Fuel Efficiency Rule De Facto EV Mandate

Kevin Stone explains at Heartland Daily News. Fuel Producers, States Challenge New EPA Rule Effectively Mandating Electric Vehicles.  Excerpts in italics with my bolds.  H/T John Ray

An unlikely coalition is challenging the U.S. Environmental Protection Agency’s (EPA) revised fuel economy rules.

At issue is a revised fleetwide. corporate average fuel economy (CAFE) standard of 55 miles per gallon in model year 2026. The shortened timeline for the much higher fuel economy forces automakers to reduce their fleets’ carbon dioxide emissions by 22.6 percent more than previous rules required.

Sixteen states, plus groups representing the fossil fuel and ethanol industries in 15 states, are challenging the Biden EPA’s emissions rules. They argue the EPA’s new standards effectively mandate a national transition from internal combustion powered vehicles to electric vehicles starting in 2026.

Farmers, Drillers, Attorneys General

A mix of corn and soybean growers associations from the states of Illinois, Indiana, Iowa, Michigan, Minnesota, North Dakota, Ohio, and South Dakota joined with Diamond Alternative Energy in one of the lawsuits filed to block the EPA’s new rules.

In addition, Texas Attorney General Ken Paxton filed a lawsuit on behalf of Texas, joined by the states of Alabama, Alaska, Arkansas, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, and Utah. Arizona filed a separate lawsuit to block the rules.

The Competitive Enterprise Institute (CEI), along with additional petitioners such as the Domestic Energy Producers Alliance, a nationwide coalition of 39 associations representing the oil and gas industry, also filed a lawsuit to block the new standards.

Essentially an EV Mandate

The lawsuit filed by representatives of various states’ biofuel associations argues the new standard is an unauthorized de facto mandate forcing people to use electric vehicles.

“Through the final rule, EPA seeks to unilaterally alter the transportation mix in the United States, without congressional authorization and without adequately considering the vast greenhouse gas reduction benefits provided by renewable fuels,” the complaint states.

CEI and its co-petitioners make a similar argument in their filing by lead attorney Devin Watkins, saying the rules exceed the agency’s authority.

“EPA is trying to transform the motor vehicle market from gas-powered to electric vehicles by making gas-powered cars more expensive,” Watkins’ petition states.

Ambitious or Unworkable?

The EPA’s new standard and timeline are unrealistic because the mass adoption of electric vehicles and construction of the infrastructure needed to support and power them won’t magically appear overnight, says Paul Driessen, a senior policy advisor with the Committee For A Constructive Tomorrow, which co-publishes Environment & Climate News.

“It’s vital to remember that President Joe Biden, Rep. Alexandria Ocasio-Cortez (D-NY), and other climate-focused activists aren’t talking about just replacing current fossil fuel vehicle use or electricity generation,” said Driessen. “They also want to convert home and office heating, cooking, and water heating to electricity; convert factories from coal and gas to running on wind- and solar-generated electricity; and have massive battery modules as backup power for windless, sunless days.

“That means nearly doubling existing U.S. electricity generation, and doing all of it with intermittent, unreliable, weather-dependent power generation systems,” said Driessen. “It means millions of onshore and offshore wind turbines, billions of solar panels, billions of 1,000-pound battery modules, and thousands of new transformers, covering tens of millions of acres, all powered by wind and sunshine, and all connected via thousands of miles of new transmission lines to power users all across America.”

‘It Is a Pipedream’

Electrifying the transportation system and in fact the entire U.S. economy is a fool’s errand, doomed to fail while placing an unnecessary burden on the public, says Driessen.

“They expect, hope, and fantasize this will somehow work, that a massively stressed power grid never built or tested before will be able to handle huge, sudden electricity surges and cutoffs due to wind and sunlight cooperating with demand only incidentally, failing minutes, hours, or days at a time and crashing repeatedly and catastrophically,” said Driessen.

“It is a pipedream that has failed everywhere it’s been tried on much tinier scales than what they intend to impose on us,” said Driessen. “Think of Texas two winters ago, and South Australia a few years ago, multiplied a thousand times over. We’re going to be asked to accept having electricity for every aspect of our industry, hospitals, and lives, when it’s available instead of when we need it.”

It’s ‘MAGIC’

There is no way the United States can get the needed raw materials and do the infrastructure transformation required by the EPA’s and other agencies’ new rules implementing Biden’s “whole of government approach” to fighting climate change, says Driessen.

“Just getting the metals, minerals, plastics, concrete, and other raw materials to create this system will take mining at scales unprecedented in human history,” said Driessen. “Team Biden seems to think this will just happen, under a government-mandated program you could call Materials Acquisition for Global Industrial Change, abbreviated MAGIC.

“This new, unworkable system would totally bankrupt America,” said Driessen. “Energy analyst David Wojick, Ph.D. calculates that building a battery system to back up just New York City’s current peak electricity needs, not counting new electric cars or future growth, for one week of no wind or sunshine would cost $3 trillion! For all of New York State, it would cost $8 trillion. And that’s just New York.”



Pipe Dreams: How America Is Energized

Kite and Key Media provides a primer on America’s Energy supply in the above video and transcript below in italics with my bolds.

Pipe Dreams: How America Gets Energy.
The Backbone of America’s Energy Infrastructure

In the winter of 2022, the world watched in horror as Russian forces invaded Ukraine.  The question on everyone’s mind: “How did they think they could get away with this?”

One very good answer to that question: Because over 40% of the natural gas Europe relies on to keep itself warm during the winter … comes from Russia.  And standing up to the people who are keeping you from freezing … is a tall order.

Now, if you’re an American, this scenario might seem unthinkable. After all, the U.S. produces more natural gas than any other nation in the world.   We’d never have to rely on a hostile nation to keep ourselves warm.

Or at least that’s what you’d think…
…unless you were there the day that Russian gas pulled into Boston harbor.

Here’s a simple test to determine whether you live in a prosperous society: Do you ever worry about where you’re going to get the necessities of life?

Do you ever pull up to the gas station and worry that the pumps might be empty? Do you ever go to switch on the lights and worry that nothing will happen?

Most of the time, the answer is ‘no’ … which is why it’s so terrifying when the answer is ‘yes.’

Blackouts in Texas in early 2021. Over 10,000 gas stations running dry after a cyberattack only a few months later.   What do those incidents have in common?

They demonstrate what happens when pipelines aren’t working.

If America’s energy supplies are the lifeblood of our economy, then we can think of pipelines as something like the nation’s circulatory system.

