A slew of protectionist measures in response to soaring food prices by several major exporters has raised alarm bells over food security in the short term. In the longer term, it raises questions of how food security priorities can be aligned with those of effective climate action. Read more
Food protectionism: Starving the world of effective climate response?
A slew of protectionist measures in response to soaring food prices by several major exporters has raised alarm bells over food security in the short term. In the longer term, it raises questions of how food security priorities can be aligned with those of effective climate action
The global pandemic in 2020 has triggered a food and nutrition crisis that has continually gotten worse and is fuelling dangerous levels of insecurity. This is the key takeaway of the UN State of Food Security and Nutrition report published on July 6. The number of people affected by hunger grew sharply by over 22% compared to pre-pandemic numbers to 828 million people in 2021. Following a period of relative stability between 2015 and 2019, the proportion of the global population jumped by 1.8 percentage points from 8% to 9.8% between 2019 and 2021. Meanwhile, nearly 30% of the world or 2.3 billion people recorded at least moderate food insecurity, an increase of nearly 350 million people since the outbreak of COVID-19.
The situation only seems to be getting more dire in 2022, with the World Food Program estimating the number of people currently enduring insufficiency of food at 871 million across 91 (mainly developing) countries. The surge in food insecurity has come alongside protracted increases in food prices since the beginning of the pandemic.
The UN Food and Agriculture Organisation (FAO) revealed in its March update that food prices had increased by a whopping 70% since mid-2020. A more recent estimate of the increase in food prices comes from the World Bank’s Agricultural Price Index, which has registered a hike of over 34% as of June 30, 2022 as compared to January 2021. Heading into the second half of the year, more warnings have ensued that given the spike in input costs, directly affected by higher energy prices and supply chain disruptions emanating from Russia’s “special military operation” in Ukraine, there could be further elevation in food prices during the remainder of 2022.
How climate change is making a bad situation worse
Climate change will increasingly be detrimental to crop productivity as levels of warming progress—the IPCC made this high confidence statement back in 2019. The sentiment was emphasised again in 2021 and 2022 in the second and third instalments of the IPCC’s Sixth Assessment Report.
Over the past few years, the impacts of climate and extreme weather on India on agricultural and food commodity prices seem to have crystallised like never before. India, for example, recorded its hottest March in 122 years this year, the direct result of which was a significant drop in wheat yield. India was to increase its wheat production to help ease the global shortage of the crop after the invasion of Ukraine, which is a major supplier to the west. Similar fears have now surrounded India’s rice yield for the year after a staggered onset of the monsoon has delayed sowing in several parts of the country.
But climate-change-induced heatwaves forced India to ban exports of wheat in May this year in order to provide enough domestically. The ban on wheat followed similar restrictions on sugarcane exports. India is not the only country to have a protectionist response to the food crisis. Indonesia banned palm oil exports, while China restricted its global supply of fertilisers following the Russian invasion. Malaysia last month announced an export ban on chicken this week amid fears of domestic shortages. Piling export restrictions, particularly in major agricultural hubs, prompted the WTO to issue a warning of the dangerous implications of continuing such bans.
The rise in fertiliser and other input prices have added to soaring food costs, which have been taking a toll on food security and nutrition even in developed parts of the world, including the US, UK, Europe and Australia, from which they have typically remained insulated. The continuation of a multi-year protracted drought in several parts of Africa has further heightened the risks of food insecurity, especially in import-dependent countries already reeling from record high food prices and disrupted supply chains.
Extreme weather, pest attacks and crop diseases that have plagued global agricultural output in recent times have all been linked to climate change. What doesn’t help matters is that global food production of essential crops is concentrated in a small number of countries that are especially vulnerable to the effects of climate change.
Regions that are not exposed to such extreme events, but depend on food imports, are also, therefore, indirectly affected. In other words, we are all in this together, even if the degree of impact varies. Even the IPCC, in its latest report on adaptation, emphasised on international cooperation as an important tool for effective climate action.
The third wave of protectionism
Sadly, the exact opposite is evident from government responses to the string of recent crises. After nearly three decades of seemingly unstoppable globalisation across economic value chains, the outbreak of the COVID-19 pandemic has exposed the fragilities of global supply chains. The pandemic itself set off the first wave of protectionism as governments sought to control vaccine technology and supply chains while pushing for global mandates. The rollercoaster in energy markets through the lockdowns, the recovery and the conflict in Ukraine has spurred growing protectionism in energy. Food and agricultural commodities over the past few months have now carried the third wave of protectionism in the last two years.
