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March 10, 2017
 
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In surreal role swap, oil industry touts climate action as EPA scorns it

In a once-unthinkable reversal of roles, CEOs of oil giants this week talked up limiting carbon emissions and supporting the Paris Agreement, while the head of the U.S. Environmental Protection Agency (EPA) scoffed at CO2's role in climate change and disparaged the U.N. pact.

The turnabout was on full display in Houston at CERAWeek, the oil-and-gas sector's premier annual gathering of industry leaders and key policymakers. On Monday, ExxonMobil CEO Darren Woods expounded on his company's commitments to selling natural gas, reducing greenhouse gas emissions and sustaining the Paris Agreement. Eldar Saetre, CEO of Norway's Statoil, said his company would increase investment in renewable energy from today's 5 percent to as much as 20 percent of total spending by 2030. "One day, there will be a peak in oil demand," Saetre said. "At some point, it will be a shrinking business."

ConocoPhillips CEO Ryan Lance recommended that President Trump keep the United States in the Paris Agreement, while Royal Dutch Shell CEO Ben van Beurden warned that the oil-and-gas sector risks losing public support if it does not embrace the world's transition to cleaner energy. "I do think trust has been eroded to the point that it is becoming a serious issue for our long-term future," van Beurden said. "This is the biggest challenge as we have at the moment as a company. …[S]ocietal acceptance of the energy system as we have it is just disappearing." About half of Shell's holdings are now in natural gas, according to FuelFix. Shell also announced this week plans to sell most of its Canadian oil sands holdings and to tie 10 percent of executive bonuses to cutting greenhouse gases from the company's oil and gas operations.

In stark contrast, EPA Administrator Scott Pruitt, also at CERAWeek, triggered a firestorm of media coverage Thursday when he told CNBC that human carbon emissions were not a primary driver of climate change. "I think that measuring with precision human activity on the climate is something very challenging to do, and there's tremendous disagreement about the degree of impact…," he said. "We need to continue the debate and continue the review and the analysis." He went on to call the Paris Agreement a "bad deal" for America that favors China and India and suggested the accord was a treaty that requires the approval of Congress.

Pruitt's predecessor at the EPA, Gina McCarthy, was quick to respond. "When it comes to climate change, the evidence is robust and overwhelmingly clear that the cost of inaction is unacceptably high," she said in a statement. "Preventing the greatest consequences of climate change is imperative to the health and well-being of all of us who call Earth home. I cannot imagine what additional information the administrator might want from scientists for him to understand that." Hawaii Senator Brian Schatz, a Democrat, said Pruitt's comments disqualified him to head the EPA. "Anyone who denies over a century's worth of established science and basic facts is unqualified to be the administrator of the EPA," he said. Michael Brune, executive director of the Sierra Club, tweeted that Pruitt should be fired for his comments.

Speaking on CNN, Vermont Senator Bernie Sanders, an Independent, seemed incensed. "I wish I could come up with another word—it is pathetic that that is the position of the administrator of the Environmental Protection Agency," he said. "You have the head of the Environmental Protection Agency who denies... reality in [the] face of overwhelming scientific evidence. Not only is it sad, it is a real threat to the well-being of this country and the world."

In related news, the Independent revealed that Chevron stated in a filing with the Securities and Exchange Commission (SEC) that its financial health could be undermined by "investigations" and "litigation" related to its part in accelerating climate change. "In the years ahead, companies in the energy industry, like Chevron, may be challenged by an increase in international and domestic regulation relating to greenhouse gas emissions," the oil giant also said in the filing. "Such regulation could have the impact of curtailing profitability in the oil-and-gas sector or rendering the extraction of the company's oil and gas resources economically infeasible."

Meanwhile, the non-profit research group CDP released a new analysis showing that eight of the world's oil majors—including ExxonMobil and Shell—emit as much greenhouse gas pollution as the entire United States.

Climate context

The week opened with a warning from scientists that restricting global warming to 2°C above pre-industrial temperatures may not prevent a massive melting of Arctic ice, which could transform the world's climate in catastrophic ways. "The 2°C target may be insufficient to prevent an ice-free Arctic," James Screen and Daniel Williamson of Exeter University wrote Monday in Nature Climate Change. The researchers estimated there is a 73-percent chance that Arctic ice will disappear in summer if the world continues on its current trajectory toward a 3°C rise.

The amount of carbon dioxide in the atmosphere is set to blow past another record high concentration in human history. This month or next, CO2 will go beyond 410 parts per million (ppm), according to a U.K. Met Office forecast, after crossing the 400-ppm only last year.

New research published Tuesday warned that half of the world's oceans may suffer multiple negative impacts from climate change in the next 15 years. By 2030, 55 percent of Earth's oceans could experience some combination of temperature rise, acidification, decreased oxygen and depletion of food supplies beyond the range of natural variability, researchers wrote in Nature Communications. By 2050, nearly all of the world's oceans—86 percent—could be damaged, they said.

