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EIB plans to cut all funding for fossil fuel projects by 2020

The European Investment Bank has vowed to end its multibillion euro financing for fossil fuel projects by the end of next year in order to align its strategy with climate targets.

The EU’s lending arm has drafted plans, seen by the Guardian, which propose cutting support for energy infrastructure projects which rely on oil, gas or coal by barring companies from applying for loans beyond the end of 2020.
 
EIB plans to cut all funding for fossil fuel projects by 2020

The European Investment Bank has vowed to end its multibillion euro financing for fossil fuel projects by the end of next year in order to align its strategy with climate targets.

The EU’s lending arm has drafted plans, seen by the Guardian, which propose cutting support for energy infrastructure projects which rely on oil, gas or coal by barring companies from applying for loans beyond the end of 2020.
This is great. Most of the economic damage done by climate change will boil down to a misallocation of capital. Banks don't have to be the ones left holding the bag. It's a choice. If the market economy really believes that fossil projects are a real winner, then other investors will happily step in to invest capital where banks and others refuse to lend. Judging by the rolling cash burn known as US fracking, there's plenty of dumb money out there. Banks don't have to be part of it.

Moreover, default scenarios for lenders is particularly troublesome. When a fossil developer defaults on a loan, debt lenders get the distressed physical assets pledged as capital. This is why oil wells keep pumping long after their owners have gone bankrupt. So in ordinary circumstances a lender would try to liquidate such collateral. But try to think of the moral and political problems of major banks operating or selling climate destroying asset while the rest of society is desperate to solve climate troubles. You get to a place where the socially responsible disposition of these distressed assets is to shut them down and do environmental clean up. Major banks could be politically exposed not just to taking a total loss on principle, but even funding remediation too. Total losses could exceed principle! Or alternatively, tax payers foot the bill as governments bail out banks. Neither is a happy conclusion.

So my personal view (not speaking for my employer) is that big banks really need to steer clear of carbon assets. Small institutions and investors, whom the government would not bother to bail out in a crisis, can bear this risk alone if they wish to.
 
Fossil fuel companies are banking on increased plastic production to make up for losses as people burn less oil and gas.
There may be serious pushback on this strategy.

How the Plastics Industry Is Fighting to Keep Polluting the World

A Bag’s Life is just one small part of a massive, industry-led effort now underway to suppress meaningful efforts to reduce plastic waste while keeping the idea of recycling alive. The reality of plastics recycling? It’s pretty much already dead. In 2015, the U.S. recycled about 9 percent of its plastic waste, and since then the number has dropped even lower. The vast majority of the 8.3 billion metric tons of plastic ever produced — 79 percent — has ended up in landfills or scattered all around the world. And as for those plastic shopping bags the kids were hoping to contain: Less than 1 percent of the tens of billions of plastic bags used in the U.S. each year are recycled.

The confluence of terrible news has taken public outrage over plastic to a new level. Once regarded mostly as an eyesore or a nuisance, plastic waste is now widely understood to be a cause of species extinction, ecological devastation, and human health problems. And because more than 99 percent of plastic is derived from oil, natural gas, and coal — and because its destruction also uses fossil fuels — environmental groups now recognize plastic as a major contributor to climate change. Naturalist David Attenborough has likened the shift in public opinion over plastics to the process through which the public reached a consensus on the harms of slavery.

All in all, Long admitted, it had been a tough year, in which some 376 anti-plastics bills were introduced, and the perception of the plastics industry has continued to “spiral down exponentially.”

Asked about the apparent dissonance between its sustainability pledge and participation in the Plastics Industry Association, Walmart provided an emailed statement saying that “Walmart’s aspiration is to achieve zero plastic waste. We are taking actions across our business to use less plastic, recycle more and support innovations to improve plastic waste reduction systems.” The statement also said that Walmart has “asked our suppliers to reduce unnecessary plastic packaging, increase packaging recyclability and increase recycled content, and to help us educate customers on reducing, reusing and recycling plastic.”
 
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Interesting perspective from the oil industry. They view natural gas as a part of the "low carbon" future and are counting on it to carry the industry.

Goldman: Big Oil Spend Half Of Budgets On Low-Carbon Business | OilPrice.com

Big Oil firms already spend half of their budgets on low carbon businesses, including natural gas, Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, said on Friday, discussing how the largest oil firms fare in a world of energy transition.

“When we look at the budgets of Big Oil today, they are already spending about half of the budgets on low-carbon activities, including gas to substitute coal,” Della Vigna told CNBC in an interview on Friday.

