Climate of Hope

One of the positives of the US President pulling out of the Paris Climate Change Accord is it has galvanized the many who see the need to act to save our planet. Coupling the US exit with the President placing climate change deniers and fossil fuel supporters in key cabinet roles, he has placed the US government at the kids table, while the adults talk about solving the world’s problems.

Fortunately, even the President’s actions cannot stop the momentum as a tipping point on renewable energy and other efforts have been reached. As reported in the book “Climate of Hope,” by former New York City Mayor Michael Bloomberg and former Executive Director of the Sierra Club Carl Pope, cities, businesses and citizens have been leading the way. This is important as cities are significant contributors to climate change and can therefore make a huge dent in ameliorating its effect. And, they are sharing their successes formally and informally.

Some of these efforts include:

– Restoring and renovating older buildings into green buildings. Bloomberg touts the renovation of the 1931 built Empire State as a key example.

– Building new structures with an even greener footprint. In India they deploy white rooftops to reflect away the sun to minimize cooling costs, e.g,

– Building more pedestrian areas which provide safer and eco-friendly access to shops, restaurants and businesses. These car free zones actually are part of a solution to reroute traffic to reduce carbon polluting stoppage.

– Building with buffers to allow nature to do its jobs to absorb the pounding of the ocean, since,  so many large cities are coastal cities with some below sea level. We should use nature to provide defenses that stand the test of time.

– Developing master traffic plans embracing car sharing, ride sharing, bike sharing, pedestrian pathways, electric vehicles from buses to taxis, and the elegant use of mass transit based on capital needs and restrictions. Bloomberg is big on measuring things, so installing GPS in New York taxis allowed them to measure success and make modifications to their plans as executed.

– Planting more carbon saving trees in cities and other areas, as well as using other plants such as mangroves in coastal areas as they suck carbon out of the air.

– Conserving food and reducing wastage. We waste huge amounts of food, both before and after it is cooked. Imperfect fruits and vegetables go straight to the dumps unless concentrated efforts prevent it and guide distribution to other users. Buying local saves on transportation costs and emissions, as well.

– Challenging manufacturers for efficient production and distribution. For example, a significant amount of wood goes to pallets that are tossed after one use. Look to more durable pallets that can be reused. Plus, the US does an excellent job of distributing products by rail and can do even better, as the rest of the world improves their efforts. These transmodal distribution centers that marry the efforts of ships, planes, trains and trucks provide huge efficiences and enhance trade.

– Dissuading the building of new coal plants. Active efforts have reduced coal from over 53% market share in 1990 to 30% market share of energy in 2016. Market forces are reducing this further as natural gas became cheaper and renewable energy cost fell to become more on par with coal. If new coal plants must be built, do it in concert with retiring older, less efficient plants.

– Making investment funds available to pay for upfront costs for renewable energy in countries that have fewer capital funding sources. India could do even more with available funding, especially as they electrify more of the country.

The great news is these things are happening. And, they are being shared. Please read this book. It is brief and optimistic. Also, watch the soon to be released sequel to Al Gore’s “An Inconvenient Truth.” Then spread the news about what is happening.

To be frank, these actions are positive and smart irrespective of one’s stance on climate change. And, a final note from Bloomberg is the millennials are paying attention. They want to work in places that are doing their part to fight climate change. Think about that as you plan.

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Interesting thing is happening at energy company shareholder meetings

An interesting development occurred at annual shareholder meetings of two major companies in the energy business – PPL Corp, a utility serving Pennsylvania and other states and Occidental Petroleum Corp. A shareholder instigated vote took place at each firm and passed over the recommendations against it by their Boards of Directors. The proposal is for each company to share formally a report on what they intend to do about climate change.

Per the website “Financial Advisor” the following was reported earlier this month about the Occidental vote:

“The proposal received the backing of Occidental’s largest shareholder, $5.4 trillion asset manager BlackRock Inc. BlackRock, which owns a 7.8 percent stake in the oil explorer, said it took action due to the “lack of response” on the issue by the company and a lack of improvement in its climate-change related reporting following a similar proposal last year which received more than 40 percent support.”

