Energy News Beat

 November 20, 2023

Data source: U.S. Energy Information Administration, Form EIA-860M, Monthly Electric Power Industry Report

The average utilization rate (or capacity factor) for the entire U.S. fleet of combined-cycle natural gas turbine (CCGT) electric power plants has risen as the operating efficiency of new CCGT units has improved. The CCGT capacity factor rose from 40% in 2008 to 57% in 2022. Increased efficiency improved the competitiveness of newer CCGT units against other fuel sources and older CCGT units.

Two factors affect the utilization of a CCGT unit: the efficiency of the generator and the delivered cost of natural gas. More advanced H- and J-class natural gas turbine technology entered the market in the mid 2010s, increasing the efficiency of newer natural gas-fired power plants. Lower natural gas prices typically increase capacity factors at natural gas-fired power plants because the electricity generated is cheaper than from other sources, such as coal-fired plants. In 2012 and 2015, annual average capacity factors of CCGT units increased by more than seven percentage points when the annual Henry Hub natural gas price declined.

Grid operators generally dispatch generators sequentially from lowest to highest cost. Because CCGT units built between 2010 and 2022 typically have the lowest operating costs, they are dispatched more frequently compared with older CCGT power plants. In 2022, the capacity factor of CCGT units that began operations between 2010 and 2022 averaged 64%, compared with 55% for those that began operations between 2000 and 2009 and 35% for units that began operations between 1990 and 1999.

Data source: U.S. Energy Information Administration, Form EIA-860M, Monthly Electric Power Industry Report
Note: Time ranges based on operation start date. Btu/kWh=British thermal units per kilowatthour.

About one-half of today’s CCGT capacity was built between 2000 and 2006. This sudden increase in the number of CCGT plants was in response to power shortages that occurred in the late 1990s, coinciding with new and more efficient F-class natural gas turbines entering the market. Now, many of these CCGT plants are about 20 years old, which could lead to lower capacity factors as the units age.

Lower heat rates, the ratio of the amount of fuel required to generate a unit of electricity, are the result of increased efficiency of newer CCGT power plants. CCGT power plants built between 2010 and 2022 have the lowest average heat rate among all CCGT plants, at 6,960 British thermal units per kilowatthour (Btu/kWh) in 2022, which is 7% lower than units built between 2000 and 2009.

Principal contributors: Lindsay Aramayo, Mark Morey

 

The average utilization rate (or capacity factor) for the entire U.S. fleet of combined-cycle natural gas turbine (CCGT) electric power plants has risen as the operating efficiency of new CCGT units has improved. The CCGT capacity factor rose from 40% in 2008 to 57% in 2022. Increased efficiency improved the competitiveness of newer CCGT units against other fuel sources and older CCGT units. 

The post Natural gas combined-cycle power plants increased utilization with improved technology appeared first on Energy News Beat.

 

Energy News Beat

In a recent Angus Reid Institute survey, Canadians were asked which political party they would prefer to manage the country’s climate change file. The winner was the Conservative Party of Canada; 28 per cent wanted the Tories, against 14 per cent who wanted the Liberal status quo.

What’s more, respondents were endorsing a version of the Conservative Party that has very explicitly not prioritized climate change. The Conservatives under leaders Andrew Scheer and Erin O’Toole were very careful about stressing to the electorate that they cared about rising emissions and had a viable plan to bring them down.

 

But under Poilievre, there are no emissions targets and and he hasn’t released a climate change strategy. The party’s chief issue is abolishing the carbon tax, and whenever someone asks what policy will replace it, the Tory answer is “technology.”

“Small modular nuclear reactors, hydroelectric dams, tidal wave power and other emissions-free energy … get the government out of the way and speed up approvals to green-light green projects,” said Poilievre earlier this month.

And if polls are to be believed, none of this is holding back the Tories’ massive surge in popularity. After years of received wisdom that a Conservative could not become Canadian prime minister without an aggressive emissions plan, Poilievre is on course for one of the biggest landslides in the country’s history.

It’s just the latest sign that — after years of Canadians ranking climate change as one of their most pressing national issues — they suddenly seem to have lost interest.

When Trudeau was first elected prime minister in 2015, one of the Liberal Party’s strongest issues — and the one which they statistically had one of the largest mandates — was the issue of emissions reduction.

In the lead-up to the vote, an Angus Reid Institute poll found that 56 per cent of Canadians were frustrated that the Canadian government had not spent enough attention on climate change. One fifth of all respondents, meanwhile, reported that the climate would be a “deciding factor” in their vote.

Shortly after Trudeau’s victory, a Nanos poll found 73 per cent agreeing that “climate change presents a significant threat to our economic future.” Respondents even thought it had diplomatic consequences, with 79 per cent saying that Canada’s “international reputation” had been harmed by a lacklustre emissions reduction policy.

As to what’s changed in the last eight years, the main reason is likely that the country has been blindsided by a suite of affordability crises. Rent has reached all-time highs — and is still surging by an average of $175 per month. All the while, wages have been in decline for years and are on course for 40 years of sustained stagnation.