Although food supply chains have become substantially more dispersed in the post-Cold War era, supplies have remained fairly concentrated. Network analysis conducted on global food trade patterns published in 2021 by the Chinese Academy of Sciences shows that the food trade network has evolved from unipolar to multipolar.
While major food producers have changed since 1992 and more countries have emerged export hubs, 80% of all food exports still come from just 10 countries. At the same time, the imports have shown increases in both the number of recipient countries and extent of dependence. Interestingly, Ukraine and Russia replaced other major European agricultural producers following the end of the Cold War to become major suppliers of multiple food staples and agricultural inputs to the global market. The conflict in Ukraine and trade sanctions on Russia that have followed have effectively curbed one of the most export hubs in global food trade, widespread effects on supplies, prices and food security across the world.
According to the Food and Fertilizer Export Restrictions Tracker maintained by IFPRI, export limitations at the height of restrictions in April-May this year accounted for almost 17% of global trade of calories from 23 countries, including some major cogs in global agricultural supply chains like India, Indonesia, Argentina, Turkey and Russia. Another eight countries have introduced new export licensing measures.
As far as fertilisers go, current restrictions affect over 20% of global supplies of all major categories (nitrogenous, phosphates and potash). Current levels of restrictions have not been seen since the 2008 food crisis that set off several conflicts and food riots around the world. The current food crisis, however, is compounded by a cocktail of ominous developments in the geopolitical arena and an aggressively inflationary environment following stimulative spending undertaken to keep the global economy afloat during the pandemic.
Under the current set of geopolitical and economic variables, food is fast becoming the new oil. India, for example, has decided to permit the export of wheat to Indonesia in exchange for the latter’s palm oil. These export restrictions and government-to-government deals, however, offer a myopic solution to a problem that transcends borders, and have disproportionate impacts on the world’s poorest and most vulnerable.
The seen and the unseen
Global food prices are unlikely to stabilise with such short-term measures. Import-dependent countries such as those in Africa are already getting the short end of the stick, as are low-income households in developed countries. The surge in food prices due to protectionist measures affects all food importing countries, but also exacerbates inequality between and within countries as well. While rich countries and populations can afford to keep buying the high prices, populations in poorer economies are priced out and forced into dietary compromises. Within these countries, low-income households and other vulnerable groups like women, children and the elderly bear a disproportionate brunt of price escalations and limited access.
The past month has seen energy prices come down due to a surging dollar and forecasts of recession-led demand downturns and export restrictions have slightly loosened as well. They, however, remain well above pre-pandemic levels and hyper-sensitive to developments in geopolitics, energy prices, supply chain disruptions, and the impacts of unfavourable weather. A recession, which seems all but confirmed at present, will likely keep food markets tight if not make them worse.
The frailties in global food supply chains have been laid bare multiple times since the COVID-19 pandemic. While calls for collaborative action to alleviate the global food crisis have been raised at multiple inter-governmental platforms, a natural response in many import-dependent countries, particularly in Africa and Asia, has been to prioritise food security. With the effects of climate change only likely to strain global food supply chains, meeting the objective of food security could see widespread changes in land use and more land coming under cultivation. Will this lead to an expansion and deepening of the environmental imprints and carbon footprints?
Overseas development aid has increasingly been aligned with food security, evidenced by the $5 billion pledge made towards global food security by G7 countries. So has private capital, as was clear at the World Economic Forum in Davos in May where the combination of food security and climate concerns culminated in the resurgence of the “climate friendly farming” lexicon. But the problem is far from being simple enough to solve by throwing money at it. With mega billionaires and investment giants showing massive interest in agricultural technology under the guise of climate change mitigation and adaptation, the world’s food shortage problem could well turn out to be yet another David versus Goliath battle.
This is the first in a series on the evolving food security crisis and how it intersects with the future of climate action
Monsoon rain in northeast India showing a declining trend: IMD
Every year, news cycles are flooding with updates of incessant monsoon rain in northeast India, especially Assam and Meghalaya, and this year was no exception. A study by the India Meteorological Department (IMD), however, found that rainfall over the region has been decreasing over the past three decades, indicating a change in pattern because of climate change.
