Should the Nord Stream 2 pipeline face sanctions following this week’s air piracy by Russian ally Belarus? Oil company Shell faces continued protests and car manufacturers - and other industries - find the chips are down. In the hunt for rare metals, mining may come back to the UK. Will it cause as much pollution as mining for bitcoin - now opening new markets for coal-generated electricity? Restaurant chain Nando's announces plans to go carbon neutral by November while McDonald's is under siege from Animal Extinction protesters.
It’s Friday. It’s 28th May 2021 and I’m Anthony Day. Before you rush off to enjoy your Bank Holiday Monday, that's a public holiday for those not in the UK, take a moment to listen to the latest Sustainable Futures Report.
You're no doubt well aware that this week the Belarus government sent a fighter jet to intercept a Ryanair passenger service from Athens to Vilnius in Lithuania and forced it to land at Minsk. Passengers were detained for eight hours and journalist Roman Protasevich and his Russian girlfriend were arrested. There was international condemnation and the EU and Britain have both advised their airlines not to enter Belarus airspace and the Belarus national carrier is not allowed to enter those countries. In retaliation, there have been calls for sanctions to be imposed on the Nord Stream 2 pipeline, under construction by Russia to bring gas to Germany, as Russia has supported the action of Belarus.
Nord Stream 2
The pipeline has long been a controversial project. Back in the days of President Reagan the original Nord Stream 1 was opposed on the grounds that Russia would be able to hold Germany to ransom by threatening to turn off the gas. Surely nothing has changed as far as that is concerned.
President Joe Biden has said he opposes the $11bn (£7.8bn) project and his Secretary of State Anthony Blinken said during his confirmation hearing that he was "determined to do whatever we can to prevent the completion" of Nord Stream 2. The US has sanctioned operations related to the project, although only last week it lifted sanctions on the operating company and its chief executive. This is believed to be smoothing the path towards the first meeting between President Biden and President Putin which Reuters suggests could take place in Switzerland in the coming weeks.
Since the action by Belarus the US has now imposed sanctions on 13 vessels involved in the project prohibiting their dealings with US banks and companies. US companies are prohibited from supplying goods and services to a further 11 ships. Since they are all Russian-owned and Russian-flagged this is little more than a token gesture. Whether more serious sanctions will follow remains to be seen.
Gas is a Fossil Fuel
Quite apart from the political dimension, and whether Russia will have undue influence over Germany by controlling a significant element of its energy supply, how can the increased use of gas be squared with Net Zero 2050? The Nord Stream 2 corporate site says, “By 2035, the EU will need to import about 120 bcm more gas per year.” Burning that gas will release emissions. Of course, as it also says on the site, “Generating electricity from gas instead of coal produces ~50 percent less CO₂”. True, but it still produces CO2. Germany obtained 45% of its electricity from renewables in 2020 - more than the UK, more than the EU average. 24% came from coal and two thirds of that was lignite, a soft coal which produces much more pollution than just CO2. Replacing that with gas would beneficial, but it would still leave the Net Zero problem. Nobody is suggesting that the Nord Stream 2 is a temporary solution. A project like that will typically have a design life which will take us way beyond 2050, adding to CO2 in the atmosphere all the way. Carbon capture and storage? Nobody has made it work commercially because of the cost, and if some of the gas is burnt in domestic boilers there’s no way of capturing and storing carbon there.
Another quotation from the Nord Stream 2 website: “[At] 47,800 bcm: Russia has the largest natural gas reserves in the world.” Along with the oil, it is Russia’s principal source of wealth. If President Biden could prevent the completion of the Nord Stream 2 pipeline it would be a dramatic demonstration of his commitment to tackling the climate crisis. It would also be a direct challenge to Russia, it would make the pipeline investment worthless and reduce the value of their gas reserves.
As I said, it’s all political.
If you are in any doubt about how Russia would react I suggest you read Putin’s People by Catherine Belton. Fascinating! And frightening!
I have long said that dealing with the climate crisis is a political issue because it's only governments that have the power to take the necessary action. Having said that, if you look at the size and power of some of the global multinationals, it's clear that nothing will be achieved without their cooperation and it's not altogether clear how far governments can control them. That doesn’t stop individual people taking them to task. Oil company Shell has had its share of protestors recently. You probably heard about the fuss when the Science Museum staged an exhibition entitled “Our Future Planet” which included an item on carbon capture and storage for avoiding carbon emissions. A fuss because it was sponsored by Shell, one of the organisations, as people pointed out, responsible for the problem in the first place.
