FC100: Fossil Fuels Carnage
Plus, bionic swifts, the best science fiction movie of the last three decades, and good news on funding for the WHO, prison rates in the US, and conservation in Pakistan.
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Photo by US Navy Photo/Alamy Stock Photo
The funny thing about living through a turning point in human history is that it doesn’t feel historical or momentous. In the popular history books, everything happens in nice tight story arcs, with a few key protagonists, and “a number of factors that contributed to the events of that year.” For the people living through it though, historical moments are mostly a confusing mess (just ask the revolutionaries in Paris, the proletariat in Moscow or the former residents of East Berlin). Each day seems crazier than the last, the whiplash of news becomes increasingly unreal, until eventually everyone is reduced to a semi-permanent state of shock, exclaiming “can you believe it?” to each other over and over again like a Hillsong Kids record on repeat.
Five, ten, hundred years later, the messiness is cleaned up and smoothed over for popular audiences, wrapped up for mass consumption in a pretty, fifteen chapter bow. The daily news stories that seemed so important at the time quite literally, become footnotes, and if the historians do their work really well, the last thing left is just the date itself, 1789, 1917, 1989, four numerals containing multitudes, serving as shorthand for millions of small stories of freedom, revolution, or peace.
What do you think 2020 will come to symbolize? Back in March, we pointed out that it was too early to impose narrative on this pandemic, that all of our carefully constructed heuristics had fallen apart overnight, and that it didn’t make sense to evaluate the raw, noisy data until more time had passed. Five months in, it’s probably time give it another go. What will the historians of the future write about this current moment in time? Perhaps it’ll be something like “with the United States reeling from the body count and distracted by its domestic political dramas, China cemented its superpower status by abolishing the autonomy of Hong Kong,” or “while remote working had been around for years, the crisis turned it mainstream overnight, ushering in the biggest change to working habits since the invention of the PC.”
These aren’t bad candidates, but it’s not clear whether they count as major turning points in history. That distinction belongs instead to something you might not have heard about at all unless you’ve been staring gobsmacked at the news coming out of global energy markets. We’re willing to bet that many years from now, when the two newest members of the FC family, Lola (8 months) and Nina (3 months) are in high school, they won’t be writing essays about lockdowns or protests or masks or even elections. Instead, they’ll be learning about how the coronavirus crisis set off the most devastating downturn in the fossil fuel industry’s 150-year history, one from which, ultimately, it would never recover.
You see, 2020 isn’t just the year of the pandemic.
It’s the year of fossil fuel carnage.
“What’s front and center has been the extreme volatility and carnage that’s occurred in the energy sector. These companies are now in survivor mode, never mind thinking about the energy transition.”
Jennifer Rowland, Senior Analyst, Edward Jones
The last few years haven’t been easy for coal, gas and oil companies. They’ve come under growing pressure from climate activism and divestment campaigns, and the rapid growth of cheaper alternatives. COVID-19 however, has put everything on fast forward, brutally exposing their frailties, wiping billions from market valuations, and catapulting them into situations they thought they would only have to deal with five or ten years from now. It’s the biggest shock to the global energy system in more than seven decades, with the drop in demand this year set to dwarf the impact of the 2008 financial crisis. Many energy analysts are now saying something that would have been unimaginable a few months ago — it looks very likely that global carbon emissions peaked in 2019.
The historic decline in global emissions is not something to be celebrated. It comes at an unimaginable cost, hundreds of thousands of premature deaths and devastating economic trauma around the world. Nor is a peak guaranteed. If governments do not learn the lessons of the last financial crisis, and put clean energy technologies — renewables, efficiency, batteries, hydrogen and carbon capture — at the heart of their plans for economic recovery, then this brief, unlooked-for window of opportunity will close. There are good reasons to believe though, that this time will be different, because this time, it’s all about the money.
Coal has been the hardest hit, with global coal-fired power generation set to fall by more than 10% this year. That’s the problem with being the dirtiest and most expensive source of electricity. You’re the first thing that gets switched off, and you don’t get switched on until demand comes back up again. The key issue is what economists call the ‘marginal cost.’ The idea is simple: once you’ve built your power stations, it’s more expensive to run the ones that need fuel than the ones that rely on wind, rain or sunshine. Think about it. Coal-fired electricity requires you to keep on digging up black rocks, transporting them to power plants, and setting them on fire. Once you’ve installed your wind turbine, solar panel or hydropower plant though, the electrons come pretty much free of charge.
A similar economic logic applies to natural gas — demand is on track to decline 5% in 2020, the largest recorded year-on-year drop since natural gas was developed at scale during the second half of the 20th century. Renewables will be the only energy source that will grow in 2020, with their share of global electricity generation projected to jump by 5% this year. Adding momentum is the fact that renewables keep on getting cheaper. Not only is clean energy now the lowest cost source of power generation for at least 85% of global power generation, it’s actually cheaper to build new wind and solar, including battery storage, than to continue operating 40% of the world’s existing coal capacity.
