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SINGAPORE, Oct 25 (Reuters) – Tightening markets for liquefied natural gas (LNG) worldwide and major oil producers cutting supply have put the world in the middle of “the first truly global energy crisis”, the head of the International Energy Agency (IEA) said on Tuesday.

Rising imports of LNG to Europe amid the Ukraine crisis and a potential rebound in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters of new LNG capacity will come to market next year, IEA Executive Director Fatih Birol said during the Singapore International Energy Week.

At the same time the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to cut 2 million barrels per day (bpd) of output is a “risky” decision as the IEA sees global oil demand growth of close to 2 million bpd this year, Birol said.

“(It is) especially risky as several economies around the world are on the brink of a recession, if that we are talking about the global recession…I found this decision really unfortunate,” he said.

Soaring global prices across a number of energy sources, including oil, natural gas and coal, are hammering consumers at the same time they are already dealing with rising food and services inflation. The high prices and possibility of rationing are potentially hazardous to European consumers as they prepare to enter the Northern Hemisphere winter.

Europe may make it through this winter, though somewhat battered, if the weather remains mild, Birol said.

“Unless we will have an extremely cold and long winter, unless there will be any surprises in terms of what we have seen, for example Nordstream pipeline explosion, Europe should go through this winter with some economic and social bruises,” he added.

For oil, consumption is expected to grow by 1.7 million bpd in 2023 so the world will still need Russian oil to meet demand, Birol said.

G7 nations have proposed a mechanism that would allow emerging nations to buy Russian oil but at lower prices to cap Moscow’s revenues in the wake of the Ukraine war.

Birol said the scheme still has many details to iron out and will require the buy-in of major oil importing nations.

A U.S. Treasury official told Reuters last week that it is not unreasonable to believe that up to 80% to 90% of Russian oil will continue to flow outside the price cap mechanism if Moscow seeks to flout it.

“I think this is good because the world still needs Russian oil to flow into the market for now. An 80%-90% is good and encouraging level in order to meet the demand,” Birol said.

While there is still a huge volume of strategic oil reserves that can be tapped during a supply disruption, another release is not currently on the agenda, he added.

ENERGY SECURITY DRIVES RENEWABLES GROWTH

The energy crisis could be a turning point for accelerating clean sources and for forming a sustainable and secured energy system, Birol said.

“Energy security is the number one driver (of the energy transition),” said Birol, as countries see energy technologies and renewables as a solution.

The IEA has revised up the forecast of renewable power capacity growth in 2022 to a 20% year-on-year increase from 8% previously, with close to 400 gigawatts of renewable capacity being added this year.

Many countries in Europe and elsewhere are accelerating the installation of renewable capacity by cutting the permitting and licensing processes to replace the Russian gas, Birol said.

Reporting by Florence Tan, Muyu Xu and Emily Chow; Editing by Jacqueline Wong and Christian Schmollinger

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Toll of Russian Strikes Mounts, Adding Urgency to Ukraine’s Pleas for Weapons

Credit…Jean-Francois Badias/Associated Press

PARIS — France began pumping natural gas directly to Germany for the first time on Thursday, part of a landmark agreement struck by both governments to help each other confront Europe’s energy crisis as Russia cuts off gas supplies to Europe.

Volumes of gas capable of producing around 31 gigawatt-hours per day of electricity began flowing early on Thursday into Germany, the French network operator GRTgaz said. The connection has a maximum capacity of 100 gigawatt-hours per day, equal to the power output of four nuclear reactors, or about 10 percent of the amount of liquefied natural gas that France imports each day, the company said.

GRTgaz said that months ago it had begun modifying its pipeline networks to be able to send gas to Germany. For years, the German economy has relied on Russian gas exports, but this year Moscow has slashed them in response to Western sanctions for its invasion of Ukraine.

France gets its gas from the Netherlands, Norway and Russia, according to the International Energy Agency, although supplies from Russia were cut off in September. It also receives deliveries of liquefied natural gas from several L.N.G. terminals.

