Energy Policies

Experts Were the Covid Crisis in 2020

Posted on by Ron Clutz

John Tamny makes the case that authoritarian government is a poor substitute for free people managing themselves facing a public health threat.  He writes at Real Clear Markets Dear Washington Post Editorial Board, the Experts Were the Crisis In 2020.  Excerpts in italics with my bolds and added images.

The quote from Tolstoy’s War and Peace is a useful way to begin addressing the Washington Post editorial board’s confident assertion that “’A collective national incompetence in government’” was at the root of the U.S.’s alleged failure vis-à-vis the coronavirus in 2020. According to the Post quoting from a recently released report (“Lessons from the Covid War”), “The United States started out ‘with more capabilities than any other country in the world,’ but “it ended up with 1 million dead.” Were he still around, one guesses Tolstoy would mock the conceit of the Post’s editorialists.

That’s the case because “the thing that matters most to any man” is “the saving of his own skin.” That this needs to even be said speaks to how wrongheaded the Post’s editorial board’s approach to the virus was, and still is. It implies we have dead because government didn’t act properly, as though free people eager to live were unequal to a virus that the right kind of collective governmental action was more than equal to. Ok, but what was government going to do? Better yet, what if the virus had struck in 2015 when Barack Obama was still in the White House. What would he have done? Would he have instructed a virus that was spreading faster than the flu to take a “time out”?

The simple truth missed by the Post is that as humans
we’re wired to preserve ourselves.

On the matter of life and the presumption of death, government is excess. Whatever solution Obama might have come up with, or whatever Donald Trump did come up with, or (try not to laugh) whatever Joe Biden, Nancy Pelosi and Chuck Schumer would have done if the virus had revealed itself in 2021 would have been vastly unequal to the solutions crafted by free people.

Deep down the Post’s editorialists must know the above is true. Indeed, it’s not that the Soviet Union lacked experts, or that Cuba lacks experts now. The problem was and is that the remarkable knowledge of very few very smart people will never measure up to the collective knowledge of the citizenry. That’s why communism failed so impressively in the Soviet Union, and it’s why it fails in Cuba. Translated for those who need it, the people are the market and markets work. As I make plain in my 2021 book When Politicians Panicked, the problem was experts and politicians substituting their limited knowledge for that of the people. That was the crisis. Not so, according to the Post and the report they cite.

Supposedly the “leaders of the United States could not apply their country’s vast assets effectively enough” such that “1 million died.” Wrong. Over and over again. To see why, imagine if 10 million Americans had died in March of 2020. Can the Post editorial board think of what government might have done that would have somehow improved on a feverish individual desire to survive against long odds? The simple truth glossed over by the Post is that the more threatening a virus is (and the Post seems to view what most didn’t know they were infected with as wildly threatening), the more superfluous government action is.

Really, who reading this ever needs to be forced to avoid behavior that might result in sickness, or even death? And if the reply to this question is that some people DO need to be forced, you’re making the best case of all for unfettered freedom. Think about it. Those who reject expert opinion are the most crucial “control group” as a virus spreads. By going against the grain, we learn from their freely arrived at actions if the virus is as lethal as presumed, or not, how it spreads, how to perhaps avoid its spread, and all manner of other important bits of information suppressed by one-size-fits-all national solutions.

It cannot be stressed enough that free people crucially produce information. Instead of allowing them to produce it in abundance in 2020, the response arrived at by Democrats and Republicans was to lock people in their homes, thus blinding a nation “with more capabilities than any other country” to the best approaches to a spreading virus. Please keep all of this in mind with the report’s assertion that the “most important and fundamental misjudgment” about the virus was how it spread. You think? Of course, the muscular assertion ignores yet again that if knowing how a virus spreads is of utmost importance, the only credible answer is freedom.

Consider the latter in light of the statement of the obvious that all advances in medicine have always been born of matching doctors and scientists with the abundant fruits of wealth creation. In 2020, rather than encourage the very wealth creation that has long been the biggest foe of death and disease (by far), panicky politicians quite literally chose economic contraction as a virus mitigation strategy. Historians will marvel at the abject stupidity of the U.S. political class, but not the Post’s editorialists or the authors of a report that the editorialists remarkably find insightful.

Rather than acknowledge the obvious about government and experts as the crisis, the Post editorialists and the experts they kneel before bemoaned a national abdication of “wartime responsibilities.” One gets the feeling Tolstoy would chuckle yet again. In his words, “The course of a battle is affected by an infinite number of freely operating forces (there being no greater freedom of operation than on a battlefield, where life and death are at stake), and this course can never be known in advance; nor does it ever correspond with the direction of any one particular force.”

In short, on matters of life and death government control
is wretched, crisis-inducing excess.

 

Obviously Climate Policies Are Inflationary

Posted on by Ron Clutz

 

Rupert Darwall explains how central bankers avert their eyes from the obvious in his Real Clear Energy article Inflation, Net Zero, and the Bank of England. Excerpts in italics with my bolds and added images.

A central banker tiptoes toward the inflationary consequences of Net Zero.

“What a banker,” read the unsubtle headline in the Sun. “BoE official on £190k salary says Brits must accept they’re worse off.” The Mail agreed. “BoE chief risks fury as he says Brits must accept they are poorer.” What sparked the tabloids’ outrage was a Columbia Law School podcast with Huw Pill, the Bank of England’s chief economist and a member of the Bank’s interest-rate-setting Monetary Policy Committee. Pill made the uncontroversial point that higher energy prices were making Britons worse off, but that attempts by workers and firms to recoup the real spending power they’d lost risked embedding inflation.

