Corona Virus has Fossil Fuels on Life Support

June 22, 2020

Financial Times (Paywall):

An influential research firm has cut its estimate of potential oil production by an amount that exceeds the reserves of Saudi Arabia, as the coronavirus crisis accelerates longer-term structural changes to the market.

In an annual report published on Thursday, Oslo-based Rystad Energy said its estimate of “recoverable” oil resources — the volume that could be extracted from the earth, given constraints of technology and demand — has fallen since 2019 by 282bn barrels to 1.9tn barrels, as consumption habits change and oil companies abandon exploration plans. The proven reserves of Saudi Arabia, the world’s second biggest producer, come to 267bn barrels.

“‘Peak oil’ is now a little closer,” said Per Magnus Nysveen, head of analysis at Rystad, referring to the hypothetical moment of maximum production. “We used to say that peak oil will happen around 2030. Now we say that it could happen in 2027 or 2028.”

Crude consumption dropped as much as one-third at the height of the coronavirus crisis in April, as lockdowns and travel restrictions forced people to stay home. Demand has begun to recover, but there is growing acknowledgment across the industry that the impact of the virus may reverberate for years to come.

People will be reluctant to travel by air for some time, Mr Nysveen said, reducing demand for jet fuel. Meanwhile, he said, the sharp fall in crude prices will cause drilling activity to plunge in the near term, leading to a spike in prices between 2023 and 2025 — just as electric vehicles become competitive with the combustion engine. This should accelerate a switch from petrol and diesel, further hurting demand for crude.

Rystad said this drop-off in demand, coupled with increasing environmental consciousness among investors, would discourage oil producers from pumping money into projects in more remote areas with long lead times, meaning areas previously expected to be explored for oil would be left untouched.

Modelling by Moody’s suggests global oil demand may not return to 2019 levels until at least 2025. The rating agency said that there is possibility that demand does not return to last year’s levels at all.

“Oil demand may take a long time to recover . . . due to the combination of weaker economic growth, decarbonisation trends and behavioural shifts, increasing the possibility that demand peaked in that year,” said James Leaton, senior credit officer at Moody’s.

Yale Environment 360:

Any day now, New York State will be coal-free. Its last coal-fired power station, at Somerset on the southern shore of Lake Ontario, will shut for good as the winter ends. Remember when Donald Trump promised to bring back coal? Well, three years on, coal’s decline is accelerating — in the United States and worldwide.

With the fuel unable to compete in most places with natural gas, nuclear, and renewables, the mining and burning of coal is increasingly toxic economically as well as environmentally. Coal mines are becoming “stranded assets” — unlikely ever to pay off the costs of their development. The risks for financiers are becoming too great.

Now, even insurance companies are refusing to underwrite coal-fired power plants and coal mining ventures. And without insurance, say gleeful climate campaigners, coal is dead.

Coal burning worldwide fell a further 3 percent last year, the biggest decline yet from a peak in 2013. That trend is unlikely to change. The number of new coal plants that began construction worldwide fell by 84 percent between 2015 and 2018, according to NGOs tracking the demise. Across the developed world, coal’s contribution to keeping the lights on is in freefall.

Despite the Trump administration’s dismissal of the climate crisis, the U.S. is proving no exception. Twelve years ago, 45 percent of U.S. electricity was generated by burning coal. The figure is now 24 percent and falling fast. Since Trump arrived in the White House, 39,000 megawatts of coal-burning power plants have been retired across the U.S. and none commissioned. Starved of markets, eight U.S. coal mining companies filed for bankruptcy last year. They included the largest surviving private company, Murray Energy, owned by Robert Murray, a prominent Trump backer.

Meanwhile, Drilled News has a running tally of the Trump administration’s desperate attempts on behalf of the dying fossil industry, to roll back environmental protections under the guise of the corona virus emergency.
That’s right – limit testing and tracing for human beings, but accelerate help to fossil barons.