To face the energy crunch, France has been storing gas and getting more of it from its European partners and Qatar. Recently, President Emmanuel Macron has burnished relations with Algeria, a former French colony, which has agreed to sharply increase gas exports to France.

In exchange for the gas from France, Germany has pledged to export more electricity to that country as it grapples with an unprecedented crisis in its nuclear power industry that has reduced power production.

“Germany needs our gas, and we need the electricity produced in the rest of Europe, and in particular in Germany,” President Emmanuel Macron said last month after speaking with the German chancellor, Olaf Scholz, about the agreement. “We will contribute to European solidarity in gas and benefit from European solidarity in electricity.”

“Merci beaucoup,” Klaus Müller, the head of Germany’s federal network agency, wrote in a Twitter message to GRTGaz on Thursday. “The gas deliveries from France, through Saarland, help Germany’s energy security.”

European countries have pledged to work together to get through winter as Russia’s aggression in Ukraine raises the prospect of a prolonged energy crisis. On Thursday, Spain proposed increasing its gas deliveries to France by 18 percent in the coming months, Spain’s ecological transition minister, Teresa Ribera, said.

As Europe’s largest economy and the one most dependent on Russian gas, Germany has been among the countries worst affected by the energy crisis rippling across Europe, where natural gas costs about 10 times what it did a year ago. Both Berlin and Paris have imposed a broad range of conservation measures, including lowering thermostats and hot water heaters, encouraging the use of public transport and requiring public buildings to turn off lights early.

The energy crunch has forced European governments to fall back on less-desirable power sources that they had been trying to phase out in a push to go green. Germany, for instance, has decided to keep coal-fired power plants online and restart several others that had been mothballed.

In addition, Germany decided to keep two of its three remaining nuclear power plants operational as an emergency reserve for its electricity supply, breaking a political taboo and delaying its plans to become the first industrial power to go nuclear-free for its energy.

And in France, the government is facing an energy crisis of its own after half its fleet of nuclear power plants — the largest in Europe — was taken offline earlier this year for inspections and repairs. The electricity shortage has driven prices to record levels, forcing factories to cut production and put tens of thousands of employees on furlough.

Bruno Le Maire, France’s economy minister, warned Thursday that high energy prices continued to pose a “major risk” to French industry and would lead to a 10 percent decline in industrial production this winter.

Berlin this month announced a 200 billion euro (about $196 billion) aid plan for German households, businesses and industries. It includes policies to curb natural gas and electricity prices domestically. And France has already spent around €100 billion since last winter doing the same.

But with Mr. Scholz facing pushback over his government’s decision to keep nuclear plants running, Germany’s ability to uphold its end of the energy-swap deal with France may wind up depending on the French themselves: GRTgaz said that the exported French gas would allow Germany to produce more electricity, which in turn would be sent back to the French grid during peak hours.

“If we did not have European solidarity,” Mr. Macron said in a televised interview on Wednesday, “we would have serious problems.”

— Liz Alderman

Biden disappointed by ‘shortsighted’ OPEC+ cut, more SPR releases possible

WASHINGTON, Oct 5 (Reuters) – President Joe Biden called on his administration and Congress to explore ways to boost U.S. energy production and reduce OPEC’s control over energy prices after the cartel’s “shortsighted” production cut, the White House said on Wednesday.

The Saudi Arabia-led OPEC+ cartel at a Vienna meeting on Wednesday ignored pleas from the White House to keep oil flowing and agreed to cut output by 2 million barrels per day, its deepest cuts in production since the 2020 COVID-19 pandemic.

The move drew a sharp response from Biden that underscores the growing rift between the United States and Saudi Arabia on energy policy.

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“The President is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of (Russian President Vladimir) Putin’s invasion of Ukraine,” national security adviser Jake Sullivan and National Economic Council Director Brian Deese said in a statement.

