“The Global Warming Statistical Meltdown” – Wall Street Journal, 9 October 2014

For months, climate reports have been warning us that we must prevent the world from warming by 2 degrees Celsius (3.6 degrees Fahrenheit) in order to avoid the most disastrous effects of climate change. However, what policy makers and world leaders have failed to mention is that the world is less delicate than we think: CO2 emissions might not be so damaging to our climate.

As stated in the international treaty, the UN Framework Convention on Climate Change, the earth’s surface temperatures have increased by almost 0.8 degrees Celsius since 1850-1900, which means we only have a margin of 1.2 degrees Celsius before we reach the 2 degree cap.

Estimations by the Intergovernmental Panel on Climate Change (IPCC)‘s latest 2013 report were calculated using positive and negative models. If there is a massive drop in emissions, then the Earth might not reach the 2 degree mark; however, if coal-use and population growth both skyrocket, then we might meet the mark by 2040.

However, these estimates aren’t based on real-world models, and don’t take into account the sensitivity of our climate. According to the Wall Street Journal, “Climate sensitivity is defined as the global surface warming that occurs when the concentration of carbon dioxide in the atmosphere doubles.” If the climate is overly sensitive, then rising emissions will indeed push the world to the UN’s “dangerous” warming levels; if the climate isn’t overly sensitive, then emissions won’t have such a devastating impact on our environment, and it will take us longer to reach those ‘dangerous’ levels.

Climate reports using an observation-based energy-balance approach and global climate models have had different findings — even the IPCC’s report admitted the distinctions in the two models. With observation-based models, climate sensitivity projections are substantially less than global climate models’ projections. Observation-based energy balance models also take climate change’s 1998 hiatus into account, where we didn’t see a drastic rise in the Earth’s temperature.

The warming hiatus wasn’t considered in the IPCC’s 2007 report, which predicated that the world would warm by 0.2 degrees Celsius every 10 years in the beginning of the 21st century. With that in mind, can we trust climate reports that employ global climate models, rather than observation-based models? Why, then, are we on the fast track to implement policy that slashes emissions when we have room to explore economical ways to gradually lower our emissions? What’s the rush?

Climate sensitivity is something the public doesn’t often hear about, but is a fundamental aspect of the climate policy debate. Reports that take an observation-based approach show that human’s impact on our climate won’t cause the Earth to warm by 2 degrees, even by the end of the 21st century. Perhaps it’s time to re-evaluate our climate policies.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

October 15, 2014

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“Mexico Oil Giant Seeks US Shale” – Wall Street Journal, 19 August 2013

Petroleos Mexicanos (Pemex), Mexico’s state oil monopoly, is looking to extend its reach — from a solely crude-producing, Mexico-based company — to include shale oil and gas from the US. The purpose of Pemex’s new company is to generate shale oil and gas as a way to counteract Pemex’s decreased production. Pemex is the fifth-leading crude producer in the world, but rarely does business outside of Mexico.

Though Pemex has no experience generating natural gas, it will begin exploring the techniques and technologies that US gas and oil companies use to extract natural gas from shale rock. The company’s only collaboration so far has been a refinery with Shell Oil Co. in Texas; but Pemex is looking to partner with an international company, and hopes to launch its new company by the end of next year.

Pemex’s move coincides with new energy reforms made by the Mexican government. In 1938, the country nationalized private oil companies; but now, for the first time since 1938, private oil companies will be able to have a portion of oil profits.

Mexico’s waters have a lot of potential for natural gas; the US government and other experts believe Mexico to have the fourth-largest shale-rock resources in the world. For years, rather than exploring the oil and gas fields in nearby Gulf of Mexico, Pemex and the Mexican government have been concentrating on crude, to the detriment of the country’s energy production.

Pemex’s new president Emilio Lozoya aims to complete a gas pipeline that extends from the Gulf of Mexico to the Pacific Ocean. Such a pipeline will boost Mexico’s profits by allowing Mexico to sell to Asia, while also supplying inexpensive energy for Mexico. Mexico does not currently generate any natural gas, only imports it.

This goes to prove one more time that the biggest exports for the US are innovation and technology. US is capitalizing on new technologies from Apple, Google, and now energy, developed by the US DOE with taxpayer’s money, and commercialized by US companies. Innovate or Perish.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

September 4, 2013

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Climate Change and the Global Aluminum Industry — the Role of China

In reference to our previous post last month on China’s role in the global economy, “China Weighs Environmental Costs”, consider the following THREE facts:

1. China is now the world’s largest producer (> 50%) of primary aluminum using mostly (> 80%) coal-generated electricity;

2. Production of primary aluminum requires large quantity of electricity, and therefore emits a large quantity of GHG (12 tonnes of CO2eq per tonne of aluminum); and

3. China is also the world’s largest emitter of CO2, the main component of GHG.

See our previous post, China’s Soaring Coal Consumption Poses Climate Challenge.

