Editors: Tom Whipple and Steve Andrews
“In one of the most dramatic bouts of selling ever, Brent futures sunk by 31 percent in a matter of seconds after the open of trading in Asia this morning after already suffering their biggest loss since the global financial crisis at the end of last week. As Brent collapsed as low as $31 a barrel, Goldman Sachs Group Inc. warned prices could drop into the $20s.”
Quote of the Week
“In recent days, the Lufthansa Group has been exposed to drastic declines in bookings and numerous flight cancellations due to the spread of the COVID-19 virus. All traffic areas are now affected.” Deutsche Lufthansa, as it announced cutting flights by 50%
Graphics of the Week
1. Energy prices and production
Last week saw upheavals in the financial and energy markets as the coronavirus continues to spread rapidly across the world and the OPEC+ production limiting agreement broke down. OPEC responded by removing all limits on its own production. At week’s end, New York oil futures were down to $41 a barrel and London was down to $45 after Brent suffered its biggest one-day loss in more than 11 years on Friday.
A turning point for the oil markets came on Friday when Moscow confirmed it was not willing to follow the Saudi lead and cut production further. This refusal to cooperate opened the way for a production and price war that is likely to send oil prices still lower. Many oil traders now are talking about prices falling into the $30s and a few pessimists say into the $20s.
Behind the Kremlin’s decision was a desire to get out of the situation in which the US shale industry was able to expand into new markets. At the same time, Russian production was frozen and headed lower under the OPEC+ agreement. Moscow is outraged at the Trump administration’s efforts to stop the Nordstream 2 pipeline that will send even more natural gas into Europe and the sanctioning of Rosneft for selling Venezuelan oil. The Russians are counting on being able to drive US shale oil producers out of business. In contrast, Russian producers can continue to increase the output of its relatively cheap conventional oil.
As the coronavirus spreads, forecasters have been cutting their estimates of how much oil demand will increase (or even decrease) this year. A few months back, most were forecasting around a 1.2 million b/d increase, with a few pessimists talking about demand falling below a 1 million increase. Now we are getting forecasts of little or no increase in demand, even though the course of the virus is not yet clear.
Goldman Sachs is forecasting that production will decline by 150,000 b/d. IHS is forecasting global oil demand at 3.8 million b/d lower than a year ago. And ever-optimistic Rystad is saying demand only will grow by 500,000 b/d, down from 1.1 million b/d that it estimated in February. Since the beginning of the commercial oil market in the 19th century it has been rare for annual demand to drop, with contractions generally limited to recessions, as in 2008, or dramatic spikes in price, such as during the Arab oil embargoes of the 1970s.
OPEC’s crude production fell to the lowest in more than ten years last month as some producers cut more deeply than they had agreed to, and Libya’s output continued to decline amid the oil port blockade. At 27.84 million b/d, the cartel’s February average was 510,000 b/d lower than the January average, with Libya’s production at a little over 120,000 b/d. Russia’s average oil production increased to 11.29 million b/d in February, up by 3.2 percent on the year and slightly up from 11.28 million b/d in January.
Reliable oil production data for the US comes from the EIAʼs Petroleum Supply Monthly. It takes about two months for the administration to compile and verify the data so that we have a reasonably accurate picture of US production. The February EIA report shows that US production dropped from November by 84,000 b/d to 12,779,000 b/d in December.
The sharp drop in the oil price has left US shale producers hanging on for survival as Russia and the Saudis fight a battle for market share by keeping the taps flowing. US producers absorbed $400 billion of capital between 2008 and 2018 without returning much of it, said Artem Abramov, head of shale research at Rystad. Wall Street has now closed off the capital pipeline, tired of funding a business model that is better at pumping oil than profits.
With West Texas Intermediate falling to $41 a barrel, US shale oil and gas producers are feeling growing heat. Except for the Permian, where the production of both oil and gas is still growing, the US shale oil production is retrenching. And the Permian may soon follow suit. In its latest Drilling Productivity Report, released in the middle of last month, oil production had declined across six of the seven major shale plays in the country, by some 21,000 b/d. In the Permian, however, production rose by 39,000 b/d, tipping the total into a net increase of 18,000 b/d. Now, while this confirms the star status of the Permian, it also suggests that oil production growth is becoming uneconomical in other shale plays.
