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Energy

Reports of the Impending Death of Petroleum Have Been Greatly Exaggerated

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18 minute read

From EnergyNow.ca

By Jim Warren

There is a good chance climate activists smugly celebrating the collapse of conventional energy production within a generation are wildly mistaken. It is just as plausible that the time between today and ‘sunset’ for petroleum will run several decades beyond ‘net zero day’ in 2050. Actually, both predictions are suspect. History has shown people are rarely able to foresee conditions three or more decades into the future with any great precision.

Yet it seems sections of the investment community and the legacy news media assume our geopolitical future will be governed by the race to achieve net zero. They see the green transition as inevitable as death and taxes and presume oil will be sidelined accordingly.

A CBC news item that aired on March 16 boldly led with the prediction that the recently completed Trans Mountain pipeline is “likely the last new oil export pipeline the country will ever need.” The reporter was clearly caught up in a chicken and egg conundrum. He mused that due to declining production over the next decade we wouldn’t need any new pipelines. Here’s a thought, if increases in production do indeed taper off it will likely be because we can’t get enough pipelines built. Of course some CBC reporters and their fellow travellers in the climate alarmist camp never let logic get in the way of writing jubilant obituaries for the fossil fuel industries. One of the problems for conventional energy producers is that lots of people, including potential investors, have been drinking the same Kool-Aid as the media.

If the climate alarmists really have won the day, the window of opportunity is closing or has already closed on significant oil sands plant expansions, new pipelines to tidewater and any future boom in conventional oil production. After all, who wants to invest in infrastructure projects that will take a decade or more to be approved, could later be cancelled, or taxed into insolvency well before the end of their productive life spans?

No matter how long the window for viable investments remains open, one thing is clear—the Justin Trudeau government has already shortened it by a decade or more. During the eight year oil price depression that began in late 2014, new pipelines to tidewater were the one glimmer of hope for an improvement in the prices received by Canadian exporters. With more than 90,000 jobs lost in oil and gas production, manufacturing and construction by 2017, there were a lot of unemployed people in the producing provinces looking for a break. Northern Gateway, Energy East and Trans Mountain would of course allow Canadian producers to avoid the steep discounts they were subject to in the US for a significant proportion of their exports. The Trudeau Liberals cancelled any hope for that modestly brighter future.

Trans Mountain was the exception. It was the consolation prize to make up for the cancellations of Northern Gateway, Energy East and the Keystone XL. And yes, amazingly, the federal government finally got it built. It was touch and go. We were always just one bird nest away from another lengthy delay.

But wait, take heart. There is mounting evidence to suggest the hand wringing climate activists and cautious investors could have it all wrong. The goals of the green transition will probably take many more decades to achieve than they imagine.

In fact, recent events suggest the whole green transition project could actually be coming off the rails. Europe’s Green politicians are being clobbered at the polls while climate change skeptics from populist and conservative parties continue to attract voters and win elections. Green transition initiatives have been postponed and cancelled in several EU countries and the UK. The principal cause of the retreat is popular resistance to green transition initiatives that contribute to what is already an unacceptably high cost of living.

For instance, the Yellow Vests protests in France forced President Emmanuel Macron to forego a number of unpopular fuel tax measures including a carbon tax. But that wasn’t until after 11 people died and over 4,000 were injured as a result of the protests. The protests began in November 2018 and have continued sporadically to the present.

Protests by farmers in the Netherlands in 2019 beat back GHG reduction measures which would have restricted nitrogen fertilizer use and cut the national cow herd by one-half. Farmers refused to accept the assault on their incomes and plugged the country’s highways with their tractors. One of their demonstrations was reported to have caused 1000 km of traffic jams. In another protest they shut down Eindhoven airport for a day. Members of one of the more militant groups participating in the protests, the Farmers Defense Force, threatened civil war.

A new political party, the Farmer-Citizen Movement (Dutch: BBB), arose out of the Dutch farm protests. In March of 2023, the BBB won the popular vote in Netherlands’ provincial elections (they are all held on the same day) and the majority of seats in each of the country’s 12 provinces. The victory is all the more significant because the provincial governments choose who sits in the national Senate which has the power to block legislation. Protests by farmers over similar green transition projects have been occurring in France, Belgium and Germany.

The German government’s ambitious heat pump mandate had to be postponed and rethought. The ineptitude of environmentally-friendly bureaucrats who came up with the scheme was evident in the fact they still hadn’t figured out which type of heat pumps would work best under different conditions. For example, the heat pumps’ inability to operate effectively in cold weather was one of the details planners had overlooked. Additionally, they neglected to train enough technicians in heat pump installation to actually put them in people’s homes. Green politicians and their allies in government were blamed for the technical debacle and high costs for consumers. As a result, populists and likeminded conservative candidates have been defeating the Greens and Social Democrats in regional elections.