In the U.S., pipelines are used to bring us about 90% of our petroleum and virtually all of our natural gas — which is pretty significant, given that those two power sources alone make up about 70% of the country’s entire energy use.

That’s why America has over 2.6 million miles worth of pipelines. Because without them … the whole country gets very Amish very fast.

But, as you may have noticed … not everyone is thrilled about this. In recent years, legal challenges have led to the cancellation of several major pipelines and delays for many others. From 2009 to 2018, the time it takes to get pipelines approved increased by more than 50%. 

So, what’s happening here? The objections to pipelines rest primarily on two critiques. The first is that they’ll contribute to carbon emissions. The second is that pipeline accidents could lead to oil spills.

And both of those claims … really require context to understand.

When it comes to carbon emissions, it’s important to know that the pipelines themselves aren’t really the issue. They’re just a mode of transportation.

The carbon emissions come from the petroleum and natural gas that flow through the pipelines. But here’s the catch: Getting rid of the pipelines … doesn’t mean getting rid of the emissions.

Cancelling the Keystone XL pipeline, for instance, may have felt like a win for the environment — but it’s not like that oil is gonna stay in the ground as a result. In fact, much of it is likely to be shipped to China — which isn’t exactly a low-emissions trip.

And we can probably expect to see more of that. Current government projections are that, even with a steep increase in the use of renewable fuels, we’ll still be getting about 2/3 of our energy from natural gas and petroleum … 30 years from now.

Refusing to build pipelines won’t change that reality …
but it will make the system we actually have much harder to operate.

Which gets to those concerns about safety. Do accidents occur with pipelines? Yes. It happens. However, accidents occur with all forms of energy transportation. So, the real question is what’s safest among the available options.

And on that front … pipelines do pretty well. Because if you’re not going to move fuel through the ground, you only have three other options: put it on trains, put it on trucks, or put it on boats.

Now, none of those methods is especially dangerous, but pipelines spill a lower percentage of the oil they transport than any method except boats.  And boats have … limited utility on this front. Because they still need fuel in Nebraska … and America’s 26 other land-locked states. 

So, what does a world without pipelines look like?
We already sorta know the answer.

The reason that Boston was getting gas from Russia, for instance, was because the state of Massachusetts refused to allow a pipeline to bring it from Pennsylvania. That’s the same reason, by the way, that, in January of 2022, the citizens of Boston … were paying 400% more for natural gas than those Pennsylvanians only 200 miles away — in the middle of a New England winter.

Here’s the reality: None of us are willing to live in a world where the lights don’t reliably come on or gas doesn’t reliably come out of the pump. We can aspire to a future powered by cleaner energy sources, but until that day comes … we’re going to be relying on fuel sources like petroleum and natural gas.

Which means we either rely on pipelines…

…or rely on places like Moscow…

…or get very comfortable with horses.


Vexing Truths About Energy

Philip Dick’s insight has a corollary:  Reality is also that which doesn’t happen no matter how much you want it to.  Chris Wright explains the contradictions with energy fantasies in his Denver Gazette article Inconvenient truths about energy.  Excerpts in italics with my bolds and added images.

The energy transition is not happening. Or not nearly at the pace that everyone believes or wishes. At current rates the “transition” is set to finish in the mid-2600s. The U.N. Rio Convention and subsequent Kyoto Protocol launched the energy transition drive in 1992. Global energy consumption from hydrocarbons has grown massively since then, with market share only declining by four percentage points over the last 30 years from 87% in 1992 to 83% today. I am not celebrating this fact as I have spent years working on energy transition technologies.

The energy transition isn’t failing for lack of earnest effort. It is failing because energy is hard, and 3 billion people living in energy poverty are desperate for reliable and scalable energy sources. Meanwhile, 1 billion energy-rich people are resistant to diminishing their standard of living with higher cost and an increasingly unreliable energy diet.

There is no “climate crisis” either. If there is a term more at odds with the exhaustive literature surveys of the Intergovernmental Panel on Climate Change (IPCC) than “climate crisis,” I have not heard it.

Climate change is a real global challenge that is extensively studied. Unfortunately, the facts and rational dialogue about the myriad tradeoffs aren’t reaching policy makers, the media, or activist groups. Or are they are simply ignoring these inconvenient truths?

For example, we hear endlessly about the rise in frequency and intensity of extreme weather. This narrative is highly effective at scaring people and driving political action. It is also false. The reality is detailed in countless publications and summarized in the IPCC reports. Deaths from extreme weather have plunged over the last century, reaching new all-time lows last year, an outcome to be celebrated. This is not because extreme weather has declined. In fact, extreme weather shows no meaningful trend at all.

Deaths from extreme weather events have declined because highly energized, wealthier societies are much better prepared to survive nature’s wrath.

My Mind is Made Up, Don’t Confuse Me with the Facts. H/T Bjorn Lomborg, WUWT

Recognizing reality

You are not supposed to say out loud that there is no climate crisis or that the energy transition is proceeding at a glacial pace. These are unfashionable and, to many, offensive facts. But let’s be honest. Energy transition ambitions must recognize reality. Otherwise, poor investment decisions and regulatory frameworks will lead to surging global-energy and food prices. This is exactly what is happening. We are here today in large part because energy transition efforts that previously encompassed solely aggressive support of alternative energy policies, economics be damned, have recently supplemented this strategy with growing efforts to obstruct fossil fuel development.

Fossil fuels make the modern world possible.

The real crisis today is an energy crisis. It began to reveal itself last fall with a severe shortage in globally traded Liquified Natural Gas (LNG). The LNG crisis has not abated and it gives Russia’s Vladimir Putin tremendous leverage over Europe. Without Russian gas, the lights in Europe go out. Amid war, public outrage, and intense sanctions, Russian gas flows to Europe remain unchanged. Russian oil exports have continued with minimal interruption. The world can talk tough about sanctioning Russian energy exports, but those exports are vitally needed; hence they continue. Energy security equals national security.

The world energy system, critical to human wellbeing, requires meaningful spare capacity to handle inevitable bumps in the road. In the electricity sector, which represents only 20% of global energy but 40% in wealthy countries, this is called reserve capacity. In the oil market, spare production capacity today is shrinking and concentrated in OPEC nations like Saudi Arabia and the United Arab Emirates. Also, there is a massive global storage network in both surface tanks and underground caverns. In natural gas markets, there are both extensive underground storage reservoirs and typically spare export capacity through pipelines and large industrial LNG export and import facilities.

