reports

By Stacy Mitchell and Walter Wuthmann - Institute for Local Self reliance, November 2014

In October 2014, at an event broadcast live from Walmart’s Arkansas headquarters, the company’s top executives took the stage to extol its environmental leadership. The announcements they made that day would be covered widely by the press, including the Boston Globe, Guardian, and New York Times.

The event opened with a video listing Walmart’s achievements over the preceding months: “We signed our largest multi-state solar power purchase agreement,” the narrator says, over a shot of workers installing new, glossy solar panels. “We were recognized by President Obama for announcing that we will double the number of on-site solar energy projects.” Then Walmart’s CEO, Doug McMillon, and its vice president of sustainability, Manuel Gomez, addressed the crowd. “You get one point for launching a goal,” said Gomez, “and nine points for execution... and what you saw in the video is exactly what we’re doing: executing against these goals.”

But off the stage and out in the real world, Walmart’s sustainability initiatives are heavy on admiration-inducing goals and astonishingly light on execution. Nearly a decade ago, the company pledged to shift to 100 percent renewable energy and acknowledged its responsibility to reduce its climate emissions as quickly as possible. Today, however, Walmart remains as deeply committed as ever to the dirtiest fuels, especially coal. It derives only 3 percent of its U.S. electricity from its renewable energy projects, down from 4 percent two years ago.

In this first-of-its-kind analysis, ILSR provides new information about Walmart’s energy mix and environmental footprint. We calculate the total electricity use, coal-fired power consumption, and resulting carbon emissions of every Walmart store and distribution center in the country in 2013. We also evaluate the company’s renewable energy projects, finding that they are too small and located in the wrong places to have much of an impact on Walmart’s coal use and climate emissions.

Our analysis finds that Walmart’s electricity consumption entails burning a staggering amount of coal: 4.2 million tons a year. That’s enough to give every kid in America a stocking filled with 126 pounds of the sooty stuff as a holiday present. Or, to measure it another way: If you dumped coal on a football field, you’d have to pile it 35 feet high, from end-zone to end-zone, just to power Walmart’s U.S. stores for one week. Walmart sources more of its electricity from coal (40 percent) than the U.S. as a whole (39 percent) — a remarkable fact for a company that has touted its environmental responsibility for years. Indeed, we find that Walmart alone consumes 0.5 percent of all the electricity produced from coal in U.S., a stunning figure given the size of the entire national economy and population.

Read the report (PDF).

By Stephanie Porter - Land Stewradship Project, November 2014

The frac sand industry has rapidly proliferated across Wisconsin, with the number of facilities multiplying by more than tenfold within four years,from 10 in 2010 to 135in 2014. The Land Stewardship Project reviewed readily available public data from the Wisconsin Department of Natural Resources (DNR)and media reports to determine what conclusions can be drawn about this industry and its rapid growth. We found that:

• Of the forty-seven frac sand companies currently operating in Wisconsin, twenty-four or 51% have seriously violated DNR regulations, manipulated local governments, or engaged in influence peddling and conflicts of interest.
• Twenty of forty-seven companies (43%) not only violated DNR regulations, but they required substantial regulatory action to come into compliance —or, even worse, never came into compliance even after court action and fines. (One county-level regulator was quoted as saying “citations are pretty much ineffective for this industry.”
• In total, between 2011 and 2014 there were at least nineteen cases of frac sand companies abusing the annexation process to avoid regulations, engaging in influence peddling, and creating conflicts of interest in local governments.

The industry in both Wisconsin and Minnesota has claimed that violations of state regulations and abuses of the public trust are isolated incidents by “bad apples” or new, inexperienced companies. However, the data paints a picture of an industry in which violations are the norm, not the exception, and insider dealing, conflicts of interest, and influence peddling are common.

As recently as October 6, for instance, a mine in Trempealeau County was shut down for operating without proper permits, prompting a frustrated local regulator to say “they are just running wild, with no permit at all.” This recent case was not the first time a violation this basic has occurred. In 2011, Unimin Corporation –which has been mining for over 40 years –began constructing a site without a permit and continued with construction even after being notified by the DNR of their violation. As seen in these examples and the many others detailed below, this is an industry that consistently ignores state regulations enacted for the sake of the health of local citizens, rural communities, and the land.

Read the report (PDF).