Pill’s analysis should have been directed at his fellow central bankers,
who let inflation slip the leash.

In his Geneva speech, Pill says that central bankers need to assess structural factors likely to prevent inflation falling back to target. “If a rise in energy prices is seen as permanent, it is more likely to trigger greater intrinsic inflation,” he argues. If it does, it would “justify a stronger tightening of monetary policy.” Not mentioned by Pill, however, are the effects of climate policy and net zero on energy costs and prices – and therefore the persistence of inflation on an economy being subjected to a multi-decadal program of decarbonization.

Climate policies drive up energy costs through two channels.

The first are policies forcing energy companies to replace hydrocarbons with inefficient, inferior lower-carbon alternatives, notably wind and solar. Were such technologies superior and capable of delivering greater efficiencies, there would be no need for government intervention promoting their adoption. The second channel is by progressively constricting the sources of energy supply, for example by Environmental, Social and Governance (ESG) investors preventing investment in new oil and gas fields, thereby increasing the market share of OPEC plus Russia.

In Britain’s case, powering past coal meant increased dependence on natural gas to keep the lights on. As Pill notes, all market transactions involve distribution of some “economic surplus” between the parties; “the more effective the seller is in extracting that economic surplus, the higher the resulting economic price will be.” Unfortunately for Britain and the rest of Europe, Vladmir Putin and Gazprom have a much better understanding of how energy markets work than Western politicians who made their continent vulnerable to surplus extraction through the myopic pursuit of net zero.

With the Bank of England, it’s not so much myopia as wilful blindness to any possibility of a link between climate policies and inflation. In a speech this month unironically asking “Climate action: a tipping point?,” Sarah Breeden, the bank’s executive director for financial stability and risk, describes its role as creating a regulatory framework that encourages markets “to allocate capital to support real economy decarbonization,” i.e., to worsen the supply constraints on hydrocarbon energy. At the November 2022 G20 meeting in Bali, Deputy Governor Sir Dave Ramsden spoke of the need to avert climate catastrophe. “Among all the shocks – many unprecedented – facing the global economy today, the challenge of climate change is the most profound and far reaching,” Sir Dave declared, in the very month it was announced that consumer price inflation in Britain had reached 11.1 percent.

From the governor on down, the Bank of England became obsessed with conjuring up specters of climate risk as threats to financial stability, all the while blanking out any possibility that climate change policy might threaten attainment of the bank’s inflation mandate. Less than two years ago, Andrew Bailey, the bank’s governor, was talking of net zero as a way of regenerating capital and raising productivity. “These positive effects should be larger in countries like the UK that are net importers of energy,” Bailey asserted – the opposite of what the bank’s chief economist is now saying.

Alarm bells should be ringing in Threadneedle Street. Giving evidence to a House of Lords inquiry on the Bank of England independence, former chancellor George Osborne cast doubt on making climate goals one of the bank’s objectives. His former Labour opponent, Ed Balls, who helped design the arrangements making the bank independent in 1997, went further, arguing that it didn’t make sense to give the bank a role for which it had no tools, and suggesting that climate had become a distraction from its core mission on price and financial stability.

Climate is worse than a distraction:
misjudgement and misanalysis of climate-change policy is a key factor
in the Bank of England losing control of inflation.

Net Zero Not Rational

Posted on by Ron Clutz

Jonathan Lesser explains in his Real Clear Energy article Why “Net Zero” Is Not a Rational U.S. Energy Policy.  Excerpts in italics with my bolds and added images.

Cost of achieving net-zero carbon emissions would be staggering for neglible climate impact.

Despite Germany’s last-ditch attempt at realism, the European Union recently approved a 2035 ban on gas-powered cars, moving ahead with its “net zero” emissions agenda. In the U.S., the cost of achieving net-zero carbon emissions would be staggering – $50 trillion if the goal is reached by 2050 – as would the demand for raw materials, which in most cases would exceed current annual worldwide production. 

Global critical metal demand for wind and PV

The impact on world climate, however, would be negligible. Emissions in developing countries will continue to increase as those countries’ focus is economic growth for their citizens, not permanent economic misery to “save” the climate. Although a recent Washington Post article suggests that wealth be viewed in terms of “joy, beauty, friendship, community, [and] closeness to flourishing nature,” impoverished individuals who cook with animal dung – such as 80% of the population in the African nation of Burkina-Fasso – aren’t likely to find much joy and beauty in economic misery. Granted, having to cook with animal dung ensures “closeness to nature,” although probably not the one the article’s author envisions.

Rather than approaching energy policy clearly, the U.S. (and most of the western world) is pursuing so-called “net zero” energy policies aiming to fully electrify western economies, while relying almost entirely on wind and solar power. The additional required electricity – after all, the wind doesn’t always blow, and the sun sets nightly – would supposedly be supplied by energy storage batteries or hydrogen-powered generators.

Two factors drive these policies. 

First, there is climate hysteria, which promotes claims that have either proven to be false (the “end of snow” in Great Britain, the disappearance of glaciers in Glacier National Park) or posit extreme scenarios (complete agricultural collapse, massive sea level increases, more frequent hurricanes). The actual evidence is to the contrary, including increased agricultural yields, minimal sea level rise, and no increases in observed hurricane frequency. 