The last several years have seen this spare capacity whittled away due partly to lower commodity prices and poor corporate returns shrinking the appetite to invest.

Excess capacity has also shrunk due to regulatory blockage of critical energy infrastructure like pipelines and export terminals. Roadblocks for well permitting and leasing on federal lands, together with a mass public miseducation campaign on energy and climate alarmism, are also stymieing hydrocarbon development. Investment capital is further constrained by a corporate Environment, Social and Governance (ESG) movement, and divestment campaigns. These factors are shrinking hydrocarbon investment below what it otherwise would be in response to price signals and outlook for supply and demand.

The net result is a constrained supply of oil, natural gas, and coal, which means higher prices and greater risk of market dislocations like the one unfolding today.

High energy and food price inflation is the cruelest form of tax on the poor. After a few specific examples, I’ll return to what we should do now to reverse these damaging and deeply inequitable trends.

In denial about demand

Why does the world today suffer from a severe shortage of LNG? Demand for natural gas has been growing strongly for decades. It provides a much cleaner substitute for coal in electricity production, home heating, and a myriad of industrial and petrochemical uses. Rising displacement of coal by natural gas has been the largest source of GHG emission reductions. Unfortunately, the aforementioned factors have prevented supply from keeping pace with rising demand. Energy shortages drive rapid prices rises and have cascading impacts on everything else. Energy is foundational to everything humans do. Everything.

Perhaps the most critical use of natural gas is nitrogen fertilizer production. Roughly a century ago, two German chemists, both subsequently awarded Nobel Prizes, developed a process to produce nitrogen fertilizer on an industrial scale. Before the Haber-Bosch process innovation, nitrogen content in soil was a major constraint on crop productivity. Existing nitrogen sources from bird guano, manure, and rotating cultivation of pea crops were limited. Today, elimination of natural gas-synthesized nitrogen fertilizer would cut global food production in half.

The now six-months-long LNG crisis translates into a worldwide food crisis as skyrocketing fertilizer prices are cascading into much higher food prices. Wheat prices are already at a record high and will likely head higher as spring plantings suffer from under fertilization.

Global LNG markets are tight because rising demand has outrun the growth in LNG export capacity in the United States, now the largest LNG exporter. We have an abundance of natural gas in the United States. Unfortunately, we have a shortage of pipelines to transport this gas and LNG export terminals, preventing us from relieving the energy crisis in Europe and around the world. These pipeline and export terminal shortages are due in large part to regulatory blockage. The result is that natural gas prices in the United States and Canada are five to ten times lower than in Asia and Europe. This deeply disadvantages consumers and factories (like fertilizer factories) in Europe and Asia that rely on LNG imports to fulfill their needs.

Failed energy policies

Russia’s invasion of Ukraine did not cause today’s energy crisis. Quite the reverse. Today’s energy crisis is likely an important factor in why Russia chose to invade Ukraine now. Europe’s energy situation is both tenuous and highly dependent on Russian imports. Russia is the second-largest oil and natural gas producer after the United States. Russia is the largest exporter of natural gas, supplying over 40% of Europe’s total demand. Additionally, Russia is the largest source of imported oil and coal to Europe. Europe put itself in this unenviable position by pursuing unrealistic, politically-driven policies attempting to rapidly transition its energy sources to combat climate change.

Europe’s energy pivot has been a massive failure on all fronts: higher energy costs, grave energy insecurity, and negligible climate impacts.

Germany is the poster child of this failure. In 2000, Germany set out to decarbonize its energy system, spending hundreds of billions of dollars on this effort over the last 20 years. Germany only marginally reduced its dependence on hydrocarbons from 84% in 2000 to 78% today. The United States matched this 6% decline in hydrocarbon market share from 86% in 2000 to 80% today. Unlike in the US, Germany more than doubled its electricity prices — before the recent massive additional price increases — by creating a second electric grid. This second grid is comprised of massive wind and solar electric generating sources that only deliver 20% of nameplate capacity on average, and often less than 5% for days at a time. The sun doesn’t always shine and the wind doesn’t always blow. Hence, Germany could only shrink legacy coal, gas and nuclear capacity by 15%. It now must pay to maintain both grids. The legacy grid must always be flexing up and down in a wildly inefficient manner to keep the lights on, hospitals functioning, homes heated, and factories powered. Outside of the electricity sector, Germany’s energy system is largely unchanged. It has long had high taxes on gasoline and diesel for transportation, and lower energy taxes on industry. Germany subsidizes industrial energy prices attempting to avoid the near-complete deindustrialization that the UK has suffered due to expensive energy policies across the board.

Over the last 20 years, the United States has seen two shale revolutions, first in natural gas and then in oil.

The net result has been the U.S. producing greater total energy than consumed in 2019 and 2020 for the first time since the 1950s. The U.S. went from the largest importer of natural gas to the second-largest exporter in less than fifteen years, all with private capital and innovation. The shale revolution lowered domestic and global energy prices due to surging growth in U.S. production. Surging US propane exports are reducing the cost and raising the availability of clean cooking and heating fuels for those in dire energy poverty still burning wood, dung, and agricultural waste to cook their daily meals. U.S. GHG emissions also plunged to the lowest level on a per capita basis since 1960. Imagine the world’s energy situation today with the American shale revolution.

We are starting to hamstring and squander the enormous benefits of the shale revolution. The same misinformed anti-hydrocarbon crusade that impoverished Europe and made it heavily dependent on Russia is now sweeping the US. California and New England had already adopted European-style energy policies driving up electricity prices, reducing grid reliability, and driving manufacturing and other energy-intensive, blue-collar jobs out of their states. Colorado is not far behind.

California, a state with a plentitude of blessings, managed to create the highest adjusted poverty rate in the nation with an expensive, unstable power grid increasingly reliant on coal-powered electricity imports from Nevada and Utah.

New England’s proximity to Pennsylvania’s clean low-cost natural gas resources was a stroke of luck. But it refused to expand the natural gas pipelines running from Pennsylvania, leaving it chronically short of natural gas, its largest source of electricity and cleanest option for home heating. Instead, it remains heavily reliant on fuel oil for home heating and occasionally imports LNG from Russia to keep the lights on. Last winter New England burned copious amounts of fuel oil to produce electricity which went out of fashion in the 1970s elsewhere in the US.

Texas has not been immune from energy illiteracy and collateral damage. Texas’ poorly designed electric grid, structured to encourage investment in renewables, led to hundreds dying last year in the Uri cold spell. No one would pay the same price for an Uber that showed up whenever convenient for the driver and dropped you off wherever they desired. But that is what Texas does with electricity: paying the same price for reliable electricity that balances the grid as they do for unreliable, unpredictable electricity. No wonder the reliability of the Texas grid has declined and is headed for more trouble.

