EIB to stop investing in fossil fuel projects

The European Investment Bank will stop funding fossil fuel energy projects from the end of 2021, under its New Energy Lending Policy.

In what it described as a „quantum leap“ in its climate action and environmental sustainability ambitions, the EIB has said it will stop financing fossil fuels and that it will launch “the most ambitious climate investment strategy of any public financial institution anywhere.”

Under the revised energy lending policy, the EIB has said it will no longer consider new financing for unabated, fossil fuel energy projects, including gas -which has been seen as the least polluting fossil fuel – from the end of 2021 onwards.

More specifically, the move implies that EIB end support to the production of oil and natural gas; traditional gas infrastructure (networks, storage, refining facilities); power generation  technologies resulting in GHG emissions above 250 gCO2 per kWh of electricity generated, averaged over the lifetime for gas-fired power plants seeking to integrate low carbon fuels; and large-scale heat production infrastructure based on unabated oil, natural gas, coal or peat.

Phasing-out support for fossil fuel projects reflects a decision by the Bank to focus its limited resources on investments needed to meet the EU 2030 targets.

“The Bank acknowledges that fossil fuels will continue to play a role within the global energy system up to 2030 and that switching from oil or coal to natural gas may reduce greenhouse gas emissions in the short term. These investments are very likely to take place even without EIB financing,” EIB said.

Going forward, the bank has said it will aim to support EUR 1 trillion of investments in climate action and environmental sustainability “in the critical decade from 2021 to 2030.”

EIB Vice-President Emma Navarro, in charge of climate action and environment, said: “To meet the Paris climate goals we urgently need to raise our level of ambition and this is precisely what we have done today. Two weeks before the United Nations climate change conference in Madrid, these decisions send an important signal to the world: The European Union and its bank, the EIB, commit to mobilize investments on an unprecedented scale to support climate action projects around the world. In addition, we commit to align all EIB Group activities with the principles and goals of the Paris agreement by the end of 2020. Any financing that is not green will be made sustainable, according to the requirements of the Paris deal.”

Woodmac: Tide might turn on gas as it has on coal

Commenting on EIB’s move energy intelligence group Wood Mackenzie’s research director Nicholas Browne said: “The EIB’s new financing criteria will make lending to gas projects very difficult. It highlights that gas is also increasingly in the spotlight of the climate debate.

“When burnt, gas releases less carbon dioxide, nitrogen and sulfur oxides than coal and oil. Furthermore, coal-to-gas replacement has had a profound impact on air quality in northern China to the huge benefit of public health. It also has significantly lower full life-cycle carbon emissions than coal. However, while the comparative combustion benefits are undoubted, the sector may not be able to rely exclusively on this argument to make the case for gas and LNG. The benchmark looks like it will be set higher. Gas and LNG may be better but are they good enough?

“Methane and carbon dioxide are lost to the atmosphere by creating LNG through a combination of vents, flares, liquefaction, regasification and pipeline leakage. Currently, there is no consistent method of assessing the data through the value chain for how much gas is lost by the time it reaches a consumer. However, media reporting and political scrutiny of this issue will intensify. This might increase the risk that the popular and political tide turns on natural gas like it already has on coal in most countries. If this does occur, it may slow the rate of growth of gas and LNG demand. In turn, this would be a major strategic challenge for companies that have identified gas as the key driver of future growth.

He said there was no industry consensus on how or whether companies should act to mitigate this risk. He said: “There are some industry bodies such as the Oil and Gas Climate Initiative that are seeking voluntary reductions through their members. Additionally, several governmental bodies are seeking to introduce more data transparency to this question. However, if voluntary measures don’t prove enough, more restrictive environmental measures could be introduced due to shareholder pressures such as what we’ve seen with the EIB guidelines.

“Beyond financing, it is possible that the debate could start to impact procurement decisions from carbon-intensive projects and portfolios, likely accelerating carbon capture, carbon offsetting and electrification of liquefaction. This year already saw the first carbon neutral LNG cargoes delivered while several companies are implementing or investigating using renewable power to drive the liquefaction process.”