The sun sets behind an idle pump jack near Karnes City, Texas, April 8, 2020 (AP Photo/Eric Gay)
Money talks. It doesn’t matter how strong the coal and gas lobby has been, how many officials they’ve bribed or how many campaign donations they’ve made — the inexorable logic of economic gravity is taking hold. Those companies hoping to eke it out for another few years have suddenly discovered that there’s no ground under their feet. Union leader Nicholas Klein’s often misattributed aphorism comes to mind. First they ignored clean energy, then they laughed at it, then they fought it with every dirty trick they had, and now they’re on the wrong end of a battle they cannot win.
The bad news is coming thick and fast. In the United Kingdom, where humanity’s industrial experiment first began, the country didn’t switch on a coal plant at all between the 10th April and the 17th June, and permanently retired two coal plants during lockdown, leaving just four in operation. Eight years ago, about 40% of the country’s electricity came from coal. This year, it’ll be a rounding error. Renewables have filled the gap; their output was higher than fossil fuel generation in the UK for the first time ever in the first quarter of 2020, with wind energy alone supplying almost as much electricity as natural gas.
Across the Channel, thermal coal has been absolutely hammered, with imports to Europe plunging to lows not seen in 30 years. Thanks to the EU’s slow ratcheting up of the carbon price, four fifths of the continent’s coal fleet is already more expensive to run than to build new wind and solar. This presumably, is why, since March, Sweden and Austria have closed their last coal plants, Poland and the Czech Republic have scrapped planned coal expansions, Portugal has brought forward its planned coal shutdowns by two years, Italy’s largest utility has brought forward its closures by five years, and seven of Spain’s remaining 15 coal-fired power stations have been retired after the owners admitted they couldn’t afford to keep them open any more. Two years ago, 15% of electricity in Spain came from coal. In May this year, it contributed just 1.4% of the power mix.
It’s Germany however, that has surprised analysts the most. In Europe’s industrial powerhouse, and the fourth largest economy in the world, coal only supplied about 20% of the power mix in the first half of the year (compared to 31% in 2019) and more than half of electricity has come from renewables. This remember, is a country that’s been hammered by environmentalists from the one side for its refusal to abandon coal, and from the other by carbonists for its ‘profligate’ spending on clean energy. Suddenly, from out of nowhere, it looks possible that Germany’s remaining 40GW of coal power will shuttered by the middle of this decade, well ahead of the government’s 2038 deadline. Someone, somewhere, is muttering Ich hab’s dir doch gesagt under their breath (we’re just not sure who).
This is not intended as a criticism of environmentalists — far from it. Their untiring efforts have slowly but surely shifted the climate conversation to the center of debate in Brussels. It’s been a grueling process, the result of decades of activism, painstaking planning, lobbying, and death by committee. The reward, when it came though, was quick. The European Green Deal, in the space of less than 24 months, went from NGO wish list to the new defining mission of the European Union, and a ‘green transition’ is now at the heart of the region’s recovery plan. It’s backed by almost €2 trillion of financial firepower. The way Europe sees it, if every nation in the world is going to be in debt for at least the next decade, they might as well be paying for something that solves the biggest challenge of the 21st century.
The US president models a hard hat in support of miners during a rally at the Charleston Civic Center in Charleston, West Virginia. Credit: Mark Lyons/Getty
That same political calculus of course, is nowhere to be seen in the United States. In 2018, the current president declared that “coal is indestructible” and that “the coal industry is back.” The current president is of course, not exactly the world’s most reliable purveyor of facts, and has an interesting way of defining, ‘back.’ Last year saw an 18% decline in coal generation, a 15% fall in coal consumption, and a 53% drop in the value of coal stocks. Coming into 2020, the US coal industry was already in the middle of its very own Kodak moment, punchdrunk from a combination of climate activism, cheap gas and renewables.
The lockdowns have acted like a clean uppercut to the jaw: as demand for electricity has plummeted, expensive coal has been the first thing to go. The latest estimates suggest that US coal generation this year will provide less than 18% of power supply, and analysts predict it could fall to just 10% in five years, down from 50% a decade ago. By contrast, renewables will account for over a fifth of electricity generation this year, surpassing coal for the first time since 1885, when the Statue of Liberty first arrived in New York. Nobody in the coal industry, it appears, is laughing any more.
