U.S. Senate Committee pushes oil industry’s antisocial LNG scheme.

Oil & Gas field, Midland, Texas. Photo credit: EcoFlight

How long can the fracking spending spree last?
— Houston Chronicle
headlineSept 14, 2018.

The answer to the Chronicle’s question is: for as long as investors have money to burn. Justin Mikulka, writing Dec 18, 2018, for Desmogblog, puts it this way: “Fracking in 2018 was another year pretending to make money. . . . Whether fracking companies are profitable or not doesn’t really matter to Wall Street executives who are getting rich making the loans that the fracking industry struggles to repay.”

Yet the industry is currently pumping more fracked gas than ever before. The market is swamped and prices are at or below break even (see “Natural Gas Prices Fall Below Zero In Texas” – Oilprice.com, Nov 28, 2018). And now there’s a push to liquify as much of the stuff as possible for shipment overseas to anyone who’ll buy it.

Speaking at a July 11, 2019 hearing of the U.S.  Senate Committee on Energy and Natural Resources on “The Important Role of LNG in Evolving Global Markets”, Nikos Tsafos, Senior Fellow, Energy and National Security Program Center for Strategic and International Studies (CSIS), said:

There is an oversupply of LNG on the market, leading to historically low prices in Europe and Asia . . .  Despite [these] historically low prices today, companies are betting billions to enable the next wave of LNG supply—and this wave will be far bigger, more diverse, and perhaps more politically complicated than earlier waves. . . . [There are an] unprecedented number of proposed LNG supply projects that might reasonably start construction over the next two year.

Since the U.S. Senate is controlled by Republicans, only people supportive of the oil and gas industry and its LNG subset were invited to give evidence at the Senate Energy Committee hearing. The talk was all about how best to promote the industry and take advantage of an imagined “window of opportunity” to strengthen its global competitiveness. There was no mention of global warming or the need to restrain the production of fossil fuels. This is how Steven E. Winberg, Assistant Secretary for Fossil Energy U.S. Department of Energy, summarized his testimony:

“Natural Gas has transformed our Nation and the world for the better. The increased use and production of natural gas has grown our economy, created countless American jobs, and made our air cleaner. Further, increasing exports of domestically produced natural gas to 36 countries around the world has given our allies a stable, reliable and secure source of clean energy.”

Here’s what’s wrong with that picture: Hydraulic fracking is a filthy business, it poisons the water table, adds greenhouse gasses to the atmosphere, and far from making the world better, it makes it bad (see below for specifics on just how bad); The people employed in the industry would be far more constructively employed in building the nation’s renewable energy economy; Natural Gas is not a stable, reliable, or secure source of energy, let alone a clean one — gas deposits are bound to become stranded due to the superior economics of renewables. And considering the political and social pressures surrounding climate change, “our allies” would be well advised not to get hooked on it.

Renewables are displacing fossil fuels. During this transition, the U.S. has more than enough natural gas to satisfy its current domestic needs. That’s what energy security means. The push to export LNG is not about energy security, or even about making money, it’s about building expensive infrastructure (pipelines, liquefaction plants, terminal facilities, etc) to keep the Oil & Gas Industry in business. Pitching the benefits of investing in this LNG boondoggle is Charlie Riedl, Executive Director of the Center for Liquefied Natural Gas. Here’s part of his testimony before the above mentioned Senate hearing on LNG markets.

“The U.S. is now home to four LNG export terminals in operation, six projects under construction, and seven projects that are permitted and awaiting Final Investment Decisions. There are another fourteen projects in the [Federal Energy Regulatory Commission] FERC queue. Each of these projects individually represents billions of dollars of investment in America’s energy future. . . . Technological breakthroughs in the oil and natural gas industry have unleashed an energy renaissance, establishing the United States as the world’s largest natural gas producer – and domestic production continues to grow. We have enough natural gas to supply affordable energy domestically for at least 100 years with current technology, as well as to significantly increase U.S. participation in the global market for LNG.” (my underlines)

Mr. Riedl paints a picture of a world living indefinitely on fossil fuels, a world much to the liking of the Oil & Gas Industry. He does not mention the impact of global warming or the Paris Climate Accord which calls for a sharp reduction in the total use of fossil fuels. The International Energy Agency’s ‘Sustainable Development’ estimate of World Energy Demand to 2040, shows no increase in natural gas consumption beyond 2020 (see post of July 6, 2019, titled Oil & Gas Industry aims to make global warming even warmer).

