Government Regulation
September 27, 2021
Chinese Energy Woes
Millions Of Chinese Residents Lose Power After Widespread, “Unexpected” Blackouts; Power Company Warns This Is “New Normal”
by Tyler DurdenMonday, Sep 27, 2021 – 12:40 PM
Just yesterday we warned that a “Power Supply Shock Looms” as the energy crisis gripping Europe – and especially the UK – was set to hammer China, and just a few hours later we see this in practice as residents in three north-east Chinese provinces experienced unannounced power cuts as the electricity shortage which initially hit factories spreads to homes.
People living in Liaoning, Jilin and Heilongjiang provinces complained on social media about the lack of heating, and lifts and traffic lights not working.
Local media in China – which is highly dependent on coal for power – said the cause was a surge in coal prices leading to short supply. As shown in the chart below, Chinese thermal coal futures have more than doubled in price in the past year.
There are several reasons for the surge in thermal coal, among them already extremely tight energy supply globally (that’s already seen chaos engulf markets in Europe); the sharp economic rebound from COVID lockdowns that has boosted demand from households and businesses; a warm summer which led to extreme air condition consumption across China; the escalating trade spat with Australia which had depressed the coal trade and Chinese power companies ramping up power purchases to ensure winter coal supply. Then there is Beijing’s pursuit of curbing carbon emissions – Xi Jinping wants to ensure blue skies at the Winter Olympics in Beijing next February, showing the international community that he’s serious about de-carbonizing the economy – that has led to artificial bottlenecks in the coal supply chain.
The coal price surge prompted the China Electricity Council to publish a statement saying that “to ensure winter coal supply, power companies continue to increase market purchases *regardless of cost* under the situation of substantial losses.”
Whatever the reason, it’s just getting started: as BBC reported, one power company said it expected the power cuts to last until spring next year, and that unexpected outages would become “the new normal.” Its post, however, was later deleted.
At first, the energy shortage affected factories and manufacturers across the country, many of whom have had to curb or stop production in recent weeks. In the city of Dongguan, a major manufacturing hub near Hong Kong, a shoe factory that employs 300 workers rented a generator last week for $10,000 a month to ensure that work could continue. Between the rental costs and the diesel fuel for powering it, electricity is now twice as expensive as when the factory was simply tapping the grid.
“This year is the worst year since we opened the factory nearly 20 years ago,” said Jack Tang, the factory’s general manager. Economists predicted that production interruptions at Chinese factories would make it harder for many stores in the West to restock empty shelves and could contribute to inflation in the coming months.
Three publicly traded Taiwanese electronics companies, including two suppliers to Apple and one to Tesla, issued statements on Sunday night warning that their factories were among those affected. Apple had no immediate comment, while Tesla did not respond to a request for comment.
But over the weekend residents in some cities saw their power cut intermittently as well, with the hashtag “North-east electricity cuts” and other related phrases trending on Twitter-like social media platform Weibo.
The extent of the blackouts is not yet clear, but nearly 100 million people live in the three provinces.
In Liaoning province, a factory where ventilators suddenly stopped working had to send 23 staff to hospital with carbon monoxide poisoning.
There were also reports of some who were taken to hospital after they used stoves in poorly-ventilated rooms for heating, and people living in high-rise buildings who had to climb up and down dozens of flights of stairs as their lifts were not functioning. Some municipal pumping stations have shut down, prompting one town to urge residents to store extra water for the next several months, though it later withdrew the advice.
One video circulating on Chinese media showed cars travelling on one side of a busy highway in Shenyang in complete darkness, as traffic lights and streetlights were switched off. City authorities told The Beijing News outlet that they were seeing a “massive” shortage of power.
Social media posts from the affected region said the situation was similar to living in neighboring North Korea.
The Jilin provincial government said efforts were being made to source more coal from Inner Mongolia to address the coal shortage.
