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Economy

Welcome to the Era of Energy Realism

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The Honest Broker Roger Pielke Jr.

Every year for the past 15 years, JP Morgan publishes an outstanding annual energy report by Michael Cembalest. Last week JP Morgan published its 2025 edition and today I share five important figures from the many in the report, which I highly recommend.

Cembalest’s top line:

[A]fter $9 trillion globally over the last decade spent on wind, solar, electric vehicles, energy storage, electrified heat and power grids, the renewable transition is still a linear one; the renewable share of final energy consumption is slowly advancing at 0.3%–0.6% per year.

You can see that in the figure below — my graph using data from the 2024 EI Statistical Review of World Energy — which shows the proportion of global energy consumption from all carbon-free sources. Since 2012, that proportion has increased from about 14% to a bit over 18%. Exactly as Cembaest observes — that increase has been linear. At that rate of change the world would hit 100% carbon-free sometime after 2200.

Let’s take a look at some of the figures I found most interesting in the JP Morgan Report.

Solar Reality Check

“. . . when you boil it all down, solar power accounts for ~2% of global final energy consumption, a figure we expect to reach 4.5% by 2027. Even if these solar trends continue into the 2030’s, human prosperity will be inextricably linked to affordable natural gas and other fossil fuels for many years.

Human prosperity, in places where it thrives, relies heavily on steel, cement, ammonia/fertilizer, plastics, glass, chemicals and other industrial products which are energy- intensive to produce. . . these products currently rely on fossil fuels for 80%-85% of their energy.

And remember, prosperity itself is energy-intensive: among the tightest relationships in economics is the connection between a country’s per capita GDP and its per capita energy consumption.”

I remain very bullish on solar, but it won’t displace much fossil fuels anytime soon.

Electrify Everything is Proceeding Slowly

“Remember this key aspect of the energy transition: until an energy use is electrified, it’s hard to decarbonize it using green grid electrons. And while grid decarbonization is continuing at a steady pace, the US has made little progress increasing the electricity share of final energy consumption for the reasons discussed in last year’s “Electravision” piece. One major obstacle: transmission line growth is stuck in a rut, way below DoE targets for 2030 and 2035. Another obstacle: shortages of transformer equipment, whose delivery times have extended from 4-6 weeks in 2019 to 2-3 years. . . “

The panel on the rgiht above indicates that the U.S. was never going to meet the emissions reduction targets of the Biden Administration — which has been clear for several years now.

“The US is not unique with respect to the slow pace of electrification, although a few countries are making faster progress. Over the last decade China made the largest advance, bringing it in line with the OECD.

Part of the challenge may simply be the long useful lives of existing industrial plants, furnaces, boilers and vehicles. In other words, electrification might accelerate as their useful lives are exhausted. But the high cost of electricity compared to natural gas (particularly in places without a carbon tax) is another impediment to electrification that is not easy to solve since this ratio reflects relative total costs of production and distribution.”

(In order to coerce users, a carbon tax is necessary)

Energy Dependence and Independence

“The US has achieved US energy independence for the first time in 40 years while Europe and China compete for global energy resources. China’s imports are similar to Europe in energy terms but half as much as a share of domestic energy consumption. Energy intensive manufacturing has shifted to the developing world since the mid 1990’s. China is negotiating with Russia and Turkmenistan regarding future gas pipeline projects. China has the benefit of time: China gas imports are projected to reach 250 bcm by 2030 vs 170 bcm in 2023, almost all of which can be met by already contracted supplies. What was Taiwan thinking by shutting down nuclear power which has fallen from 50% to 5% of generation? Taiwan is now one of the most energy dependent countries in the world, resulting in rising economic costs if China were to impose a blockade.”

The Trump administration’s trade war with Canada risks upending North America’s energy dominance. What can they be thinking?

Fossil Fuels Falling and Rising

“Fossil fuel shares of final energy are falling faster in China, Japan and Europe than in the US. Growth in fossil fuel consumption is slowing but no clear sign of a peak on a global basis. Hydraulically fractured oil and gas account for 60%+ of US primary energy consumption. Global LNG export capacity is set to expand by one third by 2030. Coal consumption is roughly flat in final energy terms as rising EM consumption offsets falling OECD consumption.”