Misplaced faith

The common thread in these cases is unrealistic beliefs in how rapidly new energy systems can replace demand for hydrocarbons, currently at all-time highs. Political intervention and miscalculation have led to over-investment in unreliable energy sources and, far worse, under-investment in reliable energy sources and infrastructure. The full costs of this colossal malinvestment have been somewhat hidden from view as spare capacity in the global energy network has mostly kept the train on the tracks. Now that excess capacity has shrunk to a critically low level, more impacts are hitting home.

Like the disease itself, the cure takes years to run its course. But that longer time frame is no excuse not to act now in a thoughtful fashion to begin rectifying historical blunders.

Steel, cement, plastics and fertilizer are the four building blocks of the modern world and all are highly reliant on hydrocarbons.

Most critically this means removing the growing myriad obstacles to hydrocarbon development, justified in the name of fighting climate change. This is nonsense. Overly cumbersome hurdles to hydrocarbon development in the U.S. do nothing to change oil and gas demand. They simply displace U.S. production overseas where production practices are less stringent and less ethical. Resulting in increased GHG emissions and other air pollutants, reduced economic opportunities for Americans, and increased geopolitical leverage of Russia and OPEC — see the invasion of Ukraine.

Climate change is a long-term problem best addressed with technologies cost-effective today like natural gas, energy efficiency, and nuclear. The solution requires combining today’s commercial low-carbon energy sources with research and technology development in carbon sequestration, next-generation geothermal, and economical energy storage to make solar and wind more viable.

Today the price mechanism must destroy energy demand to bring it in line with short-term supply. This reduces the quality of living, especially for low-income families. The price mechanism will also incent new supply to the extent possible in the face of growing regulatory hurdles, infrastructure shortages, and capital starvation. A revaluation of all three of these factors is urgently needed.

♦  Is the overarching goal “energy transition” at all costs?
♦  Or is it humane policies that better human lives and expand opportunities for all?

We need to replace the former mindset with the latter.

Chris Wright is chairman and CEO of Liberty Energy, a Denver-based hydraulic fracturing company. Read “Bettering Human Lives”, a report released last year for more information on the above issues.



Oil Is Hero or Zero, Which Is It?

United Arab Emirates’ Minister of Energy and Infrastructure Suhail Mohamed Al Mazrouei attends a session of the Russian Energy Week International Forum in Moscow, Russia October 14, 2021. REUTERS/Maxim Shemetov

David Blackmon explains at Forbes UAE Energy Minister Urges The World To Make Up Its Mind About Oil.  Excerpts in italics with my bolds and added images.

Speaking at the Global Energy Forum by the Atlantic Council in Dubai on Monday, United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei urged the public and global policymakers to make up their collective mind about whether they want more oil production, as quoted by Reuters.

“I think in COP 26 all the producers felt they were uninvited and unwanted but now we are again superheroes, it’s not going to work like that,” he said in reference to last year’s UN-sponsored COP 26 global climate conference, at which representatives from the oil and gas industry were disinvited to attend. Obviously, a short-sighted decision by the organizers, given recent developments.

Al-Mazrouei emphasized the need for long-term planning related to energy needs, and pointed to the reality that the recent pattern of governments and investors alternatively forcing under-investment in finding new oil resources and then demanding more oil production whenever prices rise is not sustainable. He pointed out that the OPEC+ cartel as a group must invest the capital needed to replace 5 to 8 million barrels of oil per day of production each year just to maintain a steady level of global supply.

“We as a country are trying to do our best. We are investing and raising our capacity to 5 million barrels,” he said. “But that does not mean that we will leave OPEC+ or do something unilateral. We will work with this group to ensure that the market is stable.

Oil company leaders who have seen their industry derided for years by the climate change lobby and globalist politicians in the U.S. and other Western democracies who have pumped the energy transition narrative can be excused for seeing more than a little irony in the suddenly urgent calls from the same policymakers for them to now rapidly raise their production levels. Indeed, expecting a major supply response from the U.S. industry in the current economic environment seems not just ironic, but unrealistic.

The point is that the days of the U.S. industry being able to increase production by an amazing 2 million barrels per day, as it did across one 12-month period during 2018-19, are no longer with us. The industry simply lacks the investor capital support and supply chain efficiency to run the 1,000+ active drilling rigs required to accomplish that in the current environment.

That doesn’t mean, however, that U.S. domestic production will not rise during 2022. In fact, the Dallas Federal Reserve Office recently reported results of a survey that indicate that the corporate U.S. producers plan to increase their year-over-year production by 6% in the current year, while privately held companies plan a more robust 15% increase. If those plans combine to produce, say, an 8% increase overall, it would mean an increase in U.S. daily production of almost 1 million barrels per day during the 2022 calendar year.

Given the successful efforts by both government and ESG investors to limit the domestic industry in recent years, that would be a pretty extraordinary achievement. So, Minister al-Mazrouei is right in saying that oil producers shouldn’t be treated as superheroes, but their companies are still capable of doing some big things despite the best efforts of their opposition.


Texas Electricity Stays On This Year

Generators in Texas meet electric demand, avoid widespread outages during recent cold snap is an EIA article.  Excerpts in italics with my bolds.

A cold snap brought cold weather and icy conditions to Texas earlier this month, increasing heating demand for electricity across the state. Power plants and electric generators in the Electric Reliability Council of Texas (ERCOT)—the grid operator for most of the state—increased output to meet elevated demand during the storm. Unlike February 2021, when extreme cold disrupted the supply of electricity in Texas and left millions without power, generators maintained fuel supplies and avoided widespread power outages.

ERCOT forecasts electricity demand to help ensure it has sufficient generation resources to meet expected demand. Actual demand refers to the amount of electricity that customers actually consume. When power outages occur, customers may want to consume more electricity but are unable to, resulting in lower actual demand.

During the recent cold snap, actual demand for electricity in ERCOT peaked at 68,862 megawatthours (MWh), slightly below the peak actual demand of 69,215 MWh during the February 2021 winter storm. However, this winter’s peak was still below the demand ERCOT forecast for February 2021 before widespread outages began, which resulted in lower actual demand than forecast. This winter, actual demand on the peak day (February 4) was much lower than ERCOT’s day-ahead forecast, largely because temperatures were warmer than predicted.

