The world is “losing the race” against climate change, UN chief Antonio Guterres warned yesterday, demanding bolder action from governments to arrest runaway warming.
Guterres delivered a no-holds-barred appraisal to business and political leaders gathered at the World Economic Forum (WEF) in Davos, which has featured much hand-wringing on the planetary crisis this week.
“In my opinion it is the most important global systemic threat in relation to the global economy,” the UN secretary-general told his high-calibre audience.
“Climate change is running faster than what we are,” he said. “I believe we are losing the race.”
The business community and civil society are increasingly engaged, “but the political will is still very slow”, he said, lamenting the position of climate doubters.
“We are moving dramatically into a runaway climate change if we are not able to stop it.”
A UN summit last month in Poland, which was designed to advance the Paris climate accord, laid bare continuing fissures over the share of responsibility among countries to cap temperature rises.
The Paris accord has been shaken by the withdrawal of the United States under President Donald Trump, and by threats to do the same by Brazil’s new hard-right leader, Jair Bolsonaro.
Guterres, on an earlier Facebook Live broadcast, said that the commitments made in Paris were already “not enough” but was “not hopeful” that nations would find the necessary resolve.
“If what we agreed in Paris would be materialised, the temperature would rise more than 3.0° (Celsius),” he said.
“We need countries to make stronger commitments,” Guterres said, calling for more measures to mitigate climate change and adapt to it, along with financial aid for poorer countries.
A WEF survey ahead of the Davos meeting found that climate change was the leading concern of forum participants around the world, noting in particular the growing frequency of extreme weather events.
Corporate executives in Davos such as Patrick Pouyanne, the chief executive of French energy giant Total, have been touting their own measures to transition to a greener economy.
“We don’t look to renewables to be green,” he told the CNBC channel in Davos yesterday, noting that electricity is the fastest-growing segment of the energy market.
“We look to renewables because it’s the best way to go in to this electricity market, but the electricity market will require also natural gas, so natural gas and renewables.”
However, activists say companies are not doing nearly enough.
One vocal voice in Davos this week has been Swedish 16-year-old Greta Thunberg, who has inspired a wave of climate protests by schoolchildren around the world after delivering a fiery speech at the UN climate summit in Katowice, Poland last month.
“They (companies) have known exactly what priceless values they have been sacrificing to continue making unimaginable amounts of money,” she told AFP in an interview.
Former US secretary of state John Kerry, who signed the Paris accord for the United States in 2016, said that 38 out of the 50 US states were implementing their own climate policies despite Trump’s withdrawal and vocal scepticism on climate change.
The Paris pact was based partly on the expectation that the private sector would step up with new investment in areas such as batteries and solar panels, he noted.
“It’s not happening enough, and even in Katowice recently, you saw the fight that was taking place, just to be able to try to be reasonable here,” Kerry said in Davos on Tuesday, also on CNBC.
“We’re heading towards 4.0° Centigrade increase in this century, and the passive indifference that most countries are accepting is basically a mutual suicide pact.”
Another idea long in the mix of the climate debate is a carbon tax, which would factor in the polluting price of fossil fuels so as to discourage their use over time.
That has been anathema for many governments, including the United States well before Trump.
However, it is gaining ground anew under an initiative by the Climate Leadership Council that is backed by 27 Nobel economics laureates and four former chairs of the Federal Reserve.
Ted Halstead, president of the US organisation, has been in Davos this week selling the idea of US households getting back the revenue raised, in the form of lump-sum rebates.
Greenpeace welcomed the intervention by Guterres.
“The UN secretary general’s speech once again drives the urgency of the climate emergency home,” said the environmental group’s executive director Jennifer Morgan. “Guterres’s argument is compelling and has to be heard.”

The Amir of Qatar HH Sheikh Tamim bin Hamad al Thani was in Lebanon only for a few hours over the weekend, but the impact of his visit will last far longer– and help improve the lives of all Lebanese in the process.