At the recent AGM, the company urged shareholders to vote for its plans to achieve Net Zero by 2050 but Legal & General Investment Management (LGIM), one of the oldest fund managers in the City of London, was among investors behind a significant shareholder vote against Shell’s climate transition targets. The revolt has been coordinated by a group called Follow This, which has opposed similar motions at BP.
Dutch pension fund Aegon and UK investment firm RWC Partners were preparing to back Follow This in calling for tougher targets at Shell. British hedge fund billionaire Chris Hohn also urged investors to side with the activist group. You may remember that I mentioned Sir Chris Hohn in a previous episode. He’s a self-made billionaire who has promised to use his fund’s $30bn of investments to “force change on companies who refuse to take their environmental emissions seriously”.
Both at BP and at Shell the directors won the vote, but at BP it was won by less than last year. Signs that the message is getting through.
Meanwhile, in the US this week Engine No 1, a tiny hedge fund, dealt a major blow to Exxon Mobil Corp by unseating at least two board members in a bid to force the company’s leadership to reckon with the risk of failing to adjust its business strategy to match global efforts to combat climate change. Over at Chevron shareholders voted 61% in favour of the proposal to cut so called "Scope 3" emissions, according to a preliminary count announced by Chevron at its annual general meeting.
Although the proposal does not require Chevron to set a target of how much it needs to cut emissions or by when, the overwhelming support for it shows growing investor frustration with companies, which, they believe, are not doing enough to tackle climate change.
And in the Netherlands, Friends of the Earth, alongside six other bodies and more than 17,000 Dutch citizens have taken Shell to court. The civil court ruled that by 2030, Shell must cut its CO2 emissions by 45% compared to 2019 levels. The Shell group is responsible for its own CO2 emissions and those of its suppliers, the verdict said.
It is the first time a company has been legally obliged to align its policies with the Paris climate accords, says Friends of the Earth (FoE).
Carbon Neutral or Net Zero?
With the reopening of restaurants in England last week Nando's, the chicken and chilli chain, took the opportunity as it opened its doors to announce its plans to be carbon neutral by November and net zero by 2030. Although the terms seem to be used interchangeably, there is a difference. Carbon neutral is accepting that an operation will create carbon emissions, but buying an equivalent volume of offsets. Net Zero is eliminating all CO2 emissions from the organisation’s operations, or absorbing them all internally.
You're probably aware that I'm quite sceptical about a lot of offsets. You can buy a few trees to offset your holiday flights, but while the flights will take a few hours, the trees will take decades to absorb the emitted carbon. And that’s as long as they don’t die, catch fire or get chopped down. And they don’t get sold to another eager off-setter. And another, and another, and another…
Nando's has the advantage that it's big enough to get directly involved in the schemes that it supports and is able to be sure that the schemes are delivering their promises. On its website it shows Kariba Forest Protection which is saving forests, protecting wildlife, and changing lives by supporting communities. Another project that it supports is Wonderbag, a slow cooker for people in developing nations, which uses less energy, less fuel, avoids pollution from smoky cooking fires and gives the cook time to do other things. And of course all of these things reduce or avoid carbon emissions.
As you’d expect, burger chain McDonald’s has plenty about sustainability on its website although it has yet to set specific decarbonisation goals. It has its own problems with Animal Extinction protestors blockading the McDonald’s distribution centre. Although every restaurant chain, including Nando’s and McDonald’s, offers a vegetarian if not vegan option, protestors want nothing but plant-based choices on the menu. I can’t see the great British public standing for that, and whether we should give up meat altogether is a debate for another day - a debate, incidentally, which I’m planning to bring to the Sustainable Futures Report before long. Please get in touch you would like to participate. Priority to patrons.
My newspaper today reports that BUG, a crowd-funded start-up, is bringing insect-based recipe kits to market later this year. We can look forward to “soft and crunchy” buffalo worm falafels; “delicious crunchy” crickets with Italian herbs to add to pastas or salads; and sticky teriyaki crickets for stir fries. Yum.
The UN’s Food and Agriculture Organisation (FAO) estimates that insects already form part of the diet of at least two billion people, with more than 1,900 species reportedly used as food.
The Chips are Down
Turning to chips, no, microchips not potato chips; there’s a shortage. There are microchips in almost anything electrical – even your toaster or your toothbrush. There are many chips in a modern car and the car industry is particularly suffering from the shortage at the moment. This means that some manufacturers like Jaguar have had to reduce production and go on short time. Others are just leaving out some of the more expensive options from their cars because they don't have the electronics to make them work. The shortage is likely to affect white goods like washing machines, cookers and refrigerators, and personal electronics like phones, tablets, laptops and televisions.