Witnesses to the Senate hearing, including Mr. Riedl, refer to natural gas as a clean fuel. It isn’t. Here’s how it compares to other fuels in terms of CO2 emissions:

Lbs of CO2 emitted per million BTU of energy: 
Coal (anthracite) – 229 Lbs
Gasoline – 157 Lbs
Natural Gas – 117 Lbs
Solar (wind or PV’s) – zero emissions

During its production cycle, natural gas also releases methane, a greenhouse gas 80 times as potent as CO2. Last month, the Trump Administration announced plans to weaken existing rules designed to curb the release of methane. That’s not all. Natural gas is routinely flared (burned off) or vented when emitted from wells drilled primarily for oil. The following table from Bloomberg News June 12, 2019, shows the amount of gas flared by certain companies operating in the Permian Basin oil field of Texas:

Table showing gas flared (as a percentage of gas produced) by oil companies operating in Texas
Gas flared (as a percentage of gas produced) by oil companies operating in the Permian Basin of Texas. Original source: Rystad Energy

An article in Bloomberg Businessweek Sept. 10, 2019, by Ryan Collins and Rachel Adams-Heard, contains the following passage: “Gas flaring globally emits more than 350 million tons of carbon dioxide equivalent in a year, according to the World Bank. . . . In the U.S., flaring accounts for an estimated 9% of the greenhouse gas emissions of the oil and gas industry. In addition, the practice spews particulate matter, soot and toxins into the air that have been shown to be hazardous to humans.”

Fracking natural gas is bad for the climate, bad for the country, bad for the world. The current scramble to increase — at any cost — LNG production and shipping, is nothing more than a hostile and antisocial scheme by the Oil & Gas Industry to prolong its own life by delaying an orderly transition to renewable energy. It’s an industry scheme that’s being eagerly supported by the Oil & Gas-dependent Republicans in Congress and their like-minded buddies in the Trump Administration.

Gas flaring. Image: Dallas Morning News

How to sue Big Oil for money and win . . . maybe

Photo of judges hammer and money
Image: from NY Post

Last year (Jan 2018) New York City sued five major Oil & Gas companies — ExxonMobil, BP, SheIl, Chevron, and Conoco Phillips — for contributing to global warming and the resulting physical damage to city property. It asked the court to hold the oil companies liable for the damage they’ve caused, and award the city monitory compensation. But on July 20, 2018, the court dismissed the lawsuit in favour of the oil companies.

In dismissing the lawsuit, U.S. District Court Judge John F. Keenan, ruled that the city’s claims come under federal law involving greenhouse gas emissions that cross state lines, thus putting them under the jurisdiction of the Environmental Protection Agency (EPA). Problems associated with climate change, the judge said, should be tackled by Congress and the executive branch. In its brief to the Second Circuit Court of Appeals November 12, 2018, the city claims that Judge Keenan misunderstood the lawsuit. The appeal argues that the city did not ask the court to regulate emissions but, rather, to award the city damages on the basis of Public Nuisance, Private Nuisance, and Trespass, which, to a non lawyer, sounds pretty mild.

