U.S. pipeline manufacturers suffered a bad week. Or, maybe, a bad year.
On Monday a federal judge ordered the Dakota Access Pipeline development shut down pending a new environmental review while, the same day, the Supreme Court rejected an environmental permit the Keystone XL pipeline needs to continue construction. Both pipelines have already lost billions over years of delays won by environmental campaigns.
On Sunday, Dominion and Duke Energy—two of the U.S.’ largest utilities—scrapped plans for a 600-mile long Atlantic Coast Pipeline, too. Environmental lawsuits and delays increased the projected cost of the pipeline from $5 billion to $8 billion.
And back in May, New York State blocked two natural gas lines by withholding water permits. The Department of Environmental Conservation (DEC) said construction of the underwater pipes would have churned up contaminants such as mercury in New York harbor.
National Grid, which proposed the New York pipeline, has discussed trucking in oil and gas as an alternative delivery system. That’s not great either. According to the Fraser Institute, trucking oil has the highest instances of spillages per million barrels moved. Pipes are actually the safest, with the lowest spillage rates. But when it comes to environmental protection, spillages aren’t everything.
Building entirely new pipelines to increase fossil fuel supply goes against the consensus on climate change, which calls for reduced reliance on carbon-emitting fuels. The DEC said as much when it rejected National Grid’s pipeline plans.
The department argued that prolonging the use of natural gas is inconsistent with New York’s Climate Leadership and Community Protection Act 2019, which mandates New York state achieve an 85% reduction in carbon emissions across all sectors by 2050.
As renewables become cheaper and carbon emissions become more expensive, demand for fossil fuels will decline. Some say it has already peaked, although it could make a comeback once the pandemic clears—as Fortune’s Katherine Dunn points out in an article about Warren Buffett’s latest bet on energy storage. Buffett bought Dominion’s pipeline network and storage units but, crucially, the Atlantic Coast Pipeline remains cancelled.
There might well be a fossil fuel spike post-pandemic, providing a boon for owners of current storage facilities. But betting on long-term expansion—the sort you’d need new pipes for—no longer seems smart.
More below.
Eamon Barrett
-eamon.barrett@fortune.com
CARBON COPY
New data shows the U.S. underestimated the number of homes exposed to flood risks by 67%. The non-government report warns 14.6 million properties are at risk from severe flooding; far more than the 8.7 million properties shown on federal maps. The sudden redrawing of flood boundaries could prompt a spike in insurance applications.
The pandemic is set to knock global meat consumption down 3% this year, to its lowest level since 2011, data from the UN shows. A number of factors have contributed to the slimdown, including restaurant closures, consumers saving on grocery bills, and disruption to production. China, the world’s largest consumer of pork, has also endured a mass culling of its pig stocks. It’s unclear how long the low-meat diet will continue after the pandemic.
By the end of the decade, U.S. investment in offshore wind power will rise to a level nearly on par with spending on offshore oil drilling, according to energy consultancy Wood Mackenzie. Ten years ago, U.S. spending on offshore wind farms was zero. Now, offshore wind projects are on course for about $78 billion in capital spending this decade, compared with the $82 billion planned for U.S. offshore oil and gas development.
The World Meteorological Organization warns there’s a 20% chance global warming will rise above 1.5C over pre-industrial levels within the next five years. Maintaining a temperature rise below 1.5C would stave off the worst effects of climate change and was a target set by signatories of the Paris Agreement.
Denmark passed a law that seeks to hold successive governments accountable for meeting climate change goals. The law is designed to safeguard against short-term policy planning, which is often a consequence of election cycles, by forcing the government to seek an annual parliamentary vote on its climate progress. Technically, if the government fails to achieve a majority, it would have to step down.
Rio Tinto slashed estimates of how much copper and gold it can extract from its $6.8 billion expansion project of a mine in the Gobi Desert. Rio cut its estimates for gold by 17% and for copper by 15%. The expansion plan has suffered numerous setbacks since it began. The latest write down adds more pressure to CEO Jean-Sébastien Jacques. His company recently destroyed two sacred Aboriginal sites to make way for a mine expansion in Australia.
IN CASE YOU MISSED IT
Warren Buffett’s buy-on-fear strategy will be tested with his latest bet on fossil fuels by Katherine Dunn
Shell’s $22 billion Q2 write-down is just the tip of the iceberg for fossil fuels by Katherine Dunn
Airline bailouts highlight the debate over how green the coronavirus recovery should be by David Meyer
CLOSING NUMBER
17%
In early April, global CO2 emissions were down 17% on 2019 levels as shutdowns prompted by the coronavirus reduced traffic, production, and energy usage. By mid-June, global emissions were only down 5%, showcasing how quickly pollution has returned as governments attempt to restart their economies. Emission levels in China, which hit a trough in mid-February, appear to have already returned to normal. I recommend a click through to the report for some good visuals on the turnaround.
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