Exxon is slowing the pace of its shale project in the Permian Basin, one of the first signs that the oil majors are throttling back on production in response to the recent slump in prices. The US energy giant will cut Permian production growth by about 10 percent over the next two years, the company said at its analyst day in New York on Thursday but will stick to its long-term plan to almost triple output from the basin by 2024. Chevron, however, increased its output target for the basin to fund as much as $80 billion of dividends and share buybacks over the next five years.
Global exploration and production investments may take a substantial hit this year because of the coronavirus, as staffing and supply shortages at crucial construction yards in Asia and beyond delay project deliveries by up to a year. Some of the investments are likely to come back in 2021, but the situation is expected to worsen in March, slamming the global services industry well beyond Asia.
2. Geopolitical instability
In the wake of Moscow’s decision not to support Saudi efforts to cut OPEC+ oil production further, Riyadh has every incentive to boost production to maximize revenue as prices fall. The kingdom plans to raise its crude oil production to significantly above 10 million b/d in April, two sources told Reuters on Sunday.
Saudi Arabian Crown Prince Mohammed bin Salman has embarked on a broad security crackdown by rounding up royal rivals, government officials, and military officers to quash potential challenges to his power. Members of the Saudi royal court have told allies that they detained two princes and their supporters because they were plotting a palace coup aimed mainly at arresting the rise of Prince Mohammed to king. So far, there have been few signs of opposition to the crown prince, so the arrests appear likely to have few repercussions.
On Friday, the Iranian government began to acknowledge that the covid-19 virus has hit that country extremely hard, and it’s likely to get much worse. In a televised news conference, the spokesman for Iran’s coronavirus task force announced that 4,700 cases of the virus have now been confirmed, including more than 1,200 in the previous 24 hours. The official death count stands at 194.
Based on the figures from Tehran, Ashleigh Tuite, an infectious-disease epidemiologist, estimated that the current outbreak in Iran had reached as much as 28,000 cases. “I expect these numbers to keep going up,” said Tuite, who is based at the University of Toronto.
In the early days of the virus outbreak, officials in Tehran were worried about turnout in the Feb 11th parliamentary elections. They feared that low voter turnout — which, as anticipated, was aggravated by the Iranian military’s shootdown of a Ukrainian passenger jet carrying many Iranians — would further undermine public support for the government. Now news that an increasing number of ministers and lawmakers have tested positive for the virus — two of whom have already died from it — has shattered what was left, if anything, of the government’s credibility.
Iran has temporarily released more than 54,000 prisoners to combat the spread of the coronavirus disease in crowded jails. A judiciary spokesman told reporters that the inmates were granted leave after testing negative for Covid-19 and posting bail. “Security prisoners” sentenced to more than five years will not be let out.
A large number of Iranians are displaying symptoms of the coronavirus but are choosing to stay home rather than risk infecting colleagues or being sent to hospitals. The long Nowruz holidays, which mark the traditional Iranian new year, are starting in less than two weeks, which will increase the risk of a rapid spread of the virus.
Tehran is increasing its production of enriched uranium in the wake of the Trump administration’s decision to abandon the 2015 nuclear deal. The UN nuclear watchdog confirmed the increase last week while also criticizing Tehran for blocking access to possible nuclear-related sites. Inspectors reported a near-tripling of Iran’s stockpile of low-enriched uranium just since November, with total holdings more than three times the 300-kilogram limit set by the nuclear accord. Iran also substantially increased the number of machines it is using to enrich uranium, the agency said, allowing it to make more of the atomic fuel faster.
Washington is preparing to impose new measures as soon as next week to stifle Venezuela’s oil exports, including not renewing Chevron’s license to do business with PDVSA. The US imposed harsh sanctions on Venezuela in early 2019, to oust President Nicolas Maduro, whose 2018 re-election was considered a sham by most Western countries. Venezuela’s oil exports have dropped by one-third since then, but more than a year on, Maduro remains in power, backed by Venezuela’s military as well as Russia, China, and Cuba.