By Will Blyth, Rob Gross, Jamie Speirs, Steve Sorrell, Jack Nicholls, Alex Dorgan, and Nick Hughes - UK Energy Research Center, November 2014

‘Green’ sectors account for as many as 3.4 million jobs in the EU, or 1.7% of all paid employment, more than car manufacturing or pharmaceuticals. Given the size of the green jobs market, and the expectation of rapid change and growth, there is a pressing need to independently analyse labour market dynamics and skills requirements in these sectors. What is more controversial is the question of whether policy driven expansion of specific green sectors actually creates jobs, particularly when the policies in question require subsidies that are paid for through bills or taxes. There are strong views on both sides of this debate. Politicians often cite employment benefits as part of the justification for investing in clean energy projects such as renewables and energy efficiency. Such claims are often backed up by project or sector-specific analyses. However, other literature is more sceptical, claiming that any intervention that raises costs in the energy sector will have an adverse impact on the economy as a whole.

The UKERC Technology and Policy Assessment (TPA) theme was set up to address such controversies through comprehensive assessment of the current evidence. This report aims to answer the following question:

“What is the evidence that policy support for investment in renewable energy and energy efficiency leads to net job creation in the implementing regions?”

The focus on net jobs here is important: whilst it is clear that jobs can be created at a local scale by spending money on new infrastructure projects, other jobs may be displaced if the new project provides activities or services that would otherwise have been provided elsewhere in the economy. Analysis of net jobs therefore needs to take account of both jobs created and jobs displaced.

Read the report (PDF).

By Elizabeth Bast, Shakuntala Makhijani, Sam Pickard, and Shelagh Whitley - Oil Change International, November 2014

Governments across the G20 countries are estimated to be spending $88 billion every year subsidising exploration for fossil fuels. Their exploration subsidies marry bad economics with potentially disastrous consequences for climate change. In effect, governments are propping up the development of oil, gas and coal reserves that cannot be exploited if the world is to avoid dangerous climate change.

This report documents, for the first time, the scale and structure of fossil fuel exploration subsidies in the G20 countries. The evidence points to a publicly financed bailout for carbon-intensive companies, and support for uneconomic investments that could drive the planet far beyond the internationally agreed target of limiting global temperature increases to no more than 2ºC.

It finds that, by providing subsidies for fossil fuel exploration, the G20 countries are creating a ‘triple-lose’ scenario. They are directing large volumes of finance into high-carbon assets that cannot be exploited without catastrophic climate effects. They are diverting investment from economic low-carbon alternatives such as solar, wind and hydro-power. And they are undermining the prospects for an ambitious climate deal in 2015.

Read the report (PDF).

By Tom Sanzillo, Lorne Stockman, Deborah Rogers, Hannah McKinnon, Elizabeth Bast, and Steve Kretzmann - Oil Change International, October 29, 2014

The report, “Material Risks: How Public Accountability Is Slowing Tar Sands Development,” presents market analysis and industry data to support its estimates on lost sales revenue to the tar sands industry as public opposition creates delays and project cancellations. The report also describes other market forces that are putting tar sand developers at a growing disadvantage.

The report puts tar sands development lost revenue at $30.9 billion from 2010 through 2013, in part due to the changing North American oil market but largely because of a fierce grassroots movement against tar sands development. The report attributes 55% of the lost revenue, or $17 billion, to the diverse citizen protests against pipelines and the tar sands.

A significant segment of opposition, the report notes, is from First Nations in Canada who are raising sovereignty claims and other environmental challenges.

Among the report’s findings:

• Market forces and public opposition have played a significant role in the cancellation of three major tar sands projects in 2014 alone: Shell’s Pierre River, Total’s Joslyn North, and Statoil’s Corner Project. Combined, these projects would have produced 4.7 billion barrels of bitumen that would in turn have released 2.8 billion metric tonnes of carbon dioxide (CO₂) into the atmosphere. This is equivalent to the emissions of building 18 new coal plants that would last 40 years each.
• Tar sands producers lost $30.9 billion from 2010 through 2013 due to transportation bottlenecks and the flood of crude coming from shale-oil fields. Of that, $17.1 billion, or 55 percent, can be attributed to the impact of public- accountability campaigns.
• The combination of risks facing the industry has the potential for canceling most or even all of the planned expansion of the industry in Canada.
• Rather than seeing more than a doubling of output from 2 million barrels of oil per day to 4.8 million barrels per days — as the industry predicts — the report projects flat production levels.
• Tar sands producers have lagged, with 9 of 10 leading tar sands producers in Canada underperforming the broader stock market in the last five years.

