Letter to US Bank Executives re: DAPL

A few weeks ago I closed my U.S. Bank credit card. I recently wrote a letter the U.S. Bank executives explaining that it is because they are a bigger funder of the Dakota Access Pipeline (DAPL). Here’s the letter:

December 27, 2016

To: Richard K. Davis, Chairman and CEO, U.S. Bank
Cc: Dana E. Ripley, Senior VP of Corporate Communications, U.S. Bank
Susan Beatty, Brand, Corporate Social Responsibility, Sponsorships, U.S. Bank

Recently I closed my U.S. Bank credit card. I have not had any negative experiences with U.S. Bank, but I learned that the bank is one of the biggest funders of the Dakota Access Pipeline (DAPL), and heeded the calls from #NoDAPL organizers to close accounts with U.S. Bank.

It is worth remembering that the fight at Standing Rock over the DAPL is first and foremost about respecting the sovereignty and land of American Indian tribes. Only secondarily is it about fossil fuels and climate change. However, as a climate activist, that secondary motive is very important to me, as it should be to you.

Funding a fossil fuel project is fundamentally at odds with the function of a bank. The role of a bank is to facilitate investment: the use of today’s money to build things that will generate value over time. Building fossil fuel infrastructure now destroys value. Generations will suffer and have to pay dearly for the damage generated by new oil and gas pipelines, coal mines, and the like.

What you are doing is enriching yourselves in the present at the expense of the future, and that is the exact opposite of investment.

I ask you to remove all funding from the DAPL, and also to remove all funding from all fossil fuel infrastructure projects, and to publicly commit not to fund any fossil fuel projects in the future.

Sincerely,
Martin MacKerel

If you would like to join me, check out Yes Magazine’s article on which banks are funding DAPL and how to contact them.

Comments on the scope of the WesPac EIR, part 1

August 7th, 2015 – my first email submitting comments, on issues other than climate change. Part two focuses on climate change.


In this document, I am listing all comments on the scope of the WesPac 2015 RDEIR other than those related to climate change.

Pipeline and tank integrity issues

When I refer to “pipelines”, I mean both the pipelines fully internal to the site, as well as the external pipelines that connect to the regional refineries and other distribution networks.

Please include detailed information about the age of all tanks and pipelines. Which of these tanks will be refurbished?

What are the limits of vapor pressure that the tanks and pipelines can handle? How does this compare to the known very high vapor pressure of Bakken shale oil?

What other effects does crude type have on pipeline or tank integrity? For example, both tar sands dilbit and Bakken shale are likely to be more corrosive than fuel oil or other crudes, and the more viscous tar sands dilbit is likely to be pumped at higher pressure than other crudes. Tar sands dilbit is also often heated to get it to flow; how does this affect pipeline integrity? It could increase corrosion and it could also increase wear-and-tear from thermal expansion and contraction.

The Mayflower spill in Arkansas was a result of the rupture of Pegasus, a 65-year-old pipeline that was intended for refined products. Exxon 1) reversed the flow and 2) sent more corrosive tar sands dilbit down the pipe 3) at high pressure. All three actions stressed the already quite old pipeline; together, they weakened it enough to rupture it.

Continue reading “Comments on the scope of the WesPac EIR, part 1”

Investing to Support the Clean-Energy Revolution

While I’m definitely anti-capitalist, for the meantime, capitalism is the social form we have. So I am investigating the best ways to limit climate change within that system, while at the same time looking to overcome it.

One way to work within capitalism is in the directing of your money, both as a consumer and as an investor. Here are the results of my research into some “green” ways to invest.

Financing installation, not companies

I am focused on directly financing the rollout of existing clean energy technologies – primarily wind and solar – rather than financing R&D or buying stock in clean-energy companies. Since I still work full-time, any investment income is taxed at a high rate. But most of the investment instruments that finance the direct implementation of these technologies are income-generating assets (which makes sense). Therefore I am specifically looking for things that I can buy through my retirement accounts.

In any case, most of my investable money is in my retirement accounts (IRAs that were rolled over from 401k funds). I have them all at Vanguard, and it’s easy to set up a brokerage account. From there I can buy anything publicly traded.

