Tag Archives: Energy

Germany ahead of schedule on natgas supplies

European governments are scrambling to fill underground storage with gas supplies to provide households with enough fuel to keep homes warm during winter.

Picture Alliance | Picture Alliance | Getty Images

Germany’s natural gas storage facilities surpassed a fill level of more than 75% this month, two weeks ahead of schedule, as Europe’s largest economy scrambles to prepare for the coming winter.

The latest data compiled by industry group Gas Infrastructure Europe shows Germany’s gas storage facilities at slightly over 77% full.

Chancellor Olaf Scholz’s government initially planned for gas storage levels to reach 75% by Sept. 1. The next federally mandated targets are 85% by Oct. 1 and 95% by Nov. 1.

European governments are racing to fill underground storage facilities with natural gas supplies in order to have enough fuel to keep homes warm during the coming months.

Russia has drastically reduced natural gas supplies to Europe in recent weeks, with flows via the Nord Stream 1 pipeline to Germany currently operating at just 20% of agreed upon volume.

Moscow blames faulty and delayed equipment. Germany, however, considers the supply cut to be a political maneuver designed to sow European uncertainty and boost energy prices amid the Kremlin’s onslaught against Ukraine.

Even if Germany gets through the winter, the problem might come in spring next year, so the uncertainty is there and companies are concerned.

Marcel Fratzscher

President of DIW

“Germany developed a business model that was largely based on dependence on cheap Russian gas and thus also a dependence on a president who disregards international law [and] to whom liberal democracy and its values are declared enemies,” Economy Minister Robert Habeck said at a press conference on Monday, according to a translation. “This model has failed, and it is not coming back.”

His comments came as Germany’s gas market operator, Trading Hub Europe, announced that households nationwide would have to pay almost 500 euros ($507.3) more per year for gas.

The new tax is designed to help utilities cover the cost of replacing Russian supplies, though Germany’s government has faced calls to provide further relief for the public.

“All measures, and this is undisputed, have a price,” Habeck said. “All measures have consequences and some of them are also impositions, but they lead to us being less susceptible to blackmail and us being able to decide on our energy supply independently of Russia.”

‘Uncertainty is poison’

Europe’s race to save enough gas to get through the colder months comes at a time of skyrocketing prices. The surge in energy costs is driving up household bills, pushing inflation to its highest level in decades and squeezing people’s spending power.

Germany, until recently, bought more than half of its gas from Russia. And the government is now battling to shore up winter gas supplies amid fears Moscow could soon turn off the taps completely.

“I think the chances are quite good that Germany will get to 90% storage capacity by the beginning of winter, but that still is not sufficient to really avoid a gas shortage,” Marcel Fratzscher, president of the German Institute for Economic Research (DIW), told CNBC’s “Squawk Box Europe” on Tuesday.

“Even if Germany gets through the winter, the problem might come in spring next year, so the uncertainty is there and companies are concerned,” Fratzscher said.

“The uncertainty is poison for the economy. Companies investing less, consumers consuming less — and so the result is that we are seeing a massive slowdown of the German economy,” he added.

‘Gas storage isn’t enough’

RWE Chief Financial Officer Michael Muller told CNBC’s Joumanna Bercetche on Aug. 11 that the firm’s gas storage levels stood above 85%.

Muller said the Essen-headquartered company, one of Germany’s largest energy providers, was “well on track” to reach the government’s target by November.

Analysts told CNBC that Germany has been able to rapidly fill its gas stocks in recent weeks because of a number of factors. These include strong supply from Norway and other European countries, falling demand amid soaring energy prices, businesses switching from gas to other types of fuel, and the government providing more than 15 billion euros in credit lines to replenish storage facilities.

“If you spend a lot of money then it is relatively straightforward to fill the storage of course,” Andreas Schroeder, head of energy analytics at ICIS, a commodity intelligence service, told CNBC via telephone.

If the German government “wants to see this as a success, then fine. We will see,” Schroeder said. “But Germany is still not faring better than other countries, like France or Italy. They have filled their storage more without paying the huge subsidies.”

One reason Germany has found itself with a “strategic disadvantage” compared with other major European economies, Schroeder said, is that Germany’s gas storage had previously been partly owned by Gazprom-controlled facilities.

Germany’s Rehden natural gas storage facility is seen as crucial to the country’s energy security.

Picture Alliance | Picture Alliance | Getty Images

This was the case with Germany’s huge Rehden storage facility, for example, a site critical to the country’s energy security.

“In other countries, [such as] France and Italy, you didn’t have this problem at the outset,” Schroeder said, adding that he remains skeptical about whether Germany will be able to reach the “quite ambitious” 95% storage level target by November.