According to the study, while the quantum of rainfall is decreasing, extreme rainfall events are on the rise in the region. This is consistent with the findings of the Intergovernmental Panel on Climate Change (IPCC). So far this year, at least 121 people have died since April 1 in Assam and 2.5 million people have been affected. Scientists have linked the erratic and early rains in the northeast and Bangladesh to climate change.
Monsoon covers India earlier than usual, sets stage for a rainy July
The southwest monsoon covered the entire country on July 2, six days ahead of schedule, the India Meteorological Department (IMD) announced last week. A combination of favourable conditions has seen monsoon progress picked up in the second half of June after a staggered onset which saw June rainfall record a deficit of 8%. The formation of a low pressure zone off the coast of Odisha has moved northwards and inland over the past week, setting in motion an active phase of the monsoon. Heavy rains this week have battered multiple locations across the country, particularly in the along the west coast, east coast and the Himalayan region.
50,000 people told to evacuate after floods in Sydney; Typhoon Chaba hits China
Australia’s largest city, Sydney, was hit by floods over the past weekend. Around 50,000 people were asked to evacuate their homes after the city received eight months of rain in just four days. According to experts, flooding has become a more frequent event in the region because of climate change and a La Niña weather phenomenon.
In China, Typhoon Chaba was downgraded to a tropical depression but is expected to bring heavy rain to central and eastern China. It already brought heavy rain to the southern provinces that are already reeling from incessant rainfall and thunderstorms.
Freshwater lakes evaporating faster than previously thought: Study
Freshwater lakes are disappearing at a rate that is faster than previously thought, according to a new study published in the journal Nature. Warming temperatures and a rise in solar radiation because of changing cloud cover patterns has led to more evaporation of water from these lakes, according to the study.
Loss of ice cover has also exasperated the problem. The study observed evaporation rates in 1.42 million global lakes using satellite data. It found the long-term lake evaporation is 1,500 plus or minus 150 cubic kilometres per year, which is 15.4% larger than previous estimates.
Cement CO2 emissions doubled in past 20 years: Data
Carbon dioxide emitted during cement production has doubled in the past 20 years, according to new data. According to data released by Norway’s CICERO Center for International Climate Research and the Global Carbon Project, last year, global emissions from cement production for buildings, roads and other infrastructure stood at 2.9 billion tonnes of CO2, more than 7% of global carbon emissions. In 2002, this figure stood at 1.4 billion tonnes. This spike has been largely driven by China, where cement emissions have been estimated to grow at a rate of 2.6% a year.
G7 leaders backtrack on key climate commitments at summit
The G7 summit did not end on a good note for climate activists. Member countries have given themselves room to continue non-fossil fuel investments in “exceptional circumstances”. The countries had previously vowed to end public support to fossil fuels by 2022. G7 leaders also backtracked on a commitment to making half of all vehicles zero-emission by 2030. This decision was primarily taken because of pressure from Japan. Experts said these commitments were watered down largely because of the energy crisis triggered by Russia’s invasion of Ukraine. There was also pressure from UK and EU automakers, according to experts.
Prime Minister Narendra Modi, meanwhile, attended the summit and called on rich countries to support India’s efforts to combat climate change while making a case for the country’s emerging market for clean energy technology.
EU makes progress on climate laws, but will energy charter hamper efforts?
The past few weeks have been busy for the European Parliament with members debating and bringing the bloc’s climate laws into force. Following passage of laws regarding the revision of the EU’s emissions trading system (ETS) and Carbon Border Adjustment Mechanism (CBAM), yet more laws were codified, including the setting up of a multi-billion Euro fund. But while the European Parliament has been making good progress, a 28-year-old treaty protecting high-carbon investments has been a thorn on the side.
An attempt to modernise the 1994 Energy Charter Treaty (ECT) achieved some degree of success this month. A fresh deal now removes any legal protection for new fossil fuel projects in the UK and EU. This 10-year transition period, however, has been met with criticism from environmentalists who believe a complete exit from the treaty is the only way for the EU to meet its climate objectives.
Developers in India can now buy plantations from private owners for compensatory afforestation
New rules have allowed project developers to buy land with plantations from private owners and present them as compensatory afforestation. According to the Forest (Conservation) Rules 2022, developers who divert forest for non-forest activities must purchase land that is 10 ha and have trees that are at least five years old with a density of 0.4 or more. Previous rules stipulated developers had to purchase land that was not deemed a forest and bear the cost of compensatory afforestation on the same plot.
