The silver lining in Europe’s energy crisis as brutal summer begins

Source: Alberto Masnovo / iStock via Getty Images

In a month where the largest heatwave in memory hit Asia and Canadian wildfires are shutting down vast parts of Alberta and sending oil prices higher, Europe had been relatively unscathed — until deadly flooding shut down the Italian Grand Prix this weekend.

It’s a devastating economic blow to Italy, a horrible loss of life, and a reminder that even our cherished sports are subject to the ravages of global warming. It’s also the beginning of what is expected to be a brutally hot and wet summer in Europe, which is still reeling from the energy crisis brought on by Russia’s war on Ukraine.

Yet the sky-high energy prices across the continent have finally begun to fulfill the predictions of many who said last year that Russia’s invasion would ultimately yield benefits as it would speed up the transition to renewable energy in Europe. Bloomberg reports that power from fossil fuels in Europe is down 16% from last year as renewables have taken up the slack, and emissions so far this year are at levels not seen since the Covid lockdowns of 2020. The lower emissions also come as factories and companies reduce energy usage because of high prices.

That may change as air conditioners are flicked on this summer to combat what scientists expect to be one of the worst heat years in history, but it is an encouraging sign that the renewable energy transition is making progress despite the rush to fossil fuels after the invasion last year.

Investors take note. Oil and gas may be with us for a long while yet, but as cheaper renewables come on to the market, simple economics will dictate a lower-emission future.

Zeus: Why investors are betting the climate farm on carbon capture

. . . . It’s the hottest climate tech on Wall Street. President Joe Biden’s climate plan depends on it. And the head of COP28 says it’s the only way forward. Despite the hype, climate capture and storage is nowhere near working at the scale needed to offset the amount of carbon oil and gas companies are putting into the air and water. David Callaway analyzes whether this is the birth of a bold new technology opportunity for investors or a Hail Mary for governments as global warming approaches the point of no return. . . .

Read the full Zeus column

Thursday’s market insights

. . . . Who said being the top dog is easy? In a couple of recent decisions, Biden had to weigh support for green policies against opposition from key players. In one area — a pipeline across Sen. Joe Manchin’s West Virginia — he caved; in the other — retaining flexibility for solar under the IRA — he stood up to those who want to punish China for unfair trade practices. Read more. . . .

. . . . EVs produce no carbon emissions. Great, except that they emit more of a troubling pollutant: tiny tire particles. That’s because the weight and power of electric vehicles shaves more off tires than regular autos. Now the tire industry is trying to do something about it. Read more here. . . .

Editor’s picks: Most Americans face higher risk of summer blackouts

Grid monitor says most of U.S. faces higher risk of summer blackouts

As much as two-thirds of North America is at a higher risk of summer blackouts and energy shortfalls this summer, the North American Electric Reliability Corp. said Wednesday in its 2023 Summer Reliability Assessment. NERC warned that periods of extreme electrical demand, including heat waves, elevate the risk of supply shortages, and that recovery times following storms and hurricanes could be slowed by low inventories of replacement transformers. Resources should be adequate to meet normal summer peak demand, but “if summer temperatures spike and become more widespread, the U.S. West, Midwest, Texas and Southeast United States, New England and Ontario may experience resource shortfalls,” NERC said.

Report: Stopping methane leaks could add jobs in Texas

Some Texas officials may be opposed to federal regulations designed to stop methane emissions from oil and gas operations, but a new report says the work of plugging the damaging leaks could boost business and create as many as 35,000 new jobs in the state. Inside Climate News reports that while some officials have claimed the methane regulations would kill jobs, the report from the Texas Climate Jobs Project and the Ray Marshall Center at the University of Texas, Austin, finds that “oil and gas producing regions, including the Permian Basin, would need a significant workforce to detect methane leaks, replace components known to leak the gas and plug abandoned wells. Previous research shows the methane mitigation industry is already growing.”  The EPA’s draft methane rule and a new methane fee under the Inflation Reduction Act, will have a major impact on oil and gas operations in the state.

Explain that: The Paris Agreement

. . . . The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 parties at the UN Climate Change Conference (COP21) in Paris, France, in December of 2015. According to the UN, the treaty is a landmark in the multilateral climate change process because, for the first time, a binding agreement brings all nations together to combat climate change and adapt to its effects. Its overarching goal is to hold “the increase in the global average temperature to well below 2°C. above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C. above pre-industrial levels.” The UN notes that in recent years, world leaders have stressed the need to limit global warming to 1.5°C. by the end of this century. “That’s because the UN’s Intergovernmental Panel on Climate Change indicates that crossing the 1.5°C. threshold risks unleashing far more severe climate change impacts, including more frequent and severe droughts, heatwaves and rainfall.” To limit global warming to 1.5°C., greenhouse gas emissions must peak before 2025 at the latest, and decline 43% by 2030. . . .

Words to live by . . . .

“Everything we think about regarding sustainability — from energy to agriculture to manufacturing to population — has a water footprint. Almost all of the water on Earth is salt water, and the remaining freshwater supplies are split between agricultural use and human use — as well as maintaining the existing natural environment.” — Jamais Cascio, author and futurist.

Callaway Climate Insights