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CCNet 20/01/14

Europe To Ditch Climate Protection Goals

Re-Industrialisation More Important Than Climate Change







The EU’s reputation as a model of environmental responsibility may soon be history. The European Commission wants to forgo ambitious climate protection goals and pave the way for fracking — jeopardizing Germany’s touted energy revolution in the process. It seems that the climate is no longer of much importance to the European Commission, the EU’s executive branch. As of 2020 at the latest — when the current commitment to further increase the share of green energy expires — climate protection in the EU will apparently be pursued on a voluntary basis. --Gregor Peter Schmitz, Spiegel Online, 15 January 2014

 
 

 
 
The European Commission is beginning to shift away from its current climate policy: “For an industrial renaissance”, the needs of the economy should play a key role in setting environmental objectives in the future. It is already clear that the new targets are set in a less binding way than the climate targets for 2020. On Wednesday, it will adopt a message that is entitled:”For an industrial renaissance” and states: “The Commission will take into account industrial competitiveness and technological feasibility in the design of the climate and energy policy framework for the year 2030... in order to avoid that the difference in energy costs between the EU and its major international competitors expands even further”. --Florian Eder, Die Welt, 20 January 2014
 

 
 
 
 
 
Germany’s economy minister wants to cut the support price paid for electricity from solar and wind power generators by about a third by 2015, according to a draft proposal for one of the most challenging economic reforms facing Chancellor Angela Merkel’s new government. And Economy Minister Sigmar Gabriel wants the reduction to start taking effect for some new projects from as early as next week, according to the draft seen by Reuters on Saturday. --Reuters, 20 January 2014
 


 
 
 
 
Germany’s clean-energy industry said government plans to accelerate cuts in aid to developers of wind and solar power plants threaten to derail the country’s transition to renewable sources from nuclear energy. Wind-turbine maker Nordex SE (NDX1), which has benefited from booming installations on land, fell to its lowest in two weeks in Frankfurt trading today after weekend reports that Economy and Energy Minister Sigmar Gabriel aims to rein in subsidies. “The energy switch threatens to be derailed,” the BWE wind lobby said. --Stefan Nicola, Bloomberg, 20 January 2014
 
 
 
 
 
 
This weekend I found myself in another part of Europe attending a conference on the future of our collective energy needs. The discussion presented an extraordinarily shocking, and terrifying vision for our future prospects. The sum total of our deliberations was that European energy police and practice are in chaos and we collectively face dangerously expensive supplies, as well as the increasing threat of grave shortages. There was a frightening enthusiasm to terminate all green levies.  What will come hardest to those campaigning on climate change will be the abandoning of sustainability targets in the energy sector. I left the conference downhearted. --Jon Snow, Channel 4 New, 20 January 2014
 
 

 
Russia began drilling a well in its Bazhenov shale formation in Siberia this week, tapping in to what may be the world’s largest single reserve of shale oil. If Russia is able to successfully plumb its Siberian depths for shale oil and gas, it could leverage its energy holdings towards its ambition of becoming a Great Power once again. But a long list of hurdles needs to be cleared, and no one—not the UK, not Poland, not even China—has been able to follow in America’s footsteps. Russia is just now drilling its first exploratory well, so it’s still far too early to tell whether or not it will fall to the same pitfalls, but it has a lot going for it. --Walter Russell Mead, The American Interest, 19 January 2014
 
 
 
Citing economic and national security woes, more than a dozen European nations are ramping up pressure on Washington to open wider its federally restricted spigot of natural-gas exports. "We've had so many country representatives come into the office, pleading with us to step up our efforts to export LNG," said Rep. Ed Whitfield, chairman of the House Energy and Commerce Energy and Power Subcommittee. "The reason why is because the Russians have them over the barrel and they're able to extract really high prices from them." --Amy Harder, National Journal, January 16, 2014
 
 
 
Britain is sitting on 50 years’ worth of shale gas and can exploit it safely, but communities near fracking sites will endure significant disruption, according to President Obama’s Energy Secretary. Speaking in London, he said that shale gas was far less polluting than coal and was helping the US to meet its greenhouse gas emissions-reduction target. Dr Moniz, a physics professor at the Massachusetts Institute of Technology, said: “If the UK does in fact develop shale gas, there is a huge resource . . . 50 years’ worth of gas.” --Ben Webster, The Times, 18 January 2014
 
 

