Tag Archives: fossil fuel

Peak Tech Bubble

Nelsons-Column-Great-Smog-London-1952The following story is surely a sign of the impending implosion of the next tech bubble — too much easy money flowing to too many bad and lazy ideas.

While an increasing number of people dream of a future built on renewable, clean energy, some entrepreneurs are defining ways to make gasoline (petrol) consumption even more convenient for consumers. Welcome to Uber-style, gas delivery on-demand.

This casts my mind back to the mid-1960s, recalling the deliveries of black, sooty coal to our cellar (basement) coal bunker. Thankfully, the UK’s Clean Air Acts of the 1950s and 60s finally paved the way for cleaner fuel and cleared the skies of unhealthy, mid-century London smog.

Surely, these modern day counterparts are heading in the wrong direction just to make a quick buck.

From the Guardian:

It is hard to imagine a less hospitable niche for a startup to enter than gasoline – a combustible commodity that is (one hopes) being innovated into obsolescence.

And yet, over the past 18 months, at least six startups have launched some variation on the theme of “Uber for gas” – your car’s tank gets refilled while it is parked somewhere.

The gas delivery startup founders all share similar stories of discovering the wannabe entrepreneur’s holy grail: a point of friction that can be translated into an app.

“David, one of the co-founders, basically said, ‘I hate going to the gas station’,” said Nick Alexander, the other co-founder of Yoshi, of their company’s origins. “I think he had run out of gas recently, so he said, ‘What about an idea where someone comes and fills your car up?’”

For Ale Donzis, co-founder of WeFuel, the moment came when he was trying to get gas in the middle of winter in upstate New York and realized he had forgotten his gloves. For Frank Mycroft, founder and CEO of Booster Fuels, it was during his wife’s pregnancy when he started refueling her car as well as his own.

“It wore on me,” Mycroft said. “I didn’t like doing it.”

The tales of gas station woe are the kind of first-world problems that have inspired a thousand parodies of startup culture. (A customer testimonial on the website of Purple, another gas delivery service, reads: “I live across the street from a gas station, but I don’t always have time to make the stop.”)

But delivering large quantities of a toxic and flammable liquid is significantly more complicated – and regulated – than delivering sandwiches. The companies generally source their gasoline from the same distributors that supply 10,000-gallon tankers to retail gas stations. But the app companies put the fuel into the back of pickup trucks or specially designed mini-tankers. Booster Fuels only services cars in open air, corporate parking lots on private property, but other companies offer to refill your car wherever it’s parked.

Read the entire story here.

Image: Nelson’s Column during the Great Smog of London, 1952. Courtesy: By N T Stobbs, CC BY-SA 2.0.

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Two-Thirds From a Mere Ninety

Two-thirds is the overall proportion of man-made carbon emissions released into the atmosphere, since the dawn of the industrial age. Ninety is the number of companies responsible for the two-thirds.

The leader in global fossil fuel emissions is Chevron Texaco, which accounts for a staggering 3.5 percent (since 1750). Other leading emitters include Exxon Mobil, BP, Royal Dutch Shell, Saudi Aramco, and Gazprom. See an interactive graphic of the top polluters — companies and nations — here.

From the Guardian:

The climate crisis of the 21st century has been caused largely by just 90 companies, which between them produced nearly two-thirds of the greenhouse gas emissions generated since the dawning of the industrial age, new research suggests.

The companies range from investor-owned firms – household names such as Chevron, Exxon and BP – to state-owned and government-run firms.

The analysis, which was welcomed by the former vice-president Al Gore as a “crucial step forward” found that the vast majority of the firms were in the business of producing oil, gas or coal, found the analysis, which has been published in the journal Climatic Change.

“There are thousands of oil, gas and coal producers in the world,” climate researcher and author Richard Heede at the Climate Accountability Institute in Colorado said. “But the decision makers, the CEOs, or the ministers of coal and oil if you narrow it down to just one person, they could all fit on a Greyhound bus or two.”

Half of the estimated emissions were produced just in the past 25 years – well past the date when governments and corporations became aware that rising greenhouse gas emissions from the burning of coal and oil were causing dangerous climate change.

