Weekly ESG clippings #55 - data distortion, net zero chances, unhinged Kyoto, impossible copper, Hertz hurts, outstanding Exxon
SCIENCE
• HadCRUT Has Fully Removed 0.15°C From 1940s Warmth ‘Blip’ As Proposed In Climategate E-mails
• Halfway Between Kyoto and 2050: Zero Carbon Is a Highly Unlikely Outcome
• Annual GWPF lecture: Climate Uncertainty and Risk
INVESTMENT/ECONOMICS
• The amount of copper needed to build EVs is ‘impossible for mining companies to produce’
• Hertz's EV bet goes bust
• Gwyn Morgan: Ottawa's EV mandate is in trouble and that's a good thing
• Efforts To Oust ExxonMobil Chairman, Board Members Run Aground
ABSURDITIES
• New 'Godfather' Sequel Features Big Oil in the Lead Role
"And, like they had said they would, 0.15°C of warmth has gradually been removed from the 1940s HadCRUT global temperature data over the last 15 years. They have “corrected” the data to align with their narrative."
"So, within the last decade, a 15-year temperature trend has been changed from a pause to a strong warming. After all, when the observations don’t fit the narrative, it is time to change the observations."
Our take: look carefully at the graph - it shows changes made to the records, not actual temperature measurements. As the article author says, when the observations don’t fit the narrative, it is time to change the observations.
Halfway Between Kyoto and 2050: Zero Carbon Is a Highly Unlikely Outcome - Vaclav Smil
- "This essay evaluates past carbon emission reduction and the feasibility of eliminating fossil fuels to achieve net-zero carbon by 2050.
- Despite international agreements, government spending and regulations, and technological advancements, global fossil fuel consumption surged by 55 percent between 1997 and 2023. And the share of fossil fuels in global energy consumption has only decreased from nearly 86 percent in 1997 to approximately 82 percent in 2022.
- The first global energy transition, from traditional biomass fuels such as wood and charcoal to fossil fuels, started more than two centuries ago and unfolded gradually. That transition remains incomplete, as billions of people still rely on traditional biomass energies for cooking and heating.
- The scale of today’s energy transition requires approximately 700 exajoules of new non-carbon energies by 2050, which needs about 38,000 projects the size of BC’s Site C or 39,000 equivalents of Muskrat Falls.
- Converting energy-intensive processes (e.g., iron smelting, cement, and plastics) to non-fossil alternatives requires solutions not yet available for large-scale use.
- The energy transition imposes unprecedented demands for minerals including copper and lithium, which require substantial time to locate and develop mines.
- To achieve net-zero carbon, affluent countries will incur costs of at least 20 percent of their annual GDP.
- While global cooperation is essential to achieve decarbonization by 2050, major emitters such as the United States, China, and Russia have conflicting interests.
- To eliminate carbon emissions by 2050, governments face unprecedented technical, economic and political challenges, making rapid and inexpensive transition impossible."
Annual GWPF lecture: Climate Uncertainty and Risk "1988 was the year that the UN established the Intergovernmental Panel on Climate Change, or the IPCC. The first assessment from the IPCC in 1990 concluded that the recent warming was within the magnitude of natural variability. Well, that didn’t hinder the UN. They went ahead with the 1992 Treaty from the UN Framework Convention on Climate Change that was signed by 196 countries, to prevent dangerous anthropogenic climate change caused by emissions.
"The second IPCC assessment report in 1995 found pretty much the same thing as the first assessment report. However in the meeting with policy makers to write the summary, there was substantial pressure for a stronger finding. They came up with the word ‘discernible’, and then went back and changed the body of the report to be consistent. At that point, the IPCC lost any pretense of being independent or uninfluenced by politics. Apparently ‘discernible’ was sufficient to justify the 1977 Kyoto Protocol.
"A number of leading scientists were deeply concerned about the policy-driven science of the IPCC. Pierre Morel, Director of the World Climate Research Programme, had this to say: “The consideration of climate change has now reached the level where it is the concern of professional foreign-affairs negotiators, and has therefore escaped the bounds of scientific knowledge (and uncertainty).”
"William Nordhaus, Nobel Laureate in economics, stated: “The strategy behind the Kyoto Protocol has no grounding in economics or environmental policy.”
"Underlying all this is an important moral dilemma that is implicit in climate policy debates. There’s a conflict between possibly preventing future harm from climate change, versus helping currently living humans. The UN policies are targeted at possibly preventing future harm. However, the UN climate policies are hampering the UN Sustainable Development Goals that focus on currently living humans."
INVESTMENT/ECONOMICS
The amount of copper needed to build EVs is ‘impossible for mining companies to produce’ "Many countries across the world are putting forward policies for EVs. For instance, in the US the Inflation Reduction Act, signed into law in 2022, calls for 100% of cars manufactured by 2035 to be electric. However, an EV requires three to five times more copper than petrol or diesel cars, not to mention the copper required for upgrades to the electricity grid."