The mere fact of Sheikh Tamim’s presence spoke of a vision of partnership that sets Qatar apart from a great many countries on the world stage these days, and this on multiple levels, because the circumstances of his visit make the substance even weightier.

For observers of Arab politics unaccustomed to such phenomena, this is what genuine principle looks like. The Amir’s visit was not only a powerful gesture of support for the right of each and every Arab League member state to have a voice of its own, it also was a firm rejection of the dangerous and increasingly common notion that alliances are purely transactional relationships bereft of loyalty, shared interests, or any other marker of genuine friendship. In addition, the Qatari leader also concretised his country’s support to a fellow Arab state by agreeing to have it purchase some $ 500 million worth of Lebanese government bonds.

That Qatar can afford to do this is in itself an indicator of strong governance, because it comes despite the billions of dollars it has had to spend propping up its own national economy since June 2017, when several of its Arab brethren imposed an unlawful blockade. Now that it has reoriented its trade to more reliable partners and revamped its agrofood sector to increase self-sufficiency, the economy is once again growing strongly and sustainably, and public finances are as robust as ever. The purchase comes at a crucial juncture. Lebanon’s economy faces major challenges, including sluggish growth, a massive public debt, tight credit markets for the private sector, and weak confidence among both consumers and investors, be they foreign or domestic. In addition, the political arena is so sharply divided that more than eight months after the May 2018 parliamentary elections, a government is yet to be formed, further hamstringing efforts to institute reforms that would unlock billions in soft loans from friendly governments.

The resulting logjam even led to downward pressure on the Lebanese Pound (LBP), causing the Banque du Libnan (BDL) to take a variety of supportive measures, and sparking rumours that Beirut might not be able to make payments on sovereign debt maturing later this year. (In fact, just a day after the summit ended, Moody’s Investors Service downgraded Lebanon’s creditworthiness, although it also improved the outlook from “negative” to “stable”.

This decision would have been taken before the Qatari cash infusion, but it nonetheless gives a very good idea of how analysts view Lebanon’s predicament.) Enter Qatar and its bond deal, which confers multiple benefits. First, the cash signals to any currency speculators that a bet against the Lebanese Pound is also one against the financial muscle of the world’s richest country per capita-wise. Second, it substantially reduces the likelihood of debt rescheduling, which should calm nervous investors. Third, it significantly cuts the risks of holding LBP, which benefits each and every Lebanese – regardless of address, income, and/or sectarian/political affiliation – but especially the poor because they would be the most vulnerable to the consequences of currency depreciation, including higher inflation and even, potentially, the gutting of whatever savings they have been able to accumulate. Perhaps most importantly, both the actual and perceived impacts of Qatar’s largesse will be magnified because it is being channelled through the BDL, probably Lebanon’s most universally respected public institution. Under the leadership of Riad Salamé, the BDL has earned the respect of local and outside experts alike, as well as that of the US Federal Reserve and other leading central banks around the world, so observers can be confident that the funds provided by the Qataris will be put to their intended use. Finally, it more than bears mentioning that this is hardly the first time Qatar has been there for Lebanon, and for all Lebanese. During the bloody war waged by Israel against Lebanon in 2006, Sheikh Tamim’s father, the then Emir HH Sheikh Hamad bin Khalifa al Thani, made a similar demonstration of authentic friendship. Unlike most countries, Qatar threw open its land, air, and sea borders to any and all Lebanese, suspending visa requirements and even covering the cost of food, shelter, and utilities to those who could not afford it. Once the war was over, Qatar also forked over the equivalent of more than USD 1 billion for Lebanon, helping to rebuild homes, churches, and mosques, and to revive the Lebanese National Library in Beirut.