As noted previously, power restrictions are already in place for factories in 10 other provinces, including manufacturing bases Shandong, Guangdong and Jiangsu.
Of course, a key culprit behind China’s shocking blackouts is Xi Jinping’s recent pledge that his country will reach peak carbon emissions within nine years. As a reminder, two-thirds of China’s electricity comes from burning coal, which Beijing is trying to curb to address climate change. While coal prices have surged along with demand, because the government keeps electricity prices low, particularly in residential areas, usage by homes and businesses has climbed regardless.
Faced with losing more money with each additional ton of coal they burn, some power plants have closed for maintenance in recent weeks, saying that this was needed for safety reasons. Many other power plants have been operating below full capacity, and have been leery of increasing generation when that would mean losing more money, said Lin Boqiang, dean of the China Institute for Energy Policy Studies at Xiamen University.
“If those guys produce more, it has a huge impact on electricity demand,” Professor Lin said, adding that China’s economic minders would order those three industrial users to ease back.
Meanwhile, even as it cracks down on conventional fossil fuels, China still does not have a credible alternative “green” source of energy. Adding insult to injury, various regions have been criticized by the government for failing to make energy reduction targets, putting pressure on local officials not to expand power consumption, the BBC’s Stephen McDonell reports.
And while the blackouts starting to hit household power usage are at most an inconvenience, if one which may soon result in even more civil unrest if these are not contained, a bigger worry is that the already snarled supply chains could get even more broken, leading to even greater supply-disruption driven inflation.
As Source Beijing reports, several chip packaging service providers of Intel and Qualcomm were told to shut down factories in Jiangsu province for several days amid what could be the worst power shortage in years.
The blackout is expected to affect global semiconductor supplies – which as everyone knows are already highly challenged – if the power cuts extend during winter.
The NYT confirms as much, writing today that the electricity shortage is starting to make supply chain problems worse. The sudden restart of the world economy has led to shortages of key components like computer chips and has helped provoke a mix-up in global shipping lines, putting in the wrong places too many containers and the ships that carry them.
Nationwide power shortages have prompted economists to reduce their estimates for China’s growth this year. Nomura, a Japanese financial institution, cut its forecast for economic expansion in the last three months of this year to 3 percent, from 4.4 percent.
It is not clear how long the power crunch will last. Experts in China predicted that officials would compensate by steering electricity away from energy-intensive heavy industries like steel, cement and aluminum, and said that might fix the problem. State Grid, the government-run power distributor, said in a statement on Monday that it would guarantee supplies “and resolutely maintain the bottom line of people’s livelihoods, development and safety.”
Maybe China should just blame bitcoin miners for the crisis to avoid public anger… alas, it can’t do that since it already banned them and drove most of its technological innovators out of the country.
September 27, 2021
Chinese Energy Woes
Millions Of Chinese Residents Lose Power After Widespread, “Unexpected” Blackouts; Power Company Warns This Is “New Normal”
by Tyler DurdenMonday, Sep 27, 2021 – 12:40 PM
Just yesterday we warned that a “Power Supply Shock Looms” as the energy crisis gripping Europe – and especially the UK – was set to hammer China, and just a few hours later we see this in practice as residents in three north-east Chinese provinces experienced unannounced power cuts as the electricity shortage which initially hit factories spreads to homes.
People living in Liaoning, Jilin and Heilongjiang provinces complained on social media about the lack of heating, and lifts and traffic lights not working.
Local media in China – which is highly dependent on coal for power – said the cause was a surge in coal prices leading to short supply. As shown in the chart below, Chinese thermal coal futures have more than doubled in price in the past year.