If Judge Keenan misunderstood the city’s lawsuit it’s because the city framed its 67 page brief around global warming as an international threat instead of what was intended, a limited and local demand for compensation. The titles of sections IV thru VIII in the brief give the flavour of the thing:

IV. Climate Change Impacts on New York City
V. Fossil Fuels Are the Primary Cause of Climate Change
VI. Defendants Have Produced Massive Quantities of Fossil Fuels—and Have Continued to Do So Even as Climate Change Has Become Gravely Dangerous
VII. Defendants Had Full Knowledge that Fossil Fuels Would Cause Catastrophic Harm
VIII. Despite Their Early Knowledge that Climate Change Posed Grave Threats, Defendants Promoted Fossil Fuels for Pervasive Use, While Denying or Downplaying These Threats

Within the brief, ‘greenhouse gas’ is mentioned 29 times, ‘emissions’ 46 times, ‘global warming’ 48 times, ‘climate change’ 100 times. On the other hand, the word ‘damages’ appears in the brief only 7 times. The impression given is that the city is afraid that the judge might not understand the situation unless provided with multiple reminders that global warming exists and that it’s a serious problem.

The fact is, the judge understands the issue very well. New York City framed its complaint in terms of global warming, an international problem that requires an international solution. The judge ruled accordingly. Fossil fuel companies are happy to defend themselves at the national or international level. They know how slow and ineffective national efforts to limit global warming are. They know how to influence those efforts so as to slow them down to a crawl. They even go so far as to promote placing taxes on CO2 emissions, knowing that that distances the production of fossil fuels from the possibility of direct control. It’s a tactic that also gets others to pay what  the oil companies should be paying.

If New York City’s lawsuit fails on appeal, it will show that the Nuisance and Trespass laws are not sufficient. What then? How can any city structure it’s climate lawsuits in such a way that the trans-boundary issue is sidelined?

Here’s my contribution to solving the puzzle:

1. The science linking fossil fuels to global warming , climate change, increasing damage from storms, drought, sea level rise, etc., is settled. Global Warming is happening now. The judges know it. The Oil & Gas companies do not deny it. They most certainly do not want to wind up in court fighting the science. They would lose. Instead, when sued for climate damages, oil companies fight back by attacking the lawsuit’s legal right to stand. There’s no need to stress the existence and effects of global warming when suing oil companies.

2. Even though oil companies have known for decades about the dangerous effects that result from the use of their products, they deliberately kept the knowledge to themselves.

3. New Yorkers generate pollution while engaged in manufacturing, transportation, electricity generation, day to day living, etc. The energy used in these activities includes fuels purchased from the oil companies. New York takes responsibility for the pollution it generates and is working to abate it.

4. As New Yorkers use fossil fuels purchased from the oil companies, carbon dioxide (CO2) molecules are released into the atmosphere. All of those CO2 molecules released by New York to date, remain in the atmosphere and will remain there indefinitely, doing their part in causing the atmosphere to heat up. Once in the atmosphere, those molecules that originated in New York cannot be controlled or regulated by any agency. 

5. The CO2 molecules released by New York from the fossil fuels supplied by the oil companies, add to the burden of CO2 molecules that have built up in the atmosphere over time from other sources. It follows that the atmospheric heating and consequent damage has increased by some measure due to New York’s use of those fossil fuels. To put it another way, if New York had not used any of those fossil fuels, the amount of damage inflicted on New York would be less by some measure (see item 7).

6. The oil companies learned in the 1980’s or earlier about the dangers posed by their products.  Had they behaved honestly and, at that time, informed New Yorkers about the dangers, it’s reasonable to assume that the city would have acted earlier to reduce its dependence on fossil fuels by at least 50% of what it is today. The oil companies should pay the costs flowing from that failure to tell the truth.

7. According to the U.S. Government Accounting Office (report dated Oct. 24, 2017), damage from Climate Change has cost U.S. taxpayers $350 billion over the past decade (2007 to 2017). When adjusted for population size, New Yorkers’ share of that cost was 2.6% or $9.1 billion. 

Considering all the above, how much money should the oil companies pay New York in damage compensation?

For the period 2007 to 2017 (see item 7), 50% of $9.1 billion = $4.55  billion in the form of a lump sum payment.