This shortage is caused partly by the Covid crisis which has made manufacturing more difficult but there was also a devastating fire in one of the largest chip producing factories in the world. In due course all this will no doubt be resolved, but there is a more serious problem on the horizon which will not be solved as easily. It's the shortage of raw materials. The shortage of rare metals needed for microchips and related hardware such as batteries.
Switch to EVs
A recent article published in journal Nature Reviews Materials, reports that switching Britain’s 31.5m petrol and diesel vehicles to battery power will require 264,000 tonnes of lithium carbonate, 207,900 tonnes of cobalt, 7,200 tonnes of neodymium and dysprosium, and 2.4m tonnes of copper. These amounts represent twice the annual current global production of cobalt, an entire year of neodymium production and 75 per cent of world production of lithium. And that’s just for the UK. Experts at the Natural History Museum say that the UK should start mining materials such as lithium and cobalt in Britain rather than importing them and two companies are already prospecting for lithium in abandoned lead mines in Cornwall, southwest England. The experts say that once sufficient material has been extracted the circular economy should ensure its re-use and mining will decline. Patron Adrian Bond informs me that new batteries superseding lithium-ion will not need cobalt, so that reduces demand for one rare mineral. Still, those amounts are immense. Can we really ramp up global production to meet global demand? And should we? But that’s another debate.
Alice Courvoisier, an expert in rare metals, appeared on the Sustainable Futures Report a while ago. More recently she got in touch after I had commented on the new book by Bill Gates. She said, “I heard about Gates’ book on radio 4, but that caused me to turn the radio off. I find it extremely challenging to take advice or lessons from someone who makes a fortune out of computers, pretends to change the world yet does no efforts to help with the life cycles of electronic products.” If consumption is bad, planned obsolescence is worse and we see it all the time with cars, phones and computers.
Alice Courvoisier told me about Vandana Shiva and her latest book: Oneness vs the 1%. Vandana Shiva quotes Bill Gates as describing the pandemic as a war. She disagrees:
“In fact, the pandemic is not a war. The pandemic is a consequence of war. A war against life. The mechanical mind connected to the money machine of extraction has created the illusion of humans as separate from nature, and nature as dead, inert raw material to be exploited. But, in fact, we are part of the biome. And we are part of the virome. The biome and the virome are us. When we wage war on the biodiversity of our forests, our farms, and in our guts, we wage war on ourselves.”
“Health is about life and living systems. There is no ‘life’ in the paradigm of health that Bill Gates and his ilk are promoting and imposing on the entire world. Gates has created global alliances to impose top-down analysis and prescriptions for health problems. He gives money to define the problems, and then he uses his influence and money to impose the solutions. And in the process, he gets richer. His ‘funding’ results in an erasure of democracy and biodiversity, of nature and culture. His ‘philanthropy’ is not just philanthrocapitalism. It is philanthroimperialism.”
Not sure that I agree with all that. You can decide for yourself. Those are quotations from the overview to her book. You can read more via a link below or indeed you can buy the book.
Alice Courvoisier also drew my attention to the work of Philippe Bihouix, a member of the Institut Momentum, a French think-tank on the Anthropocene, ecological overshoot and transition.
The Age of Low Tech
In his book The Age of Low Tech: Towards a Technologically Sustainable Civilisation he says, “I believe ‘high’ technology will not solve global problems and propose a different ‘low tech’ approach to building a more resilient, equitable and sustainable society.
“How might this be done? We must reinvent our modes of production. In questioning the race for productivity and economies of scale in mega-factories, we should review the place of people in our economies, the degree of mechanisation and robotisation, and our way of choosing between manpower and resources. It is not about returning to the spinning wheel and draught animals, but about relocating workshops and businesses on a human scale to manufacture durable goods. Equipping these with a few simple and robust machines, we should be able to maintain a good part of current productivity, while reducing energy demand. Such manufacturing units, less productive but more labour-intensive and closer to locations of consumption, would be coupled with arrangements for the recovery, repair, resale and sharing of everyday objects.
Commenting on the book, Mogens Lykketoft, Former President of the United Nations General Assembly says,
"There is no high-tech quick-fix against climate change. Technology can help us. But a much more responsible behaviour in consumption and production is the most important. A new civilisation!”
If we cannot obtain the resources to support our current progress - and from the figures above estimating the resources needed to electrify the car fleet the demand looks unsustainable - then maybe we do indeed need a new civilisation. Persuading people to accept the change will be no mean task. Especially to do it in time.