Biden warned that he will now continue to direct releases from the nation’s Strategic Petroleum Reserve “as necessary,” a shift from the White House’s previous comments that it would end the drawdown in the coming weeks.

Earlier this year, the Biden administration announced the largest sale ever from the reserve: 180 million barrels for six months beginning in May. Last month it extended that historic sale into November as only about 155 million barrels had been sold. It now aims to sell 165 million through November.

As a result, the amount of oil in the reserve has fallen to the lowest level since July 1984. It now holds about 416 million barrels of oil, well above what the United States is required by its membership in the International Energy Agency, at sites on the Texas and Louisiana coasts.

Rising oil and fuel prices are a risk to Biden’s fellow Democrats as they seek to keep control of Congress in the Nov. 8 midterm elections.

Biden also pledged to consult with Congress on additional tools to cut OPEC’s control over energy prices, a potential reference to a decades-long effort to open the cartel to antitrust lawsuits for orchestrating supply cuts.

The so-called NOPEC bill, which has brought up numerous times over the past 20 years but never enacted, easily passed a Senate committee in May.

The White House has previously expressed concerns about unintended consequences of the bill.

The White House is also worried about the cut cementing Saudi Arabia’s closer cooperation with Russia, also a member of OPEC+, as oil revenues fund Moscow’s war machine in Ukraine.

“Look it’s clear that OPEC Plus is aligning with Russia with today’s announcement,” White House spokesperson Karine-Jean Pierre told reporters aboard Air Force One on Wednesday.

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Reporting by Susan Heavey and Jarrett Renshaw; editing by Tim Ahmann and David Gregorio

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As E.U. Seeks to Curb Russia’s Revenues, Oil Supply Cut Poses Obstacle

Credit…Getty Images

What impact a European price cap on Russian oil may have remains a matter of conjecture because many of the details, including the price, remain to be determined. But some analysts say it could have unintended consequences.

Henning Gloystein, a director at Eurasia Group, a political risk firm, said that the cap might wind up just continuing the status quo, since Russia is already selling oil to China and India at a 30 percent discount. The end result of the cap may be to simply replicate that discount on Russian oil exports to those nations, which have resisted joining the West in imposing sanctions. “It is formalizing something that is already there,” he said.

Others say that the cap, which is expected to gain final approval on Thursday, will add more bureaucratic procedures to a long series of sanctions already in place against Russia. Those extra steps may impede the flow of oil around the world and raise prices, causing the sort of major disruption that Washington appears to be trying to avoid.

“It adds new complexity to the task of redirecting Russian oil to new destinations,” Richard Bronze, head of geopolitics for Energy Aspects, a political risk firm, said.

That the specifics of the cap, including the price, have not been spelled out will likely make life difficult for people buying and selling oil, who need to make decisions several weeks in advance, Mr. Bronze said.

“They would not know what they would need to do or what price they would need to agree with a Russian seller if they wanted to abide by the price cap,” he said. “This is another example of how policymakers are not in tune with what the industry and the market are saying to make this policy work.”

China has leaned in favor of Russia during the Ukraine war, repeating Russian disinformation, but so far, Western government experts say, China has refrained from providing Moscow military assistance or helping Russia to evade sanctions.

China’s foreign ministry criticized the concept of price caps soon after the idea was first unveiled by Western leaders a month ago, warning that oil was too important to the global economy to be subject to the planned price controls. “Oil is a global commodity — ensuring global energy supply security is vitally important,” Mao Ning, a foreign ministry spokeswoman, said on Sept. 5.

Four days later, Ben Harris, the assistant secretary of the U.S. Treasury for economic policy, said at forum that price caps by other countries would allow China to demand deep discounts on the oil it purchases from Russia as well. The United States would be satisfied with that indirect effect on Russia’s prices, he said.

China’s foreign ministry is closed this week for a national holiday, and issued no immediate response to the European action on Wednesday.

