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The Feds Just Issued an Earthshaking Report About Fracking

Mother Jones

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Oklahomans have always had to deal with tornadoes, wildfires, and ice storms. But now residents of the Sooner State are facing a new threat: damaging earthquakes.

For the first time, the US Geological Survey has included “human-induced” earthquakes in its seismic hazard forecast. These man-made tremors are most often attributed to the injection wells in which oil and gas companies dispose of wastewater from hydraulic fracturing, or “fracking.” The USGS seismologists estimate that some 7 million people in the central and eastern United States now live in areas at risk of a damaging earthquake.

More Mother Jones coverage of fracking


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Why Coal Is (Still) Worse Than Fracking and Cow Burps


Clinton and Sanders Want to Restrict Fracking. Will That Make Global Warming Worse?


Deep Inside the Wild World of China’s Fracking Boom

“By including human-induced events, our assessment of earthquake hazards has significantly increased in parts of the US,” said Mark Petersen, who leads the agency’s National Seismic Hazard Mapping Project, in a statement.

The risk is most acute in parts of central Oklahoma and southern Kansas, the epicenter of a fracking boom. According to the new report, the chances of a damaging earthquake (defined as level 6 or greater on the Modified Mercalli Intensity scale) in these areas now range from 5 percent to 12 percent in the next year. Level 6 is considered the threshold at which earthquakes become more than a matter of a few smashed dishes and jolted nerves, causing structural damage in the form of cracked walls and chipped plaster.

However, the researchers say damaging tremors linked to injection wells are unlikely to pack the punch of the strongest earthquakes on the West Coast. The largest earthquake ever in Oklahoma was a magnitude 5.6 on the Richter scale in 2011 centered near the town of Prague, about 40 miles east of Oklahoma City. (A level six MMI corresponds to roughly 5.0 on the Richter scale.) Located near several active injection wells, the trembler injured two people and destroyed more than a dozen homes.

The 2016 seismic risk assessment focused on human-induced and natural earthquakes in the eastern and central United States. The risk of natural quakes in the West is given for comparison. USGS

Other hubs of human-induced seismicity identified in the USGS report include the Dallas area, which has seen more than 180 earthquakes since 2008; central Arkansas; and the Raton Basin along the New Mexico-Colorado border. An additional area of natural earthquake activity visible on the map lies along the New Madrid fault west of Nashville.

Typically, the USGS releases hazard forecasts with a 50-year outlook. They are used as guidance for local building codes and engineering design strategies in quake-prone areas. But the new report looks just one year ahead, a decision the researchers say is due to the highly variable risk of human-induced earthquakes from year to year.

In the past six years, that danger has spiked. From 1973 to 2008, the central United States saw an average of 24 earthquakes each year with a magnitude of 3.0 or greater (earthquakes weaker than that are not typically felt). The rate increased steadily between 2009 and 2015, averaging 318 earthquakes per year and reaching 1,010 in 2015. The tremors haven’t abated this year, the USGS says; through mid-March, there have been 226 earthquakes of magnitude 3.0 or larger in the central United States.

Still, it’s possible the earthquake risk could diminish with similar speed, the researchers note, given that unlike tectonic plates, industrial practices can be regulated. In an interview with the Oklahoman, Tom Robins, the state’s deputy energy secretary, noted that recent efforts to rein in wastewater injection are not yet reflected in the USGS data. That includes a call from regulators earlier this month for a 40 percent reduction in wastewater injection volume.

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The Feds Just Issued an Earthshaking Report About Fracking

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Things Just Got Even Worse For Coal

Mother Jones

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Just a few days after President Barack Obama promised new actions on climate change during his final State of the Union address, his administration has unveiled a sweeping overhaul of how coal can be extracted from federal land.

Interior Secretary Sally Jewell announced on Friday that she was placing a moratorium on new coal-mining leases on public land and that her department would begin a multiyear review of how those lease contracts are awarded. The policy change is likely to make the leases more expensive for mining companies, to generate increased royalties for the government, and to offset the damage coal production and consumption do to the environment.