Second, these policies are driven by old-fashioned greed. Green energy subsidies, which were already large, have been hugely expanded under the Biden Administration’s Inflation Reduction Act (IRA). The IRA is a virtual smorgasbord of green energy subsidies for offshore wind, solar power, electric vehicles, and charging infrastructure. The green energy pork, which relies on climate alarmism for its justification, is increasing electricity costs and reducing standards of living, such as in Europe, where deindustrialization is taking place because of unaffordable energy costs. Even progressive California admits its zero-emissions goals primarily will benefit the wealthy at the expense of the poor.

Although the author of the Washington Post article may think differently, modern society requires ample supplies of reliable and affordable energy. A modern society that runs solely on electricity must have a foundation built upon three key pillars.  First, it must provide lots of electricity, far more than is generated today, because U.S. electricity consumption accounts for only about one-fifth of total energy consumption. Second, all of that electricity must be available 24-7. Third, it must be affordable. Those pillars cannot be supported by reliance on intermittent wind and solar power and huge banks of batteries to store electricity when the wind doesn’t blow and the sun doesn’t shine. Nor will those pillars be based on technologies that don’t even exist, such as generators that run on pure hydrogen. 

Even if one believes that addressing climate change is crucial and
that low- or zero-emissions technology will yield worldwide benefits,
the current approach is the most expensive way to achieve it. 

Despite the hyperventilation of some politicians, such as Senator Sheldon Whitehouse’s predictions of doom, climate change need not entail economic suicide. A far better approach is adaptation to and mitigation of potential future damages that may be caused by a changing climate, such as gradual sea level rise and slightly warmer temperatures.

It is doubtful the U.S. will adopt this approach in the near future, because political expediency nearly always beats rational economics. But as economist Herb Stein said long ago, something that cannot go on forever, won’t. The unrealistic energy policies in place today eventually will collapse under their own weight. The resulting costs to U.S. consumers and businesses will be staggering. 

See also Series of Four Posts– World of Hurt from Climate Policies

Part 1, Zero Carbon Means Killing Real Jobs with Promises of Green Jobs

Part 2, Reducing Carbon Emissions Means High Cost Energy Imports and Social Degradation

Part 3, 100% Renewable Energy Means Sourcing Rare Metals Off-Planet

Part 4, Leave it in the Ground Means Perpetual Poverty

 

European Energy Suffering, Now Hydro and Nuclear

Posted on by Ron Clutz

Irina Slav explains at Oil Price Europe’s Energy Troubles Continue: Hydro And Nuclear Output Declining.  Excerpts in italics with my bolds.

♦  Europe’s hydro and nuclear output is declining, leading to more energy troubles.
♦  Renewables are struggling to fill the gap as wind and solar output increase.
♦  The EU may require increased LNG imports from the US to meet energy demands.

Last year, Europe was on the brink of an energy breakdown as Russian gas flows dried up and most of Europe doubled down on renewable energy.

The renewable energy bet paid off, in a way. Solar and wind electricity generation in Europe hit a record in 2022. In fact, for the first time in history, wind and solar together produced more electricity than natural gas-fired power plants.

There was just one problem with that. Lower hydro and nuclear output
more than wiped out the significance of that record output.

Droughts were severe in Europe last year. They threatened major trade routes such as the Rhein in Germany and the Po in Italy. And they also caused severe declines in hydropower electricity output. For example, in Spain, hydropower output dropped by almost half because of the droughts. All this might repeat this year as well.

Meanwhile, nuclear wasn’t doing so swell, either. France suddenly found that years of underinvestment in maintenance would have consequences: emergency reactor shutdowns for repairs and maintenance.

The problems cost EDF a massive annual loss of $19 billion as half of its reactors had to be shut down for maintenance. Most blamed the pandemic, but nuclear experts such as Mark Nelson saw the roots of the problem much further into the past when France decided to bet on renewables over nuclear.

That might have been the case in 2022, but this year things are different. Wind and solar are still producing electricity at a record rate, it appears, but declines in hydropower and nuclear output are so severe they are more than offsetting those record output rates, Reuters’ Gavin Maguire reported in a recent column.

Maguire noted that Europe managed to boost its wind and solar power capacity by 9 percent last year to 57.29 GW, which was a record high. At the same time, however, the troubles of hydro and nuclear dragged total electricity generation down and are still doing it.

Over the first quarter, European power generation stood at 1,213 terrawatt-hours, which was 6.4 percent lower than output for the first quarter of 2023. That’s according to climate change advocacy Ember. According to Maguire, this is not necessarily alarming in itself. This time last year, Europe was coming out of pandemic lockdowns, and demand was soaring.

Where things could become problematic is later in the year as business activity across the continent begins to rebound after the energy crunch of last year, the Reuters columnist noted. And most of the Russian gas that was available last year is no longer an option.

French nuclear is a major source of hope, but it will be a while yet before output recovers. At the moment, French nuclear power plants are producing 17.5 percent less than the average output rate for 2020 and 2021. That’s down from 23 percent for last year, so there is some progress, and that’s a good sign.

Hydro is trickier because, although to a lesser extent than wind and solar, hydro is weather-dependent. With Europe’s mild winter that saw a lot less snow than usual, a repeat of last year’s drought is not out of the question. In fact, it is a distinct possibility.

