Connect with us
[bsa_pro_ad_space id=12]

Energy

Energy wise, how do you even describe 2024?

Published

16 minute read

From the Frontier Centre for Public Policy

By Terry Etam

There still remains a full court press in North America/western Europe among certain socioeconomic classes to “just stop oil” and the like. While we as an industry in many ways remain in our foxholes, and the opponents of hydrocarbons roam freely, looking to criminalize if at all possible any positive dialogue about the value of hydrocarbons.

Huh. Look at that. It’s been ten years since I started writing about energy. Not that that particular trivia interests anyone, why would it, however it is interesting to look back at the impetus for writing and how that has changed.

Ten years ago, as I worked in a communications department for an energy infrastructure business that did not like publicity of any kind whatsoever, it began to dawn on me how dangerous were the habits that formed thereof, and how far reaching the consequences. As but one example, anti-pipeline activists were all over Washington DC like ants on a mound, pressuring the government to kill the Keystone XL pipeline. They swarmed social media and a motivated army spread the gospel like wildfire, truth be damned.

The pipeline industry looked at the energy ignoramuses and kind of just sniggered, for they knew they were right – pipelines were and are the safest and most reliable form of liquid/gas transportation, forming a global industrial backbone we can’t even imagine living without – and there seemed a largely prevailing attitude in industry that these pipeline facts were so glaringly obvious that everyone would figure it out. I still hear the chortling: “Look at those lunatics, protesting pipelines without knowing they’re standing on one that’s been there for 40 years.”

Yeah, well, the lunatics did pretty well didn’t they… Keystone XL is a distant memory, the US Mountain Valley Pipeline is years late and twice over budget, and even TMX is only now limping into service at what, about 700 times over budget and equally late… I shudder to think what kind of back room deals were cut with extremists who promised TMX would never be built and yet now stand silent. If we had a conservative prime minister at the helm now trying to complete TMX, I would bet my ears that the going wouldn’t be as protest-lite as it is now.

Ten years ago, the impetus was to fill a void in public energy knowledge because there wasn’t much of an effective voice that was doing so. If there was, there was scant evidence of any success. So that was kind of fun, going for the low hanging fruit of explaining energy nuances to a public that cared about nothing except utility bills and what it cost to fill up the family beast.

But that excitement faded as the energy industry’s inability to articulate its value was overwhelmed by the likes of Greta Thunberg, a Swedish teen that was hoisted onto the shoulders of cagey mobs, and thrust into the public consciousness as some sort of Jesus-like figure. At that point, the battlefield was completely overrun, and the oil/gas industry seemed to head underground and wait for the storm to pass. What a mistake.

There still remains a full court press in North America/western Europe among certain socioeconomic classes to “just stop oil” and the like. While we as an industry in many ways remain in our foxholes, and the opponents of hydrocarbons roam freely, looking to criminalize if at all possible any positive dialogue about the value of hydrocarbons. But. The anti-fossil fuel people are so busy working on Orwellian regulations/policies/roadmaps that they haven’t looked over their shoulders at the storm clouds brewing, the ones that hydrocarbon producers always knew would arrive.

As seven out of eight billion people on earth strive to live like the west does, the inevitable is happening: global demand for energy, in all forms, is soaring, and absolutely no one wants to take a step backwards in terms of standard of living. The world wants to add a billion air conditioners, because those things are life-transforming (see: any modern glass-cube high rise residential/commercial building, modern hospitals/seniors centers, etc), and the comfy west wants to add an estimated $250 billion per year in data centers because we can and it looks fun.

We haven’t even begun to figure out how to rewire the world for an energy transition even if we used energy consumption from 20 years ago as the starting point; today, we can’t keep up using all our resources. Every year, we set new records for solar installations, wind installations, coal consumption, oil consumption… and new natural gas infrastructure is being built around the world backed by multi-decade contracts. The fight over nuclear continues in the oddly ridiculous way it now goes, with countries within the same jurisdiction (EU, for example) shutting down nuclear facilities (Germany) on safety or environmental (?) grounds while countries right beside them add new ones. In the US, the same craziness is happening within the country; places like New York shuttering nuclear facilities while other parts of the country develop new ones.

