Tag Archives: carbon footprint

Greening the Mining Industry

An Australian regulator recently told Peabody Energy Glencore they couldn’t export coal from a new mine to countries that haven’t signed the Paris climate agreement. Two other Australian coal projects were scuttled in 2019, partly out of concern about greenhouse-gas emissions overseas.  Investors, too, are growing inquisitive about miners’ records on their customer emissions—partly out of fear about potential liability. Miners are responding by increasing carbon-impact disclosure, forming alliances with buyers and investing in technology to cut emissions from steel mills and power plants.  BHP  has said its scope 3 emissions—pollution mostly created when customers transport and use the commodities it produces—are almost 40 times greater than those generated at its own operations.

In the oil industry, facing similar pressures, there is friction among large companies over whether to commit to reducing greenhouse-gas emissions from products such as gasoline—in big part because emissions vary hugely depending on the vehicle…

Threats to miners’ business go beyond pushback on new projects. Consumer brands could stop buying commodities they consider too dirty, experts say. Many are already innovating with recycled materials.

In July 2019, BHP pledged to spend $400 million over five years to develop technologies that can reduce emissions both from its operations and its customers’.  “We won’t stop at the mine gate,” BHP Chief Executive Andrew Mackenzie said. …Rio Tinto is also drawing up scenarios for decarbonizing the steel industry. Success could materially affect the value of its core iron-ore business, it said.  Meantime, miners are touting their role in the shift to a low-carbon economy by producing commodities such as copper and nickel for wind turbines and electric vehicles.

Excerpts from Rhiannon Hoyle, Miners’ New Worry: Other People’s Pollution, WSJ, Oct. 9, 2019

Climate Change: the Costs of Deep Decarbonization

Nuclear is already the largest source of low-carbon energy in the United States and Europe and the second-largest source worldwide (after hydropower). In the September 2018 report of the MIT Energy Initiative, The Future of Nuclear Energy in a Carbon-Constrained World shows that extending the life of the existing fleet of nuclear reactors worldwide is the least costly approach to avoiding an increase of carbon emissions in the power sector. Yet, some countries have prioritized closing nuclear plants, and other countries have policies that undermine the financial viability of their plants. Fortunately, there are signs that this situation is changing. In the United States, Illinois, New Jersey, and New York have taken steps to preserve their nuclear plants as part of a larger decarbonization strategy. In Taiwan, voters rejected a plan to end the use of nuclear energy. In France, decisions on nuclear plant closures must account for the impact on decarbonization commitments. In the United Kingdom, the government’s decarbonization policy entails replacing old nuclear plants with new ones. Strong actions are needed also in Belgium, Japan, South Korea, Spain, and Switzerland, where the existing nuclear fleet is seriously at risk of being phased out.

What about the existing electricity sector in developed countries—can it become fully decarbonized? In the United States, China, and Europe, the most effective and least costly path is a combination of variable renewable energy technologies—those that fluctuate with time of day or season (such as solar or wind energy), and low-carbon dispatchable sources (whose power output to the grid can be controlled on demand). Some options, such as hydropower and geothermal energy, are geographically limited. Other options, such as battery storage, are not affordable at the scale needed to balance variable energy demand through long periods of low wind and sun or through seasonal fluctuations, although that could change in the coming decades.

Nuclear energy is one low-carbon dispatchable option that is virtually unlimited and available now. Excluding nuclear power could double or triple the average cost of electricity for deep decarbonization scenarios because of the enormous overcapacity of solar energy, wind energy, and batteries that would be required to meet demand in the absence of a dispatchable low-carbon energy source.  One obstacle is that the cost of new nuclear plants has escalated, especially in the first-of-a-kind units currently being deployed in the United States and Western Europe. This may limit the role of nuclear power in a low-carbon portfolio and raise the cost of deep decarbonization. The good news is that the cost of new nuclear plants can be reduced through…modular construction shifting  labor from construction sites to productive factories and shipyards…and seismic isolation to protect the plant against earthquakes, which simplifies the structural design of the plant.

Excerpts from John Parsons, A fresh look at nuclear energy, Science, Jan. 2019

Cut or Pay up: Net Negative Carbon Emissions

Sweden’s parliament passed a law in June which obliges the country to have “no net emissions” of greenhouse gases into the atmosphere by 2045. The clue is in the wording. This does not mean that three decades from now Swedes must emit no planet-heating substances; even if all their electricity came from renewables and they only drove Teslas, they would presumably still want to fly in aeroplanes, or use cement and fertiliser, the making of which releases plenty of carbon dioxide. Indeed, the law only requires gross emissions to drop by 85% compared with 1990 levels. But it demands that remaining carbon sources are offset with new carbon sinks. In other words greenhouse gases will need to be extracted from the air

[I]f the global temperature is to have a good chance of not rising more than 2ºC above its pre-industrial level, as stipulated in the Paris climate agreement of 2015, worldwide emissions must similarly hit “net zero” no later than 2090. After that, emissions must go “net negative”, with more carbon removed from the stock than is emitted…

To keep the temperature below a certain level means keeping within a certain “carbon budget”—allowing only so much to accumulate, and no more. Once you have spent that budget, you have to balance all new emissions with removals. If you overspend it…you have a brief opportunity to put things right by taking out more than you are putting in…

Climate scientists like Mr Henderson have been discussing negative-emissions technologies (NETs) with economists and policy wonks since the 1990s. [But] NETs were conspicuous by their absence from the agenda of the annual UN climate jamboree which ended in Bonn on November 17th 2017.

