctions imposed on Russia last year, while a stronger Venezuelan economy also helps curb the flow of migrants to the U.S.

Sudden decision. In recent weeks, foreign oil executives have met officials from the oil ministry, state-controlled oil company Petróleos de Venezuela SA, or PDVSA, and the International Investment Center, a government-led investment promotion entity, the people said.

The scope of the Biden administration’s decision to ease controls for six months, allowing oil companies to operate relatively freely in Venezuela, took many in the industry by surprise, setting off a rush to Caracas by would-be deal makers.

Venezuela has more than 40 oil partnerships with foreign and local companies, some of which suspended activity due to the difficult business climate. The government now seeks to replace these with companies willing to make new investments and produce.

The government is targeting production of 1 MMbpd, from about 750,000-800,000 bpd currently. The nation has about 300 Bbbl of reserves, a greater number than Saudi Arabia.

The country could reach that target by end of next year if the U.S. extends its license for another six months after it expires in March, according to Asdrúbal Oliveros, head of Caracas-based consultancy Ecoanalitica.

“The question is if this opening will last,” Oliveros said in a webcast this month.

Shell declined to comment. Repsol, Mol Nyrt, Maha Energy, the National Gas Company of Trinidad and Tobago and Bolivia’s state gas company YPFB didn’t reply to written requests for comment.

Venezuela’s information ministry, oil ministry and PDVSA didn’t reply emails seeking comment.

The Maduro government and a coalition of opposition parties signed an agreement in Barbados in October that contains guarantees for a fairer presidential election in 2024, including foreign observers and the release of political prisoners.

 

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The Biden administration on Tuesday will auction off 35,000 acres (14,164 hectares) of land in Wyoming to oil and gas drillers, the first in a series of such sales that will coincide with a United Nations’ conference aimed at combating fossil fuel-driven climate change in Dubai.

The Interior Department’s U.S. Bureau of Land Management (BLM) will offer 63 drilling parcels on nearly 44,000 acres (17,806 hectares) in six Western states over the next two weeks. The Wyoming sale is by far the largest, with 37 parcels.

The remaining acreage, in New Mexico, Oklahoma, Nevada, North Dakota and Utah, will be sold on Nov. 30, Dec. 5 and Dec. 12. All the sales will be held on the online auction platform EnergyNet.

The UN’s “Conference of the Parties” on climate, known as COP 28, will begin on Thursday and will take place over the same two weeks. Dozens of nations plan to push for the world’s first deal to phase out carbon dioxide-emitting coal, oil and gas at the meeting. U.S. President Joe Biden is not expected to attend.

An Interior spokesperson did not comment on the timing of the sales.

Environmental groups were critical of the sales.

“Instead of doing the necessary work to fight climate change, Biden continues to support the expansion of fossil fuels here in the U.S.,” Nicole Ghio, senior fossil fuels program manager for Friends of the Earth, said in a statement.

U.S. oil extraction policies have been a headache for President Biden, who promised on the campaign trail to end new leasing on federal lands and waters, but was blocked by courts from doing so.

Biden’s Inflation Reduction Act (IRA), a climate change law passed last year, made oil and gas auctions a prerequisite for renewable energy development. It also, however, requires higher royalty rates and minimum bids meant to boost taxpayer returns.

Biden’s Interior Department has issued far fewer new leases than previous administrations. The agency issued 527 leases in fiscal years 2021 and 2022 combined, compared with 2,740 in the previous two years, during the Trump administration, according to BLM data.

(Reporting by Nichola Groom; Editing by Aurora Ellis)

 

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Chinese authorities have been keen to avoid a repeat of last year’s power shortages.
Generally, China is certain that its winter power supply is guaranteed, but shortages could occur in the Yunnan province and Inner Mongolia.
China will continue to provide high levels of coal volumes to ensure stability in power supply this winter.

China is ramping up coal and natural gas production, imports, and consumption as its electricity demand jumped in the year’s second half and looks to hit a record-high winter peak demand.

Chinese authorities have been keen to avoid a repeat of last year’s shortages and spiking prices and have instructed utilities and producers to maximize imports and output before the winter.

Ahead of the 2023/2024 heating season, China looks better prepared to meet peak power demand than in the previous winter.

China sees its peak power demand potentially rising by 12.1%, or by 140 gigawatts (GW), this winter, a spokesperson for the National Energy Administration (NEA) said at the end of October.

Generally, China is certain that its winter power supply is guaranteed, but shortages could occur in the Yunnan province and Inner Mongolia, according to NEA spokesperson Zhang Xing, quoted by Reuters.

Previously, figures by the NEA have shown that the peak power demand in China was at 1,159 GW last winter.

This winter, peak demand is expected to be higher due to increased consumption in the second half of the year, including a hotter-than-normal summer.

China will continue to provide high levels of coal volumes to ensure stability in power supply this winter, according to the official.

Energy major CNOOC said in September that China’s natural gas demand is set for an 8% increase this year compared to 2022, with imports of both LNG and pipeline gas expected to rise by around 11%.

Much lower LNG prices this year than last have helped drive Chinese LNG imports higher, potentially sapping the global market at the expense of Europe, which relies on LNG to offset the loss of Russian pipeline gas supply.

Demand in Europe and Asia is rising in November compared to the warmer October, but LNG spot prices in Asia have either dropped or remained steady in the past few weeks amid high inventories in both Asia and Europe and weak demand.

Last week, the LNG price for January delivery into Northeast Asia averaged $16.40 per million British thermal units (MMBtu), slightly down from $16.70 per MMBtu, per industry sources estimates cited by Reuters.

Last month, China told its largest natural gas suppliers to fill up their storage sites ahead of the peak winter season. The National Energy Administration noted China’s gas market was “generally in balance,” but full storage could better manage supply in case of disruptions in the international market.

Beijing has also asked Chinese coal miners to ramp up production ahead of peak demand season this winter.

A spokesperson for the National Reform and Development Commission—Beijing’s planning agency—said that the central government would encourage local authorities and companies to work on boosting coal supply, Reuters reported earlier this month.

China relies on coal to avoid blackouts as the economy reopened after the Covid lockdowns. During the first half of this year, coal production, coal imports, and coal-fired electricity generation surged and offset a significant decline in power output at China’s massive hydropower capacity due to insufficient rainfall and drought.

Chinese coal production rose by 3% year-on-year between January and September. October output fell by 1.1% from a six-month high in September due to more safety checks at mines, but was still up by 3.8% compared to October 2022, per official Chinese data quoted by Reuters.

China continues to rely on coal and coal-fired power generation to meet its growing power demand, and despite being the world’s top investor in solar and wind capacity, it also plans a lot of new coal-fired electricity capacity.

During the first half of 2023 alone, China approved more than 50 GW of new coal power, Greenpeace said in a report this year. That’s more than it did in all of 2021, the environmental campaign group said.

Source: Oilprice.com

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