What makes energy commentary challenging these days is that we’ve become desensitized to such insanity, we are pickled in it, and treat it as just the regular public discourse. I mean really. Look at Germany’s self inflicted damage in shutting down its nuclear plants on the grounds of safety. How much safer are Germans if Belgium builds new ones next door?

We’ve become used to the blaring theme “electrify everything” when we can clearly see, if we choose to look, that electrifying anything at all is becoming more challenging, with grid operators all over the place issuing warnings about potential energy shortages/rolling blackouts or brownouts/falling grid reliability.

AI is coming. Like a freight train. No one is prepared for it. Anyone paying attention is sounding the alarm bells: Power consumption is going to go through the roof. And that is in addition to a world that continues to set new energy usage records relentlessly, a trend that seems unstoppable and huge even before AI.

The storm clouds are there, they are growing, and no one wants to look up.

And then we need to set this insanity against a truly mind-boggling global geopolitical framework that looks like something out of Monty Python.

China is an amazing object, like a parallax, that looks completely different depending on your vantage point. By that I mean: energy transition advocates, the ones that ‘just know’ that net-zero 2050 is inevitable and simply requires more ‘policy’, point to China as a green hero, installing more solar than any other country, at breakneck pace. At the same time, the opposite camp that ‘just knows’ that net-zero 2050 has no chance due to the sheer challenge point out that China is constructing new coal-fired power plants at a rate of two per week.

Both are right. So are the people that rejoice at how solar panels have become so much cheaper due to China’s manufacturing prowess, as are the people that point out the staggering environmental footprint of building all that stuff behind a somewhat opaque curtain.

The people that herald the rise of China’s EV adoption are right, but so are the people that fear China’s control of most of the critical mineral/metal supply/processing chain.

India is a rising behemoth. The EU still thinks it runs the world. The US’ leadership is a gym full of blindfolded shouting people running at full speed. Canada thinks it is the world’s conscience, to the extent it is still thinking at all, building foreign and local policy on the notion that Canadians are the global good guys, a selfless hero running around the globe’s stages eagerly saying politically correct things while back home the wheels are coming off. Watch us impale our economy on a stick just to show the world that no one can possibly be morally superior. Russia is a vodka-soaked-yet-clever power monger with some thousand-year-old chip on its shoulder and enough bullets to fill a million Ladas. The Middle East remains the Middle East, reliably distributing both petroleum products and anger to every corner of the world…

The world’s biggest economies are so far in debt that they don’t know what to do, and we must painfully watch central bankers craft new policies and plans under the faulty pretense that they do know what they’re doing. The US is adding a trillion dollars worth of debt every hundred days, and the gurus of monetary policy are watching the economy with the wisdom and effectiveness of a time-forgotten goat-herder buying a cell phone before he’s found out what electricity is.

The future is never certain. Obviously. There will be black swans, rare events that have major global seismic repercussions. Terrorists are pretty good at destabilizing the world with a flick of the wrist, doing more damage than a tsunami, but then there are tsunamis as well. And all sorts of human hijinks that can throw a spanner in the works quite easily because we are all one step away from snapping.

There will be new wars, apparently, the peace dividend nothing but a dead deer on the side of the road. Political polarization is so severe that at any given time some substantial percent of the population believes that if their political enemy gets elected that ‘the future of the nation is at stake’. In the US two very ancient people are leading these charges, and every single American I talk to says, in a burst of frustration, “How the hell did we get here, and why are those two the only choices?”

And all of us that pay attention to energy ask the very same questions about the energy world. We watch economic powerhouses like Germany and California screw themselves into the ground with remarkable efficiency. We can see these problems arising. We listen to grid operators that warn of coming instability instead of shouting them down or tossing them out and replacing them with people that toe the line.

The energy industry is, despite all the madness, making actual strides in reducing emissions, developing new types of energy, developing carbon sequestration options, working on hydrogen programs, integrating with all sorts of green technology. It’s tough slogging, because most attempts are met with chants of “greenwash, greenwash” by people that don’t want progress, they want fossil fuels dead and gone. As their vision of a solution, they throw soup on famous paintings. The world stands in awe, like watching a naked drunk lurch across a freeway, oblivious to his surroundings.

