How Manchin struck a miracle of a deal with Schumer, Pelosi and Biden
A months-long standoff between Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) ended Wednesday when they reached a historic deal on deficit reduction, an Affordable Care Act extension, drug price reductions, climate and clean-energy investments to provide energy security, and expedited full-spectrum energy-permitting reform. Washington, the Democratic Party, and perhaps the world…Washington, the Democratic Party, and perhaps the world can breathe more easily again because — by some miracle of twisted turns and backflips — Schumer, Manchin, President Biden and House Speaker Nancy Pelosi (D-Calif.
One could not invent a more perfect storm — since the 1970s, at any rate.
Petroleum and natural gas prices have come under pressure, a consequence of pandemic recovery and war, but also structural fundamentals and emerging political pressures on producers and refiners that predated both events.
Many want these ructions — in Europe, the U.S., and around the world — to herald a refreshed commitment to alternative energy schemes, a wave of green new deals. They want global energy and emissions solved in one fell swoop. Nirvana — from the White House to the G7.
Except for a not-so-small problem: What’s considered to be “upstream” for alternative energy looks a heck of a lot like upstream for conventional energy. The non-renewable ingredients, derived from non-fuel minerals underpinning wind, solar, batteries and other alternative energy equipment, including key enablers such as semiconductors, hinge on exploration, drilling, extraction, processing and supporting logistics. Nor is this action a matter of “once and done,” as far too many believe. The capacity must remain in place for maintenance, replacement and expansion. Without that, we are not shovel-ready and cannot extract these vital minerals.
Manchin walks back opposition and agrees to $370 billion for climate and energy and a 40% emissions cut by 2030, report says
The much bigger question is whether, as many once believed (and still believe) for oil, we might face “peak minerals” supply. Humans can face “peak supply” for anything at any time. “Peakism” rests on starving investment for replenishing stocks. Technologies that push the resource envelope — as with shale oil and gas — rely upon risk-taking investors. Apply investment starvation to non-fuel minerals and we get a twofer — chronic shortages of raw materials and a lack of available and viable alternatives.
“New energy” rests on raw materials that must come from somewhere. The U.S. and Europe both are disadvantaged when it comes to domestic non-fuel minerals (mining, processing, refining). The U.S. constitutes 4 percent of total world tonnage (excluding aggregates and other non-metal construction materials). The entire European Union is about the same, 5 percent. Russia also is about 5 percent, but with high-quality nickel, titanium and platinum. China’s output dominates at 18 percent. Plus, Chinese outbound investments and supply chain sophistication make for a most uneven playing field.
What’s in the “game changer” climate bill nobody saw coming
$369 billion new reasons to have renewed hope on climate change.The $369 billion of climate spending in the Inflation Reduction Act that Sen. Joe Manchin (D-WV) announced on Wednesday includes funding for clean energy and electric vehicle tax breaks, domestic manufacturing of batteries and solar panels, and pollution reduction.
A recent report on copper raised questions about the availability of that key metal but, in fact, the entire periodic table is under pressure.
Video: U.S. needs an all-of-the-above clean energy investment strategy, says Rep. Jake Auchincloss (CNBC)
As well, a harsh precondition exists — hydrocarbons are necessary and vital. We need conventional energy fuels to support inherently intermittent, non-dispatchable, lower energy density alternative energy technologies (until we find other solutions) and to manufacture those technologies. We need chemicals for manufacturing and advanced plastics and composites that reduce weight, increase strength and durability and provide insulation and packaging.
In the short run, when prices are favorable, investors desire to recapture the loads of cash they provided to producers, slowing commitments. Investors have a point: Cashing out when prices are favorable helps to recycle critical risk capital. Meanwhile, inflation and recession fears moderate demand and prices. Customers get some relief, but producer expectations are dashed.
Energy & Environment — Manchin agrees to climate provisions in reconciliation
Sens. Joe Manchin and Charles Schumer announce a breakthrough on climate spending, the Energy Department announces its first loan under an electric vehicles program in a decade and the Biden administration seeks to boost solar power. This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond.…This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Subscribe here.
Longer term, the challenges for scaling up alternative energy hinge on upstream mining and minerals beneficiation (equivalent to oil and gas processing and refining). These businesses suffer all of the same burdens, risks and uncertainties as their oil and gas brethren. Many of the largest mining operations are long in the tooth. Declining head grades and lower-quality ores mean more intensive processing, especially to reach the purity required by many applications like batteries.
Major discoveries for key metals have been scarce for years. Prospecting activity is up, but patterns of capital spending raise hard questions. Where to go for new opportunities? How to deal with ever longer “cycle times,” upwards of 20 years or even more, until achieving production (if ever)?
Worse, the geopolitics of non-fuel minerals supply chains are no better than for oil and gas. Fragile states provide much non-fuel minerals content for the global economy. “Resource nationalism” is alive and well. In our country, it takes the form of opposition to extractive industries. Emergency powers to accelerate greenness, a bad idea, in any case, will be ineffective unless they unlock policy and regulatory barriers for materials.
States hope for revenue boost with Mega Millions craze
A bump in college scholarships for New Mexico students. A new bike trail nestled in the western slope of Colorado. More homeless shelters in Arizona. When lottery sales soar, players holding the golden ticket aren’t the only ones who win. Across the U.S., state lottery systems use that money to boost education, tourism, transportation and much more. Now that the giant Mega Millions lottery jackpot has ballooned to more than $1 billion, state officials are hoping increased national interest in securing the top prize will result in more funding for their own causes.
Policy inducements for green energy hatch parallel green ESG (environment, social, governance) impediments. Political and policy stances are upside down, promoting the rapid advancement of technologies that deploy more raw materials content relative to energy output while ignoring permitting realities for land-intensive development of mines, wind, solar and power transmission.
U.S. policymakers and industry must, and can, take action now to address this concern. One way to forestall disruptive and damaging interruptions in commodities markets is to put “materials first.” No more funding technology silver bullets without steady, vigorous attention to materials sourcing, supply chains and full-cycle economics. Invoking emergency powers will only worsen the tenuous state of affairs, a bad deal for taxpayers.
The moral of the “peak minerals” warning is that investment is key. The mining industry is attempting to do more with less by recovering minerals from waste. We might get incremental gains from recycling. Sooner than later, we need new projects to replenish vital stocks while we vet frontier options — new sources, new substitutes. Put materials first!
Michelle Michot Foss is a fellow in Energy, Minerals and Materials at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy.
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Why Louvre's Mona Lisa keeps a smile: Paris' cooling system .
PARIS (AP) — The Mona Lisa may maintain her famously enigmatic smile because she benefits from one of Paris’ best-kept secrets: An underground cooling system that’s helped the Louvre cope with the sweltering heat that has broken temperature records across Europe. The little-known “urban cold” network snakes unsuspecting beneath Parisians’ feet at a depth of up to 30 meters (98 feet), pumping out icy water through 89 kilometers (55 miles) of labyrinthine pipes, which is used to chill the air in over 700 sites.