“We haven’t done a top-to-bottom review of the coal program in 30 years,” Jewell told reporters. She added that her department will search for ways “to manage coal in a way that is consistent with the climate change agenda.”

This is a big win for environmental groups. But don’t expect it to result in an overnight decline in coal use, the nation’s No. 1 source of greenhouse gas emissions. Jewell said the lease moratorium will not “have any impact at all on coal production” and that the review will largely be carried out by the next presidential administration. All of the Republican presidential contenders have vowed to scale back Obama’s climate legacy; the Democratic candidates have vowed to push it forward.

About 40 percent of all US coal extraction takes place on federal land, much of that in Wyoming, the nation’s top coal producer. For years, environmentalists have complained that the coal industry enjoys royalty rates much lower than offshore oil or other publicly owned fossil fuels. Those low rates make it cheaper for coal companies to operate and may also be a raw deal for the public that has to deal with the impacts, from local environmental degradation to global climate change. While offshore oil companies typically pay a royalty rate of about 18 percent, Jewell said, the rate for coal is only 8-10 percent. A Government Accountability Office report in 2014 found that undervalued coal leases cost the US Treasury nearly $1 billion per year in lost revenue.

When the leasing policy was originally created decades ago, Jewell said, “our practice was really about getting as much coal as possible” to feed the nation’s power plants. Now, many scientists agree that the exact opposite approach is needed to have any chance of limiting global warming. A 2015 study found that 92 percent of US coal reserves need to stay buried to have any hope of limiting warming to 2 degrees Celsius (3.6 degrees Fahrenheit), the cap enshrined in the international climate agreement brokered in Paris last month.

Jewell said there are about 50 pending coal leases that could be halted by the moratorium; leases that have already been approved will be allowed to go forward, and there will be no change to any current mining operation. There’s enough coal in reserve under existing leases to continue production at its current rate for another 20 years, she said. Many of the leases that could be put on ice were unlikely to have gone into production anyway, said Matt Lee-Ashley, director of the public lands program at the Center for American Progress. That’s because, with prices so low, big coal companies in the West routinely snatch up leases just to keep in their back pocket without necessarily developing them.

In effect, Lee-Ashley said, “it’s a pause on adding additional stockpiles on coal.”

The coal companies, he added, “are well resourced to continue mining for the foreseeable future.”

Still, the announcement is yet another headache for an industry that has already had a very bad start to 2016. Coal has been battered over the last few years by competition from cheap natural gas and by new climate regulations from the Obama administration. US coal production is at a 30-year low, one of the country’s biggest companies recently declared bankruptcy, and once-promising export markets in China now seem to be drying up.

The leasing reform quickly faced a backlash from Republican lawmakers who represent coal states.

“Once again the administration is circumventing Congress, the voice of the American people, to launch another unilateral attack on coal,” Rep. Ed Whitfield of Kentucky said in a statement. “We will continue to fight to ensure our policies promote access to affordable, reliable energy.”

Kentucky is among the two dozen coal-reliant states that are suing the Obama administration over its plan to limit greenhouse gas emissions from power plants.

Lee-Ashley countered that the reforms are “a giant step forward” on Obama’s climate agenda. “This is the first time any administration has taken such a serious look at the management problems, and also the environmental costs, of fossil fuel production on public lands,” he said. He cautioned that if a Republican follows Obama in the White House, he or she could impede the climate-oriented aspects of the reform. But he said the financial overhaul should enjoy bipartisan support, since it boils down to giving the American people a fair price for their natural resources.

“When you look at the money being lost to taxpayers through these loopholes, anybody who believes in good business should be able to carry it forward,” he said.

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Things Just Got Even Worse For Coal

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Obama: Paris Climate Agreement Could Be a "Turning Point For the World"

Mother Jones

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More than seven years ago, Barack Obama told campaign supporters that one day, Americans would be able to tell their children that “this was the moment when the rise of the oceans began to slow and our planet began to heal.”