Farmers’ protests rattle Dutch plans to curb livestock emissions
The Dutch government is facing widespread protests by farmers for its plans to drastically cut emissions from its agricultural sector. The protests, which have been simmering since the passage of the Dutch National Climate Agreement in 2019, have escalated over the past month after the government released its targets for reducing emissions in rural areas. The past two weeks have seen protestors blockade several roads with tractor rallies attended by several thousands of farmers. Under pressure from court rulings which have blocked permits for infrastructure due to the country’s missed emission targets and having signed on to the EU’s climate action plans, the government has sought to cut nitrogen emissions by up to 70% in 131 locations close to areas close to protected natural zones (Natura 200 areas). The plans to cut nitrogen emissions, mainly from nitrogen oxide and ammonia, by 50% by 2030 would see farmers cut their emissions by 40%, implying a 30% reduction in livestock. The government, which has termed the emission cuts as an “unavoidable transition” has earmarked 24.3 billion Euros help push through the plan and finance the reduction in livestock. Importantly, farmers are not protesting the need for emissions reductions as a whole, but rather have expressed discontent that they are being disproportionately burdened for historic emissions for which they are not responsible.
CPCB lowers PM emissions limits for industries using small boilers
Industries that are run on small boilers won’t be able to pollute more, the Central Pollution Control Board (CPCB) has revised the particulate matter emission standards for capacity less than two tonnes per hour. The emission limit was reduced to 500 milligrams per cubic metre from 1,200 mg / NM3.
As per a CSE study, a majority of the boilers in the industrial clusters of Delhi-NCR, covering Rajasthan, Haryana and Uttar Pradesh, are baby boilers. It’s important to regulate and control emissions at these units because installing continuous emissions monitoring systems (CEMS) and air pollution control devices is not economically feasible.
The emission norms for such boilers, however, was quite relaxed compared to that for big boilers installed in the organised sector. Thus, industries with small boilers were given huge margins to pollute the environment.
Delhi, North-West plains more polluted this summer than 2021: Study
The Particulate Matter PM10, PM2.5 and nitrogen dioxide (NO2) pollution in Delhi was worse this summer compared to last summer, NCAP Tracker analysis revealed. From March to June, PM10, PM2.5 levels were above the safe limit, and NO2 rose in March and April. Pollution from coal-based electricity was the main cause because power demand was more this year, one of the hottest summers. Delhi, Mumbai and Bengaluru were among the 10 cities that breached safe limits during summers.
On June 10, India’s power demand peaked at 211 GW against the peak requirement of 186 GW in 2021 and 75% of this was provided by coal-fired thermal power plants. The heatwave also pushed up the demand for air conditioning resulting in higher coal consumption reflected in higher PM 2.5 levels.
Delhi did not have a single day when PM 2.5 met the CPCB’s 24-hour safe limit of 60 ug/m3. Mumbai had only nine days of safe PM 2.5 concentration. Such prolonged exposure can have an impact on human health, the analysis revealed.
Pollution warnings should be directed towards polluters, rather than people: Study
A new air pollution study based in London concludes that air pollution data and warnings place health responsibility on people when actually warnings need to be directed towards polluters. The Oxford study analysed the ways Londoners access air pollution data. The study noted a large number of systems—54—in operation. The study found that an increasing number of commercial companies are providing data to create a market for the purchase of personal sensors, masks and air filters.
Current systems have their weaknesses. If people are seeking air quality information associated with their exact physical location, most services are incapable of providing it, the author said.
The study highlighted that the narrow focus on messages to help people protect themselves when air pollution gets high was sensible, but risks transferring responsibility for the problem to the individuals that suffer the consequences.
Instead of being directed towards people who breathe poor air, the information should be directed towards polluters. The study noted that in 1955, the pollution warning system made industries activate plans to lower boilers and use carpooling schemes, while residents were asked to drive less and stop burning rubbish.
ACME to set up 1.5 GW green hydrogen project in Tamil Nadu
Indian renewable energy developer Acme will set up a ₹52,474 crore ($6.61 billion) green hydrogen and ammonia project in Tamil Nadu with 1.5 GW of electrolysis capacity and 1.1 million tonnes of ammonia synthesis, which will be run on a 5 GW solar plant. The project will produce green ammonia through the ammonia synthesis loop process with electrolysis-based hydrogen.
The project will be the largest such plant in India, which will help de-carbonise sectors such as fertilisers, power, refining, and steel, among others. The project requires four ingredients—solar radiation, access to port, availability of land and skilled resources. Tamil Nadu offers all of these, reported PV Magazine.