US Secretary of Energy Chris Wright spoke at an energy conference in Houston, and his remarks have been transcribed by Robert Bryce. Here is an excerpt:

Let’s do a quick survey of energy access today. Roughly one billion people live lives remotely recognizable to us in this room. We wear fancy clothes, mostly made out of hydrocarbons. We travel in motorized transport. The extra lucky of us fly across the world to attend conferences. We heat our homes in winter, cool them in summer, store myriad foods in our freezers and refrigerators, and have light, communications and entertainment at the flip of a switch.

Pretty awesome.

This lifestyle requires an average of 13 barrels of oil per person per year. What about the other seven billion people? They want what we have. The other seven billion people, on average, consume only three barrels of oil per person per year versus our 13. Africans average less than one barrel.

We need more energy. Lots more energy. That much should be obvious.

Read Wright’s speech alongside Cembalest’s energy analysis — We are at long last in an era of energy realism.

The Honest Broker

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Alberta

Alberta’s grand bargain with Canada includes a new pipeline to Prince Rupert

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From Resource Now

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Alberta renews call for West Coast oil pipeline amid shifting federal, geopolitical dynamics.

Just six months ago, talk of resurrecting some version of the Northern Gateway pipeline would have been unthinkable. But with the election of Donald Trump in the U.S. and Mark Carney in Canada, it’s now thinkable.

In fact, Alberta Premier Danielle Smith seems to be making Northern Gateway 2.0 a top priority and a condition for Alberta staying within the Canadian confederation and supporting Mark Carney’s vision of making Canada an Energy superpower. Thanks to Donald Trump threatening Canadian sovereignty and its economy, there has been a noticeable zeitgeist shift in Canada. There is growing support for the idea of leveraging Canada’s natural resources and diversifying export markets to make it less vulnerable to an unpredictable southern neighbour.

“I think the world has changed dramatically since Donald Trump got elected in November,” Smith said at a keynote address Wednesday at the Global Energy Show Canada in Calgary. “I think that’s changed the national conversation.” Smith said she has been encouraged by the tack Carney has taken since being elected Prime Minister, and hopes to see real action from Ottawa in the coming months to address what Smith said is serious encumbrances to Alberta’s oil sector, including Bill C-69, an oil and gas emissions cap and a West Coast tanker oil ban. “I’m going to give him some time to work with us and I’m going to be optimistic,” Smith said. Removing the West Coast moratorium on oil tankers would be the first step needed to building a new oil pipeline line from Alberta to Prince Rupert. “We cannot build a pipeline to the west coast if there is a tanker ban,” Smith said. The next step would be getting First Nations on board. “Indigenous peoples have been shut out of the energy economy for generations, and we are now putting them at the heart of it,” Smith said.

Alberta currently produces about 4.3 million barrels of oil per day. Had the Northern Gateway, Keystone XL and Energy East pipelines been built, Alberta could now be producing and exporting an additional 2.5 million barrels of oil per day. The original Northern Gateway Pipeline — killed outright by the Justin Trudeau government — would have terminated in Kitimat. Smith is now talking about a pipeline that would terminate in Prince Rupert. This may obviate some of the concerns that Kitimat posed with oil tankers negotiating Douglas Channel, and their potential impacts on the marine environment.

One of the biggest hurdles to a pipeline to Prince Rupert may be B.C. Premier David Eby. The B.C. NDP government has a history of opposing oil pipelines with tooth and nail. Asked in a fireside chat by Peter Mansbridge how she would get around the B.C. problem, Smith confidently said: “I’ll convince David Eby.”

“I’m sensitive to the issues that were raised before,” she added. One of those concerns was emissions. But the Alberta government and oil industry has struck a grand bargain with Ottawa: pipelines for emissions abatement through carbon capture and storage.

The industry and government propose multi-billion investments in CCUS. The Pathways Alliance project alone represents an investment of $10 to $20 billion. Smith noted that there is no economic value in pumping CO2 underground. It only becomes economically viable if the tradeoff is greater production and export capacity for Alberta oil. “If you couple it with a million-barrel-per-day pipeline, well that allows you $20 billion worth of revenue year after year,” she said. “All of a sudden a $20 billion cost to have to decarbonize, it looks a lot more attractive when you have a new source of revenue.” When asked about the Prince Rupert pipeline proposal, Eby has responded that there is currently no proponent, and that it is therefore a bridge to cross when there is actually a proposal. “I think what I’ve heard Premier Eby say is that there is no project and no proponent,” Smith said. “Well, that’s my job. There will be soon.  “We’re working very hard on being able to get industry players to realize this time may be different.” “We’re working on getting a proponent and route.”