Saturday* evening—just hours after international leaders agreed to a historic deal to fight global warming—Obama told the nation that the accord could represent “a turning point for the world” and would help humanity “delay or avoid some of the worst consequences of climate change.”

“We may not live to see the full realization of our achievement, but that’s OK,” Obama said. “What matters is that today we can be more confident that this planet will be in better shape for the next generation.” You can watch Obama’s remarks above.

The deal, known as the Paris Agreement, includes commitments from countries around the world to reduce their emissions and pledges from high-polluting, developed nations help help poorer countries transition to clean energy and adapt to climate change. You can read more about the details of the agreement here.

Obama portrayed the hard-won deal as a product of American leadership. He said that the joint plan to control emissions that he and China’s President Xi Jinping announced last year inspired other countries to make ambitious climate commitments. “Over the past seven years,” Obama said, “we’ve transformed the United States into the global leader in fighting climate change.”

Obama also took a shot at his Republican critics, who have bitterly opposed his regulations on power plant emission and his other climate policies. “Skeptics said these actions would kill jobs,” said Obama. “Instead, we’ve seen the longest streak of private-sector job creation in our history.”

Still, Obama acknowledged that the Paris Agreement is far from sufficient to end the dangers posed by climate change. Negotiators pledged to limit warming to “well below” 2 degrees Celsius or 3.6 degrees Fahrenheit. They also agreed and to “pursue efforts” to limit the increase to 1.5 degrees Celsius.

However, all of the emissions cuts promised by countries thus far won’t come anywhere close to meeting those goals. Scientists estimate that these commitments would put the planet on course for 2.7 degrees Celsius of warming—and that’s only if countries actually follow through on them.

“The problem’s not solved because of this accord,” said Obama. “But make no mistake, the Paris Agreement establishes the enduring framework the world needs to solve the climate crisis.”

* Day corrected

Original source – 

Obama: Paris Climate Agreement Could Be a "Turning Point For the World"

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Hackers are messing with the oil and gas industry

Hackers are messing with the oil and gas industry

By on 18 Nov 2015commentsShare

The best part about an oil and gas addiction — besides all the pollution, environmental degradation, and crippling income inequality, of course — is how pathetically vulnerable it makes us to cyber attacks.

Say you’re a hacker. Pick a cool name — something like Krazy Keys or The Epidemic. Now, say you want to really fuck with the U.S. economy (you’re still reeling over those damn Starbucks cups). What better way to take down Uncle Sam than to target the slick, gooey oil that is his life blood? Fortunately for you, Cyber Satan, a growing number of oil and gas companies are making that pretty easy to do.

By connecting their infrastructure to the ever-expanding network of internet-enabled devices known as of the Internet of Things (check out our explainer video here), these companies are automating their operations and thus improving efficiency, but they’re also opening themselves up to cyber attacks. Here’s more from Motherboard:

The industry has a lot of different moving parts and processes, including pump control, blow-out prevention, and managing gas storage. Unexpected changes to these processes or the operations technology systems that run them can have a major impact like production stoppages or even damage to the infrastructure.

“Maybe the hackers’ intentions may not be to destroy something, but by not understanding the full picture of the system or what component of it they are messing with, they can have a real catastrophic effect,” said (cyber security expert Jasper Graham). This could be anything from bringing productivity to a standstill to disabling alarm systems or communications between workers on the field, which could put their safety at risk.

Already, there have been a number of attacks on oil companies around the world. In 2012, a group called The Cutting Sword of Justice (real name) attacked Saudi Aramco, partially or fully wiping files on 35,000 computers, Motherboard reports. The hackers didn’t manage to tamper with any pumping or drilling operations, but the company did have to temporarily shut down all of its computers. And last year, dozens of oil companies in Norway fell prey to unidentified internet marauders. Even Anonymous is getting in on the action, according to Motherboard. The notorious hacking group targeted gas stations earlier this year.