Many of the same companies are also sitting on substantial reserves of fossil fuel which – if they are burned – puts the world at even greater risk of dangerous climate change.

Climate change experts said the data set was the most ambitious effort so far to hold individual carbon producers, rather than governments, to account.

The United Nations climate change panel, the IPCC, warned in September that at current rates the world stood within 30 years of exhausting its “carbon budget” – the amount of carbon dioxide it could emit without going into the danger zone above 2C warming. The former US vice-president and environmental champion, Al Gore, said the new carbon accounting could re-set the debate about allocating blame for the climate crisis.

Leaders meeting in Warsaw for the UN climate talks this week clashed repeatedly over which countries bore the burden for solving the climate crisis – historic emitters such as America or Europe or the rising economies of India and China.

Gore in his comments said the analysis underlined that it should not fall to governments alone to act on climate change.

“This study is a crucial step forward in our understanding of the evolution of the climate crisis. The public and private sectors alike must do what is necessary to stop global warming,” Gore told the Guardian. “Those who are historically responsible for polluting our atmosphere have a clear obligation to be part of the solution.”

Between them, the 90 companies on the list of top emitters produced 63% of the cumulative global emissions of industrial carbon dioxide and methane between 1751 to 2010, amounting to about 914 gigatonne CO2 emissions, according to the research. All but seven of the 90 were energy companies producing oil, gas and coal. The remaining seven were cement manufacturers.

The list of 90 companies included 50 investor-owned firms – mainly oil companies with widely recognised names such as Chevron, Exxon, BP , and Royal Dutch Shell and coal producers such as British Coal Corp, Peabody Energy and BHP Billiton.

Some 31 of the companies that made the list were state-owned companies such as Saudi Arabia’s Saudi Aramco, Russia’s Gazprom and Norway’s Statoil.

Nine were government run industries, producing mainly coal in countries such as China, the former Soviet Union, North Korea and Poland, the host of this week’s talks.

Experts familiar with Heede’s research and the politics of climate change said they hoped the analysis could help break the deadlock in international climate talks.

“It seemed like maybe this could break the logjam,” said Naomi Oreskes, professor of the history of science at Harvard. “There are all kinds of countries that have produced a tremendous amount of historical emissions that we do not normally talk about. We do not normally talk about Mexico or Poland or Venezuela. So then it’s not just rich v poor, it is also producers v consumers, and resource rich v resource poor.”

Michael Mann, the climate scientist, said he hoped the list would bring greater scrutiny to oil and coal companies’ deployment of their remaining reserves. “What I think could be a game changer here is the potential for clearly fingerprinting the sources of those future emissions,” he said. “It increases the accountability for fossil fuel burning. You can’t burn fossil fuels without the rest of the world knowing about it.”

Others were less optimistic that a more comprehensive accounting of the sources of greenhouse gas emissions would make it easier to achieve the emissions reductions needed to avoid catastrophic climate change.

John Ashton, who served as UK’s chief climate change negotiator for six years, suggested that the findings reaffirmed the central role of fossil fuel producing entities in the economy.

“The challenge we face is to move in the space of not much more than a generation from a carbon-intensive energy system to a carbonneutral energy system. If we don’t do that we stand no chance of keeping climate change within the 2C threshold,” Ashton said.

“By highlighting the way in which a relatively small number of large companies are at the heart of the current carbon-intensive growth model, this report highlights that fundamental challenge.”

Meanwhile, Oreskes, who has written extensively about corporate-funded climate denial, noted that several of the top companies on the list had funded the climate denial movement.

“For me one of the most interesting things to think about was the overlap of large scale producers and the funding of disinformation campaigns, and how that has delayed action,” she said.

The data represents eight years of exhaustive research into carbon emissions over time, as well as the ownership history of the major emitters.

The companies’ operations spanned the globe, with company headquarters in 43 different countries. “These entities extract resources from every oil, natural gas and coal province in the world, and process the fuels into marketable products that are sold to consumers on every nation on Earth,” Heede writes in the paper.

The largest of the investor-owned companies were responsible for an outsized share of emissions. Nearly 30% of emissions were produced just by the top 20 companies, the research found.

