Category Archives: Low-carbon transition

China coal use falls for second year in a row: IEA boss

Here’s what Fatih Birol, executive director of the International Energy Agency, tweeted this morning:

The key two words here are “if continues.” During the Paris climate summit, researchers from the Tyndall Centre at the U.K.’s University of East Anglia and colleagues in the U.S., Australia and Norway approached 2014 and 2015 coal use and emissions data with cautious optimism. Is it a lasting trend, or an anomaly? It’s still too early to say.

Driven mostly by a need to get local air pollution under control, China has put a 2020 cap on coal emissions. Less economic emphasis is being put on energy-intensive industries such as steel manufacturing and big investment continues in renewables. That, combined with an economic slowdown, has contributed to a shifting to a “new normal,” said Glen Peters from Norway’s Centre for International Climate and Environmental Research. “It’s happening faster than we expected.”

Assuming the latest data from China is more than just an anomaly, what does that mean in the battle to rein in global GHG emissions? Answering that question means knowing what will happening in India, which was described by the researchers as the big wild card. India’s actions over the next 20 years could make or break attempts to keep average global temperatures from rising above 2 degrees C – let alone keeping such temperatures “well below” that threshold, a target specified in the Paris agreement.

There’s been a lot of hope that global GHG emissions and global GDP have permanently “decoupled”, meaning we can achieve economic growth without increasing emissions. Usually the two rise in lock-step, but the researchers, in a paper published last month in the journal Nature Climate Change, reported that global emissions were expected to fall last year during a period of decent economic growth. That’s unusual – and potentially great news – given that emissions growth between 2003 and 2014 averaged 2.4 per cent.

We’ll see. Some believe India won’t pull its weight in the climate fight, while others point to the country’s determination to embrace renewables, particularly solar. During the Paris summit one of the big announcements came from Indian Prime Minister Narendra Modi, who spearheaded creation of a 120-country solar alliance to help realize the “dream of universal access to clean energy.”

On the other hand, one of the most sobering moments during the Paris conference was when I heard India’s energy-efficiency chief Ajay Mathur talk about one of the country’s biggest challenges: a fast-growing middle class that wants air conditioning. Studies forecast that India’s middle class could double to half a billion people before 2030, and these people will want more of the comforts that North Americans take for granted. India has had its share of heat waves and is expected to experience more as the climate changes, so who could blame them for wanting to keep cool – especially if they have the means?

Mathur’s wish list over the coming years: amazingly energy-efficient air conditioners, “using at least half if not a third as much energy as we use today, and affordable as well,” he said. “How do we make that happen?”

It’s the billion-dollar question for a country that, based on its current energy trajectory, is expected to become the world’s largest importer of coal by 2020.

This isn’t to downplay Birol’s comment today about China. That such changes are taking place in China is tremendous news that should be applauded and encouraged. But we need to see in India what is currently happening in China before intolerable levels of smog begins choking its urban populations. Fortunately, renewable energy technologies are much more mature and affordable compared to when China began its rapid growth phase. Also, India has the benefit of learning from China’s mistakes and it has the backing of developed countries that want to see it make the right choices. Finally, post-Paris, it has added pressure from the international community to get it right.

 

Canada’s clean electricity exports to triple under U.S. Clean Power Plan

Originally published in the Toronto Star tablet edition, Star Touch.

By Tyler Hamilton

As Canada’s petroleum sector struggles with the reality that sub-$30 (U.S.) oil could be here for some time, the country’s power sector is prepping for a dramatic increase in U.S. demand for clean electricity.

Call it a shift from pipelines to power lines.

Action on climate change is the reason — more specifically, U.S. President Barack Obama’s Clean Power Plan, which aims to slash carbon dioxide emissions from power plants by a third by 2030.

The plan is expected to triple the flow of Canadian electricity into Midwestern and northeastern border states, part of a broader U.S. effort to comply with the international climate obligations that 196 countries agreed to in Paris.

Stakeholders from the Canadian power sector are calling it a breakthrough. “We are very pleased with the outcome,” said Patrick Brown, director of U.S. affairs with the Canadian Electricity Association (CEA).

Screen Shot 2016-01-18 at 11.04.21 AMClean electricity imports from Canada are a multibillion-dollar opportunity, but have typically not counted toward state-level renewable energy mandates. After being heavily lobbied, however, the U.S. Environmental Protection Agency recognized imported power, including hydroelectricity, as an important way for states to comply with the new federal emission rules.

Brown said 80 per cent of electricity generated in Canada is emission-free, versus about 20 per cent south of the border. “That’s a real competitive advantage that we believe the Canadian government and provinces need to leverage,” said Brown, adding that an education effort is underway to make state officials more aware of the import option.