The October 2023 state elections in economically and politically powerful Hesse and Bavaria provided two of the more significant (and startling) losses in support of Germany’s three party governing coalition that includes the social democrats and the Greens. What the coalition parties lost, the right-wing populist Alternative for Germany (AfD) and conservatives won. (The Greens claim the AfD are “climate change denialists.”)  The AfD is now the second largest party in terms of voter support in Hesse and the third largest in Bavaria. The online publication Energy Wire observed that the AfD platform featured concern for the flagging German economy, high energy prices, climate policy, the energy transition and immigration (in that order). More recently the Greens were the biggest losers in this May’s vote in the city state of Bremen. The Green’s 11.7% share of the vote was their poorest showing in 25 years.

Last year’s auction of UK government contracts for new offshore wind farms failed to receive a single bid. Under the auction scheme companies who purchased permits to build wind farms would receive a guaranteed premium price for the electricity they produced. The premium offered was too low to attract any interest. The Sunak government was simply not prepared to weather the consumer backlash that would accompany raising the guaranteed premium price high enough to attract bidders. Increasing the premium would require increasing electrical bills and/or taxes paid by British voters.

Melting glaciers are apparently not enough to convince some Europeans to open their wallets in support of achieving net zero. This applies even in the heart of the Alps in Switzerland. The 2020 Swiss referendum on a plan for achieving net zero GHG emissions by 2050 was soundly defeated. A significantly revised plan was later approved, but only after carbon taxes had been removed in favour of a carbon offset system and a number of other tax measures had been withdrawn. The Economist reported that one of the loudest lobby groups opposing the first referendum was the organization for Swiss resort and hotel owners. The carbon tax threatened to raise the cost of making artificial snow.

Europe’s Greens hoped to take a victory lap after recent increases in the number of solar power farms being built across Europe; especially in Germany. They have been woefully disappointed. Their promises about the thousands of new jobs that would be created by the transition to renewables proved empty and voters are not impressed. It turns out 95% of the solar systems installed in Europe are imported from Asia, mostly from China. With the exception of some local installation work, the lion’s share of the economic benefits and jobs go to Chinese firms.

No less embarrassing is the fact that one third of the essential components for Chinese solar systems are sourced from Xinjiang Province where manufacturers are known to be using forced labour. Members of the region’s Uyghur minority, who are being held prisoner in “reeducation camps,” provide the captive labour. Europe’s own solar panel producers are lobbying for relief in the form of trade restrictions on Chinese imports and/or EU subsidies. Solar system advocates in the west are between the proverbial rock and a hard place. To create the promised jobs will likely require stiff tariffs that will in turn increase the cost of solar energy and contribute to the public backlash over the already high cost of living.

Europe’s solar power dilemma echoes the French populist, Marine Le Pen’s, critique of global free trade: “Globalization is when slaves in China make things to sell to the unemployed in the west.” Le Pen came second in the last French presidential election. She has a shot at winning the next one which will be held three years from now. Le Pen is an EU skeptic who is unlikely to readily buy into its suite of exceedingly zealous GHG reduction targets and green transition policies; especially those relying heavily on foreign imports.

European auto makers have geared up their electric car production capabilities in anticipation of the EU ban on the manufacturing of new internal combustion passenger vehicles set for 2035. They are currently worried Chinese electric vehicle makers (EVs) are going to eat their lunch. The zippy little EVs made in China are far less expensive than European models. Chinese EV exports grew by 70% last year to just over $34 billion. As is the case with solar systems, the employment benefits associated with the transition to electric vehicles will be enjoyed in China not Europe. Apparently, European auto makers are frantically lobbying their governments to follow Joe Biden’s example and impose hefty tariffs on Chinese made EVs. If the car makers get their wish, jobs will be saved in Europe but the costs to European car buyers will be higher than they would be if they could buy Chinese autos. Europe’s EV problems involve the same sort of high costs versus jobs Catch 22 plaguing the EU’s solar system manufacturers. Whichever way things go, a lot of voters will be unhappy.

The growing list of failed and failing green transition initiatives is in part responsible for the surge in support for populist and conservative parties in Europe (Poland’s general election being a recent exception). And, most of Europe’s populist politicians are openly opposed to measures that increase taxes and the cost of living on behalf of combating climate change. The electoral success of the right-wing populist party, the Party for Freedom (Dutch: PVV) in the Netherlands’ November 2023 federal election is a case in point. The PVV is led by the infamous anti-immigration populist, Geert Wilders.

Wilders is not a climate change denier. He just doesn’t want to ruin the Dutch economy to combat it. Dutch environmentalists warn sea level rise caused by climate change warrants a significant reductions in GHG emissions; particularly in a country where 26% of the land is below sea level. Wilders’ solution is to just build the dikes higher.