Since climate damage is ongoing, annual costs following 2017 will be one tenth of $9.1 billion = $0.91 billion per year (see item 7). Oil companies should therefor pay 50% of 0.91 = $0.455 billion per year starting in 2018. For how many years should the oil companies pay that annual amount. Idefinitely or until they go bust.

Photo of Verrazano bridge taken Oct 2012 during Hurricane Sandy
Verrazano bridge from Brooklyn waterfront, NYC, during Hurricane Sandy Oct. 29, 2012. Image credit: Carlos Ayala

How to survive global warming — Nail the culprits before they nail us

Atmospheric carbon dioxide (CO2) continues its rapid rise. Last month (May 2019) CO2 in the atmosphere set a new record with the average peaking at 414.7 parts per million at NOAA’s Mauna Loa Atmospheric Baseline Observatory (see graph below). 

NOAA graph showing atmospheric CO2 2014 to present
The red line represents the monthly mean values. The black line represents the same as a moving average of 7 adjacent seasonal cycles, after correction for the average seasonal cycle. Image: NOAA

The highest level of CO2 in the atmosphere during the 800,000 years preceding the industrial revolution was 300 ppm. That occurred about 330,000 years ago, long before modern humans arrived on the scene (see graph at bottom of post).

What is being done about the present accumulation of greenhouse gas in the atmosphere? Here’s what the World Bank (April 2018) says: Some 40 countries and more than 20 cities, states and provinces already use carbon pricing mechanisms, with more planning to implement them in the future.  Together the carbon pricing schemes now in place cover about half their emissions, which translates to about 13 percent of annual global greenhouse gas emissions.”

As the above graph shows, these carbon pricing efforts, while well meaning, have had no noticeable effect on the rise in atmospheric CO2. Is it possible that if the carbon pricing efforts become more widespread, their effect will become noticeable? That is unlikely. Why? Because the carbon pricing schemes currently in use target the emissions from fossil fuels rather than the fossil fuels themselves.

In a shooting war, the bullets are not the enemy, the people loading the guns and pulling the triggers are the enemy. To win the war, you duck the bullets and focus your attack on the gunmen. In our climate war, we need to look past the CO2 emissions and set our sights on the gunmen, the people who extract fossil fuels from the ground, the oil and gas industry. 

The best way to fight the industry is to replace fossil fuel based technologies with clean technologies. That’s already happening simply because the cost of clean technologies has dropped sharply. Clean technologies are now cheaper and more efficient than fossil fuel based technologies and they are starting to be used in large areas of the economy (see May 27 post — NY Governor Cuomo goes for clean power technology in a big way). The fossil fuel industry will eventually collapse because of its inferior economics. But not fast enough.

Applying a carbon tax is a way to speed things up. However, to be effective the tax must be targeted, not against the CO2 emission from fossil fuels, but against the carbon content of the fossil fuels before they are burned. The most effective time and place to apply the carbon tax is when and wherever the fuels are extracted from the ground or imported into the country. The correlation between the amount of tax charged and the resulting reduction in oil and gas produced will be close, unambiguous, and directly measurable; a huge advantage for the administrators.

Is it right to single out a particular industry and tax it so as to throttle its production? Of course it is. Our survival depends on it. Being fair to the enemy is not a winning strategy. In any case, fossil fuel companies do not deserve equitable treatment. They knew for years that the use of their products would cause global warming. Did they inform the public? No. They kept the knowledge to themselves, continued pumping fossil fuels, and lied about the dangers.

Keep this in mind:
The oil and gas industry is in favour of taxing CO2 emissions. Why? Because it provides a smoke screen in which to hide. When CO2 emissions are taxed, everyone pays. It allows the oil and gas industry to masquerade as just another industry paying its fair share. It is not just another industry, it is the culprit. As I write this post, the culprit is busy promoting a scheme to 
tax CO2 emissions, a scheme much to its advantage (see May 12 post — Oil Industry promoters want to pay Americans not to complain about global warming).