Unfortunately, oil and gas companies aren’t the only ones failing to protect themselves against cybersecurity threats. The Internet of Things is taking over a lot of our infrastructure, and most of that infrastructure isn’t ready to take on hackers. On the plus side, the oil industry is pretty evil, so as long as Queen Crypto and The Wackadoodle aren’t hurting anyone or creating serious economic mayhem, more power to them. And besides, the environmental movement is always in desperate need of a little badassery. These Hackers might just do the trick:

Source:

The Internet of Things Is Making Oil Production Vulnerable to Hacking

, Motherboard.

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Hackers are messing with the oil and gas industry

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Ted Cruz Really Hates Climate Change

Mother Jones

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Yesterday I dinged Ted Cruz for blathering about how he’d eliminate five cabinet departments. Big deal. The programs would just go elsewhere. Instead, tell me what programs you’d eliminate.

As it turns out, Cruz does have a list of programs he wants to get rid of. It’s really hard to find because his website is a horrific mess, but here it is:

  1. Climate Ready Water Utilities Initiative
  2. Climate Research Funding for the Office of Research and Development
  3. Climate Resilience Evaluation Awareness Tool
  4. Global Methane Initiative
  5. Green Infrastructure Program
  6. Greenhouse Gas Reporting Program
  7. New Starts Transit Program
  8. Pacific Coastal Salmon Recovery Fund
  9. Regulation of CO2 Emissions from Power Plants and all Sources
  10. Regulation of Greenhouse Gas Emissions from Vehicles
  11. Renewable Fuel Standard Federal Mandates
  12. UN Intergovernmental Panel on Climate Change
  13. UN Population Fund (abortion)
  14. USDA Catfish Inspection Program (genuinely wasteful)
  15. Appalachian Regional Commission (helps poor people)
  16. Consumer Financial Protection Bureau (Obama program)
  17. Corporation for Public Broadcasting (culture war)
  18. Corporation for Travel Promotion (???)
  19. Legal Services Corporation (helps poor people)
  20. National Endowment for the Arts (culture war)
  21. National Endowment for the Humanities (culture war)
  22. Presidential Election Campaign Fund (no one uses it anymore)
  23. Saint Lawrence Seaway Development Corporation (???)
  24. Sugar Subsidies (anti-Rubio)
  25. Transportation Investment Generating Economic Recovery (part of hated Obama stimulus program)

I’ve re-ordered this list to make clear just how much Cruz hates climate change. Nearly half of his cuts are to programs related to the environment or climate change. Cruz also wants to ditch some culture warrior stuff (arts, humanities, public broadcasting), some anti-liberal stuff (legal services, CFPB, TIGER), some anti-Rubio stuff (sugar subsidies), and some genuinely stupid stuff (USDA catfish inspection, a clever protectionist measure beloved of catfish-producing states).

So how much would this save? Cruz says $50 billion per year, but that seems pretty optimistic. The catfish thing, for example, costs $14 million, and lots of items on the list don’t cost the government anything. I suppose I could google all 25 of them and see what they add up to, but not today. My horseback guess, though, is maybe $10-20 billion.

I’ve tried to identify the reasons Cruz hates each of these programs, but I came up blank on two of them: travel promotion and the Saint Lawrence Seaway. Maybe they’re genuinely wasteful. I’m not sure.

In any case, this is it. Cruz deserves credit for at least making a list, which is more than most candidates are willing to do. But will this actually save more than a tiny fraction of his stupendous tax cuts? Not a chance.

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Ted Cruz Really Hates Climate Change

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Canada’s New Prime Minister May Be a Liberal—But He Still Loves the Keystone Pipeline