Jharkhand 2022 solar energy policy to install 4 GW capacity by 2027
The state of Jharkhand announced the Solar Energy Policy 2022 to install 4 GW of solar power generation capacity by 2027. This includes about 3 GW of utility scale solar, 720 MW under distributed generation, and 280 MW under off-grid mode. Solar parks, canal-top solar, floating solar, will be part of the schemes that will provide a single-window system, payment security mechanisms, and land arrangements through land banks to encourage private investors.
Jharkhand also proposes the setting up of a dedicated solar power cell, statutory approval within a maximum of 60 days, setting up 1,000 solar villages, schemes to encourage economically backward villagers, and cross-subsidy to promote the adoption of solar energy.
India added 15.4 GW RE in 2021, third-highest after China (136 GW) & US (43 GW)
According to a global status report, India added around 15.4 gigawatts (GW) of renewable power capacity in 2021, the third-highest after China (136 GW) and the United States (43 GW). The REN21’s renewables 2022 global status report said aftershocks of the Covid-19 pandemic and a rise in commodity prices led to a disruption in renewable energy supply chains and delayed renewable energy projects. The subsequent 4% increase in global energy demand was mostly met by fossil fuels resulting in record carbon dioxide (CO2) emissions, according to the report.
India is now the third-largest market in the world for new solar photovoltaics (PV) capacity and ranked fourth in the world for total solar energy installations (60.4 GW) by overtaking Germany at 59.2 GW and following China (305.9 GW), US (121.4 GW) and Japan (78 GW).
Tata Power, JSW announce big renewable energy plans
Speaking at the company’s annual meeting, Tata Power chairman Natarajan Chandrasekaran stated that after adding 707 MW of RE capacity in FY22, the company is set to double down on its renewable investments over the next five years with a planned capital expenditure of Rs.75,000 crore (~$9.45 billion). “This has increased our clean and green portfolio to 34% of total capacity and the company aims to raise it to 60% in the next five years,” Chandrasekaran said. He added that the company will seek to more than double its energy generation capacity from the current 13.5 GW to 30 GW by 2030, 80% of which will come from renewables. The company also announced the setting up of a 4 GW solar cell and module manufacturing capacity in Tamil Nadu with an investment of ₹3,000 crore. Meanwhile, JSW Steel has earmarked Rs.10,000 crore ($1.26 billion) to reduce and replace coal used in production with high-efficiency technologies and renewables and bring down the company’s carbon footprint. “We have earmarked ₹10,000 crore for investments to reduce our carbon emissions through various initiatives, such as increasing the use of renewable energy to replace thermal power, reduce our fuel rate through improved raw material quality via beneficiation, and deployment of Best Available Technologies (BAT),” stated JSW Group chairman Sajjan Jindal.
Clean energy boom leaves fossil spending behind, solar now cheapest power in history: IEA
According to the International Energy Agency (IEA), global investment in renewable energy will outpace fossil fuel spending in 2022 as uncertainties over future energy demand scenarios keep oil, gas and coal capital expenditures below the levels seen prior to the pandemic in 2019. Clean energy investment is likely to exceed $1.4 trillion in 2022, according to the IEA’s world energy investment report for 2022. Clean energy market witnessed annual growth of 12% since 2020.
The IEA’s World Energy Outlook 2020 four “pathways” to 2040 predict a major rise in renewables. The IEA’s main scenario has 43% more solar output by 2040 than it expected in 2018, showing that solar power is 20-50% cheaper than thought.
The IEA says it is too soon to declare a peak in global oil use, without climate action. It says demand for gas could rise 30% by 2040, unless stopped with policy action. For the first time, the IEA includes detailed modeling of a 1.5°C pathway that reaches global net-zero CO2 emissions by 2050. It says individual behaviour change, such as working from home “three days a week”, would play an “essential” role in reaching this new “net-zero emissions by 2050 case”, reported Carbon Brief.
156 GW: China’s clean energy growth outlook for 2022 keeps getting bigger
As reported by Bloomberg, China will install a record 156GW (gigawatts) of wind turbines and solar panels in 2022, according to Quoting Yi Yuechun, vice dean of the China Renewable Energy Engineering Institute (CREEI), a think-tank that supports the National Energy Administration (NEA), the country’s top energy planner. The CREEI forecast includes 100GW of solar, 50 of onshore wind and 6 of offshore wind. The CREEI noted that it is the “most bullish yet among government thinktanks and industry associations”. The outlet adds that the figure of 156GW would be a “25% jump” from the previous record set in 2021, according to BloombergNEF data.
