In weighing various energy sources, ESG investing needs reality-based principles
- Aug 26, 2021 9:47 pm GMT
Pressured by activists, legislators and regulators, many companies, banks, universities and investment houses are adopting Environmental, Social and Governance standards and disclosure rules. The guidelines typically reflect claims that fossil fuel emissions are raising planetary temperatures and causing more frequent and furious extreme weather events.
ESG rules purportedly exist to help businesses make money and “make the world a better place.” In reality, they let companies “greenwash” their reputations, while helping brokers maximize fees and assuage guilt over their profits and fossil fuel use.
This past June, on a 215-214 largely party-line vote, the U.S. House of Representatives passed HR 1187, supporting and authorizing Securities and Exchange Commission plans to impose new ESG rules requiring that publicly traded power generation, mining, finance, “nonrenewable” energy and other companies disclose “climate risks” caused by oil, gas and coal production, use and emissions.
Targeting such companies is bad enough. Even worse are campaigns to compel companies, states and countries to replace carbon-based energy with wind, solar, battery and biofuel power. This replacement energy is notoriously intermittent, weather-dependent and heavily subsidized.
Still worse, ESG promoters and guidelines studiously ignore serious environmental, social and human rights consequences.
Wind and sunlight certainly are clean, green, renewable and sustainable. But harnessing their highly dispersed, unpredictable energy to meet humanity’s huge and growing energy needs absolutely is not. That requires lands and raw materials that are anything but renewable – using fuels and processes that are absolutely not clean, green, ecological or sustainable.
In fact, “renewable” energy is the least renewable, sustainable, eco-friendly energy source of all. Any ESG program that fails to recognize this is dishonest, even fraudulent – and must be reformed or scrapped.
Wind, solar and battery land and raw material requirements are astronomical. Onshore wind turbines require nine times more metals and minerals per megawatt than a modern combined-cycle gas power plant. One onshore 3-MW turbine foundation needs 600 cubic yards (1,500 tons) of concrete, plus rebar.
Offshore wind requires 14 times more materials per MW. Just the 2,100 850-foot-tall offshore turbines (30,000 megawatts) that President Biden wants installed by 2030 would require over 100,000 tons of copper, plus millions of tons of steel, aluminum, fiberglass, cobalt, rare earth metals and other materials.
At an average of 0.44% copper in ore deposits worldwide today, the copper alone would require mining and processing 25 million tons of ore, after removing some 40 million tons of overlying rock to reach the ore bodies.
Add in materials for solar panels, more wind turbines, backup battery systems, electric vehicles, transmission lines, electric home heating and cooking systems, and all-electric factories – to run the entire USA, Europe and world – and the “green energy transformation” would require hundreds of billions of tons of metals and minerals, trillions of tons of ores, trillions of tons of overburden, and thousands of mines, processing plants and factories. Nearly all using fossil fuels!
In the USA alone, hundreds of millions of acres of scenic, wildlife habitat and coastal areas would be impacted. Millions of birds, bats and other wildlife would be displaced or killed. And when their short productive lives are finished, the turbine blades, solar panels and batteries cannot be recycled. They will be sent to enormous landfills.
Equally outrageous, laws and attitudes make mining in America nearly impossible, even to support an “environment-friendly” Green New Deal. That means the mining, processing and most manufacturing will be done in Africa, Asia and Latin America, increasingly by Chinese companies;
Cobalt mining already utilizes the labor of 40,000 African children, some as young as four. Many Chinese solar panels are made by Uighur forced labor.
These activities often employ hazardous chemicals and release toxic pollutants. They require vast volumes of water, often in the world’s most water-deprived regions. They cause acid mine drainage, create mountains of waste rock, and often result in vast “lakes” of toxic chemicals from refining the ores. Most are conducted under almost nonexistent pollution control, mined-land reclamation, endangered species, workplace safety, child and slave labor, and fair wage rules.
Reformed ESG rules must require that all these issues are addressed for every wind turbine, solar panel, battery, transmission line and biofuel proposal. Threatened, endangered, migratory and marine species must be protected – in America; wherever mining, processing and manufacturing take place; and wherever “renewable” energy installations are contemplated.
We must know in advance how many turbines, panels, batteries and power lines are contemplated; how many tons of metals, minerals, concrete and plastics they will require; where those materials will come from; under what environmental, pollution, safety, wage and child labor conditions. Companies and government agencies must certify that supply chains are free from child or slave labor.
Project-specific, comprehensive and cumulative U.S. and global environmental studies must be conducted in advance, and must include regular, independent reviews of bird, bat, reptile, whale, porpoise and other wildlife displacements, injuries and deaths.
These reality-based Environment, Labor and Human Rights (ELHR) principles are just a beginning. But they will help ensure that any Green New Deal is founded on moral and ethical standards that actually do make the world a better place.
Craig Rucker is president of the Committee For A Constructive Tomorrow (www.CFACT.org), a Washington, D.C.-based organization that works on issues of environment and development.
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