The North American Electric Reliability Corporation, which monitors and regulates grid stability in Canada and the U.S., estimated in a report last April that net Canadian electricity exports under the Clean Power Plan could grow three-fold between 2020 and 2030 as demand for renewable power grows in states such as Ohio, Michigan, New York and jurisdictions in New England.

In 2014, such exports represented $3 billion in cross-border trade, meaning the market could be worth $9 billion annually within the next 15 years. The projections are consistent with the preliminary findings of a new high-level report prepared by Boston-based consultancy London Economics International.

“States could decide they don’t want Canadian power, as there’s nothing in the plan that says they should use it. But it does encourage states to look in that direction,” said Andrew Finn, an associate of the Canada Institute at the Woodrow Wilson International Center for Scholars in Washington, D.C.

Finn has spent the past few years pointing to Canada as something more than just the oil sands and pipeline projects, both of which have overshadowed the hydro import option.

“Frankly, the Keystone XL pipeline project took so much oxygen out of the room, but with that out of the way this idea has more room to breath,” he added.

Longer term, some observers say the size of the export market has potential to reach $40 billion a year. Jatin Nathwani, a professor of engineering and environment at the University of Waterloo, estimates that clean electricity trade to the U.S. could soar 10- to 20-fold over the next few decades as part of a continental-wide effort to reduce greenhouse-gas emissions.

“Such an epochal change is conceivable over a 30- to 50-year timeframe consistent with the timelines for achieving a low-carbon economy,” Nathwani argued in a 2014 analysis that was featured in a report from the Canadian Academy of Engineering.

But the transition from pipelines to power lines comes with its own set of challenges, not unlike those experienced by Keystone XL proponents. Long distances and sometimes rough geography make for high upfront infrastructure costs and considerable risk, especially in the face of any political or public opposition to transmission infrastructure routes.

The fact that the constitution gives the provinces authority over electricity generation and transmission has historically been a sticking point.

“Support for expansion of electricity generation and transmission facilities — on a vastly increased scale — as part of a deliberate national ‘export driven’ strategy is either limited or all too often met with derision or outright hostility,” Nathwani wrote.

Still, the opportunity could prove irresistible. As more sub-national jurisdictions move to price carbon, and as more vehicles and industrial activities switch to running on electricity, power consumption is expected to rise in the United States faster than domestic developers can keep up.

The International Energy Agency, meanwhile, has warned in one scenario that the accelerated retirement of aging U.S. nuclear reactors could see nuclear power supply drop by as much as 70 per cent by 2040.

“The demand for electricity is going to keep going up,” said Dan Woynillowicz, policy director at Clean Energy Canada. He added that in a post-Paris world it will need to be low-carbon electricity, which bodes well for Canada.

“We need to get that message out in the same way we’ve had that full offensive championing the oil sands,” Woynillowicz said. “Imagine if we took that same level of effort to promote clean electricity exports?”

That’s exactly what some observers expect Prime Minister Justin Trudeau will do when he visits the White House for a state dinner with Obama. The two leaders have already indicated that closer co-operation on climate action and energy policy will be part of their discussion.

As for what Trudeau should do to stimulate investment on the Canadian side, Woynillowicz said it comes down to reducing risk and creating market certainty. That means creating political and financial supports, such as federal loan guarantees, and rallying the Canadian public behind the idea.

“Hopefully the Canadian government has learned some lessons in light of its experience on the pipeline side,” he said.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to and following the UN Paris climate summit. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star had full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.

After Paris, it’s time for Canada to finally join IRENA

IRENA is the International Renewable Energy Agency, a UN-affiliated organization established in 2009 to promote awareness and growth of renewable energy technologies on the global stage. It’s a kind of counter-balance to existing agencies that have long represented the fossil fuel and nuclear industries. The idea for IRENA goes as far back as 1981, but it took a quarter century to get the political traction it needed.

Today, 145 countries have officially joined IRENA and another 30 are in the process of becoming members. That would bring the total to 175. By comparison, the 42-year-old International Energy Agency has only 29 members, while the 59-year-old International Atomic Energy Agency has 167 members.

Canada is a founding member of the IEA and IAEA, yet Canada is the only G8 countries not part of IRENA. In fact, all other G8 countries were founding members of IRENA. Canada isn’t even in the process of joining, yet China, India, Australia, Saudi Arabia and Iran are already members. Even Syria is signing up. The only other large country that sits with Canada outside of this massive international group is Brazil.