A mass bleaching of coral is now underway in the Great Barrier Reef for a second year in a row, the Great Barrier Reef Marine Park Authority announced on Thursday. "Just a few months ago, these corals were full of color and life. Now, everywhere you look is white," said marine biologist Brett Monroe Garner. "The corals aren't getting the chance to bounce back from last year's bleaching event. If this is the new normal, we're in trouble."

Surprises

In a precedent-setting surprise, the High Court judge in South Africa ruled Wednesday that the country's Department of Environmental Affairs had not "comprehensively assessed or considered" the climatic consequences of a proposed 1.2-gigawatt coal-fired power plant in Limpopo province before allowing its construction and that it must now do so. Plaintiff Earthlife Africa Johannesburg declared victory in what it said was South Africa's first climate change lawsuit. Environmental Affairs Minister Edna Molewa had argued that the country had no legal requirement for such an assessment, but with this ruling, it may now have one.

In a surprising attempted end run, Acting U.S. Assistant Attorney General Jeffrey Wood asked an Oregon court to send a climate case brought against the federal government by 21 young people to appeal before hearing evidence. Wood, a fossil fuel lobbyist, argued the case was "staggeringly broad" and that the information it requests could "cripple units within agencies that gather potentially relevant data or analyze climate change more broadly." Lawyers for the youths said the "plaintiffs maintain that their requests are limited, reasonable and aimed at getting to trial this fall." Alex Loznak, one of the older plaintiffs who is now a Colombia University student, called the appeal request "an attempt to cover up the federal government's long-running collusion with the fossil fuel industry."

Canadian pollster EKOS Research was surprised when it found Canadians' concern about climate change had decreased. Canadians tend to be more concerned about environmental matters than their American neighbors, and EKOS President Frank Graves speculated U.S. President Donald Trump's rhetoric could be to blame for the startling poll results. "We do see in Canada that this populist movement has had [an effect] on the conservative base. It looks a little more like the Trump base than it did in the past," Graves said. "It seems it's more permissible to just say, 'Look, I think climate change is a lot of hooey' in an environment where you have Donald Trump winning the presidency."

Stay of execution

In what probably felt like little more than a stay of execution for some advocates of climate action, the Trump administration this week postponed the White House decision on whether to drop out of the Paris Agreement and an executive order to neutralize the Clean Power Plan.

POLITICO reported that President Trump's decision on the Paris Agreement could be delayed until the G7 summit in May or the G20 summit in July. And although Reuters reported this would be the week the Clean Power Plan went on Trump's chopping block, Climatewire reported Thursday that an order to repeal and not replace the rule limiting carbon emissions from existing power plants would not come until next week. "If EPA withdraws [the rule] and does not replace it with strong standards, we will challenge the agency's action in court," Joanne Spalding, managing attorney at the Sierra Club, told Climatewire.

The Trump administration will seek to cut many of the climate services provided by the National Oceanic and Atmospheric Administration (NOAA), with "the biggest single cut proposed... from NOAA's satellite division," according to The Washington Post, which obtained a memo on the matter. "Cutting NOAA's satellite budget will compromise NOAA's mission of keeping Americans safe from extreme weather and providing forecasts that allow businesses and citizens to make smart plans," said Jane Lubchenco, the agency's administrator under President Obama. The proposed cuts also include programs that help "coastal areas to withstand major storms and rising seas," the Post reported.

The administration wants to slash the $2.1-billion budget of the Department of Energy's Office of Energy Efficiency and Renewable Energy to $700 million or less, Bloomberg reported. Meanwhile, over at the EPA, the Energy Star program, which certifies everything from small appliances to high-rise buildings for energy efficiency, could be axed entirely, according to several news reports.

The stripping down of the EPA proved too much for Assistant Associate Administrator Mustafa Ali, a 24-year veteran of the agency who helped create its environmental justice program during the presidency of President George H.W. Bush. Ali submitted his resignation to Scott Pruitt on Wednesday. "My values and priorities seem to be different than our current leadership, and because of that, I feel that it's best if I take my talents elsewhere," Ali told InsideClimate News. "When the administrator was in Oklahoma, I do not know of any time that he made environmental justice a priority," he said of Pruitt, former attorney general of the Sooner State.

'Blue sky' promises

"We will make our skies blue again," Chinese Premier Li Keqiang promised as he opened the National People's Congress (NPC) on Sunday in Beijing. "We will work faster to address pollution caused by coal burning," Li told the nearly 3,000 delegates gathered in the Great Hall of the People. "All key sources of industrial pollution will be placed under round-the-clock online monitoring." Officials who flout air quality laws "will be held accountable," he said.

The National Development and Reform Commission (NDRC) vowed before the NPC to do its part in cutting China's glutted steel and coal industries, while also reducing the country's energy consumption per capita by 3.4 percent and its carbon intensity per unit of GDP by 4 percent this year. Provincial leaders took their turns at the podium, promising steep reductions in the number of polluting "zombie companies" and rapid replacement of coal with cleaner options for heating and electricity.