Justin Trudeau is better on climate than Stephen Harper. But he’s no Barack Obama. Sean Kilpatrick/The Canadian Press/AP Well before his stunning victory in Canada’s elections, Justin Trudeau, the Liberal party leader, telephoned David Suzuki, the country’s best-known science broadcaster, environmentalist—and a national treasure—to ask for his endorsement. The conversation did not go well. Suzuki admitted to journalists he called Trudeau a twerp, and the Liberal leader dismissed his critique of the party’s climate policy as “sanctimonious crap.” Those hoping for a U-turn in Canada’s climate change policy after Conservative Prime Minister Stephen Harper’s crushing defeat are in for a reality check. Trudeau has repudiated Harper’s vision of Canada as an “energy superpower,” promised to reverse devastating cuts to government science budgets, and fix the country’s reputation as a carbon bully in international climate negotiations. But it would be a mistake to see Trudeau or the Liberals as climate champions. In his victory speech on Monday, there was no mention of climate change, and he was criticized for being vague on the issue during campaigning. Read the rest at The Guardian. Read the article:   Canada’s New Prime Minister May Be a Liberal—But He Still Loves the Keystone Pipeline ; ; ;

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Canada’s New Prime Minister May Be a Liberal—But He Still Loves the Keystone Pipeline

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We Now Know Marco Rubio’s Energy Plan: Drill, Drill, Drill, and Drill Some More

Mother Jones

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Marco Rubio sidestepped the challenges posed by climate change as he laid out his campaign’s energy policy Friday afternoon at a manufacturing plant in Salem, Ohio. Instead, the Florida senator and GOP presidential hopeful called for expanding oil and gas development, weakening environmental protections, and rolling back President Barack Obama’s efforts to combat climate change, which Rubio characterized as an illegal intrusion into the market by overreaching government agencies.

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Rubio’s proposals amounted to a conservative policy wish list. He’d dismantle Obama’s carbon pollution rules for existing power plants, change Department of Energy grants for new energy research, and make it harder for environmental groups to sue the government.

“On matters of energy, Washington uses a vast regulatory bureaucracy to override consumers and undercut innovators,” Rubio told the audience. “And the results are fewer choices, fewer jobs, and higher prices.” He cast himself as a Washington outsider, saying, “Leaders in both parties are to blame,” and he criticized Hillary Clinton’s promise to tackle climate change as simply a misguided attempt at “changing the weather.” He described the Clean Power Plan—Obama’s new rules aimed at reducing greenhouse gas emissions from power plants—as “one of the costliest regulations of all time.”

Rubio paid scant attention to efforts to develop clean energy. Instead, he pledged to review Obama’s offshore drilling policies to ensure increased oil and gas production, promised to approve the Keystone XL pipeline, and called for speeding up approval of natural-gas export terminals, according to a policy paper posted to his website Friday afternoon.

The announcement from Rubio—who previously declared that America shouldn’t act on climate change because “it is not a planet”—provides a stark contrast to the Democratic presidential candidates, who called for climate action in their first televised debate Tuesday night. Clinton, for example, promised new investments “in infrastructure and clean energy, by making it possible once again to invest in science and research, and taking the opportunity posed by climate change to grow our economy.”

Rubio has said that climate change is real (he voted in January for a Senate resolution that said climate change is real and not a hoax), but he has publicly speculated that humans aren’t to blame. “I do not believe in climate change in the way that some of these people out there are trying to make us believe,” Rubio told CBS’ Face the Nation in April. “I believe the climate is changing because there’s never been a moment where the climate is not changing.”

“The question is what percentage of that, or what is due to human activity,” he said.

Not surprisingly, green groups immediately slammed Rubio’s energy plan. The vice president of the League of Conservation Voters said in a statement that Rubio’s proposals “will unleash waves of damage like those already flooding Miami’s streets. His plan would accelerate climate change just to protect the profits of the big polluters that fund his campaign.”

“Senator Rubio’s plan appears to have been written by executives in the fossil fuel industry,” said Khalid Pitts, political director at the Sierra Club, according to the Hill.

Rubio’s remarks also come at a time when the candidate is drawing interest from big donors, including casino magnate Sheldon Adelson.

