Friday, 14 November 2014

The $88bn fossil fuel bailout

The Overseas Development Institute has urged the G20 to fulfil promises made five years ago:

G20 governments propping up fossil fuel exploration

The G20 pledged to phase out 'inefficient' fossil fuel subsidies in 2009, yet new research finds that governments are spending $88 billion every year supporting exploration – more than double what the oil and gas companies are investing.
The fossil fuel bailout: G20 subsidies for oil, gas and coal exploration | Publication | Overseas Development Institute (ODI)
G20 states spend $88bn in fossil fuel exploration subsidies - Yahoo News
G20 urged to ditch $88bn subsidies for fossil fuel exploration - 11 Nov 2014 - Analysis from BusinessGreen
Rich countries subsidising oil, gas and coal companies by $88bn a year | Environment | theguardian.com

This week's energy newsletter from the New Economics Foundation looks at 'decarbonisation'... 
as well as the ODI report:
New Economics Foundation

Good morning,

Fossil fuel emissions need to hit zero by end of this century to reduce the dangerous and irreversible impacts of climate change, says the latest IPCC report. That may seem a long way off, but global emissions are still rising relentlessly and according to the IEA's latest World Energy Report on current trajectories we will exhaust the global carbon budget by as soon as 2040.

A significant step was made this Wednesday when the world’s two biggest polluters, the US and China announced a new climate deal. The agreement sees the US cutting emissions to 24-26% below 2005 levels by 2025, while China pledges to cap its emissions by 2030. Further and more ambitious commitments are required to meet IPCC targets, but the agreement gives some hope for global negotiations in Paris next year – seen by many as the last chance for meaningful action. Whether President Obama still has the political muscle to make good on the deal, with Republicans in control of both legislative houses following last week’s elections, remains to be seen.

Decarbonisation is going to require a huge deployment of renewables. Such a scenario is looking increasingly viable: Deutsche Bank sees solar power reaching a price competitive with conventional electricity in all but 3 US states by 2016. The IEA report shows renewables growing strongly as costs fall, and on target to be the biggest source of electricity by 2040, but more needs to be done. Governments are still subsidising fossil fuels by $550bn a year – four times the amount spent supporting renewables. And it isn’t just oil dependent nations; an Overseas Development Institute report released this week found that the G20 alone spends $88bn on fossil fuel subsidies including generous tax breaks for exploration for new reserves.

Another expose on government support for fossil fuels, specifically the UK government’s support for fracking, was released by the UK Energy Research Centre this week. The report author Professor Jim Watson said: “Shale gas has been completely oversold. Where ministers got this rhetoric from I have absolutely no idea. It’s very misleading for the public.” Perhaps the government could now move its charm offensive to renewables.

Best wishes,
Simone Osborn
Co-editor, Energy Crunch

Three things you shouldn't miss this week

  1. Infographic: The fossil fuel bailout

    Source: ODI
  2. Article: End fossil fuels by 2100 - the dramatic 'final warning' over climate change - Fossil fuels will have to be significantly scaled back in the coming decades, and eliminated entirely by 2100, in order to keep within what is widely considered to be the “safe” limit for global warming.
  3. Article: Fracking won't cut bills and ministers 'oversold' shale gas benefits, experts say - Ministers must "stop banking on this idea that shale is going to be plentiful and cheap", Government-funded UK Energy Research Centre says.

Energy Transition

America’s solar boom, in charts - Last week, an energy analyst at Deutsche Bank came to a startling conclusion: By 2016, solar power will be as cheap or cheaper than electricity from the conventional grid in every state except three.
Local communities to be offered stakes in wind farms and renewable energy stations - People living near wind farms and hydroelectric power stations could soon be able to buy stakes in renewable energy projects as part of community ownership schemes.

Oil & Gas

Energy security threatened by rising tensions, says IEA report - The US shale gas boom is disguising serious risks to the security of global energy supplies, according to one of the industry's leading consultancies.
Texas oil town makes history as residents say no to fracking - The Texas town where America’s oil and natural gas boom began has voted to ban fracking, in a stunning rebuke to the industry.
Vladimir Putin: oil price decline has been engineered by political forces - As slumping oil prices dampen Russia's economic outlook, the country's President has said that "at some moments of crisis it starts to feel like it is the politics that prevails in the pricing of energy resources".
Russia, China Add to $400 Billion Gas Deal With Accord - China and Russia deepened their energy ties with a second blockbuster deal that lessens Russian reliance on Europe.
Oil price slump exposes Canada’s tar sands risk – report - As global oil prices fall below US$85 a barrel, polluting tar sands ventures become a bigger gamble, says Carbon Tracker.
Romania does not have shale gas, PM Ponta says - Romania has fought hard to discover shale gas that apparently does not exist, Prime Minister Victor Ponta said late on Sunday.


India aims to double coal production in five years - Energy minister targets a billion tonnes of coal in 2019 to meet soaring electricity demand.
The real story of US coal: inside the world's biggest coalmine - Despite Obama’s pledge to cut carbon emissions, production at North Antelope Rochelle mine in Wyoming is booming - and climate change is off the agenda.


Nuclear – The Thin End of a Failing Wedge - Just over a decade ago, Stephen Pacala and Robert Socolow of Princeton University published “Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies”.
French government on high alert after unexplained drone flights over nuclear power stations - An epidemic of mysterious – and potentially disturbing – drone flights over French nuclear power stations remains unexplained despite the recent arrests.


Shale gas: George Osborne proposes north of England fund - Shale gas extraction revenues could be held in a "sovereign wealth fund" for the north of England, the chancellor has said.
Government too optimistic over coal plant retirements by 2030, says study - The UK government’s projections that coal will be off the system by 2027 are wrong, according to modeling from Imperial College London.
Five things we learned from DECC's annual energy statement - There's a mass of information in the report, but you probably don't have time to read it. So here are five things we learned from DECC's annual energy statement.
'Major' coal find under Firth of Forth - An energy firm has announced plans to extract gas from under the waters of the Firth of Forth following a major coal find.
EA likely to approve fracking bid on the Fylde coast - The Environment Agency has said it is inclined to grant permits to allow fracking at a site in Lancashire.
Factcheck: Are UK fracking regulations on earthquakes 'ridiculous'? - Scientists at the University of Glasgow have branded current rules designed to limit tremors from fracking operations to 0.5 on the Richter scale “ridiculous”.


US and China strike deal on carbon cuts in push for global climate pact - Barack Obama aims for reduction of a quarter or more by 2025, while Xi Jinping sets goal for emissions to fall after 2030.
Rich countries subsidising oil, gas and coal companies by $88bn a year - US, UK, Australia giving tax breaks to explore new reserves despite climate advice that fossil fuels should be left buried
Poland rejects IPCC target of zero emissions by 2100 - IPCC recommendation to phase out fossil fuels by end of century to avoid dangerous global warming is categorically rejected by Poland and other eastern European countries

Related Reports and Commentary

WEO-2014 executive summary - International Energy Agency (IEA)
Climate Change 2015 Synthesis report – Intergovernmental Panel on Climate Change (IPCC)
Ninety percent of future oil sands projects at risk from eroding oil price – Carbon Tracker
The fossil fuel bailout: G20 subsidies for oil, gas and coal exploration – Overseas Development Institute (ODI)
A Bridge to a Low-Carbon Future? Modelling the Long-Term Global Potential of Natural Gas - UK Energy Research Centre (UKERC)
The UK’s Global Gas Challenge - UK Energy Research Centre (UKERC)

Energy round-up: the road to decarbonisation? | New Economics Foundation

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