Analysts have recently downgraded their outlook for tar sands production.

The report also explores how smaller tar sands producers are having trouble accessing capital markets, how the industry is increasing capital spending even as it faces declining cash flows, weak revenue expectations, rising production costs and tight margins.

Read the report (PDF).

By Joseph E. Aldy - Common Resources, August 22, 2014

On April 20, 2010, the Transocean Deepwater Horizon suffered a catastrophic blowout while drilling in a BP lease in the Gulf of Mexico’s Macondo Prospect. This accident resulted in the largest oil spill in US history and an unprecedented spill response effort. Due to the ongoing spill and concerns about the safety of offshore oil drilling, the US Department of the Interior suspended offshore deep water oil and gas drilling operations on May 27, 2010, in what became known as the offshore drilling moratorium. The media portrayed the impacts of these events on local employment, with images of closed fisheries, idle rigs, as well as boats skimming oil and workers cleaning oiled beaches.

In a new RFF discussion paper, “The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and Offshore Drilling Moratorium,” I estimate and examine the net impact of the oil spill, the drilling moratorium, and spill response on employment and wages in the Gulf Coast. The spill and moratorium represented unexpected events in the region, and the resulting economic impacts varied within and among the Gulf states. Coastal counties and parishes were expected to bear the vast majority of the burden of these two events, while inland areas were expected to be largely unaffected. The moratorium was expected to affect Louisiana—with significant support of the offshore drilling industry—but not, for example, Florida, which had no active drilling off of its coastline. Beyond the economic impacts, the timing and magnitude of the spill response varied across the states over the course of the spill as well.

Despite predictions of major job losses in Louisiana resulting from these events, I find that the most oil-intensive parishes in Louisiana experienced a net increase in employment and wages. In contrast, Gulf Coast Florida counties south of the Panhandle experienced a decline in employment. Analysis of the number of business establishments, worker migration, accommodations industry employment and wages, sales tax data, and commercial air arrivals likewise show positive economic activity impacts in the oil-intensive coastal parishes of Louisiana and reduced economic activity along the non-Panhandle Florida Gulf Coast. The billions of dollars of spill response and clean-up mobilized over the course of the spring and summer of 2010 positively impacted economic activity, similar to the effect of fiscal stimulus. The geographic variation in labor market impacts reflects the focus of spill response efforts in Louisiana and the absence of oil and thus spill response along the Gulf coast of Florida south of the Panhandle.

Read the report (PDF).

By staff - GRAIN, October 7, 2014

Since the global food crisis of 2008, there has been a massive wave of private sector investment in agriculture. More money flowing into agriculture means more innovation, more jobs and more food for a hungry planet, say the G8, the World Bank and corporate investors themselves.

But does it?

Looking at the investments made by Indian billionaire Chinnakannan Sivasankaran – one of the most active private sector players in the global rush to acquire farmland – a worrying picture emerges of what happens when speculative finance starts flowing into food production.

Since 2008, the Siva Group and its myriad subsidiaries have acquired stakes in around a million hectares of land in the Americas, Africa and Asia, primarily for oil palm plantations. On paper, this makes Sivasankaran one of the world’s largest farmland holders.

But Sivasankaran's also a land grabber and tax avoider. Like the majority of transnational investors in agriculture, his investments are channeled through a web of shell companies based in offshore tax havens. The companies he holds shares in are engaged in dubious land deals and kick back schemes, and seem more concerned with funnelling generous payments into the pockets of their directors than with producing food.

The alarming side effect of this type of investment is the commodification of land and the marginalisation of communities that rely on it. Wherever the Siva Group and its like go, they secure title to vast parcels of land by any means necessary – often without the meaningful consent of the affected communities. They then leverage these landholdings for cash and credit to turn still more deals.

Governments have so far done little, if anything to protect their people from this new wave of predatory investment. Their efforts have focussed more on providing investors with safeguards and incentives, while proposing only voluntary guidelines to keep corporate responsibility in check. The door is thus wide open for financial players like Sivasankaran to grab lands and make quick profits, undermining food systems and the livelihoods of farmers in the process.