Now, when Canadians are asked to rank their top concerns, the top spot is a duel between “economy” and “cost of living” — with climate change lucky if it can crack the top five.

 

This is even true of young people; the one demographic that can usually be trusted to worry about the environment. In August, an Abacus Data survey of voters aged 18 to 27 found that the top concern, as picked by 73 per cent of respondents, was “the rising cost of living.” In fifth place — with just 29 per cent of respondents pegging it as a top three issue — was “climate change.”

 

Top three issues among Canadian voters aged 18 to 27. PHOTO BY ABACUS DATA

Canadians have also been increasingly asked to pay for their opinions on climate change. Carbon pricing was broadly popular when Trudeau took office; one survey had 56 per cent of Canadians supporting a price on emissions. As support has dwindled, it’s dropped in almost perfect tandem with the rate of Canadians actually paying the carbon tax.

This was most dramatic in Atlantic Canada, where good feelings on carbon pricing screeched to a halt on July 1 when it became the country’s last region added to the federal carbon pricing scheme.

None of this is to say that Canadians do not believe in climate change, or doubt that it’s the result of human-caused emissions. When queried on the basic science of the phenomenon, a rising share of Canadians think it’s a problem. But the sentiment appears to be that most Canadians don’t want to personally assume any measurable sacrifice or cost.

An Ipsos survey from September hinted at this odd duality. More than 60 per cent of respondents said that “the government” and “corporations” should do more to fight climate change, but large proportions also wanted affordability to take priority. “Yes, there is increased urgency to fight climate change, but there also is increased urgency to battle the affordability crisis that we’re seeing in Canada,” Ipsos Vice President of Public Affairs Sean Simpson told Global at the time.

That new Angus Reid Institute survey mentioned in the introduction asked this question as bluntly as it could, and the results were decisive.

On the statement, “cost of living concerns should come first, even if it damages policies to fight climate change,” 63 per cent said they agreed.

 

 

IN OTHER NEWS

Prime Minister Justin Trudeau is kind of all over the place whenever he tries to weigh in on the Israel-Hamas conflict. Earlier this week he was delivering prepared remarks accusing the Israelis of recklessly killing women and babies. And then, on Thursday the Prime Minister’s Office released a statement that was almost a complete about-turn. Trudeau, said the statement, “expressed his unequivocal condemnation of Hamas’ terrorist attacks, including the atrocious use of Palestinian civilians as human shields.” The statement added that “Hamas does not represent the Palestinian people nor their legitimate aspirations.” The occasion for the turnaround was Trudeau having a phone call with Israeli liberal politician Benny Gantz. While the current Israeli prime minister Benjamin Netanyahu is a decidedly conservative figure, Gantz is his more centrist rival – but has joined Netanyahu in a coalition government to destroy Hamas.

There aren’t many protest movements that target both Prime Minister Justin Trudeau and Conservative Leader Pierre Poilievre with equal vigour. But only two days after 100 police responded to a mob of pro-Palestinian protesters at a Vancouver restaurant where Trudeau was dining, a clutch of demonstrators screaming “ceasefire now” interrupted a Poilievre rally in London, Ont. After saying Canada was a “free country” where everyone was entitled to their opinion, Poilievre told the group to “hit the road,” adding “the people support my agenda no matter how loud you scream.” PHOTO BY DEREK RUTTAN/LONDON FREE PRESS

Last Saturday, we covered the more influential signatories on a petition inked by more than 700 Canadian academics and lawyers which asserted that the Oct. 7 massacres need to be “contextualized,” rather than condemned. This week yielded an even more extreme petition, also with no shortage of prominent signatories. It accuses Israel of “genocide,” says it’s an “Islamophobia trope” to refer to Hamas as “terrorists,” and then calls it an “unverified accusation” that Hamas terrorists raped their victims. There’s plenty of evidence, both witness and forensic, on that last point, but it didn’t stop several women’s groups from signing on. This included the University of Alberta Sexual Assault Centre, and Sarah Bayliss, a self-described “family violence researcher.”

This is Austin Lathlin-Bercier, 25, from the Opaskwayak Cree Nation in Northern Manitoba. Lathlin-Bercier was in Romania when the Russian invasion began, and was inspired to join the Armed Forces of Ukraine. The Ukrainian Embassy has confirmed that Lathlin-Bercier was killed on Remembrance Day in fighting near Avdiivka, a city in the Ukrainian east that has been subject to an all-out attempt at capture by Russian forces. PHOTO BY HANDOUT

Plastic straws are back (sort of). Straws were among a handful of single-use plastic items (including grocery bags and stir sticks) that were banned by the Trudeau government under the assertion that they were “toxic” as defined by the Canadian Environmental Protection Act. But a federal court just ruled that it’s “unreasonable and unconstitutional” to simply declare an entire class of consumer products as “toxic” without providing any compelling evidence as to why they’re toxic. While this certainly throws a wrench in the government’s plans to purge plastic straws from Canada, any sufficiently creative government lawyer can probably think of a new way to bring the hammer down on straw usage, which is why law professor Stewart Elgie told the National Post that (absent any legislative change) paper straws are probably here to stay.