One good thing about the world of energy though, compared to the utter lunacy of the global political/geopolitical/sociological mess, is that we can see fairly clearly where energy is going. The crazed experiments, the building of castles to the sky, will slow to a pace that makes sense and is digestible. Global demand for oil, natural gas, and it looks like even coal will stay strong for several decades at least. Nuclear power will have a renaissance, and new technologies or battery breakthroughs will enter the scene at a rate that the world can handle. It won’t be pretty or linear or without strife, but that’s how it will be. People won’t live without cheap reliable energy.

So if you’re in the energy business, take heart – in the world of political theatre, reality is whatever you can get away with convincing the world that it is. In the world of energy, fuel is fuel, availability is availability, and we can at least count on the fact that despite all the handwringing and grandiose policy that reality can’t be evaded. It might be small comfort but at least it’s real.

Terry Etam is a columnist with the BOE Report, a leading energy industry newsletter based in Calgary.  He is the author of The End of Fossil Fuel Insanity.  You can watch his Policy on the Frontier session from May 5, 2022 here.

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Daily Caller

Trump’s One Big Beautiful Bill Resets The Energy Policy Playing Field

Published on

 

From the Daily Caller News Foundation

By David Blackmon

Make no mistake about it, the One Big Beautiful Bill Act (OBBBA) signed into law on Friday by President Donald Trump falls neatly in line with the Trump energy and climate agenda. Despite complaints by critics of the deal that Majority Leader John Thune struck with Alaska Sen. Lisa Murkowski to soften the bill’s effort to end wind and solar subsidies from the Orwellian 2022 Inflation Reduction Act, the OBBBA continues – indeed, accelerates – the Trumpian energy revolution.

Leaders in the oil and gas industry, hamstrung at every opportunity by the Biden presidency, hailed the bill as a chance to move back into some semblance of boom times. Tim Stewart, President of the U.S. Oil and Gas Association, told his members in a memo that, “For the oil and gas industry, the bill…signals a transformative opportunity to enhance domestic production.”

API CEO Mike Sommers also praised the OBBBA as a positive step for his members: “This historic legislation will help usher in a new era of energy dominance by unlocking opportunities for investment, opening lease sales and expanding access to oil and natural gas development.

While leaders of organizations like those must curb their enthusiasm to some extent in their public statements, they and their peers must be somewhat amazed at how much real substantive change the thin GOP majorities shepherded by Thune and House Speaker Mike Johnson managed to stuff into this bill. This industry, historically an easily demonized bogeyman for Democrats and too often ignored by previous Republican presidents, does not experience days as encouraging as July 3 was in the nation’s capital.

Even so, many Republicans, especially in the House, remained unsatisfied by amendments the Senate made to the bill related to IRA subsidy rollbacks. To help Speaker Johnson hold the party’s narrow House majority together, President Trump committed the executive branch to strict enforcement of the new limitations, and promised the White House will work with congressional allies to move a major deregulation package ahead of the 2026 midterm elections.

But the OBBBA as passed is chock full of energy and environment-related provisions. FTI Consulting, a business consultancy with a major presence in Washington, DC, published a quick analysis Thursday that projects natural gas and nuclear as the biggest winners as the OBBBA’s impacts begin to take hold across the United States. Interestingly, the analysis also projects battery storage to expand more rapidly over the next five years even as wind and solar suffer from the phasing-out of their IRA subsidies.

The side deal struck by Thune and Murkowski is likely to result in significant new investment into wind and solar facilities as developers strive to get as many projects on the books as possible to meet the “commenced construction” requirement by the July 4, 2026 deadline. The bill’s previous language would have required projects to be placed into service by that time. But even that softer requirement will almost certainly cause a flow of capital investment out of wind and solar once that deadline passes, given the reality that many of their projects are not sustainable without constant flows of government subsidies.

What it all means is that the OBBBA, combined with all the administration’s prior moves to radically shift the direction of federal energy and climate policy away from intermittent energy and electric vehicles back to traditional forms of power generation and internal combustion cars, effectively reset the policy playing field back to 2019, prior to the COVID pandemic. That was a time when America had become as energy independent as it had been in well over half a century and was approaching the “Energy Dominance” position so dear to President Trump’s heart.