The Harper government avoided it like the plague. Not joining made a statement that even like-minded governments in Australia refused to make. But times have changed. Canada has a new government that says it’s serious about taking climate action. Canada played an important role in reaching a binding international climate agreement in Paris last month. Canada’s provinces have set ambitious emission-reduction targets that will require accelerated deployment of renewable energy. The country simply can’t afford to remain on the outside of IRENA.

So what’s the government’s position? Here’s the answer I got back after posing the question:

Screen Shot 2016-01-14 at 10.52.53 AM“‎The Government of Canada was recently asked to join the International Renewable Energy Agency. This request is still under review,” said Caitlin Workman, press secretary for Catherine McKenna, Canada’s federal minister of environment and climate change.

It’s safe to say that since IRENA was founded the invitation for Canada to join has been a standing one.

Some might say: Who cares? It’s just another international agency that costs money to join and doesn’t offer much in return. I’d argue it does offer value. It will keep Canadian officials more abreast of global trends in renewable energy, but more important, it will give Canada a seat at a table filled with dozens of countries looking for the skills, knowledge and technology required to transition their economies away from fossil fuels.

The export opportunities for Canada are immense. The World Bank, in a report released in September 2014, estimated that investment in clean technologies in developing countries over the next decade will exceeded $6.4 trillion (U.S.). Of that, $1.9 trillion will be focused on renewable energy technologies, with a significant chunk of that creating an opportunity for small- and medium-sized businesses. In my opinion, that number is likely low-balling the opportunity, especially in the wake of the Paris climate summit.

IRENA is an opportunity for Canada to identify the needs of others, and the role it can play in meeting those needs.

Already, representatives from its 145 members are gathering in Abu Dhabi for IRENA’s sixth-annual assembly to discuss the role of renewables just one month after the Paris summit. There will be much to discuss as they tease out the details of the Paris agreement, and much back room dealmaking that Canada will not be a part of.

Canada should be there showing leadership.

 

 

Something to Remember: Key Climate Milestones in 2015

  • Began with the warmest winter on record globally.
  • Hottest year on record globally.
  • Toronto had the hottest Christmas Eve on record for a Canadian city, with the thermometer reaching 15.4 degrees C.
  • 2015 was last year we’ll see atmospheric CO2 concentrations below 400 parts per million, above which the global climate starts getting wacky.
  • The average global temperature increase averaged 1 degree C above pre-industrial times for the first time.
  • Tropical cyclone Patricia went off the hurricane category scale with winds of over 320 km per hour.
  • The Arabian peninsula was hit by two consecutive cyclones, unprecedented in the region.
  • After four years of drought California was the driest it has been in 500 years.
  • Jurisdictions such as B.C. and Alberta had their worst-ever wildfire seasons.
  • Record flooding hit northern England, winter tornadoes hit Texas and record heat crippled southern Australia.
  • Year ended with the North Pole being warmer than Toronto, Chicago, Boston, and even some parts of California.
  • And, we got a binding global climate agreement in Paris…. Yay!

Could proposed B.C. refinery be the future of liquid fuels?

A shorter version of this story appeared originally in the Toronto Star.

By Tyler Hamilton

As oil giants headquartered in Calgary face the reality that the best days for their industry could be behind them, the towns of Chetwynd and Dawson Creek in northwestern British Columbia hold out hope that better times lie ahead.

It is on about 1,000 acres of land straddling both municipalities that a small B.C.-based company called Blue Fuel Energy plans to build an industrial-scale refinery that could create enough low-carbon gasoline to fuel 20 per cent of vehicles in Canada’s third-largest province.

Called the Sundance Fuels project, it’s expected to create about 1,500 construction jobs and another 150 permanent positions. But beyond a boost to the local economy, the project carries broader significance for what it represents to Canada’s petroleum sector: a path to phasing out the “fossil” from its fuels in a world that must dramatically reduce its greenhouse-gas emissions.

Juergen Puetter 100414 for printBlue Fuel chief executive Juergen Puetter, the mastermind behind the $2.5 billion-plus project, has coined the term “liquid electricity” to describe the clean synthetic fuel his venture will produce. Initially, Blue Fuel’s pump-ready gasoline will be made from plentiful B.C. natural gas, not Alberta crude oil, and will have a carbon footprint 10 per cent smaller. It will achieve this by making its refinery more efficient than conventional refineries and using zero-emission hydro and wind power from B.C.’s grid to drive as many steps in the process as possible.

Not bad – enough, in fact, to comply with low-carbon fuel standards in B.C. and California – but nothing to brag about.

It’s just the start, says Puetter, whose ambition seems to have no limit. “By having the refinery in place, we could ultimately make our fuel not just low carbon, but 100 per cent renewable,” he says.