Fatih Birol, the executive director of the International Energy Agency, said in an email on Wednesday that while Russia had profited in recent months from high world energy prices, the country would pay a long-term price.

“It’s clear at this stage that Russia isn’t winning the energy battle,” Mr. Birol said. “Its short-term gain in income from the crisis is outweighed by the long-term loss of both trust and revenues that it has brought about by ruining its relationship with the European Union, its biggest customer.”

Before the invasion of Ukraine, Mr. Birol pointed out, about 75 percent of Russia’s natural gas exports and 55 percent of its oil exports went to Europe. “Finding alternative markets on this scale cannot be done quickly or easily, especially in the case of natural gas,” he said.

— Stanley Reed and Keith Bradsher

Stocks subdued by outsized rate risks, yen fragile

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Fed looms over broader markets, dollar rises
Oil tumbles on demand concerns, U.S. rail strike averted
Treasury yields climb while oil gold tumbles

NEW YORK, Sept 15 (Reuters) – Wall Street indexes were firmly in the red after a choppy start to Thursday’s session while bond yields rose as investors digested economic data that provided the Federal Reserve little reason to ease its aggressive interest rate hiking cycle.

Oil futures tumbled more than 3% on demand concerns and after a tentative agreement that would avert a U.S. rail strike, as well as continued U.S. dollar strength with expectations for a large U.S. rate increase. read more

Economic data showed U.S. retail sales unexpectedly rebounded in August as Americans ramped up purchases of motor vehicles and dined out more while taking advantage of lower gasoline prices. But data for July was revised downward to show retail sales declining instead of flat as previously reported.

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Separately the Labor Department said initial claims for state unemployment benefits fell for the week ended Sept. 10 to the lowest level since the end of May. read more

Investors are widely expecting an aggressive rate hike after the Federal Open Market Committee (FOMC) meeting next week, but nervously awaiting hints from Fed Chair Jerome Powell about future policy moves, said Quincy Krosby, chief global strategist at LPL Financial.

“The market remains choppy knowing that there’s a Fed meeting next week. Even though participants agree that it’ll be a 75 basis points rate hike, it’s what the statement adds to previous commentary and what Chairman Powell says in his press conference” that have them worried, Krosby said.

The Dow Jones Industrial Average (.DJI) fell 173.07 points, or 0.56%, to 30,962.02; the S&P 500 (.SPX) lost 44.69 points, or 1.13%, to 3,901.32 and the Nasdaq Composite (.IXIC) dropped 167.32 points, or 1.43%, to 11,552.36.

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) shed 0.96% while emerging market stocks (.MSCIEF) lost 0.57%.

Stocks, bonds and currencies on Thursday were showing a market “increasingly understanding the Fed is going to hike more aggressively next week,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.

Referring particularly to the still strong labor market, Ladner said “economic numbers released today are tying a bow on the situation.”

Treasury yields rose with the two-year hitting fresh 15-year highs, after data on retail sales and jobless claims showed a resilient economy that gives the Fed ample room to aggressively hike interest rates.

Also already signaling a recession warning the inverted yield curve – the gap between 2-year and 10-year treasury yields – widened further to -41.4 basis points, compared with -13.0 bps a week ago.

Benchmark 10-year notes were up 4.5 basis points to 3.457%, from 3.412% late on Wednesday. The 30-year bond last fell 5/32 in price to yield 3.4779%, from 3.469%. The 2-year note last fell 5/32 in price to yield 3.8646%, from 3.782%.

“In this vicious cycle where the data continues to remain resilient, that would imply a Fed that would likely stay the course and continue to tighten policy,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.

Also clouding investors’ moods on Thursday was the World Bank’s assessment that the world may be edging toward a global recession as central banks across the world simultaneously hike interest rates to combat persistent inflation. read more

In currencies the dollar was slightly higher against the yen while the Swiss franc hit its strongest level against the euro since 2015. read more

The dollar index , which measures the greenback against a basket of major currencies, rose 0.091%, with the euro up 0.18% to $0.9995.