In 2008, when street clashes appeared to push Lebanon down the road to another civil war, it was Qatar that stepped in to mediate a reconciliation that restored some degree of functionality to the presidency and other key institutions. Since then, Qatar has repeatedly gone out of its way to assist the government and people of Lebanon, including last year, when it once again lifted visa restrictions on Lebanese travellers, the only Gulf Arab state to do so. In 2006, Qatar earned the gratitude of all Lebanese, not just because (unlike many others) it made good on its pledges, but also because its assistance was distributed without regard to the recipients’ religious or political persuasions. In fact, most of its generosity was disbursed in areas whose populations are heavily Shiite. To Sheikh Hamad, whose country’s citizenry is overwhelming Sunni, these details were irrelevant to the task of restoring hope, dignity, and the basics of modern life – not to Muslims, Christians, Sunnis, or Shia, but to human beings. Thanks to this brave humanitarian approach, the phrase ‘Shukran, Qatar’ made itself heard wherever there were Lebanese: at cafés and restaurants, at home and abroad, in print and over the radio, through satellite television and myriad emails and text messages. Now that Sheikh Tamim has so emphatically replicated his father’s courage, fairness, and wisdom, the time has come to say it again: Shukran, Qatar!

Roudi Baroudi is CEO of Energy and Environment Holding, an independent consultancy based in Doha. He is also a proud and grateful Lebanese.

Europe’s natural gas market is tanking and it’s hard to see why prices should stop falling now.
Storage levels are above average for the time of year because of the mild winter – curbing demand at a time sales should delight the region’s utilities. And with liquefied natural gas cargoes arriving at Europe’s ports in record numbers, the market looks saturated, according to Julius Baer Group Ltd.
The mild winter in the Northern Hemisphere has not only hit Europe’s energy markets. Asian LNG prices have slumped for eight straight weeks as buyers haven’t felt much of a need to top up buying done ahead of the winter. That has reduced incentives for exporters from Russia to the US to send tankers to Asia, instead leaving northwest Europe as their preferred destination.
“Europe has become the dumping ground for LNG,” said Norbert Ruecker, head of macro and commodity research at Julius Baer, who expects prices could fall another 20%, without giving a time frame.
Northwest Europe imported a record 32.5 cargoes in December, according to data compiled by Bloomberg. And purchases are strong this month too.
To some extent, LNG has for now supplanted the need for huge storage sites.
“Storage has just been building and building,” Ruecker said. “Given that this trend could continue, it will put pressure on European gas prices.”
Another bearish factor is that demand this month may be much lower than traders earlier expected. Temperatures are now forecast near normal by the end of the month, versus forecasts last week for temperatures about 6 degrees Celsius below the usual level.
“The market balance is the key fundamental prices follow and somehow it does not seem to be really mirrored in the price,” Ruecker said.
Dutch front-month gas is trading at about €22 a megawatt hour on the ICE Endex exchange. The option to sell with the most open interest below that level is at a strike price of €18, according to data from the bourse. Last year, prices dropped as low as €16.78, while in 2017 the low was €14.43.

Oil majors Chevron Corp, Total SA and Reliance Industries Ltd are investing in blockchain- backed digital trading platform Vakt Holdings Ltd, signaling more industry buy-in for the technology. The addition of the US, French and Indian oil companies means that Vakt has won investments and participation from half of the world’s 10 biggest oil and gas firms by market capitalisation, the London-based technology startup said in a statement. Widespread adoption of a uniform system will be key to the success of any digital trading platform using blockchain – a digital ledger process that has the potential to reduce trading costs by cutting down on paper work, and increasing the security of transactions. “Total has been supporting industry initiatives to digitize cargo post-trade processes for some time,” said Thomas Waymel, president of trading and shipping at Total’s trading arm Totsa SA. “We view them as a major step forward towards safer, faster and cheaper logistical operations,” he said. The oil trading units of BP Plc, Equinor ASA, Royal Dutch Shell Plc, as well as trading houses Gun- vor Group Ltd and Mercuria Energy Group Ltd were among the first investors in Vakt. The platform went live in November, trading crude cargoes underpinning North Sea Brent, one of the world’s most important crude oil benchmarks. In addition to oil majors and trading houses, Vakt’s other investors include trade finance banks ABN Amro Group, ING Groep NV and Societe Generale SA. The three largest independent trading houses Vitol Group, Glencore Plc and Trafigura Group haven’t joined Vakt nor a similar blockchain-driven digital trade finance platform based in Geneva called Komgo SA, that has many of the same backers as Vakt.

