Articles in Category: Environment

The Supreme Court has blocked the EPA Clean Power Plan and U.S. steel shipments ticked up in December, even as they lost ground from 2014 on the entire year.

Supreme Court Blocks Clean Power Plan… For Now

The Supreme Court has blocked President Obama and the Environmental Protection Agency‘s new climate rules for power plants, dealing a major blow to the president’s climate agenda.

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In an order released Tuesday night, the court said it is placing a stay on the EPA’s Clean Power Plan to cut carbon pollution from power plants while industry and state lawsuits move forward. This is not unexpected, as the rule — currently being challenged by 29 states and several industry groups — will be heard at the D.C. circuit court in June and could go through appeals that could last more than a year after that.

The length of the appeals process is important because the High Court granted the request in a 5-4 vote on Tuesday night, saying the rule was on hold until the circuit court reviews it and all Supreme Court appeals are exhausted. The court’s four liberal justices dissented from the decision.

The rules would have required existing electricity generating utilities to reduce carbon dioxide (CO2) emissions by 32% in the next 15 years. The Court “stayed” a decision on implementing the rule while it considers the legal challenges.

White House press secretary Josh Earnest said in a statement that the administration disagrees with the order, but “we remain confident that we will prevail” when the rule is argued on its merits.

That stands in stark contrast to the statements from the 29-state majority challenging the law and the industry groups that have joined the lawsuit.

The American Iron and Steel Institute (AISI) released a statement saying it applauded the decision. Wisconsin Attorney General Brad Schimel (R.), one of the 29 attorneys general challenging the rule, took his applause a bit further.

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“It is an extraordinary action for the Supreme Court of the United States to grant a stay and is telling of the obvious illegality of the rule,” Schimel said in a statement. “It’s imperative that we fight back against the federal government’s intrusion into the affairs of the State of Wisconsin.”

Steel Shipments Up in December, Down for the Year

The AISI also reported that for the month of December, U.S. steel mills shipped 6,556,342 net tons, a 1.5% increase from the 6,457,870 nt shipped in November 2015, and a 17.8% decrease from the 7,978,310 nt shipped in December 2014. Shipments for the full year 2015 were 86,546,657 nt, an 11.9% decrease vs. full year 2014 shipments of 98,248,666 nt.

 

There was a lot of talk last year about coal resources needing to be left in the ground if the world was to reach it’s 2-degree-celsius reduction environmental targets.

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The suggestion was that legislation was required to force power generators to switch to less polluting energy sources and, while in the meantime tougher emissions standards have played their part, the market has been much more active than government in encouraging change.

Could 2015 be the beginning of the end for coal-fired power in the US? Source: Adobe Stock/Snap Happy

Could 2015 be the beginning of the end for coal-fired power in the US? Source: Adobe Stock/Snap Happy.

A recent US Energy Information Administration report covered by Reuters states that generators produced 101.86 million megawatt hours (MWh) of electricity with gas in November versus just 87.78 million MWh with coal, the lowest monthly level since May 1980 when monthly coal use was 84.88 million MWh.

How Coal Lost Ground

After more than one hundred years during which coal was the dominant fuel for power generation, some analysts think that when the final data for December is in, 2015 will prove to be the year natural gas took over. Read more

We recently wrote about how the spending bill signed in December favors solar power with better and longer renewable energy tax credits than it gives to wind power. However, solar also did better in the extenders” bill than the one technology responsible for generating the most energy from renewables in the US today: biomass.

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The tax extenders package benefits biomass power with an extension of the Section 45 production tax credit (PTC). The PTC for technologies other than solar or wind has been extended for two years, through Dec. 31, 2016. The incentive amount for wind, geothermal, and “closed-loop” biomass — the kind that does not create carbon dioxide — is $0.023 per kilowatt hour. For other eligible technologies such as fuel biomass, municipal solid waste, landfill gas and others, the credit is $0.012 per kw/h.

Can sugar cane bagasse solve our clean electrical power generation problems? Source: Adobe Stock/ idmanjoe.

Can sugar cane bagasse solve our renewable electrical power generation problems? Source: Adobe Stock/ idmanjoe.

In contrast, the legislation allows solar power companies to keep claiming federal tax credits at 30% of the price of a solar array. The credits, which apply to home solar kits as well as big commercial installations, will be good through 2019. After that, though, the credit will begin to drop, declining to 10% in 2022. Credits through 2022 vs. $0.012 cents per kw/h for one year? Even wind did better than biomass with its $0.023 cents per kw/h and an extension of those credits through 2019.

What is Biomass?