The shareholder proposals are at the impetus of CalPERS, one of the largest pension trust funds in the world and a major investor in each company. Other state pension trust funds are supportive of CalPERS’ push. A similar vote was taken recently at Royal Dutch Shell and was defeated, with another vote scheduled at ExxonMobil. It should be noted that institutional investor groups are recommending against these proposals, but two have passed.

With a White House at odds with the rest of the world on climate change, we will need a groundswell of advocacy. Fortunately, we are passed the tipping point on renewable energy due to falling prices and rapidly increasing jobs. And, some of these same companies are advocating the US stay in the Paris Climate Change accord. Yet, the US cannot leave the table. To assure that we remain, we need these kinds of shareholder votes and other advocacies.

The White House has now canceled two meetings to discuss the future of our involvement in the Paris Climate Change. I believe this is in reaction to the push back from business. We cannot backtrack on this and other environmental issues. Let’s push forward and, if the President does not want to play a role, we and the rest of the world can leave him behind.

 

A few mid-week musings

Since we are at mid-week, let me offer a few miscellaneous musings, mostly good with a few bad. Let me start with some good news:

A Federal appeals court in the Chicago area ruled that the LGBT community is protected under the 1964 Civil Rights amendment even though they were not specifically listed. The court case was around a community college professor who contended she was fired for being a Lesbian. The ruling was 8 to 3, but will of course be appealed to the district court in Indiana.

On what appears to be good news, but falls way short, the North Carolina General Assembly passed a repeal to the discriminatory HB2 law, yet left the most important piece of discrimination therein. They rolled back the change on the transgender bathroom issue, yet left in place the exclusion of the LGBT community from protected status for discrimination. Reviewing the above ruling in Chicago, it is apparent that feature is unconstitutional.

The electric car maker Tesla blew past expected deliveries this past week for their first quarter with over 25,400 cars. Tesla is on pace to deliver the high-end of their 45,000 to 50,000 first half of the year estimate. What is interesting the stock market is valuing the future for this company and its current market capitalization value is $48 Billion which is now higher than Ford at just under $45 Billion. Tesla is owned by Elon Musk who is leveraging his battery technology to aid in solar and wind energy storage, working on a key project to help Australia with an outage problem.

Reuters reported today that utility companies are not being influenced by our President’s fight to end the war on coal. With the exception of one of 31 companies, a two-thirds majority said it would not impact their plans to move to cheaper and cleaner natural gas and increasingly cheaper renewable energy sources. The other companies were silent. In a piece I read last year, we are passed the tipping point on renewable energy and it was postulated about utilities why would they invest in an expensive coal-fired plant that will be obsolete before it is completed?

On the bad side, I am increasingly concerned by Bashar al-Assad and his willingness to gas people. This man has a history of doing this and then lying to reporters and other leaders about it. It would be great to see the UN powers come together and say, we will help end this war in your country, but you must step down now or face charges of war crimes. While our former President did many good things, his handling of Syria was not one of them. He and Congress let the world down by not spanking this SOB for his last gassing of civilians. I am a peaceful person, but there are times when you must stand up to evil.

Then, there is North Korea who remains a threat as it is run by a petulant tyrant. China must join with the rest of the world in helping put a lid on this man’s chest beating. Otherwise, we leave it in the hands of our own mess maker. While I trust some of his military advisors in doing the right thing, I have little confidence in our leader solving this problem without some diplomatic help. What at least should scare North Korea is our President is a loose cannon, as it scares me.

Well, that is all for now. Have a great rest of your week.

 

Shoot straight with coal miners

I truly feel sorry for coal miners. They do a very hard, dirty and dangerous job in an industry that is in decline. Many are losing their good paying jobs as the industry continues to go downhill as other industry sources replace this source.

They are being promised things that politicians will have a hard time keeping. And, they have been told such promises for years. Leaders need to shoot straight with these hard working men and women. Frankly, I fault their Senators, Congressional Representatives and Governors for not shooting straight as what has been happening has been known for several years.