What this means is that Europe may need to import a lot more LNG from its new top supplier, the United States. Some have worried that the EU is building too much LNG import infrastructure that would become stranded assets before too long, but right now, those assets appear to be vital for the bloc’s energy survival.

Energy Doublethink Update April 14, 2023

Posted on by Ron Clutz

First from the Zero Carbon zealots at Resilience Record clean-power growth in 2023 to spark ‘new era’ of fossil fuel decline.  Excerpts in italics with my bolds and added images.

The power sector is about to enter a “new era of falling fossil generation” as coal, oil and gas are pushed out of the grid by a record expansion of wind and solar power, according to new analysis by climate thinktank Ember.

Wind and solar power reached a record 12% of global electricity generation last year, according to Ember’s global electricity review 2023. This drove up the overall share of low-carbon electricity to almost 40% of total generation.

With even faster growth set to continue this year, Ember says 2022 is likely to mark a “turning point” when global fossil fuel electricity generation peaked and began to fall.

The thinktank forecasts that, by the end of 2023, more than 100% of the growth in electricity demand will be covered by low-carbon sources.

Experts broadly agree that global electricity generation needs to be completely decarbonised by 2040 if the world is to stay on track for its climate targets.

OTOH we have:

This month a 2023 US Energy Outlook from EIA (Energy Information Agency).  Excerpts in italics with my bolds.

Our projected growth in associated natural gas production is mainly driven by three trends:

♦  Rising oil prices support increased production from unconventional oil formations with significant natural gas volumes.
♦  Many unconventional oil wells are aging, and as these wells age, they tend to produce a higher ratio of natural gas relative to oil.
♦  Associated natural gas resources are becoming more economical, driven in part by provisions in the IRA, which creates penalties for venting and flaring methane and encourages producers to capture more natural gas from oil formations.

We project that associated natural gas production will increase from 7.2 Tcf in 2025 to 8.8 Tcf in the United States by 2050 in the AEO2023 Reference case. In the AEO2023 High Oil Price case, associated natural gas production peaks at 13.6 Tcf in 2035, accounting for 30% of the total domestic natural gas supply. By contrast, in the AEO2023 Low Oil Price case, associated natural gas production falls to 4.2 Tcf by 2050.

Strong continuing international demand for petroleum and other liquids will sustain U.S. production above 2022 levels through 2050, according to most of the cases we examined in our Annual Energy Outlook 2023 (AEO2023). We project that the United States will continue to be an integral part of global oil markets and a significant source of supply in these cases, as increased exports of finished products support U.S. production.

In our AEO2023, we explore long-term energy trends in the United States and present an outlook for energy markets through 2050. We use different scenarios, or cases, to understand how varying assumptions about the future could affect energy trends. These cases include:

  • The Reference case, which serves as a baseline, or benchmark, case. It reflects laws and regulations adopted through mid-November 2022 but assumes no new laws or regulations in the future. It also assumes the Brent crude oil price reaches $101 per barrel (b) (in 2022 dollars) by 2050.
  • The High Oil and Gas Supply case, which assumes 50% more ultimate recovery per well for tight oil, tight gas, or shale gas in the United States compared with the Reference case. It also assumes 50% more undiscovered U.S. oil and natural gas resources and 50% more effective technological improvements than in the Reference case.
  • The Low Oil and Gas Supply case, which assumes 50% less ultimate recovery per well and undiscovered sources, and 50% more effective technological advancement than the Reference case.
  • The High Oil Price case, which assumes the price of Brent crude oil reaches $190/b (in 2022 dollars) by 2050.
  • The Low Oil Price case, which assumes the price of Brent crude oil reaches $51/b (in 2022 dollars) by 2050.

Although domestic consumption of petroleum and other liquids does not increase through 2040 across most cases, production of U.S. petroleum and other liquids remains high because of more exports of finished products. In the High Oil Price case, increased production leads to the most U.S. exports among all cases over the projection period at 9.13 million barrels per day (b/d) by 2050, more than double the 3.9 million b/d exported in 2022. The Low Oil Price case shows the opposite trend with the least 2050 export volumes of 407,000 b/d, nearly 90% less than 2022 exports.

Electric Power Outlook

The figure above illustrates the relationship between installed capacity (left panel) and electricity generation (right panel). Because wind, solar, and nuclear have the lowest operating costs, their electricity generation over time mirrors their trend in installed capacity: slightly declining for nuclear, and increasing for wind and solar. By contrast, natural gas and coal have higher operating costs, and so their generation can vary over time depending on demand levels and the relative operating cost of other technologies.

In our March Short-Term Energy Outlook, we forecast the wind share of the U.S. generation mix will increase from 11% last year to 12% this year. We forecast that the solar share will grow to 5% in 2023, up from 4% last year. The natural gas share of generation is forecast to remain unchanged from last year (39%); the coal share of generation is forecast to decline from 20% last year to 17% in 2023.

The electric power sector includes electric utilities and independent power producers. It does not include generators in the industrial, commercial, or residential sectors, such as rooftop solar panels installed on homes or businesses or some combined-heat-and-power systems.