There are several reasons for the surge in thermal coal, among them already extremely tight energy supply globally (that’s already seen chaos engulf markets in Europe); the sharp economic rebound from COVID lockdowns that has boosted demand from households and businesses; a warm summer which led to extreme air condition consumption across China; the escalating trade spat with Australia which had depressed the coal trade and Chinese power companies ramping up power purchases to ensure winter coal supply. Then there is Beijing’s pursuit of curbing carbon emissions – Xi Jinping wants to ensure blue skies at the Winter Olympics in Beijing next February, showing the international community that he’s serious about de-carbonizing the economy – that has led to artificial bottlenecks in the coal supply chain.
The coal price surge prompted the China Electricity Council to publish a statement saying that “to ensure winter coal supply, power companies continue to increase market purchases *regardless of cost* under the situation of substantial losses.”
Whatever the reason, it’s just getting started: as BBC reported, one power company said it expected the power cuts to last until spring next year, and that unexpected outages would become “the new normal.” Its post, however, was later deleted.
At first, the energy shortage affected factories and manufacturers across the country, many of whom have had to curb or stop production in recent weeks. In the city of Dongguan, a major manufacturing hub near Hong Kong, a shoe factory that employs 300 workers rented a generator last week for $10,000 a month to ensure that work could continue. Between the rental costs and the diesel fuel for powering it, electricity is now twice as expensive as when the factory was simply tapping the grid.
“This year is the worst year since we opened the factory nearly 20 years ago,” said Jack Tang, the factory’s general manager. Economists predicted that production interruptions at Chinese factories would make it harder for many stores in the West to restock empty shelves and could contribute to inflation in the coming months.
Three publicly traded Taiwanese electronics companies, including two suppliers to Apple and one to Tesla, issued statements on Sunday night warning that their factories were among those affected. Apple had no immediate comment, while Tesla did not respond to a request for comment.
But over the weekend residents in some cities saw their power cut intermittently as well, with the hashtag “North-east electricity cuts” and other related phrases trending on Twitter-like social media platform Weibo.
The extent of the blackouts is not yet clear, but nearly 100 million people live in the three provinces.
In Liaoning province, a factory where ventilators suddenly stopped working had to send 23 staff to hospital with carbon monoxide poisoning.
There were also reports of some who were taken to hospital after they used stoves in poorly-ventilated rooms for heating, and people living in high-rise buildings who had to climb up and down dozens of flights of stairs as their lifts were not functioning. Some municipal pumping stations have shut down, prompting one town to urge residents to store extra water for the next several months, though it later withdrew the advice.
One video circulating on Chinese media showed cars travelling on one side of a busy highway in Shenyang in complete darkness, as traffic lights and streetlights were switched off. City authorities told The Beijing News outlet that they were seeing a “massive” shortage of power.
Social media posts from the affected region said the situation was similar to living in neighboring North Korea.
The Jilin provincial government said efforts were being made to source more coal from Inner Mongolia to address the coal shortage.
As noted previously, power restrictions are already in place for factories in 10 other provinces, including manufacturing bases Shandong, Guangdong and Jiangsu.
Of course, a key culprit behind China’s shocking blackouts is Xi Jinping’s recent pledge that his country will reach peak carbon emissions within nine years. As a reminder, two-thirds of China’s electricity comes from burning coal, which Beijing is trying to curb to address climate change. While coal prices have surged along with demand, because the government keeps electricity prices low, particularly in residential areas, usage by homes and businesses has climbed regardless.
Faced with losing more money with each additional ton of coal they burn, some power plants have closed for maintenance in recent weeks, saying that this was needed for safety reasons. Many other power plants have been operating below full capacity, and have been leery of increasing generation when that would mean losing more money, said Lin Boqiang, dean of the China Institute for Energy Policy Studies at Xiamen University.
“If those guys produce more, it has a huge impact on electricity demand,” Professor Lin said, adding that China’s economic minders would order those three industrial users to ease back.
Meanwhile, even as it cracks down on conventional fossil fuels, China still does not have a credible alternative “green” source of energy. Adding insult to injury, various regions have been criticized by the government for failing to make energy reduction targets, putting pressure on local officials not to expand power consumption, the BBC’s Stephen McDonell reports.
