Thursday, November 4, 2021

Canada to stop financing fossil fuel projects abroad

 



24 countries make the pledge, including the United States

Kyle Bakx · CBC News · 
The oil and natural gas sector is a key economic driver as one of Canada's top exports. The federal government agreed to end financing for Canadian fossil fuel project abroad. The commitment was signed on to with two dozen other countries at the COP26 climate summit. (Kyle Bakx/CBC)

Our planet is changing. So is our journalism. This story is part of a CBC News initiative entitled Our Changing Planet to show and explain the effects of climate change and what is being done about it.

The federal government announced Thursday morning it will cut subsidies that help oil and natural gas companies operate and expand outside the country by the end of next year.

The United States, New Zealand and Costa Rica are also among a total of 24 countries signing the international statement.

The countries are pledging to direct the funds to clean energy development.

If every one of the countries implements the change, the policy could transfer about $15 billion US ($18.6 billion Cdn) a year of public money out of fossil fuels and into clean energy, officials said.

"We are in a climate crisis. We need to urgently reduce emissions in every sector of the economy, everywhere in the world. This, of course, applies to the energy sector as to all sectors of the economy," Natural Resources Minister Jonathan Wilkinson said during the announcement.

"Canada's signature is significant. We are one of the world's largest energy producers."

Natural Resources Minister Jonathan Wilkinson says Canada will end financial support for the oil and natural gas companies to operate internationally by the end of 2022. (Kyle Bakx/CBC)

In an interview on Wednesday evening, Wilkinson said the government has taken the position to end subsidies for the oilpatch and this is a first step in that process. 

"During the election campaign, the Liberal Party committed not to a specific date, but to phasing that out domestically as well. That is something we'll be working on," he said.

  • Have questions about COP26 or climate science, policy or politics? Email us: ask@cbc.ca. Your input helps inform our coverage.

Japan, Korea and China, which environmental groups say are some of the largest providers of international public fossil fuel finance, were not part of Thursday's pledge.

Support for overseas coal power plants also ending

In the past week, Canada and the other G20 countries made a similar announcement to end financial support of coal power plants overseas.

"From our perspective and our partners from many civil society organizations, it is rather a historic day," Richard Florizone, president of the Winnipeg-based International Institute for Sustainable Development, said during Thursday's Thursday's announcement.

"After a wave of pledges on coal including from China and others in the past few months, this statement and action today shows that not only is urgent action needed to ensure we can end public finance for fossil fuels, but we can actually achieve it."

The announcement on international financing will impact Export Development Canada (EDC), a Crown corporation providing a variety of financial supports to help companies operate internationally.

Last year, the organization provided the oilpatch with about $1 billion in support after oil prices crashed to record lows, even turning negative.

By the beginning of December 2020, the EDC's oilpatch support included:

  • About $852 million in bonding support for 43 companies.
  • About $350 million in loans either approved or in the process of approval for 10 companies.
  • About $15 million in credit insurance for 32 companies.

It's not yet clear how much of an impact Thursday's announcement will have on the sector.

ABOUT THE AUTHOR

Kyle Bakx

Reporter

Kyle Bakx is a Calgary-based journalist with CBC's network business unit. He's covered stories across the country and internationally.https://www.cbc.ca/news/business/bakx-cop26-fossil-fuel-subsidies-1.6236636?__vfz=medium%3Dsharebar

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Wednesday, November 3, 2021

With shale subdued, Saudi, Russia become more comfortable with oil rally

 NDON/MOSCOW, Nov 3 (Reuters) - Saudi Arabia and Russia are more confident higher oil prices will not elicit a fast response from the U.S. shale industry, OPEC+ sources said, reflecting a desire to rebuild revenue and supporting the case against raising OPEC+ output more quickly.

The two countries lead the OPEC+ group of the Organization of the Petroleum Exporting Countries and allies. OPEC+ supply restraint has underpinned a rally that pushed global benchmark Brent crude to a three-year high of $86.70 last month.

The signs that Riyadh and Moscow are less wary about higher prices help explain why OPEC+ has rebuffed calls from the United States and other consumers for a more rapid unwinding of output cuts made last year during the worst of the pandemic.

"OPEC+ keeps an eye on U.S. oil production and reserves and for the time being the alliance has no worries about that," said a Russian OPEC+ source. "U.S. shale oil output is recovering relatively modestly."

All oil producers suffered a drop in income during the pandemic and the price rally has allowed them to rebuild their balance sheets.

U.S. shale companies were under pressure even before the pandemic to cut spending and expansion and increase returns to shareholders. That pressure has kept them in check even as oil prices have risen to levels that would previously have sparked a boom in shale oil drilling.

The trend looks to have eased OPEC+ concerns that higher prices would lead to more U.S. shale output, therefore making them more comfortable about the rally.