Comment:

The statement above concerning capacity and operating costs is simplistic, and could be misleading.  EIA actually has a more realistic method of comparing power sources.  Example below:

EIA has developed a dual assessment of power plants using both Levelized Cost and Levelized Avoided Costs of Electricity power provision. The first metric estimates output costs from building and operating power plants, and the second estimates the value of the electricity to the grid.

More detailed discussion here:

Cutting Through the Fog of Renewable Power Costs

 

Don’t Buy Green Hydrogen Hype

Posted on by Ron Clutz

Frank Lasee gives the game away in his Real Clear Energy article The Expensive Impossibility of Green Hydrogen From Part-Time Wind and Solar.  Excerpts in italics with my bolds and added images.

There has been some new thinking from the anti-CO2 religionists. The fact that the world is desperately short of lithium and cobalt for electric vehicle batteries, at the scale they want to force, is dawning on them. There isn’t enough and likely will not be enough in the coming decades to meet the electric batteries demand. Certainly not enough for grid scale electric batteries too.

The climate alarmists haven’t let the facts get in the way of their unrealistic green fantasy of averting climate doom with part-time wind and solar. That it could somehow replace all the coal, oil, and natural gas we use, which provide us with 80% of our energy.

Except one huge, huge problem. Wind and solar produce little or no energy 70% of the time.  Reliable, full-time, on demand electricity keeps the heat going and the lights on when it is dark, and the wind is not blowing.

The new expensive, impractical, and impossible federal $9.5 billion
hydrogen subsidies talking point is wasted spending.

Green hydrogen made from wind and solar is not practical and is a very expensive form of energy storage and transport.  Hydrogen is not a fuel. Hydrogen must be created; it must be made from another energy source, just as electricity must be made from other energy.

No one is making green hydrogen at scale because it is difficult, expensive and requires major factories. Spoiler alert, there isn’t excess “green” energy – wind and solar – to make hydrogen with.

Green hydrogen requires 13 times more water than hydrogen produced.

Sea water must be desalinated first for an added cost. More water is needed for cooling. So, it is a good idea to locate hydrogen facilities near abundant water, not in the chronically short of water western U.S.

Then the water must be heated to 2,000 degrees and electrocuted. Then the hydrogen must be super chilled to near absolute zero. Then it’s compressed to 10,000 psi, three times the psi of an average scuba tank.

Then you have usable hydrogen- liquid, super- cold, compressed hydrogen.
This is an expensive energy-intensive process.

The insurmountable problem with this process is that it cannot be turned on an hour after sunrise and an hour before sunset when solar panels provide the electricity. Or turned on when the wind blows and turned off when the wind stops.

Without some other energy storage device to store the “over-produced” wind and solar electricity, making green hydrogen is impossible. The costs of over-building wind and solar, then adding batteries to provide a steady stream of 24/7 electricity to make “green” hydrogen is astronomical. And in 25 years when the wind towers and solar panels wear out, or when the batteries need to be replaced every 10 years, you need to essentially start over.

Green hydrogen sounds good. And there is a well-funded industry
of selling it and obscuring the truth.

They have to cover up the facts and mislead people in order for the government and investor gravy train to keep them in business.

Canada and Germany Sign Agreement to Enhance German Energy Security with Clean Canadian Hydrogen August 2022

Don’t fall for the green or the pink hydrogen hype. It just doesn’t make sense. Apply a little common sense and critical thinking and you will join me in opposing this waste of money.

The hydrogen lobby duped congress to provide $9.5 billion for hydrogen hubs. Even red states who know this is a boondoggle are attempting to land this federal largesse.

Because it will create jobs with borrowed taxpayer money. I remind you that the US is $31 trillion in debt, with estimates it will balloon to over $50 trillion over the next decade.

These hydrogen jobs will last only as long as the subsidies do. Then like the Obama U.S. solar revolution, they will go bankrupt.

Frank Lasee is a former Wisconsin state senator and former member of Governor Scott Walker’s administration. The district he represented had two nuclear power plants, a biomass plant and numerous wind towers. He has experience with energy, the environment, and the climate. You can read more energy and climate information at http://www.truthinenergyandclimate.com which Frank leads.

 

Americans Polled on Energy

Posted on by Ron Clutz

The poll was conducted by Senate Opportunity Fund, a not-for-profit 501(c)(4) organization, to test public opinion regarding congressional bill H.R.1, called The Lower Energy Costs Act.  A national sample of 800 likely voters were contacted by phone during March 21 to 23, 2023, with questions regarding a number of public policy issues.  Responses are shown by self-identified political leanings, and by participants located in battleground states. Note that the final question showed about 80% approval by all cohorts.

 

Dark Money Grabbing Your Nat Gas

Posted on by Ron Clutz

Robert Bryce reports on the wealthy and shadowy push against domestic use of natural gas in his substack article The Dark Money Behind The Gas Bans.  Excerpts in italics wtih my bolds and added images

The big-money donors behind the gas bans are hiding their identities, and their funding,
behind an extensive dark money network.

 

Last Tuesday, Rewiring America announced that it has hired Georgia politician Stacey Abrams to help the group “launch and scale a national awareness campaign and a network of large and small communities working to help Americans go electric.”

In a press release, Abrams, who will hold the title of “senior counsel” said she is “excited to join Rewiring America to share the benefits of electrification and ensure families get their fair share. I look forward to working together as we build the tools that will transform everyday Americans from energy consumers to energy moguls.”