The PVV won more seats than any other party in 2023 giving it the plurality but not a majority in the Dutch parliament. On May 16, four parties including the PVV and the Farmer-Citizen Movement (BBB) finally cobbled together a coalition government. Geert Wilders will become prime minister sometime this June. Obviously, neither the PVV or the BBB are fans of the EU’s climate change mitigation policies.

Closer to home, should Donald Trump win this November’s U.S. presidential election, progress toward net zero will virtually cease in the US for at least the next four years. And, in Canada, if current federal polling numbers hold up until Trudeau finally calls an election, we can expect the cancellation of a number of Liberal environmental initiatives; presumably, the No More Pipelines Bill and the carbon tax in particular.

The foregoing examples of recent setbacks, along with stories told by the tea leaves, indicate the road toward a green transition will be pitted with potholes and subject to roadblocks. Achieving net zero by 2050 is far from a slam dunk. Oil production is just as likely to prove far more robust than the environmental movement imagines.

Then again, if science figures out how to contain fusion reactions for extended periods of time in the next decade or so, all bets are off. Nobody knows for certain what the future holds when it comes to geopolitical conditions and energy production thirty to fifty years from today. The economist, John Maynard Keynes, claimed the only consolation for those foolishly trying accurately to predict events over the long run, was that “In the long run we are all dead.”

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Automotive

‘Save Our Cars’ Is A Winning Campaign Message In An Age Of EV Mandates

Published on

From the Daily Caller News Foundation

By KEVIN MOONEY

 

Automobile consumers who treasure the open roads during the summertime could upend the presidential campaign and U.S. Senate races in surprising places if public opposition to electric-vehicle mandates and other regulations continues to rise.

That is what some recent polls suggest and it certainly helps to explain why the Biden administration is poised to artificially reduce fuel prices by selling one million barrels of gasoline from an energy reserve in New England timed with the summer driving season and in anticipation of the November elections.

Since the East Coast consumed in excess of three million barrels a day of gasoline last June, it is not evident that having an additional one million barrels on the market will make an appreciable difference.

Moreover, there is an argument to be made that by tapping into the reserve Team Biden is leaving the region open to cyberattacks that would disrupt energy supplies. (Recall, that is precisely what happened throughout the southeast in 2021 when a ransomware attack hit the Colonial Pipeline.)

But even in the absence of any cyber drama, the cumulative effect of President Joe Biden’s anti-energy agenda is already registering with consumers who benefit from affordable, reliable energy. This is particularly true where conventional, gas-powered cars are concerned.

On holiday weekends, cars erase differences, bring families together and improve the quality of life. The American Automobile Association (AAA) predicts almost 50 million people will travel 50 miles or more from their homes to celebrate Independence Day over the weekend of June 30 to July 4.

This would represent an increase of 3.7% from 2021 bringing travel volumes to where they were prior to the COVID-19 pandemic in 2019. This increase will be particularly acute with AAA expecting 42 million Americans to hit the roads this coming Independence Day.

But what about those EV mandates?

President Biden and California Gov. Gavin Newsom, a fellow Democrat, remain undeterred by the paucity of charging stations, the limited range of EV’s, their exorbitant costs, and the vulnerability of foreign supply chains leading back to China as they press ahead with new regulatory initiatives. Biden’s Environmental Protection Agency finalized a tailpipe emissions rule in March aimed at coercing automakers into selling more EVs while the California Air Resources Board is pressing ahead with a “zero emissions” rule the board approved last year to meet Newsom’s stated climate goals.

California is clearly working hand in glove with the Biden administration to achieve zero emissions goals for vehicles by 2035. This effort will most certainly limit consumer choice and raise costs.

Despite all the subsidies and regulatory schemes developed to favor EV’s, they represent only about 1% of the 290 million vehicles in the U.S. today. Meanwhile EV costs continue to soar.

Recent studies also show that EVs, on average, are more expensive to own and operate than their gas-powered counterparts. So how should consumers respond to the regulatory onslaught?

Enter the “Save Our Cars Coalition,” which includes 31 national and state organizations devoted to preserving the ability of consumers to select the vehicles most suitable to their needs.

Tom Pyle, president of the Institute for Energy Research, a coalition member that favors free market energy policies, views cars as an integral component of American life. The Biden-Newsom regulations amount to what Pyle describes as “an assault on American freedom.”

“In a nation as expansive as the United States, cars are not merely vehicles, they are integral to the American way of life,” Pyle says. “They play a pivotal role in our daily lives, especially in suburban and rural settings. This modern-day prohibition would outlaw a product and a value–in this case, gasoline-powered cars and trucks that have created personal mobility on an unprecedented scale – that it cannot persuade people to forego themselves.”