This was the scene inside Scotiabank headquarters on Friday, as protesters refused to leave while accusing the bank of “genocide” via its investment in Israeli companies. Friday also yielded the police-assisted evacuation of a Toronto-area Hebrew school following a bomb threat. PHOTO BY X.COM

Source: Nationalpost.com

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Energy News Beat

For decades, the fruits of the fracking revolution, plus our newly minted status as the world’s top net exporter of natural gas, demonstrated that American consumers were swimming in bountiful energy.

But as the pandemic effects of supply chain shortages, the war in Ukraine, and higher government spending gave way to inflation hikes, suddenly all eyes were on utility bills. In 2021, Americans spent as much as 25% more on energy than in the previous year.

Compounding that problem for energy consumers are political pledges aimed at the “electrification of everything,” including massive subsidies for electric vehicles, home heat pumps, and solar panels in pursuit of a carbon neutral future.

Now state policies are accelerating that, as at least 22 states — plus Puerto Rico and Washington, D.C. — have committed to either 100% carbon-free electricity generation or “net zero” carbon emissions by 2050.

But rather than subsidize our way toward political climate goals with foreign-made solar panels, batteries, and wind turbines, what if we looked to the new generation of a safe technology that is already the densest and carbon-free source of electricity in the world? What if it’s time to once again champion nuclear energy?

Energy investors, customers, and even green politicians should have every reason to love the atom. Nuclear energy is safe, clean, and reliable for decades. It produces no emissions and produces tens of thousands of good jobs for generations. There’s a reason nuclear plants have larger parking lots than wind turbines or solar farms.

At least three states — Illinois, New Hampshire, and South Carolina — currently generate over 50% of their electricity needs from nuclear power, making them effectively carbon neutral and an ideal hub for energy-intensive industry.

Even green warrior California Gov. Gavin Newson was forced to rethink the closing of Diablo Canyon in the face of aggressive climate goals, giving the state’s only nuclear plant a lifeline. Other states are reconsidering nuclear energy as their licenses head toward their expiration date.

That said, traditional nuclear energy faces several obstacles. Environmental and radiation concerns are invoked, though new innovations like accident-tolerant fuels have lessened the risk. Regulatory restrictions and permitting can delay approvals and renewals for up to a decade. Most importantly, nuclear projects are significantly labor and capital intensive, testing the financial limits of private investors and utilities who dip into subsidies to stay afloat.

But the age of the brutalist concrete cooling towers and highly centralized state control as the only features of nuclear power may already be over.

Next-generation nuclear energy technology — such as small modular reactors — may share the splitting of the atom with its predecessor, but its modern form is anything but.

SMRs can be as small as an SUV but still produce plenty of megawatts of energy. They can more quickly and reliably deliver power to the electric grid or industry, and in some cases, the spent fuel can be reused. SMRs could become the main carbon-free power source for a large manufacturing facility that would employ thousands of people and keep the load off residential grids.

For example, SMR developer X-energy is collaborating with chemical giant Dow to install  an advanced SMR nuclear plant at Dow’s manufacturing site in Seadrift, Texas. The Dow project is focused on providing its Seadrift site with safe, reliable, zero carbon emissions power and industrial steam as existing energy and steam assets near their end-of-life.

The project is contingent upon delivering on various reviews and approvals, as companies like Dow must follow strict timeframes to ensure continued operation of its site. X-energy first initiated NRC pre-application activities for their Xe-100 reactor in 2018.

Only one small modular reactor design, made by Oregon-based NuScale, has been certified by the National Regulatory Commission, which released its final rulemaking after a decade-long application process.

If we want to deliver energy at scale and at a low cost for millions of energy consumers, that pace will have to move to a warp speed timeline.

There are simple solutions that could save us time. Every state with an expiring nuclear license should consider supporting plant life extensions. States with anti-nuclear statutes should rethink their implications. Where possible, states should include nuclear and fusion technology within “clean energy” definitions, as North Carolina seems poised to do. The NRC should continue its steadfast efforts in reducing regulatory burdens to fast-track reviews and permits for new nuclear while still keeping a laser focus on safety.

Rather than closing coal plants without alternatives, states should quickly allow experienced project proponents to convert those facilities into nuclear stations. The US Department of Energy estimates that over 80% of the country’s existing coal plants could be cheaply converted into SMRs or advanced nuclear reactors, saving up to 35% in infrastructure costs while reducing emissions for decades. Roadmaps already exist to convert coal plant jobs to next-generation nuclear jobs.

This would represent billions in savings to energy customers, hundreds of thousands more good-paying jobs, and unlimited opportunities for innovators to unleash the next generation of nuclear power technology both domestically and as a global export.