“Gas storage is not enough. You need demand reductions as well,” Schroeder said.

The European Union agreed last month to reduce natural gas use to offset the prospect of further Russian supply cuts. The draft law is designed to lower demand for gas by 15% from August through to March with voluntary steps.

Mandatory cuts would be triggered for the 27-nation bloc if there aren’t enough savings, however.

What about other EU countries?

Zongqiang Luo, gas analyst at energy consultancy Rystad Energy, told CNBC that Germany’s position as the biggest consumer of natural gas in Europe means it is tricky to compare Berlin’s storage levels to other European countries.

Luo said only France, Spain and Italy were comparable in terms of the scale of their gas consumption, but France’s reliance on nuclear production for power generation, Spain’s use of LNG import terminals and Spain and Italy’s reliance on Algerian gas exports mean they all differ from Germany.

France’s gas storage facilities were last seen at nearly 87% full, according to GIE, while Spain and Italy’s gas stocks stood at roughly 81% and 77%, respectively.

“So, I will say compared to Germany’s storage plan with these three countries, Italy, France and Spain, I will say that so far Germany has done a good job,” Luo said.

“But let’s see how they are going to fulfill the target for the next two months,” he said. “This will be very, very critical for the coming winter.”

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OPEC not to blame for soaring inflation

New OPEC Secretary-General Haitham Al Ghais said Wednesday that the influential producer group is not to blame for soaring inflation, pointing the finger instead at chronic underinvestment in the oil and gas industry.

“OPEC is not behind this price increase,” Al Ghais told CNBC’s Hadley Gamble.

“There are other factors beyond OPEC that are really behind the spike we have seen in gas [and] in oil. And again, I think in a nutshell, for me, it is underinvestment — chronic underinvestment,” he added.

“This is the harsh reality that people have to wake up to and policymakers have to wake up to. Once that is realized I think then we can start to think of a solution here. And the solution is very clear. OPEC has a solution: invest, invest, invest,” Al Ghais said.

Earlier this year, Kuwait’s Al Ghais was appointed for a three-year term as OPEC’s secretary general. He succeeds Nigerian oil industry veteran Mohammad Barkindo, who died at the age of 63 last month just days before he was due to step down from the organization.

The International Energy Agency said in June that global energy investment was on track to increase by 8% this year to reach $2.4 trillion, with most of the projected rise coming mainly in clean energy.

It described the findings as “encouraging” but warned investment levels were still far from enough to tackle the multiple dimensions of the energy crisis.

For oil and gas, the IEA said investment jumped 10% from last year but remains “well below” 2019 levels. It said today’s high fossil fuel prices provided “a once-in-a-generation opportunity” for oil and gas-dependent economies to undergo a much-needed transformation.

The IEA has previously said investors should not fund new oil, gas and coal supply projects if the world is to reach net-zero emissions by the middle of the century.

To be sure, the burning of fossil fuels, such as oil, gas and coal, is the chief driver of the climate emergency.

U.N. Secretary-General Antonio Guterres warned in April that it is “moral and economic madness” to fund new fossil fuel projects.

‘OPEC is doing its part’

Al Ghais’ comments come shortly after the influential producer group of OPEC and non-OPEC partners, an energy alliance often referred to as OPEC+, surprised market participants at its Aug. 3 meeting by announcing plans to add only 100,000 barrels per day from next month.

The group said that “severely limited availability of excess capacity” meant it was necessary to proceed with “great caution.”

It was seen as a snub to U.S. President Joe Biden, who during a visit to OPEC kingpin Saudi Arabia last month had called for the group to pump more crude to help the U.S. and global economy.

OPEC and non-OPEC producers are next scheduled to meet on Sept. 5.

OPEC and non-OPEC producers are next scheduled to meet on Sept. 5.

Jakub Porzycki | NurPhoto | Getty Images

Asked whether OPEC, which produces roughly 40% of the world’s oil output, should shoulder the blame for surging energy prices driving up inflation, Al Ghais replied: “No, absolutely not. I mean it’s all relative, that’s number one.”

“Number two is OPEC is doing its part. We have been increasing production in line with what we see and a gradual mechanism that has been very transparent … We are doing everything we can to bring the market back to balance but there are economic factors that are really beyond OPEC’s control,” he added.

Oil prices have tumbled in recent weeks amid renewed concerns of a global recession and a softening demand outlook.

International benchmark Brent crude futures traded at $92 a barrel on Wednesday morning, down around 0.4%, while U.S. West Texas Intermediate futures stood at $86.25 a barrel, more than 0.3% lower.

