Big Oil's legal attack on EV rule aimed at swing states
Big Oil's legal attack on EV rule aimed at swing states
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In a week in which the world’s most prominent energy regulator forecast that global oil supply would begin to outstrip demand within six years, it might seem strange to see oil lobbyists doubling down against new electric vehicle regulations. But that’s election year politics for you.
The American Petroleum Institute’s suit Thursday to block new federal tailpipe emission rules — citing the now common argument that the Environmental Protection Agency overstepped its Congressional authority with the rules — is designed more than just to force the issue up to the Supreme Court. It’s specifically geared to appeal to swing state voters in Michigan, Wisconsin, and Ohio who work in the auto industry and fear the rise of EVs will take their jobs.
Oil jobs and auto-worker jobs are quickly becoming a key battleground in the presidential election as President Joe Biden’s initiatives to fight climate change smack against former President Donald Trump’s campaign to keep drilling as much as possible. The lawsuit won’t be decided before the election, but it’s enough to align Big Oil’s forces behind Trump, who has promised them untold riches if he wins.
Election campaigns are typically fought in a vacuum of truth and honesty, and this one is no different. On both sides, of course. But the oil suit leaps out this week as it comes just after the International Energy Administration forecast that oil supply will peak at about 214 million barrels a day in 2030 while demand will likely tap out before that at about 206 million barrels.
The potential for chaos in markets and in the fossil fuel industry, projected to be about $11 trillion by the end of the decade, without some sort of transition to different forms of energy is certainly high. But when you’re running a massive public company that looks out only quarter to quarter, and with an election less than two quarters away, it likely pales in comparison to the battle at hand. For voters casting ballots for the next four years, though, the stakes are even higher.
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Fund activism breakdown yields surprising result
. . . . Funds that engage on climate with the companies they own rather than divest have always seemed better equipped to force change, but a new Japanese study seems to confirm that, writes Mark Hulbert. Fund managers who worked directly with the management teams of their holdings saw improved ESG scores compared to those who divested or simply voted against management. But there was one surprising catch. The managers needed to be paid to do it. . . .
Thursday’s subscriber insights
EU tariffs on Chinese EVs will only delay the inevitable
. . . . It’s tempting to speculate that the EU’s surprise slapping of new auto tariffs on Chinese EVs this week of up to 38% was a Hail Mary by EU President Ursula von der Leyen to secure her job after the drubbing she took last week in parliamentary elections. But whatever the motivations, the new protectionism will simply delay the inevitable.
Chinese EV imports to Europe have grown seven-fold in the past four years to more than $11 billion, even with existing tariffs of up to 10%. Many Chinese automakers have also secured manufacturing joint ventures in Europe, which will likely allow them to skirt the taxes anyway.
Still, the shock to the auto industry was palpable and China will certainly have a reaction. Unlike with the U.S., it has more skin in the game in Europe.
The drumbeat of China’s dominance in all aspects of EVs, from minerals for the batteries to supply chains and nifty tech features, means that China will lead this market globally for some time. For EV buyers, that means lower costs and more choice — eventually. After the protectionist folly has run its course. . . .
Bonn infighting bodes poorly for COP29 later this year
. . . . It’s been seven months since COP28 in Dubai and the divide between wealthy and poorer nations on climate aid is as wide as ever. As pre-COP talks begin in Bonn this week, nations reportedly couldn’t even agree on a target for monetary aid.
Developing nations, led by the fiery prime minister of Barbados, Mia Mottley, want something above $1 trillion while larger nations, led by the U.S. and China, are closer to the $100 billion that’s been bandied about in the past.
The constant bickering over climate aid for those who are sinking into the sea from those who caused the pollution bodes poorly for any sense of progress in Baku in November at the UN COP29 summit.
Unless there is a breakthrough in Bonn in the next 10 days, we may be destined for a third straight oil fest at the international climate summit, as the clock ticks on the smaller countries.
Editor’s picks: A mighty wind (turbine); plus, 3M says ‘bring on green hydrogen’
Siemens Gamesa may be developing 21 MW offshore turbine
Siemens Gamesa has plans to produce a massive 21-MW wind turbine in the near future, according to published reports. Bloomberg, citing unnamed sources, said Siemens is working on what could be the world’s largest offshore turbine by power rating. If so, that would beat 18-MW models developed by Chinese companies over the past year. General Electric has said it is developing a 17- to 18-MW model that could launch within the next few years. According to a report from Yahoo Finance, Siemens Gamesa had received €30 million ($32.2 million) in funding from the EU for testing what media reports have described as the world's most powerful wind turbine prototype at the National Test Centre for Large Wind Turbines at Osterild, Denmark.
Making green hydrogen a reality
3M MMM 0.00%↑ is investing in green hydrogen and focusing research on lowering costs to make it an economical energy option, according to a new report from the Minneapolis Star Tribune. Green hydrogen is made by using clean electricity from surplus renewable energy sources, such as solar or wind power, to electrolyze water, according to the National Grid Group. Electrolyzers use an electrochemical reaction to split water into its components of hydrogen and oxygen, emitting zero-carbon dioxide in the process. “The problem is a kilogram of green hydrogen is about $4 today,” Bill Weber, business building director at 3M Ventures, told the paper. “It gets really competitive if we get it down around $1.” According to the report, 3M joined a $20 million investment round with a California company that manufactures electrolyzers. It also is working on how to store and transport green hydrogen, and has partnered with Korean ship builder HD Hyundai to develop liquid hydrogen storage tanks using glass bubbles 3M makes for insulation.
Latest findings: New research, studies and projects
Cutting farm emissions: Comparing New Zealand and California
In this environmental taxation paper titled Reducing Climate Emissions from Farms: New Zealand's Proposed Levy and California Policies Compared, the authors note that cutting methane emissions would have a more immediate impact on the climate than cutting CO₂. Also, about 40% of global methane emissions come from agricultural activities, primarily from raising cattle. From the abstract: “New Zealand plans to be the first country to introduce emissions pricing for agriculture. In contrast to New Zealand, most other countries, rather than taxing agricultural pollution, provide significant subsidies to agriculture, including subsidizing the use of fossil fuels used in agriculture. California has taken significant action to curb methane pollution from farms. This paper focuses on the proposed taxation of methane emissions from farming in New Zealand, comparing California’s efforts at reducing methane emissions.
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Words to live by . . . .
“We have the evidence of the damage that we inflict upon the Earth, and we have the capability to respond and reduce such damage. The real question is: Do we have the compassion, leadership, selflessness, and wisdom to address climate change without further delay?” — John Fitzgerald, CEO of SuperNode.