Trump’s signing of the OBBBA gives the oil and gas, nuclear, and even the coal industry a chance at a do over. It is an opportunity that comes with great pressure, both from government and the public, to perform. That means rapid expansion in gas power generation unseen in 20 years, rapid development of next generation nuclear, and even a probable chance to permit and build new coal capacity in the near future.

Second chances like this do not come around often. If these great industries fail to grab this brass ring and run with it, it may never come around again. Let’s go, folks.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Continue Reading

Carbon Tax

Canada’s Carbon Tax Is A Disaster For Our Economy And Oil Industry

Published on

From the Frontier Centre for Public Policy

By Lee Harding

Lee Harding exposes the truth behind Canada’s sky-high carbon tax—one that’s hurting our oil industry and driving businesses away. With foreign oil paying next to nothing, Harding argues this policy is putting Canada at a major economic disadvantage. It’s time to rethink this costly approach.

Our sky-high carbon tax places Canadian businesses at a huge disadvantage and is pushing investment overseas

No carbon tax will ever satisfy global-warming advocates, but by most measures, Canada’s carbon tax is already too high.

This unfortunate reality was brought to light by Resource Works, a B.C.-based non-profit research and advocacy organization. In March, one of their papers outlined the disproportionate and damaging effects of Canada’s carbon taxes.

The study found that the average carbon tax among the top 20 oil-exporting nations, excluding Canada, was $0.70 per tonne of carbon emissions in fiscal 2023. With Canada included, that average jumps to $6.77 per tonne.

At least Canada demands the same standards for foreign producers as it does for domestic ones, right? Wrong.

Most of Canada’s oil imports come from the U.S., Saudi Arabia, and Nigeria, none of which impose a carbon tax. Only 2.8 per cent of Canada’s oil imports come from the modestly carbon-taxing countries of the U.K. and Colombia.

Canada’s federal consumer carbon tax was $80 per tonne, set to reach $170 by 2030, until Prime Minister Mark Carney reduced it to zero on March 14. However, parallel carbon taxes on industry remain in place and continue to rise.

Resource Works estimates Canada’s effective carbon tax at $58.94 per tonne for fiscal 2023, while foreign oil entering Canada had an effective tax of just $0.30 per tonne.

“This results in a 196-fold disparity, effectively functioning as a domestic tariff against Canadian oil production,” the research memo notes. Forget Donald Trump—Ottawa undermines our country more effectively than anyone else.

Canada is responsible for 1.5 per cent of global CO2 emissions, but the study estimates that Canada paid one-third of all carbon taxes in 2023. Mexico, with nearly the same emissions, paid just $3 billion in carbon taxes for 2023-24, far less than Canada’s $44 billion.

Resource Works also calculated that Canada alone raised the global per-tonne carbon tax average from $1.63 to $2.44. To be Canadian is to be heavily taxed.

Historically, the Canadian dollar and oil and gas investment in Canada tracked the global price of oil, but not anymore. A disconnect began in 2016 when the Trudeau government cancelled the Northern Gateway pipeline and banned tanker traffic on B.C.’s north coast.

The carbon tax was introduced in 2019 at $15 per tonne, a rate that increased annually until this year. The study argues this “economic burden,” not shared by the rest of the world, has placed Canada at “a competitive disadvantage by accelerating capital flight and reinforcing economic headwinds.”

This “erosion of energy-sector investment” has broader economic consequences, including trade balance pressures and increased exchange rate volatility.

According to NASA, Canadian forest fires released 640 million metric tonnes of carbon in 2023, four times the amount from fossil fuel emissions. We should focus on fighting fires, not penalizing our fossil fuel industry.

Carney praised Canada’s carbon tax approach in his 2021 book Value(s), raising questions about how long his reprieve will last. He has suggested raising carbon taxes on industry, which would worsen Canada’s competitive disadvantage.

In contrast, Conservative leader Pierre Poilievre argued that extracting and exporting Canadian oil and gas could displace higher-carbon-emitting energy sources elsewhere, helping to reduce global emissions.

This approach makes more sense than imposing disproportionately high tax burdens on Canadians. Taxes won’t save the world.

Lee Harding is a research fellow for the Frontier Centre for Public Policy.

Continue Reading

Trending

X