The Japanese yen weakened 0.19% versus the greenback at 143.44 per dollar, while Sterling was last trading at $1.1469, down 0.57% on the day.

Before the tentative labor agreement, fears of a U.S. railroad worker strike had supported oil prices due to supply concerns on Wednesday. In addition, the International Energy Agency (IEA) said this week that oil demand growth would grind to a halt in the fourth quarter.

U.S. crude settled down 3.82% at $85.10 per barrel while Brent finished at $90.84, down 3.46% on the day.

Gold dropped to its lowest level since April 2021, hurt by elevated U.S. Treasury yields and a firm dollar, as bets of another hefty Fed rate hike eroded bullion’s appeal.

Spot gold dropped 1.9% to $1,664.46 an ounce. U.S. gold futures fell 2.02% to $1,662.30 an ounce.

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Additional reporting by Herbert Lash in New York, Marc Jones in London, Stefano Rebaudo in Milan, Tom Westbrook in Singapore and Wayne Cole in Sydney; Editing by Kirsten Donovan and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Oil dips on weak demand fear, strong dollar

General view of oil tanks and the Bayway Refinery of Phillips 66 in Linden, New Jersey, U.S., March 30, 2020. REUTERS/Mike Segar

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Summary
Companies

U.S. railroad strike averted by late-night deal
Strong dollar weighs as Fed decision looms over broader markets
IEA says oil demand growth to slow in Q4
Armenia-Azerbaijan clashes lend support -analyst

NEW YORK, Sept 15 (Reuters) – Oil futures fell over 3% to a one-week low on Thursday on a tentative agreement that would avert a U.S. rail strike, expectations for weaker global demand and continued U.S. dollar strength ahead of a potentially large interest rate increase.

Brent futures fell $3.26, or 3.5%, to settle at $90.84 a barrel, while U.S. West Texas Intermediate (WTI) crude ended $3.38, or 3.8%, lower at $85.10, the lowest closes for both benchmarks since Sept. 8.

Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by President Joe Biden’s administration to avert a rail shutdown that could have hit food and fuel supplies across the country and beyond. read more

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The prospect of a strike lent the market some support on Wednesday.

That rail deal also helped pressure U.S. diesel and gasoline futures to drop more than 5% during the session.

“The oil complex is drafting back down on U.S. dollar strength and the tentative agreement that would avert a U.S. rail workers strike,” analysts at energy consulting firm Ritterbusch and Associates said, noting crack spreads were weak.

The U.S. 3:2:1 crack spread – a measure of refining profit margins – was on track for its lowest close since early March.

Downside risks continue to dominate the global economic outlook and some countries are expected to slip into recession in 2023, but it is too early to say if there will be a widespread global recession, according to the International Monetary Fund (IMF). read more

World Bank Chief Economist Indermit Gill said he was concerned about “generalized stagflation,” a period of low growth and high inflation, in the global economy, noting the bank had pared back forecasts for three-fourths of all countries. read more

Wall Street indexes (.SPX), (.IXIC) were in the red while the dollar (.DXY) held near the 20-year high it hit on Sept. 6 as a slew of economic data pointed to resilience in the U.S. economy which could keep the Federal Reserve on track for aggressive interest rate hikes. [nL4N30M33J] read more

A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.

“Oil fundamentals are still mostly bearish as China’s demand outlook remains a big question mark and as the inflation fighting Fed seems poised to weaken the U.S. economy,” said Edward Moya, senior market analyst at data and analytics firm OANDA.

The International Energy Agency (IEA) said this week that oil demand growth would grind to a halt in the fourth quarter.

Crude prices have dropped substantially after a surge close to its all-time highs in March after Russia’s invasion of Ukraine added to supply concerns, pressured by the prospects of recession and weaker demand.