Politicians and regulators have created the paradigm of a net zero world. Nuclear energy will enable that and provide prosperity, resilience, and sustainability that will keep us energy independent.

It’s time we recognize nuclear energy’s vital role and champion it as a force for good in our world.

Source: Realclearenergy.org

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The modern American version of “the environmental emperor has no clothes” until now has been the rise and fall of Enron. As former Ken Lay speechwriter Robert Bradley, Jr., says, “(T)he cause of Enron’s financial bankruptcy were at root philosophical…. Enron’s leaders were certainly engaged in massive philosophical fraud – an attempt to cheat reality itself.”

For years, Enron was hailed as one of the most forward-thinking corporations, and Lay, its founder and CEO, was a man in great demand. During his 13-year tenure that ended with a bang in 2021, Lay collected over $220 million in cash and company stock, and just months before “the largest bankruptcy in America” (at that time) Lay gave five presentations at the 2001 World Economic Forum meeting in Davos.

As Bradley, now the CEO of the Institute for Economic Research, recounts, Lay was the salesman promoting a business model developed by Jeffrey Skilling, who Lay had brought on as chief operating officer. In Skilling’s “mark-to-market” accounting, anticipated future profits from any deal were accounted for by estimating their present value rather than historical cost. Thus, argued Skilling, Enron did not really need “assets.”

It just needed connections.

And that was Lay’s special skill. His idea was to embrace a “revolution always” business philosophy, which Bradley called “a perpetual search for the first-mover advantage.” To that end, he became all things to all people, winning favor from Republicans, Democrats, environmentalists, minorities, and business leaders. His “illusion-making” in effect created a smokescreen so strong that nearly everyone was caught by surprise when the bubble burst.

[Editor’s note: As an environmental writer in Louisiana, I wrote in 1999 that the U.S. Senate rejection of the Kyoto Protocol would ensure Enron’s soon demise. I based my view on the fact that the company lacked assets and had built its presumed net worth on Kyoto largesse. As Bradley points out, Enron relied heavily on government favors.]

Today, the collapse of FTX and the recent criminal conviction of founder and CEO Sam Bankman-Fried (who is facing a lifetime behind bars) brings Enron, Skilling, and Lay to mind. But, despite the magnitude of SBF’s fraud, it pales in comparison to the ongoing fraud being perpetrated mostly on America and its Western allies in the name of “climate change.”

A bit like FTX, but unlike Enron, there are plenty of warning signs that the “Green Revolution” is about to come tumbling down and its loudest advocates brought to account. The main thing keeping the mirages afloat today is the massive egos and their investments in folly that may leave them going down with the ship.

While the “Green Revolution” has been under way for decades, it is the Biden Administration that has imposed mandates, attacked popular energy sources and transportation options, and waged war against traditional industrial development. Europeans and states like California had earlier imposed their own mandates with supposedly “hard” deadlines for abolishing the use of oil, natural gas, coal, and every tool or vehicle that uses them.

The green war on fossil fuels, as fleshed out in the “Net Zero” campaign, is perhaps history’s greatest example of philosophical fraud.

“To dream the impossible dream” and turn it into reality would mean sacrificing an estimated 6,000 useful products that rely on byproducts from crude oil refineries – products that range from asphalt for highways to fertilizers, cosmetics, synthetic rubber, medicines and medical devices, cleaning products, plastics, so many more. The 3 billion who live without the benefits fossil fuels have provided are also the poorest, sickest, and most vulnerable humans on the planet.

Cracks are already developing in the “Net Zero” world, what with countries backing away from the mandates they so recently touted while marching around like peacocks in mating season. In March the European Union reached an agreement with Germany to formally back away from its total ban on internal combustion engines in 2035.

Still, 30 countries are signatories to the Glasgow Declaration that would force all vehicles sold by 2040 to have zero carbon dioxide emissions, and 21 others have crafted plans to ban new ICE vehicle sales earlier than 2040. Dozens of major cities and states, most notably California and the California clone states, intend to disallow new ICE vehicles by 2035.

Several problems stand in the way of their utopian dream. Even EV advocates are now admitting the “EV-olution” has to overcome “serious issues” – like the use of child labor in lithium mining, the woefully inadequate EV charging infrastructure, and an unprepared power grid. Yet the biggest obstacle is that a majority of the Earth’s people object to having EVs – or heat pumps, or electric stoves, and so on — shoved down their throats.

EVs may be fine for short-trip urban travel but not for construction equipment, airplanes, or even urban buses, as evidenced by the recent horrific scene in San Francisco when a Google-operated electric bus lost power and slid backwards downhill into nine vehicles. Today’s EVs are wholly impractical for mountain and prairie residents or others making long trips (worse with children).

Like Ken Lay with Enron, the Green revolution has relied heavily on government subsidies and a “revolution always” business philosophy aimed at making pariahs of anyone who dares oppose the grandiose – but fatally flawed – plan.