PROVEN TECH

How would that work? It comes down to basic chemistry. Any refinery that makes gasoline is just juggling carbon and hydrogen molecules – hence the word hydrocarbons. The molecules in natural gas are reformulated into something call synthesis gas, which in turn is refined into methanol. In Blue Fuel’s case, it plans to use technology licensed from ExxonMobil to convert that methanol into gasoline.

But natural gas, or any fossil fuel for that matter, doesn’t have to be the original hydrocarbon source. Puetter’s longer-term plan is to install machines called electrolyzers that use clean B.C. electricity to split water into oxygen and hydrogen gases. Carbon would come from the CO2 emissions captured from existing industrial facilities or, as technology evolves, directly from the air. Over time, the idea is that the supply of waste CO2 and renewable hydrogen will grow and the use of natural gas will shrink. Eventually, the fossil in the fuel is squeezed out of the final formula.

“Nobody so far has been able to prove this to be fundamentally wrong,” says Puetter, conceding that it’s been a challenge raising the capital to get the project moving. Still, he’s aiming for gasoline to start flowing out of Sundance by 2020. “If I told you this has been easy I’d be lying.”

Puetter isn’t a mad inventor who hatched the idea in his garage. He has a track record, having founded several successful businesses – including Bionaire, a maker of indoor environmental control products, and Hydroxyl Systems, a water and wastewater treatment company. He developed the first commercial wind farm in B.C. and for five years sat as chairman of federally funded Sustainable Development Technology Canada, where he is still a board member.

The fact that Michael Macdonald, former senior vice-president of global operations at Methanex, the world’s largest methanol maker, joined Blue Fuel as its president lends serious credibility to the venture; as does the decision by RBC Capital Markets to lead the company’s hunt for financing.

Blue Fuel is also not the only company pursuing this idea. The first commercial plant to produce gasoline from natural gas began operation 30 years ago in New Zealand, and in 2011 a company called Carbon Recycling International opened up a small refinery in Iceland that makes methanol out of captured CO2 and hydrogen produced from clean electricity.

Screen Shot 2016-01-09 at 10.52.45 PMEven German carmaker Audi is testing the waters. It has partnered with a company called Sunfire to make “e-diesel” made from CO2 and renewably produced hydrogen. A portion of its clean fuel has also been made from CO2 captured directly out of the air using technology developed by Zurich-based Climeworks.

Closer to home, a Calgary-based company called Carbon Engineering wants to use CO2 collected from its own air-capture technology to produce gasoline using a different process than the one Blue Fuel has chosen. “Our vision has always been about doing this at large scale,” says company CEO Adrian Corless.

Puetter says he can see Carbon Engineering one day becoming a supplier of CO2 to Blue Fuel. “But first we need to reduce the cost of CO2 capture,” he says. “It’s coming down, but it’s not economical yet on a large scale.”

CARBON NEUTRAL GASOLINE?

Still, the technology exists and it’s easy to see a future where the liquid fuels we use don’t add carbon to our atmosphere. It’s a tall order. But if oil is truly an economic addiction, synthetic fuel made from recycled carbon could be what methadone is to a heroin addict, and would address the reality that not all vehicles – from big trucks to airplanes – can run on battery power alone.

“There’s a market opportunity coming that really is quite extraordinary,” says Puetter, envisioning a day when big oil companies make their products with clean energy, instead of using fossil fuels to extract and produce dirtier fossil fuels.

The oil giants, after all, are already in the business of making liquid hydrocarbons. They have the project management experience, engineering skills and deep pockets needed to gradually transition from fossil to clean synthetic fuels, and the existing infrastructure – such as pipelines – to get their product to market.

“We believe we’ll be the first plant that is truly a gateway to that future,” added Puetter. “Our refinery will hopefully be a poster child for bridging the fossil fuel industry to renewables.”

Leah Lawrence, president and CEO of SDTC and past chair of the Calgary Chamber of Commerce, said Blue Fuel Energy is an important piece of the ultimate puzzle: what Canada’s energy sector might look like in a carbon-constrained world.

“For the first time we’re seeing a rapid uptake of technologies where before we couldn’t see how they all fit together,” said Lawrence. “Now we’re seeing it. Now you can see how a transition might happen.”

So is the oil industry paying attention? Does it care?

“It’s astounding how the oil boys club in Calgary is unwilling to change,” says Puetter, admitting that what he’s trying is “outside the box” and without precedent in Canada. The financial community has been an equally tough sell. “All they see is the risk. They don’t see the upside,” he says.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to the United Nations Climate Change Conference in Paris, December 2015. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star has full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.