Shares of oilfield firm Halliburton Co fell sharply yesterday after the company forecast lower revenues in key business areas next quarter, overshadowing a quarterly profit beat and a pledge to reduce 2019 spending.
Clients in North America, Halliburton’s biggest market by revenue, began pulling back on some drilling services last year amid transportation bottlenecks in the largest US production region and after oil prices slid sharply in the fourth quarter.
An oil glut and concerns about a global economic slowdown have pushed US crude futures down about 30% since October to around $53 a barrel.
The company anticipates mid- to high-single digit revenue declines in its Completion and Production and its Drilling and Evaluation divisions next quarter.
Halliburton said it will reduce its 2019 capital spending budget by nearly 20% to $1.6bn.
Further reductions could be made if market conditions erode, executives said on the company’s fourth quarter earnings call.
Although Halliburton beat profit expectations, Wall Street analysts questioned chief executive officer Jeff Miller during the call on the lack of investor returns from the oilfield service sector, which has struggled to recover from the 2014 downturn in oil prices.
Halliburton’s share price in December fell to its lowest level since 2010, trading under $25.
Houston-based Halliburton said revenue from North America fell about 2% to $3.3bn from a year earlier and dropped 11% from the third quarter.
International revenue rose to $2.6bn from $2.5bn from a year earlier.
It rose 7% from the third quarter.
“In North America, the demand for completions services decreased during the fourth quarter, leading to lower pricing for hydraulic fracturing services,” Miller said in a statement.
The number of active hydraulic fracturing fleets in the Permian basin fell to 140 in January, versus 192 in June of 2018, a 27% decline, according to data from consultancy Primary Vision.
Halliburton’s international business “continues to show signs of a steady recovery,” Miller added.
The company saw an increase in demand for services in Argentina, which help offset some lower activity in North America.
Halliburton said net income attributable to the company was $664mn, or 76 cents per share, for the fourth quarter ended December 31, compared with a loss of $824mn or 94 cents per share, a year earlier.
Excluding one-time items, the company earned 41 cents per share, beating analysts’ estimates of 37 cents per share, according to IBES data from Refinitiv.
Fourth-quarter revenue was largely flat at $5.94bn.