Brent futures climbed to nearly $128 a barrel in the days following Russia’s invasion of Ukraine on Feb. 24 — part of an upswing in prices seen across all types of energy that pushed inflation to multi-decade highs.

OPEC’s relationship with Russia is ‘solid’

On the energy alliance’s ties with non-OPEC leader Russia, Al Ghais said the group has a “solid” relationship with Moscow and it always seeks to separate politics from its market stabilizing objectives.

“First of all, if you look at history, if I may, such challenges are not new to OPEC and the OPEC history,” Al Ghais said, citing the Iran-Iraq war in the 1980s and the invasion of Kuwait in 1990.

“We try always in our meetings to separate the politics and the political aspects from what we do in terms of managing the market balance and in terms of what we do as OPEC+, I think the methodology is clear,” he continued.

“Russia’s leadership in supporting the declaration of cooperation has been clear since day one, since 2017. The relationship is solid in terms of managing the market.”

Asked whether this means that he trusts Russia, Al Ghais replied: “Yes.”

A well-known OPEC figure, Al Ghais’ career in the global oil industry spans 30 years.

He has advised six Kuwaiti oil ministers on oil market developments in recent years and has previously been a leading member of Kuwait’s delegation to OPEC meetings.

Al Ghais served as Kuwait’s governor for OPEC from 2017 through to 2021 and was also a member of the group’s Internal Audit Committee.

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The Sunday Read: ‘How One Restaurateur Transformed America’s Energy Industry’

It was a long-shot bet on liquid natural gas, but it paid off handsomely — and turned the United States into a leading fossil-fuel exporter.

The journalist Jake Bittle delves into the storied career of Charif Souki, the Lebanese American entrepreneur whose aptitude for risk changed the course of the American energy business.

The article outlines how Mr. Souki rose from being a Los Angeles restaurant owner to becoming the co-founder and chief executive of Cheniere Energy, an oil and gas company that specialized in liquefied natural gas, and provides an insight into his thought process: “As Souki sees it,” Mr. Bittle writes, “the need to provide the world with energy in the short term outweighs the long-term demand of acting on carbon emissions.”

In a time of acute climate anxiety, Mr. Souki’s rationale could strike some as outdated, even brazen. The world may be facing energy and climate crises, Mr. Souki told The New York Times, “but one is going to happen this month, and the other one is going to happen in 40 years.”

“If you tell somebody, ‘You are going to run out of electricity this month,’ and then you talk to the same person about what’s going to happen in 40 years,” he said, “they will tell you, ‘What do I care about 40 years from now?’”


Additional production for The Sunday Read was contributed by Emma Kehlbeck, Parin Behrooz, Anna Diamond, Sarah Diamond, Jack D’Isidoro, Elena Hecht, Desiree Ibekwe, Tanya Pérez, Marion Lozano, Naomi Noury, Krish Seenivasan, Corey Schreppel, Margaret Willison, Kate Winslett and Tiana Young. Special thanks to Mike Benoist, Sam Dolnick, Laura Kim, Julia Simon, Lisa Tobin, Blake Wilson and Ryan Wegner.

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Saudi Aramco profit surges 90% in second quarter amid energy price boom

An employee looks on at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019.

Maxim Shemetov | Reuters

Saudi oil giant Aramco reported a stunning 90% surge in second quarter net income and record half year results on Sunday, as high oil prices continue to drive historic windfalls for “Big Oil.” 

Aramco said strong market conditions helped to push its second quarter net income to $48.4 billion, up from $25.5 billion a year earlier. The result easily beat analysts estimates of $46.2 billion.

“Our record second-quarter results reflect increasing demand for our products — particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry,” Aramco President and CEO Amin Nasser said. 

Aramco said half year net income soared to $87.9 billion, easily outpacing the largest listed oil majors, including Exxonmobil, Chevron and BP and other “Big Oil” companies, which are all benefiting from a commodity price boom.

Oil prices surged above $130 dollars a barrel earlier this year, as the global energy crisis, made worse by supply disruptions stemming from Russia’s invasion of Ukraine, roiled global markets and contributed to decades high inflation.

“While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential — both to help ensure markets remain well supplied and to facilitate an orderly energy transition,” Nasser added.

Aramco said it expects the post-pandemic recovery in oil demand to continue for the rest of the decade, despite what it called “downward economic pressures on short-term global forecasts.”

The blowout results are also a major windfall for the Saudi Arabian government, which relies heavily on its Aramco dividend to fund government expenditure. The Kingdom reported a $21 billion budget surplus in the second quarter. 

Aramco said it would maintain its dividend payout of $18.8 billion in the third quarter, covered by a 53% increase in free cash flow to $34.6 billion. 