"The study found that renewable energy’s copper needs would outstrip what copper mines can produce at the current rate. Between 2018 and 2050, the world will need to mine 115% more copper than has been mined in all of human history up until 2018 just to meet current copper needs without considering the green energy transition. To meet the copper needs of electrifying the global vehicle fleet, as many as six new large copper mines must be brought online annually over the next several decades. About 40% of the production from new mines will be required for EV-related grid upgrades."
“What we will end up with is tension between how much copper we need to build infrastructure in less developed countries versus how much copper we need for the energy transition.”
- A normal Honda Accord needs about 40 pounds of copper. The same battery electric Accord needs 200 pounds.
- Onshore wind turbines require about 10 tons of copper, and offshore approx. 20 tons.
- The world will need to mine 115% more copper than has been mined in all human history just to meet “business as usual.”
- This would meet our current copper needs and support the developing world without considering the green energy transition.
- Six new large mines need to come online every year by 2050 to meet global copper demand, but the problem is it takes about 20 years between discovering a new copper mineral deposit and getting a permit to build a mine.
- None of this takes into consideration the upgrades to the electrical infrastructure needed to "electrify the world by 2050.”
- In short electrifying the world by 2050 is a politician’s pipe dream that will never happen.
Gwyn Morgan: Ottawa's EV mandate is in trouble and that's a good thing - All the new electrical generation and metal mining required means EVs don't have a hope of getting up to speed in the 11 years left.
"Finally, the bottom-line question: will this big shift to electric vehicles have any environmental benefit? An International Energy Agency study shows that to meet international EV pledges the world will need no fewer than 388 new lithium, nickel and cobalt mines. But the time between regulatory application to actual production ranges from six to nine years for lithium and 13 to 18 years for nickel. And 2035 is only 11 years away."
"The answer to the question “Will the shift to electric vehicles have any net environmental benefit?” is therefore clearly no. And the human cost of trying to meet the EV targets will be profoundly negative. Those factors alone make it highly unlikely Ottawa’s ban on gasoline vehicles will actually happen. But the biggest reason it will fail is that people don’t want it. As I write this there are new reports of EV sales collapsing despite both subsidies from governments and price-slashing from firms. Governments are discovering, to their dismay and citizens’ relief, that, as Adam Smith himself put it in his 1759 book: The Theory of Moral Sentiments, “people are not chess pieces to be moved around by a hand from above.”
Efforts To Oust ExxonMobil Chairman, Board Members Run Aground "ExxonMobil chairman and CEO Darren Woods and lead independent board member Joseph Hooley sailed to easy re-elections to the Board of Directors Wednesday at the company’s annual shareholder meeting. As detailed here last week, both had been targeted by ESG-focused investors in recent weeks, with state fund managers in California (CalPERS) and New York pledging to oppose most or all the rest of the Board as well."
"All those efforts failed by overwhelming margins. ExxonMobil said in a release that all 12 Board members were re-elected, receiving support from an average of 95% of voting shareholders. Despite the various efforts from the alliance of ESG interests, that was barely off from the 96% support for incumbent members at the company’s 2023 meeting.
"In the release, Mr. Woods said, “Today, our investors sent a powerful message that rules and value-creation matter,” adding that the outcome “signals a belief that we are on the right track by overwhelmingly re-electing our directors and soundly defeating all four proposals that would have hampered our ability to create long-term value by providing the world with the energy and products it needs while investing billions to reduce carbon emissions in our own business and others.”
Our take: maybe another case study in the making, the opposite of the Hertz story above. In this case management produced the best results ever for shareholders and was attacked by a small radical group of activist climate alarmist investors. Imagine if Exxon fully understood the good they do for the world and had the moral gumption to say so proudly.
ABSURDITIES
New 'Godfather' Sequel Features Big Oil in the Lead Role "...the Grand Poohbah of climate alarmist hyperbole, decided it was time for him to up the fear rhetoric one more time. Guterres has already gifted us with gems like “the world is on a highway to hell,” which he topped in January with his infamous warning we are entering into “the era of global boiling” due to our continued consumption of fossil fuels."
"In a speech commemorating something called World Climate Day (who knew?) Guterres harangued his favorite boogeymen, oil companies, urging a 30% windfall tax on their earnings and a ban on advertising to punish them for…what, exactly?
"For consistently fulfilling demand for their products from those 8 billion people? For enabling the creation of a modern society in which poverty and starvation have been reduced by well over 90% in the last century? For being largely responsible for extending human life expectancy from around 40 years to almost 80?
"No, Guterres wants to punish the oil companies for emitting plant food, raising it to levels that are, well, that are pretty low in historic context. The very same plant food that has resulted in an almost unprecedented greening of the planet. The same plant food that has enabled farmers to feed a constantly rising planetary population. That same plant food that is in fact the foundation for all life on Planet Earth is, of course, the dreaded carbon dioxide."
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