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We Now Know Marco Rubio’s Energy Plan: Drill, Drill, Drill, and Drill Some More

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Hackers can now mess with our infrastructure. Thanks, internet

Hackers can now mess with our infrastructure. Thanks, internet

By on 15 Oct 2015commentsShare

In case you missed it, we made a video about the Internet of Things this week. It involves jelly fish and nerve nets and egg trays (oh my!), so you should really check it out, but if you don’t have the three minutes and 25 seconds, here’s the gist: The Internet of Things is the more than 1.3 billion (and growing) gadgets and sensors currently connected to the internet. These “things” can help us regulate water and energy use, route trains and cars, control internal heating systems, even keep track of the contents of our refrigerators. Basically, the IoT is a very powerful tool for sustainability.

But where there’s an internet-connected device, there’s a hacker waiting to mess with it (OK — maybe not in your fridge), which means the more we connect our infrastructure and resources to the internet, the more vulnerable we and the environment will be to cyber attacks. And according to the The New York Times, it’s already time to start worrying:

The phrase “cyber-Pearl Harbor” first appeared in the 1990s. For the last 20 years, policy makers have predicted catastrophic situations in which hackers blow up oil pipelines, contaminate the water supply, open the nation’s floodgates and send airplanes on collision courses by hacking air traffic control systems.

“They could, for example, derail passenger trains or, even more dangerous, derail trains loaded with lethal chemicals,” former Defense Secretary Leon E. Panetta warned in 2012. “They could contaminate the water supply in major cities, or shut down the power grid across large parts of the country.”

Here are some numbers that will freak you out, from the Times:

150 — the number of times that foreign hackers have infiltrated the Department of Energy’s networks in the past four years
163,228 — the number of cyber attacks against industrial control systems that occurred in January 2013, according to Dell Security
675,186 — the number of cyber attacks against industrial control systems that occurred in January 2014, according to Dell Security (most of these were in the U.S., Britain, and Finland)
1,000 — the number of energy companies across Europe and North America targeted in an attack that the U.S. Department of Homeland Security said it was investigating last year
60 — the percent of pipeline operators in North America whose critical information was accessed by CHinese hackers in an attack on Schneider Electric
50,000 — the number of computers and servers at South Korean banks and media companies that North Korean hackers “knocked out” for several days
90 — the number of minutes that computers at various U.S. airports went down yesterday (the Department of Homeland Security has yet to say what caused the outage)

Fortunately, countries with the most advanced hacking capabilities like China, Russia, Israel, and Britain are unlikely to launch any serious attacks against the U.S., the Times reports. That’s because either: a.) They’re our allies, so attacking us would be super uncool; or b.) they realize that throwing down the cyber gauntlet with the U.S. would be trés unwise (USA! USA! USA!).

But as former head of the NSA Michael V. Hayden told the Times, the “renegade, lower-tier nation-states that have nothing to lose” — Iran, North Korea, and Islamic militant groups, for example — are cause for concern. These groups may not have the capabilities to do serious damage yet, but they’re working on it.

In 2012, U.S. intelligence officials reported that Iranian hackers attacked Saudi Aramco, the world’s largest oil company, replacing data on its computers with images of a burning American flag. In that incident, and another Iranian attack, this time against Qatari oil company RasGas, hackers tried to infiltrate oil production systems but never made it past corporate servers, the Times reports.

More recently, hackers attacked a German steel mill, causing serious damage to a blast furnace. And just last week, hackers with the Washington State National Guard showed that they could infiltrate the Snohomish County Public Utility District computer system in just 22 minutes.

So as cool as the Internet of Things is, it’s important that we don’t get ahead of ourselves here. Cybersecurity has to be a top priority, right above making your smart fridge compliment your hair every morning. I mean, we all remember the great Sony hack of 2014, right? That was a big deal, but it was mostly just an internet dump of corporate gossip. Imagine what will happen when hackers start going after our water supply and electrical grid. Shit’s gonna get real, and the aftermath will be way less fun to talk about in the grocery store checkout line.

Source:

Online Attacks on Infrastructure Are Increasing at a Worrying Pace

, The New York Times.

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It’s Getting Harder for Oil Companies to Make Money. Here’s Why.

