Europe Burns Its Forests for the Trees // Do We Have Enough Copper to Transition? // UK Lifts Fracking Ban

Europe Burns Its Forests for the Trees

In the 1970s, Amory Lovins rose to prominence as an energy guru. Back then, the green movement, to which he was attached, prized decentralization as much as it did stopping pollution. Their fight was against the Fordist, top-down, industrial state--including its centralized structures. Lovins would go on to consult with various governments, including Germany, on energy policy. Biomass was part of his decentralized vision. How has that panned out for Europe?

"When the [EU] began subsidizing wood burning over a decade ago, it was seen as a quick boost for renewable fuel and an incentive to move homes and power plants away from coal and gas. Chips and pellets were marketed as a way to turn sawdust waste into green power," reports the New York Times. "Those subsidies gave rise to a booming market, to the point that wood is now Europe’s largest renewable energy source, far ahead of wind and solar."

But burning wood is carbon intensive and consumes tons of land. Europe is now sacrificing its lush forests to keep the lights on. This problem also showcases the awkward fit between the green vision promulgated in the 1970s and the climate-focused policy goals of the 21st century.  

Do We Have Enough Copper to Transition?

The energy transition relies heavily on copper. Will green dreams of wind and solar future get derailed by a copper shortage?

BloombergNEF reports that annual copper demand is set to expand by over 50% in the next 18 years. The main driver of this expansion is the electrification of transport and other infrastructure. "In the same span, BNEF’s base case has supply up just 16% amid a dearth of new mines, leaving a shortfall of 14 million metric tons by 2040. Even in a best-case scenario, a shortage of more than 5 million tons is possible."

To put the energy transition's demands on copper in perspective, electric vehicles need over double the amount of copper as the standard internal combustion engine. “Meanwhile, solar and offshore wind need two times and five times, respectively, more copper per megawatt of installed capacity than power generated using natural gas or coal," reports CNBC.

A commitment to more copper mining and discovery is sorely needed. The increasing demand might help. "As copper becomes increasingly scarce and increasingly expensive, the economics of better copper recovery will likely encourage far greater recovery in this respect, making copper not only better suited to support renewable, but more renewable itself," reports Oilprice.com.

The major snag is that those who push the hardest for the renewable energy transition are often the first on the barricades against mining projects. And then there are the downstream effects of shifting the electricity sector to unreliable generators like wind and solar. Not to mention this crew's penchant for policies that drive up the cost of fossil fuels, which are the only fuels that make copper mining possible at all. 

UK Lifts Fracking Ban

Liz Truss, the new British PM, just lifted the UK's ban on fracking. 

“It is vital we take steps to increase our domestic energy supply,” Truss said. “We will end the moratorium on extracting our huge reserves of shale that could get gas flowing in as soon as six months where there is local support for it.”

This is a sudden about-face for a British industry that had received the last nail in its coffin earlier this year. The energy crisis, exacerbated by the Ukraine war, has persuasive power like no other. All over Europe, countries are taking a second look at their received energy policies and see great room for revision.

But what does the road ahead look like for the British fracking industry? It should expect powerful opposition from communities and will have to overcome Britain's challenging geology.

Only 17% of the British public support fracking. But opinion is more malleable than rock. 

"There are a few key differences between the rocks below Britain and those in America’s Permian Basin," reports Bloomberg. "The best performing shale reservoirs in the US are found in rocks that are largely silica-based. That allows for the drilling of sturdy wells that will last a long time. In the UK, the ground is made of clay that won’t hold a fracture for as long."

And unlike America, with its wide spans of uniform rock, the UK has a cornucopia of variation beneath the surface. This poses a huge obstacle for economies of repetition. They may have better luck in the North Sea, where the oil and gas industry has deep roots and proven reserves. 

"Truss said her government will proceed with an offer of new North Sea exploration licenses announced earlier this year, with more than 100 new permits available," Bloomberg reports.

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Conversation Starters

1. Like its major oil refinery, South Korea's Kori nuclear plant survived a recent typhoon unscathed. "Typhoon Hinnamnor, one of the most powerful storms ever to hit South Korea, moved out of the country early morning Sept. 6 after battering major industrial sites with floods and power outages," reports S&P Global. Kori's operations have already returned to normal.

2. Belgium's PM Alexander De Croo rang the alarm bell this week, saying that Europe needs to act now and act fast to address the energy crisis. “A few weeks like this and the European economy will just go into a full stop. Recovering from that is going to be much more complicated than intervening in gas markets today,” he told Bloomberg. “The risk of that is de-industrialization and severe risk of fundamental social unrest.” Belgium plans to get rid of half of its electricity which is sourced from nuclear by 2025. The first plant is set to switch off in the early days of winter. Imported natural gas is supposed to replace the country's nuclear fleet.

3. Global oil and gas leasing has fallen to an all-time low. "Only 21 lease rounds were completed globally through August this year, half of the 42 rounds held in the first eight months of 2021. The acreage awarded so far this year has shrunk to a 20-year low of 320,000 square kilometers. Global lease rounds are expected to total 44 this year, 14 less than in 2021 and the lowest level since 2000," reports Rigzone. 

Crom's Blessing