Coal has been on the decline for several years, primarily due to the fracking boom which produced increasingly cheaper natural gas. The gas burns cleaner than the coal, although it has its own issues. But, the lower production costs caused utilities to switch their coal-fired plants to natural gas. Plus, they do not have to maintain coal ash for many years in the future, even after the plant stops producing electricity.

The next wave became the movement to more renewable energy sources like wind, solar and biomass. Solar and wind energy continue to plummet in price and are comparable to coal in cost. Yet, these renewable energy sources don’t have the additive long term costs of maintaining coal ash sites, health costs that coal burning creates and the environmental costs of acquisition and transport. Plus, there is ongoing litigation risk, which TVA and Duke Energy are witnessing in spades.

Finally, the concept of a “virtuous cycle” enters in. With solar and wind energy, energy need not be created to produce electricity. With coal and natural gas, energy must be expended through burning to create steam out of water to turn the turbines which turn the electromagnets to create electricity. This less virtuous cycle costs money, which means over time the efficiency of renewable energy will be greater. So, a company may not invest in a coal-fired plant, as it will eventually become less cost-effective. This will be heightened further by improved battery storage and long term, if clean nuclear fusion can be accomplished in large scale, following small scale success in the last two years.

What this means is coal miner jobs will continue to decline and they won’t  be coming back. With climate change, the need to move is great. Unfortunately for these workers, coal is not the future answer. Yet, the leaders in these states should have communicated this a few years ago and worked to get money for retraining and new industries. To me, they have been derelict in their duties. One Presidential candidate has said he will bring those jobs back, which is a false promise. On the flip side, the other party has said let’s focus on retraining and new industries. Bernie Sanders even proposed a bipartisan bill in the Senate to do just that.

On a positive note, the sister and brother-in-law of a coal miner are teaching several displaced coal miners how to computer program. It started small, but has grown with the increasing need and additional funding. The program is appropriately called “Mined Minds.” This is the kind of investment in our coal miners that is needed, as those jobs are going away. Now, the leaders need to step in and do what they should have done a few years ago. It is time to shoot straight with these hard working men and women.

 

 

 

 

It is not just surplus oil driving prices down

As many know, the price of gas continues to fall. Drivers have been smiling at the gas pump paying US$25 rather than US$50 each fill-up. It is obviously related to the price of a barrel of oil which is beneath US$30.

A key cause for the falling price per barrel is the glut or surplus supply in the market. It was already high, but Saudi Arabia decided to keep producing. Now, we are about to see Iran release more oil when the sanctions are lifted. This may drive the price down even further.

But, is it only related to the glut? There have been three trends that have and will continue to impact the demand side. First, as started by President George W. Bush and ratcheted up by President Obama, new cars must have increasingly higher miles per gallon (mpg) requirements. In 2015, there were more cars sold in America than ever before, which means buyers’ replacement vehicles will likely have better mileage. Even a new truck will have better mpg than the one it replaces.

Second, an increasing number of hybrid cars are being sold. It is no longer rare to see hybrids on the road. And, electric cars are starting to sell, but the pace is where hybrids were a few years back. It should be noted one of the new Teslas is the highest rated car ever. Once battery storage permits longer usage than today, the electric cars may take off.

Third, there has been a noticeable trend toward fewer licensed drivers, with younger people foregoing the license.  People are choosing to live in urban areas where a car is not needed. Plus, with more transactions online, they can reduce the number of trips to the store or for entertainment. Car sharing, ride sharing, mass transit, and cheaper taxi services are creating downward pressure on demand for gas and, as a result, oil.

So, we are embarking down a path of a new normal. The counterbalance is the growing number of drivers in emerging markets, but even that growth may pull back some with obvious congestion and air pollution. Plus, lower gas prices means more car travel.

The times are indeed a changing. And, our fossil fuel industries may need to accelerate their thinking in renewable energy sources for future revenue. The new normal may cause the recovered price of oil to fall short of the old price level, once the glut is used up.

The Virtuous Cycle

The virtuous cycle is a nice term, but what in the heck does it mean? In the context under which I most recently saw it used is with one of two ultimate rationales why the move to renewable energy will begin to accelerate and replace fossil fuel energy sources.