Read the entire article here.

Image: Strip coal mine. Courtesy of Wikipedia.

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The Coming Energy Crash

By some accounts the financial crash that began in 2008 is a mere economic hiccup compared with the next big economic (and environmental) disaster — the fossil fuel crisis accompanied by risk denial syndrome.

From the New Scientist:

FIVE years ago the world was in the grip of a financial crisis that is still reverberating around the globe. Much of the blame for that can be attributed to weaknesses in human psychology: we have a collective tendency to be blind to the kind of risks that can crash economies and imperil civilisations.

Today, our risk blindness is threatening an even bigger crisis. In my book The Energy of Nations, I argue that the energy industry’s leaders are guilty of a risk blindness that, unless action is taken, will lead to a global crash – and not just because of the climate change they fuel.

Let me begin by explaining where I come from. I used to be a creature of the oil and gas industry. As a geologist on the faculty at Imperial College London, I was funded by BP, Shell and others, and worked on oil and gas in shale deposits, among other things. But I became worried about society’s overdependency on fossil fuels, and acted on my concerns.

In 1989, I quit Imperial College to become a climate campaigner. A decade later I set up a solar energy business. In 2000 I co-founded a private equity fund investing in renewables.

In these capacities, I have watched captains of the energy and financial industries at work – frequently close to, often behind closed doors – as the financial crisis has played out and the oil price continued its inexorable rise. I have concluded that too many people across the top levels of business and government have found ways to close their eyes and ears to systemic risk-taking. Denial, I believe, has become institutionalised.

As a result of their complacency we face four great risks. The first and biggest is no surprise: climate change. We have way more unburned conventional fossil fuel than is needed to wreck the climate. Yet much of the energy industry is discovering and developing unconventional deposits – shale gas and tar sands, for example – to pile onto the fire, while simultaneously abandoning solar power just as it begins to look promising. It has been vaguely terrifying to watch how CEOs of the big energy companies square that circle.

Second, we risk creating a carbon bubble in the capital markets. If policymakers are to achieve their goal of limiting global warming to 2 °C, 60 to 80 per cent of proved reserves of fossil fuels will have to remain in the ground unburned. If so, the value of oil and gas companies would crash and a lot of people would lose a lot of money.

I am chairman of Carbon Tracker, a financial think tank that aims to draw attention to that risk. Encouragingly, some financial institutions have begun withdrawing investment in fossil fuels after reading our warnings. The latest report from the Intergovernmental Panel on Climate Change (IPCC) should spread appreciation of how crazy it is to have energy markets that are allowed to account for assets as though climate policymaking doesn’t exist.

Third, we risk being surprised by the boom in shale gas production. That, too, may prove to be a bubble, maybe even a Ponzi scheme. Production from individual shale wells declines rapidly, and large amounts of capital have to be borrowed to drill replacements. This will surprise many people who make judgement calls based on the received wisdom that limits to shale drilling are few. But I am not alone in these concerns.

Even if the US shale gas drilling isn’t a bubble, it remains unprofitable overall and environmental downsides are emerging seemingly by the week. According to the Texas Commission on Environmental Quality, whole towns in Texas are now running out of water, having sold their aquifers for fracking. I doubt that this is a boom that is going to appeal to the rest of the world; many others agree.

Fourth, we court disaster with assumptions about oil depletion. Most of us believe the industry mantra that there will be adequate flows of just-about-affordable oil for decades to come. I am in a minority who don’t. Crude oil production peaked in 2005, and oil fields are depleting at more than 6 per cent per year, according to the International Energy Agency. The much-hyped 2 million barrels a day of new US production capacity from shale needs to be put in context: we live in a world that consumes 90 million barrels a day.

It is because of the sheer prevalence of risk blindness, overlain with the pervasiveness of oil dependency in modern economies, that I conclude system collapse is probably inevitable within a few years.

Mine is a minority position, but it would be wise to remember how few whistleblowers there were in the run-up to the financial crash, and how they were vilified in the same way “peakists” – believers in premature peak oil – are today.

Read the entire article here.

Image: power plant. Courtesy of Think Progress.

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