Net Zero

1. Problematic oil promises
2. Putin’s uranium threat
3. Climate litigation surge
4. Ukraine drains Europe
5. Wind farms blow back

Utilities’ strategy for data centers is ‘blind, blunt, and random,’ and Greenpeace USA is on the cusp of being ‘wiped out.’

At COP28 in Dubai, everyone was fixated on the apparent conflict of interest — one of the world’s top oil and gas producers — and the ostensible main goal of the conference, to sharply cut global greenhouse gas emissions. But what struck me after the summit reached an agreement that the world should “transition away from” fossil fuels, was that there was probably But what struck me after the summit reached an agreement that the world should “transition away from” fossil fuels, was that there was probably no other country that had enough credibility with both Big Oil and Big Climate to get a deal like that done.

The Gulf is full of contradictions on climate change. It’s a locus of power for OPEC, but also a hub for oversized investments in hydrogen, carbon capture, renewables, and other new technologies. Because of their low drilling costs, Gulf countries will likely be among the last on Earth to give up oil production, offering them increasing sway in global energy geopolitics in years to come. But they also have the financial and natural resources, and willingness, to quickly and drastically scale up clean energy. As one of the world’s hottest and driest regions, they have a personal stake in mitigating climate impacts. If you care about the planet’s future, you must keep a close eye on the Gulf.

That’s why I’m so excited that Semafor is launching a new newsletter to do just that. Starting on Monday, Semafor Gulf will cover the biggest stories in the region’s tech, energy, finance, and politics, and break news on the Gulf’s growing power on the world stage.

Sign up here.

Trump and Harris have the same issue

Growth in oil demand is cooling off. That’s a complication for both US presidential candidates.

In its latest market outlook, the International Energy Agency cut its expectation for demand growth by nearly 100,000 barrels per day, and said growth this year has been the slowest since the pandemic. That has pushed prices to their lowest level in three years, with the international benchmark dipping below $70 per barrel.

Yet oil production in both the US and globally is at record highs. That will push prices down even more next year, the agency forecast, as stockpiles of surplus crude start to accumulate. The main culprit in the demand freeze is China, the world’s top importer, where consumption has been contracting for months amid a broad economic slowdown.

There was little daylight between Vice President Kamala Harris and ex-President Donald Trump in their presidential debate this week when it came to fossil fuels. Trump warned that if he loses the election, “oil will be dead,” while Harris touted overseeing “the largest increase in domestic oil production in history,” and said more investment was needed to “reduce our reliance on foreign oil.” The trouble is, the market isn’t asking for more drilling — and pushing for more exploration than the market wants is a recipe for disaster for oil companies.

It’s typical for presidential candidates to make promises on energy that are outside their power to deliver. But the difference between those promises and what oil companies will be willing and able to deliver is especially wide this year. China’s economic indicators are grim, and that’s especially a problem for US producers, which depend on foreign exports as their only viable opportunity for growth outside the well-supplied domestic market. OPEC has barely managed to hold the line on sticking to relatively low production quotas, and would need to cut even deeper to avoid an oversupply next year, Citigroup analysts said this week. Warring factions in Libya appear close to an agreement that would allow the country to restart drilling.

Put it all together, and some analysts see global oil prices falling as low as $60 per barrel next year, which would be below the average price US producers need to break even.

Putin’s uranium threat

Widespread efforts to expand the use of nuclear power globally might be derailed by the Ukraine war. Russian President Vladimir Putin told government ministers in a televised meeting that Moscow should consider restricting exports of commodities including uranium in retaliation for Western sanctions against the country: Russia is the world’s fourth biggest producer of uranium and accounts for nearly half of global enrichment capacity, according to Reuters. Meanwhile the chief executive of the world’s biggest uranium miner told the Financial Times the war was making it harder to supply Western utilities, many of whose countries have targeted tripling nuclear electricity capacity by 2050 in a bid to curb carbon emissions.

Nights of Net Zero: Powering the Future

David Hardy, Group EVP and CEO Americas, Ørsted and Kathleen Barrón, EVP and Chief Strategy Officer, Constellation join Semafor on Monday, Sep. 23 to discuss the most efficient ways the energy sector can meet the moment and maintain clean, reliable energy. Networking reception to follow. Request Invitation.

The Next 3 Billion

President Julius Maada Bio, Sierra Leone and Mcebisi Jonas, Chairman, MTN Group will join the stage at The Next 3 Billion summit on Tuesday, Sep. 24 — the premier US convening dedicated to unlocking one of the biggest social and economic opportunities of our time: connecting the unconnected. Request invitation.