China’s leaders mull banning solar panels from farmland
China may ban developers from building panels on farmland as the government prioritises the importance of food security against its clean energy goals. Three ministries, including the NEA have sought comments on a draft proposal that would make forests and cultivated farmland off-limits for solar development, according to a report by industry media outlet Polaris Solar Network, citing a copy of the document.
Haryana, Chhattisgarh unveil new EV policies, eye a share of the manufacturing pie
Indian states of Chhattisgarh and Haryana have released their EV policies with a view to accelerate adoption and manufacturing. Haryana has cleared the provision of subsidies and exemptions up to Rs10 lakh as part of an early bird benefit transfer scheme. For manufacturers, the state is offering 100% reimbursement of stamp duty along with exemptions on electricity duty for 20 years. Manufacturers will also be eligible for reimbursements up to 50% of the net SGST and an employment generation subsidy of Rs48,000 per employee per year for 10 years. The state has also renewed its pledge of converting its state transport bus fleet to 100% non-fossil fuel based by 2030. Targeting research and development in the emergent technology, Haryana has provided multiple grants and subsidies.
The Chhattisgarh government, meanwhile, has offered grants to cover 25% of the upfront costs of setting up manufacturing plants and machinery. The government has also promised the allocation of 500-1,000 acres of land to set up an EV manufacturing park. Consumers will be provided exemptions on registration fees and road taxes in a staggered fashion over the next five years. Capital subsidies of 25% up to a maximum of Rs.10 lakh per station will be provided for the first 300 fast charging stations in the state and 100% reimbursements of SGST for charging and swapping stations has been approved. The state aims for 15% of all new vehicle registrations by 2027 to be electric.
US: 16 states suing US Postal Service over lack of commitment to EVs
The US Postal Service will be sued by 16 states, including Delware, Pennsylvania and New Jersey, over its lack of commitment to switching the majority of its fleet to EVs. The lawsuit states that the USPS has committed to converting only 20% of its 165,000 gasoline delivery trucks—that run at an average fuel economy of 8.2mpg — in its future plan, called Next Generation Delivery Vehicles. The service’s union itself is said to be open to the transition, but its decision makers reportedly overestimated the cost of EVs (as replacement vehicles) and massively underpriced the price of gasoline 20 years down the line in its assessment of what vehicles would be the most suitable replacements.
Also, the lawsuit, jointly being filed by CleanAir Now and Sierra Club, alleges that the 30-year old trucks are bad for the air pollution profile of the routes they service, and that by not investing in EV chargers that could also be used by the general public, the USPS is depriving itself of an additional revenue stream. The service defended itself by saying that the upfront cost of acquiring EVs to convert 95% of its fleet would be too high to be justified over the 20-year lifespan of the vehicles.
China: CATL unveils 1000-km EV battery
China’s EV manufacturing giant, CATL, unveiled its latest iteration of EV batteries and the new technology will enable an EV to run 1,000 kms on a single charge. Named Qilin, the battery is the third iteration of the manufacturer’s cell-to-pack (CTP) technology and boasts a class-leading energy density of 255Wh/kg, besides improved thermal stability. It can also be fully recharged in 10 minutes under fast charging and is slated to hit commercial production in 2023.
India signs deal with Australia for critical minerals
India’s Khanij Bidesh India Ltd. (KABIL) signed a three-year MoU with Northern Australia to source critical minerals that it needs for its solar power and EV industries. Worth AUD 5.8million, the deal comes at a time when the supplies of lithium and other minerals from Ukraine’s Donbas region, important to the global energy industry, have been constrained over Russia’s military invasion of the country. India’s new deal will require an initial investment of USD 6 million (from both sides) for due diligence and to identify the best spots for extraction.
US: Mississippi posts highest uptake of alternative vehicles since 2014, Florida posts 0%
A new survey revealed that the US state of Mississippi had posted a 241% growth in its uptake of alternative vehicles — mostly EVs — since 2014, which was the highest of all states. The figure was surprising as the state sits in a region that traditionally favours gasoline cars, much more so than California, Washington or Oregon. The second highest rate of adoption came from Hawaii (116.5%), and Utah posted 97%, with both the states again not being the expected markets for electric vehicles. On the other hand, Florida’s rate of adoption stood at 0%, but the worst performers were South Carolina and South Dakota, where the share of the vehicles had actually shrunk since 2014.