3. Climate change
As the world’s biggest polluter, Beijing is setting aside its environmental ambitions as it confronts an unprecedented slowdown in growth. China, which spews more carbon into the atmosphere than the US and European Union combined, is being forced to give further priority to an economy that had wilted during the trade war with Washington and is now being flattened by the coronavirus epidemic.
Its economic problems are prompting Beijing to roll back restrictions on industrial pollution, slow its transition away from coal, and slash subsidies for cleaner energy and transportation. There are signs that the government is unwilling to set a higher bar this year for its climate goals.
“In China, there’s a belief that problems can only be solved in the process of economic development,” said Ma Jun, director of the Institute of Public and Environmental Affairs in Beijing. “Just like a moving bicycle, it runs more smoothly when it is moving at a high speed. But when it slows down, setbacks tend to occur.”
China’s measures to minimize further coronavirus infections have created one unexpected benefit — a dramatic improvement to the nation’s air quality. Satellites operated by NASA and the European Space Agency have detected significant drops of major airborne pollutants above vast swathes of the country.
The winter of 2019-2020 shattered temperature records in Russia and France as well as other parts of Europe and the US. In Moscow, this was the warmest winter in nearly 200 years of record-keeping, and the first winter there to have an average temperature at or above 32 degrees. The average winter temperature during December, January, and February in Moscow was 32.3 degrees, which is 11.3 degrees above the 1981-2010 average and shatters the previous record held by the winter of 1960-61 by an astonishing 3.5 degrees.
We have pushed atmospheric carbon dioxide levels almost 50 percent higher than they were before industrialization. That dramatic number would be even higher without tropical forests, which have been absorbing as much as 17 percent of CO₂ emissions along the way. Rainforests, however, can’t capture carbon like they used to. In a new study using 30 years of data from Amazon and African tropical forests, researchers found the actual rate CO₂-reduction rate peaked a quarter-century ago. These rainforests absorbed about a third less CO₂ over the past decade than they did the 1990s, according to the study published in the journal Nature.
4. The global economy and trade wars
According to Bloomberg Economics, the coronavirus is going global, and it could bring the world economy to a standstill. The epidemic that began in the depths of China’s Hubei province is spreading rapidly. There are now significant outbreaks from South Korea to Italy and Iran, and the first deaths have been reported in both North and South America. The economic fallout could include recessions in the US, euro-area, and Japan, the slowest growth on record in China, and a total of $2.7 trillion in lost output. That’s the most extreme of four scenarios developed by Bloomberg.
As the coronavirus spreads across the world and brings large parts of the global economy to a stop, the financial press is scurrying to put numbers on how bad the situation is going to be. The first problem with getting a handle on the state of the Chinse economy is that Beijing is not honest about the virus situation in the country. For the past few days, Beijing is claiming that, except for the epicenter of Wuhan and 28 sick Iranians that flew into the country, there have been no new cases of the virus anywhere. Given how fast the virus is spreading elsewhere in the world, this claim is hard to believe, especially as tens of millions are supposed to be returning to work.
The pressure to get the economy back to work after the coronavirus shutdown is resurrecting an old temptation: doctoring data, so it shows senior officials what they want to see. This phenomenon is playing out in Zhejiang province, an industrial hub on the east coast, in the form of electricity usage. At least three cities there have given local factories targets to hit for power consumption because they’re using the data to show a resurgence in production, according to people familiar with the matter. That’s prompted some businesses to run machinery even as their plants remain empty, the people said.
While it’s unclear how wide the problem of doctored data is in China, there are signs that electricity usage has become a focus for more than Zhejiang. The official Xinhua News Agency last week published a story about production resuming in Guangdong, China’s largest provincial economy, using power consumption as the primary evidence to show how quickly things were getting back to normal.
On Saturday, a government official announced that 78 million migrant rural workers, accounting for 60% of the total who left for home for the Chinese New Year holiday, have returned to work. The official did admit that the risk of contagion from increased population flows is rising.
China’s overall exports contracted by 17.2 percent in dollar terms in January and February, more than was expected by economists polled by Bloomberg. Imports fell by 4 percent, and China posted a trade deficit of $7.1 billion in the first two months of the year. “China’s manufacturers imported the raw materials but were unable to produce and export due to shutdown of the production and logistics,” said Zhou Hao, senior emerging markets economist at Commerzbank. “However, if the demand can’t recover, which is probably the case due to virus spreading globally, China’s imports would also further soften going forward.”
