Hello there!
Welcome to another edition of Living In A Greenhouse. If you read my previous update, you’d know how this email reaching your inbox today is a personal milestone. (I hope I don’t see another passive-aggressive email from Substack).
We are 6 months into 2022. Congratulations on that, everyone :) Go find a pool, because it also means summer is here.
Speaking of summers, I am not sure if Joe Biden is the summery type.
He seems like a dude who’d describe summers as ‘crowded, cloudless months when people wear fewer layers.’
While I can never credibly establish something that I am fully convinced about, I can certainly speak to his summertime sadness.
It’s a tough job to be Joe. Joe never catches a break.
Joe ran a presidential campaign on the promise of a “transition from oil”, reduce shale drilling, enact sweeping new climate legislations, and break America’s dependence on fossil fuels.
Safe to say, none of that happened 18 months into his tenure..
In what I dub a move of ‘bravado maxx’, his administration scrapped the Keystone XL pipeline to transport (tar sands) oil from Canada, hours after it took over the office. We have come a long way from that. Now, the same administration find themselves negotiating an agreement for Venezuelan crude oil, from a regime that is heavily sanctioned against … by the US government.
What gives 🤷🏻♂️?
Let’s get into this week’s edition. It speaks a bit more about Joe and his sojourn in Bonn.
War is good for the (fossil fuel) economy
A few things happened over the last month or so, that will certainly set us back on our global climate action.
These events reach a special crescendo around the meeting of the G7 in Bonn which concluded last week. The city that is also the birthplace of Ludwig van Beethoven (only ‘cos I said crescendo? Or, did I plug crescendo to give you this useless fact?)
Here is a quick run down.
Germany is restarting the coal plants it shut down; Germany is also passing a law to re-introduce coal into the energy mix by next month …
.. because Russia turned off its natural gas pipeline citing maintenance issues. Yes, it’s the same Russia that is being admonished for unprovoked warmongering. Also, Germany wants to ensure they have enough reserves and don’t run short come the winter months.
Biden and other G7 countries were in Germany to sign a commitment to utilise public funding to provide the EU with LNG infrastructure …
New LNG infrastructure essentially means that the facilities will be continue to be utilised for at least another couple of decades. With that signature, Biden also came through on his Valentine’s promise to provide Europe with at least 15 billion cubic metres of additional Liquefied Natural Gas; gas that otherwise wasn’t in the production plan.
Fun Fact: Macron’s government, back in 2020, successfully convinced the French Multinational Utility, Engie SA, to scrap a deal to import American LNG. It was deemed ‘dirty’ because of associated emissions from shale drilling, and oil and gas production.
… and to reach a deal to buy oil from Russia at a discounted price
Here’s Joe on Putin a couple of months ago. Tee-hee.
The G7 wants this deal because embargoes against purchases of Russian oil, amidst a shortage in production, have resulted in an increase in oil prices.
I am amazed at how an entire bloc of nations could delude themselves into thinking - if they stop buying, nobody else would buy. India and China continue to serve their self-interests and buy Russian oil at discounted rates. Now, Europe wants in on that.
Germany is lobbying the same G7 to scrap a proposed plan to ban overseas investment in fossil fuel projects by the end of this year
I can’t even.
And now, for the pièce de résistance
The European Union voted to designate investments in natural gas and nuclear as ‘green’
A short explainer:
Natural gas is mainly made up of methane, which has more potent global warming properties than carbon dioxide in the near term, that can leak during production and distribution.
Nuclear power does not emit greenhouse gases but produces toxic waste that requires safe disposal and can pose radiation risks.
Firstly, we should stop calling it ‘natural gas’ and call it fossil fuel gas. And secondly, we should not talk about nuclear power in the same breath, because the risk profiles are entirely different.
Fun fact: Countries including Russia, South Africa, and Bangladesh designed a similar labelling system for investments, and did not classify natural gas as green. Who’s the climate leader now, Ursula?
Another fun fact: Russia produces a fifth of the Uranium used in the nuclear reactors.
This is the summer that Biden’s credibility as a climate champion will be seriously questioned. His administration continues to insist the policies favouring fossil fuels are reactionary and short term. It continues to cite the geopolitical crisis, and rising crude prices as reasons. We will only have to wait and see how short-term this is.
This is also the summer when EU loses its sheen as a climate leader. The policy precedents set are far from ideal, and will pose a stumbling block in advancing the climate agenda among developing countries.
It’s going to be a long, cloudless summer for Joe.
But I am certain it is going to be worse for the rest of us.
Bonus
— Watershed moment? Possibly. But, I wouldn’t hold my breath.
The world saw a slew of net-zero targets around COP26. It’s like what happens around the tax season. My favourite person in all of Climate Finance, Mark Carney, rallied an assembly line of these signatures as a part of his Global Financial Alliance for Net Zero or GFANZ.
(Here’s a quick 43-second excerpt from the last time I had a few choice words about Mark Carney and that god-awful acronym. I have another 37-second one from a different edition should you be interested)
273 of the world’s major asset managers with over $63 trillion under management now have net-zero targets. They need tools to first see their exposure, before they can do anything about it.
Here is a new toolbox that will help them measure their fossil fuel exposure.
What will they do with that information? That’s anybody’s guess.
— Turkey could disrupt the power balance in the clean energy transition
Okay, I have to admit. This flummoxed me a little. How do you explain it to yourself when you find lots of something that is supposed to be ‘rare’? Tell me, Turkey.
(Fun fact: ‘Rare-earth’ metals are nowhere nearly as rare as gold, platinum, and palladium, and aren’t as profitable. But these 17 elements have remarkable capabilities to store and transmit energy, with minimal losses. Naturally, this is extremely crucial to advancements in energy storage and battery technology.)
That insignificant tangent aside, this wasn’t an overnight discovery and has been a decade in the making. Drilling to collect samples started in the year 2011.
Of the 17 known rare elements, the country will produce 10 from the new field.
There are competing claims about whether this is the largest, or the second-largest after China. However, China is the undisputed leader in extraction and production of rare earth metals, meeting over 80% of global demand.
But extracting rare-earth minerals from reserves is a complex process. Turkey’s governance issues and long-drawn hyperinflation are things to watch out for. Follow this space closely.
Banter
— If there’s one thing you do today, please hit play
It’s catchy af. Now, try getting this out of your head.