Mother Jones

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Fossil fuels Illustration by Johnny Sampson

One morning in May, Danielle Fugere tried to convince America’s second-largest oil company to get out of the oil exploration business. Standing before a room full of Chevron shareholders in San Ramon, California, she warned that climate change and rapidly shifting oil markets were threatening to erode the corporation’s profits.

Fugere, president of the shareholder activist group As You Sow, pointed out that Chevron—the world’s largest corporate source of carbon dioxide emissions—has spent billions of dollars searching for new, often remote sources of oil that will take years to tap. How, she wondered, can the company remain profitable when it faces plummeting crude oil prices and looming restrictions on fossil fuel use? Rather than funding long-term projects that might never pay off, she argued, Chevron could return the money as dividends or steer it into less risky ventures like renewable energy. “Oil that stays in the ground is valueless,” she said.

The proposal garnered less than 4 percent of Chevron’s shareholder votes. But warnings about oil’s uncertain future are no longer just coming from climate activists. From Wall Street analysts to Middle Eastern bankers, some of Big Oil’s former cheerleaders are starting to sound the alarm, questioning whether the industry can stay on its current course and remain in the black. “They’re in a vise,” says Mark Lewis, chief energy economist at the international financial consulting firm Kepler Cheuvreux. “You have economics and technology on one side of the vise. And you have politics, the push for climate action, on the other side.”

Start with the tumbling price of oil. Finding new sources of petroleum, especially when they’re deep beneath the sea or buried in layers of shale, is extremely expensive, so energy companies need prices to stay reliably high. In 2014, Goldman Sachs cautioned investors that the largest new drilling projects needed to earn at least $90 per barrel to break even. The World Bank says one-third of current oil production and two-thirds of future reserves could be uneconomical even at $60 per barrel. In August, the price dipped below $40, the lowest in more than six years.

Over the past year, ExxonMobil and Chevron‘s earnings have slumped by more than 50 percent; their stock prices (as well as those of Shell, ConocoPhillips, and BP) dropped by as much as one-third in the first eight months of 2015. In July, Standard & Poor’s downgraded Shell’s credit rating, partly in response to the company’s controversial efforts to drill in the Arctic and other pricey endeavors. On Monday, Shell announced that it would halt its Arctic exploration “for the foreseeable future.” The company cited the project’s enormous costs and “disappointing” outcome, as well as the “challenging and unpredictable federal regulatory environment in offshore Alaska.”

Kepler Cheuvreux reports that the industry’s expenditures on developing new oil sources have increased 120 percent since 2000, while supplies of crude have increased just 11 percent. Investing $100 billion in solar or wind power, the firm’s analysts conclude, would produce far more energy in the long term than an equivalent investment in oil. “The rules of the game for upstream oil and gas companies have changed,” says Lewis. “Every year they have to replace cheaper legacy barrels with more expensive barrels.”

View image | gettyimages.com

One explanation for falling prices is the glut of cheap domestic oil from the fracking boom. But the industry is also confronting what Bloomberg energy analysts have characterized as a “demand shock.” California’s new regulations on fuels’ carbon intensity and the Obama administration’s aggressive fuel efficiency standards, scheduled to take effect in 2025, are steering carmakers toward designs that use less gasoline. “We’re on the opposite side of the oil companies in the battle over the low-carbon fuel standard,” says General Motors spokesman Shad Balch. “The first company with a no-gas car wins.” Citi’s commodity research team predicts these factors, combined with the rising use of natural gas, will cause the rate of US oil consumption to peak by 2030. In August, the Interior Department reported an almost unprecedented lack of interest in purchasing leases for new wells in the Gulf of Mexico. And the National Bank of Abu Dhabi recently concluded that developing wind or solar capacity in the Middle East would be cheaper than building a new oil-fired power plant, even if the price of oil drops to $30 per barrel.

