As responsible investors weigh up their approach to artificial intelligence (AI), Sam Altman, CEO of ChatGPT creator OpenAI, spoke of his belief in regulatory intervention to minimise risks introduced by powerful AI models. Speaking to lawmakers on Capitol Hill, Altman suggested a combination of licensing and testing requirements could help avoid "quite wrong" results from the technology. As concerns of widespread water shortages grow, richly valued start-ups working in water technology have become a focus. Gradiant, which develops new ways of treating industrial wastewater, became the WaterTech sector's first "unicorn" this week, following a $225m funding round led by New York family office BoltRock Holdings and Centaurus Capital. Boston-based Gradiant has attracted interest from chipmakers, miners and carmakers looking to secure water supplies and avoid pollution. However, pharmaceutical companies are also facing pressure to tackle antimicrobial resistance (AMR). Venture capitalists are investing in start-ups developing new ways to tackle AMR as the AMR Action Fund, which aims to create two to four new drugs against drug-resistant bacteria, has already invested in two start-ups.
The US House Natural Resource Committee will discuss a plan this week to protect California’s giant sequoias from fires and climate change. The Save Our Sequoias Act is a bipartisan piece of legislation that offers over $300m and further emergency protection options for US Forest Services to tackle the effects of climate change and wildfires on the world’s largest trees, which are going extinct. However, many Democrats and environmental advocacy groups have opposed the bill, stating that the plan could weaken environmental laws such as the National Environmental Policy Act (NEPA). The legislation would allow environmental projects to move ahead under emergency conditions before being assessed for their potential environmental impact. The outcome of the vote will directly impact the future of protecting the Sequoia National Forest and the balance between environmental protection and climate change mitigation.
Ford 'disappointed' in Ottawa's handling of rocky Stellantis deal for EV battery plant
CBC
23-05-17 20:01
Ontario Premier Doug Ford has criticised the Canadian federal government for its handling of auto maker Stellantis, following its appeals for assistance with electric vehicle battery plant construction in Windsor. Both the provincial and federal authorities are keen to prevent Stellantis from ending its joint project with LG Energy Solutions, but Ford suggested it is up to the government to deliver on its promises. While Ottawa wants Ontario to pay its "fair share", Ford said the he is unsure what that equates to. The government wanted capital contribution and production subsidies to open Volkswagen's battery factory in St. Thomas, which was licensed in March.
The Biden administration has allocated $251m to carbon capture and storage (CCS) projects in seven US states, indirectly encouraging US oil and gas companies to use CCS as a method for reducing greenhouse gas. CCS involves taking CO2 from polluting source and storing it underneath the Earth, alternatively gas can be transported through pipelines to storage facilities. Environmental groups have been vocal in their criticism of the technology arguing it is costly, not scalable and distracts from renewable energy solutions. Studies into how to transport CO2 from power and industrial operations to storage facilities are part of the allocation.
Stellantis, parent company of Chrysler, Jeep, and Fiat, has halted construction on its EV battery factory in Windsor, Ontario, citing its demands to match the US's manufacturing incentives under the Inflation Reduction Act. The province and federal government each contributed CAD $500m ($399m) for the facility, demanding that Stellantis and LG Energy Solution match subsidies to keep the project competitive in Canada. The Windsor facility will employ 2,500 workers once it reaches its full capacity. The Inflation Reduction Act was introduced six months after the initial March 2022 deal between the government and Stellantis, in which the federal government is contributing CAD $700m to VW's EV battery factory. However, negotiations became difficult as Stellantis demanded that the government live up to its promise to honour the agreement that was made three weeks prior to construction.
The future of a $5bn electric vehicle battery plant joint project from automaker Stellantis LV and battery maker LG Energy Solution, in Windsor, Ontario has been thrown into doubt after the two companies halted construction and called on Ottawa to "keep its commitments." The federal government wants Ontario to contribute what it considers its "fair share" to the project, despite having promised in recent years to match subsidies available in the US on similar projects. Ontario Premier Doug Ford says the amounts requested are not clear and says it is Ottawa's job to match US support.
Ontario Premier Doug Ford is calling on the federal government to clarify its demand that the province pays its "fair share" to ensure an EV battery plant deal with Stellantis and LG Energy Solutions in Windsor, Ontario goes ahead. The complaint comes after Stellantis said the federal government wrote to confirm it had raised production incentives under the US' Inflation Reduction Act five times, without delivering on the promised matching payment. Federal Finance Minister Chrystia Freeland has said provinces that benefit from Ottawa’s $120bn green industrial strategy need to "pay their share".