Goldman Sachs sees five levers for Big Oil to get through the energy transition profitably and at the same time heed shareholder and society demands for a lower-carbon future. The biggest oil firms can do more gas, more biofuels, use more oil products to create petrochemicals rather than burn them, do carbon sequestration and reforestation, and enter clean power, Della Vigna said.

“Renewables make perfect sense up to 50 percent of the power generation because then you can still manage the unreliability of supply and the timing of demand,” he told CNBC.

“The long-term solution of renewables plus gas-fired power generation, plus some level of CO2 sequestration is the cheapest way to get to a net zero carbon power generation,” the strategist said.
 
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Fossil fuel companies are banking on increased plastic production to make up for losses as people burn less oil and gas.
There may be serious pushback on this strategy.
Philadelphia is looking to ban plastic bags. The PA state Legislature just made it illegal to pass such an ordinance in the state. Lobbyists own the Legislatures of fracking states.
 
North American oil producers burned through $187 billion of cash since 2012. That's between 5-20 billion dollar negative free cash flow in most of the years...

ValueAnalyst1 shows the interesting graph directly:

ValueAnalyst on Twitter

Here the full article on Bloomberg: I had to open a private window to watch it (article limit reached).

Bloomberg - Are you a robot?
The oil is drilled in the Permian basin, the profits are in Washington DC tax code.
 
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Interesting perspective from the oil industry. They view natural gas as a part of the "low carbon" future and are counting on it to carry the industry.

Goldman: Big Oil Spend Half Of Budgets On Low-Carbon Business | OilPrice.com

Big Oil firms already spend half of their budgets on low carbon businesses, including natural gas, Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, said on Friday, discussing how the largest oil firms fare in a world of energy transition.

“When we look at the budgets of Big Oil today, they are already spending about half of the budgets on low-carbon activities, including gas to substitute coal,” Della Vigna told CNBC in an interview on Friday.

Goldman Sachs sees five levers for Big Oil to get through the energy transition profitably and at the same time heed shareholder and society demands for a lower-carbon future. The biggest oil firms can do more gas, more biofuels, use more oil products to create petrochemicals rather than burn them, do carbon sequestration and reforestation, and enter clean power, Della Vigna said.

“Renewables make perfect sense up to 50 percent of the power generation because then you can still manage the unreliability of supply and the timing of demand,” he told CNBC.

“The long-term solution of renewables plus gas-fired power generation, plus some level of CO2 sequestration is the cheapest way to get to a net zero carbon power generation,” the strategist said.
I'm trying to lose weight by eating more smart popcorn. I can't say I've actually lost any weight, but I'm snacking smarter!
 
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Interesting perspective from the oil industry. They view natural gas as a part of the "low carbon" future and are counting on it to carry the industry.

Goldman: Big Oil Spend Half Of Budgets On Low-Carbon Business | OilPrice.com

Big Oil firms already spend half of their budgets on low carbon businesses, including natural gas, Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, said on Friday, discussing how the largest oil firms fare in a world of energy transition.

“When we look at the budgets of Big Oil today, they are already spending about half of the budgets on low-carbon activities, including gas to substitute coal,” Della Vigna told CNBC in an interview on Friday.

Goldman Sachs sees five levers for Big Oil to get through the energy transition profitably and at the same time heed shareholder and society demands for a lower-carbon future. The biggest oil firms can do more gas, more biofuels, use more oil products to create petrochemicals rather than burn them, do carbon sequestration and reforestation, and enter clean power, Della Vigna said.

“Renewables make perfect sense up to 50 percent of the power generation because then you can still manage the unreliability of supply and the timing of demand,” he told CNBC.

“The long-term solution of renewables plus gas-fired power generation, plus some level of CO2 sequestration is the cheapest way to get to a net zero carbon power generation,” the strategist said.

It's progress. Renewables used to make sense up to 20%.
 
Next they'll be saying that renewables make sense up to 90%. When renewables are at over 100% of electricity needs (which they will be -- they'll get overbuilt and batteries will store the excess), I think that's when the oil strategists will get up.
Actually this reminds me of an interesting episode on the energy transition show podcast where a guest argues that in a lot of cases, it cheaper to have renewables like wind and solar operating in a curtailed mode especially when they start making up 50-60% supply, than build up battery capacity to back it up and use it. Batteries should mainly be used for time shifting between day / night, fast response frequency regulation, etc.

One plan is to have the excess energy (instead of curtailing) to be used for chemical storage for seasonal energy shift from summer to winter.
 
Actually this reminds me of an interesting episode on the energy transition show podcast where a guest argues that in a lot of cases, it cheaper to have renewables like wind and solar operating in a curtailed mode especially when they start making up 50-60% supply, than build up battery capacity to back it up and use it. Batteries should mainly be used for time shifting between day / night, fast response frequency regulation, etc.