Unlike in February 2021, this winter’s storm didn’t cause major declines of natural gas production in Texas, and natural gas-fired power plants in Texas maintained their fuel supply during the cold weather. In February 2021, weather-related production issues reduced peak natural gas production by 16 billion cubic feet (Bcf), according to data from IHS Markit, compared with a 3 Bcf decline in peak dry natural gas production this winter.

In addition, renewable generators, largely wind, maintained a high level of output during the coldest periods this winter, when demand for space heating was the highest. In addition, coal-fired and nuclear units did not experience outages, which occurred in February 2021. In response to the ample supply, the ERCOT prices for wholesale electricity in the real-time market were below $100 per MWh during the recent storm; prices were as high as $9,000 per MWh (the price cap for wholesale electricity in ERCOT at the time) during the February 2021 storm.

ERCOT hourly generation by source Source: U.S. Energy Information Administration, Hourly Electric Grid Monitor

After widespread outages in Texas during the winter storm last February, ERCOT took several actions to ensure grid reliability in the event of colder-than-normal weather, including:

♦ Inspections of generating and transmission assets for weatherization
♦ Proof of weather readiness from generation and transmission equipment owners
♦ Increasing operational reserves
♦ Requirements for some on-site fuel supply
♦ Unannounced testing of generation resources


The Texas power generation graph for this period shows natural gas (beige) doing most of the heavy lifting with a surge in wind (green) the last 2 days. Coal in brown persisted, dropping slightly when wind power was available and preferred by the grid due to subsidy contracts.  Solar and nuclear patterns did not change.  Hydro and other sources are insignificant.

On CO2 Sources and Isotopes

A recent rigorous analysis was published, creating discussion among those concerned with global warming/climate change science.  The paper is World Atmospheric CO2, Its 14C Specific Activity, Non-fossil Component, Anthropogenic Fossil Component, and Emissions (1750–2018) by Kenneth Skrable, George Chabot, and Clayton French at University of Massachusetts Lowell.

The analysis employs ratios of carbon isotopes to calculate the relative proportions of atmospheric CO2 from natural sources and from fossil fuel emissions. The results are welcomed by skeptics and repulsed by warmists. Excerpts in italics with my bolds.

The specific activity of 14C in the atmosphere gets reduced by a dilution effect when fossil CO2, which is devoid of 14C, enters the atmosphere. We have used the results of this effect to quantify the two components: the anthropogenic fossil component and the non-fossil component.  All results covering the period from 1750 through 2018 are listed in a table and plotted in figures.

These results negate claims that the increase in total atmospheric CO2 concentration C(t) since 1800 has been dominated by the increase of the anthropogenic fossil component. We determined that in 2018, atmospheric anthropogenic fossil CO2 represented 23% of the total emissions since 1750 with the remaining 77% in the exchange reservoirs. Our results show that the percentage of the total CO2 due to the use of fossil fuels from 1750 to 2018 increased from 0% in 1750 to 12% in 2018, much too low to be the cause of global warming.

Synopsis of Analytics

Readers will find in the the linked paper a complete description of the assumptions, definitions, data sources and equations leading to the above findings.  This post attempts to explain the logic of the analysis for a general audience, with excerpts in italics with my bolds.

Carbon-14 is a radioactive isotope of carbon having a half-life of 5,730 y. Carbon-14 atoms are produced in the atmosphere by interactions of cosmic rays, and they have reached an essentially constant steady state activity, i.e., disintegration rate, in the total world environment (Eisenbud and Gesell 1997). The age of fossil fuels is much longer than the 5,730 y half-life of the 14C radioactive isotope; consequently, fossil fuels are devoid of the 14C isotope. The units used in this paper are disintegrations per minute per gram of carbon abbreviated as dpm (gC)−1, the common units used in 14C dating.

The global carbon cycle for CO2 is described by the Energy Information Administration (EIA 2020). Natural, two-way exchanges of CO2 occur between the atmosphere and its two exchange reservoirs, the oceans and terrestrial biosphere. Two-way exchanges with the atmosphere also occur from changes in land use. The ocean is the largest reservoir of CO2, and it contains 50 times that for the atmosphere and 19 times that for the terrestrial biosphere (Water Encyclopedia 2005). All of the two way exchanges are considered in this paper to be comprised of both the non-fossil component and the anthropogenic fossil component. Annual changes, DCNF(t) in CNF(t), in the atmosphere relative to the 1750 initial value, C(0), can be positive or negative depending on the net flow of CO2 between the atmosphere and its exchange reservoirs as well as on land use changes.

A one-way pathway of anthropogenic fossil CO2 into the atmosphere from fossil fuel combustion and industrial fuel processes since 1750 is represented by annual emissions,  DE(t), of anthropogenic fossil CO2 to the atmosphere, which have been increasing each year since 1750. These emissions over time t result in increasing annual mean anthropogenic fossil concentrations, CF(t), that result in values of 14C in C(t) that are increasingly lower than the initial value.

During the last long glacial period, the oceans absorbed a large amount of CO2 from the atmosphere. It appears in the figure that Earth is still in the Holocene interglacial period that started 11,500 y ago. Its peak temperature change over the 11,500 years, thus far in 1950, appears to be significantly less than those over the three previous interglacial periods. Its peak CO2 appears less than 300 ppm and less than the peak value in the previous interglacial period. Thus, the increase in CO2 that Earth has been experiencing since 1800 appears to have started more than 5,000 years ago.

A Wikipedia link for14C describes the increase in the concentration of 14CO2 in the atmosphere that resulted from high altitude nuclear bomb tests, circa 1955–1963. Based on the figure in the Wikipedia link, 14CO2 from the atmospheric bomb tests during this period would be significant in 1955 to about 2005. For the purpose of estimating the anthropogenic fossil and non-fossil components of CO2, measurements of 14C specific activities of atmospheric CO2 during this period should be corrected for the contribution from bomb tests. Outside of this period, no correction would be required.

The methodology used to calculate fossil concentrations CF(t) and non-fossil CNF(t) relies on two accepted facts:

(1) the initial total mole fraction C(0) of (280 ± 10) ppm before 1750 has been essentially constant for several thousand years (Prentice et al. 2018) and

(2) the production rate of 14C atoms in the atmosphere has been essentially constant for at least 15,000 years (Eisenbud 1997).