1) Europe In Full Retreat: Re-Industrialisation More Important Than Climate Change - Die Welt, 20 January 2014

2) Green Fade-Out: Europe To Ditch Climate Protection Goals - Spiegel Online, 15 January 2014

3) Panicky German Government To Cut Green Subsidies From Next Week - Reuters, 20 January 2014

4) Green Lobby Alarm: “Green Energy Switch Threatens To Be Derailed.” - Bloomberg, 20 January 2014

5) Jon Snow Mugged By Reality: ‘EU Energy Crisis - Prepare To Abandon Energy Targets’ - Channel 4 New, 20 January 2014

6) Europe To America: We Want Your Shale Gas - National Journal, January 16, 2014

7) Russia Wakes Up and Smells the Shale - The American Interest, 19 January 2014

8) Obama’s Energy Secretary: UK Shale Gas ‘Would Last For 50 Years’ - The Times, 18 January 2014
 
 

1) Europe In Full Retreat: Re-Industrialisation More Important Than Climate Change
Die Welt, 20 January 2014

Florian Eder

The European Commission is beginning to shift away from its current climate policy: “For an industrial renaissance”, the needs of the economy should play a key role in setting environmental objectives in the future.

The EU Commission has re-discovered the importance of industry for economic development. On Wednesday, it will adopt a message that is entitled:”For an industrial renaissance” and states: “Without a strong industrial base, Europe will not be able to prosper.” Industry is “at the core of European economic revival and competitiveness”, says the text.

The commitment to the industrial base is a reaction to its weakening in recent years. Only in five EU member states, the industry’s share of GDP has increased since 2007 according to the Commission. Besides Germany, the countries include the Netherlands, Austria, Lithuania and Slovakia. Everywhere else, and especially in the large countries France, Italy, Spain, UK, there has been a trend towards de-industrialization.

The importance of industry has been falling incessantly

3.8 million industrial jobs have been lost in the same period in the EU. The industry’s share of GDP last year fell to a mere 15 percent. The EU target of 20 percent by 2020, which the Commission will renew in its decision, seems far away.

Against this background, the EU Commission uses lofty words, and yet they suggest a cautious change.

In those areas where the EU can actually do something to strengthen industry, it now wants to do so. It intends to “improve the regulatory environment and to make it more stable and predictable”, according to the proposed declaration for the meeting on Wednesday. In particular, it wants to make EU laws “easier and reduce bureaucratic burdens.” The Commissioners request comparable actions by the Member States and announced to monitor the progress.

“The Commission is on the right track if it rediscovers the importance of industrial production for Europe’s economies,” said the FDP politician Holger Krahmer. He called for the application of this knowledge: “The European industry is exposed to an unprecedented level of regulation. If, in fact, the European Commission considers a renaissance of the faltering industry as important, then some legal frameworks must be fundamentally revised,” said the MEP.

Internal market is the key to more growth

Further trade agreements should do their bit to promote growth. In addition, the internal market, the magic formula for growth in the EU, should give way to further breakthroughs in areas where today 28 different national regimes make it difficult for businesses to expand and to export in other EU countries. This is especially true for the energy and telecom markets, which the Commission wants to open further. Suggestions on how to do that are in the process of legislation.

“After the crisis, the single market can again play its role to revive the economy and to create jobs and growth,” it says.

Therefore, the Commission urges the European Parliament and the Member States to speed up the legislative process. At the EU summit in March, the heads of government will consult on the proposals and impose pressure to act on themselves in this way. The announcement is part of a package of projects and specific legislative proposals by the Commission on industrial and climate policy, which the Commission – coordinated and interlocking – will decide upon on Wednesday.

It amounts to an identifiable shift in emphasis. The policy paper says: “The Commission will take into account industrial competitiveness and technological feasibility in the design of the climate and energy policy framework for the year 2030.” This was to be done “in order to avoid that the difference in energy costs between the EU and its major international competitors expands even further”.

Brussels reaches out to industry

This is an important step, if the EU’s power centre is serious about it: an outreach to industry which has always complained that the EU’s climate policy ignored both feasibility and economic considerations – and has only showed the desire to be the world leader in climate protection. It would appear that this is about to change.

In fact, the evidence is still pending, but the Commission has the opportunity to follow through on Wednesday. In addition to the industrial policy communication, it will then decide about the European climate targets for 2030. Among EU Commissioners CO2 targets are still being discussed. The European Parliament has called for a reduction of 40 percent, which corresponds to the maximum demand in the circle of Commissioners.