Major gains

Aramco is using its major gains to invest in its own production capabilities in both hydrocarbons and renewables, while also paying down debt. 

“We are progressing the largest capital program in our history, and our approach is to invest in the reliable energy and petrochemicals that the world needs, while developing lower-carbon solutions that can contribute to the broader energy transition,” the company said.

Saudi Arabia, alongside its OPEC+ counterparts, has been under increasing pressure to boost oil output to ease high prices. Company executives said limited global spare production capacity was a major concern for the global pricing outlook.

Aramco said it achieved total hydrocarbon production of 13.6 million barrels of oil equivalent per day in the second quarter, and was working to boost capacity from 12 million barrels of oil per day to 13 million barrels of oil per day by 2027.

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U.S. tells India that Indian ship was used to reroute Russian-linked fuel to New York

The Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra, arrives at a news conference after a monetary policy review in Mumbai, India, February 6, 2020. REUTERS/Francis Mascarenhas

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NEW DELHI, Aug 13 (Reuters) – The United States has expressed concern to India that it was used earlier this year to export fuel made from Russian crude to New York through high-seas transfers, a top Indian central banker said on Saturday.

U.S. sanctions on Russia for its February invasion of Ukraine prohibit imports to the United States of Russian-origin energy products including crude oil, refined fuels, distillates, coal and gas.

“You know that there are sanctions against people who are buying Russian oil, and this was reported to us by the U.S. Treasury,” Reserve Bank of India Deputy Governor Michael Patra told an audience of government officials and figures in finance and banking.

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“It turns out, an Indian ship met a Russian tanker in mid-seas, picked up oil in the mid-seas, came to a port in Gujarat, it was processed in that port and converted into a distillate which actually goes into making single-use plastic,” Patra said at the event in Odisha state, held to celebrate 75 years of India’s independence.

“The refined output was put back on that ship and it set sail without a destination. In the mid-seas it received the destination so it reached its course, went to New York. So that’s the way war works. It works in strange ways.”

Patra did not name the ship or give any other details.

The U.S. embassy in New Delhi had no comment.

India, the world’s third-biggest oil importer and consumer, has become one of the biggest importers of Russian oil since the invasion of Ukraine, having bought very little of it previously. read more

Russia is traditionally India’s biggest supplier of military hardware, and New Delhi has not condemned Moscow’s aggression towards Ukraine, though it has called for an end to violence.

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Reporting by Nidhi Verma; Editing by William Mallard and Hugh Lawson

Our Standards: The Thomson Reuters Trust Principles.

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You’ll Almost Have to Buy an Electric Vehicle if Climate Bill Passes

The attractions of electric vehicles have been magnetic in 2022.

Soaring gas prices, inflation not seen in four decades and a push for cleaner, environmentally friendly technology have all combined to make EVs more appealing than ever to consumers.

Now, there is legislation headed toward the home stretch that will give EVs not only new legitimacy in the eyes of the auto market, but potentially lucrative perks to automakers and consumers who decide to bet on electric vehicles as their chosen mode of transportation — and investment.

The new climate bill passed by the Senate on Aug. 7 is now headed to a vote in the House.

So What Can Consumers Expect in the Climate Bill?

If lawmakers make it official, the legislation is chock full of rebates, tax deductions, subsidies and incentives to move everything from their house’s power source to their toaster to a more climate-friendly energy source.

“This climate spending includes $60 billion for solar panel and wind turbine manufacturing (and $30 billion in credits for new projects), $60 billion for disadvantaged communities that bear the brunt of climate impacts, $27 billion for clean tech R&D, $20 billion to reduce agricultural emissions, $5 billion for forest conservation, $4 billion for drought funding in Western states, new battery manufacturing credits and many more climate-related priorities,” EV site Elektrek reports.

What Do You Get For Your Electric Vehicle in the Climate Bill?

It also includes a 30% tax deduction for homeowners who install solar energy at their homes, and a variety of financial perks for switching to the electric versions of household appliances, tech used for running a business and even cars.

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It is that last one that has investors sitting up to take notice.

Both new and used electric vehicles will be eligible for tax credits, up to $7,500 for new cars, and $4,000 for use ones. The bill also ends the 200,000 cap on the number of cars that can be sold by a manufacturer that qualify for rebates. That’s good news for Tesla  (TSLA) , which reached the cap long ago. But the flip side is that the bill limits the rebates to lower priced vehicles and families with relatively low incomes, so many high-end cars and trucks won’t qualify.

While electric vehicles have been gaining popularity at a scorching pace as gas prices have pushed some drivers into the market – some estimates say interest in EVs has soared by as much as 60% since January 2022 – there is still a lack of inventory in the space.