Therefore, the steady-state activity of 14C per unit volume of the atmosphere also would have been constant except for the redistribution of CO2 in the atmosphere in each year with its exchange reservoirs. The product is proportional to the activity per unit volume of the atmosphere, which varies each year depending on whether there is a net input or output, DCNF(t), of non-anthropogenic fossil CO2 in the atmosphere. The change in the product each year is independent of the value of CF(t) in the atmosphere because it contains no activity of 14C . Also, except for the dilution of S(0) by the anthropogenic fossil component, C(t), present in the atmosphere each year, the 14C would have remained constant at our chosen initial value, S(0), of 16.33 dpm (gC)−1 in 1750.

Based on a molecular weight of 44.01 g mole−1 for CO, the total mass of anthropogenic fossil CO2 present in the atmosphere in 2018 is calculated as 3.664 × 1017 g. The Table 2 value of 1,589.86 billion metric tons of anthropogenic fossil-derived CO2 emitted into the atmosphere in 1751 through 2018 (EIA 2020a and 2020b) represents 1.590 × 1018  g. The inference is that the quantity of anthropogenic fossil CO2 in the atmosphere in 2018 represents about 23% of the total amount of anthropogenic fossil-derived CO2 that had been released to the atmosphere since 1750.

Therefore, 77% of the total anthropogenic fossil emissions of CO2 then would be present in the atmosphere’s exchange reservoirs in 2018. These results differ significantly from those reported by others:

The assumption that the increase in CO2 since 1800 is dominated by or equal to the increase in the anthropogenic component is not settled science. Unsupported conclusions of the dominance of the anthropogenic fossil component of CO2 and concerns of its effect on climate change and global warming have severe potential societal implications that press the need for very costly remedial actions that may be misdirected, presently unnecessary, and ineffective in curbing global warming.

Footnote On Elements and Isodopes

The study above, along with the foibles of the current US administration, reminds me of this announcement of a newly discovered element.

The new element is Governmentium (Gv). It has one neutron, 25 assistant neutrons, 88 deputy neutrons and 198 assistant deputy neutrons, giving it an atomic mass of 312, the heaviest of all.  These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lefton-like particles called peons.

Since Governmentium has no electrons or protons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction normally taking less than a second to take from four days to four years to complete.

Governmentium has a normal half-life of 3-6 years. It does not decay but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.  In fact, Governmentium’s mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes.

This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass.

When catalyzed with money, Governmentium becomes Administratium, an element that radiates just as much energy as Governmentium since it has half as many peons but twice as many morons. All of the money is consumed in the exchange, and no other byproducts are produced. It tends to concentrate at certain points such as government agencies, large corporations, and universities. Usually it can be found in the newest, best appointed, and best maintained buildings.

Scientists point out that administratium is known to be toxic at any level of concentration and can easily destroy any productive reaction where it is allowed to accumulate. Attempts are being made to determine how administratium can be controlled to prevent irreversible damage, but results to date are not promising.

Credit: William DeBuvitz, Heaviest Element Discovered

Leftist Energy Ignorance Abounds

Leftists are recognized by having three personality traits:  Know-it-alls, Drama Queens and Control Freaks.  The latest example is Liz Warren blaming rising fuel prices on energy producers rather than on her favored restrictive energy policies.  An article schooling the senator and her constituents is published at the Delaware Valley Journal PA Energy Pros Dismiss Liz Warren’s Complaints: ‘It’s Econ 101, Not Rocket Science’.  H/T Tyler Durden Excerpts in italics with my bolds.

Sen. Elizabeth Warren’s latest attempt to “turn up the heat” on the energy sector sparked a backlash from industry leaders who say the real problem comes from policies the Massachusetts’ Democrat has endorsed.

In recent letters to natural gas producers, Warren blasted what she called their “corporate greed” and demanded an explanation for the record exports of natural gas at the same time prices are rising in the U.S.

Warren wants the industry to respond to questions about “the extent to which these price increases are being driven by energy companies’ corporate greed and profiteering as they moved record amounts of U.S. gas out of the country,” she wrote.

She got a response, but not the one she demanded.

Leaders in the natural gas sector responded with a letter of their own, dismissing Warren’s comments as a diversion, one intended to distract consumers from the impact of the energy policies she’s championed.

“This a misguided and headline-grabbing ploy,” says David E. Callahan, president of the Marcellus Shale Coalition (MSC).

“If she knows anything about these highly complex energy markets, she must know what’s really going on here,” added Callahan, who co-authored a response letter alongside the leaders of the Gas & Oil Association of West Virginia (GO-WV), and Ohio Oil & Gas Association (OOGA). “It’s a commodity market, prices ebb and flow, and the market is responding to those signals.

Warren is an aggressive supporter of the Green New Deal, which would drastically restrict the production of oil and natural gas. In her state of Massachusetts, policies blocking the expansion of natural gas pipelines have resulted in Russian LNG tankers in Boston Harbor bringing fuel to the Bay State.

“She has her constituents to represent and her political affiliation to support,” said Charlie Burd, executive director of GO-WV. “But to be perfectly honest, I just think those comments almost show a complete lack of understanding on how energy is explored for, produced, and transported in this country.”

And those constituents are paying the price, according to Callahan.

“Number one, her region has very high energy costs, and her region is severely capacity-constrained when it comes to pipeline infrastructure,” Callahan said. “A Carnegie Mellon study from within the year pointed out that due to those pipeline constraints, customers in the New England region paid upwards of $1.8 billion in excess energy costs during just one month in 2014.”

“It’s really supply and demand 101,” added Burd. “It’s not rocket science.”

Republican National Committee spokesperson Allie Carroll said Warren’s latest attempt to blame energy companies for the results of Biden and Democrats’ war on energy is an insult to hardworking Pennsylvanians.

“From canceling the Keystone XL pipeline to stripping away our energy independence, Democrats’ reckless anti-energy policies are crippling our country, and turn after turn, Pennsylvania families are paying the price.”

Pennsylvania is the nation’s second-largest producer of natural gas, and attacks on the industry have an impact on the state’s economy.

“Hostility toward the fossil fuel industry ill-serves the American people, including Pennsylvanians who sit atop huge natural gas and coal deposits that provide plentiful and affordable energy to millions of people,” said Gordon Tomb, a senior fellow at Commonwealth Foundation. “The benefits of these resources can hardly be overstated: well-paying jobs and prosperity as well as a foundation for all kinds of business activity and energy security.”

Republican U.S. Senate candidate Dr. Mehmet Oz also pushed back on Warren’s approach.

“The ground under Pennsylvania and surrounding states has almost as much natural gas as Saudi Arabia that is readily accessible through fracking,” Oz said. “We should be using this to make our nation safer, create jobs, and less dependent on China. As the Senator for Pennsylvania, I will fight against any effort to destroy Pennsylvania’s energy leadership and the jobs it supports.”