Biomass is biological material derived from living, or recently living organisms. In the context of biomass for electrical power generation, this is often used to mean plant-based material, but biomass can equally apply to both animal- and vegetable-derived material. Woodburning stoves are a primitive form of biomass heating. Ethanol for cars also falls under the biomass category as “biofuel” but it’s not used for electrical power generation.

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29 States that are challenging the Environmental Protection Agency‘s Clean Power Plan on Tuesday urged the US Supreme Court to block the controversial regulations slashing carbon emissions from existing power plants while they’re being litigated, after the Washington, D.C. Circuit refused to issue a stay last week.

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The D.C. Circuit said Thursday that states and industry groups challenging the Clean Power Plan hadn’t satisfied the strict requirements for granting a stay.

In its Supreme Court application for a stay, West Virginia and 28 other states and state agencies argued that a majority of justices would likely agree that the US Environmental Protection Agency doesn’t have the Clean Air Act authority to craft the rule.

The MATS Precedent

The states might have a strong case for the stay simply because the High Court — at least a 5-4 majority of the justices — sided with them in an earlier case, last year, that pitted the EPA against a similar group of states involving its toxic emissions rule, which tried to limit mercury and air toxics, aka MATS.

That ruling set a major precedent for federal agencies, that they had to consider compliance costs before laying down rules and regulations. This would seem to favor the states filing suit to stop the CPP, as its compliance costs are not calculated, in any way, into the “plan.”

States are, rather, given up to three years to come up with their own plans to implement the CPP, although they may elect to have the EPA do that work for them.

The Effect of a Stay

Of course, the Supreme Court still might not stay the rule while the case is heard and simply wait for the D.C. circuit — which did move the case up on its docket to June — to rule and then hear an appeal to its decision, no matter which side wins. That would mean states would need to comply for a process that could take at least a year to shake out in the legal system.

Remembering that the EPA would only need to sway one justice to its way of thinking, then, perhaps the compliance process playing out over a year could favor the federal government. But, considering that Justice Scalia wrote the opinion in the MATS case, the precedent seems to be staunchly against them.

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“It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. Statutory context supports this reading,” Scalia wrote in the MATS decision.

An appeals court will allow the EPA Clean Power Plan to stay in effect while it is argued in court and China’s plans to tame its largely state-run metals producers are starting to become more clear.

Clean Power Plan Will Stay in Effect

The Washington D.C. Circuit on Thursday refused to put the Environmental Protection Agency Clean Power Plan on hold until legal challenges to the rule are completed, but they did fast-track a trial on the legality of the new rule.

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The Obama administration considers this an early victory as it looks to defend and implement the sweeping regulations that would slash carbon emissions from existing power plants.

29 States and several industry groups petitioned to overturn the CPP or, at the very least, block it from being implemented while the legal battle plays out. They’ve argued that they’ll be irreparably harmed by starting the compliance process, even though they’re likely to succeed in convincing the court that the rule is illegal.

However, the D.C. Circuit panel shot the request down in a two-page order, though it said the appeals court would expedite the consideration of the case and schedule oral arguments for June 2.

China’s Metals Transition Plan

China’s plans to set up funds to manage coal and steel capacity closures and stockpiling schemes for metals such as aluminum have offered nervous markets some clarity on the likely future make-up of the country’s sprawling and predominantly state-run metals and mining industries. But it’s still way too early to tell if these initiatives even can be successful in taming overproduction.

As the world’s largest producer of aluminum, steel and other metals, and the biggest consumer of copper and iron ore, China is crucial to global metals markets which have slumped in the past year as Chinese industrial demand growth slowed.

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After weeks of talks between government officials and leading metals producers, Beijing looks set to take a direct approach to managing capacity cuts and layoffs in coal and steel. It will provide smaller-scale financing deals to groups of producers of non-ferrous metals, such as aluminum, for stockpiling and capacity cutback initiatives.

Greece’s highest court overturned its government’s decision to stop Eldorado Gold‘s mining operation and Johnson-Matthey has lifted its estimate of last year’s platinum market deficit.

Eldorado Gold Wins Greece Gold Mine Appeal

Greece’s top administrative court has annulled the government’s decision last year to revoke Eldorado Gold‘s mining license, according to court documents published on Wednesday. The Canadian mining company had appealed to Greece’s top court to overturn the ban on its plans to develop gold mines in a forested area of northern Greece, in a case widely seen as a test of the new leftist government’s approach to foreign investment.

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Eldorado has put about $700 million into the project since 2012 and planned to invest another $1 billion to develop two mines at Skouries and Olympias sites in Halkidiki. Greece’s government initially revoked its permit in August, saying the tests for a so-called flash-melting method the company planned to use to ensure there would be no environmental damage did not take place on the spot, but rather outside Greece.