Of course, renewable energy has many benefits and as the cost of production continues to fall, it will be on par with current fossil fuel energy production costs. This does not even consider the other costs that can be avoided which are inherent in the fossil fuel process. And, a key rationale for the migration will be the avoidance of the significant water loss that occurs in the fossil fuel and nuclear power production process through dissipated steam and loss of water to retrieve natural gas and oil through fracking.

But, the virtuous cycle will be one that will join water as the key reason for the accelerated migration to renewable energy. In essence, in fossil fuel energy production, energy has to be used to create energy. For example, to create electricity with fossil fuel, we have to burn coal or natural gas to boil water into steam to turn the turbines which turn the electromagnet generators. We have to exhaust energy to make more energy.

With renewable energy, we need not exhaust energy to make energy. The sun will shine and the wind will blow. They are doing this already, so we are merely harnessing that energy to produce electricity thereby creating a virtuous cycle. Using monetary terms, we do not need to spend money to make money, once the solar panels or windmills are created. Yes, we need to maintain them, but we do not have to spend energy to create new energy.

This matters now as energy companies look to build new energy production facilities. As a company considers the building over years of a natural gas-fired plant, the virtuous cycle of renewable energy may render that natural gas investment obsolete before a return on investment can be achieved. Companies will migrate to cost-effective and environmentally friendly energy sources. The fossil fuel industry is big on focusing on the cost and jobs as reasons to do more of the status quo, yet the production cost will flip the other way and will become more favorable for renewables. The jobs are already there and growing rapidly with double-digit increases.

So, when  people say we cannot afford to move to renewable energy, that is actually a very short-sighted argument. When you factor all of the added costs on environment and health of fossil fuel acquisition, use, and future maintenance, the costs are already in the favor of renewables. The virtuous cycle will accelerate the move even more.

 

 

Ziggy got it right

One of the funniest comic strips courtesy of my favorite everyday person, Ziggy, is our hero reviewing the fancy communications material produced by his company for employees. In true Ziggy deadpan fashion, he notes, “Uh oh. The better the communication material, the worse the message.” This simple observation speaks to the heart of fancy public relations messaging that is often masked as fact with slick images and spokespeople.

I mention this as the Koch Brothers’ Americans for Prosperity (which is more aptly named Americans for Our Prosperity) are funding commercials to dissuade North Carolina General Assembly from letting an increasing renewable energy requirement on Duke Energy continue. This phase-in requirement is one of the reasons North Carolina is fourth in the country in solar energy. The other key reason of a tax credit is set to expire this year, which is also a very poor move.

Let me summarize this in base terms. The fossil fuel industry, who has benefitted from government support for years, now is wanting an even playing field in North Carolina as the price of renewable energy falls and it has shown to be a success for attracting business and creating jobs. So, we will get to see slick commercials to tell us how renewable energy is more expensive for poor people and it is unfair to the fossil fuel industry for the government to play favorites (unless the fossil fuel industry is favored).

I have seen the studies presented that show the cost of renewable energy is higher than burning coal or natural gas. First, that equation focuses on production costs and the differential is narrowing and is expected to be equal at the end of 2018. Second, those comparisons do not factor in the added health cost, environmental degradation cost, loss of evaporated water to create steam from burnt fossil fuel, long term disposal costs of coal ash, and litigation costs to handle problems like Duke faced with the coal ash spill. These costs disproportionately affect the poor who tend to live nearer these areas. That is consistent with the Pope’s message.

The commercials will be slick and emphatically sincere as the pro-fracking commercials have been with the young actress playing the earnest mother who does not realize she is being paid to embellish the truth and outright lie. Fracking is perfectly safe she says as she whispers so as not to wake the children. No, it has been proven to be not safe and it will be proven to be worse than currently believed in the future. And, coal is definitely not safe no matter how you get it, heat it or store its ashes.

So, the nicer the commercial should be a larger red flag. Our state, country and planet need us to move faster down the path of renewable energy. Don’t let slick commercials convince you otherwise.