 Reforesting logged areas or “afforesting” previously treeless ones presents no great technical challenges. More controversially, they also tend to invoke “bioenergy with carbon capture and storage” (BECCS). In BECCS, power stations fuelled by crops that can be burned to make energy have their carbon-dioxide emissions injected into deep geological strata, rather than released into the atmosphere….

The Carbon Capture and Storage (CCS)  technologies that exist today, under development by companies such as Global Thermostat in America, Carbon Engineering in Canada or Climeworks of Switzerland, remain pricey. In 2011 a review by the American Physical Society to which Ms Wilcox contributed put extraction costs above $600 per tonne, compared with an average estimate of $60-250 for BECCS…

Much of the gas captured by Climeworks and other pure NETs firms (as opposed to fossil-fuel CCS) is sold to makers of fizzy drinks or greenhouses to help plants grow. It is hard to imagine that market growing far beyond today’s total of 10m tonnes. And in neither case is the gas stored indefinitely. It is either burped out by consumers of carbonated drinks or otherwise exuded by eaters of greenhouse-grown produce…..

One way to create a market for NETs would be for governments to put a price on carbon. Where they have done so, the technologies have been adopted. Take Norway, which in 1991 told oil firms drilling in the North Sea to capture carbon dioxide from their operations or pay up. This cost is now around $50 per tonne emitted; in one field, called Sleipner, the firms have found ways to pump it back underground for less than that. A broader carbon price—either a tax or tradable emissions permits—would promote negative emissions elsewhere, too…

Another concern is the impact on politicians and the dangers of moral hazard. NETs allow politicians to go easy on emission cuts now in the hope that a quick fix will appear in the future.

Excerpt from Sucking up Carbon, Combating Climate Change, Economist,  Nov. 18, 2017

Don’t Cut that Tree!

A revolutionary new approach to measuring changes in forest carbon density has helped scientists determine that the tropics now emit more carbon than they capture, countering their role as a net carbon “sink.”*

“These findings provide the world with a wakeup call on forests,” said scientist Alessandro Baccini, the report’s lead author….Forests are the only carbon capture and storage ‘technology’ we have in our grasp that is safe, proven, inexpensive, immediately available at scale, and capable of providing beneficial ripple effects—from regulating rainfall patterns to providing livelihoods to indigenous communities.”

Using 12 years (2003-2014) of satellite imagery, laser remote sensing technology and field measurements, Baccini and his team were able to capture losses in forest carbon from wholesale deforestation as well as from more difficult-to-measure fine-scale degradation and disturbance …from smallholder farmers removing individual trees for fuel wood. These losses can be relatively small in any one place, but added up across large areas they become considerable.

[T] he researchers discovered that tropics represent a net source of carbon to the atmosphere — about 425 teragrams of carbon annually – which is more than the annual emissions from all cars and trucks in the United States.

Excerpts from New approach to measuring forest carbon density shows tropics now emit more carbon than they capture, Woods Hole Research Institute Press Release, Sept. 28, 2017

*Tropical forests are a net carbon source based on aboveground measurements of gain and loss by A. Baccini et al., Science, Sept. 28, 2017

Demand for Carbon Tax

“You can argue that Big Oil is becoming Big Gas,” says Occo Roelofsen of McKinsey, a consulting firm. Others are going in for renewables. Total of France has a majority stake in SunPower, one of the world’s biggest solar-power firms. Eldar Saetre, the boss of Statoil, Norway’s state-run oil company, says that in 15 years there may be more opportunities outside oil and gas than within.

Plenty of oil firms (Exxon among them) are also calling for governments to enact a “carbon tax” on emitters of greenhouse gases. Their critics argue that this is less altruistic than it appears. For one thing, such a tax would hurt the coal industry especially, thereby boosting the oil firms’ gas businesses. And governments, especially in the developing world, where fossil-fuel demand is still surging, may find such a tax politically impossible anyway; the oilmen are calling for it, opponents say, in the knowledge that such countries will never introduce it….

On November 4th New York’s attorney-general, Eric Schneiderman, subpoenaed documents from Exxon to investigate how much it has known since the 1970s about the effects of fossil fuels on the climate. Exxon is reportedly being investigated under the Martin Act, dating back to 1921, which gives prosecutors wide-ranging powers to investigate securities fraud. Exxon says it has long disclosed information about the risks to its business from climate change, and from action to prevent it, in reports to its shareholders. But the firm’s run-in with the New York justice department may be a portent of what is to come.

Another worry for oil executives is pressure from investors spooked by the financial risks of climate change. Policymakers, such as Mark Carney, governor of the Bank of England, talk about the possibility of many oilfields turning into “stranded assets”, or “unburnable carbon”, if governments get serious about climate-change action. Anthony Hobley of Carbon Tracker, a climate-advisory firm, says that if the Paris pledges are taken at all seriously, the oil and gas industry may become “ex-growth”. Oil executives dispute that. But shareholders, if motivated, could force the industry to shrink just by limiting the funds they provide for new oil discoveries.

Curiously, the present situation may provide a foretaste of this—though cyclically, because of falling oil prices, rather than structurally, because of rising temperatures. Faced with a world awash in crude, oil majors are abandoning high-cost reserves in the Arctic, Canada, North Sea and Gulf of Mexico. One oil executive ruefully calls it a “practice run” for the day in the distant future when fears of global warming, or the emergence of cheap, clean alternative technologies, mean that demand for fossil fuels starts to wane.

Excerpt from Oil Companies and Climate Change: Nodding Donkeys, Economist, Nov. 14, 2015, at 61