The US says it sees no reason China will not honor its commitments to buy an additional $52 billion in US energy products over the next two years despite the coronavirus, Secretary of Energy Brouillette said Thursday. However, the slowing of imports raises doubts that China will be able to meet its target in its trade deal with the US. China has agreed to buy $200 billion more US goods than it did in 2017. But imports from the US rose just 2.5 percent year on year in January and February. Exports to the US fell almost 28 percent.
China’s crude oil imports posted a 3.4 percent year-on-year growth for January and February, despite shrinking oil demand and refinery throughput levels. China cut an unprecedented 2.9 million b/d in refinery runs in February, and refinery runs will likely remain under severe pressure in March. However, growth in China’s natural gas imports, including piped gas and LNG, slowed to 2.8 percent over January-February from 18.5 percent a year ago due to the coronavirus outbreak and a warmer winter.
China’s car sales had the biggest monthly plunge on record as the coronavirus kept shoppers away, intensifying the pressure on automakers already battling an unprecedented slump before the outbreak. Sales fell 80% in February, according to preliminary numbers from the China Passenger Car Association released Wednesday.
Shipping volumes out of China plummeted in February as factory shutdowns in the wake of the epidemic crimped industrial production. Containership operators have canceled nearly 60 trans-Pacific sailings to the ports of Los Angeles and Long Beach in the first quarter and more than 110 to all of North America. Typically there are about 200 sailings of container ships across the Pacific a month. That means fewer ships are available to make the return journey east, and the average turnover of containers has stalled.
While still fighting a health emergency, the Chinese government also has to decide how much to spend and on what, mindful of the risks long posed by an enormous debt burden and the declining usefulness of yet more new roads and railways. Much will also depend on whether it wants to preserve the growth target of “about 6%” it was initially expected to set two weeks ago. If it does keep aiming high, then a scale of stimulus not seen since the $577 billion wave after the Great Recession will be required. That would likely help support slumping global growth too. For now, the wait-and-see approach is being fed by government statistics indicating that the epidemic itself is being brought under control, which may save Beijing the need to spend big.
In the U.S., the Federal Reserve’s latest nationwide survey of business conditions has found that the coronavirus outbreak has begun to impact tourism and disrupt manufacturing chains in parts of the country. The study compiled by the Fed’s 12 regional banks and released Wednesday found that growth through late February continued at a moderate rate. But it noted that concerns are rising about how the virus that began in China might impact the US economy.
The coronavirus epidemic could cost passenger airlines up to $113 billion in lost revenue this year, an industry body warned on Thursday, more than three times a projection it made just two weeks ago as the virus continues to spread. The warning from the International Air Transport Association came as British regional carrier Flybe became the first big casualty of the slump in travel. Only 6.2 million light-duty vehicles were sold worldwide in January—the lowest monthly figure since January 2012, which saw 5.9 million units sold, according to GlobalData, a data and analytics company.
The OECD sounded the alarm about coronavirus on Monday, warning that it could halve global economic growth this year from its previous forecast. The organization lowered its central growth forecast from 2.9 percent to 2.4 percent but said a “longer lasting and more intensive coronavirus outbreak” could slash global growth to 1.5 percent in 2020.
The outbreak of the coronavirus disease will cause extensive staffing and supply shortages in the oil and gas industry, as well as a fall in the investment of around $30 billion in 2020, says Rystad Energy. At the same time, experts do not yet know when the effects of the epidemic will ease; they state, ‘the situation will worsen in March’ and predict the impact of the virus will affect the entire global petroleum industry. According to Rystad Energy, the virus outbreak could postpone deliveries of oil platforms and other equipment.
5. Renewables and new technologies
The competition to dominate the electric vehicle markets in the years ahead heated up last week. On Wednesday, GM Chief Executive Officer Mary Barra and the team from GM’s Technical Center made a case that they can catch up to and maybe even pass Tesla in the race to electrification. GM thinks it has a killer app in a battery platform that reduces the use of cobalt, one of the more expensive elements needed to store energy, and has a Lego-like structure that can be shrunk down or expanded to double as the chassis for anything from a compact Chevrolet Bolt hatchback to a Hummer pickup.
