ExxonMobil fined €3.3 million for failure to report emissions

Kim Lawton and Annie Pyke

In what is surely a strong reminder to companies around the globe to comply with green regulations, oil giant ExxonMobil has been fined €3.3 million (approximately $4.4 million CAD) for failure to correctly report its carbon dioxide emissions from a Scottish chemical plant. This is the largest fine for an environmental offence in British history.

The fine was imposed by the Scottish Environment Protection Agency (SEPA) under the European Union Greenhouse Gas Emissions Trading Scheme (EU ETS) that came into effect in 2005. Under the EU ETS, companies which fail to report their greenhouse gas emissions can be fined €100 per tonne for unreported emissions.

The fine was imposed in 2010-11, but was only just revealed by SEPA when it published its 2010-2011 enforcement report.

UK proposes lowering FIT rates

Matthew Cameron -

Announced the same day as the Ontario Power Authority’s review of the Ontario Feed-in Tariff program, the UK Department of Energy and Climate Change (DECC) announced the start of its review of its Feed-in Tariffs scheme (FITs) on October 31, 2011 by releasing a comprehensive review document and requesting responses in respect of its solar PV program.  The review is open for responses until December 23, 2011.

The review document proposes to reduce the prices offered to solar PV generating projects under 250kW commissioned after December 12, 2011 (projects between 250kW and 5MW will continue to be offered 8.5p/kWh, subject to adjustment per the Retail Price Index). Solar PV has led the FITs in terms of volume deployed and has had a substantial increase in the pipeline of potential FITs projects. That, coupled with the dropping cost of solar PV components and the rising cost of energy, has led to returns beyond the 5% originally envisaged which, in the DECC’s view, is not sustainable and thus requires a revised price.

While the Ontario Feed-in Tariff program is structured differently than the FITs, the OPA indicated a price reduction will be considered in its review when it announced its review process (see our previous blog posting ). The Ontario government’s long-term energy plan (available from the Ministry of Energy ) referenced previously reduced tariffs in Denmark, German and France and the effect advances in technology and economies of scale have on costs of production when discussing the upcoming Ontario review process. It is likely elements from the UK review will affect Ontario’s review.

Also interesting is that the DECC review proposes adding new tariff rates for solar PV “aggregators”. Under the proposal, where a single individual or organization owns several PV installations, all installations under 250kW owned by that individual or organization with an eligibility date after April 1, 2012 will be subject to a lower tariff rate. The eligibility date is defined in the FITs contracts but is likely to occur after installation of the project. An aggregator’s rate for a 100-150kW system, for example, is proposed at 10.3p/kWh as compared to 12.9p/kWh for a non-aggregator (which itself is a reduction from the 19p/kWh currently offered).

The FITs also seeks to link energy production with energy efficiency. If implemented, the proposal would see all solar PV installations connected to a building with an eligibility date after April 1, 2012 qualify for the full FITs price only if the building meets a certain energy efficiency rating. Failure to meet such rating would result in the PV installation qualifying for a reduced FITs rate. The proposal recognizes energy efficiency measures are more complex for non-domestic buildings but proposes the requirements apply to both domestic and non-domestic buildings.

The UK’s FITs began in April 2010. As at the 18 month mark of the program, September 2011, 255MW of solar PV had been registered for FITs according to the DECC’s report. That represents more than two and a half times the targeted 94MW anticipated by that time.

Canada imposes new sanctions against Iran

On Monday, Foreign Affairs Minister Lawrence Cannon announced that the federal government was toughening sanctions against Iran. The announcement, which was co-ordinated with other countries, came as a response to Iran’s continuing refusal to stop uranium enrichment activities.

The Special Economic Measures (Iran) Regulations are effective immediately and are designed to curb the progress of Iran’s nuclear programs.

In addition to prohibitions against dealing in nuclear, chemical, biological and missile technology,  new investments in Iran’s oil and gas sector and the export of items and technology for refining oil and gas have also been banned.

G-20 declaration deals with energy matters

At the recently concluded G-20 summit, world leaders confirmed their ongoing commitment to phasing out subsidies for inefficient fossil fuels.

This commitment, which originated at the 2009 Pittsburgh G-20 Summit, is designed to combat wasteful consumption and greenhouse gas emissions. 

At the request of the G-20, a special report on energy subsidies was prepared by the International Energy Agency (IEA), the OECD, OPEC and the World Bank. 

Leaders at the Summit “note[d] [the report] with appreciation” and further demonstrated their support by calling on Finance and Energy officials to develop timeframes and strategies for phasing out the subsidies. Nevertheless, the Declaration acknowledged that certain countries remain dependent on fossil fuels. Consequently, the G-20 promised that plans to phase out subsidies would be tailored to every country’s specific needs.

The Declaration also addressed the ongoing oil spill in the Gulf of Mexico. Leaders of the G-20 agreed that countries must begin sharing best practices with each other to protect the marine environment and to prevent future offshore drilling accidents. The Declaration, however, does not outline any specific steps that the G-20 will take to achieve this greater level of cooperation.

Senate ratifies free trade agreement with Columbia

On June 21, 2010, Bill C-2, An Act to Implement the Free Trade Agreement between Canada and the Republic of Columbia, passed its third reading in the Senate. Upon royal assent the act will implement the Free Trade Agreement and the related agreements on the environment and labour cooperation entered into between Canada and the Republic of Colombia and signed at Lima, Peru on November 21, 2008.

The Canada-Columbia FTA will strengthen the investment ties between the two countries and advance the rights and protections for Canadian businesses that currently have, or that plan to make, investments in Columbia. The FTA provides for the free flow of capital to investments, protection against expropriation without compensation and requires Canadian investments and investors to receive fair and equitable treatment.

Because of its significant natural resources Columbia is an important investment destination for Canadian companies involved in mining and oil exploration. Speaking at an auction of oil exploration and production blocks the Energy and Mining Minister of Columbia, Hernan Martinez, stated that the Canada-Colombia FTA “opens the way for a lot of opportunities” for Canadian oil companies. 

Columbia is South America’s forth largest oil producer and is in the process of auctioning off more than 200 exploration and production blocks in a process that could bring in between $250 and $500 million dollars.