Canadian leaders are in disagreement over who should pay to prevent automaker Stellantis NV potentially moving its battery plant. The disagreement has arisen over Ontario and Ottawa granting Stellantis and its partner LG Energy Solution $1bn in subsidies to build a plant in Windsor. The estimated cost of this plant is $5bn. Prime Minister Doug Ford wants the feds to step in and finance the whole amount, while the feds believe Ontario should contribute its “fair share”. There is no defined agreement to who should pay and no figure for how the plant should be subsidised.
Three former UK business secretaries from different parties, Lord Mandelson, Sir Vince Cable and Greg Clark, have accused Chancellor Rishi Sunak of having neither an effective nor visible industrial strategy. Clark said Sunak had never even referred to the subject. Mandelson said the lack of enthusiasm had resulted in a confused policy, while Cable said it had been discontinued due to "ideological zealotry". Senior government insiders admitted the policy was not contained within a single document and was a "comms issue". The role of the state in economies recently has highlighted a difference between European and US approaches.
New car import rules which come into force in January may pose a threat to the UK's struggling car manufacturers. As of next year, all cars exported from the UK into the European Union must contain 45% of their components by value from either the UK or the EU. Vehicles that do not meet this threshold will face a 10% duty when heading for the Continent. The rules were designed to encourage firms to establish supply chains nearer home, however, the UK has failed to establish a battery industry, meaning car executives fear that the deadline will be an "existential threat". Industry experts have warned that the new regulations could cause the closure of such sites as Stellantis's Vauxhall van factory at Ellesmere Port. The rules will also make industry-based technologies, such as professional wireless communication devices, more important when conducting automotive research and development.
The Australian government is pumping AUD50m ($36.8m) into critical minerals refineries, rare earths mining and battery plants to diversify supply chains. The funding will split between seven projects in Western Australia, three in New South Wales and three in Queensland. The projects will receive funding under the critical minerals development program, an initiative focused on the electric vehicle lithium-ion battery sector and supply chain materials for advanced manufacturing in aerospace, medicine, energy and defence, Resources Minister Madeleine King said.
Over the last year, the western manufacturers of wind turbines have not shared the fortunes of wind-farm operators, mostly due to declines in pricing. The biggest western turbine manufacturers include Nordex, Siemens Gamesa, GE Renewable Energy and Vestas, who make 90% of the market outside China, they all saw combined net losses of nearly $5bn last year, and in recent weeks Siemens Gamesa, Nordex and GE Renewable Energy have all reported losses in the first quarter of this year. Markets have been cooler towards buyers, including large utilities and private infrastructure investors as they have found it more challenging to secure the necessary permits. The selling price per megawatt has fallen from €1m in the mid-2010s to €700k last year. The increase in material prices, geopolitics, supply-chain disruptions and increasing interest rates, among other factors, are adding to the challenges. as there is a growing protectionist mood across Washington and European capitals. Meanwhile, the biggest Chinese turbine company, Goldwind, which installed 12.5 gigawatts of capacity last year, is generating an annual net profit of around $340m.
Global venture capital funding for clean energy startups increased to $12.3bn last year, from $1.9bn in 2019, according to analysts Oliver Wyman. Battery, storage and renewable technology comprised two-thirds of last year's investments, while investors in North America made up 57% of the total, European investors contributed $3.5bn and Chinese investors contributed $1.2bn. Green subsidies in the US and Europe spurred the rise, and interest in clean tech investment is set to increase, according to industry insiders.
The Canadian and Ontario governments are currently learning the hard way that when you pay a subsidy to one particular industry it can create a domino effect of ransom notes from other companies in that same industry. This is currently happening as Stellantis and LG Energy Solution are requesting an increase in state-subsidised funding for their electric vehicle battery factory after having seen their competitor, Volkswagen, already receive substantially better terms. Last year, Volkswagen was given $13bn worth of subsidies from Ottawa over ten years for its factory, which is 13% of the company’s market value, plus $500m from Ontario. Unfortunately for Canada, it doesn't look like it was satisfied with simply subsidizing Volkswagen and is now in danger of overpaying even more for Stellantis and LG’s ventures. This highlights the problematic nature of the government’s aggressive pursuit of electric vehicles, which could leave the taxpayer footing the bill for a series of increasingly extortionate ransom notes.