For any automaker that wants to take on Tesla in the EV race, the battery is vital. Its cost can put the car out of reach for many consumers and undermine a carmaker’s chances of achieving profitability. If a battery can’t make a car travel 300 miles or better on a single charge— a range that only Tesla has on sale right now—most consumers won’t consider it.
GM plans to invest more than $20 billion over the next six years toward electric-vehicle programs. And by the middle of the decade, the company aims to sell a combined one million EVs annually in its two largest markets of the US and China.
Not to be outdone, the Chinese government announced the next day that it had certified a new electric car, the Xpeng P7 electric sports sedan, to have a driving range of 439 miles.
Electric car buffs are eagerly awaiting Tesla’s “battery day,” which is to take place next month. At the battery day presentation, Elon Musk is rumored to reveal a new type of vehicle battery that will be so cheap, last so long, charge so fast, and store so much electrical energy that its competitors will be blown out of the water.
California’s burgeoning hydrogen market has the potential to rapidly replace oil and gas engines for trucks, helping the state to meet its carbon-neutrality goals by mid-century. Progress is being made on new and cheaper ways of producing hydrogen. Researchers at Korea’s Ulsan National Institute of Science and Technology have developed a novel process for the production of hydrogen using various types of biomass, including lignin, as an efficient alternative to breaking down water or natural gas.
Tasmania will invest $33 million to build a renewable hydrogen industry. Australia’s smallest state seeks to benefit from its abundance of hydropower generation and the falling cost of large-scale production from renewables to make emissions-free hydrogen for export to Asia.
6. The Briefs (selections from the press – date of article in Peak Oil News is in parentheses – see more here: news.peak-oil.org)
Big oil conflicted: Exxon and Chevron boasted to investors this week about booming US oil production, illustrating how the gap has widened – at least in words – between top American oil and gas companies and their European rivals over efforts to transition to clean energy and fight climate change. (3/6)
Airlines hammered: With the coronavirus outbreak continuing to spread around the globe, the aviation industry is being jolted. An industry trade group said the coronavirus could wipe out between $63 billion and $113 billion in worldwide airline revenues this year. (3/6)
50% airline cutback: German airline group Lufthansa will slash flight capacity across its fleet by half over the coming weeks because of the fallout from coronavirus, the company said on Friday, just days after announcing a 20% reduction. (3/7)
Russian squeeze: President Vladimir Putin’s spending promises are under threat from falling oil prices that could hurt the savings the Kremlin is tapping to rekindle growth. The coronavirus outbreak last week pushed Brent crude, the international oil benchmark, down 10 percent to a year-low of close to $50 a barrel. The fall puts prices near Russia’s break-even price of $42 a barrel, threatening to undermine the policy that has helped Moscow build a national wealth fund since 2017. Facing a fall in living standards that pushed his approval ratings to record lows, Mr. Putin pledged in January to spend $60 bn on infrastructure and social spending. The national wealth fund is key to those plans. (3/2)
Saudi Arabia expanded a rare freeze on pilgrimages to the Muslim holy cities of Mecca and Medina by foreigners to also include Saudi citizens and residents due to concerns about the new coronavirus. Riyadh reported its first case of the flu-like disease on Monday and a second incidence on Wednesday, both from nationals who had not disclosed recent visits to Iran, which has reported the most deaths outside China where the virus originated. (3/5)
The Niger Delta is rich in crude oil deposits and home to multinational companies such as Shell. Decades of exposure to gas flaring by the foreign oil refineries in Niger Delta has harmed the health of residents. The toxic plumes of smoke are their constant reminder of an industry that gives them nothing more. This is an everyday reality for the many communities that live here. (3/7)
Venezuela has moved to seize assets of six shipping companies claiming they have an unpaid debt to state oil company PDVSA. A court decreed that the six shipping companies had misappropriated funds at the expense of PDVSA without mentioning the exact size of the misappropriation. Reuters notes that private shipping companies operating in Venezuela on behalf of its clients pay the Venezuelan state company fees for using the oil ports, which PDVSA owns, as well as fees for services such as anchorage and tugboats. (3/5)
Canadian oil sands quagmire: After Teck Resources canceled its oil sands project, even approved oil sands projects could be challenging for Canada’s companies to bring online in the short term until more pipeline capacity becomes available and the federal regulatory process becomes more explicit. (3/3)