Meanwhile, Europe is facing fuel scarcity as winter approaches and some of the nations are turning back to coal to meet immediate demands. American exports are vital, experts say.

“Our friends and allies in Europe and Asia, they need natural gas and for a whole host of reasons including over-reliant policies on intermittent renewables,” says Callahan. “The wind is not blowing as hard as they expected it to this year, they find themselves in need of natural gas, and so we’ve been shipping some gas overseas to supply those markets and help our friends.”

Frank Macchiarola, American Petroleum Institute (API) Senior Vice President of Policy, Economics and Regulatory Affairs, also has a message for U.S. policymakers.

“They play a critical role in spurring long-term investment in U.S. natural gas supplies as well as expanded pipeline capacity to deliver the energy America and the world needs while driving down emissions,” says Macchiarola. “Rising natural gas costs reflect an imbalance between supply and demand that is exacerbated in regions like the northeast due to added state-level policy restrictions on building much-needed gas infrastructure that has made the region more reliant on foreign imports.”

Callahan believes Warren should “support infrastructure expansion” to get product where it is needed, domestically and globally.

“We felt the need to set the record straight, that the rhetoric is dangerous,” said Callahan.


Don’t Forget Biden’s War on Energy Producers

Hugo Gurdon writes at Washington Examiner that  Biden Hopes You Forget His War on US Energy Producers.  Excerpts in italics with my bolds.

Joe Biden’s decision to order the Federal Trade Commission to investigate high gasoline prices and see if Big Oil is manipulating them prompts an ironic chuckle, for it is perfectly emblematic of this presidency. It is calculated to suggest concern about a widely felt problem without actually giving two hoots about it except insofar as it might do serious electoral damage to the party of the Left.

Since their drubbing in the Virginia governor’s race and elsewhere on Nov. 2, panicky Democrats have scrambled to create the illusion that they’re still in touch with the concerns of ordinary Americans. Biden touts his Build Back Better — or is it Bankrupt? — welfare plan as a “blue-collar blueprint” for prosperity. Translation: Hey, little people, I’ve got your back. The hapless veep nods toward government’s need to hear everyone’s voice. Translation: We don’t think you’re deplorables.


And now, because everyone notices and dislikes rising pump prices, Biden wants to persuade us saps to disregard Occam’s razor and believe corporate baddies are to blame, not his mismanagement and cheek-by-jowl adherence to the Left’s anti-energy agenda.

The reality is that Biden and his minions have waged war on domestic energy producers since his first day as president. Even now, he is doing his best to foist a comptroller of the currency onto the nation who explicitly calls for the ruin of oil companies, saying she wants them to “go bankrupt.”

Prices are soaring because demand outstrips supply, and several of the reasons can be laid at Biden’s door.

He’s weakened the supply chain, discouraged domestic production in part by raising costs, and failed to persuade Russia, the Saudis, and others to bail him out with more output. (He begged them to increase production — another national embarrassment — which would substitute dirty overseas output for the world’s most regulated and cleanest production here at home. So much for concern about greenhouse gas emissions).

The problem for Biden is that sleight of hand, extra PR, and frantic communication efforts don’t fix underlying problems, as the Washington Examiner’s Byron York recently noted . The administration can spin like a dreidel — goodness knows, it’s trying — but spin doesn’t change the facts.

Obscuring the real causes of rising prices won’t make prices come down or people feel them less. Saying inflation is a luxury concern and anyway is only temporary won’t make it so. Saying another $4 trillion of spending, much of it with borrowed money, will reduce price acceleration won’t achieve that end.

So, as you drive to join family members to celebrate Thanksgiving this week, you’ll know who to thank for the extra $20 you must pay to fill your gas tank each time. When you sit down to dinner, you’ll know who to thank for the fact that your favorite foodstuffs were out of stock.

Yet, for all that, there are real reasons, even in today’s politics, to be thankful. One is that voters have already seen through the Democrats’ spin and are signaling that change is a-coming. Another is that presidential terms don’t last longer than four years.

War on Energy Case Study:  Trainer Refinery south of Philadelphia

Gordon Tomb writes at Real Clear Energy East Coast’s Remaining Refineries’ Daunting Domestic Threat.  Excerpts in italics with my bolds.

The modernization of the Trainer Refinery south of Philadelphia is initially obscured by aged brick buildings and hulking equipment. With closer examination, however, emerge brightly painted pipes, scores of gleaming white tanks and towering construction cranes that hint of ongoing upgrades.

With a growing post-pandemic economy and strong energy prices, prospects are bright save for threats of a controversial carbon tax scheme by the governor and federal regulations. Federal rules have contributed to the closure of seven independent refineries on the East Coast since 2009, leaving only Trainer and three others remaining. And one of those — owned by PBF Energy in New Jersey — closed half its refining units and laid off 250 employees last summer.

Monroe Energy, which owns the Trainer Refinery, annually spends tens of millions of dollars on improvements to keep abreast of government regulations and customer needs. A few years ago, it invested nearly $200 million on installing equipment to make low-sulfur gasoline. Currently, the company is building high-efficiency electrical substations, as well as water-cooling units that enable millions of gallons of water to be reused, drastically reducing dependence on Delaware River water.

It employs approximately 500 people and hires at any one time up to 1,400 members of the Philadelphia Building Trades for maintenance projects that can last for months. Because of their work, Trainer produces daily more than 8 million gallons of fuel, mainly for transportation and heating.

Among the worries is Pennsylvania Gov. Tom Wolf’s proposal to institute a tax on electricity generators that use fossil fuels through the Regional Greenhouse Gas Initiative (RGGI). This taxation scheme is intended to replace fuels like coal and natural gas with more expensive wind and solar energy.

In comments to regulators, Monroe Energy noted its extensive use of electricity and cited data showing that the cost of power was 38 percent less outside existing RGGI states. The company has spent hundreds of millions on environmentally beneficial investments with plans for more. “However, Monroe added, “we fear that enacting a program like RGGI will increase costs to such an extent that we may be unable to move forward with some of these projects.”

RGGI also would put at risk tens of thousands of jobs in Pennsylvania’s electric-power and manufacturing industries by inducing operations to move away.

An even more immediate issue for Monroe is the federal government’s 16-year-old Renewable Fuel Standard (RFS), which requires refiners to add ethanol to transportation fuels or buy credits. The RFS has expanded since its inception creating a burden that threatens to put Monroe out of business if not addressed.