US House Republicans have proposed a permitting overhaul as part of negotiations with President Biden on raising the debt limit. The permitting reforms would cover energy projects, but Democrats are reluctant to support them, at least in part because they suspect Republicans would not honour a pledge to revisit the reforms later and add in Democrats’ priorities. There is bipartisan enthusiasm for permitting reform, which Republicans included in the bill they recently passed to lift the debt limit. However, some Democrats want the priority to be building new transmission lines for clean energy projects financed under the Biden administration’s climate law. Changes to the permitting process for energy projects is a high-stakes issue in the negotiations to raise the debt limit before the federal government runs out of money to pay its bills on 1 June. It is unclear whether Congress could regulate artificial intelligence, another thorny issue, which has prompted calls for the creation of an independent regulator, although legislation introduced by Democratic Senator Michael Bennet has failed to make it through Congress.
The Department of the Interior's Bureau of Land Management has completed an environmental review for the SunZia transmission project, which can connect up to 4.5 GW of renewable energy across the southeastern US. The BLM considers the completion of the study a milestone in the Biden administration's efforts to hasten the buildout of electric transmission infrastructure across the country, paving the way for the development of renewable energy projects as part of the US's broader goal to decarbonise the power sector by 2035. The SunZia project consists of two planned 500-kV transmission lines that stretch across 520 miles of federal, state and private land.
The Limit, Save, Grow Act was passed in the House of Representatives with a slim 217-215 majority. The legislation would reduce the budget deficit by an estimated $4.8tn over 10 years, and includes the “REINS Act” which would subject regulatory agency rulemaking to stricter congressional review and approval processes if proposed regulations would increase costs to individuals or businesses significantly. The deficit reduction is paired with an up to $1.5tn increase to the current $31.4tn statutory debt limit to avoid an interruption in Treasury Department checks. While it is unlikely that the Senate will pass the bill in its current form, the House passage helps push President Joe Biden to the negotiating table and address the nation's financial woes meaningfully. If it were to pass, the legislation's biggest winners are taxpayers who avoid a future tax burden, and consumers can expect inflation to drop, reducing the costs of goods and services. The IRS would be a loser, with taxpayers getting back $70bn of unspent bonus funding. Future generations would benefit from a reduced federal debt burden, and federal bureaucracy would be limited. Untaxed corporations are set to lose the most, as the bill scales back new energy tax breaks enacted by the previous Congress, returning most pre-existing green tax credits to pre-2022 and levelling the playing field of corporate taxes. Small businesses would benefit from a more stable atmosphere, while doctors, lawyers, and advanced degree holders who have not paid their bills would be the biggest losers, with a change in borrower income calculation methods being proposed.
Despite receiving $80bn of funding to target rich tax evaders and corporations, tipped employees could be subject to investigation by the IRS in the US, as the agency attempts to crack down on underreported tips. Despite the rhetoric from the White House and the IRS stating that both individuals earning less than $400k per year and small businesses would not be a target, this new proposal contradicts that. The IRS itself needs voluntary compliance from taxpayers and as such, public trust is a necessary part of achieving it. Biden's new IRS commissioner, if confirmed, should restore that trust.
President Biden's latest budget increases Medicare's wasteful spending by increasing payroll taxes through another tax bracket while raising the tax rate for Medicare. This doubles down on the failed policies of the past and only postpones Medicare's ultimate insolvency to a later date. To preserve benefits for existing retirees and those set to retire soon, Medicare must become more flexible and competitive, but that does not mean "slashing entitlements." Flexible health savings accounts are an example of how people's incomes can be redirected to cost-effective health care. The longer it takes to change direction, the more painful the course correction will be, and the more draconian the cuts to benefits.
The leaders of the G7 met this past weekend in Hiroshima to discuss issues including climate change, amid global energy crises and Russia’s ongoing war with Ukraine. As we commented last week, Japan has been criticised for promoting dangerous fossil gas as part of the global energy transition, something the Biden administration is also being condemned for. Both nations are accused of making commitments to climate issues then backing out. Despite the relative success of the Kyoto Protocol in incentivising CO2 reductions when it was signed in 1997, targets have been revised upwards repeatedly since.
