Russia's war has mobilized $500 billion in clean energy spending

Breanne Deppisch

December 25, 06:30 AM December 25, 06:30 AM

Russia’s war in Ukraine has accelerated the pace of clean energy spending, according to a report from the world’s leading energy agency, sparking $500 billion in new government investments alone, as leaders seek to transition away from fossil fuels and keep costs down for consumers.

The two primary drivers of government clean energy spending this year were concerns over energy security and soaring costs of commodities, according to the International Energy Agency’s Government Energy Spending Tracker.

In Europe, the energy crisis sent natural gas prices soaring to a record high of more than 300 euros per megawatt hour in August, touching off fears of an affordability crisis, while gas prices in the U.S. reached an all-time high of more than $5 per gallon in June.

But the crisis has also led governments to embrace clean energy policies in an effort to decrease global demand for every type of fossil fuel in the near future. As a result of the shift to clean energy, coal use will peak within the next few years before declining, while natural gas demand will plateau by 2030, the report said. Total renewable capacity growth is set to nearly double in the next five years, the report found, overtaking coal as the largest source of electricity generation.

RUSSIAN OIL EXPORTS CRATERED BY MORE THAN HALF SINCE G-7 PRICE CAP BEGAN

The U.S. was at the fore of clean energy spending this year, according to the tracker, largely due to its August passage of the Inflation Reduction Act, which allocates more than $360 billion in clean energy and climate spending. It was followed closely by the European Union — and particularly, the governments of Finland, France, and Germany.

Other countries, including Japan and South Korea, have also ramped up their renewable energy investments this year. Japan announced the launch of its Green Transformation program, which invests in clean energy technologies such as nuclear, low-emissions hydrogen, and ammonia, while South Korea has accelerated its efforts to increase the amount of nuclear power and renewable sources in its energy mix.

Energy security was a major concern this year, especially in the European Union, which depended heavily on Russian fossil fuels prior to the war. But in the 10 months since Russia’s invasion, the bloc has raced to accelerate clean energy projects, such as solar, wind, and nuclear power, bringing down its total demand for natural gas and oil by 20% this decade, and coal demand by 50%.

Meanwhile, Inflation Reduction Act investments put the U.S. on track to see its annual solar and wind capacity increase by 2.5 times by 2030, compared to today’s levels, and electric vehicle sales increase by seven times the current amount.

In total, the new national investments in clean energy bring to $1.22 trillion the amount that governments have allocated to clean energy since the start of the COVID-19 pandemic.

That funding has also substantially incentivized spending by the private sector, the IEA found: Government spending is expected to mobilize flows of private investment by another 50% by 2030, reaching more than $2 trillion annually.

“The responses from governments to the crisis are going in the right direction,” IEA Executive Director Fatih Birol said in a statement.

“The unprecedented financial support we are seeing for clean energy transitions is improving energy security and dampening the impact of high fuel prices on customers," he said.

Greens hopeful Interior review of oil and gas leases leads to cancellations

Jeremy Beaman

December 07, 04:28 AM December 07, 04:28 AM

Environmental groups are hopeful the Interior Department will pull the plug on any number of thousands of oil and gas leases issued during previous administrations after it completes a retroactive review of their underlying environmental assessments.

It would be a welcome outcome for green nongovernmental organizations, whose legal challenges against the lease sales in question have resulted in Interior's reassessment and whose successes of late in their campaign to rein in oil and gas leasing have been overshadowed by congressional action favoring new development.

INTERIOR PROPOSES METHANE WASTE PREVENTION RULE FOR OIL AND GAS ON FEDERAL LANDS

Interior is taking another look at the environmental review work performed for dozens of lease sales conducted during both the Obama and Trump administrations pursuant to a series of court decisions and legal settlements entered with green groups. The groups argued that the agency failed to consider the full environmental effects of the lease sales, including the potential greenhouse gas emissions associated with the development of the leases.

Leases subject to scrutiny number 3,600 and total some 3,433,615 acres in seven states: Colorado, Montana, New Mexico, Utah, Wyoming, North Dakota, and South Dakota.

The Bureau of Land Management, the Interior agency tasked with managing mineral leasing on public lands, published a supplemental environmental assessment in November that gave out fresh estimates of the prospective emissions footprints of the leases.

The BLM, which is taking comment on the supplemental environmental assessment through Dec. 27, said its pending decision on how to carry forward would decide "whether to affirm previous leasing decisions from the February 2015 to December 2020 lease sales for the subject leases," implying it may void leases.

That clause from the BLM stood out to Jeremy Nichols, the climate and energy program director for WildEarth Guardians, which was the lead plaintiff in the five lawsuits undergirding the government's reassessment of the leases.

"They're acknowledging that as part of the process, they're going to decide whether they're going to reaffirm these past leasing decisions or decide to take a different approach, which could include canceling them altogether," Nichols told the Washington Examiner.

"It's pretty big. There's a lot on the table and a lot of public lands, a lot of public minerals tied up in this," Nichols said.

The government's review is a win for the environmentalist movement, which has faced numerous roadblocks recently in its campaign against expanded mineral leasing and drilling on public lands — even under a Democratic president who largely shares its aims.

Among those roadblocks are the new pro-leasing leasing provisions passed in the Inflation Reduction Act, the green energy and healthcare spending bill that was passed in a party-line vote in August.

The law is revamping oil and gas leasing thanks to language, finalized at the demand of a make-or-break vote from Sen. Joe Manchin (D-WV), that incentivizes the Biden administration to lease lands for mineral development.

Other provisions directly ordered oil and gas lease sales, and Interior has followed through with scheduling multiple onshore and offshore lease sales since the law was passed.

The new leasing has frustrated Biden's environmentalist constituency, as it wants the department to use its discretion to delay or limit leasing more aggressively.

"It definitely kind of transcends political administrations and affiliations," Nichols said, pointing to the fact that the BLM is assessing Obama- and Trump-era leasing, "but it really speaks to just how when we got leasing program has just been implemented in such a way as to defy climate science and the reality of climate change."

The Biden administration has been under competing pressure from oil and gas industry groups, which have filed multiple lawsuits against Interior for not holding lease sales more regularly, and critics have accused the administration of pursuing policy by settling in suits with outside allies.

Trade groups such as the American Petroleum Institute have opposed the department's legal settlements providing for the reconsideration of past environmental assessments, arguing the settlements violate an existing 90-day statute of limitations against leasing decisions provided in the Mineral Leasing Act.

Kathleen Sgamma, the head of the Western Energy Alliance, said she expects the outcome of Interior's supplemental environmental assessment of the past leasing decisions to be more procedural in nature by including new estimates of greenhouse gas emissions, as opposed to a more significant decision like voiding leases.

"If they try that, we're going to sue them," said Sgamma, whose group filed suit against the administration Monday due to the lack of a third-quarter oil and gas lease sale.