Ethanol is added to fuel as it is distributed to end users — or shortly before — to protect the equipment of refiners and transporters from the additive’s corrosive effect. Because Monroe does not sell to end users, it has virtually no ability to add ethanol and has to buy credits, whose price has risen from a few cents to nearly two dollars.

“The difference between credit prices of 2 cents and 2 dollars for us is hundreds of millions of dollars in compliance-obligation costs,” says Mr. McGlaughlin. Since buying Trainer in 2012, Monroe has spent more than $800 million on RFS compliance — multiples more than the refinery’s purchase price.

The negative consequences of both RFS and RGGI — including job losses and diminished fuel security — seem obvious to nearly everybody. Yet the employees at Trainer are still waiting for relief from Washington while also hoping to avoid the economic wreckage proposed by the governor and the absurdity of bureaucrats trying to improve the climate.

“We hope people will side with us and allow us to keep doing our jobs,” says Ron Pierce.

See also Energy Industry Fights Off Biden Hostile Takeover






King Coal is Dead. Long Live the King!

You’ve heard the pronouncements:  “Coal Is Dead and Oil Is Next.”  “Glasgow is the Death Knell for the Coal Industry” (Boris Johnson).  “Coal is declining sharply, as financiers and insurance companies abandon the industry” (Yale360) “Parties to accelerate efforts towards the phase-down of unabated coal power” (COP26 agreement). The unspoken reality is the opposite:  Demonizing coal has increased coal consumption.  MISH explains in his article The Big Green Push to Get Rid of Coal Had the Opposite Effect.  Excerpts in italics with my bolds.

An alleged big win to eliminate coal turned into a bust and then some.

Investors Pushing Mining Giants to Quit Coal is Backfiring

Bloomberg has an interesting story on how Environmentalists Pushing Mining Giants to Quit Coal has backfired.

It was supposed to be a big win for climate activists: another of the world’s most powerful mining companies had caved to investor demands that it stop digging up coal.

Instead, Anglo American Plc’s exit from coal has become a case study for unintended consequences, transforming mines that were scheduled for eventual closure into the engine room for a growth-hungry coal business.

And while it’s a particularly stark example, it’s not the only one. When rival BHP Group was struggling to sell an Australian colliery this year, the company surprised investors by applying to extend mining at the site by another two decades — an apparent attempt to sweeten its appeal to potential buyers.

Now, after years of lobbying blue-chip companies to stop mining the most-polluting fuel, there’s a growing unease among climate activists and some investors that the policy many of them championed could lead to more coal being produced for longer.

BHP may end up holding on to the Australian mine it was battling to sell, Bloomberg reported last week. Earlier this year, Glencore Plc sounded out a major climate investor group before announcing it would increase its ownership of a big Colombian coal mine, according to people familiar with the matter.

India now burns more coal than Europe and the U.S combined and miners are betting on rising demand over the next decade from countries such as Vietnam, Bangladesh and Indonesia, although pollution concerns and cheaper alternatives threaten to derail those plans.

Tough to Eliminate Coal

The push to abandon coal made selling the mines difficult. So companies chose to extend their life.

Developing countries that invested in coal-powered electrical plants that have many years of useful life want reparations to develop new plants.

New wind and solar plants are cheaper but unreliable. And they are not cheaper than plants already built.

Moreover, wind can die for days and solar has on average 12 hours a day of outages.

This places additional capital investment requirements for countries to build energy storage facilities.

China alone is currently building or planning coal power plants that are the equivalent of six times Germany’s entire coal burning capacity.

It’s tough to get rid of coal when you build more coal plants than you retire.

Beware the Green Bubble Popping

David P. Goldman writes at Asia Times Green bubbles threaten to pop stock markets.  Excerpts in italics with my bolds.

Magical US thinking of a Green agenda financed by endless amounts of printing-press money will only end in tears

Prices for all energy commodities jumped during the past month, some by record margins, as a global energy shortage set off a scramble for gas, coal and oil. Brent crude has doubled in the past year, Newcastle coal has quadrupled, and Netherlands natural has risen seven-fold.  There are many small reasons for the global energy squeeze, and one big one:

Investment in hydrocarbons has collapsed under pressure from the Green agenda adopted by international consensus.

Energy investment in the United States has dwindled as large institutional investors boycott fossil fuel investments. China’s critical electricity shortage is the result of draconian regulation of coal mining, exacerbated by Beijing’s punitive ban on Australian coal imports.

The idea is fanciful that the world can re-direct US$100 trillion in capital investment during the next 30 years to reduce carbon emissions to zero by 2050, as the International Energy Agency has proposed. . . To put in context what this number implies, the entire free cash flow of the world’s private corporations would barely make up a third of the Global Reset investment budget.

The political pressure of the Green agenda has virtually wiped out investment in the US oil and gas industry. Capital expenditures for US exploration and development companies during 2021 (and projected for 2022) are only a fifth of the 2015 peak of $150 billion.

Meanwhile, oil and gas companies are sitting on mountains of cash. The free cash flow of the oil and gas industry will rise to $50 billion next year, the highest on record. In 2015 the oil and gas industry showed negative free cash flow because it borrowed to expand production.

Now oil and gas companies are paying down debt and returning cash to shareholders rather than take hydrocarbons out of the ground.

Virtually the whole of the world’s political elite has signed on to the carbon neutrality agenda, including the government of China, which appears to believe that support for carbon neutrality (which China has pledged by 2060) will mitigate hostility to China in the West.

But the energy market suggests that the hard reality of supply constraints will overwhelm the Green agenda before it gets started.

The cost of shelter, which comprises about two-fifths of the US Consumer Price Index, continues to rise at a record pace in the United States. This hasn’t turned up in the official data, because it takes time for old rental leases to expire and new leases to be written.

But several additional percentage points of inflation are now programmed into US inflation for the next two years.

As the Fed forced down the “real” interest rate, by reducing its overnight rate to zero and by purchasing hundreds of billions of dollars in TIPS, investors were forced into stocks.

At some point, the Fed’s game is going to come to an end. The magical thinking of a green agenda financed by endless amounts of printing-press money will be followed by a nasty hangover. Rates will rise and the asset bubble will pop.

Exactly when that will happen is beyond anyone’s capacity to forecast, but the unpleasant September in US equity markets was a foretaste of what we can expect.

A worker installs polycrystalline silicon solar panels as terrestrial photovoltaic power project starts on November 17, 2015 in Yantai, China. Photo: Getty