However, it is already clear that the new targets are set in a less binding way than the climate targets for 2020. Commission President José Manuel Barroso does no longer want to impose binding goals on the Member States regarding the development of wind and solar energy.

No binding expansion targets

Instead, according EU diplomats, there should be a binding overall EU target for the development of renewable energy sources. The Commission will then assess the corresponding efforts by the Member States relating to reporting requirements, rather than impose any fixed targets.

Another piece of the puzzle makes the signal of a more pragmatic EU climate policy even more evident. Fracking, the extraction of natural gas from shale rock, is largely responsible for the huge benefits the United States enjoys in energy costs for businesses. In Europe, the extraction is more difficult, also technically, perhaps because one would have to drill deeper.

However, the EU does not want to turn down this opportunity. A paper by Environment Commissioner Janez Potočnik, which is also on the Wednesday agenda, provides minimum standards for the protection of the environment and health – but fracking will not be prohibited or restricted.

Translation Philipp Mueller
 
 


2) Green Fade-Out: Europe To Ditch Climate Protection Goals
Spiegel Online, 15 January 2014

Gregor Peter Schmitz

The EU’s reputation as a model of environmental responsibility may soon be history. The European Commission wants to forgo ambitious climate protection goals and pave the way for fracking — jeopardizing Germany’s touted energy revolution in the process.

The climate between Brussels and Berlin is polluted, something European Commission officials attribute, among other things, to the “reckless” way German Chancellor Angela Merkel blocked stricter exhaust emissions during her re-election campaign to placate domestic automotive manufacturers like Daimler and BMW. This kind of blatant self-interest, officials complained at the time, is poisoning the climate.

But now it seems that the climate is no longer of much importance to the European Commission, the EU’s executive branch, either. Commission sources have long been hinting that the body intends to move away from ambitious climate protection goals. On Tuesday, the Süddeutsche Zeitung reported as much.

At the request of Commission President José Manuel Barroso, EU member states are no longer to receive specific guidelines for the development of renewable energy. The stated aim of increasing the share of green energy across the EU to up to 27 percent will hold. But how seriously countries tackle this project will no longer be regulated within the plan. As of 2020 at the latest — when the current commitment to further increase the share of green energy expires — climate protection in the EU will apparently be pursued on a voluntary basis.

Full story
 



3) Panicky German Government To Cut Green Subsidies From Next Week
Reuters, 20 January 2014

Germany’s economy minister wants to cut the support price paid for electricity from solar and wind power generators by about a third by 2015, according to a draft proposal for one of the most challenging economic reforms facing Chancellor Angela Merkel’s new government.

Under the draft proposal the feed-in tariffs paid to renewable power generators will be cut to an average across all technologies of 12 euro cents per kiloWatthour (cent/kWh) by 2015 from 17 cents/kWh currently.

And Economy Minister Sigmar Gabriel, who also leads the Social Democrats (SPD), wants the reduction to start taking effect for some new projects from as early as next week, according to the draft seen by Reuters on Saturday.

“The old rates of support (under the old renewable energy law (EEG)) are applicable for wind energy plants that start operating by Dec 31, 2014 and that were authorised … by Jan. 22, 2014,” said the draft outline prepared for a cabinet meeting this week.

The economy ministry, has been merged under Merkel’s right-left coalition with the energy portfolio and is run by Gabriel.

Europe’s biggest economy is in the throes of shifting away from nuclear and fossil fuel-powered generation to so-called renewable sources, but the move has sent electricity costs for consumers soaring.

When striking a coalition deal late last year, Merkel’s conservatives and Gabriel’s SPD agreed to limit the growth of renewables and reform the discounts and subsidies afforded to industry for solar and wind power.

Full story
 
 

 



4) Green Lobby Fears For It Handouts: “Green Energy Switch Threatens To Be Derailed.”
Bloomberg, 20 January 2014

Stefan Nicola 

Germany’s clean-energy industry said government plans to accelerate cuts in aid to developers of wind and solar power plants threaten to derail the country’s transition to renewable sources from nuclear energy.

Wind-turbine maker Nordex SE (NDX1), which has benefited from booming installations on land, fell to its lowest in two weeks in Frankfurt trading today after weekend reports that Economy and Energy Minister Sigmar Gabriel aims to rein in subsidies.