Johnson-Matthey Lifts Platinum Estimate

Johnson-Matthey has lifted its estimate of last year’s platinum market deficit after a surge in Japanese bar investment late in the year, though it cut its expectations for the palladium market shortfall.

Speaking at ETF Securities‘ annual investment conference on Wednesday, JM’s general manager for market research Peter Duncan said he expected deficits for both metals to persist this year, although he admitted this may have little impact on prices.

The company lifted its estimate for last year’s platinum market deficit to 702,000 ounces from 652,000 ounces in November, which Duncan cited in the earlier presentation. He credited the change to both an upswing in investment and a 13% drop in recycling.

Platinum hit its weakest point in more than seven years on Wednesday at $812.09 an ounce.

This is part two of a series on the potential of lithium for energy storage and the investor reaction. See part one first if you missed it.

California is said to have ordered its electricity firms to offer 1.3 gigawatts of non-hydroelectric storage capacity within five years, more than double the 0. 5GW of batteries plugged into grids around the world today.

It remains to be seen how popular Tesla’s “Powerwall” electricity storage devices will become, but as the price comes down through competition and technology improvements they will prove popular in countries where solar panels can supply domestic power economically such as Australia and the southern US, or where power supply is intermittent as in India or South Africa.

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So, the market is looking good for lithium even though the technology still needs considerable improvement to achieve truly large-scale uptake. As the Argonne National Laboratory in Chicago is quoted in the Economist as saying, large-scale batteries need to offer hundreds of miles of driving range, be rechargeable in minutes instead of hours, and provide power at costs comparable with natural gas before they can take off. In the meantime, though, supplies of lithium are not, as was the case with rare earths, held in the stranglehold of one country. As this graphic courtesy of the Economist shows, supplies are already well established from several stable, developed mining countries.

Lithium_sources

Source: US Geological Survey.

Lithium minerals have been used for years in the ceramics and glass industry according to the US Geological Survey, so extraction is not a new technology and nor is the supply chain undeveloped.

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When US lawmakers voted to extend lucrative federal subsidies for renewable energy as part of the $1.15 trillion spending deal last month, wind and solar companies celebrated as they looked forward to passing those savings along to customers and reducing their own production costs.

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But are some renewable technologies more promising than others?

You can install PV panels on our roof, collect a tax credit and bring down your own electricity bill. A wind turbine? Not so much. Source: Adobe Stock/rob245.

You can install PV panels on your roof, collect a tax credit and bring down your own electricity bill. A wind turbine? Not so much. Source: Adobe Stock/rob245.

For solar, this is an unqualified windfall as the consumer products manufacturers such as SolarCity and SolarWorld make, mostly silicon photovoltaic panels, can qualify homeowners, banks and other end users for tax credits, but the picture is still murkier for far more costly and technically challenging wind power.

Solar’s Sweet Deal

The legislation allows solar power companies to keep claiming federal tax credits at 30% of the price of a solar array. The credits, which apply to home solar kits as well as big commercial installations, will be good through 2019. After that, though, the credit will begin to drop, declining to 10% in 2022. It will remain at 10% unless legislation eventually eliminates the credit before or after 2022. Read more

Home sales unexpectedly fell last month and China has required its industries to report greenhouse gas emissions.

Home Sales Fall

The National Association of Realtors‘ index of pending home sales fell 0.9% in November after rising 0.4% in October.

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The median projection of economists surveyed by Bloomberg anticipated a 0.7% increase for November.

China Requires Carbon Emission Reporting

China issued national standards for industrial firms to report their greenhouse gas emissions as part of the country’s plan to launch a national carbon market in 2017.

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The new standards, issued by the National Development and Reform Commission (NDRC) on Wednesday, will enable the China to create a statistical system for greenhouse gas emissions and support the establishment of a national carbon trading scheme.

We sometimes indulge our more geeky side and cover topics that, while metals related, are never going to significantly move the needle on metals consumption, pricing or supply and demand. We reserve the right to be geeky.

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While a recent development recently discussed by Mark Shackleton, Professor of Finance and Associate Dean Postgraduate Studies at Lancaster University definitely falls under the “geeky” heading, it could, one day, potentially move the needle for tin demand if the economics permit.

Carbon Capture and Carbon Taxes

One of the biggest dynamics in the next 10 years will be how legislators approach carbon emissions. If they seek to control emissions by putting a significant price on carbon, it will have profound implications for the metals industry, along with just about every energy-consuming activity out there.

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