This is the text of the Sustainable Futures Report published as a podcast at susbiz.biz
Welcome to the latest edition of the Sustainable Futures Report. It’s Friday 7th October 2016 and this is Anthony Day. I’m delighted to be back after an extended summer break and pleased to report that I am in robust health. Thanks for your messages and concern.
This week: despite opposition from the local council, the borough council and the county council who all threw it out the government has overridden them and confirmed that fracking can go ahead at a site in Lancashire. Unfortunately the decision is no real surprise.
What does Brexit mean for sustainability?
The oil price is on the move again, but where’s it going? Why are children taking the US government to court?
Large problems with nuclear power, and not just at Hinkley C.
News from Canada on carbon taxes, and Suncor, a major producer of oil from tar sands wants to strand some of its assets.
First of all though, I’m going to take the opportunity to reiterate my purpose and motivation in producing and presenting the Sustainable Futures Report. It’s a weekly review of sustainability issues.
This podcast aims to be informative and interesting. Some of the content is aimed at you as a consumer and some is for you as a professional, or as a business leader, an employee, a sole trader or an entrepreneur. I want to make you aware of current news about sustainability and how it might affect you. Of course I won’t pretend to cover the whole field. After all, sustainability includes climate change, population, energy, waste, resource scarcity (including materials and water), the circular economy, technology and a whole range of social and political issues. I’m not going to ignore politics, but this is not a party-political podcast. I’ll praise policies that I believe in and I’ll not hesitate to criticise those that I believe wrong, ill thought-out or dangerous. In the coming weeks I hope to include more interviews. I’ve got a number of people in mind. If you have something to say or you’d like to suggest someone we should hear from please get in touch - mail@anthony-day.com
I generally take a UK perspective, but we certainly can’t ignore the international context. There are listeners in the US, Canada, China, Australia and across Europe. I’ll look for content relevant to all.
The Sustainable Futures Report has recently been invited to join the Better World Podcast Collective. You can find it at http://www.narrativematters.co.uk/better-world-podcast-collective There you’ll find a number of podcasts on sustainability and related issues.
The UK government’s ruling on fracking this week, permitting Cuadrilla to re-start operations in Lancashire, northwest England, is hardly unexpected despite local and national opposition.
Just to recap. Fracking is the injection of water and certain chemicals into rocks below ground in order to crack them and release gas or oil. The technique has been extensively used in the United States and has created much controversy. Theoretically there are vast reserves of gas in the northwest of England and of oil in the south-east. This operation by Cuadrilla is to determine the extent of expected reserves and find out whether in fact they can be extracted. In the short-term the UK is committed to using gas both for domestic heating and for generating electricity. We already import some 20% of gas by pipeline from Europe and by sea from the Middle East. If we can extract gas from deposits in the UK it clearly improves our energy security position. We won’t be dependent on foreign suppliers, although we will have to pay world prices. Compare this with Germany which is heavily dependent on gas supplies from Russia and arguably their foreign policy has been restrained as a result.
On the other hand opponents claim that fracking in the United States has polluted drinking water and caused earth tremors. Certainly earth tremors occurred here in the UK some years ago when Cuadrilla was drilling previously. Opponents are also concerned about what will happen to the contaminated water which is extracted as part of the fracking process, and to the contaminated water which is never recovered but just seeps away underground. The water that is recovered either has to be trucked away or in some places it is simply stored in large ponds. This water is often mildly radioactive and cannot be treated in conventional sewage farms. Whether or not this contaminated water is trucked away, there will be a high level of lorry movements to deliver the fracking water to the site, certainly in the early stages and again if the well needs to be re-injected.
Kevin Hollinrake is MP for Thirsk and Malton, an area across the Pennines where the local council has approved fracking. He is in favour of it, but in a parliamentary debate last year he admitted that at least 10,000 wells would be needed across the UK just to replace the gas which we import by sea from Qatar in the Middle East. Multiply that by the lorry journeys needed to deliver and recover the fracking water and to collect the gas and you can appreciate why so many people are claiming that fracking will ruin their quality of life.
Pam Foster, co-founder of Residents Action on Fylde Fracking, (Fylde is the local area) said: "This is a total denial of democracy. Our parish council, our borough council, our county council all threw this application out.
"We have pursued every democratic channel we can do, there's nothing left for us. We're pretty disgusted and very upset."
She said the campaigners would continue to fight fracking "peacefully and legally”.
Another argument is that at the end of the day (probably five years at the earliest) we will have gas which is another fossil fuel which produces CO2 when burnt. It will also contribute to the poor air quality which is killing thousands of people prematurely in the UK.
Is the government backing the right horse? It’s not certain that the gas can be extracted and nobody said it would be cheap. Why not invest in wind and solar? We have the technologies. We know they work. Battery and storage technology is developing rapidly. Why not embark on an energy efficiency drive, raising awareness, insulating homes and encouraging people to use less? Of course the privatised electricity and gas companies might object to the effect on their profits that that would bring.