You can find a link below to Philippe Bihouix’s book and a YouTube presentation.
I started this section talking about problems with manufacturing cars caused by shortages of chips. I've come across an article by Glen Hendrix. He starts off, “I love my car. It symbolises freedom. I can get in and go right now. No waiting on a taxi, Uber, Lyft, bus, train, plane. …”
And he ends the article, “The car and car ownership as we know it must change, and it must do so quickly in order to save our planet.”
In between, he analyses the impact of the car as an expensive object which typically lies idle for 95% of the time. Looking at all the components involved, he estimates that the embodied energy in the manufacture of each car is more than 20,000 kWh. There’s embodied energy in the roads as well, and generating much of that energy leads to emissions, in addition to the emissions cars themselves create in use.
“About 90 million cars are made each year, he says, “so we should discuss the feasibility of extracting or making 15 million tons of plastic, 89 million tons of steel, 6.5 million tons of rubber, 21 million tons of aluminium, and 3.5 million tons of glass per year after year ad infinitum. And this problem won't get better with electric vehicles. It may get worse as a rare earth metals and copper get more and more expensive and harder to find.”
We need to talk about cars. I tried to contact the Campaign for Better Transport, but they didn't respond.
It wouldn't be the Sustainable Futures Report without some comment on energy.
An article in Nature Communications by Shangrong Jiang of the School of Economics and Management, University of Chinese Academy of Sciences, Beijing, China and others says,
“The growing energy consumption and associated carbon emission of Bitcoin mining could potentially undermine global sustainable efforts. By investigating carbon emission flows of Bitcoin blockchain operation in China with a simulation-based Bitcoin blockchain carbon emission model, we find that without any policy interventions, the annual energy consumption of the Bitcoin blockchain in China is expected to peak in 2024 at 296.59 Twh and generate 130.50 million metric tons of carbon emission correspondingly. Internationally, this emission output would exceed the total annualised greenhouse gas emission output of the Czech Republic and Qatar. Domestically, it ranks in the top 10 among 182 cities and 42 industrial sectors in China.”
Bitcoin is a cryptocurrency. It exists exclusively in electronic form, although these days the money in your regular bank account is in electronic form as well. The main difference is that there is no government or central bank behind bitcoin, it is only worth what people say it is worth and its value fluctuates wildly. Nonetheless, it is attractive to some, particularly because it is secret and out of the reach of governments and tax authorities. Elon Musk accepted bitcoin for the purchase of Tesla cars for a short while this year but then changed his mind. His decisions moved the market and affected bitcoin value.
Some people have got very rich. Others have lost a packet. There is a limited supply of bitcoin and its value is partly linked to its rarity. To obtain a bitcoin requires solving a number of highly complex algorithms which needs immense computing power - bitcoin mining. The Wall Street Journal reports that the demand for electricity to run these vast computers has led to idle coal power stations being re-commissioned. Apparently one of the reasons that Elon Musk decided to stop accepting bitcoin was the fossil-fuel emissions generated by bitcoin mining.
A University of Cambridge index estimates the annual power consumption of bitcoin mining at around 130 terawatt-hours, more than three times higher than at the beginning of 2019. That's more than the national power consumption of Argentina. It’s not clear whether this relates just to bitcoin, or takes account of all the other cryptocurrencies. There are at least 100 of them. All this to create something which doesn’t really exist and certainly has no intrinsic value, but can make miners rich. If people are prepared to do this for their own benefit, what hope is there that people will change their behaviour for the benefit of the global population?
And That’s It.
I think that’s enough for this week. It certainly seems to have taken a time to complete. Next week is a short week because of public holidays so although there will no doubt be another Sustainable Futures Report next Friday, it may well be a short one.
Thank you for your feedback and please keep your comments coming. You’re welcome to contact me by email, but if you post your comments on the website you’ll get a wider audience. (And so will I, I hope!) There’s a comment box at the bottom of each episode. There are also comment boxes on Patreon and on the Apple podcasts site.
Thanks for listening. Patrons - thanks for supporting! Find more at www.patreon.com/sfr.
That was the Sustainable Futures Report.
I’m Anthony Day.
Until next week!
Nord Stream 2
Shell and Oil companies
Eco investors turn up the heat on Shell over climate target
Influential investor joins shareholder rebellion over Shell’s climate plan
Change on the Menu
Nando’s neutral by November
Chips are Down
Exploiting the Earth
Musk is right that dirty bitcoins and clean Teslas don’t sit well together