Source: EIB to stop investing in fossil fuel projects | Offshore Energy Today

UK setting up center to help decarbonize offshore oil & gas industry

The UK is set to establish a technology center aimed to develop solutions aimed at decarbonizing its offshore oil and gas industry.

The new center, backed by oil companies and oilfield services providers, and being launched Oil & Gas Technology Centre, will be named Net Zero Solutions Centre.

OGTC said the aim of the new center is to accelerate the development and deployment of technologies to decarbonize offshore operations and develop the UKCS “as the first net-zero oil and gas basin globally, supporting the industry’s Roadmap 2035.”

According to OGTC, Net Zero Solutions Centre is supported by BP, Chrysaor, Shell, Wood, Aker Solutions, Ineos, CNOOC, Total, Siemens, and Equinor.

The Net Zero Solution Centre will work with government and industry to address the UK offshore oil and gas industry’s emission footprint, while also developing technologies that will contribute to the growing demand for hydrogen production and carbon sequestration, OGTC said.

“This evolution of the industry, repurposing of facilities and partnering with companion industries such as renewables, will create a new future for the UKCS, while also supporting the creation of net-zero carbon economy,” OGTC sad.

OGTC has said that center would “champion the creation of an integrated offshore energy system, partnering with companies to accelerate the development of carbon capture, utilization and storage, hydrogen capability and other net-zero technologies.”

Colette Cohen, CEO of the Oil & Gas Technology Centre said: “The UK offshore oil and gas industry is a dynamic system of infrastructure, supply chains, expert workforce, research activity, and technology development and deployment. This diverse industrial ecosystem must play a fundamental role in the creation of a net-zero carbon economy.

“With the backing of industry and government and strong track of delivery, the OGTC is committed to moving the dial on carbon reduction and enabling the UK Continental Shelf to become the first net-zero hydrocarbon basin in the world.

“Our focus will be on developing technologies to reduce operational carbon emissions, working with other parts of the energy sector to create integrated solutions and repurposing infrastructure to accelerate carbon capture usage and storage, hydrogen production and gas-to-wire capacity.

“We’re delighted to be working with a strong group of companies and look forward to adding new strategic partners to the Net Zero Solution Centre over the coming months.”

 OGUK Chief Executive Deirdre Michie said: “This is a clear statement of intent from an industry rooted in finding solutions to some really complex problems, and we look forward to setting out our plans in more detail when we publish Roadmap 2035 later this week. The Net Zero Solutions Centre will help to identify some of the practical steps we can take as we look to net zero, and further establish the UK oil and gas industry as a center of excellence at a time when the UK is looking for answers.”

Source: UK setting up center to help decarbonize offshore oil & gas industry | Offshore Energy Today

Ireland says no to offshore exploration ban

Ireland’s offshore oil and gas association has welcomed the government decision this week to block a bill that would ban the issuing of further licenses for oil and gas exploration and production.

Had it been passed into law, the Climate Emergency Bill proposed by People Before Profit TD Bríd Smith would’ve banned future offshore exploration block awards, putting Ireland shoulder to shoulder with Costa Rica, Belize, France, and New Zealand as nations who’ve banned future oil and gas exploration.

The move has been welcomed by the Irish Offshore Operators’ Association (IOOA) who said that “the Government of Ireland has taken an important step to ensure energy security, protect the environment, and create jobs, by allowing gas and oil exploration to continue.”

The representative organization for the Irish offshore oil and gas industry says the decision not to proceed with the Climate Emergency Bill “has paved the way for finds similar to the Kinsale and Corrib gas fields which currently supply 60% of gas to Irish homes and businesses.”

Mandy Johnston, CEO of the Irish Offshore Operators’ Association said: “Government has recognized that using our own natural resources is not only good for energy security but also good for the environment and jobs. The facts speak for themselves: Russian Gas imported to Ireland creates 34-38% more greenhouse gas emissions than using Irish gas, while Liquified Natural Gas (LNG) imported from Qatar creates 22-30% more.”

She said there was no realistic scenario under which gas and oil will not be required to contribute a major part of Ireland’s energy supply in the short to medium term.

Johnston said: “Brexit, and political instability in the Middle East and Russia, together with the lack of established gas interconnection with mainland Europe, leave us extremely vulnerable to massive major gas and energy disruptions.