Oil companies will also be in a quandary if prices at the pump go back up. Higher prices could make hybrids, electric vehicles, and mass transit more attractive than conventional cars. According to a Bloomberg analysis, even if the cost of gasoline averaged just $2.09 per gallon, electric vehicles’ penetration of the US car market would rise from 1 percent to 6 percent by 2020; at $3.34 per gallon, it would jump to 9 percent. (In the first eight months of 2015, the average price of a gallon of regular gas nationwide was $2.53.)

And it’s becoming more expensive to burn fossil fuels. The European Union, California, and several other states have all imposed some sort of direct price on carbon emissions. Last week, China pledged to create a nationwide cap-and-trade system. Rising pressure from the public as well as climate negotiators preparing to gather in Paris in December suggest these policies will continue to spread. If the cost of greenhouse gas emissions rises high enough, fossil fuel reserves could turn into so-called “stranded assets,” meaning it would no longer make financial sense to exploit them. ExxonMobil and other American oil companies have already started integrating hypothetical carbon costs into their internal accounting, preparing for the inevitable drop in demand that will kick in if policymakers can agree on a universal price tag.

The new realities facing the energy sector are reflected in Bloomberg’s 2013 decision to display companies’ fossil-fuel-­related risks on the omnipresent terminals that deliver financial data to investors. Such liabilities, however, do not have to be reported in public financial statements. In 2010, the Securities and Exchange Commission asked publicly traded companies to voluntarily report their financial risks from climate change. So far, not even 15 percent of S&P 500 companies have bothered to do so.

Meanwhile, overseas investors have had more success in prodding the industry to make changes that it has thus far been able to dodge in the United States. In January, Royal Dutch Shell shareholders enlisted management support for unprecedented emissions disclosures and a suggestion that executive compensation be linked with planning for a carbon-constrained energy market. In April, just before Chevron stockholders ignored Fugere, BP’s shareholders agreed to similar policies.

So while the oil industry isn’t going away anytime soon, the barrel it is over is increasingly hard to ignore.

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It’s Getting Harder for Oil Companies to Make Money. Here’s Why.

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No One Is Ready for the Next Katrina

Climate change is making catastrophic floods more likely, and US politicians are doing little to prepare. NOAA/Wikimedia Commons After the storm, after the flooding, after the investigations, the US came to realize that what happened to New Orleans on August 29, 2005 was not a natural disaster. The levee system built by the US Army Corps of Engineers had structural flaws, and those flaws were awaiting the right circumstances. In that way, what happened was all but inevitable. And just as the storm is not to blame, New Orleans is not unique in its vulnerability. The city endured a lot of tsk-tsking in the aftermath of Katrina, as if the storm was the climax to a parable about poor urban planning. Sure, the city sits below sea level, at the end of hurricane alley, and relies heavily on an elaborate (and delicate) system of infrastructure. But where the city’s geography is unique, its vulnerability is anything but. Just about every coastal city, state, or region is sitting on a similar confluence of catastrophic conditions. The seas are rising, a storm is coming, and critical infrastructure is dangerously exposed. The basic math of carbon dioxide is pretty simple: Generally, as CO2 levels rise, the air will warm. Warmer air melts glaciers, which drip into the sea—even as the water itself warms, too. Both cause the oceans to rise. Even if the entire planet stopped emitting carbon dioxide, Earth would continue to suffer the effects of past emissions. “We’ve got at least 30 years of inertia in terms of sea level rise,” says Trevor Houser, a Rhodium Group economist who studies climate risk. And even if the sea weren’t rising, the rate of urban growth will more than double the area of urban land at high flood risk, according to a study Global Environmental Change published earlier this year. But the sea is rising, at about .13 of an inch per year, for the past 20 years. (It was rising before then, too, but at about half the rate for the preceding 80 years.) Another recent study calculated that the world should expect about 4 feet of sea level rise for every degree Fahrenheit the global average temperature rises. This puts nearly every coastal city, in every coastal state, in danger of floods. Climate Central has an extensive project looking at sea level risk, if you’re curious about your city’s risk. Read the rest at Wired. Read article here –  No One Is Ready for the Next Katrina ; ; ;

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No One Is Ready for the Next Katrina

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