Read the report (PDF).

By Stacy Mitchell - Institute for Local Self-Reliance, October 2014

Critical fights over the future of our energy system are underway in dozens of states, with far-reaching implications for both climate change and our economy. At issue is the recent, rapid expansion of rooftop solar, which is revolutionizing who owns and profits from electricity generation. Rather than power production being monopolized by utilities, more and more households are becoming energy producers themselves. This transition is saving families money and driving the creation of tens of thousands of well-paying jobs.

But rooftop solar threatens the profits of utilities and the companies that supply them with energy. These powerful interests have gone on the offensive and are campaigning to weaken policies that enable rooftop solar in multiple states. They have begun to score wins, including a pivotal victory in Arizona, where regulators granted the state’s largest utility, APS, the right to impose new fees on households with rooftop solar. The fees have undermined the economics of rooftop solar, dramatically slowing installations and causing widespread job losses.

Read the report (PDF).

By various - Sierra Club, 350.org, Carbon Market Watch, Pacific Environment, and FOE, October 2014

In January and May 2014, a coalition of non-governmental organizations (NGOs), the Sierra Club, 350.org, Carbon Market Watch, Pacific Environment, and Friends of the Earth U.S. (hereafter referred to as the Fact Finding Team), undertook two field visits to Singrauli, India, to meet with communities affected by Reliance Power’s Sasan Ultra Mega Power Project (UMPP) and its associated mine to assess the project’s effect on local communities and the environment.

Since the U.S. Export-Import Bank (Ex-Im Bank) approved over $900 million in financing for the coal project in October 2010, little information has been provided by the agency about Sasan’s compliance with Ex-Im environmental, social, human rights, and corruption policies. This includes the Bank’s commitments under the Equator Principles1 and the International Finance Corporation (IFC) Performance Standards,2 the agency’s environmental, social, human rights and corruption policies, as well whether or not the project has lived up to the expectations laid out in the Environmental and Social Impact Assessment (ESIA) documents for the mine and the power plant. An apparent lack of oversight prompted the NGOs involved in this report to conduct this independent investigation. The Fact Finding Team has uncovered numerous reports of corruption and human rights and labor violations associated with the Sasan coal project, all of which have largely been ignored by the Ex- Im Bank.

Read the report (PDF).

By J David Hughes - Post Carbon Institute, October 2014

In recent years Americans have been hearing that the United States is poised to regain its role as the world’s premier oil and natural gas producer, thanks to the widespread use of horizontal drilling and hydraulic fracturing (“fracking”). This “shale revolution,” we’re told, will fundamentally change the U.S. energy picture for decades to come—leading to energy independence, a rebirth of U.S. manufacturing, and a surplus supply of both oil and natural gas that can be exported to allies around the world. This promise of oil and natural gas abundance is influencing climate policy, foreign policy, and investments in alternative energy sources.

The primary source for these rosy expectations of future production is the U.S. Department of Energy (DOE). Each year the DOE’s Energy Information Administration (EIA) releases its Annual Energy Outlook (AEO), which provides a range of forecasts for energy production, consumption, and prices.

The 2014 AEO reference case projects U.S. crude oil production to rise to 9.6 million barrels of oil per day (MMbbl/d) in 2019 and slowly decline to 7.5 MMbbl/d by 2040, while natural gas production is projected to grow for at least the next 25 years and hit 37.5 trillion cubic feet per year in 2040. Tight oil (shale oil) and shale gas serve as the foundation for these optimistic forecasts.

This report provides an extensive analysis of actual production data from the top seven tight oil and seven shale gas plays in the U.S. (These plays account for 89% of current tight oil production and 88% of current shale gas production, and serve as the primary sources of future production in the EIA’s forecasts—82% of forecast tight oil and 88% of forecast shale gas production through 2040.) It concludes that the current boom in domestic oil and gas production is unsustainable at the rates projected by the EIA, and that the EIA’s tight oil and shale gas forecasts to 2040 are extremely optimistic. What this means is that the country's current energy policy—which is largely based on the expectation of domestic oil and natural gas abundance far into the future—is badly misguided and is setting the country up for a painful, costly, and unexpected shock when the boom ends.