Proposals to reduce aid for onshore wind units as much as 20 percent in 2015 from 2013 levels are “counterproductive,” the BWE wind lobby said. Cuts that are too harsh “threaten the wind energy expansion all over Germany,” Sylvia Pilarsky-Grosch, the BWE’s head, said in an e-mailed statement. “The energy switch threatens to be derailed.”

Full story
 
 

 
5) Jon Snow Mugged By Reality: ‘EU Energy Crisis - Prepare To Abandon Energy Targets’
Channel 4 New, 20 January 2014

This weekend I found myself in another part of Europe attending a conference on the future of our collective energy needs. The discussion presented an extraordinarily shocking, and terrifying vision for our future prospects.


 
Put crudely, natural gas in Britain, and most parts of the EU, is costing precisely three times what it costs in the United States. This year every America will enjoy an extra $1300 in his or her pocket, thanks to the rise of shale gas. By 2016 this could reach $4,000 per American citizen. This is big money that can be used to buy products and boost the US economy.

In contrast, the average Brit will suffer an annual increase this year of $200 (£122) to pay for their energy needs – thus leaving still less to spend on UK produced products.

There were a number of big business leaders and European civil service technocrats present. The sum total of our deliberations was that European energy police and practice are in chaos and we collectively face dangerously expensive supplies, as well as the increasing threat of grave shortages.

It’s a staggering truth given that the EU’s origins were the old European iron and coal grouping. Twenty years after the Eastern Bloc countries joined we still have no EU-wide energy grid.

Get fracking?

In our discussion, the answers to this crisis were grim. The first was for Europe to get fracking, right now, wherever shale gas exists. Going nuclear is a major option too, irrespective of disposal threats. Reconsidering coal was even talked about.

But there was a frightening enthusiasm to terminate all green levies. You may wonder whether I had actually left Britain for this conference. Actually I was 1,000 miles away and the talk was of abandoning the targets for 20 per cent renewable energy by 2020, much along the lines that the coalition government here is pursuing.

At the same time we were urged to consider looking at who supplies our gas right now. Expensive gas comes in from Qatar, the UAE, and Saudi. Europe’s cheapest gas comes from Russia, direct by pipeline – indeed Russian supplies account for 30 per cent of Europe’s gas consumption. By 2016 it could rise to 50 per cent.

And yet Europe’s relations with Russia are dire. So it is clearly in all our interests to improve these relations at every level – more partnerships, more technical exchanges and the rest. It will come hard, particularly for those campaigning for human rights and attempting to bear down on organised crime.

Getting cosy with Russia

But in reality, does getting cosy with Moscow really come any harder than the appalling compromises entered into with Saudi and Qatar to obtain their oil and gas?

What will come hardest to those campaigning on climate change will be the abandoning of sustainability targets in the energy sector. Yet all these unpalatable options are now in play, as Europe faces the appalling consequences of lack of competitiveness brought about by currently consuming some of the most expensive gas in the world. It is now commonplace for European governments, including the British, to simply abandon all the collectively agreed targets.

I left the conference downhearted. The fact is that we, Europe, emit 15 per cent of the world’s C02. If we cut 20 per cent, we save 3 per cent of the world’s emissions. It brings me no joy to say it: we are going to find ourselves willingly abandoning most of the sustainable energy targets. We had better face up to it.

 

 
6) Europe To America: We Want Your Shale Gas
National Journal, January 16, 2014

Amy Harder

Citing economic and national security woes, more than a dozen European nations are ramping up pressure on Washington to open wider its federally restricted spigot of natural-gas exports.

The countries, which primarily include Eastern European nations heavily dependent upon Russia for their energy supplies, are working with a Washington-based government-affairs firm to launch a lobbying coalition in the next month with American energy companies. 

The coalition, whose name will be LNG Allies, will lobby Washington on allowing these countries easier access to natural gas from the United States, where supplies have ballooned in recent years and domestic prices have plummeted compared with the rest of the world. Right now, federal law significantly restricts U.S. companies from exporting natural gas to countries that are not free-trade partners with United States, which includes Europe.

"These countries are all still very heavily dependent upon Russia, and they're excited about getting into the LNG [liquefied natural gas] marketplace, and are looking for not only U.S. gas, but good, solid business relationships," said the coalition's organizer, who works for the firm launching the coalition. 