And while the blackouts starting to hit household power usage are at most an inconvenience, if one which may soon result in even more civil unrest if these are not contained, a bigger worry is that the already snarled supply chains could get even more broken, leading to even greater supply-disruption driven inflation.
As Source Beijing reports, several chip packaging service providers of Intel and Qualcomm were told to shut down factories in Jiangsu province for several days amid what could be the worst power shortage in years.
The blackout is expected to affect global semiconductor supplies – which as everyone knows are already highly challenged – if the power cuts extend during winter.
The NYT confirms as much, writing today that the electricity shortage is starting to make supply chain problems worse. The sudden restart of the world economy has led to shortages of key components like computer chips and has helped provoke a mix-up in global shipping lines, putting in the wrong places too many containers and the ships that carry them.
Nationwide power shortages have prompted economists to reduce their estimates for China’s growth this year. Nomura, a Japanese financial institution, cut its forecast for economic expansion in the last three months of this year to 3 percent, from 4.4 percent.
It is not clear how long the power crunch will last. Experts in China predicted that officials would compensate by steering electricity away from energy-intensive heavy industries like steel, cement and aluminum, and said that might fix the problem. State Grid, the government-run power distributor, said in a statement on Monday that it would guarantee supplies “and resolutely maintain the bottom line of people’s livelihoods, development and safety.”
Maybe China should just blame bitcoin miners for the crisis to avoid public anger… alas, it can’t do that since it already banned them and drove most of its technological innovators out of the country.
August 20, 2021
Stay on Top of These Potential Regulation Changes
The fines are hefty for non-compliance and ignorance of the rules that no one in government informs you about is no excuse . . .
A sign of the EPA at its building in Washington on Sept. 21, 2017. (Pablo Martinez Monsivais/AP Photo) US News
Environmental Protection Agency’s Reporting on Chemicals Questioned
By Nathan Worcester August 19, 2021 Updated: August 19, 2021 biggersmallerPrint
The Environmental Protection Agency (EPA) has moved to change the way it gathers data on commercial chemicals under the Toxic Substances Control Act (TSCA), prompting concerns from some environmental activists at a time when the agency is already under scrutiny after whistleblowers’ allegations that it’s fast-tracking dangerous chemicals because of industry pressure.
Three Democratic congressional committee heads have written to the agency seeking a response to the claims.
The TSCA, signed into law by President Gerald Ford in 1976, was most recently revised in 2016 through the bipartisan Frank R. Lautenberg Chemical Safety for the 21st Century Act, the House version of which passed 398-1. While the original TSCA had grandfathered in more than 60,000 chemicals that were already on the market, the Lautenberg Act mandated that the EPA assess the safety of chemicals already being sold.
The TSCA’s Chemical Data Reporting (CDR) rule requires manufacturers, including importers, to report information every four years on chemicals produced and used in commerce.
The changes to the CDR, discussed at a public webinar on July 27, would introduce Tiered Data Reporting (TDR) for chemicals. The EPA’s presentation states that the CDR would collect fewer data from manufacturers, while TDR would introduce three sequential datasets for chemicals identified for prioritization: a dataset for prioritization candidates, a dataset for prioritized chemicals, and a risk evaluation/risk management dataset for those chemicals.
The first two datasets would require reports three months after the date of listing, while the final dataset would require a report four to six months after listing.
“EPA is seeking to ensure that data collection strategies using more of the authorities available to EPA provide timely, relevant, and specific information tailored to better meet the agency’s basic chemical data needs related to TSCA, while minimizing the burden on industry stakeholders,” an EPA spokesperson told The Epoch Times in an email.
“By collecting specific data in a timely sequence that is relevant to the current needs of EPA, the agency is ensuring that it has the information necessary to fulfill its mission under TSCA and protect human health and the environment without unduly burdening the information providers.”