“Other countries have recognized this challenge. Only a handful have banned offshore exploration. The only European country that has done so is France, and it has a stable nuclear infrastructure powering over 50% of its needs”

“Other countries have recognized this challenge. Only a handful have banned offshore exploration. The only European country that has done so is France, and it has a stable nuclear infrastructure powering over 50% of its needs. Conversely, Norway is generally cited as one of the more progressive low carbon economies in the world and is today the largest producer of oil and gas in North West Europe.

The Irish Offshore Operators’ Association is fully committed to continuing to work with communities, policymakers and others to identify and implement policies which are based on science, evidence, and facts. We must work together to create progressive policies which can make a meaningful and positive impact, without undermining the prosperity of Ireland for our future generations.”

In a recent debate, Fine Gael politician Jom Daly argued the bill would not lead to a reduction Ireland’s emissions and would force the country to import fossil fuels it already uses and would continue to use “at a time when the Kinsale gas fields are due to cease production in the very near future and Corrib production is already in decline.” He also said the measure would reduce the country’s energy security.

Bríd Smith, who authored the Climate Emergency Bill, said the latest government action showed “the utter hypocrisy of the Government on climate and renders null and void any other measure in the Climate Action Plan.”

“If we can’t stop new exploration for fossil fuels while knowing that 80% of existing reserves need to stay in the ground then we will never limit climate change to 1.5 degrees. Nothing else this government announces on climate can be taking seriously if they continue to support looking for more reserves of fossil fuels,” Bríd Smith said.

She said that Solidarity/ People Before Profit would continue to fight the decision. She urged climate activists to attend a protest outside the Dáil next Tuesday at 5.30pm called by the group ‘Not Here Not Anywhere’ on the issue of the Climate Bill and the governments blocking of 53 other bills from the opposition.

Source: Ireland says no to offshore exploration ban | Offshore Energy Today

 U.S. presidential candidate Bernie Sanders has released a $16.3 trillion plan to tackle climate change. He promises the U.S. will reach 100 percent renewable energy for electricity and transportation by no later than 2030. The plan also sees “taking on”  the fossil fuel industry, by slapping it with massive taxes and penalties, and prosecution for damage caused.

Sanders’ plan – labeled the most progressive, or the most radical, or “budget annihilating,” depending on who you ask – envisions a ban on fracking, mountaintop removal coal mining, offshore drilling, and imports and exports of fossil fuels, among others.

“Our coal and natural gas are contributing to increased emissions abroad. We will also end the importation of fossil fuels to end incentives for extraction around the world. We can meet our energy needs and ensure energy security and independence without these imports,” the text of the plan released Thursday says.

Furthermore, Sanders would end all new and existing fossil fuel extraction on federal public lands, and end all new federal fossil fuel infrastructure permits.

“We will ensure fossil fuels stay in the ground by stopping the permitting and building of new fossil fuel extraction, transportation, and refining infrastructure,” the plan labeled “Green New Plan” reads.

Sanders would if elected, work to see offshore drilling banned: “If we are serious about moving beyond oil toward energy independence, lowering the cost of energy, combating climate change, and cutting carbon pollution emissions, then we must ban offshore drilling.

“If there is a lesson to be learned from the 2010 BP oil spill disaster, it is that Congress must not open new areas to offshore oil drilling.”

$16.3 trillion budget for green energy transition

Sanders, U.S. Senator from Vermont, promises to spend $16.3 trillion as part of the plan to employ 20 million people in steel and auto manufacturing, construction, energy efficiency retrofitting, coding and server farms, and renewable power plants, sustainable agriculture, engineering, a reimagined and expanded Civilian Conservation Corp.

He would aim to   transform the U.S. energy system away from fossil fuels to 100 percent renewable energy, like wind, solar, and geothermal, and also to “fully decarbonize the economy by 2050 at latest”

The plan envisions $2.09 trillion in grants to low- and moderate-income families and small businesses to trade in their fossil fuel-dependent vehicles for new electric vehicles; $85.6 billion building a national electric vehicle charging infrastructure network; $407 billion in grants for states to help school districts and transit agencies replace all school and transit buses with electric buses; $216 billion to replace all diesel tractor-trailer trucks with fast-charging and long-range electric trucks

We need a president who has the courage, the vision, and the record to face down the greed of fossil fuel executives and the billionaire class who stand in the way of climate action

He would commit to reducing emissions throughout the world, including providing $200 billion to the Green Climate Fund, rejoining the Paris Agreement, “and reasserting the United States’ leadership in the global fight against climate change.”