That data comes from Recurrent, which took a deep dive look at a market that was worth $163 billion in 2020 and is projected to be worth $824 billion by 2030.

There Will Be A Lot More EV Competition Soon

That is slated to change. An earlier report from the Environmental Defense Fund outlined just how far automakers are looking ahead.

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It found that over a dozen carmakers in America have rolled out plans to open EV manufacturing sites, spending $75 billion in six new states nationwide.

That is in addition to the $515 billion global auto companies are spending to build electric vehicles by 2030, when more than 100 new EV models are expected to be on the market, the report found.

Even tech darling Apple  (AAPL)   — which has fans who are arguably as rabid as Elon Musk’s Tesla  (TSLA)  — appears to be getting ready to debut its own electric vehicle.



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Five Chinese state-owned companies to delist from NYSE

SHANGHAI/HONG KONG, Aug 12 (Reuters) – Five Chinese state-owned firms including China Life Insurance (601628.SS) and oil giant Sinopec (600028.SS) said Friday they would delist from the New York Stock Exchange, amid heightened diplomatic and economic tensions with the United States.

The companies, which also include Aluminium Corporation of China (Chalco) (601600.SS), PetroChina (601857.SS) and Sinopec Shanghai Petrochemical Co (600688.SS), said in separate statements that they would apply for delistings of their American Depository Shares from later this month.

The five, which were added to the Holding Foreign Companies Accountable Act (HFCAA) list in May after they were identified as not meeting U.S regulators’ auditing standards, will keep their listings in Hong Kong and mainland Chinese markets.

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There was no mention of the auditing row in separate statements by the Chinese companies outlining their moves, which come amid heightened tensions after last week’s visit to Taiwan by U.S. House of Representatives Speaker Nancy Pelosi.

Beijing and Washington have been in talks to resolve a long-running dispute that could mean Chinese firms being kicked off U.S. exchanges if they do not comply with U.S. audit rules.

“These companies have strictly complied with the rules and regulatory requirements of the U.S. capital market since their listing in the U.S. and made the delisting choice for their own business considerations,” the China Securities Regulatory Commission (CSRC) said in a statement.

Some of China’s largest companies including Alibaba Group Holdings , J.D Com Inc and Baidu Inc are among almost 270 on the list and at threat of being delisted.

Alibaba said last week it would convert its Hong Kong secondary listing into a dual primary listing which analysts indicated could ease the way for the Chinese ecommerce giant to switch primary listing venues in the future. read more

In premarket trade Friday, U.S.-listed shares of China Life Insurance and oil giant Sinopec fell 5.7% about 4.3% respectively. Aluminium Corporation of China dropped 1.7%, while PetroChina shed 4.3%. Sinopec Shanghai Petrochemical Co shed 4.1%.

“China is sending a message that its patience is wearing thin in the audit talks,” said Kai Zhan, senior counsel at Chinese law firm Yuanda, who specialises in areas including U.S. capital markets and U.S. sanction compliance.

Washington has long demanded complete access to the books of U.S.-listed Chinese companies, but Beijing bars foreign inspection of audit documents from local accounting firms, citing national security concerns.

The companies said their U.S. traded share volume was small compared with those on their other major listing venues.

PetroChina said it had never raised follow-on capital from its U.S listing and its Hong Kong and Shangai bases “can satisfy the company’s fundraising requirements” as well as providing “better protection of the interests of the investors.”

China Life and Chalco said they would file for delisting on Aug. 22, with it taking effect 10 days later. Sinopec and PetroChina said their applications would be made on Aug. 29.

China Telecom (0728.HK), China Mobile (0941.HK) and China Unicom (0762.HK) were delisted from the United States in 2021 after a Trump-era decision to restrict investment in Chinese technology firms. That ruling has been left unchanged by the Biden administration amid continuing tensions.

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Reporting by Samuel Shen in Shanghai, Scott Murdoch in Hong Kong and Medha Singh in Bengaluru; Editing by Hugh Lawson, David Goodman and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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Big climate bill: Major new spending to spur green energy

By SETH BORENSTEIN, MATTHEW DALY and MICHAEL PHILLIS

August 11, 2022 GMT

WASHINGTON (AP) — After decades of inaction in the face of escalating natural disasters and sustained global warming, Congress hopes to make clean energy so cheap in all aspects of life that it’s nearly irresistible. The House is poised to pass a transformative bill Friday that would provide the most spending to fight climate change by any one nation ever in a single push.

Friday’s anticipated action comes 34 years after a top scientist grabbed headlines warning Congress about the dangers of global warming. In the decades since, there have been 308 weather disasters that have each cost the nation at least $1 billion, the record for the hottest year has been broken 10 times and wildfires have burned an area larger than Texas.