YieldCos

The main type of investment I’ve invested in (of the money devoted to clean energy) is the YieldCo, a relatively new type of investment that provides a steady stream of income. The idea is that the YieldCo effectively owns income-generating assets like wind farms and solar installations and distributes most of the income as dividends. YieldCos buy these assets from developers; the developers can then take that capital and use it to build new wind farms and install more solar. Usually each YieldCo is closely tied to one developer, which does raise the potential for conflicts of interest.

I did some investigation into some of the available YieldCos. I picked a few for purity and yield (like meth). By yield of course I mean how much the dividends amount to as a percentage of the purchase price. By purity I mean how much of their assets are in clean energy. One in particular, NRG’s YieldCo, has a high percentage of dirty energy assets (natural gas power plants and even coal power plants) in order to have the tax equity to take full advantage of the federal Investment Tax Credit available for solar and wind. While I understand the rationale, I’d prefer my money to be used to fund as close to 100% clean energy as possible. And as you can see, it’s quite possible:

This graph is from an absolutely excellent overview (about a year old) at Forbes called Clean Energy Yield Cos: Growing Pains.

Continue reading “Investing to Support the Clean-Energy Revolution”

Dinosaur Mating and the Endgame of the Fossil Fuel Era

The Fossil Fuel Endgame

It is my contention that we are currently witnessing the beginning of the end of the fossil fuel industry.

After years of high prices for crude oil (~$100/barrel for Brent, just under that for West Texas Intermediate), prices starting falling in late summer 2014 and have been sitting for the past few months at just above half their former prices. The proximate cause of this fall is the decision by the Saudis to go after market share rather than keep oil prices high.

I believe this decision marks a turning point in the history of oil. It’s not short-term but permanent.

The average barrel of oil has become more difficult to extract over time, and oil prices have risen accordingly. The Saudis are sitting on enormous reserves of cheap-to-extract oil, and have benefited from the increased prices. A couple of years ago, their reserves looked like a steadily appreciating asset – worth more in the future (when oil would likely be more expensive than now).

However, we have two major new factors: renewable energy is rapidly decreasing in cost, and real climate policy in the major economies (US, China, EU) looks inevitable. Now oil is likely to be less lucrative in the future – and most of it will have to be left in the ground. This graph shows just how dramatically the price of solar has dropped in recent years (wind has seen similar though less dramatic improvements over time):

That means that oil is now a depreciating asset and it makes financial sense to sell it now, even at historically cheap prices. It’s like a gold rush in reverse, as the endgame of the fossil fuel era plays out. The Saudis have single-handedly cut the price of oil in half and have announced their intention to push prices lower if need be. So oil prices won’t be going up any time soon.

At today’s prices, Canadian tar sands projects are totally untenable, and Bakken shale oil is marginal: oil will continue to flow from existing wells, but new wells will only tap the most productive spots. This means that the need for North American crude-by-rail will dry up over the next year or so. In particular, we’ve seen the Pittsburg WesPac project be re-proposed, but this time without the rail terminal. And the Kinder Morgan crude-by-rail terminal in Richmond, CA apparently stopped receiving shipments in February 2015.

Dinosaurs Mating

Recently Shell announced that it would buy the BG Group (an LNG – liquefied natural gas – supplier) at a 50% premium in a huge deal. Far from being a sign of a robust and growing industry, this reminds me of nothing so much as the “dinosaur mating” of the big mainframe manufacturers as their product became less and less relevant over the course of the 1980s and 1990s.

In the face of inexorable improvements in price/performance of clean energy technology, a growing fossil fuel divestment movement, and increased clamor for a price on carbon or other way to tackle climate change, I think we will see more of these deals in the future as the industry contracts and slowly dies. Our goal should be to hasten the death of this industry in order to limit the damage it’s still able to inflict.

Update

This Financial Post article, “Saudi Arabia was worried about a danger much bigger than shale when it blindsided oil markets“, supports much of what I say here. The Saudis are worried about the peak and then decline of demand for oil, in part because of its replacement by clean energy. If anything I think they’re not paranoid enough.

Public Comment to the EPA on the Clean Power Plan

The folks over at 350 Silicon Valley have made a web page that explains really easily how to send a letter to the EPA regarding the Clean Power Plan (the plan to limit climate-related pollution from coal plants). Their aim is to send 1000 letters by the deadline of December 1st – and they already have almost 800!


 

November 12, 2014

To Whom It May Concern:

I support the Clean Power Plan and recommend that it be made as strong as possible.