List is too lengthy to repost, – small sampling here:

Drilled News:

  • Trump Administration Asks Supreme Court to Unblock Keystone XL Pipeline The Trump administration has asked the Supreme Court to intervene and stay an April ruling by Judge Brian Morris of the U.S. District Court for the District of Montana, to to block the Army Corps of Engineers’ nationwide permit to build the Keystone XL pipeline through wetlands and streams. Morris had ruled that the “blanket permit” for approving construction across federally-protected waterways was invalid, because the Corps failed to do cross-agency consultations required by the Endangered Species Act; and to analyze the risks of the nationwide permit, which was also applied to other energy projects including wind turbines and transmission lines. The Corps has applied the permit to more than 37,000 projects since 2017, reported AP. Status: Pending. The administration made the request on June 15, 2020.
  • Interior Declines to Extend Public Comment, Hold Public Hearing on Changes to Reporting Coal Mining Violations Although presented as a simple “clarification” of coal-mining oversight, this proposed change would entirely revamp the reporting process for mining violations, requiring citizens to report to state instead of federal agencies, making such reports more complicated to file, and removing any sort of response deadline. (Currently federal regulators must respond to a report within 10 days.) “This is a blatant attempt to circumvent federal oversight so that the coal cronies running state regulatory programs can ignore the people being harmed by coal-mining pollution,” said Tierra Curry, a senior scientist at the Center for Biological Diversity, in a statement. Interior denied requests from two dozen non-governmental groups to extend the public comment period and hold a public hearing. Status: Pending. Public comment period closed June 15, 2020.
  • Ag Chief Orders Increased Logging, Mining, and Grazing in Public Forests In a new “blueprint for the future,” Agriculture Secretary Sonny Perdue directed the Forest Service to “streamline” (a longtime anti-regulatory euphemism for easing up on environmental reviews) planning and approvals for energy and minerals development, as well as to “promote active management on Forest Service lands,” which again translates to weakened reviews and an emphasis on logging over conservation. Purdue also directed the agency to increase grazing permits for national grasslands, and speed up both grazing and logging permit processing. A wholesale expansion of mining, fracking, logging, and grazing in national forests will likely decrease air, water, and soil quality. Status: Memorandum published June 12, 2020.
  • EPA Moves to Narrow Interpretation of Clean Air Act The EPA proposed shifts to Clean Air Act implementation that will make it harder for environmentalists to use the law to hold polluters accountable. The proposed rule would “ensure that information regarding the benefits and costs of regulatory decisions is provided and considered in a consistent and transparent manner.” It’s vague enough both to trigger decisions that weigh economics above environmental impacts and to enable regulators to, once again, question data around air pollution, a key tactic the fossil fuel industry has deployed for decades. The American Petroleum Institute supports the change, no surprise. In a statement, the trade group said, “Ensuring the EPA’s rulemaking process uses clear and consistent data showing how the agency developed proposed rules will benefit the public, industry and all stakeholders.” Status: Proposed rule released June 4, 2020. Public comment period closes July 2, 2020.
  • FERC Approves Permitting Workaround for Mountain Valley Pipeline In the wake of a judge’s decision to pause use of a broadly permissive U.S. Army Corps of Engineers permit for energy projects near water sources, developers of the Mountain Valley Pipeline have proposed drilling under the Roanoke River, according to a report in the Roanoke Times. Somehow this enables the project to sidestep the sort of comprehensive environmental review the Corps permit now requires and simply ask FERC, which, under current leadership, has yet to see a pipeline proposal it doesn’t like. Status: Approved. Pipeline developers say this portion of the pipeline can be complete in 90 days.
  • BLM Proposes to Eliminate Protest Period for Timber Sales on Public Lands The BLM has moved to eliminate the 15-day protest period following timber sales on public lands, which has been in place since 1984. In its proposal BLM notes, “This change would help the BLM achieve the original purpose of the process, expediting the implementation of timber management decisions, while still providing ample opportunity for public comment and input, including, but not limited to, comment during the NEPA review process.” However the “NEPA review process” was recently suspended by a Trump executive order. Status: Pending, Public comment period closes August 7, 2020.
  • Pipeline and Hazardous Materials Safety Administration (PHMSA) Moves to Weaken Pipeline Regulations PHMSA proposes “amendments to the Federal Pipeline Safety Regulations that are intended to ease regulatory burdens on the construction, maintenance and operation of gas transmission, distribution, and gathering pipeline systems.”

2 Responses to “Corona Virus has Fossil Fuels on Life Support”

  1. […] Corona Virus has Fossil Fuels on Life Support | Climate Denial Crock of the Week […]

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