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KERRY’S WARNING: Climate envoy John Kerry exhorted leaders at the World Economic Forum earlier today against being “seduced” into building out a bunch of new oil and gas infrastructure in response to the global energy crisis, but his position is already being challenged by the European Union’s newest energy plan and the United States’ promise to send allies there more natural gas.
“No one should believe that the crisis of Ukraine is an excuse to suddenly build out the old kind of infrastructure that we had. ... We have to be much smarter than that, given the stakes,” he said.
That’s in tension with Europe’s plans: For all the European Commission's plans to boost green energy and replace imports from Russia, new fossil fuel infrastructure is nonetheless still a line item in the plan.
The commission proposes €10 billion of investment in “limited” additional gas infrastructure to help member nations displace Russian imports, and up to €2 billion for oil infrastructure is also on the table where the prospective Russian oil embargo is concerned.
In her own speech at the World Economic Forum today, Commission President Ursula von der Leyen welcomed the pending inaugurations of new liquefied natural gas terminals in Greece, Cyprus, and Poland, and she brought up the U.S.-EU joint Task Force for Energy Security.
The task force in particular, whose goal is to provide Europe with several hundred billion cubic feet of additional LNG in coming years, has driven a wedge between environmentalists and the Biden administration for its embrace of an energy strategy that will require new infrastructure to be built.
One more thing: The Europeans have maintained that new gas pipelines and LNG terminals will be different from legacy ones in that they will be able to accommodate more than just fossil gas, meaning countries will have use for them even if or when fossil fuels are phased out.
“The connecting pipeline infrastructure will then over time form the core of our hydrogen corridors,” von der Leyen said of the projects in Greece, Cyprus, and Poland. “Hydrogen, Ladies and Gentlemen, is the new frontier of Europe's energy network.”
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SEC SLAPS $1.5M FINE ON BNY MELLON FOR ESG CLAIMS: The SEC fined BNY Mellon Investment Adviser, Inc. $1.5 million for allegedly making misstatements and omissions about Environmental, Social, and Governance (ESG) information for certain mutual funds it managed—a first-of-its-kind case that comes as the SEC moves to clamp down on its scrutiny of false or misleading ESG practices, and to penalize so-called “greenwashing” by investment groups.
According to the SEC order, between July 2018-Sept. 2021, BNY Mellon Investment Adviser represented or implied “that all investments in the funds had undergone an ESG quality review, even though that was not always the case,” and that “numerous investments” held by certain funds did not have an ESG quality review score at the time of the investment. In paying the $1.5 million fine, BNY neither admitted nor denied the claims.
It shows the difficulty in regulating ESG: Still, the SEC’s decision to go after investment firms for so-called “greenwashing” ESGs could be a very large—and potentially very tough-to-impose—extension of regulators’ jobs. Bloomberg columnist Matt Levine notes that ESGs themselves are a “diffuse set of strategies” that will by their very nature require certain trade-offs; such as deciding “whether to buy shares in an electric car company that exploits workers or an oil company with a really diverse board of directors.”
“If you disagree with a fund’s trade-offs, or its ranking system, you can always say ‘this isn’t real ESG, this is greenwashing,” Levine continued. “To some extent ESG means ‘buy companies that you think are making the world better,’ and if different people have different conceptions of what makes the world better then they will disagree about what ESG demands. … You might have a list of things that ESG funds should and shouldn’t do, but how do you know that the SEC will have the same list? How do you know that your list, or the SEC’s, is right?” Read Levine’s full column here.
HSBC SUSPENDS SENIOR BANKING EXECUTIVE OVER CLIMATE CHANGE COMMENTS: HSBC suspended a senior executive pending internal investigation into climate change remarks made at a presentation last week.
Controversy erupted last week when Stuart Kirk, HSBC’s head of global responsible investing at the bank’s asset management division accused central bankers and policymakers of overstating the financial risks of climate change—an effort he described during the presentation as trying to “out-hyperbole the next guy,” according to a report from the Financial Times.
Speaking at a “Moral Money” event hosted by FT late last week, Kirk likened the climate crisis to the fears of a massive computer glitch in the months leading up to Y2K—telling attendees that, throughout his more than 20-year career in finance, “there was always some nut job telling me about the end of the world.”
“Unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong,” he wrote on a slide that accompanied his presentation, according to another FT report published shortly after the event.
Asked for comment, HSBC declined to offer additional details on the status of the investigation or the employee in question.
NEGATIVE POWER PRICES IN BOSTON: Unexpectedly mild temperatures in Boston this weekend left New England’s power grid with a large excess of power, sending electricity prices plummeting to roughly -$150 a megawatt-hour, and forcing generators to pay consumers to take their power, according to a spokesman for grid operator ISO New England.
Control room operators issued the unprecedented “minimum generation” emergency alert Saturday after temperatures in Boston climbed to a high of just 71 degrees Fahrenheit— some 20 degrees below the original forecast for the day, which had anticipated highs in the mid-90s. Those lower-than-expected temperatures caused spot power to remain at negative levels from 10:30 a.m. to almost 2:00 p.m., forcing ISO New England to ask generators to dial back their supply. Read more from Breanne here.
CLEAN POWER SEES RECORD QUARTER: The U.S. added a record 6.6 gigawatts of utility-scale clean power capacity in the first quarter of the year, led largely by new battery storage additions, according to a new report from industry group American Clean Power Association.
While wind installations declined compared to Q1 2021, battery storage additions grew 173% compared to last year. Solar additions grew by 11%.
HOME DEPOT TO REEVALUATE WOOD-SOURCING SUPPLY CHAIN AMID SOURCING CONCERNS: Home Depot announced it will reevaluate its wood-sourcing policy and supply chain; following reports that some of the plywood it sells might be sourced from vulnerable forests in Ecuador and Brazil. Those findings sparked pressure from activist investors and conservation groups, Mongabay reports, and prompted shareholders to vote last week on a proposal requiring the chain to study certification standards of its wood suppliers globally.
That move was cheered by green groups, who said it was an important step in helping limit deforestation in vulnerable areas. “It’s a good day for the world’s forests, from Canada’s boreal to the tropical rainforests of South America, and for the species that depend on them,” Leslie Samuelrich, the president of the Green Century group, said in a statement.
AIR LIQUIDE OPENS NEVADA HYDROGEN PLANT: French industrial gas giant Air Liquide announced today it has inaugurated its new liquid hydrogen production facility near Las Vegas.
The facility will produce 30 metric tons of hydrogen per day and has enough capacity to produce hydrogen for over 40,000 fuel cell vehicles in California in compliance with the state's Low Carbon Fuel Standard, according to the company. Its operations will also be powered by renewable energy.
CAN CONSERVATIVE ACTIVISTS HELP DE-POLITICIZE THE CLIMATE CRISIS? On this week’s “Plugged In” podcast, former FERC chairman Neil Chatterjee was joined by Alex Flint, a former GOP Senate staffer who specializes in issues of climate policy and nuclear power, to discuss how leaders in Congress can work across the aisle to deescalate partisan rhetoric around issues of climate change.
Flint, who now serves as the executive director of the pro-carbon tax group Alliance for Market Solutions, said that climate change “is something that is going to affect us on the multi decade timeframe.”
“We need to figure out solutions that will have political stability [and] durability,” he said. “And that requires Democrats and Republicans [to start] working together and agreeing on policies that the private sector can then anticipate over the long-term and prepare for and accommodate.” Listen to the full episode here.
The Rundown
Euractiv Lithuania now fully independent of Russian energy
HuffPost The lithium war next door
Politico Europe Macron’s new (not so) green team
Bloomberg BOE says climate transition will cost finance system billions
Calendar
TUESDAY | MAY 24
12 p.m. The House Select Climate Crisis Committee will hold a hearing that examines ways to create an affordable and resilient food supply chain in the face of climate change. The panel will hear testimony from nonprofit groups including ReFED, the North American Renderers Association, the National Audubon Society, and more.
2:00 pm The House Subcommittee on Energy and Mineral Resources will hold a remote hearing to consider the Boundary Waters Wilderness Protection and Pollution Prevention Act. Stream the hearing here.
WEDNESDAY | MAY 25
10 a.m. 406 Dirksen The Senate Environment and Public Works Committee holds a confirmation hearing on the nomination of Joe Goffman to be assistant administrator of EPA’s Office of Air and Radiation.