A Reuters analysis on Monday predicted coal cutbacks could once again—as happened in 2016—outpace capacity reductions at the country's power plants and steel mills, reigniting demand for imports from places such as Australia to bridge the gap. "Overall, it's poised to be another good year for coal exporters to China, although longer term the picture becomes less rosy, as Beijing appears committed to ultimately using less of the polluting fuel," columnist Clyde Russell wrote. However, stocks of Australia's coal companies had slumped by Wednesday, after the NDRC announced it would not cut the number of coal mining days as it did last year nor make production cuts large enough to again cause shortages or trigger price spikes.

In other news that caught global attention, Wang Yi, a member of the NPC and vice president of the Chinese Academy of Sciences, indicated China may be moving toward a carbon tax instead of the nationwide emissions trading scheme (ETS) that was scheduled to go into effect this year. "I think we would like to employ a different and effective measurement to promote low-carbon development and also reduce our greenhouse gas emissions," Wang told Climate Home. "Maybe the market is one method, but I would also have another choice: a carbon tax." China's ETS, modeled after the European Union's, is behind in its scheduled implementation, but E.U. officials told Climate Home they would be "surprised" if China changed course. Other knowledgeable observers seemed relieved by Wang's remarks. "It is plain to everyone at this point that a tax could be more effective than carbon trading. The ETS just doesn't seem to save any carbon," said Isabel Hilton, editor of chinadialogue. "It may be that after two years of experimentation, they just look at this dog's breakfast and say, 'Oh God, we'll never make it work.' When you look at everything that made it not work in the E.U., you've got it in spades in China."

Growing appetite

As the Trump administration went to work lifting regulations for the American coal industry, West Virginia Congressman David McKinley flew to India to sell his state's coal. "The rest of the world has a voracious appetite for coal," the Republican told a Virginia television news outlet. "India is the largest democracy in the world. They have 1.3 billion people. I sometimes have to stop when I throw the numbers around and have people understand. That's over four times the population of the United States... ."

Indeed, India is set to supplant Russia as the world's third largest oil refiner, according to Oil 2017, the International Energy Agency (IEA) market analysis released at CERAWeek. "It is not only oil. It is coal. It is solar. It is... the strong growth in the economy and the population growth," Fatih Birol, IEA's executive director, said Monday at a news conference in Houston.

India's Petroleum Minister Dharmendra Pradhan was also at CERAWeek, where he met with U.S. Secretary of Energy Rick Perry, who invited Prime Minister Narendra Modi to visit Texas, America's oil capital. "All of them consider India as the greatest energy market for the next 25 years," Pradhan said.

Back in India, the domestic coal market continued to look uncertain. State-run Coal India lowered its dividends by 32 percent from a year ago, due to declines in profits and an impending retroactive pay increase. "Dividend payouts are the only thing that's still retaining investors' interest in the stock," Goutam Chakraborty, an analyst with Emkay Global Financial Services, said prior to the drastic reduction.

Coal stocks in India reached 80 million tons in February, which the government attributed to continuing weak demand from the power sector. Nonetheless, Minister for Power, Coal, Renewable Energy and Mines Piyush Goyal told Parliament Thursday about steps to increase the country's coal production, including continued government facilitation of environmental clearances, land acquisition and railway transportation. "[Coal India] has prepared a road map to substantially enhance production of coal by 2019-20," he said. "This includes capacity addition from new projects, use of mass production technologies and identification of existing ongoing projects with growth potential."

Part of India's slack demand for power could be addressed with promotion of electric vehicles by state-owned NTPC Limited, the country's largest electric utility. The company is "looking at setting up charging stations to help create the demand for electricity generated by its plants and keep pace with the fast-changing power sector," The Hindu reported today. While that sounds like a plan to reduce carbon emissions, NTPC has nearly 36 gigawatts of installed coal-fired generating capacity but less than 1 megawatt of renewable energy capacity.

Looking forward

Trump's executive order to undo the Clean Power Plan may come up next week, which will likely trigger litigation and further speculation about the world's ability to reduce greenhouse gas emissions enough to prevent climatic disaster.

Watch for the next judicial moves in the climate lawsuit of those 21 Oregon youths against the Trump administration. "It could spawn a whole new universe of litigation at both the state and the federal levels," said Pat Gallagher, legal director at the Sierra Club, which is not involved in the case.

Upcoming summits of the G7 in May and G20 in July may prove pivotal to the future of the Paris Agreement if President Trump chooses one or the other to announce his decision regarding U.S. participation. Before then, however, G20 finance ministers may use their meeting on March 17 and 18 to back away from the $100 billion meant to flow annually from rich countries to the developing world to pay for climate action. In a draft statement seen by Bloomberg, the ministers shift the onus to development banks and the private sector, citing "scarce public resources." "That is a significant step back from what countries agreed to in Paris," Alden Meyer, director of policy at the Union of Concerned Scientists, told Bloomberg.

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