The plan is also to reduce domestic emissions by at least 71 percent by 2030 and reduce emissions among less industrialized nations by 36 percent by 2030 — the total equivalent of reducing our domestic emissions by 161 percent.

The text of the plan released on Thursday slams the fossil fuel bosses, calls them greedy and says they’re standing in the way of climate action.

“We need a president who has the courage, the vision, and the record to face down the greed of fossil fuel executives and the billionaire class who stand in the way of climate action. We need a president who welcomes their hatred. Bernie will lead our country to enact the Green New Deal and bring the world together to defeat the existential threat of climate change,” the text says.

“Just transition” for oil workers

The plan, in which “fossil fuel” appears 82 times, mostly in the negative context, envisions “a just transition” for workers employed in the fossil fuel industry.

“This plan will prioritize the fossil fuel workers who have powered our economy for more than a century and who have too often been neglected by corporations and politicians. We will guarantee five years of a worker’s current salary, housing assistance, job training, health care, pension support, and priority job placement for any displaced worker, as well as early retirement support for those who choose it or can no longer work,” the plan reads.

 

Who will pay for it?

“We cannot accomplish any of these goals without taking on the fossil fuel billionaires whose greed lies at the very heart of the climate crisis. These executives have spent hundreds of millions of dollars protecting their profits at the expense of our future, and they will do whatever it takes to squeeze every last penny out of the Earth,” Sanders’ manifesto reads.

It adds: “Bernie promises to go further than any other presidential candidate in history to end the fossil fuel industry’s greed, including by making the industry pay for its pollution and prosecuting it for the damage it has caused. ”

According to the text, the plan would pay for itself over 15 years, by among others, making the fossil fuel industry pay for pollution, through litigation, fees, and taxes, and eliminating federal fossil fuel subsidies, and collecting new income tax revenue from the 20 million new jobs created by the plan.

“As president, Bernie will…make the fossil fuel industry pay for their pollution by massively raising taxes on corporate polluters’ and investors’ fossil fuel income and wealth; Raising penalties on pollution from fossil fuel energy generation…Prosecute and sue the fossil fuel industry for the damage it has caused…End fossil fuel subsidies…Keep fossil fuels on public lands in the ground…Ban offshore drilling…end all new federal fossil fuel infrastructure permits.”

Source: Sanders’ $16.3 trillion climate plan takes on oil industry. Ban planned for oil exploration, exports | Offshore Energy Today

Total capital expenditure in Asia/Pacific (ex. China)

Rystad Energy RenewableCube, UCube

Offshore staff

OSLO, Norway – Renewable energy investment across Asia, but excluding China, could surpass upstream E&P spending in the region by 2020, according to Rystad Energy.

According to Gero Farruggio, Head of Renewables at Rystad, Australia, Vietnam, Taiwan and South Korea all have plans for renewable energy developments of all types, including offshore wind.

In Australia, the overall size of renewable energy projects is now over double the national electricity market, he claimed.

Presently the oil majors own just 1% of the country’s solar, wind and utility storage projects, but that situation looks set to change.

“By 2020 it is feasible that the majors will be the dominant renewable developers in Australia as they pursue ‘oil and gas’ scale opportunities,” he said. “Upstream companies will lead the charge, building sizeable utility storage, solar and – ultimately – offshore wind portfolios. Solar panels, lithium ion batteries and turbines will soon be conventional segments of Australia’s oilfield services.”

India too is growing investment in renewable energies, Farruggio said. “It is no surprise that Petronas and Shell have recently made moves in the Indian commercial and industrial renewables space.”

05/28/2019

Capital expenditure on renewable vs E&P in APAC (ex. China)Rystad Energy RenewableCube, UCube

Source: Renewable energy investment overtaking offshore E&P in Asia/Pacific | Offshore Magazine