They’re not laughing in the oil and gas sector either. It wasn’t that long ago that energy executives and their lobbyists in Washington were (…)
Good news you might not have heard about
The UN Security Council has unanimously agreed to a global ceasefire, adopting a resolution that demands a general and immediate cessation of hostilities around the world, in order to unite efforts to fight the coronavirus in vulnerable countries. UN
COVID-19 is poised to usher in the biggest retreat for global meat eating in decades. Global per-capita consumption in 2020 will fall to the lowest in nine years, and the 3% drop from last year represents the biggest decline since at least 2000. Bloomberg
Meet Hasina Kharbhih, whose NGO, has, in the past two decades rescued over 72,000 women and children trafficked across India, Myanmar, Bangladesh and Nepal. Ozy
This one got swamped by pandemic news, but it’s still a big deal - Congo has declared the second-largest Ebola outbreak ever is over after two years. Channel News Asia
Germany will almost double funding for the WHO this year, contributing more than half a billion euros. "We need a strong, transparent and accountable WHO today more than ever," said the country’s Health Minister Jens Spahn. DW
The US Supreme Court has passed a landmark ruling protecting LGBTQIA+ citizens from workplace discrimination. Conservative Justice Neil Gorsuch authored the decision: “It is impossible to discriminate against a person for being homosexual or transgender without discriminating against that person based on sex.” BBC
The US imprisonment rate is at its lowest level in more than two decades, with the greatest decline coming among black Americans, whose imprisonment rate has decreased by 34% since 2006. Pew
… and as rates fall, former prisons, jails, and detention centers are being converted from facilities that confine people into ones that support them, such as mental health clinics, community centres and homes for former convicts. FreeThink
Georgia’s parliament has passed a landmark democratic reform, bringing the distribution of parliamentary seats into line with the national vote results, and ending the excessive consolidation of power by a single political group. Eurasia
Volkswagen, one of the world’s biggest carmakers, just produced its last ever combustion vehicle at Zwickau, one of its biggest factories in Germany. That factory is now Europe’s largest electric vehicle plant. Next Web
California has approved a groundbreaking policy to wean its trucking sector off diesel, requiring manufacturers to sell a rising number of zero-emission vehicles from 2024, a ‘major step’ toward reducing the state’s emissions. Reuters
Amazon India has eliminated all single-use plastic in its packaging across fulfillment centers in the country, and local rival Flipkart says it has cut down the usage of plastic packaging in its own supply chain to about 50%. Reuters
Germany has agreed to end the sale of single-use plastic straws, cotton buds and food containers from July 2021, bringing it in line with a European Union directive intended to reduce the amount of plastic waste. DW
Pakistan has just announced the creation of 15 new national parks, expanding protected areas from 12% to 15% of the country, and creating 5,000 ‘guardians of nature’ jobs for young people in the next three months. Gulf News
More than two million people gathered in northern India last week, and planted 250 million trees to tackle climate change. AP
You know those online petitions? Sometimes they work. Following a campaign that garnered more than 280,000 e-mails from concerned shoppers, beauty retailer Sephora has banned mink-fur eyelashes. Independent
Following a concerted reintroduction effort two decades ago, Kentucky is now home to the largest population of elk east of the Mississippi. Their homes are the hillsides of former coal mines. NYT
Indistinguishable from magic
It’s one thing knowing there’s ice on Mars, another actually seeing it. Check out this flyover of the 2km deep Korolev crater on the planet's northern polar cap. Youtube
Alphabet Loon has just switched on its first fully commercial service: 35 floating balloons providing 4G internet across an area of 50,000 km² in the western and central areas of Kenya, including the capital, Nairobi. The Verge
NASA engineers are using generative design algorithms to help them fabricate portable life support systems for their next generation space suits, reducing the mass of some components by up to 50%. Wired
A San Diego startup has launched the world’s first autonomous freight network, a 50 truck service operating between six major cities in Arizona and Texas. Vox
Australian researchers have genetically modified cotton to make it naturally-coloured, a breakthrough they hope will remove the need for harmful chemical dyes. ABC
Scientists from Duke University have invented a hydrogel that’s finally strong enough to replace arguably the most amazing substance in the human body: the cartilage in human knees. Science Alert
Off the beaten track in the dark forest
What’s the greatest science fiction movie of the last three decades? Clue - humanity gets its ass kicked, and the themes almost perfectly align with the current political moment in the United States. New Yorker
Great interview with sex anthropologist, Helen Fisher. “We’ve evolved three distinctly different brain systems for mating and reproduction: sex drive, feelings of intense, romantic love, and feelings of deep attachment.” Nautilus
This translated essay, The Coronavirus Pandemic and a Once-in-a-Century Change, from one China’s most respected international affairs scholars, Yuan Peng, is an excellent window into how the country views this current geopolitical moment.
If you’ve visited a yoga studio at any point in the last decade, chances are you’ve heard the strains of at least some of this 2014 sunset set from Above & Beyond. Beloved by yogis everywhere, for good reason. Soundcloud
Someone asked Twitter for recommendations on the best essays ever written and now there’s a list and it’s amazing. Start by picking only three, don’t choose more you’ll be overwhelmed, and give yourself plenty of time and space to read. Notion
Pankaj Mishra gives us a political economy masterclass on the implosion of Anglo-American capitalism. “COVID-19 has shattered what John Stuart Mill called ‘the deep slumber of a decided opinion’, forcing many to realise that they live in a broken society, with a carefully dismantled state.” LRB
You know that thing you’re doing every night? It’s called doomscrolling, and you really need to stop. The promise of good news or some kind of answer always feels one click away. It’s not, or at least, you won’t find it in the news or on social media. Wired
Meanwhile, back at the ranch…
You might have noticed that we haven’t made much of a fuss about the fact that it’s our 100th issue. Instead, we’re going to reserve our celebrations for the 101st, which is, naturally a prime number. Too nerdy? Possibly, but there you go. We’re making a big announcement, so make sure you don’t miss it.
Thanks as always for the support and encouragement. We try to respond to everyone who writes in, even if it does take us a while. Hope you’re doing alright out there amongst all the madness.
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