Nights of Net Zero: Climate Innovations

Tom Steyer,  Co-Executive Chair, Galvanize Climate Solutions, Mary de Wysocki,  SVP and Chief Sustainability Officer at Cisco, and Heather Zichal,  Global Head of Sustainability, JPMorgan Chase join Semafor on Wednesday, Sep. 25 for an evening of forward-looking discussions on climate finance and AI’s role in advancing low-carbon technologies. This discussion is followed by a networking reception. Request Invitation.

Net Zero Climate Week happy hour!

Join Tim McDonnell and Prashant Rao for a casual off-the-record happy hour to round off Climate Week on the evening of Thursday, Sep. 26. RSVP here.

Climate litigation surge

The number of climate-related lawsuits filed against fossil fuel companies globally has tripled since the 2015 Paris Agreement, a report found.

Out of about 86 cases filed against top coal, oil, and gas companies since 2005, one-third seek compensation for the impacts of climate damages, the advocacy group Oil Change International reported. But so far, none of these cases have been successful. That could change soon, as the lawsuit of a farmer in Peru against the German energy company RWE nears a verdict after almost a decade in court. Other lines of attack, especially accusing companies of misleading advertising, have proven more successful so far.

Ukraine imports strain Europe

Price per megawatt-hour of electricity in Greece in August, more than double the average for this time of year. In a letter to the European Commission, Greek prime minister Kyriakos Mitsotakis complained that rising power exports from Europe to Ukraine are straining Europe’s electric grid, as Ukraine’s grid operators seek to expand imports to compensate for power plants destroyed by Russian airstrikes in recent months. The complaint illustrates how Moscow’s targeting of civilian energy infrastructure in Ukraine is already causing problems for the broader European economy, and could become an obstacle to the continent’s decarbonization efforts.

Wind farms blow back

Germany will likely remain a critical market for wind power despite the ascendance domestically of hard-right factions that oppose renewable energy, the country manager of a prominent European wind farm developer told Semafor.

“Right now, I think, is the best time for the last 10 to 15 years. Still, we see at the horizon that things may change,” said Klaus Heckenberger, who leads German operations for Eurowind, a Danish company that also manages solar, hydrogen, and biogas projects in Europe and the US.

The far-right Alternative für Deutschland party, which has made its opposition to onshore wind a central issue, notched its first statewide election win in Germany two weeks ago, but the party is far from changing federal energy policy. Eurowind has already faced right-wing resistance in parts of Eastern Europe, including Poland, Romania, Bulgaria, and Slovakia, but the long-term nature of wind projects makes them more resistant to political swings in the short term. Still, Heckenberger said the company may deprioritize wind projects in areas of Germany where it knows it could face local opposition.

New Energy

• China has leaped far ahead of the US in its development of nuclear power technology, and is building a lead on nuclear fusion.

Fossil Fuels

• Demand for liquified natural gas in Europe boomed after Russia invaded Ukraine. But Europe’s LNG peak has likely passed, a report concluded — putting investments in further import terminals at risk.
• Mitsubishi is considering buying an equity stake in a massive hydrogen plant ExxonMobil is building in Texas.
• Nigeria’s vehicle fuel subsidy is a terrible policy crippling the country’s economy. A major new refinery could make it easier for the country’s leaders to finally scrap it.

Finance

• Industry efforts to self-police the voluntary carbon market aren’t working well enough to dispel concerns about greenwashing, economist Vera Songwe warned, and need to be replaced with new binding legal standards.
• As big banks drop fossil fuels, smaller regional banks are standing by to pick up the business.

Tech

• The US Department of Energy will contribute $500 million toward the construction of a major carbon removal project in Texas led by a subsidiary of the oil company Occidental.
• Enviva, one of the world’s top makers of wood pellets that can be used as an industrial alternative to fossil fuels, is in dire financial straits even though demand for its products is high.

Minerals & Mining

• Mergers and acquisitions in the mining industry are increasing, as companies flush with cash from the mineral demand boom find it easier to buy existing mines than go through the bureaucratic nightmare of building new ones.

EVs

• A bit of good news, for a change, in how automakers in the US are changing their EV strategy: Stellantis will invest $400 million to retool plants in Michigan for EV production.

Personnel

• The fossil fuel billionaire Kelcy Warren appears to be nearing victory in a legal battle against Greenpeace USA that could “wipe out” the activist group, its leaders fear.

Patty Cook, senior vice president for distributed flexibility solutions at the consulting firm ICF. An ICF report this week lays out the significant increase in power demand utilities will face because of data centers and AI.

• Actually, the center could hold.
• Republicans fear Laura Loomer is influencing Donald Trump.
• LinkedIn’s have nots and have bots.