With natural gas demand growing faster than for any other fossil fuel, LNG futures may be finally taking off.
Derivatives represented about 2% of global LNG production at the beginning of 2017 as an array of contracts around the world struggled to gain traction. But by the end of last year, volumes had grown to almost 23%, led by a burgeoning Intercontinental Exchange Inc contract based on S&P Global Platts’ Japan-Korea Marker spot price assessments.
While volumes are a long way off established global energy benchmarks such as Brent crude – where trade dwarfs worldwide oil production many times over – the accelerating growth in LNG derivatives illustrates how the market is maturing. An explosion in supply, from the US to Australia, is bringing more market participants and a shift away from traditional pricing.
“There’s more short-term physical trading indexed to JKM and new counterparties active in the market,” said Tobias Davis, head of LNG–Asia at brokerage Tullett Prebon. “This creates more liquidity and in turn, builds more confidence in trading the swap and using it as a viable hedging tool.”
There are now at least six derivative contracts for LNG, ranging from US Gulf Coast futures on ICE to Kuwait-India on Singapore Exchange Ltd. The most established by far is ICE’s Japan-Korea Marker, launched in 2012. More than 17,000 contracts traded in December, a 10-fold increase from January 2017. The next most active is CME Group Inc’s futures contract, also based on S&P Global Platts’ JKM assessment. Its monthly volume peaked in November last year at 3,335 contracts.
The need for a liquid LNG benchmark has been the subject of much debate. Traditionally, when oil was used more commonly in power generation and production, it was almost exclusively valued relative to crude oil and brought and sold under long- term contracts. One advantage of that system is that oil has a liquid and established futures market that gives market participants visibility and the confidence to hedge.
But oil and gas don’t move in lockstep and buyers have become increasingly reluctant to be tied to crude markets. The expansion in global supply, most notably with the development of shale reserves that transformed the US into a major natural gas exporter, has opened up other options and stimulated a shift to more spot trading.
About 27% of LNG was sold under spot-or short-term deals in 2017, up from 12% in 2003, according to the International Group of LNG Importers.
That just increased the need for a reliable price benchmark and liquid futures market for hedging. Regional gas benchmarks such as Louisiana’s Henry Hub, the UK’s National Balancing Point or Dutch Title Transfer Facility reflect local fundamentals and therefore may not be ideal proxies for the global LNG trade, where the vast majority of sales are in Asia. So that’s where LNG futures come in.
JKM “is much more trusted, much more accurate, and the paper market is helping make it be more responsive to price movements,” Gordon D Waters, the global head of LNG at ENGIE, said by phone on Friday. JKM contracts could reach the level of NBP or TTF “most likely within the next 5 years.” NBP and TTF volumes both averaged about 37,000 contracts a day in 2018.
There’s still a long way to go. ICE JKM is still much smaller than other global oil and gas benchmarks. Exchange open interest, or the amount of outstanding bets at the end of every day, accounted for about $2bn at the end of 2018, compared with $36bn for US natural gas and more than $100bn for Brent oil, according to Bloomberg estimates.
For a futures market to be considered truly liquid, volumes should be about 10 times the size of the actual physical trade, according to Total SA, one of the world’s biggest producers and a major participant in the JKM market. With volumes multiplying by about three times a year, JKM should reach that level in about five years, Philip Olivier, Total’s general manager of global LNG, said in October.
Brent and US gas traders also have much more flexibility, as they’re able to buy and sell futures by the second, with prices updating to reflect the fast-moving market. Most JKM LNG trades are still brokered offline and then cleared by exchanges. Contract values are based on a monthly average of Platts assessments, so the price updates once a day when the new assessment is added.
Still, LNG has already surpassed one energy derivative. ICE’s JKM contract now has more value in open interest than the exchange’s Newcastle coal contract. The two fuels, of course, also vie in the real world for space in power plants in some regions.
“If you have a look at how the coal market developed in the mid-2000s, it took over a decade to transition to a liquid exchange order book,” said Gordon Bennett, managing director for utility markets at ICE. “It definitely feels like JKM is evolving quicker.”

Bloomberg Istanbul Turkish gas distributor Palmet Enerji AS agreed to buy all of EWE AG’s assets in the country for between €130mn ($148mn) and €150mn. Palmet beat its only competitor, State Oil Company of Azerbaijan Republic (SOCAR), to secure the assets of EWE Holding Turkey AS, Palmet chairman Doganay Samuray said in a phone interview yesterday. “We will have a stronger position in Turkey’s retail gas distribution market with this acquisition,” Samuray said. Palmet already operates gas grids in the Erzurum province in eastern Turkey, and Gebze, an industrial town to the east of Istanbul. “We held talks, and in the end decided not to buy EWE assets” in Turkey, Ibrahim Ahmadov, a spokesman for Socar in Baku, Azerbaijan, told Bloomberg. He didn’t elaborate. Palmet is in discussions with banks to finance the acquisition, which is subject to approval by Turkish energy and antitrust regulators, Samuray said. It may take “two or three months” to complete those talks. The borrowing for the acquisition will be in Turkish lira, which is the currency of EWE’s gas grid revenues in Turkey, Palmet chief financial officer Bora Kirac said. “We are in talks with five or six local banks but we will probably borrow from two or three of them.” EWE Turkey doesn’t have any outstanding debt, he said. Germany’s EWE hired Barclays Plc to manage the sale process, people with knowledge of the matter said in March. The agreed price is less than half the amount people familiar with the process had estimated the assets were worth in October. EWE’s Turkey unit owns 80% stakes in two gas grids in the provinces of Bursa and Kayseri, as well as a phone company, Millenicom. Its other assets include electricity trader EWE Enerji and Enervis, a technology service provider for the energy industry