Subsidize clean technologies. Sue oil and gas  corporations in court. Ban fossil fuel industry tax breaks. Dump investments in oil and gas. Dump politicians who support the oil and gas industry. Those are all great ways to hit the fossil fuel industry and its promoters. Here’s some pertinent advice:

“hit them fast, hit them hard, hit them a lot” — Jack Reacher (Lee Childs’ fictional character)

Graph showing Atmospheric carbon dioxide concentrations in parts per million (ppm) for the past 800,000 years, based on European Project for Ice Coring in the Antarctic (EPICA) data. Image: NOAA National Centers for Environmental Information (NCEI).
Atmospheric carbon dioxide concentrations in parts per million (ppm) for the past 800,000 years, based on European Project for Ice Coring in the Antarctic (EPICA) data. Image: NOAA National Centers for Environmental Information (NCEI).

New York v. ExxonMobil — the climate fraud case

Global warming — the rise in the atmosphere’s average temperature since pre-industrial times — forms the background to the State of New York v. the ExxonMobil Corporation lawsuit.

Chart of ice core data showing CO2 levels from year 1000 to1990’s
Ice core data showing CO2 levels from year 1000 to 1990’s. Image: CSIRO

Before 1800, the concentration of CO2 in the atmosphere fluctuated around 280 ppm (see chart above). The level of CO2 began its steep rise around 1800 due to the heavy use of coal during the industrial revolution. By the 1990’s, the continued burning of fossil fuels had  raised the CO2 level to 350 ppm. Today the level exceeds 411 ppm (NOAA-ESRL, March 2019).

CO2 in the atmosphere traps heat from the sun, a result of the greenhouse effect. As the level of CO2 increases, so does the atmospheric temperature. The Paris Climate Agreement set a goal of “holding the increase in the global average temperature to well below 2°C (3.6°F) above pre-industrial levels.” As of this date (March 2019), the average increase has already exceeded 1°C.

ExxonMobil does not deny that global warming is occurring. Nor does it deny that burning fossil fuels is the major cause of it. It is also fully aware of the various government actions being taken worldwide to limit the burning of fossil fuels. What the company is supposed to do is incorporate that knowledge into its financial statements so that investors can judge for themselves whether or not to risk their money. This requires that the company anticipate future government actions, such as, for example, the imposition of carbon taxes, and calculate their financial effects. What the lawsuit alleges is that the company lied to its investors about the potential impact of such actions. In other words, it deliberately underestimated the risks.

The New York Attorney General in her filing of October 24, 2018, against the company puts it more strongly. Exxon, the filing says, perpetrated a “longstanding fraudulent scheme … to deceive investors and the investment community … concerning the company’s management of the risks posed to its business by climate change.” Considering that the AG’s office spent three years investigating Exxon before charging it with fraud, you can bet that whatever the company is accused of doing, it won’t be easy to explain or prove in court.

Which of the parties involved in this lawsuit deserves support or sympathy? None of them. Not the investors. Not the Attorney General’s office. Certainly not ExxonMobil. Whether or not Exxon is found guilty of fraud, we know that it is guilty of pushing its product onto the market by any means it can get away with including: heavy lobbying of government; ladling out election financing to friendly politicians; feeding money to pro-industry organizations (propaganda outlets).

The internet provides investors with the same global warming information available to the Exxon Corporation. The risks of investing in the fossil fuel industry are plain to see. Signs of the industry’s slow but inevitable decline are already evident. Just how slow is anybody’s guess. Spreadsheets from corporate accountants will not aid in the guessing. The risk-free option is not to invest in the industry.

According to Bloomberg News (Oct. 24/18), the State of New York holds about $1.5 billion worth of Exxon stock. The investment includes “the state’s common retirement fund, with more than 1 million employees and retirees, and the New York State Teachers Retirement System, with nearly half a million members.” Considering that New York is a member of the U.S. Climate Alliance, and therefore supposedly committed to upholding the objectives of the 2015 Paris Agreement on limiting global warming, it strikes me as odd, hypocritical even, that the state retains its investment in a fossil fuel company, particularly one that’s being sued by its own Attorney General.