During the Obama Administration, Solyndra went under despite a $535 million government-guaranteed loan, none of which was paid back. Forbes, citing OpenTheBooks.com, noted that taxpayers were left holding the notes for $400 million given to Abound Solar, $280 million wasted by CaliSolar, $193 million doled out to Fisker Automotive (with another $336 million canceled), and $132 million to A123 Systems (a failed battery maker).

Undaunted, the Biden Administration’s $2.3 trillion “jobs” package was rife with more subsidies for technologies that by their own admission are unsustainable. Yet despite all the free money, Ford, General Motors, and many other automakers are backing away from multibillion-dollar investments in new EV factories as new EV sales have slowed despite increased rebates.

Ford in March projected a loss of $3 billion on electric vehicles in 2023, offsetting profits of as much as $14 billion from its other divisions. Ford also admitted losses of $900 million in 2021 and $2.1 billion in 2022 in its EV division. Ford and GM believe their EV fortunes will turn around by 2025, but those rosy scenarios seem wholly dependent upon Biden (or an even “greener” Democrat) winning the White House next November.

Even with a Green win in 2024, reality will still bite the EV dream. China has been quietly moving toward total dominance in the global EV marketplace – largely because it controls the lithium battery market. Financial Times wrote in September that China is so far ahead in the EV market that its competitors are trailing in the dust.

Biden’s reliance on huge subsidies to underwrite the “Green Revolution” has brought soaring inflation to the U.S. that is taking away purchasing power faster than it can increase subsidies and Mafia-style “incentives” (you will buy what we want you to buy, or else!).

Lay died of a heart attack shortly after his trial, leaving behind “a legacy of shame” characterized by “mismanagement and dishonesty” that led Politico to rank him as the third-worst American CEO of all time.

America’s doddering President Biden, now facing pre-impeachment hearings for other alleged mistakes, may not live to see his name smeared as Lay’s once was. But does anyone truly believe Biden is calling all the shots here?

Who will, then, get the blame if America’s forced march to EV subservience to Xi’s China brings an end to America’s hegemony on the world stage?

Source: Realclearwire.com

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Energy News Beat

When an Appalachian-based company begins operations at a Wyoming coal mining site late this year, the energy and enthusiasm around the work may focus more on its energy transition potential than old-school fossil fuel.

Ramaco Resources has its board approval to begin work at the Brook Mine property in Sheridan, Wyoming this quarter. The Kentucky company acquired the mine for coal, but subsequently discovered potentially vast amounts of rare earth and magnet materials, which could play a huge role in the supply chain for electric vehicles, wind power generators, and multiple other uses in the military, health care, and clean energy sectors.

The find was announced this May after extensive core sampling work was done by Ramaco, the U.S. Department of Energy’s National Energy Technology Laboratory (NETL), and mining consulting firm Weir International. If confirmed and backed up by production, this would make Brook Mine the first new rare earth mining site in the U.S. since Mountain Pass in California 71 years ago.

The global supply chain surrounding rare earth metals, in the wake of the Covid pandemic and geopolitical crises, could impede the speed of the energy transition to lower carbon resources such as EV drivetrains and utility-scale renewable projects. Some companies are developing lithium mining sites domestically to boost the supply chain for EV batteries.

Unlocking a vast new reservoir of rare earth elements stateside, however, could be a game changer. Ramaco says new tests indicate a future reserve as much as 50% higher than originally estimated, or close to 1.2 million metric tons. The materials analyzed indicate strong presence of neodymium, praseodymium, dysprosium, and terbium, as well as secondary magnetic rare earth ores including samarium, gadolinium, and holmium.

Image credit Weir International

The first four elements noted in the Ramaco announcement are all crucial in the production of permanent magnets used in EV drivetrains and wind turbines. They also could play a role in materials needed for commercial-scale microgrids which include solar and battery storage.

Ramaco CEO Randall Atkins, a former Wall Street banker, talked about the find and its future impact Monday on CNBC’s Squawk Box morning show. Atkins expressed optimism about the Brooks Mine project but urged caution, noting that rare earth ore was a much more diffused element to collect than simply mining coal.

Although it’s in early stages and production of such diffused materials is problematic, the find could be worth close to $37 billion in value, according to reports.

Despite this discovery, the nations with the highest reserves of rare earth elements remain China, Vietnam, Brazil, Russia, India, and Australia, according to reports.

Source: Energytech.com

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Wall Street rushed to embrace sustainable investing just a few years ago. Now it is quietly closing funds or scrubbing their names after disappointing returns that have investors cashing out billions.

The about-face comes after tightened regulatory oversight, higher interest rates that have slammed clean-energy stocks and a backlash that has made environmental, social and corporate-governance investing a political target.

“This really is the result of too many managers looking to cash in on increased awareness and demand for ESG investments,” said Tony Turisch, senior vice president at Calamos Investments.

The third quarter was the first time more sustainable funds liquidated or removed ESG criteria from their investment practices than were added, according to Morningstar. That is a reversal from not that long ago, when companies were rebranding faltering funds to cash in on the billions of dollars flowing into sustainable investment products.