The coalition is perfectly positioned to make EV mandates a campaign issue in areas where the affordability of cars capable of traversing long distances without frequent stops is very much on the minds of voters. State officials who continue to double-down on California-type regulations will only serve to bolster the coalition’s arguments.

By contrast, states that break free from California’s emissions standards could become surprisingly competitive in the presidential race. Virginia Gov. Glenn Youngkin, a Republican, recently announced that he would end California’s EV mandate in his state by the end of this year. Although Virginia hasn’t backed a Republican for president since George W. Bush was re-elected in 2004, polls show Biden and  Donald Trump are in a dead heat. The former, and perhaps future Republican president, is on record opposing Biden’s EV mandates.

By contrast, Gov. Phil Murphy of New Jersey, a Democrat elected in 2017 and re-elected in 2021, is moving full speed ahead with a California-type mandate requiring all new car sales to be electric by 2035. Polls show Murphy’s Jersey constituents are not keen on the policy change. In fact, more than half of state residents say they are not inclined to buy an electric car even with the mandates.

New Jersey has not voted for a Republican presidential candidate since George Bush Sr. won the state in 1988. But fresh polls show Biden leading Trump by just seven points in the Garden State. It is worth noting that New Jersey has a large block of unaffiliated voters that can be pliable in tight races such as the most recent gubernatorial campaign.

Murphy almost lost his re-election bid to Republican Jack Ciattarelli, a former assemblyman and businessman, who came within a few percentage points of pulling off an upset. Trump’s campaign rally in Wildwood, N.J., that attracted more than 100,000 people could also serve as a barometer for a potentially close election. A beach resort community, Wildwood is practically inaccessible without the kind of vehicles Biden and Newsom are attempting to ban.

The big prize though may be Pennsylvania where Trump is leading Biden in recent polls. There is also a competitive U.S. Senate race in that state between Sen. Robert Casey Jr., the Democratic incumbent, and Dave McCormick, the Republican challenger.

Polls show Casey is only ahead by six points. So far, Casey has been ducking and avoiding any questions about his position on EV mandates. With Trump already leading, and McCormick gaining in the Keystone State, anyone running on a platform of “Save Our Cars” could have a field day.

Kevin Mooney is the Senior Investigative Reporter at the Commonwealth Foundation’s free-market think tank and writes for several national publications. Twitter: @KevinMooneyDC

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Energy

Industry groups sue over Biden regulation requiring electric school buses, trucks

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From The Center Square

By

A coalition of industry groups have filed a lawsuit challenging a Biden administration rule.

A dozen groups joined together to sue the Environmental Protection Agency for the Biden administration’s new rule, finalized earlier this year, which requires model 2027 trucks to meet strict emissions standards that critics say are meant to push out diesel and gas vehicles and to replace them with electric vehicles.

The EPA’s “Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3” is the rule in question.

“The new standards will be applicable to HD vocational vehicles (such as delivery trucks, refuse haulers, public utility trucks, transit, shuttle, school buses, etc.) and tractors (such as day cabs and sleeper cabs on tractor-trailer trucks),” EPA said.

Critics argue the rules are so strict that the only option will be to go electric, part of a nationwide effort by the Biden administration to push Americans into electric vehicles. However, currently the electric grid could not handle a wholesale transition of to electric vehicles, posing a major infrastructure problem.

Notably, as The Center Square previously reported, a coalition of 19 states filed a complaint with the Federal Energy Regulatory Commission (FERC) Tuesday to challenge a recent federal rule giving the federal government broad power over the electric grid.

“FERC has never been granted the authority to revamp the structure of state energy grids or force states and their ratepayers to subsidize large-scale transmission lines that don’t transport enough energy to justify the cost,” the states argue. “This encroachment upon state authority far exceeds FERC’s limited purview and damages the ability of states to regulate their electric grids efficiently, all in the name of advancing costly climate goals.”

The American Fuel & Petrochemical Manufacturers is one of the groups that joined to protest the Biden EPA rule. They argue the EPA overstepped its authority and that it will spike costs for Americans.

“The Heavy Duty Vehicle (HDV) regulation finalized this spring aims to phase out trucks that run on American-made, American-grown diesel, biodiesel, renewable diesel and renewable natural gas,” Rich Moskowitz, AFPM General Counsel, said in a statement. “Americans will pay dearly because of it.”

Moskowitz said the federal government cannot enact such a drastic change without explicit direction from Congress.

“This policy will increase costs for consumers, dramatically strain the U.S. electric grid, contribute to more traffic and congestion on roads, undermine our energy independence, and impact every sector of the U.S. economy,” he said.

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