Offshore oil and gas exploration in the Andaman sea imminent
The Indian government has reportedly accelerated plans to commence oil and gas exploration in the Andaman deep water basin. According to reporting in The Economic Times, the Centre is putting together a funding plan for an ONGC-led drilling campaign and considering easing clearances to fast track the project. Offshore drilling in the Andaman Sea could start as early as the post-monsoon season with ONGC exploring collaborations with ExxonMobil and Shell to drill 3-4 wells under the project at an estimated cost of Rs350-400 crore. ONGC currently holds rights over three blocks and Oil India holds drilling rights over one block in the Andaman offshore waters.
Coal workers’ strike over wage increase demands likely to worsen shortages in India
State-owned coal mining company Coal India Limited (CIL) is currently contending with the possibility of a strike from the entirety of its 2,52,000 workforce, who are pushing for an increase in wages. Trade unions representing a majority of CIL’s coal workers have held five rounds of meetings with the company, but remain far from any agreement. Non-executive workers, who form 94% of the CIL total workforce, are demanding a 47% increase in wages, down from the initial demand of a 50% hike after CIL offered a 3% increase. Worker wages at CIL, which are revised every five years, are currently estimated to have amounted to Rs. 40,700 crore ($5.2 billion) in the 12 months ended in March. While facing higher costs of production, CIL has spent more than a third of its revenue on salaries in the past year.
Russia: Rising oil and gas demand tempers effect of sanctions
Russian economic output is set to contract by only 3.5%, instead of the projected figures of up to 12% by its own estimates, as the country reportedly rakes in record oil and gas revenues despite the global sanctions. The country has found takers for its increased oil exports in several Asian countries that are keen to take advantage of the lower prices, even though other areas of its economy have suffered, such as its automotive production losing 97% of its output since the sanctions were instituted. The demand for oil has been so high that Russia’s oil production was up 7% in June (versus its lows at the start of its military offensive), and despite its falling output of natural gas, it has been helped by the global spike in its demand as a “bridge fuel” for the energy transition.
Biden govt sued over resuming oil and gas drilling leases
The Biden administration was sued by a group of environmental organisations over its resumption of oil and gas drilling leases in Utah, North Dakota, Nevada and Montana. The lawsuit alleges that the leases violate the government’s own Federal Land Policy and Management Act, which necessitates the prevention of “undue degradation” of public lands, and would cause significant amounts of pollution. Some of the plaintiffs are the Centre for Biological Diversity and the Sierra Club. Interestingly, the plaintiffs’ research shows that despite promising a freeze on drilling leases by Joe Biden during his election campaign, in its very first year his government has issued leases 34% faster than the previous administration.
South Korea announces new energy plan, to re-introduce nuclear power
The new president of South Korea unveiled his government’s energy plan for the country, which aims to lower its dependence on fossil fuel imports from 81.1% in 2021 to less than 70% by 2030. However, the new plan will scrap the previous government’s nuclear phase-out policy and will raise the country’s share of nuclear power to 30% by the end of the decade — up from 27.1% in 2021. The plan also makes provisions for the country’s LNG storage and strategic oil reserves to be expanded, with the latter deemed necessary to ensure stable oil supplies, and the increase will be a part of South Korea’s new “special law on energy security” for fossil fuels and uranium. Most importantly, the new government will replace the country’s aging coal power capacity with LNG-fired plants.
Canada: Doctors’ group urges ban on ads featuring fossil fuels
A group of Canadian physicians and related occupations wrote an open letter to the country’s government, urging it to ban the advertising of gasoline vehicles and natural gas-powered cookstoves. The group alleged that the ads never highlight the severe negative consequences of the use of fossil fuels, and combined with the staggering amount of funding they receive, the ads are effective in drawing massive consumer interest. The group also said that nearly 80% of the funding for gasoline vehicles in Canada focussed on trucks and SUVs, and they (consequently) accounted for two-thirds of all vehicle sales in the region.
The group instead asked the Canadian government to follow the examples set by Norway and France, that require the ads to disclose the CO2 footprint of the vehicles and bar the use of terms such as “environmentally friendly” for the products in question. The letter additionally identified natural gas-fired cookstoves as a cause of elevated levels of nitrogen dioxide indoors, which has been known to irritate occupants.