On Aug. 5, the EPA met with representatives from the Environmental Defense Fund (EDF) to discuss EDF’s concerns with the tiered data collection strategy. According to the EPA’s summary of that meeting, the EDF expressed concerns that the new rule would decrease the amount of information gathered about individual chemicals.
In a donor appeal sent Aug. 13, the EDF wrote that the proposed changes “would significantly reduce what we know about thousands of chemicals in use today, even though this information is crucial for EPA to do its job.”
A spokesperson from the EDF declined to comment on the Chemical Data Reporting rules change or the EDF’s appeal to its supporters.
“While the planned rule would reduce the CDR data collected per chemical, if proposed and finalized, it would not reduce the number of chemicals for which CDR reporting is required, and through the TDR would add additional reporting requirements for selected chemicals,” an EPA spokesperson said in an email.
According to an EPA spokesperson, the proposed TDR rule is still under development, “informed by feedback from the public meeting and comments received.”
The move comes alongside recent allegations from four EPA whistleblowers of corruption in the EPA’s Office of Chemical Safety and Pollution Prevention, which administers the TSCA. As reported in The Intercept, the whistleblowers offered “detailed evidence of pressure within the agency to minimize or remove evidence of potential adverse effects of the chemicals, including neurological effects, birth defects, and cancer.”
Democratic leaders of the House Committee on Energy and Commerce drafted a letter to the head of the EPA, Michael S. Regan, requesting a response to the allegations.
“The Committee has a longstanding interest in ensuring EPA’s implementation of TSCA is based on sound science,” wrote Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-N.J.), Oversight and Investigations Subcommittee Chair Diana DeGette (D-Colo.), and Environment and Climate Change Subcommittee Chairman Paul Tonko (D-N.Y.). “We also firmly believe EPA’s scientific staff must be able to perform their work of protecting human health and the environment free from inappropriate interference and retaliation.
“The allegations made by the four whistleblowers are troubling, and, if true, raise serious concerns about EPA’s implementation of TSCA and about protections for EPA employees.”
The EPA spokesperson didn’t immediately respond to a request for comment on the whistleblowers’ allegations, while Republican and Democratic lawmakers didn’t immediately respond to requests for comment on the proposed TSCA changes or the whistleblowers’ allegations.
August 20, 2021
Stay on Top of These Potential Regulation Changes
The fines are hefty for non-compliance and ignorance of the rules that no one in government informs you about is no excuse . . .
A sign of the EPA at its building in Washington on Sept. 21, 2017. (Pablo Martinez Monsivais/AP Photo) US News
Environmental Protection Agency’s Reporting on Chemicals Questioned
By Nathan Worcester August 19, 2021 Updated: August 19, 2021 biggersmallerPrint
The Environmental Protection Agency (EPA) has moved to change the way it gathers data on commercial chemicals under the Toxic Substances Control Act (TSCA), prompting concerns from some environmental activists at a time when the agency is already under scrutiny after whistleblowers’ allegations that it’s fast-tracking dangerous chemicals because of industry pressure.
Three Democratic congressional committee heads have written to the agency seeking a response to the claims.
The TSCA, signed into law by President Gerald Ford in 1976, was most recently revised in 2016 through the bipartisan Frank R. Lautenberg Chemical Safety for the 21st Century Act, the House version of which passed 398-1. While the original TSCA had grandfathered in more than 60,000 chemicals that were already on the market, the Lautenberg Act mandated that the EPA assess the safety of chemicals already being sold.
The TSCA’s Chemical Data Reporting (CDR) rule requires manufacturers, including importers, to report information every four years on chemicals produced and used in commerce.
The changes to the CDR, discussed at a public webinar on July 27, would introduce Tiered Data Reporting (TDR) for chemicals. The EPA’s presentation states that the CDR would collect fewer data from manufacturers, while TDR would introduce three sequential datasets for chemicals identified for prioritization: a dataset for prioritization candidates, a dataset for prioritized chemicals, and a risk evaluation/risk management dataset for those chemicals.