The crux of the long-delayed bill, singularly pushed by Democrats in a closely divided Congress, is to use incentives to spur investors to accelerate the expansion of clean energy such as wind and solar power, speeding the transition away from the oil, coal and gas that largely cause climate change.

The United States has put the most heat-trapping gases into the air, burning more inexpensive dirty fuels than any other country. But the nearly $375 billion in climate incentives in the Inflation Reduction Act are designed to make the already plummeting costs of renewable energy substantially lower at home, on the highways and in the factory. Together these could help shrink U.S. carbon emissions by about two-fifths by 2030 and should chop emissions from electricity by as much as 80%.

Experts say it isn’t enough, but it’s a big start.

“This legislation is a true game-changer. It will create jobs, lower costs, increase U.S. competitiveness, reduce air pollution,” said former Vice President Al Gore, who held his first global warming hearing 40 years ago. “The momentum that will come out of this legislation, cannot be underestimated.”

The U.S. action could spur other nations to do more — especially China and India, the two largest carbon emitters along with the U.S. That in turn could lower prices for renewable energy globally, experts said.

Because of the specific legislative process in which this compromise was formed, which limits it to budget-related actions, the bill does not regulate greenhouse gas emissions, but deals mainly in spending, most of it through tax credits as well as rebates to industry, consumers and utilities.

Investments work better at fostering clean energy than regulations, said Leah Stokes, an environmental policy professor at the University of California, Santa Barbara. The climate bill is likely to spur billions in private investment, she said: “That’s what’s going to be so transformative.”

The bill promotes vital technologies such as battery storage. Clean energy manufacturing gets a big boost. It will be cheaper for consumers to make climate-friendly purchasing decisions. There are tax credits to make electric cars more affordable, help for low-income people making energy-efficiency upgrades and incentives for rooftop solar and heat pumps.

There are also incentives for nuclear power and projects that aim to capture and remove carbon from the atmosphere.

(AP video/Haven Daley, Rick Bowmer, Godfredo A. Vasquez)

The bill moves to ensure that poor and minority communities that have borne the brunt of pollution benefit from climate spending. Farmers will receive help switching to climate-friendly practices and there’s money for energy research and to encourage electric heavy-duty trucks in place of diesel.

The Superfund program, used to pay for cleanup of the nation’s most heavily-polluted industrial sites, will receive more revenue from a bigger tax on oil.

The Rhodium Group research firm estimates the bill would dramatically change the arc of future U.S. greenhouse gas emissions, cutting them by 31% to 44% in 2030, compared to what had been shaping up to be 24% to 35% by 2005 without the bill, said Rhodium partner John Larsen. Clean power on the grid, an upcoming Rhodium report says, would jump from under 40% now to between 60% and 81% by 2030, he said.

“It’s not as big as I want, but it’s also bigger than anything we’ve ever done,″ said Sen. Brian Schatz, a Hawaii Democrat who leads the Senate climate caucus. “A 40% emissions reduction is nothing the U.S. has ever come close to before.″

As decisive a change as it is for U.S. policy and emissions, it still does not reach the official U.S. goal of cutting carbon pollution roughly in half by 2030 to achieve net-zero carbon emissions across the economy by 2050.

Not everyone is impressed.

“This law is big for the U.S. but in global terms long overdue,” said Niklas Hohne, co-founder of the New Climate Institute in Germany. “The U.S. has a long way to go on climate change and is starting from a very, very high emission level.”

When U.S. historic carbon emissions are factored in, U.S. spending still lags behind Italy, France, South Korea, Japan and Canada, according to Brian O’Callaghan, lead researcher at the Oxford Economic Recovery Project at the University of Oxford. He noted the bill has nothing to fulfill America’s broken promise of billions of dollars in climate aid for poor nations.

President Joe Biden has frequently said America is back in the fight against climate change, but other leaders have been skeptical with no legislation to back his claim.

And there may be disappointment. Americans hoping to buy an electric car may find many models ineligible for rebates until more components are made in the U.S. Local fights over siting new renewable energy projects could also hamper the pace of the buildout, some experts said. Environmental justice communities are concerned they’ll be asked to accept new carbon capture projects.

Republicans, who unanimously opposed the bill in the Senate, say it would add to consumers’ energy costs, with House GOP Whip Steve Scalise claiming it “wastes billions of dollars in Green New Deal slush funds.”

Rhodium’s Larsen, who crunched the numbers in the bill, said it would lead to consumers paying up to $112 less a year in energy costs.

“As long as I’ve been in this game, progress on climate has always been higher costs for consumers. That’s not how this bill works,” Larsen said in an interview.