When you consider the government’s energy strategy, resting on fracking and Hinkley C, I think it’s sensible to prepare for blackouts.
And in other news since the last episode in early July. Of course Brexit has held the headlines, particularly in this week of the Conservative party conference. I could discuss Brexit at length but everything is still unclear and it would only be mere speculation. More important is the actions of the new government. The Department of Energy and Climate Change (DECC) has disappeared and its responsibilities transferred into the business department. The former Minister for DECC has done remarkably well because as you all know, Amber Rudd is now Home Secretary. The environment is in the hands of Andrea Leadsom, failed leadership candidate, whose major policy announcement seems to be that she wants to bring back foxhunting. The key Brexit issue is how regulations on pollution, the environment and health and safety and so on will develop after the break. EU regulations have driven the UK to clean up some of the dirtiest beaches in Europe and the pressure is on to cut air pollution which kills up to 50,000 people prematurely each year. Will we relax the regulations which the UK as a member of the EU is currently subject to, in order to make things simpler for business, or will we maintain them to facilitate trade with our former EU partners? The signs are that the government intends to turn the U.K.'s back on the EU single market so what they actually do with regulations is anybody's guess. That is the problem. Apart from being told that Brexit means Brexit, we still have very little idea of how things are likely to turn out. The government of course is in exactly the same position because it all depends on the negotiations which will not even start until Article 50 is invoked and that may not happen until March next year. No wonder the £ has been hitting a 31-year low!
One piece of good news from the government is that the UK will ratify the COP21 Paris Agreement before the end of the year. The shine was taken off this announcement slightly by the EU Commission which reported that it had ratified COP21 on behalf of all members, which means that the UK had done so automatically. Let’s hope that the government doesn’t change its mind once Brexit is complete. In practice, however, ratification only means that governments are committed to the limits which they promised in their submissions to COP21, the famous INDCs (Intended Nationally Determined Contributions) - contributions to the reduction of greenhouse gases in the atmosphere. There are no sanctions for non-performance, so nothing to stop the government dragging its feet. Still, the US and China have very publicly announced their commitment to COP21 so, together with the EU and other signatories, a majority has been reached, which makes the agreement binding.
Donald Trump could change all that if he gets elected. Well we never thought he’d get nominated.
Remember what George W Bush did to Bill Clinton’s commitment to the Kyoto agreement?
The oil price is up - and down. At the beginning of September Brent Crude spiked from $47 to $50, fell and hovered around $46 and now it’s back around $50. Still a lot higher than February’s $26, but way off the $130 we saw in 2011. The reason for the spike is that OPEC announced that they were going to restrict production. The spike came in September but OPEC wasn’t planning to actually do anything until November; hence the price is volatile. James Spencer of Portland Fuel doesn’t buy it. He doesn’t believe that the OPEC members will be able to come to any agreement on which countries will cut, by how much or when. In any case, if they did succeed in driving the price back up by their actions it would make the situation more favourable for the shale operators. They have seen their overheads fall dramatically in the two years that OPEC - Saudi in particular - has been trying to put them out of business by keeping the price low. Now these oil states need the money. It’s a two-edged sword. You can find more in James’s monthly Oil Market Report, which is always an interesting read. Go to http://www.portland-fuel-price-protection.com/market-reports/oi/
Jeremy Leggett looks at the long term outlook for oil in his regular “State of the Transition” updates. That’s the transition from fossil fuels to renewables. He reports that there are $500m state-of-the-art ships built specifically for the oil industry for exploration and production and they have effectively been mothballed without ever being used because the demand for oil is not there. There are serious doubts whether these ships could be successfully recommissioned if they are ever needed. Goldman Sachs complains that Big Oil has never been a very profitable investment. If they have to write off any $500m ships that will certainly not help Big Oil’s bottom line. Meanwhile, a report from the International Energy Agency (IEA ) shows that investment in new renewables in 2015 was, for the first time ever, more than enough to cover rising global electricity demand growth.
Why are children taking the US government to court?
Back in April I reported that in the first lawsuit to involve a planet, Judge Thomas Coffin of the United States Federal District Court in Eugene, Oregon, ruled in favour of twenty-one plaintiffs, ages 8 to 19, on behalf of future generations of Americans in a landmark constitutional climate change case brought against the Federal Government and the Fossil Fuel Industry.
The lawsuit is led by Our Children’s Trust http://www.ourchildrenstrust.org/us/federal-lawsuit/ and alleges that the Federal Government is violating the Plaintiffs’ constitutional and public trust rights by promoting the use of fossil fuels.