Stacey Abrams and Saul Griffith. Photo credits: Gage Skidmore (L) and Jeff Kubica.

Abrams, a Democrat who served in the Georgia House of Representatives for 11 years, ran for governor of Georgia two times but failed in both attempts against Republican Brian Kemp. Abrams famously refused to concede in the 2018 race and claimed the election was “stolen.”

Rewiring America is part of the NGO-industrial-corporate-climate complex that, as I reported here last month, is now spending some $4.5 billion per year to promote anti-industry policies. While their agendas vary, the anti-industry NGOs are generally trying to:

♦  mandate increased use of weather-dependent renewables,
♦  hinder (or stop) hydrocarbon production,
♦  prevent the construction of new hydrocarbon infrastructure,
♦  mandate building electrification, and of course,
♦  ban the use of natural gas in homes and businesses.

As I explained in January, Rewiring America’s mission to electrify everything, ban the use of natural gas in homes and businesses, (and gas stoves), is part of a years-long, lavishly funded campaign that is being bankrolled by some of the world’s richest people. But here’s the pernicious part: the big-money donors backing Rewiring America, and other groups pushing the gas bans, are hiding their identities behind a dark money network of NGOs that are purposely obscuring their funding and the groups they are bankrolling.

Although it is impossible to know exactly how much dark money is being shuffled among groups like the Windward Fund, Rewiring America, and others, my tally shows that just four of the dark money NGOs behind the gas bans have combined budgets of about $820 million. Thus, as you can see in the graphic below, by themselves, those four anti-industry groups are spending about 83% of the amount that is being spent by the top 25 NGOs that support traditional energy sources.

Indeed, despite claims from legacy media outlets about the influence of the hydrocarbon sector, the truth is undeniable: the overwhelming majority of the money, media coverage, and momentum in the debate over energy policy and climate change is on the side of the anti-hydrocarbon and anti-nuclear energy NGOs.

And one of their top priorities is banning the use of
natural gas in homes and businesses.

On its website, Rewiring America cites Griffith’s 2020 book, which is also called Rewiring America, in which he claims “we can still address the threat of climate change, but only if we respond with a massive war-time mobilization effort to transform the fossil fuel economy into a fully electrified one, run on wind, solar, and other renewable energy sources.”

Note the lack of any mention of nuclear energy. Also unmentioned: attempting to run the economy on weather-dependent renewables would require paving vast tracts of rural America with obscene numbers of noisy, 600-foot-high, bird- and bat-killing wind turbines and endless oceans of landscape-ravaging solar panels. Also unmentioned: attempting to electrify everything would require doubling or tripling the amount of electricity produced in the country, an effort that would require mining, smelting, and fabrication of staggering amounts of copper, steel, aluminum, and other metals. Also unmentioned: nearly all of the alt-energy supply chains depend on China.

Has Griffith or Rewiring America been lobbying federal officials? If it has, the group has not registered to do so. A search of federal lobby records for the U.S. House of Representatives shows no record for Griffith or Rewiring America. A similar search of lobby registration for the U.S. Senate turned up no records.

Windward’s flood of cash is not coming from foundations. Instead, most of it is coming from super-rich individuals. The first listing on Schedule B of its 990 shows a donation of $59 million from an unnamed person. Other individuals kicked in sums of $24 million, $20 million, $16 million, $14 million, $13 million, $10.5 million, $10 million, $10 million, $9 million, $6 million, and $6 million respectively.  Thus, more than two-thirds of the Windward’s 2021 revenue came from about a dozen unnamed plutocrats. Windward’s 990 also shows that it is giving grants to dozens of small climate-focused NGOs around the country.

Energy Foundation lists more than 100 staff on its website. Its board members include Gina McCarthy, who was a climate advisor to President Biden. Before that job, McCarthy headed the Natural Resources Defense Council, the giant anti-nuclear NGO that shamelessly cheered about its role in the premature closure of the Indian Point nuclear plant in New York.

In an ironic statement, given the amount of dark money that is being deployed by the anti-industry industry, McCarthy claimed, “Now it has moved from denial, but the dark money is still there. The fossil fuel companies are still basically trying their best to make sure that people don’t understand the challenge of climate.”

There is much more to be written about the dark money that is driving the anti-industry industry, the unaccountable parasitic force that employs thousands of lawyers, strategists, pollsters, and fundraisers, who are pushing policies like natural gas bans. I will close this piece by recounting a claim Abrams made in the press release put out by Rewiring America last Tuesday. She said that families across the country are living “too close to the economic edge,” and that “few understand how much money they can save with a little help to upgrade their homes and vehicles.”

Hogwash.

Banning natural gas and forcing consumers to buy EVs will impose regressive energy taxes on consumers. In addition to the high cost of replacing existing appliances with electric ones, the cost of operating an all-electric home is higher than that for a home that uses natural gas. As for EVs, good luck finding a Tesla in the barrio. An average EV now sells for about $66,000. That’s Benz and Beemer territory.

Last March, in the Federal Register, the Department of Energy published its annual estimate for residential energy costs. As you can see in the graphic above, on a per-Btu basis, electricity costs about 3.5 times more than natural gas. The fuel is, by far, the cheapest form of in-home energy, costing less than half as much as fuels like kerosene, propane, and heating oil. That point was bolstered again last October when the Department of Energy published its Winter Fuels Outlook, which predicted that heating with electricity this winter would cost about 46% more than heating with natural gas.