In 2021, Hartford Funds inserted “sustainable” into the name of its core bond product and subsequently saw investors pour $100 million into it. But after missing its own performance targets last year, Hartford is switching gears again.

Later this month, the bond fund will be known as the Core Fixed Income Fund and potentially sell some of the holdings that made it sustainable when it pivots to a conventional investment strategy, according to company filings. Hartford declined to comment on why it is rebranding the fund.

At least five other funds also announced they would drop their ESG mandates this year, while another 32 sustainable funds will close, according to data compiled by Morningstar and The Wall Street Journal.

The retreat comes after investors withdrew more than $14 billion from sustainable funds this year, leaving them with $299 billion, according to Morningstar. Conventional funds also lost money, but the pain was more acute for climate and other thematic products hit by high interest rates and other factors.

Ron Rice, vice president of marketing at Pacific Financial, said a legal fight over the Labor Department’s rule letting retirement-fund managers consider ESG factors may have weighed on the popularity of his firm’s sustainable products.

“We found that the demand for ESG investing, by financial professionals working with retirement-plan participants, was more limited than we anticipated,” he said.

Earlier this year, Pacific Financial removed sustainability from the name of three mutual funds then holding more than $187 million. All three funds subsequently saw their assets under management jump, Rice said.

Political pressure could be factoring into the changes as well. Republican presidential candidate Vivek Ramaswamy has been a vocal ESG critic. Last year, Florida said it was pulling $2 billion of its assets managed by BlackRock in part due to the company’s support of ESG.

Meanwhile, the Securities and Exchange Commission is stepping up oversight of the space and recently adopted a rule to prevent misleading naming conventions. Funds have roughly two to three years to comply, depending on their size.

Already, the SEC is policing the space more closely. In September, Deutsche Bank’s investment arm, DWS Investment Management Americas, agreed to pay $19 million to settle an investigation into alleged greenwashing by the firm for overstating how the company factored ESG data into investment decisions.

At the end of the month, DWS will liquidate a mutual fund the company rebranded as ESG in 2019.

DWS said it addressed the matters with the SEC and that it decided to liquidate the fund due to its small size.

Despite the closures, new ESG funds continue to pop up. Last year, Naperville, Ill.-based Calamos Investments said it would close a $4 million sustainable equities fund that had lagged behind its benchmark from inception, according to company filings.

Then earlier this year, the firm came up with two new ESG funds. They have the same strategy as the closed fund, but brandish NBA superstar Giannis Antetokounmpo’s name.

“While it’s not working currently, we expect that over the long term it will add value to the strategy,” said Turisch of Calamos.

Source: Msn.com

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The post Wall Street’s ESG Craze Is Fading appeared first on Energy News Beat.

 

Energy News Beat

Golar LNG has announced that the FLNG Gimi has departed Singapore’s Seatrium Shipyard and is now sailing under its own propulsion, supported by an escort tug, toward BP’s purpose-built Greater Tortue Ahmeyim (GTA) hub offshore Mauritania and Senegal.

The voyage is expected to take around 60 days, including refuelling stops in Mauritius prior to rounding the Cape of Good Hope and in Namibia prior to its arrival. The FLNG will then be moored and connected to the hub, which is expected to trigger the start of contractual cash flows under the 20-year Lease and Operate Agreement on the GTA field.

Gimi was converted from a 1975-built Moss LNG carrier with a storage capacity of 125,000 cubic metrrs. It is designed for 20 years of operations on-site without dry docking, with a liquefaction capacity of 2.7 million tonnes per annum and contracted to operate near shore in 30 metrrs of water depth.

Golar CEO Karl-Fredrik Staubo commented: “Golar is pleased to complete conversion of the FLNG Gimi. We would like to thank Seatrium, Black and Veatch and other suppliers for another successful FLNG delivery. With Gimi soon on site for start-up of operations Golar will double its operating fleet of FLNGs and bring total installed liquefaction capacity up to 5.1mtpa.

“We look forward to having FLNG Gimi in operation, and to continued long term cooperation with BP, Kosmos and the national oil and gas companies of Mauritania and Senegal. As the leading, independent owner and operator of FLNG units globally, we are committed to enabling monetization of attractive proven gas fields through our market leading operational track record, attractive capex/ton of liquefaction capacity and amongst the industry’s most efficient emissions/ton produced LNG.”

Source: Oedigital.com

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Energy News Beat

Dive Brief:

Boston is pulling out of the race to be one of the 10 Massachusetts cities and towns allowed to ban fossil fuels in new construction through a state pilot program, Mayor Michelle Wu told The Boston Globe last week.
Wu said she’d gotten “clear indications” that Boston would not be selected for the one remaining spot left in the pilot. In an emailed statement to Smart Cities Dive, she added that the city will instead focus on clearer pathways to get fossil fuels out of buildings, such as zoning changes and a “home-rule petition” to the state asking for permission to develop new building electrification rules.
The city will also continue to advocate for Massachusetts to allow all cities to “have the legal authority to take urgently needed action,” Wu said in the statement. Currently, Massachusetts does not allow municipalities to regulate or restrict the use of fossil fuels in construction, which has drawn the ire of climate advocates and local officials.

