Things are hotting up

Malcolm Latarche
Malcolm Latarche

28 February 2017

Donald Trump’s election as president of the US surprised many political pundits and has caused consternation among climate activists but it provides the perfect opportunity for some long overdue stocktaking within our industry and much further afield.

During his campaign, Trump spoke often of re-examining climate change issues and his choice of advisors would seem that he plans to follow through on that. Although attention has been focussed on Trump and what he might do, there are other events taking place which also indicate that other nations, organisations and individuals are also beginning to question and even dis-regard the so-called consensus surrounding CO2 emissions.

When it comes to emissions from shipping, it is quite right that pollution needs to be controlled as far as possible but always taking into account the economic necessity of shipping to the world. As far as NOx and SOx goes, the IMO could have done a much better job by looking at exhaust treatment as a single subject rather than attempting independent regulation for each constituent of the exhaust gas, but it is too late now to revisit those issues unless there is some future move to control other emissions such as PM and black carbon.

That emissions are cut as a result of improved efficiency is patently obvious and shipowners have pursued efficiencies ever since they have needed to buy their fuel rather than have it supplied free of charge by the wind. Taking into account technological developments such as turbochargers and increases in ship size, the efficiency savings in shipping exceed those in every other form of transport so much so that the energy required to move an ISO container today is only about 12% of what it was in the 1970s.

But as regards CO2 the time has come to step back from the headlong rush we have gotten into and make a much more detailed examination of a matter that has become far too politicised. It is now almost exactly 20 years on from the Kyoto Protocol which signalled the opening shots in the war on CO2 and the doomsday predictions have not only not come to pass but are now being questioned on a number of levels.

One of the outcomes of Kyoto that has fortunately been a spectacular failure but which is even so still be promoted is the idea of market-based measures of various types. If, CO2 is such a danger to the survival of the planet, then the only sensible solution is to ban it entirely not allow its continued emission so long as some form of payment is made. That is like someone putting a penny in a bottle every time they light a cigarette just to be sure they do not get cancer.

There is if one cares to search for it on the internet a memo sent by an Enron executive from Kyoto to his head office, outlining the financial opportunities for Enron that would come from the emission trading scheme system that would result from the Kyoto Protocol. In the event the US Senate did not ratify the Protocol although it was signed by President Clinton and its provisions have never applied to the US.

The truth behind Kyoto and the measures it has spawned were let slip several years after when Ottmar Edenhofer, German economist and member of the IPCC said in an interview with a German newspaper in 2010 “First of all, we have expropriated the atmosphere of the world community. But one has to say clearly: We are de facto distributing world wealth through climate policy. It is obvious that the owners of coal and oil are not enthusiastic about it. One must free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with environmental policy, with problems like deforestation or the ozone hole”.

Something similar was said in the months before COP 21 in Paris when Christiana Figueres, executive secretary of The UNFCC said “This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time changing the economic development model that has been reigning for at least 150 years”.

An awful lot of governments have invested huge amounts of political capital in the CO2 agenda but the prevailing mood in many parts of the world is shifting as populations see their way of life changed and living standards degraded for something that many no longer believe in and which an even larger number never did.

For politicians meeting the requirements of their nation’s industries and ensuring the electorate have access to electricity at all times is an imperative. If they fail on those accounts they will not be able to retain political power whatever else they believe. All around the globe the love affair with renewable seems to be turning sour.

In Germany and most of continental Europe, mid-January brought freezing conditions that the expensively subsidised renewable power generators could not cope with. In a report in Handelsblatt it was stated coal and gas came to the rescue with RWE’s site in Lingen in the norther state of Lower Saxony feeding more energy into the grid than ever before. The output reached 3,300MW, more electricity than all of the wind turbines in Germany can produce combined.

Lingen was not the exception, either. Nuclear- and gas-fired power plants, as well as those using black- and brown coal were in constant use nationwide. Conventional energy sources peaked at 67,000MW that day and supplied 90% of Germany’s energy, according to think tank Agora Energiewende. Renewables did not even reach 15,000MW. Wind turbines operated at 12% of their capacities, solar plants at 14% – even at midday. “Gas- and coal-powered plants ensured the supply,” an RWE spokesman said. “This was the case on many days this winter, but especially in January. Between January 17 and 25 the contribution of solar- and wind energy remained almost constantly low”.

This news item reporting a speech by Australian Prime Minister Malcolm Turnbull appeared on the Australian Broadcasting Corporation (ABC) website in mid-February.

“What a stunning turnaround. The man who lost the leadership by fighting to introduce a carbon price is now railing against renewable energy. In 2010, Malcolm Turnbull believed that Australia needed to move to “a situation where all or almost all of our energy comes from zero or very near zero-emission sources” to avoid the risks, laid out in the science, of catastrophic climate change.

Now politicians who advocate positions that Turnbull once held firmly are, he says, “drunk on left ideology on energy” and threatening peoples’ livelihoods. In Parliament yesterday, Turnbull led the charge as minister after minister accused Labor of an “ideological” obsession with renewable energy at the expense of “energy security”, blaming wind farms for another blackout in South Australia”.

The last was reference to a period when South Australia suffered blackout to more than 40,000 homes as the state’s wind farms could manage to push out just 2% of the power needed during a heatwave. South Australia has the country’s most expensive and yet most unreliable electricity because it has scrapped its coal-fired power and relies instead on wind power for 40% of its electricity although much of the time power is imported from coal fired stations in neighbouring Victoria.

Just a few days earlier, the same news organisation had reported that Japan is planning to build up to 45 new coal-fired power stations using high energy, low emissions (HELE) technology that use high-quality black coal. It has been suggested that funding for some of the power stations could be provided by Australia. The coal for the plants is likely to come from Australia and the US. Japan is the largest overseas market for Australian coal producers, taking more than a third of all exports.

According the ABC report, Tom O’Sullivan, a Tokyo based energy consultant with Mathyos Global Advisory, said in the wake of Fukushima, Japan started importing more LNG from Australia. But he said the move to more coal fired power was because coal was cheaper than LNG, and the energy security was priority for the government.

Almost simultaneously with the three reports mentioned above (and there are many similar ones that could have been used) the environmentalist lobby group Climate Analytics which is part funded by the EU and several EU member state governments published a report calling for the closure of all of Europe’s 300 plus coal-fired power plants. If Europe’s 300 coal plants run to the end of their natural lifespans, the EU nations will exceed their carbon budget for coal by 85%, according to the report. It also says the EU would need to stop using coal for electricity generation by 2030.

With elections in France, the Netherlands and Germany there are at least three further tests of the mood of the people in Europe this year and possibly more as policies are debated and positions taken while the EU comes to terms with life without the UK’s net $10bn contribution. The EU itself has nailed its colours firmly to the mast of CO2 reduction but the cost of some of the consequences of that in terms of both money and energy reliability are being discovered and the mutterings of discontent are growing louder.

The Paris Agreement is purely aspirational and there are no sanctions on states that do not meet their declared reductions. Now that the US has signalled an intention to let its commitment wither and Russia has not signed it, some are pinning their hopes on China to take a lead. But since China has bought time for itself and is allowed to continue expansion of its coal-fired power plants until 2030 at which time the emissions will be considered its baseline that is likely a forlorn hope.