Before we all get too optimistic about the run-up to Copenhagen, here are a couple of graphs from a recent Citi report about developed countries’ commitments. It’s what we already know, but it’s still striking:
We were excited to read this in the New York Times’ environment blog:
“Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” a new report from the National Research Council, a branch of the National Academies, tries to put a dollar figure on what economists call externalities.
Calculating these sorts of things can be fantastically convoluted – remember that report earlier this year that found that planes could be more environmentally sound than trains, sort of (taking into account occupancy rates, driving to meet the train, and manufacturing rail carriages and so on). So, information on energy externalities is good. But then came this: Read more
On FT Energy Source:
BP chief says oil sands, cap and trade will help – but CCS won’t Read more
News out of yesterday’s Major Economies Forum meeting in London – where the 17 biggest emitting countries battled out their Copenhagen stance – was surprisingly positive.
Developed countries talked about relenting on their demands that poorer countries sign up for big commitments for the year 2050 – something that has been a major sticking point in talks so far. Rich countries such as the UK and US have signalled that they would settle for 2020 targets for now.
And developing countries made a big concession, too – last week they apparently dropped demands for access to rich countries’ clean energy intellectual property. This was one of those demands that tended to fly under the radar in a lot of news coverage, but had been the source of a big rift behind the scenes.
So, what’s left? The task of reaching an international agreement in December is still mind-bogglingly challenging, but it will hinge on two more issues: Read more
US crude oil prices breached the $80 a barrel mark on Tuesday, reaching a fresh 2009 high, while gold rose as further weakness in the US dollar provided support for sentiment towards commodities.
Nymex November West Texas Intermediate reached a fresh 2009 high of $80.05 a barrel before easing back to trade 38 cents lower at $79.23.
The November contract expires at the end of Tuesday’s session and December WTI, the benchmark from Wednesday, slipped 33 cents to $79.63 after hitting $80.40.
Positioning in the options market provided a gravitational pull on WTI as a large number of “call” options – providing the right to buy crude oil at a predetermined price – were outstanding at the $80 mark.
Once the spot oil price moved near to that level, the sellers of the call options were forced to buy futures to cover their positions.
Olivier Jakob, head of Swiss-based oil consultancy Petromatrix, said that the outstanding call options “could accelerate prices and put fundamentals considerations to the side.” Read more
Tony Hayward, BP’s chief executive, revealed some of his thinking on the big questions facing the energy industry in a speech this morning. First, he warned policymakers not to dilly dally lest they want to see the return of energy shortages that plagued the UK in the 1970s and California at the turn of this century.
BP estimates the world will need to spend more than $1,000bn each year until 2020, to meet the expected 45 per cent increase in energy demand. Reducing carbon also needed to be a priority, with governments giving a clear path forward.
“We can’t afford to wait. We need to begin now to begin taking carbon out of the mix today,” he told a conference in London.
But turning the global economy into a carbon-light one will be slow as turn over time of capital stock in the power sector was 30 years, and in cars is 15 years, he argued. Read more
Pressure has been building on president Obama to attend the UN climate talks in December. Arguably that is unfair, since the meeting was always intended to be at only a ministerial level.
But on Monday the heat was turned up by Gordon Brown, Britain’s prime minister, when he addressed the Major Economies Forum meeting in London.
Mr Brown said he would definitely go to Copenhagen, and urged other leaders to do the same.
That created a slightly awkward situation for Todd Stern, the US climate representative who was at the London talks. Read more
The US Interior Department has decided it is okay for Shell Oil to drill exploration wells in the Beaufort Sea off Alaska for the first time in over a decade. An interesting decision by the Minerals Management Service division and one that has left the industry – except for Shell, of course – strangely silent.
In fact, the only ones who seemed to notice were the environmentalists, who insisted the decision was wrongheaded. The commentary was very much like that from the Bush years. Indeed, former President George W Bush’s name was invoked in the response by Whit Sheard, Alaska program director for Pacific Environment: Read more
Reports that the US Chamber of Commerce had issued a dramatic turnround and was actually supporting a climate change tax were quickly revealed to be a hoax by an organisation called the Yes Men.
The activist group, which has put on other hoaxes aimed at ‘correcting identities’, staged a press conference at the National Press Club fronted by a man “Hingo Sembra”, which BNet notes should have been a clue in itself. It also published a fake press statement that was almost believable – if you ignored that fact that this was an organisation that recently called for climate change science to go on trial, and was now apparently calling for a carbon tax. Read more
GE attacks protection of green industries
US group says protectionism undermining fight against global warming (FT)
Concession raises hopes for climate deal
Developed nations are preparing to relent on their demand (FT)
CNPC’s Operations Are ‘Better Than Anticipated’
Chinese group says businesses maintained ‘stability and growth’ (Bloomberg)
Reliance Industries eyeing refineries in US, Europe
Planning to buy assets worth $3-4bn (Reuters)
Options-driven rally likely if oil hits $80
A large number of call have been struck above $80 (FT)
Exxon Mobil ordered to pay $105m in NYC case
Fined for contaminating New York’s ground water (Reuters) Read more