The US oil rig count increased by 4 to 682 while the gas rig count fell by 1 to 109, according to Baker Hughes data. The total is down 234 from last year at this time. (3/7)
Record production: Annual US crude oil production reached another record level at 12.23 million barrels per day (b/d) in 2019, 1.24 million b/d, or 11%, more than the previous year. The jump was smaller than the 17% growth rate in 2018. Monthly US oil production in November 2019 averaged 12.86 million b/d, the most monthly oil production in US history. (3/5)
Bullish on Permian: Chevron has upped its Permian Basin resource estimate to more than 21 billion barrels of oil equivalent, more than double the company’s estimate just three years ago. The company’s 2017 resource estimate for the basin, the largest source of oil output in the US and a significant source of natural gas, was 9 million boe. (3/4)
Net oil exporter…sort of: The US was a net exporter of crude oil and petroleum products last month, with the four-week average net imports at a negative 907,000 b/d in the last week of February, the lowest ‘imports’ level in EIA data dating back to 1973. Despite the ‘net petroleum exporter’ status, the US continues to be a net importer of crude oil—it continues to import more volumes of crude oil than it exports. In November 2019, the latest monthly data, America imported 5.8 million b/d of crude oil and exported 3.0 million b/d of crude. (3/7)
In New England, four natural gas pipeline upgrades are either planned or under construction, which will increase deliverability by 350 million cubic feet per day into the region by 2023. As of the end of 2019, EIA estimates pipeline capacity into New England from both Canada and New York was 5,200 million. During days of peak demand in the winter, most of this capacity is fully utilized, which can lead to spikes in spot natural gas prices and, in turn, wholesale electricity prices. (3/7)
ExxonMobil maintains its strategy for capital expenditures between $30 billion and $35 billion each year through 2025, even though oil prices have tumbled by 25 percent since the start of the year. Exxon has been one of the few international oil majors that have ramped up spending levels over the past two years, aiming to grow production and shareholder value. Most other supermajors continue to stick to tight capital discipline after the 2014 oil price crash put an end to the enormous capital budgets in the oil industry. (3/6)
Chevron will continue to maintain its annual capital spending in a narrow range of $19 billion-$22 billion through 2024, maintaining strict spending discipline, unlike its US rival ExxonMobil, which has been spending a lot to grow production. (3/4)
Flaring’s imperative: Pioneer Natural Resources CEO Scott Sheffield has called flaring a “black eye” on the Permian Basin. Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy, wrote this week that flaring must end, or US oil producers will lose their social license to operate. (3/7)
Texas kerfuffle: A member of the top energy regulator in Texas lost his place on November’s ballot to a Republican challenger, a significant upset for an incumbent who has attracted criticism for his handling of natural gas flaring and occasionally split with his fellow commissioners. The Texas Railroad Commission regulates the state’s massive oil fields, including issuing permits for flaring, in which oil producers burn off unwanted natural gas. Critics characterized the incumbent as being opposed to change in flaring policies. (3/5)
FERC dust-up: In the past three months, federal energy regulators appointed by President Trump have disrupted ambitious plans to combat climate change in electric grids serving 85 million people in the US, from Chicago to New York to Washington. It was easy: an agency just rewrote some obscure pricing rules. What the agency did was impose an expanded minimum price floor for bids from providers that sell electricity in the so-called capacity market, where deliveries are promised years in the future so utilities and grids can plan for meeting peak demand. For the first time, renewable generators and nuclear plants that get boosts from subsidies or other incentives can’t bid below that price, eliminating an advantage they’ve had. Bottom line: the rules will likely increase costs to end-use consumers. (3/4)
Omnibus energy bill: Lawmakers on both sides of the aisle are seeking to add their bills to a fast-moving bipartisan energy package, which is expected to hit the Senate floor for a vote on Thursday. The 555-page proposal already includes proposals reflecting more than 50 bipartisan bills that have already been forwarded from the Senate Energy and Natural Resource Committee. (3/4)
Energy building codes scuttled: The National Association of Home Builders, one of the largest lobbying organizations in Washington, succeeded in removing from the energy omnibus bill a proposed higher energy standard through stricter building codes. Builders argued that the standards amount to an unfair and unnecessary increase in the cost of buying a home. Proponents say that higher efficiency makes homes more affordable on day one. (3/5)