From last month: China Weighs Environmental Costs

China’s growing economy has had a severely negative impact on its environment. As a tactic to reverse the threats of climate change, the Chinese Government announced it would “name and shame” China’s worst cities and factories into publicly revealing their environmental standards. The government has also set a goal of curbing emissions in major industries by 30% by the end of 2017.

China’s pollution has taken its toll on its citizens: this month, a new study revealed that air pollution from coal combustion has decreased life expectancy by over five years in various areas of the country. Previously in 2013, a harsh smog over China and stocks of rice — contaminated with the toxin cadmium — produced public outrage.

The Chinese government has been met with much opposition, namely from local governments, which will make it even that more difficult to implement and carry out new environmental policy; many local governments work on a system that remunerates officials solely based on economic performance. Beijing will be the first city to promote local officials on both economic and environmental accomplishments.

China has pledged to control its energy intensity — energy used per unit of economic output — there is little chance that we will see a direct descent in emissions. Just recently, China and the US both decided to scale back on a particular type of greenhouse gas; but China retorted that developed countries must set an example by successfully limiting carbon emissions.

For the last few years, China’s Ministry of Environmental Protection has calculated the country’s “green GDP”, as a means to estimate the unseen costs of its environmental indifference. The ministry’s study discovered that in 2010, the cost of pollution was almost 1.5 trillion Yuan, or $250 billion, or 3.5% of 2010′s GDP; in 2004, the cost was 511.8 billion Yuan, 3.1% of China’s GDP that year.

Climate change is a global issue. China is now the second-largest global economy and the largest emitter of GHG. Fortunately, China is slowing down, and steadily examining and balancing conflicting goals and resultant policies between short-term economic pressures and long-term environmental considerations.

With global economic slowdown, it will be politically and economically difficult, if not impossible, for developed countries to act unilaterally, unless developing countries — such as Brazil, Russia, India, China and newly added South Africa (BRICS) — do their part.

To compound and complicate this situation even further, an education program must be initiated to “convert” a large population of “climate change deniers” in many countries, including the US.

There are many ways to limit the carbon footprint of the global aluminum industry as articulated in papers by Dr. Das:

However, any discussion on climate change and the global aluminum industry must focus on China.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

August 31, 2013

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“Shale Threatens Saudi Economy, Warns Prince Alwaleed” – Wall Street Journal, 29 July 2013

Signs that the US’s shale oil and gas boom are affecting competitors are already beginning to show: in May, Saudi Prince Alwaleed bin Talal cautioned Saudi Oil Minister Ali al-Naimi about the toll the US’s growing energy production could take on demand in the member countries of the Organization of the Petroleum Exporting Countries (OPEC). Oil Minister Naimi, and other oil officials in Riyadh, are downplaying the US’s impact.

An OPEC report in July exhibited that the organization’s 2012 oil export revenue achieved a record high of $1.26 trillion, profits that OPEC might not be able to maintain. Saudi Arabia is the largest global oil exporter; according to Prince Alwaleed, consumers are restricting their oil imports, causing the country to generate less than its capacity.

OPEC’s data proves that Nigeria and Algeria have also experienced a distinct decline in US exports. Algeria’s oil-export profits decreased by 6% since last year; the country recently announced that increased shale oil and gas production could require the country to reduce domestic spending. OPEC also found that Iran’s oil revenues also declined by 8% last year.

Due to increased production in countries that are not members of OPEC, OPEC predicts that its 2013 crude revenues will decrease to 29.6 million barrels per day, 600,000 barrels/day less than 2012. The group’s crude average price has been 4% less than 2012. The International Energy Agency (IEA) also predicts that OPEC’s demand will wane: in 2015 IEA expects OPEC’s crude to decrease to 29.2 million barrels/day, before beginning to slowly rise in subsequent years.

Once again technology-led revolution is happening — providing an opportunity to minimize oil imports — and helping the US with trade deficits, while also creating high-economic multipliers and high-paying domestic manufacturing jobs. More importantly, the US’s energy independence means less dependence on other countries not friendly to our national interests.

The question is — do we have the will and long-term perspective to capitalize on the opportunity?

Developed and Written by Dr. Subodh Das and Tara Mahadevan

August 29, 2013

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