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By Irina Slav
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I had something else in mind for today and I had already written it when Thursday began giving and didn’t stop until I was full to the gills with new evidence that the world is going if not to hell, then to a much worse place than it is now. Because we have aggressively, arrogantly stupid people in charge of decision-making.
If you think I’m overdoing the adverbs, which I am, there is a good reason for this and I will express it with the first piece of the abovementioned evidence.
“The WEO’s analysis finds scant evidence to support claims from some quarters that climate policies and net zero commitments contributed to the run-up in energy prices,” the International Energy Agency said in the news release accompanying the publication of said WEO, or World Energy Outlook.
To say that this is a blatant lie is to state the plain truth but the IEA is not happy to just throw one lie out there and go back home. No, it has felt the need to compound the lies.
“In the most affected regions, higher shares of renewables were correlated with lower electricity prices – and more efficient homes and electrified heat have provided an important buffer for some consumers, albeit far from enough.”
I would love to get a chance to ask Fatih Birol a few questions but since that’s unlikely to ever happen, I’ll ask them here. For instance, how would he comment on the boom in energy poverty in highly-electrified, highly-renewable UK? Or last year’s profit warnings from Denmark’s wind power majors resulting from lower wind speeds?
Or, while we’re in Denmark, what about the loss of 7.85 TWh of electricity due to wind power curtailment, faults and failures, and asset degradation? That’s a loss that cost the wind industry in the country some 2 billion kroner, which is not as much as $2 billion but still quite a lot. Oh, and Denmark is decidedly not among the EU countries with the cheapest electricity.
Also, I would love to hear Mr. Birol’s thoughts on this short but strong statement by Goldman’s Jeffrey Currie, who told CNBC this week that the $3.8 trillion investment in renewables over the last decade have resulted in a reduction in the share of fossil fuels in the global energy mix of an impressive one (1) percentage point.
In other words, the share of fossil fuels in the global energy mix has fallen from 82% to 81% over the past ten years but what’s hilariously ironic is that right now Currie expects this share to rebound to 82%. I am sure the reasons for this have nothing whatsoever to do with any hypothetical or actual underperformance of renewable energy systems.
There are two things that I have no truck with. One is double standards. The other is a categorical refusal to face facts even when they are punching you in the face because these facts happen to go against your exceptionally strong beliefs.
I call this refusal stupidity but I’m always open to the corruption option as well, because getting paid to lie is a well established practice in human civilisation that has given rise to whole industries. I have no patience to speculate what the IEA deal exactly is but I can say for sure that it is a dangerous one, whether born out of stupidity or corruption.
It is dangerous because it shuts the door to any potential inquiry into why those $3.8 billion could not reduce our dependence on fossil fuels a lot more significantly than a single percentage point.
It is also dangerous because it encourages the spending of more trillions, in fact, actively calling for it, which would only make our energy supply less reliable and more expensive.
Meanwhile, the European Union is forging ahead towards peak stupidity, only I’m losing hope there is peak stupidity when the EU is concerned. All the important institutions of the bloc this week finalised their approval of what will effectively be a total ban on the sales of internal combustion engine cars beginning in 2035.
The official shape of the ban is a requirement for carmakers in the EU to reduce their emissions to literal zero by 2035, which in practice means they will be obliged to be selling only EVs by that year.
Yes, I know EVs are not emission-free on a lifecycle basis but let me remind you that the EU considers the burning of U.S.-sourced wood pellets a low-carbon form of energy so we should all be clear there’s no stooping too low for Brussels when it’s about protecting the narrative.
“This deal is good news for car drivers… new zero-emission cars will become cheaper, making them more affordable and more accessible to everyone,” said the chief negotiator for the EP, a Dutch representative named Jan Huitema.
Mr. Huitema has probably been too busy negotiating the ban to read the news, among them this latest warning about a looming copper shortage from Trafigura. I would imagine Trafigura is among the entities that know what they’re talking about when they talk about copper but I’m sure Huitema et al would deny the possibility of EVs becoming more expensive by drawing on… their hopes and dreams.
I’ve written about the ICE car ban before and as far as I remember, I was quite sceptical about it being possible even then. Today, I’m almost certain it would be the straw that breaks the EU’s back if something doesn’t do it before that. Of course, this would only happen if the EU continues to turn a blind eye — even two — to the realities of EV costs.
Yet judging by the bloc’s reaction to the energy crisis, it’s safe to say they will open those eyes in the last moment and pretend the ban was never actually on the table and they were simply trying to motivate carmakers to become cleaner and greener, and isn’t it fun, this transition?
Reality displacing lies is a sight to behold. That sight is not necessarily pretty, in fact, it’s often infuriating, but it’s worth experiencing nevertheless. Like this news report from Bloomberg, which says that, according to BloombergNEF, U.S. LNG will not be able to offset lost Russian gas supply for Europe next year.
This is something that serious analysts have been saying for months but they have been consistently ignored while European government officials cheered U.S. LNG deliveries. Until they took a look at the tab, that is, and started complaining about the price.
Yet what Bloomberg is “forecasting” is not about prices. It’s about the physical availability of natural gas. There isn’t enough of that and there won’t be enough of that for several more years. What Europe is going to do in the meantime looks even less pretty than the displacement of lies by reality.
The reality for Europe is that it’s got enough gas in its storage thanks to Russian gas. That’s right. Europe enjoyed six months of consistent although slightly lower than usual supply, with LNG imports closing the gap.
It was after June that Russia turned most of the taps off, so that six-month cushion went a long way towards filling the storage space. Next year, there will be no cushion. And U.S. LNG could only replace less than half of lost Russian supply.
This is the reality. The lies that everyone in the EU will be just fine because our American friends will sell us enough LNG just withered and died. Oh, and by the way, those same friends have been quite honest about not being able to do what the EU wants them to do. The energy business knows its limitations.
Meanwhile, I was reminded about a third thing I have no truck with — arrogance. What reminded me about it was this report in Bloomberg: Biden Urges Oil Companies to Cut Prices After Shell’s Profit Doubled.
It would have sounded perfectly normal, were it a report in a Russian newspaper from 1983, for instance. Or, I imagine, in a Venezuelan newspaper today. But it comes from a news outlet in the U.S. that is supposedly a democracy, the cradle of free enterprise in modern times, etc, which it is, only its president seems eager to change that.
“That’s more than twice of what they made in the third quarter of last year, and they raised their dividends as well, so the profits are going back in their shareholders instead of going to the pump and lowering the prices,” Biden said yesterday as if that’s wrong and inappropriate. It is indeed wrong and inappropriate. In authoritarian states.
All in all, another strong week in the dangerous stupidity department.
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