The King is dead: FT pens obituary to coal

CRIB NOTES 4-10 JAN: Coal braces for uncertain future, BP boss eyes gas glut, China targets 21% wind and solar boost

(Pic: Bert Kaufmann/Flickr)

(Pic: Bert Kaufmann/Flickr)

By Ed King

King coal’s “well hammered coffin” received a heavy nail when the Paris climate agreement was gavelled through on December 12.

That’s the view of the influential Lex column at the FT, in a bold new year prediction

“The other nails have come as much from technology as the hostile regulatory climate; what has really hurt Peabody and its peers has been proximity to cheap US shale gas, which is also a cleaner fuel. As well as a tightening regulatory noose, coal will remain vulnerable to nearly every technological advance in energy. Cheaper solar panels, improved energy storage and efficiency, smarter grids: all undermine the case for burning it.”

China bans mines

As if to prove the FT right, China signalled its intent to slash air pollution with a three-year ban on new coal mines. According to the Xinhua news agency, the government wants to close a further 1000 mines in 2016. The government plans to peak carbon emissions by 2030; analysts say coal use may have already spiked.

Separately, Bloomberg reports on plans for China to boost wind and solar capacity 21% in the coming year, that’s 20 gigawatts of wind and 15GW of solar PV. It’s already got 480GW of clean energy capacity online. To fund the expansion an electricity bill ‘surcharge’ will be increased 27%.

BP eyes dash for gas

“For me the natural bridge has to be natural gas. It has the lowest emissions of all fossil fuels, and is a great back-up for renewables.” So said BP CEO Bob Dudley in an unusual interview with his predecessor Lord Browne on BBC Radio 4. 60% of BP’s business would be focused on gas by the end of the decade, Dudley said.

The BP chief welcomed the Paris climate deal, calling it “very ambitions in many ways”, but pushed back on suggestions there would be a radical cut in the use of fossil fuels in the coming decade. Suggestions BP could be investing in assets that cannot be burnt (the so-called carbon bubble) were an overstatement, he said. Bank of England Mark Carney has issued a number of warnings on this in 2015; Dudley said he had spoken to the governor “and questioned that term”.

Meanwhile – in the US…

The debate about climate change is still raging, according to the world’s most accurate news source – twitter.

Oil prices: Up or down?

The price of a barrel of oil is hovering around the $37 mark: good news for consumers, less so for oil companies with high overheads. Saudi Arabia shows no signs of slowing production, meaning the glut of oil on the world markets is unlikely to disappear soon. Still, views on what the year has in store differ.

International Energy Agency chief Fatih Birol

“When we look at 2016, I don’t see many reasons why we can see upward pressure on the prices. Demand is weaker and we may well see Iran come back (to the market) and there will be a lot of oil.

“So 2016 may well be another year with lower prices and this will have implications of course for investments in the oil sector.”

Andy Critchlow, Reuters

“The next big move in the price of oil will be up. For now, OPEC producers are flooding the market with cheap crude. But low-cost OPEC producers will win the hydrocarbon price war because they can fight harder for longer. And when they win, the price of oil will rise.”

Worth noting Critchlow thinks the price could rise to $80 a barrel this year, as US shale production and North Sea oil start to suffer from the low prices.

Steve LeVine, Quartz

“If violence breaks out in Saudi Arabia’s Eastern Province—the location of most of its richest oilfields, and home to most of its Shia minority—that would be precisely the type of geopolitical event to bring higher prices early. Traders would smell a profit opportunity in betting on wild price spikes: up with the violence, and down again once the panic wears off.”

2016 predictions

El Nino ‘on steroids’ will cause drought, flooding; clean energy investments will soar; polluters will face court; Arsenal will win the Premier League – more here

Delhi bars cars

The city suffering the world’s worst air pollution (WHO figures) has finally taken action. The city authorities have rolled out a 2-week driving ban that they hope will take more than a million cars off the roads. Delhi’s state chief minister Arvin Kejriwal said the move was just the start. “We’ll have to undertake even sterner measures in the future to safeguard our health, and especially our children’s future. It has to become a movement.”

UN climate chief pens poem

Christiana Figueres has knocked out an ode to those who helped work on a global climate pact ahead of and during the Paris climate talks last month.

To those who walked, to those who prayed,
To those who sang, to those who cried,
To those who challenged, to those who supported,
To those who acted early,
To those who came with hope,
To those who came with facts,
To those who used the power of their influence,
To those who honoured the public trust bestowed upon them,
To all those, the millions of people around the world
who laboured now and before,
so long and so hard, I say:

This is your success.  

Individually for each of you, but, more powerfully, collectively for all of us.
A critical milestone reached, a decisive turning point inscribed into history.
We have come together to address the most daunting of challenges.
We have done so by respecting our differences 
and setting aside our enmity, by focusing on the  present we share and the future we must build together. 

 As we celebrate this momentous step, may we remember that the journey ahead, although irreversible, will equally require our determination, our ingenuity, the best of our humanity and above all our community of purpose.

Together we can.

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