Everything the climate science tells us is that things are worse than we thought: our impacts are greater, our limits are lower, than we thought just a few years ago.

There are several possible “tipping points” that we may cross soon regarding global warming that could make our planet toxic to most life as we know it.

It is imperative that we address climate change with drastic and immediate measures, harshly limiting the use of all fossil fuels, from coal to natural gas.

Please do everything in your power to curtail the use of fossil fuels and promote renewable, clean energy.

Sincerely,
Martin MacKerel

Zero Diesel: A Pathway to Environmental Justice and Climate Sanity

TL;DR: Diesel is bad. I’m proposing a campaign called Zero Diesel with two differentiators: 1) a focus on network effects: attempting to increase the network benefits of electric vehicles and decrease the network benefits of diesel, region by region, and 2) organizing parents of asthmatic children (with a focus on poor people of color) to use people power to force companies and government agencies to pay the costs of electrification. When necessary, we’ll engage in antagonistic action (e.g. boycotts and direct action such as blockades and interference with business as usual).

Why: Diesel is a Climate and EJ (Environmental Justice) Villain

After four decades of the Clean Air Act and the EPA, we still have 200,000 premature deaths a year in the US due to air pollution (7 million worldwide), as well as a staggering load of asthma and other health issues. One of the biggest culprits is diesel combustion, which is an outsize contributor to smog formation as well as the production of PM2.5 — fine particulate matter below 2.5 microns in size. This is absolutely tiny — by comparison, an average human hair is 70 microns in diameter. High levels of PM2.5 are linked to hospital admissions and death as well as the aggravation of asthma and other respiratory problems.

This pollution is not evenly distributed, of course. The residents of areas heavily impacted by air pollution tend to have more melanin and less money. So we end up with a situation where poor children of color are disproportionately afflicted with asthma, leading to obesity, emergency room visits, and missed school days — a cascading series of impairments on an already vulnerable population.

In addition, diesel is particularly bad for climate pollution. While it is better than gasoline in terms of CO2, it produces a lot of black carbon — one of the worst short-term contributors to global warming.

Climate and Electric Vehicles

In order to drastically reduce our emissions of the heat-trapping gases that cause climate change (“greenhouse gases”), we have to do two things: 1) electrify everything and 2) switch to clean sources of electricity. I think that #2 is actually easier than #1 — it’s easier to change a few tens of thousands of power plants than hundreds of millions of cars — and in fact #2 is well under way, due in part to financial considerations and in part to a massive grassroots movement against fossil fuels. That’s not to say that we don’t need to continue to organize and force the transition to clean energy; the market is headed in the right direction, but it won’t be fast enough on its own. But #1 is the weaker point right now.

In particular, the installed plant of over one billion automobiles worldwide poses a formidable obstacle to weaning ourselves from fossil fuels for transportation. A push for mass transit will help, but personal automobiles as well as trucks and commercial vehicles of many kinds are likely to continue to be needed for decades at least. While electric and hybrid vehicles are finally doing well in the market, they are still a small percentage of vehicles sold and a minuscule fraction of actively used vehicles. Part of the issue is that there are strong network effects: the charging network for electric vehicles (EVs) is still in its infancy while the refueling network for liquid fossil fuels is pervasive and standardized. At this juncture we need extra-market forces to accelerate the adoption of electric vehicles.

Continue reading “Zero Diesel: A Pathway to Environmental Justice and Climate Sanity”

A Virgin Galactic rocket exploded. Good.

It’s unfortunate that a pilot died, but it’s good that a Virgin Galactic rocket launch failed and crashed.

Virgin Galactic’s whole purpose is to start a new industry: space tourism. Many people have paid $200K and up to get a seat on a short space flight.

First of all, such luxury indulgences are obscene in a world where so many lack the most basic necessities.

But even more glaringly, we are faced by the urgency of climate change. It is criminal to invent a new industry that requires truly obscene amounts of energy based on fossil fuels at a time when we need to rapidly and drastically scale down the use of such fuels.

The Virgin Galactic program should be shut down; if Richard Branson won’t do it, governments should outlaw it. If they won’t do it, people should pressure potential customers to boycott it, and should engage in direct action to shut it down. All of the capital put into Virgin Galactic should be put into ramping up wind and solar energy and energy efficiency programs.

The crash of a Virgin Galactic rocket is a good thing for humanity as a whole.