Dive Insight:

City ordinances banning fossil fuels in new construction have gone somewhat mainstream since Berkeley, California, passed its trailblazing rule in 2019. These “gas bans” in new buildings are lower-hanging fruit for building decarbonization compared with the thornier challenge of getting fossil fuels out of existing buildings, some experts say.

Massachusetts municipalities have thus far been unable to take part in the movement, however, with the state’s attorney general striking down attempts to date for conflicting with state law. Many cities and towns are eager to pass such rules, though; when the state in 2022 created the pilot program, the 10 slots were almost immediately filled. When one city withdrew from the program, saying it could not meet affordable housing requirements, its coveted spot opened up.

Boston, the state’s largest city, has a building sector that accounts for over 70% of total greenhouse gas emissions. It faced an uphill battle as a potential applicant, however. Part of that is because the program aims to collect data from a diverse set of communities, and Boston is “electrically similar” to others already partaking in the program, a state Department of Energy Resources spokesperson told The Boston Globe.

Some local officials and building electrification advocates in Massachusetts have decried the confines of the state pilot program and are pushing a state bill that would allow any qualified community to adopt such bans. “I don’t believe that, when we have 435 communities in the state, that only 10 should be able to decide for themselves what they can do,” Jeff Cohen, a city councilor in Salem, told the Energy News Network.

Boston seems to agree. The city’s chief of environment, energy and open space, Mariama White-Hammond, said in a Nov. 3 letter to Massachusetts Energy and Environmental Affairs Secretary Rebecca Tepper that the current pilot program setup heavily favors the original communities selected to participate “and pits other communities against each other for the right to advance the public good.”

Although Boston’s potential path to new building electrification is now less clear, the city is still making some progress on building decarbonization efforts. In 2021, the city amended an ordinance to require existing large buildings to reduce greenhouse gas emissions over time with a goal of net zero emissions by 2050. An executive order by Wu in August banned fossil fuel use in new and significantly renovated municipal buildings. The city has also launched several pilot projects to help owners of two- to four-unit housing and affordable housing go electric and become more energy efficient.

“But we need to do more,” White-Hammond said in her letter. “As we have communicated since the passage of state legislation creating the Municipal Fossil Fuel Free Building Demonstration Program, any statewide climate pilot program should include Boston to have the fullest possible impact and representation.”

White-Hammond added in the letter that it seems the state pilot program is designed for smaller communities, and input from Boston about the program design was not implemented in the final regulations.

She said that rather than asking the many stakeholders in Boston “to spend significant time developing an application for a program that has not been shaped for our participation, we will focus on engaging the community around other local and state mechanisms to deliver equitable and urgent fossil fuel-free standards in Boston.”

Source: Smartcitiesdive.com

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Tokyo Electric Power Holdings is accelerating preparations for the restart of the Kashiwazaki-Kariwa nuclear power station in Niigata Prefecture. In the face of escalating fuel costs, restarting nuclear power stations is deemed crucial to stabilizing performance and maintaining a stable power supply. This move holds significant importance for the country’s energy policy as it strives for a decarbonized society.

However, the Kashiwazaki-Kariwa power station, initially scheduled for operation in 2023, faces an uncertain path. That is due to a prohibition on operations resulting from counterterrorism deficiencies.

Responsible Counterterrorism Measures

​​”Good morning. I’m XXX.” After stating their name and displaying their ID card next to their face, employees seek approval from security personnel before proceeding to the biometric authentication gate.

Kashiwazaki-Kariwa boasts the world’s highest energy output. There are over 5,000 people working on a site equivalent to more than 90 Tokyo Domes. To deter potential terrorist threats, multiple checks are conducted during entry and exit.

Despite the time-consuming process, there is a growing acknowledgment onsite that proving one’s identity is a responsibility.

The No 6 and 7 reactors also passed the Nuclear Regulation Authority’s review for restarting. However, in 2021, a series of security flaws related to counterterrorism were discovered. They led to a de facto operating ban. Additional inspections are ongoing.

Hope and Preparations

The current situation leaves the power supply system for the Tokyo metropolitan area less than fully secure.

Driven by an increase in electricity rates, TEPCO anticipates a final shift to profitability this fiscal year 2023. However, that projection relied on the assumption of restarting the No 7 reactor in October. With rising costs in thermal power generation, failure to implement another rate hike could jeopardize the company and return it to a deficit.

TEPCO is prioritizing the human element in preparation for a restart. Its workforce with operational experience on No 6 and 7 reactors has been reduced by about half. The company is intensifying educational initiatives, including accident response training using simulators. It has also arranged visits to operational thermal power plants.

Communications within the facility are now more vibrant. Since August 2022, Managing Executive Officer Takeyuki Inagaki has consistently sent handwritten message cards expressing gratitude to workers actively involved in regional activities. The number of recipients has surpassed 3,000.