The DOE’s numbers make it clear that Rewiring America’s agenda of forced electrification will result in higher energy bills for consumers. And low- and middle-income Americans will pay the biggest price because they will be forced to spend a larger percentage of their disposable income on energy than wealthy consumers.

Abrams may have found a new job at Rewiring America. Good for her. But does she really understand the economics of what she will be promoting? The facts are clear: attempting to electrify everything will impose new regressive taxes on the poor. And no amount of spin, or dark money, can change that fact.

Securing Energy vs. Decarbonizing Energy

Posted on by Ron Clutz

Irina Slav explains the deadlock over energy policy goals in her OilPrice article Energy Transition Advocates Get A Reality Check.  H/T Tyler Durden.  Excerpts in italics with my bolds and added images.

  • The choice between energy security and decarbonization is not one that tends to attract a lot of attention. 
  • Following the energy crisis in Europe last year, world leaders are more aware of energy security. 
  • The UN Intergovernmental Panel on Climate Change (IPCC) is calling for an acceleration of the decarbonization push.

This week, the Intergovernmental Panel on Climate Change released a new report. Unsurprisingly alarming, the IPCC report aimed to turn up the heat on governments, the business world, and every one of us to do more about the energy transition. Decarbonization, the report said, had to move faster and more dramatically. Yet that wasn’t the only document that made the headlines this week. Shell also released a report in which it detailed two different scenarios for the future to 2050. In those scenarios, the supermajor’s analysts pitted energy security against the energy transition – something the IPCC reports have never done.

The choice between energy security and decarbonization does not get much attention,
because it exposes the shortcomings of low-carbon energy.

Yet, as Europe found out last year, it may be wise to discuss this topic before we splash $110 trillion on the energy transition.  In one of its scenarios, dubbed Archipelagos, Shell paints a familiar picture of the world of the future, at least politically. With a focus on energy security rather than decarbonization, the Archipelagos scenario describes a world similar to 19th-century Europe, where spheres of interest shift and nations ally with a view to energy security and resilience.  In that scenario, emission reductions and the Paris Agreement take a back seat, but work continues on deploying low-carbon energy technology. It simply progresses at a much slower pace.

The IPCC would probably be quick to point out that this scenario is effectively a doomsday scenario because nothing should take priority over emission reduction and the race to net zero. However, it is much easier to make computer models of future global temperatures and sound the alarm about them than find the money and the raw materials necessary to effect the transition at the pace that the IPCC wants it.

The raw materials problem of the transition has been garnering more and more attention from the media and, with it, from various stakeholders. The United States came up with the idea of friend-shoring to source these raw materials because it has no mine capacity to meet all of its projected demand from local supply. The EU plans to set up a Critical Raw Material Club, which effectively amounts to a buyers’ cartel, but this time for metals and minerals.

The chances of success of either of these approaches are yet to become clear, but in the meantime, another thing is becoming clear: the transition bill will be even bigger than previously expected.

The sum total of transition investments has always been in the trillion-dollar territory, but the latest estimate from a climate think tank pegs the annual spend necessary to hit net zero by 2050 at $3.5 trillion. That’s a more than threefold increase on last year’s record investment in wind, solar, and other decarbonization efforts, which for the first time topped $1 trillion. Unfortunately, that record investment—some of its actual spent, the rest in commitments—brought us nowhere near either net zero or energy security.

In Shell’s second scenario (Sky 2050), however, these investments will work their miracle, with the indispensable help of everyone deciding to work for the common goal of cutting emissions and achieving what the company referred to long-term energy security.  In this scenario, governments, citizens, and businesses team up to bring those emissions down and deploy as much low-carbon energy capacity as possible, notably driven by energy security concerns. Energy security has indeed been one of the strongest arguments in favor of wind and solar—the energy produced locally is better than imported energy.

That leaves the reliability and affordability issue, which decision-makers appear determined to tackle with excess capacity—for reliability—and with massive investments and subsidies—to solve the affordability problem. Because much as climate think tanks and activists like to repeat that wind and solar are the cheapest form of energy available, the wind and solar industries themselves appear to disagree.

“We are walking when we should be sprinting,” the chairman of the Intergovernmental Panel on Climate Change, Hoesung Lee, said at the release of the body’s latest report.  There are “no big fundamental barriers to the energy transition,” said the deputy director of that climate think tank that produced the report estimating the cost of said transition.

Based on these statements and the documents behind them, the transition seems like a no-brainer, however you look at it. Except if you look at it from an energy security perspective. Or a financial one. Because if there were no big fundamental barriers to decarbonization, such as reliability issues or affordability challenges, the transition would be happening everywhere, organically, without the need for such strong government support. This is what happens with successful, beneficial technology.

Which of the two scenarios that Shell has developed for the future remains to be seen. For now, the Archipelago scenario seems more realistic, not least because it does not rely on as many assumptions as the Sky 2050 scenario, such as a global ban on ICE cars by 2040.

Planning on an Array of Assumptions

So do all the scenarios of transition advocates. They are all based on a series of assumptions, some of them dangerously far-fetched, such as the assumption that there will be enough metals for EVs to take over roads. And assumptions are risky allies. Although sometimes grounded in reality, most of the transition assumptions appear to be grounded in wishes rather than facts.

And wishes do not make reality or
bring energy security into spontaneous existence.