One plan is to have the excess energy (instead of curtailing) to be used for chemical storage for seasonal energy shift from summer to winter.

Yes, probably referring to a study published earlier this year:

https://www.latimes.com/business/la-fi-solar-batteries-renewable-energy-california-20190605-story.html

In a study published in March, New York-based researchers Richard Perez and Karl Rábago argue that solar power has gotten so inexpensive that overbuilding it will probably be the cheapest way to keep the lights on during cloudy or overcast days — cheaper than relying entirely on batteries. Solar power can meet high levels of daytime electricity demand without energy storage, the researchers say, as long as there are enough solar panels on the grid during times when none of them are producing at full capacity.

“It’s not like solar is going to be available all the time,” said Perez, a solar energy expert at the State University of New York at Albany. “At night you will need storage, and on cloudy days you will need storage. But you will need much less of it.”​

Based on this paper:

Solar Energy Journal study
 
It's already been illustrated.....in cloudy land locked Germany. On sunny spring days in 2013 they hit 60%+ wind/solar when folks said the grid could never possibly handle more than 10-20%
Germany is interconnected with other EU countries and can import/export power as needed to manage wind/solar variability. It's not the same thing as running an entire grid at 50-60%. This blog post is a couple years old but has some interesting data points.

Germany also has extremely high electricity prices, which makes it a poor example for fans of renewables.
 
Germany is interconnected with other EU countries and can import/export power as needed to manage wind/solar variability. It's not the same thing as running an entire grid at 50-60%. This blog post is a couple years old but has some interesting data points.

Germany also has extremely high electricity prices, which makes it a poor example for fans of renewables.
That's all well and good, but the grid point stands. 2009ish pundits and legitimate experts were insisting the German grid could handle maybe 10-20% variable renewables at most. 3 years later they passed 50% peak load from wind/solar on certain days with no major issues having made no significant grid upgrades.
 
Actually this reminds me of an interesting episode on the energy transition show podcast where a guest argues that in a lot of cases, it cheaper to have renewables like wind and solar operating in a curtailed mode especially when they start making up 50-60% supply, than build up battery capacity to back it up and use it. Batteries should mainly be used for time shifting between day / night, fast response frequency regulation, etc.

One plan is to have the excess energy (instead of curtailing) to be used for chemical storage for seasonal energy shift from summer to winter.
Also more high capacity electric lines to send excess renewable-generated power where it can be used.

Wasn't there a MN study that concluded a cost effective alternative to lots of storage is:
- excess renewable-generated electricity capacity;
- additional high capacity electric lines to transfer renewable-generated electricity where it's needed; and - smaller storage than would otherwise be needed?
 
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It's already been illustrated.....in cloudy land locked Germany. On sunny spring days in 2013 they hit 60%+ wind/solar when folks said the grid could never possibly handle more than 10-20%

I think California also reached 60% wind+solar.

California’s solar power record setting season is here

[...] on Wednesday, April 10th, at 11:05 am a full 93% of electricity generation in the ISO region was coming from zero carbon sources. Large hydro electric sources, plus nuclear were generating 25% of the state’s electricity. At this moment, the state was also exporting 412 MW of electricity, while burning zero coal. The only fossils burning were 1.55 GW of gas plants. When looking at the numbers for the whole day on CAISO’s website, it becomes clear that for a very large portion of the day (remember the aforementioned broad shoulders) – California’s electricity generation was very similar to 11:05 AM and its 93% zero carbon electricity.​

CA ISO doesn't seem to report supply percent of wind+solar directly. I was too lazy to download the data and put it in a spreadsheet, but here's some quick math. For 2019-04-10 at 11:05 solar+wind was 13282-MW, which is 88% of the total 15101-MW renewables. Using the numbers quoted above, zero-carbon was 93% of supply and 25% was so-called "non-renewable": nuclear and large hydro (don't ask). That leaves 68% renewables in supply; 88% of that comes to 60% solar+wind.
 
FWIW
upload_2019-7-30_8-39-36.png

'Made in China 2025' forges ahead with EV dominance in sight

ancillary to the article, is the history, during the past decade, battery leadership has approximately followed
AESC was the first to leadership, with Nissan
LG Chem, then took leadsership with Renault and GM Volt
BYD then broke cover with their own range of new energy vehicles, (taking leadership)
Panasonic reascended to leadership via Tesla
now CATL leads due to being China Inc's goto supplier for batteries, having fought through a brutally competitive internal field.