Russia often previously voiced concern that if OPEC did not increase output and keep prices in check, it would encourage more shale drilling. Russian officials have showed no such concern recently, OPEC+ sources say.

PRICE ASPIRATIONS

"There is little doubt that the Saudis and the Russians have raised their price aspirations. They started the year at an unofficial target of $75 Brent but are getting more comfortable with higher," said Gary Ross, CEO of Black Gold Investors and a veteran OPEC watcher.

"The reasons could be a combination of need, politics, and the market being able to handle it because of shale being a less dominant feature with apparent capital discipline," Ross added.

OPEC's forecasts call for no growth in U.S. shale output in 2021, and a modest rise of about 400,000 bpd in 2022, although internal forecasts seen by Reuters suggest the 2022 figure will be revised higher.

"The issue of shale oil has not arisen for several months, neither for the ministers nor at the technical level," said an OPEC+ source.

Investors have punished U.S. shale companies that tried to increase their spending on drilling for the last two years – knocking shares of companies that did not cut their budgets and aim for flat oil production.

U.S. shale operators have pulled away from far-flung locales where the break-even cost is higher than in the Permian Basin, the largest U.S. shale play, based in Texas and New Mexico.

The Permian's output peaked in March 2020 at 4.91 million barrels per day; it is forecast to be at 4.89 million bpd in November, or just 0.5% below that peak, according to U.S. Energy Department figures.

The rest of the shale basins in the United States, by contrast, were expected to produce a total of 3.3 million bpd in November, down 27% from a peak 4.5 million bpd reached in February 2020.

Rapid growth in the non-conventional shale oil supply has caused problems for OPEC in the recent past.

Rising shale output, encouraged by OPEC's policy of cutting supply to support prices, helped create a glut during 2014-2016. This glut eventually prompted the creation of OPEC+, which began to restrain output in 2017.

PRICE RALLY

With shale output seen as unlikely to rebound for now, OPEC+ has been able to avoid action to dampen the price rally.

OPEC+ at its meeting on Oct. 4 was under pressure from the United States to do more to cool the market. The group, sources said, had options to boost output by 800,000 bpd and by 400,000 bpd as called for in its plan. read more

Saudi Arabia made clear it was against adding more than 400,000 bpd, and Russia, which earlier this year was pushing for more rapid OPEC+ output hikes, did not object, OPEC+ sources said.

At its most recent meeting, to be held on Nov. 4, OPEC+ is also expected to stick to an increase of 400,000 bpd.

Saudi oil policy is driven by Crown Prince Mohammed bin Salman (MbS), who needs to fund initiatives such as Vision 2030, an economic reform plan, sources say.

"MbS is a young crown prince and will be a king for years to come and therefore he needs moderately high oil prices to help him deliver on his vision," a Saudi source close to government thinking said, declining to be identified.

"He outlines oil and Saudi OPEC policy himself, and he gave directions that they should stress at the last OPEC+ meeting that there will be no further increase," the source added, referring to the Oct. 4 meeting.

To be sure, OPEC+, Saudi Arabia and Russia have no official oil price target - OPEC dropped such efforts years ago as unworkable - and say the objective of production policy is to balance supply with demand.

Saudi Arabia is more dependent on higher oil prices than other key OPEC+ members. The IMF estimates Saudi Arabia's fiscal breakeven oil price is about $80, higher than other large OPEC producers such as Iraq and the United Arab Emirates. Russia's, in contrast, is around $40.

Russia, while less dependent on oil income than Saudi Arabia, has at various times this year urged higher output. In January, it secured a deal to boost its own production, while Saudi Arabia made a voluntary cut. read more

With shale not seen as a concern for now, calls in OPEC+ for more rapid output hikes have faded.

"The feedback we have from shale has been that investors are focused on recovering their capital, even with high prices, no increase in production is expected in the short term," said another OPEC+ source.

Reporting by Alex Lawler, Marwa Rashad, Gary McWilliams, Olesya Astakhova, Vladimir Soldatkin, Ahmad Ghaddar and David Gaffen; Editing by David Holmeshttps://www.reuters.com/business/energy/with-shale-subdued-saudi-russia-become-more-comfortable-with-oil-rally-2021-11-03/
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Monday, November 1, 2021

How Science Fiction and Midcentury Angst Shaped Elon Musk

 https://www.bloomberg.com/opinion/articles/2021-11-01/how-science-fiction-and-midcentury-angst-shaped-elon-musk?sref=qpbhckVU

How Science Fiction and Midcentury Angst Shaped Elon Musk

A historian traces the Tesla founder’s passion for space exploration and other futuristic pursuits to dystopian novels and a grandfather’s eccentric convictions.