“I won’t mention a single word about the resumption of operations until I am convinced myself,” Mr Inagaki emphasizes. He is determined to persist in such initiatives until the actions and mindset at the site undergo a complete transformation.

China’s Economic Coercion

​​On another front, TEPCO’s management faces a new challenge. China is strongly opposing the release of treated water from the Fukushima Daiichi Nuclear Power Station.

This opposition has disrupted the market for many exported scallops and sea cucumbers. Therefore, it is expected that the amount of compensation to fishermen for reputational damage will be higher than expected.

Restarting a single nuclear reactor can contribute to an improvement of approximately ¥120 billion JPY (about $800 million USD) in the balance. That makes the resumption crucial for many reasons. One such reason is the essential need to cover the growing costs of reputational damages afflicting the fishing industry.

Source: Japan–forward-com.cdn.ampproject.org

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The last time European petrochemical plants processed so little of their favorite feedstock, Sweden’s ABBA was the most popular band on the continent, and the Fall of Saigon had marked the end of the Vietnam War. It was 1975, and the region was still licking its wounds after the first oil crisis. Nearly half a century later, the industry is dying.

It would be a mistake to interpret this as a triumph in the fight against plastics. Europe keeps consuming voracious amounts of foams, paints, resins and every other product petrochemical factories make. It’s just replacing indigenous production with imported stuff.

Source: IEA

Petrochemicals are intrinsically energy intensive. In Europe, natural gas is about five times more expensive than in the US. Right now, it’s cheaper to buy ethylene, a building block for plastics, in Texas, and ship it across the Atlantic for further processing in Europe than producing it at home. And that’s precisely what petrochemical companies tell me they’re doing. The net result is loss of economic activity in Europe, an erosion of the bloc’s trade balance in chemical products and, ultimately, the loss of jobs and energy security.

First, some context. On average, a European person consumes around 150 kilograms of plastic a year, more than twice the global average of 60 kilograms, according to the European Environment Agency. Plastics are everywhere – from food packaging to construction materials, from mobile phones to clothes.

Next, the data. The petrochemical industry runs largely on two feedstocks: natural gas and naphtha, with the latter being a byproduct of refining oil, similar in some ways to gasoline. According to the International Energy Agency, European naphtha consumption will drop this year to a 48-year low of 34.2 million metric tons. Usage is down 18.5% from pre-Covid-19 levels, and almost 40% below the all-time high set two decades ago.

With processing so low, the industry’s workhorses, called steam crackers, where the naphtha and the gas is transformed into chemical building blocks, are operating at uneconomical rates. Because of their enormous fixed costs, companies typically run their steam crackers as close to capacity as they can throughout the year. Anything below 90% is a source of concern; 85% is bad, and 80% is seen as catastrophic. In recent quarters, however, they have run at loss-making rates of between 65% and 75% of their capacity.

In private, industry executives say they can only lose money for so long — so closures look certain in 2024. Using a more diplomatic language, the IEA said last week that “it is increasingly difficult to see how the continent’s petrochemical industry can recover its previous strength.” I have spent the last few weeks talking to industry executives, and the answer they give is “it won’t — period.”

European companies are adapting accordingly. When BASF SE, the company synonymous with petrochemicals in Europe, met investors a couple of weeks ago, its executives wanted to talk about anything but their home base. Look at their slide presentation, and prominent is the construction of a new factory in Zhanjiang, China, with a $10 billion price tag. “Construction activities stepped up, with currently more than 15,000 construction workers on site every day,” the slides read.

Across European chemical companies, the proportion of spending in new projects into Asia has jumped by about 50% during the past decade and a half, according to estimates by Jefferies Financial Group Inc., an investment bank.

How does that translate to the economy? Before the pandemic, Europe’s chemical trade balance with the rest of the world was typically in the black to the tune of $40 billion. Last year, the surplus narrowed to just $2.5 billion. Although it’s likely to recover somewhat in 2023, the outlook for 2024 is somber.

If European policymakers are worried, they’re hiding it well. There’s no sign of alarm in Brussels, Berlin, Madrid or London. Perhaps one can glimpse some signs of concern in Paris, but that’s about it. Right now, many European nations are busy trying to bail out the offshore wind industry — but what about the petrochemical companies producing the resins and plastics used to manufacture the blades?

Europe has lost other industries to Asia. Steel, textiles and shipbuilding all moved east. This time, the competition isn’t just China, but also the US, thanks to abundant hydrocarbons there. Domestic production of hydrocarbons under President Joe Biden is booming.

Industrial and energy policies matter. If Europe wants to preserve some of its old industrial power, policymakers must publicly support the petrochemical industry – even if it’s unpopular with climate-conscious voters. The industry itself also has some soul searching to do. Consolidation is urgently needed. Right now, there are too many companies — and chief executive officers — per ton of plastic produced. Cost cutting should start at the top.

Source: Bloomberg: 

Javier Blas

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