Some people say that the Trump administration’s opposition to the Paris Climate Accord, and its total support of the fossil fuel industry, should make it unnecessary for business, or the courts, or investors, to take global warming seriously. Those people are wrong. Dealing with the Trump Administration is like dealing with a monkey in a dining room leaping about spilling drinks, snatching food off plates, shitting on the table cloth. The prudent diner will wait until the monkey is removed before ordering a meal.

Gatehouse entrance to ExxonMobil headquarters, Irving TX
Gatehouse entrance to ExxonMobil headquarters, Irving TX. Image: Google

Climate science bugs Trump — He reaches for the bug-off

Aerial photo of Portsmouth Naval Shipyard, Maine
Portsmouth Naval Shipyard in Maine, one of several large military bases at risk from Sea Level Rise. Image credit: U.S. Navy

President Trump is vexed. Despite his well publicized positions on global warming — it’s a hoax; it doesn’t exist; etc., — elements within his own administration continue to insist that the phenomenon poses a threat to national security. For example, Daniel Coats, Director of National Intelligence, recently submitted the agency’s Worldwide Threat Assessment to the Senate Intelligence Committee for its review. The report states that “Global environmental and ecological degradation, as well as climate change, are likely to fuel competition for resources, economic distress, and social discontent through 2019 and beyond.”

The problem for Mr. Trump is what to do about these public servants who contradict his position on climate change. His natural impulse is to fire them — learned behaviour from his entertainment days. But taking that approach with the military would likely backfire. He would have to sack  a slew of senior officers. The country’s largest military bases are built on the coast and under increasing threat from sea level rise, storm surge, and hurricanes. The top brass know that and have said so publicly.

The following YouTube video from Democracy Now, shows damage caused by Hurricane Michael to Tyndall Air Force Base, Florida, on October 10, 2018. It also gets New York Times journalist Dave Philipps’s take on the reaction of the Trump Administration. Hurricane Michael was the first ever on-record category-4 cyclone to hit the Florida panhandle .

If there is one thing Mr. Trump has learned during his time in office, it is that it’s not easy in a democracy to silence dissenters. Silencing them can’t be accomplished simply by decree. To succeed, even partially, directives need to be justified in some way. That’s what Mr. Trump has lacked — justification for gagging, or at least quieting, the climate change chatterers in his administration. Now he’s aiming to rectify that situation.

Photo of professor William Happer, Ph.D.
William Happer, Ph.D. Image: Heartland Inst. website

According to the Feb. 20 Washington Post, the White House is assembling a panel to assess whether climate change poses a threat to  national security. The man slated to head the panel is William Happer. Happer is an emeritus professor of physics at Princeton University. He’s also a climate change sceptic with a bee in his bonnet about carbon dioxide (CO2). While Happer agrees that CO2 is a greenhouse gas, he claims that most of the atmospheric warming that has occurred over the past century is due to natural causes, not to humans actions. He further claims that the release of CO2 from burning fossil fuels, far from being bad for the planet, is actually good for it and for the plants and humans who live on it. Happer believes that CO2 has been unfairly maligned by the scientific community. He now fancies himself as the gas’s defender in chief.

While Professor Happer’s opinions are popular among fossil fuel producers, they are music to the President’s ears. Why? Because such opinions appeal to his support base. According to David Smith reporting for the Guardian, Mr. Trump, during his address to the Conservative Political Action Conference (CPAC) in Washington on March 2, 2019, had this to say:

 “I think the  [Democrat’s] new green deal, or whatever the hell they call it. The Green New Deal, right? I encourage it. I think it’s really something that they should promote.” — laughter from the crowd — “No planes. No energy. When the wind stops blowing, that’s the end of your electric. ‘Let’s hurry up. Darling, darling, is the wind blowing today? I’d like to watch television, darling.”   —  cheers and applause from the crowd.

When the President’s climate change panel concludes its work — if it ever does — will its findings add to humanity’s sum of useful knowledge? What do you think?