News | Headlines
Senate reinstates Obama-era controls on methane
USA Emissions abatement The US Senate voted on 28 April to effectively reinstate an Obama-era regulation designed to clamp down on emissions of methane, a powerful, climate-warming pollutant that will have to be controlled to meet president Biden’s ambitious climate change promises. Taking a hint from congressional
Republicans who in 2017 made liberal use of a once-obscure law to roll back Obama-era regulations, Democrats invoked the law to turn back a Trump methane rule enacted late last summer. That rule had eliminated Obama-era controls on leaks of methane, a major source of which is seepage from oil and gas wells. The 52-42 vote was the first time congressional Democrats have used the law,
called the Congressional Review Act, which prohibits Senate filibusters and ensures one administration’s last-minute regulations can be swiftly overturned with a simple majority vote in both chambers of Congress. Three Republican senators — Susan Collins of Maine, Lindsey Graham of South Carolina and Rob Portman of Ohio — joined Democrats and Democratic-leaning independents to vote for the measure.
In a statement of support for the vote, the White House called methane “a potent climate-disrupting greenhouse gas that is responsible for approximately one-third of the global warming” and added that “addressing methane pollution” is “an urgent and essential step.”
Republicans had used the procedure to wipe out 14 late-term Obama administration rules in the first 16 weeks of the Trump administration, but this latest vote was the first time Democrats have used the procedure to undo the policy of a Republican administration.
Many major oil and gas companies have come out in support of methane regulations: Exxon, Shell and BP had actually urged the Trump administration to keep the Obama methane rules in place. Those companies have invested millions of dollars to promote natural gas as a cleaner fuel than coal in the nation’s power plants. They fear that unrestricted leaks of methane could undermine that marketing message and hurt demand.
Doubt cast on RWE and Uniper compensation demands
The Netherlands Coal firing German utilities RWE, and Uniper, which is owned by Finnish company Fortum, are suing the Netherlands under the Energy Charter Treaty (ECT) for phasing out coal-fired power generation by 2030.
However, coal assets held by RWE and Uniper in the Netherlands are already economically unviable and have largely been written-down, according to a new analysis by IEEFA and Ember (an independent energy and climate think tank), in collaboration with SOMO, a Dutch business intelligence specialist. Market forces, says the report, not Dutch legislation, are causing the demise of these coal-fired power plants. RWE is seeking €1.4 billion in compensation for incurred damages, saying it can no longer run its Eemshaven power plant profitably after 2030. Uniper is seeking compensation between €850 million and €1 billion for its Maasvlakte 3 plant. However this new analysis states that market forces have rendered these coal plants economically unviable. The owners were making huge impairments on them from as early as 2013. This is due in large part to the uncompetitive economics of coal-fired generation, driven by a rising carbon price and cheaper generation from renewables and gas plants.
The Treaty, says the new analysis, is impeding EU coal phaseout strategies and creating a barrier to achieving emissions reduction targets by empowering foreign investors to sue countries for losses they deem caused by climate legislation, whereas taxpayers’ money spent on payouts could instead be used to
4 | May 2021 |
www.modernpowersystems.com
support a just green transition. The research finds that in fact the energy companies made short-sighted investment decisions when they opened brand new coal-fired plants in 2015 and 2016. At this time, the market conditions for coal electricity generation were in rapid decline.
Based on RWE’s own financial reporting since 2010, the analysis shows how RWE’s €3 billion investment in its Eemshaven power plant, originally designed to run for 30-40 years, had collapsed to zero value just 5 years after it entered service. Less than €700 million of that reduction can be attributed to the Dutch coal phaseout law, in contrast to the €1.4 billion in damages that RWE is seeking.
Ahead of proposed closures dates, these coal assets are already in decline. The electricity generation at all three power plants has dropped significantly from 2018 levels. RWE’s Eemshaven and Uniper’s Maasvlakte 3 average annual load factors more than halved from 73% in 2018 to 34% in 2020. Profits also tumbled in the same period from +€150 million to -€52 million. Riverstone’s Maasvlakte plant has been offline since a technical failure in January 2020, bleeding money due to fixed costs.
There is a poor outlook for profitability going forward. The report’s findings suggest that total net losses could already amount to at least €470 million by 2030 for all three plants. The ECT enables these energy companies to sue for loss of potential future earnings beyond 2030. The compensation claims overlook the fact that these supposed future profits are non-feasible by 2030 and beyond.
US coal deliveries declined 22% in 2020 USA Coal firing
The US electric power sector received 428 million short tons (MMst) of coal in 2020, the lowest annual level for that sector since the US Energy Information Administration began publishing this data in 2007. US coal shipments were down 22% in 2020 from 2019 levels, driven by lower electricity demand in response to the COVID-19 pandemic and the continued decline in US coal fired generation capacity. 67% of the coal delivered to the US electric power sector in 2020 was shipped either completely or in part by rail; the remainder was shipped by river barge, truck, or other methods. Almost all U.S. coal comes from four regions – the Powder River Basin (Wyoming and Montana), the Illinois Basin (Illinois, Indiana, and Kentucky), central Appalachia (Kentucky and West Virginia) and northern Appalachia (Ohio, Pennsylvania, and West Virginia).
Coal shipments by truck and coal received by coal-fired power plants built near coal mines declined less in 2020 than other transportation modes, falling by 18% and 19% from 2019 levels, respectively. Coal shipped by waterways fell 20% from 2019 levels. Rail shipments in all forms, including multimode, decreased the most, at 24%.
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