Rare earths push: The US State Department has helped launch an online tool aimed at staking America’s claim to many of the world’s rare-earth minerals. Last year, the State Department’s Bureau of Energy Resources launched an international partnership, the Energy Resources Governance Initiative, to encourage responsible mining of critical minerals. The website is the latest part of that initiative. The website includes specific information such as how to create data management systems to quantify a mineral resource and involved “decision trees” to weigh the costs and benefits of different approaches. (3/4)
COVID-19 hammering shipping: The coronavirus has cut deeply into the volume of cargo crossing the docks at US seaports in a further sign of the economic turmoil caused by the outbreak. First-quarter cargo volume at US seaports will be down as much as 20% from the prior-year period due to the coronavirus. A key contributor to the estimate is canceled sailings to and from parts of Asia where the impacts of the coronavirus have been most severe. (3/4)
As China encourages people to return to work despite the coronavirus outbreak, it has begun a bold mass experiment in using data to regulate citizens’ lives — by requiring them to use the software on their smartphones that dictate whether they should be quarantined or allowed into subways, malls and other public spaces. But a New York Times analysis of the software’s code found that the system does more than decide in real-time whether someone poses a contagion risk. It also appears to share information with the police, setting a template for new forms of automated social control that could persist long after the epidemic subsides. (3/2)
China’s “charm outreach”: As new coronavirus cases track downward in China, it is looking to burnish its credentials as a responsible power by sharing expertise and equipment with countries seeing a surge in cases and to repair an international image dented by the disease. China’s diplomats have fanned out to deliver a message that it can control the outbreak and call on countries to ease travel bans on Chinese people. (3/6)
EU climate action: The European Commission proposed on Wednesday enshrining the European Green Deal’s commitment for carbon neutrality by 2050 into legislation, as part of the European Union’s heightened focus on climate action and policy. (3/5)
Brussels wants the power to impose tighter carbon emission targets on EU governments every five years as Europe strives to become the first continent in the world to reach climate neutrality by 2050. Brussels will reserve the power to raise emissions targets every five years from 2030 onwards using a legal instrument where member states and the European Parliament have limited ability to object. (3/2)
The UK’s CO2 emissions fell by 2.9 percent in 2019, according to Carbon Brief analysis. This brings the total reduction to 29 percent over the past decade since 2010, even as the economy grew by a fifth. Another 29 percent reduction in coal use last year was the driving force behind the decline in UK emissions in 2019, with oil and gas use mostly unchanged. (3/5)
The anti-Greta: Naomi Seibt, a 19-year-old self-styled “climate realist” from Germany, used her debut speech at the Conservative Political Action Conference to decry what she called “climate alarmists” who are “fear-mongering and using panic as a tool to restrict our freedoms.” (3/2)
H2 push: Germany is taking its first steps to building an economy based on hydrogen instead of fossil fuels, seeking to deliver both green growth and to avoid being trapped by a small cartel of suppliers. Ministers have been quietly lining up deals with nations, including Nigeria, that might produce hydrogen from renewable energy shortly. The ambition is to reduce Germany’s pollution from oil and natural gas — and to cut reliance on the countries that produce the fuels. (3/3)
The financial world and those responsible for regulating it have been waking up to the threat posed by global warming. Earlier this year, the head of the world’s largest investment firm, BlackRock, said that climate change is causing a “fundamental reshaping of finance.” As investors, bankers, and others in finance accept that they must rethink how they operate, some insurance companies and lenders are responding by reducing their risks to flooding, wildfires, and other natural disasters. It’s a shift likely to put a more significant burden on state and federal governments and — ultimately — taxpayers when disaster hits. (3/5)
Home prices discount risk: At least 3.8 million US homes lie in flood plains. Together, they may be overvalued by $34 billion. New research published today in a National Bureau of Economic Research working paper shows that if home prices more accurately reflected risk, there would most likely be less development in flood plains. (3/3)