Footnote:  Dieter Helm’s In Depth Analysis of Climate and Energy Security Policy

See Seeking Climate and Energy Security

Europe at night from space NASA 2016

 

 

Energy Doublethink

Posted on by Ron Clutz

Doublethink: The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.

Michael Lynch provides the latest doublethink example regarding global energy in his Forbes article International Energy Week Is A Lesson In Cognitive Dissonance. Excerpts in italics with my bolds and added images.

A climate activists from the Extinction Rebellion group.. (Photo by JUSTIN TALLIS / AFP) (Photo by … [+]AFP VIA GETTY IMAGES

The slogan for London’s prestigious International Energy Week now going on is “Transitioning out of Crisis,” reflecting the focus of the conference on the post-Ukrainian-War energy industry and the transition to renewables. As their website says, it is “the global conference focused on transitioning out of the geopolitical and environmental crises facing energy….Climate change impacts and projections are worsening; international prices post-COVID are volatile and hitting consumers hard; and the effects of Russia’s devastating invasion of Ukraine are rippling out across the global economy. The energy transition offers enduring solutions, some immediate, others longer-term.”

Most of dozen primary speakers are from the renewable energy industry, or renewable/low carbon executives in the fossil fuel industry, with only two ‘pure’ oil executives, the CEOs of BP and Petronas. Presumably, the organizers would argue, the future is a transition to renewable and low-carbon energy, thus the emphasis.

But at the same time, though, we had industry executives commenting: “Demand is expected to hit record levels in the second half of the year,” Vitol Chief Executive Officer Russell Hardy said in a Bloomberg Television interview. “The prospect of higher prices in the second half of the year, in the sort of $90-$100 range, is a real possibility.” International Energy Week Returns to London With Talk of $100 Oil – Bloomberg

Cognitive dissonance is the holding of contradictory views:
expecting higher fossil fuel demand while arguing that the crisis is heralding
an accelerated energy transition seems a perfect example.

The lesson of the current energy crisis is not that acceleration of the transition is needed, but that renewables are not capable of stepping up in a crisis and that consumers cherish cheap energy much more than ‘clean’ energy. Imagining a conference that provides much more realistic assessments of our energy future is easy; imagining those arguments given serious consideration by most media and pundits, not so much.

As I have written recently, oil prices could be higher later this year, but they could also be lower, depending on what happens to supply from Russia, Iran, Venezuela, Angola, Libya and Nigeria, not necessarily in that order. But record levels of demand are much more certain for the simple fact that the heavy investments in renewables and electric vehicles have had marginal impact to date on oil demand, or fossil fuel demand overall, as the figure below shows.

Global Energy Consumption in Exajoules THE AUTHOR FROM BP DATA.

Careful scrutiny does show a couple instances when demand fell, namely the 2008 financial crisis and the 2020 pandemic, however, it seems unlikely that policy-makers will promote those as solutions to climate change.

To paraphrase the famous quote from the Vietnam War,
“We have to destroy the economy in order to save it.”

To date, it appears that renewables have largely supplemented not replaced fossil fuel consumption, despite large-scale investments and much enthusiasm about the glowing success and prospects for the renewable industry (including electric vehicles). This resembles past transitions where consumption of the dominant fuel such as coal does not disappear but new demand is met from its successor, such as oil and gas.

One problem with the conference’s approach is the long-standing tendency
for pundits to embrace consensus, sometimes without regard for reality.

One famous energy pundit in 1983 remarked “But then, in late 1981 and early 1982, U.S. consumers, encouraged by some unknowing writers and economists, began to believe that OPEC members were no longer able to hold up oil prices and that all of America’s energy problems were over. This misperception, which was encouraged by the desire for a simple view and a simple solution, obscured the nature of the energy situation.”[emphasis added; citation from “A Cautionary Tale for Oil Companies Navigating the Energy Transition,” on realclearenegy.com Cautionary Tale for Oil Companies in the Energy Transition | RealClearEnergy] Two years later, the price collapsed and remained low for fifteen years, as if a host of experts had not predicted otherwise.

Additionally, at most conferences the ‘sexy’ is favored over the boring. This is reminiscent of the way Enron was the darling of the media for its insistence that “Vertically integrated behemoths like ExxonMobilXOM -1.9% Corp. (XOM ), whose balance sheet was rich with oil reserves, gas stations, and other assets, were dinosaurs to a contemptuous Skilling.” (emphasis added; source ibid) Speeches hailing the coming of the ‘virtual corporation’ proliferated—until Enron collapsed in scandal and bankruptcy.

Larry Goldstein and I have written about the possible failure of the energy transition, but it is hardly a popular view. Like Midas’ barber, we could be whispering into a hole in the ground: the potential failure is not so much secret as unwanted.

Perhaps there should be a sequel to “An Inconvenient Truth,”
focusing on the difficulties of the transition and the potential that it would not
live up to even the more modest expectations of some advocates.

This probably sounds like the many eccentrics who point out that the scientific community has often been wrong, for example, refusing to accept the theory of continental drift. But that doesn’t mean that the scientific consensus should be ignored, rather that skeptical views should be considered rather than rejected out of hand. And by considered, I do not mean cherry-picking opposite views as evidence. (Something my peak oil critics often did.)

See Also 2022 Update: Fossil Fuels ≠ Global Warming