OPEC and its allies plan to hold a meeting in March to assess their oil-production accord in Azerbaijan, and then ministers will gather to set policy in April, according to the organization’s top official.

The body that reviews the implementation of OPEC’s supply cuts, the Joint Ministerial Monitoring Committee, will convene in the Azeri capital of Baku on March 17 to 18, Secretary-General Mohammad Barkindo said in a statement. Ministers will then meet in Vienna on April 17 to 18 to decide whether the cutbacks should be extended beyond their scheduled expiry in the summer.

The 24-nation coalition of oil producers known as OPEC+, which includes OPEC nations as well as non-members, is cutting output to stabilize global markets. They have agreed to collectively reduce supplies by 1.2 million barrels a day for the first half of this year.

By restraining supply in 2017 and early last year, the alliance engineered a recovery in prices that ended the oil industry’s worst slump in a generation, but the market has started to weaken again. At about $60 a barrel in London, prices remain about 30 percent down from a four-year high reached in October.

It took more than a month for the Organization of Petroleum Exporting Countries to settle on the dates, an unusually long time for the group, which typically concludes each conference with a prompt resolution on when to meet again.

The delay may reflect the more complicated logistics that come with expanding into a broader coalition with more countries. Whereas in the past decisions were confined to the dozen-or-so members of OPEC, these days its consultations can involve all 24 nations in the broader network, with Russia having particular influence.

Pronounced volatility in oil prices in the month since OPEC+ announced its supply curbs suggests market participants have been looking for additional clarity on the organization’s plans.

Besides the two meetings for ministers, delegates will also convene in coming weeks to work on a framework that will cement co-operation between OPEC and non-OPEC over the long-term.

OPEC officials will meet to discuss the framework on Feb. 7 to 8, and representatives from their non-OPEC partners will follow-up the consultations on Feb. 18 to 19. The charter will be finalized in order to be considered by ministers at their meeting in April, Barkindo said.

China may boost its liquefied natural gas import capacity by nearly four-fold within two decades as it pushes toward using more of the fuel.
The Ministry of Transport has proposed the nation operate 34 coastal terminals with total annual import capacity of 247mn tonnes by 2035, according to people with knowledge of the draft plan. That compares with the nation’s total nameplate capacity of 67.5mn tonnes at the end of last year, according to BloombergNEF. The plan is preliminary and could change, said the people, who asked not to be identified as the information isn’t public.
The transport ministry didn’t respond to a faxed request for comment. The Shanghai Petroleum & Gas Exchange posted information about the plan on its website on Monday, citing a report by Southern Energy Observer.
President Xi Jinping’s government has prioritised using more natural gas in place of coal for residential and industrial use, sparking a race to increase supply and expand infrastructure such as pipelines, storage tanks and import terminals. Total gas imports surged 32% last year as the nation overtook Japan to become the world’s biggest buyer, both by seaborne LNG and pipeline. The boom was so big that China accounted for 65% of global LNG demand growth last year, according to Sanford C Bernstein & Co.
The draft plan consists of two types of terminals, said the people. The first is 13 facilities referred to as “key” or “important,” and will have a combined capacity of 165mn tonnes in 2035. A second category, known as “general” or “ordinary,” will total 82mn tonnes over 21 terminals. Additionally, there are six terminals planned inland along the Yangtze River that aren’t accounted for in the total capacity figure, they said. – With assistance from Dan Murtaugh.