This source, who would speak only on the condition of anonymity since the coalition has not yet launched, said countries that are likely to be members of the group include Austria, the Czech Republic, Estonia, Finland, Latvia, Lithuania, Poland, Romania, and the Slovak Republic. These nine countries sent representatives to a meeting last month at the Lithuanian Embassy in Washington. Other potential members include Croatia, Hungary, Slovenia, Sweden, and Greece.

When reached for comment about its participation in the coalition, an official at the Czech Republic Embassy said no final decision has been made. "We want to learn more about what this will entail, what this will mean and how this will work," said Martin Pizinger, political and economic officer at the embassy.

Simonas Šatūnas, deputy chief of mission and minister counsellor at the Lithuanian Embassy, said the country was likely to join. "We are very strongly considering and probably will join," Šatūnas said.

The government-affairs source said more logistics and details must still be worked out before some countries confirm their involvement.

"We are fairly close to announcing something publicly about the coalition," the source said.

"It's a little tricky diplomatically to put together an organization that can allow embassies and their gas companies to work with our industry together in a legal way that doesn't generate immense headaches and paperwork."

Two U.S. trade associations, America's Natural Gas Alliance and the American Petroleum Institute, have not yet committed to the effort but are currently discussing it. "We certainly are interested in Eastern European markets and we are considering the best way to work with those countries to bring them America's clean and abundant natural gas, but we have not yet reached a formal agreement to work with one group or another in that endeavor," according to ANGA spokesman Dan Whitten.

The impetus behind this coalition has been growing over the last year as European countries have been meeting more and more with top officials in Congress and within the administration to explain why Europe wants American gas so badly.

"We've had so many country representatives come into the office, pleading with us to step up our efforts to export LNG," said Rep. Ed Whitfield, chairman of the House Energy and Commerce Energy and Power Subcommittee. "The reason why is because the Russians have them over the barrel and they're able to extract really high prices from them."

Full story
 
 

7) Russia Wakes Up and Smells the Shale
The American Interest, 19 January 2014
Walter Russell Mead

Russia began drilling a well in its Bazhenov shale formation in Siberia this week, tapping in to what may be the world’s largest single reserve of shale oil.

 
 
 
 
Map by Lindsey Burrows
 
Moscow is coming to the shale game very late; because Russia is already rich in conventional oil and gas, it’s felt little pressure to invest in unconventional reserves. But as its hydrocarbon production begins to stagnate, Moscow is realizing that shale energy might actually be worth looking in to. And no wonder: Russia has the world’s largest reserves of shale oil, and ninth-largest reserves of shale gas. Earlier this week, a joint venture between Royal Dutch Shell and Gazprom Neft broke ground on its first fracking well in the Bazhenov shale, just outside of Salym. Bloomberg reports:

The Bazhenov layer, which underlies Siberia’s existing oil fields, has attracted Shell and Exxon Mobil Corp. (XOM) because it’s similar to the Bakken shale in the U.S., where advances in drilling technology started a production boom. Exxon will also start a $300 million pilot project drilling in a different part of the Bazhenov with OAO Rosneft (ROSN) this year.

If Russia is able to successfully plumb its Siberian depths for shale oil and gas, it could leverage its energy holdings towards its ambition of becoming a Great Power once again. But a long list of hurdlesneeds to be cleared, and no one—not the UKnot Polandnot even China—has been able to follow in America’s footsteps. Russia is just now drilling its first exploratory well, so it’s still far too early to tell whether or not it will fall to the same pitfalls, but it has a lot going for it. Most importantly, it has the experience, service industry, and infrastructure that comes with being one of the world’s major producers of hydrocarbons.
 
 

8) Obama’s Energy Secretary: UK Shale Gas ‘Would Last For 50 Years’
The Times, 18 January 2014

Ben Webster

Britain is sitting on 50 years’ worth of shale gas and can exploit it safely, but communities near fracking sites will endure significant disruption, according to President Obama’s Energy Secretary.

Ernest Moniz dismissed concerns that fracking would contaminate water supplies and said environmental impacts were “challenging but manageable” if best practice was followed.

Speaking in London, he said that shale gas was far less polluting than coal and was helping the US to meet its greenhouse gas emissions-reduction target. Dr Moniz, a physics professor at the Massachusetts Institute of Technology, said: “If the UK does in fact develop shale gas, there is a huge resource . . . 50 years’ worth of gas.”

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