Other factors weighing on oil prices included an increase in U.S. crude inventories and an expected reduction in energy use by the Ethereum blockchain. [EIA/S] read more

The European Union’s executive, meanwhile, plans to raise more than 140 billion euros ($140 billion) to shield consumers from soaring energy prices by skimming off revenue from low-cost electricity generators and making fossil fuel firms share windfall profit. read more

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Reporting by Scott DiSavino in New York
Additional reporting by Alex Lawler in London and Muyu Xu in Singapore
Editing by Marguerita Choy and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

Scott Disavino

Thomson Reuters

Covers the North American power and natural gas markets.

In Parts Of The Mideast, Power Generators Spew Toxic Fumes 24/7

The pollutants caused by massive generators add to the many environmental woes of the Middle East.

They literally run the country. In parking lots, on flatbed trucks, hospital courtyards and rooftops, private generators are ubiquitous in parts of the Middle East, spewing hazardous fumes into homes and businesses 24 hours a day.

As the world looks for renewable energy to tackle climate change, millions of people around the region depend almost completely on diesel-powered private generators to keep the lights on because war or mismanagement have gutted electricity infrastructure.

Experts call it national suicide from an environmental and health perspective.

“Air pollution from diesel generators contains more than 40 toxic air contaminants, including many known or suspected cancer-causing substances,” said Samy Kayed, managing director and co-founder of the Environment Academy at the American University of Beirut in Lebanon.

Greater exposure to these pollutants likely increases respiratory illnesses and cardiovascular disease, he said. It also causes acid rain that harms plant growth and increases eutrophication — the excess build-up of nutrients in water that ultimately kills aquatic plants.

Since they usually use diesel, generators also produce far more climate change-inducing emissions than, for example, a natural gas power plant does, he said.

The pollutants caused by massive generators add to the many environmental woes of the Middle East, which is one of the most vulnerable regions in the world to the impact of climate change. The region already has high temperatures and limited water resources even without the growing impact of global warming.

The reliance on generators results from state failure. In Lebanon, Iraq, Yemen and elsewhere, governments can’t maintain a functioning central power network, whether because of war, conflict or mismanagement and corruption.

Lebanon, for example, has not built a new power plant in decades. Multiple plans for new ones have run aground on politicians’ factionalism and conflicting patronage interests. The country’s few aging, heavy-fuel oil plants long ago became unable to meet demand.

Iraq, meanwhile, sits on some of the world’s biggest oil reserves. Yet scorching summer-time heat is always accompanied by the roar of neighborhood generators, as residents blast ACs around the clock to keep cool.

Repeated wars over the decades have wrecked Iraq’s electricity networks. Corruption has siphoned away billions of dollars meant to repair and upgrade it. Some 17 billion cubic meters of gas from Iraq’s wells are burned every year as waste, because it hasn’t built the infrastructure to capture it and convert it to electricity to power Iraqi homes.

In Libya, a country prized for its light and sweet crude oil, electricity networks have buckled under years of civil war and the lack of a central government.

“The power cuts last the greater part of the day, when electricity is mostly needed,” said Muataz Shobaik, the owner of a butcher shop in the city of Benghazi, in Libya’s east, who uses a noisy generator to keep his coolers running.

“Every business has to have a backup off-grid solution now,” he said. Diesel fumes from his and neighboring shops’ machines hung thick in the air amid the oppressive heat.

The Gaza Strip’s 2.3 million people rely on around 700 neighborhood generators across the territory for their homes. Thousands of private generators keep businesses, government institutions, universities and health centers running. Running on diesel, they churn black smoke in the air, tarring walls around them.

Since Israel bombed the only power plant in the Hamas-ruled territory in 2014, the station has never reached full capacity. Gaza only gets about half the power it needs from the plant and directly from Israel. Cutoffs can last up to 16 hours a day.

WAY OF LIFE

Perhaps nowhere do generators rule people’s lives as much as in Lebanon, where the system is so entrenched and institutionalized that private generator owners have their own business association.

They are crammed into tight streets, parking lots, on roofs and balconies and in garages. Some are as large as storage containers, others small and blaring noise.