The judge unequivocally rejected all arguments raised by the Federal Government and the Fossil Fuel Industry in their Motions to Dismiss and the case came back to court last month. It was heard by Federal Judge Ann Aiken who has promised her ruling within 60 days. That will state only whether the case must be struck out or whether it can go forward to trial. There’s nothing rapid in the legal system. Watch this space.
The Hinkley C saga continues. Yes I know that after initially delaying a decision the new British Prime Minister gave the go-ahead for this new nuclear power station to be built by the French with the financial support of the Chinese. So is it all over? Fears nevertheless remain that it will be too expensive, too difficult to build and far too late to bridge the UK’s energy gap. Anyway, it’s not expected to enter production before 2025, even by its most ardent supporters, and Theresa May will be long gone by then. Meanwhile China has the go-ahead to build two more nuclear stations to its own design in the UK. China is also part of a consortium bidding to purchase the National Grid. Did the Brexiteers say something about taking back control?
The Ecologist magazine reports that Sizewell B and 27 other EDF nuclear plants are at risk of catastrophic failure. That’s the EDF which is to build Hinkley C and after several years’ delay has not so far managed to build similar plants in Finland or at Flamanville in Normandy. http://www.theecologist.org/News/news_analysis/2988175/sizewell_b_and_27_other_edf_nuclear_plants_at_risk_of_catastrophic_failure.html The Ecologist is referring to a report http://www.greenpeace.org/france/PageFiles/266171/Note_LargeAndAssociates_EN_26092016.pdf prepared by Large Associates and commissioned by Greenpeace France. It has been discovered that at Flamanville, a plant under construction, the level of carbon in the steel of the reactor cap appears to be so high as to make the steel dangerously brittle. The French nuclear inspectorate is still considering whether to permit construction to continue or to demand that the castings be replaced. The Large Associates report finds that castings manufactured by Areva at its Le Creusot forge and installed at other operational nuclear sites, have similar problems. The report says, “As a result of Areva's failures, a significant share of the French nuclear reactor fleet is at increased risk of severe radiological accident, including fuel core meltdown. However, there is no simple or quick fix to this problem.” EDF has acknowledged the issue, although denies that it is as serious as suggested, and will carry out extended tests at these plants during planned maintenance downtime. Downtime periods may be extended as a result. In view of this, and also because of doubts as to whether EDF has the financial strength to take on the construction of Hinkley C, Moodies have downgraded EDF’s credit rating. Mind you, If things do go wrong with these critical components, credit will be our very last concern.
Listener Imran Jiwa, Principal at Full Circle Consulting Ltd writes:
“Some good news from Canada: we're implementing a national carbon tax floor across the country. Provinces that don't develop their own cap and trade or carbon tax plan will be required to do so by the Federal Government.
“The specifics have not been outlined, but this is a step in the right direction. However, there are two areas of concern:
“(1) No updates to the reduction strategy imposed by the Harper government. The opinion from the Minister of Environment is that the presence of policies is more important than the reductions themselves. It shows that despite how committed the new government is to the environment - compromise is always needed in order to move forward.
“(2) It is unclear how the carbon tax will increase over time. We are just now moving to $30 in BC (in 2018 for Alberta). While Exxon in the States disclosed to their shareholders that they are internally budgeting a $60 price, the effectiveness at curbing emissions is unlikely.
“At least we're moving forward”, says Imran,…”albeit, slowly”. Given this pace, adaptation strategies should starting taking priority over mitigation, in his opinion.
Also in Canada, Suncor, a major producer of oil from tar sands wants to strand some of its assets. What does this mean? http://www.desmog.ca/2016/08/02/suncor-opens-conversation-about-stranded-assets-alberta-s-oilsands
Tar sands consist of sand impregnated with bitumen, or vice versa, and the bitumen is extracted and eventually refined into oil. The extraction process is energy intensive as it involves a lot of steam which is required to heat the bitumen so it will flow. Oil produced from tar sands is therefore very expensive in terms of the energy needed for production versus the energy content of the oil.
Suncor is licensed by the Alberta Province government to extract oil from a given area, and it appears that it is obliged to extract every last barrel. Some areas are far more difficult and expensive to extract, so the company has requested that it be allowed to abandon them and consider the oil there as stranded assets. The state has yet to rule, but it looks like a win-win situation. Suncor will significantly reduce its costs and also reduce the environment damage that the process causes. Tar sands is one of the dirtiest sources of oil, devastating large areas and leaving behind lagoons of water condensed from the steam used in the process. Of course stopping it altogether would be the most sustainable outcome, but that’s not likely to happen while there’s still demand from south of the border.
That’s all for this week and there will be another Sustainable Futures Report next Friday.
This is Anthony Day saying thank you for listening and do send feedback to mail@anthony-day.com.
By the way, my bees had an excellent summer and I got 76kg, 168lb, of honey from just two hives. I also got lots of wax. D’you know, I think I’ll make some candles.