The Democrats didn’t have a vote to spare in the evenly divided Senate and Sen. Joe Manchin, a conservative Democrat from coal-producing West Virginia, had long dashed hopes of an ambitious deal. But two weeks ago, faced with public shaming by environmental groups and sharp criticism even from his own colleagues, he stunned Washington by announcing his support for a bill that reduces drug costs, targets inflation and boosts renewables. Since the deal was announced July 27, Manchin has been an avid cheerleader for its passage. Sen. Krysten Sinema, D-Arizona, provided the vital 50th vote, allowing Vice President Kamala Harris to break the Senate tie.

The result is a 755-page bill that spends money without directly taking on fossil fuels, a disappointment to many on the left. Gore said the fossil fuel industry ran a decades-long “deeply unethical campaign to deceive people around the world,” casting doubt on climate change science.

The industry will face higher royalties and new fees for certain excess methane emissions, a potent greenhouse gas — a rare stick amid carrots. But the fossil fuel industry will remain a powerful force and have guaranteed opportunities to expand on federal lands and off the coast before renewables can be built in those places.

Nevertheless, “the undeniable outcome of this will be a real expansion of wind and solar,” said Harrison Fell, a professor focused on energy policy at North Carolina State University.

In 1988 on a steamy summer day, top NASA climate scientist Jim Hansen brought to public attention for the first time the decades-old concept of global warming when he told Congress carbon dioxide was heating up the Earth. That year became the hottest on record. Now, there have been so many hot years it ranks 28th hottest and Hansen has said he wishes his warnings didn’t come true about climate change.

“It’s a mark of shame that it took this long for our political system to react,” said Bill McKibben, a long-time climate activist, adding that it leaves the fossil fuel industry with too much power. “But this will help catalyze action elsewhere in the world; it’s a declaration that hydrocarbons are finally in decline and clean energy ascendant, and that the climate movement is finally at least something of a match for Big Oil.”

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Michael Phillis reported from St. Louis.

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Gas prices tumble below $4 a gallon for first time in months

The national average price for regular gasoline fell to $3.99 a gallon on Thursday, according to AAA.

Gas prices hit a record high of $5.02 in June as drivers filled their tanks for the summer travel season. They were also pushed higher by soaring global oil prices as the West turned its back on Russian crude in the wake of Moscow’s invasion of Ukraine.

But prices at the pump have since tumbled 21% as drivers have pared back spending and fears of a recession threatened to crimp demand. Despite the drop, they remain 25% higher than this time last year.

“The market was panicked at the start of the summer. Inventories were extremely tight,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “But the market got overcooked. It was overbought.”

De Haan said the national average could keep falling for the next five to 10 days before stalling out in the $3.70s or $3.80s. However, he noted that oil prices have started to bounce off their recent lows and hurricane season could disrupt energy supplies.

Brian Deese, director of the White House’s National Economic Council, said the drop below $4 is an important development for Americans, translating to $100 less in fuel costs for a typical family with two cars.

“That’s meaningful savings people are going to feel in their lives,” Deese told CNN in a phone interview.

Deese said the White House has been tracking gasoline prices and energy supplies “very closely” and added that prices should continue slipping.

“Pricing in the market today suggests we should see prices at the pump fall a bit more,” he said.

“Despite steadily falling gas prices during the peak of the summer driving season, fewer drivers fueled up last week,” the AAA said in a Monday press release.

“It’s another sign that, for now, Americans are changing their driving habits to cope with higher pump prices.”

Analysts say the unprecedented release of emergency oil by the United States has also helped to drive down oil and gasoline prices. In late March, the White House announced the release of 1 million barrels a day from the Strategic Petroleum Reserve for six months.

US crude oil prices have fallen sharply from a peak above $120 a barrel in June to around $92 a barrel on Thursday, helped by an easing of the global supply crunch.

In a report released Thursday, the International Energy Agency revised up its outlook for global oil supply, partly because Russia has continued to pump more oil than expected.

“While Russia’s exports of crude and oil products to Europe, the US, Japan and Korea have fallen by nearly 2.2 [million barrels per day] since the start of the war, the rerouting of flows to India, China, Türkiye and others, along with seasonally higher Russian domestic demand has mitigated upstream losses,” the Paris-based agency said.

By July, Russian oil production was only 310,000 barrels per day below pre-war levels while total oil exports were down just 580,000 barrels per day, it added.

The release of 180 million barrels of oil from the US Strategic Petroleum Reserve has also helped bump up supply.

Matt Egan contributed reporting.