At a number of sessions during the conference, Mansbridge has repeatedly asked speakers about the Alberta secession movement, and whether it might scare off investment capital. Alberta has been using the threat of secession as a threat if Ottawa does not address some of the province’s long-standing grievances. Smith said she hopes Carney takes it seriously. “I hope the prime minister doesn’t want to test it,” Smith said during a scrum with reporters. “I take it seriously. I have never seen separatist sentiment be as high as it is now. “I’ve also seen it dissipate when Ottawa addresses the concerns Alberta has.” She added that, if Carney wants a true nation-building project to fast-track, she can’t think of a better one than a new West Coast pipeline. “I can’t imagine that there will be another project on the national list that will generate as much revenue, as much GDP, as many high paying jobs as a bitumen pipeline to the coast.”

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Business

Carney’s European pivot could quietly reshape Canada’s sovereignty

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This article supplied by Troy Media.

Troy Media By Isidoros Karderinis

Canadians must consider how closer EU ties could erode national control and economic sovereignty

As Prime Minister Mark Carney attempts to deepen Canada’s relationship with the European Union and other supranational institutions, Canadians should be asking a hard question: how much of our national independence are we prepared to give away? If you want a glimpse of what happens when a country loses control over its currency, trade and democratic accountability, you need only look to Bulgaria.

On June 8, 2025, thousands of Bulgarians took to the streets in front of the country’s National Bank. Their message was clear: they want to keep the lev and stop the forced adoption of the euro, scheduled for Jan. 1, 2026.

Bulgaria, a southeastern European country and EU member since 2007, is preparing to join the eurozone—a bloc of 20 countries that share the euro as a common currency. The move would bind Bulgaria to the economic decisions of the European Central Bank, replacing its national currency with one managed from Brussels and Frankfurt.

The protest movement is a vivid example of the tensions that arise when national identity collides with centralized policy-making. It was organized by Vazrazdane, a nationalist, eurosceptic political party that has gained support by opposing what it sees as the erosion of Bulgarian sovereignty through European integration. Similar demonstrations took place in cities across the country.

At the heart of the unrest is a call for democratic accountability. Vazrazdane leader Konstantin Kostadinov appealed directly to EU leaders, arguing that Bulgarians should not be forced into the eurozone without a public vote. He noted that in Italy, referendums on the euro were allowed with support from less than one per cent of citizens, while in Bulgaria, more than 10 per cent calling for a referendum have been ignored.

Protesters warned that abandoning the lev without a public vote would amount to a betrayal of democracy. “If there is no lev, there is no Bulgaria,” some chanted. For them, the lev is not just a currency: it is a symbol of national independence.

Their fears are not unfounded. Across the eurozone, several countries have experienced higher prices and reduced purchasing power after adopting the euro. The loss of domestic control over monetary policy has led to economic decisions being dictated from afar. Inflation, declining living standards and external dependency are real concerns.

Canada is not Bulgaria. But it is not immune to the same dynamics. Through trade agreements, regulatory convergence and global commitments, Canada has already surrendered meaningful control over its economy and borders. Canadians rarely debate these trade-offs publicly, and almost never vote on them directly.

Carney, a former central banker with deep ties to global finance, has made clear his intention to align more closely with the European Union on economic and security matters. While partnership is not inherently wrong, it must come with strong democratic oversight. Canadians should not allow fundamental shifts in sovereignty to be handed off quietly to international bodies or technocratic elites.

What’s happening in Bulgaria is not just about the euro—it’s about a people demanding the right to chart their own course. Canadians should take note. Sovereignty is not lost in one dramatic act. It erodes incrementally: through treaties we don’t read, agreements we don’t question, and decisions made without our consent.

If democracy and national control still matter to Canadians, they would do well to pay attention.

Isidoros Karderinis was born in Athens, Greece. He is a journalist, foreign press correspondent, economist, novelist and poet. He is accredited by the Greek Ministry of Foreign Affairs as a foreign press correspondent and has built a distinguished career in journalism and literature.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

 

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