Lebanon’s 5 million people have long depended on them. The word “moteur,” French for generator, is one of the most often spoken words among Lebanese.

Reliance has only increased since Lebanon’s economy unraveled in late 2019 and central power cutoffs began lasting longer. At the same time, generator owners have had to ration use because of soaring diesel prices and high temperatures, turning them off several times a day for breaks.

So residents plan their lives around the gaps in electricity.

Those who can’t start the day without coffee set an alarm to make a cup before the generator turns off. The frail or elderly in apartment towers wait for the generator to switch on before leaving home so they don’t have to climb stairs. Hospitals must keep generators humming so life-saving machines can operate without disruption.

“We understand people’s frustration, but if it wasn’t for us, people would be living in darkness,” said Ihab, the Egyptian operator of a generator station north of Beirut.

“They say we are more powerful than the state, but it is the absence of the state that led us to exist,” he said, giving only his first name to avoid trouble with the authorities.

Siham Hanna, a 58-year-old translator in Beirut, said generator fumes exacerbate her elderly father’s lung condition. She wipes soot off her balcony and other surfaces several times a day.

“It’s the 21st century, but we live like in the stone ages. Who lives like this?” said Hanna, who does not recall her country ever having stable electricity in her life.

Some in Lebanon and elsewhere have begun to install solar power systems in their homes. But most use it only to fill in when the generator is off. Cost and space issues in urban areas have also limited solar use.

In Iraq, the typical middle-income household uses generator power for 10 hours a day on average and pays $240 per Megawatt/hour, among the highest rates in the region, according to a report by the International Energy Agency.

The need for generators has become ingrained in people’s minds. At a recent concert in the capital, famed singer Umm Ali al-Malla made sure to thank not only the audience but also the venue’s technical director “for keeping the generator going” while her admirers danced.

TOXIC CONTAMINANTS

As opposed to power plants outside urban areas, generators are in the heart of neighborhoods, pumping toxins directly to residents.

This is catastrophic, said Najat Saliba, a chemist at the American University of Beirut who recently won a seat in Parliament.

“This is extremely taxing on the environment, especially the amount of black carbon and particles that they emit,” she said. There are almost no regulations and no filtering of particles, she added.

Researchers at AUB found that the level of toxic emissions may have quadrupled since Lebanon’s financial crisis began because of increased reliance on generators.

In Iraq’s northern city of Mosul, miles of wires crisscross streets connecting thousands of private generators. Each produces 600 kilograms of carbon dioxide and other greenhouse gases per 8 hours working time, according to Mohammed al Hazem, an environmental activist.

Similarly, a 2020 study on the environmental impact of using large generators in the University of Technology in Baghdad found very high concentrations of pollutants exceeding limits set by the United States’ Environmental Protection Agency and the World Health Organization.

That was particularly because Iraqi diesel fuel has a high sulphur content — “one of the worst in the world,” the study said. The emissions include “sulphate, nitrate materials, atoms of soot carbon, ash” and pollutants that are considered carcinogens, it warned.

“The pollutants emitted from these generators exert a remarkable impact on the overall health of students and university staff, it said.

Additional reporting by The Associated Press.

Source: newsy.com

This Remote Mine Could Foretell the Future of America’s Electric Car Industry

Hiding a thousand feet below the earth’s surface in this patch of northern Minnesota wetlands are ancient mineral deposits that some view as critical to fueling America’s clean energy future.

poor environmental record in the United States, and an even more checkered footprint globally. While some in the area argue the mine could bring good jobs to a sparsely populated region, others are deeply fearful that it could spoil local lakes and streams that feed into the Mississippi River. There is also concern that it could endanger the livelihoods and culture of Ojibwe tribes whose members live just over a mile from Talon’s land and have gathered wild rice here for generations.

provoked outrage in 2020 by blowing up a 46,000-year-old system of Aboriginal caves in Australia in a search for iron ore.

at higher rates than any other racial or ethnic group in the state. Locals say the only Tesla for miles is Talon’s company car.