The first two datasets would require reports three months after the date of listing, while the final dataset would require a report four to six months after listing.
“EPA is seeking to ensure that data collection strategies using more of the authorities available to EPA provide timely, relevant, and specific information tailored to better meet the agency’s basic chemical data needs related to TSCA, while minimizing the burden on industry stakeholders,” an EPA spokesperson told The Epoch Times in an email.
“By collecting specific data in a timely sequence that is relevant to the current needs of EPA, the agency is ensuring that it has the information necessary to fulfill its mission under TSCA and protect human health and the environment without unduly burdening the information providers.”
On Aug. 5, the EPA met with representatives from the Environmental Defense Fund (EDF) to discuss EDF’s concerns with the tiered data collection strategy. According to the EPA’s summary of that meeting, the EDF expressed concerns that the new rule would decrease the amount of information gathered about individual chemicals.
In a donor appeal sent Aug. 13, the EDF wrote that the proposed changes “would significantly reduce what we know about thousands of chemicals in use today, even though this information is crucial for EPA to do its job.”
A spokesperson from the EDF declined to comment on the Chemical Data Reporting rules change or the EDF’s appeal to its supporters.
“While the planned rule would reduce the CDR data collected per chemical, if proposed and finalized, it would not reduce the number of chemicals for which CDR reporting is required, and through the TDR would add additional reporting requirements for selected chemicals,” an EPA spokesperson said in an email.
According to an EPA spokesperson, the proposed TDR rule is still under development, “informed by feedback from the public meeting and comments received.”
The move comes alongside recent allegations from four EPA whistleblowers of corruption in the EPA’s Office of Chemical Safety and Pollution Prevention, which administers the TSCA. As reported in The Intercept, the whistleblowers offered “detailed evidence of pressure within the agency to minimize or remove evidence of potential adverse effects of the chemicals, including neurological effects, birth defects, and cancer.”
Democratic leaders of the House Committee on Energy and Commerce drafted a letter to the head of the EPA, Michael S. Regan, requesting a response to the allegations.
“The Committee has a longstanding interest in ensuring EPA’s implementation of TSCA is based on sound science,” wrote Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-N.J.), Oversight and Investigations Subcommittee Chair Diana DeGette (D-Colo.), and Environment and Climate Change Subcommittee Chairman Paul Tonko (D-N.Y.). “We also firmly believe EPA’s scientific staff must be able to perform their work of protecting human health and the environment free from inappropriate interference and retaliation.
“The allegations made by the four whistleblowers are troubling, and, if true, raise serious concerns about EPA’s implementation of TSCA and about protections for EPA employees.”
The EPA spokesperson didn’t immediately respond to a request for comment on the whistleblowers’ allegations, while Republican and Democratic lawmakers didn’t immediately respond to requests for comment on the proposed TSCA changes or the whistleblowers’ allegations.
June 24, 2021
BASF Invests in Wind
BASF buys 49.5% of Vattenfall Dutch offshore wind farm for €300M
Jun. 24, 2021 9:17 AM ETBASF SE (BASFY)By: Carl Surran, SA News Editor1 Comment
- BASF (OTCQX:BASFY) agrees to acquire a 49.5% stake in the Hollandse Kust Zuid offshore wind farm from Swedish utility Vattenfall for €300M ($358M), as the company raises its investments in renewable energy to offset carbon emissions at production sites across Europe.
- Construction of the wind farm will start in July, with the project expected to become fully operational in 2023, pending approval by authorities.
- The project, which includes 140 wind turbines and a total capacity of 1.5 GW, will become the world’s largest wind farm and supply power to BASF’s plant in Antwerp, Belgium, and other European sites.
- BASF and German utility RWE last month announced a potential €4B offshore wind project.
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