By 
 
Joshua Haldeman, circa 1926, left, and grandson Elon Musk, during a “Saturday Night Live” skit in May, bear a striking resemblance.

Joshua Haldeman, circa 1926, left, and grandson Elon Musk, during a “Saturday Night Live” skit in May, bear a striking resemblance.

 

Source: Haldeman Papers/NBC

Where does Elon Musk get his ideas from? What is he trying to achieve and who does he want to be? Many of us are desperate to understand the world’s richest man, whose electric vehicle maker Tesla is now, according to the stock market, worth a trillion dollars. Jill Lepore, a historian at Harvard University, suggests Musk was shaped by his adolescent love of science fiction and the strange, science-obsessed politics of his Canadian grandfather.

Joshua Haldeman was a flamboyant character. Trained as a chiropractor, he performed in rodeos and sought adventure as an amateur archaeologist and pilot. After emigrating to South Africa with his family, he led a series of expeditions to find the mythical Lost City of the Kalahari. He died in 1974, when Elon was still a small child, but a photo shows that grandfather and grandson bear an uncanny resemblance.

In the 1930s, Haldeman led the Canadian branch of the Technocracy movement,  when “technocrat” meant something very different than a bland centrist politician. Then, it was a uniformed movement that marched under the Monad, or yin and yang, symbol, aiming to replace democracy with a society led by engineers. According to Lepore, Haldeman’s politics may have been his key bequest to his grandson.

Believing that science and technology could cure all ills, Haldeman campaigned for the capitalist monetary infrastructure to be replaced by a new universal currency, based on a unit of heat, to be known as the erg. The technocrats even wanted an end to prices, in the view that scientists could handle distribution within society far better than the market. 

Such concepts seemed dangerous to the Canadian government, which banned the movement over its opposition to World War II. The belief system faded away with the growth of prosperity after the war. But similar ideas are inspiring the current excitement over meme stocks, cryptocurrency and the man who now calls himself “Technoking.”

To Lepore, Musk’s ideology seems to flow from these outlandish — and outmoded — views. In Lepore’s words, his ambition is an “extravagant, extreme” even “extraterrestrial capitalism, driven by fantasies that come from science fiction.” 

In a new podcast series, “The Evening Rocket,” produced by Pushkin Industries in collaboration with the BBC that launches today in the U.S., Lepore offers her theory that Musk is a creature of the science fiction that he devoured in his youth, much of which reflected his grandfather’s technocratic philosophy. That gave him his storytelling gift. When investors buy shares in Tesla, they are buying a narrative, not a stream of future cash flows. That narrative sounds a lot like midcentury science fiction.

What Lepore finds disturbing is that Musk appears to have misinterpreted the science fiction he was reading, something she believes should worry us all. “A lot of what he seems to be inspired by as though it was utopian,” she told me in an interview, “was in fact dystopian.”

Much science fiction in the middle of the century was meant as a warning of how science could come to dominate our lives. But young Elon Musk, Lepore says, instead found the dystopian future exciting. That’s what inspires his company SpaceX and its mission to colonize Mars.

Lepore argues that the current popularity of Musk and his ideas, from colonizing space through to cryptocurrency, could be a symptom of a damaged society.

The rush to buy meme stocks like GameStop and AMC earlier this year was seen by its participants as a blow for equality and against the elites. Calling themselves “apes,” the young traders who tried to force short-selling hedge funds out of business acted like a flash mob. Many of them have subsequently lost money. Cryptocurrencies, which have enriched many already-wealthy people, are also viewed by their supporters as a great economic leveler. Bitcoin, its backers hope, will not only emancipate us from the hold of banks over the financial system, but also break the grip of governments — even if they were democratically elected. 

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Midcentury science fiction often had a libertarian message, and today that philosophy has many adherents in Silicon Valley and among the hedge fund community. But Lepore suggests that with Musk the Technoking, something different is going on. Crypto enthusiasts’ attitude toward money aligns directly with the distrust and feudalism of the Middle Ages, when the wealthiest people held power and trust was vested in individuals, not systems and institutions. Indeed, the campaign to buy meme stocks was very much like a medieval peasants’ revolt. Musk’s futurism, in her reading, reflects an antiquated view of the future.  

“The Evening Rocket” is an exhilarating ride through pop culture, technology and centuries of history, and it brings a perspective to Musk that is often lacking. His ideas, Lepore concludes, were born in an age of imperialism and inequality.

It’s a downbeat view of a figure who currently provides many people with much hope, but it is a perspective that should be taken seriously. Lepore does at least offer us the prospect that whatever path the Elon Musk story takes from here, it will be a sight to behold. “We aren’t going to read his obituary in 50 years and wonder whatever happened to him. It will be a big-budget Hollywood end.”

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