“Talon and Rio Tinto will come and go — greatly enriched by their mining operation. But we, and the remnants of the Tamarack mine, will be here forever,” Mr. Applegate said.

A Shell employee walks through the company’s new Quest Carbon Capture and Storage (CCS) facility in Fort Saskatchewan, Alberta, Canada, October 7, 2021. REUTERS/Todd Korol

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Aug 15 (Reuters) – Tax credits in the $430 billion U.S. climate and tax bill set to be signed into law this week will kickstart carbon sequestration projects, say oil and gas proponents, offsetting startup costs for some of the anti-pollution initiatives.

Carbon capture and storage hubs that take gases from chemical, power and gas producers and oil refineries have become the energy industry’s preferred way to combat climate warming. But large-scale development has snagged over costs and lack of guaranteed revenue.

The Biden administration’s Inflation Reduction Act, which was approved by lawmakers last week, provides a tax credit of up to $85 per ton for burying carbon dioxide produced by industrial activity, and up to $180 per ton for pulling carbon dioxide (CO2) from the air.

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The bill also greenlit new leases of federal land for oil and gas development, without considerations of climate impacts. Importantly, it automatically approved high bids from a November 2021 offshore auction that included a drilling project intended for a carbon-burying scheme. read more

“It’s a pretty big deal,” said Tim Duncan, chief executive of Talos Energy Inc (TALO.N) , an offshore oil and gas producer that is building a business around carbon sequestration. Talos has launched four projects and signed up big backers including Freeport LNG and Chevron Corp (CVX.N) .

“This is going to unlock a significant amount of emissions that could become economic for capture,” added Chris Davis, a senior vice president at Milestone Carbon, which develop carbon projects for mid-sized companies.

CONTINUED STRUGGLES

Over the last two decades, companies have tentatively tried and largely struggled to make a business from using CO2 to boost oil production. More recently, big investors want firms to address global warming, and the oil industry aims to show it takes climate change seriously.

There are carbon sequestration hubs proposed around the world – in Alberta in Canada, Rotterdam in the Netherlands, and Huizhou, China. Another type of carbon capture, which directly catches the greenhouse gas from the atmosphere rather than industrial production, also are being considered. read more

A massive expansion of carbon capture is vital to reaching net-zero emissions by 2050, according to energy consuming nations advocate, the International Energy Agency (IEA). The sector must go to storing 7.6 billion tonnes a year from around 40 million tonnes currently. read more

The new tax incentives mean “a number of small to mid-scale projects have a better chance of becoming economical,” said Frederik Majkut, a senior vice president for energy services company Schlumberger’s (SLB.N) Carbon Solutions business.

There are some 5 billion tons of carbon released in the United States annually that could be captured by these sequestration schemes. Previously, very little of that could be captured economically, said Milestone’s Davis said.

“With $85 a ton, I think you can get another billion tons,” he said. “It starts to look like an attractive investment.”

BIGGER PROJECTS

Larger projects, such as that advanced by Exxon Mobil Corp (XOM.N) , which floated a $100 billion plan for a massive carbon hub serving refineries and chemical plants, will need carbon taxes and other initiatives, said analysts.

Widespread deployment of these industrial hubs will require additional policy support from the Biden administration, an Exxon spokesperson said of the bill’s climate provisions.

Smaller projects are more likely to advance but still face hurdles including underground pore rights and permits, said Tracy Evans, chief executive of CapturePoint, which struck a partnership with pipeline operator Energy Transfer(ET.N) for a Louisiana hub.

Currently, permitting for carbon injection wells can take years to secure. And while offshore auctions cover large blocks, aggregating smaller tracts of private land owners onshore can slow the process, he said.

“It will drive more investment in the space for sure,” Evans said.

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Reporting by Liz Hampton in Denver, additional reporting by Sabrina Valle in Houston
Editing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.