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Ethereum Goerli testnet merge goes live before move to proof-of-stake

Ethereum is the world’s second-biggest cryptocurrency, and it’s giving bitcoin a run for its money.

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Ethereum, the second-largest cryptocurrency by market value, just ran a final dress rehearsal ahead of a years-awaited upgrade that’s been billed as one of the most important events in the history of crypto.

Since its creation almost a decade ago, ethereum has been mined through a so-called proof-of-work model. It involves complex math equations that massive numbers of machines race to solve, and it requires an abundance of energy. Bitcoin mining follows a similar process.

Ethereum has been working to shift to a new model for securing the network called proof of stake. Rather than relying on energy-intensive mining, the new method requires users to leverage their existing cache of ether as a means to verify transactions and mint tokens. It uses far less power and is expected to translate into faster transactions.

The final test took place Wednesday at around 9:45 p.m. ET.

Ansgar Dietrichs, a researcher with the Ethereum Foundation, said in a tweet that the most relevant metric for success when it comes to a dry run like this is looking at time to finalization. He called it “another successful test.”

A research associate from Galaxy Digital pointed out that the participation rate after the test merge dropped, and it looked like there may have been an issue with one of the clients — but overall, it worked.

“A success Merge = chain finalizes,” Christine Kim wrote in a tweet, adding that we are likely to see similar types of issues with the upgrade on mainnet, “but the point is, the Merge worked.”

The timing of the upgrade will be discussed at a meeting of ethereum core developers on Thursday. Previous guidance indicated that the merge should go into effect in mid-September.

Ethereum’s transition has been repeatedly pushed back for the last several years. Core developers tell CNBC that the merge has been slow to progress, in order to allow sufficient time for research, development and implementation.

The price of ether, the token native to the ethereum blockchain, has been on an upswing the last month, rising nearly 80%, including a gain of 10% in the last 24 hours to around $1,875. However, it’s still down by about half this year.  

Here’s what happened

One of ethereum’s test networks, or testnets, called Goerli (named for a train station in Berlin) simulated a process identical to what the main network, or mainnet, will execute in September.

Testnets allow developers to try out new things and make necessary tweaks before the updates roll out across the main blockchain. Wednesday night’s exercise showed that the proof-of-stake validation process substantially reduces the energy necessary for verifying a block of transactions, and also proved that the merger process works. 

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“Goerli has this badge of a bottom-up testnet,” said Josef Je, a developer who worked with the Ethereum Foundation and now runs a permissionless peer-to-peer lending platform called PWN. Je added that it was also the most used testnet at this point.

Je said the proof of stake on Goerli will be almost identical to how things will run on the mainnet.

The Ethereum Foundation’s blog says Goerli is “the closest to mainnet, which can be useful for testing smart contract interactions.”

Spotting the bugs

Tim Beiko, the coordinator for ethereum’s protocol developers, told CNBC that they typically know “within minutes” whether a test was successful. But they’ll still be looking out for many potential configuration issues in the hours and days ahead so they can quickly fix them.

“We want to see the network finalizing and having a high participation rate amongst validators and also make sure we don’t hit any unexpected bugs or issues,” said Beiko.

The easiest metric to track is participation rate, meaning how many validators are online and doing their duties, Beiko said. If the numbers goes down, developers will have to figure out why.

Another key issue relates to transactions. Ethereum processes transactions in groups known as blocks. Beiko said one clear indicator the test went well will be if the blocks have actual transactions in them, and aren’t empty.

The last major check is whether the network is finalizing, meaning that more than two-thirds of validators are online and agree to the same view of the chain history. Beiko says it takes 15 minutes in normal network conditions. 

“If those three things look good, then there’s a long list of secondary stuff to check, but at that point things are going well,” said Beiko.

‘More accessible’

Since December 2020, the ethereum community has been testing out the proof-of-stake workflow on a chain called beacon, which runs alongside the existing proof-of-work chain. Beacon has solved some key problems.

Beiko said the original proposal required validators to have 1,500 ether, a stake now worth around $2.7 million, in order to use the system. The new proof-of-stake proposal lowers the bar, requiring interested users to have only 32 ether, or about $57,600.

“It’s still not a trivial sum, but it’s a much more accessible system,” said Beiko.

There have been other key developments leading up to Wednesday’s test. In June, ethereum’s longest-running testnet, known as Ropsten, successfully merged its proof-of-work execution layer with the proof-of-stake beacon chain. It was the first major dry run of the process that the mainnet will undergo next month, should all go according to plan.

Beiko said that testing the merge allowed developers to ensure that the software running the ethereum protocol was stable and “that everything built on top of the network was ready for the transition.”

WATCH: Behind the nearly $2 trillion crypto wipeout



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