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Daily Caller

The Silly Peak Oil Debate Rages On

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From the Daily Caller News Foundation 

 

By David Blackmon

“What the Outlook underscores is that the fantasy of phasing out oil and gas bears no relation to fact,” said OPEC Secretary General Haitham Al Ghais

Analysts and professionals in the global energy space have long debated the prospects for reaching peak demand for crude oil. It is an issue that has long sparked debate, some of which becomes emotional among highly invested stakeholders on one side or the other.

In recent years, such stakeholders risk developing cases of whiplash when considering the competing perspectives about this “peak oil” matter published by OPEC and the International Energy Agency (IEA).

IEA has spent the last 12 months predicting an earlier advent of the peak oil phenomenon than pretty much any other experts envision, saying it will come about sometime in this decade, no later than 2030. Not surprisingly, the agency’s analysts doubled down on that projection in its most recent monthly Oil Market Report.

In a section titled “When the Music Stops,” the IEA focused on short-term factors like slowing demand growth in China, where oil consumption has declined year-over-year for the past four months. Noting that Chinese demand growth has slowed to an estimated 180,000 barrels per day (bpd) across 2024, the agency leaned on that data point as a reason to lower its estimated global demand growth to 800,000 bpd.

The same section also pointed to the isolated slowing of U.S. gasoline-deliveries growth in June — a factoid that could simply be statistical noise — as support for its annual growth forecast. But a slowdown in crude demand growth is no surprise, given that economic growth has been slowing throughout 2024. This direct cause-and-effect phenomenon has been a consistent aspect of oil markets across history. It is also a short-term factor whose impact will ultimately be diminished by subsequent events.

In contrast, OPEC’s projections over the past year regarding near-term global demand growth and the anticipated peak in oil demand have reached diametrically opposite conclusions. Last summer, the cartel projected global growth in crude demand for 2024 would be a robust 2.25 million bpd. Slowing economic growth has led OPEC’s analysts to lower that initial prediction over the past two months, but only to 2.1 million bpd — more than double that of both IEA and the U.S. Energy Information Administration (EIA).

Where the concept of peak oil demand is concerned, OPEC has held to an even more oil-bullish stance, stating its projections do not see that threshold being reached anytime during its projection timeframe through 2050. In its annual Global Outlook published last week, OPEC sees oil demand growing by that year to 120 million bpd, a rise of 18 million bpd from current levels.

“What the Outlook underscores is that the fantasy of phasing out oil and gas bears no relation to fact,” said OPEC Secretary General Haitham Al Ghais in the forward to the report.

Al Ghais also pointed out the fact that: “Over the past year, there has been further recognition that the world can only phase in new energy sources at scale when they are genuinely ready, economically competitive, acceptable to consumers and with the right infrastructure in place.” This undeniable reality means that projections of oil demand in the transportation sector being crushed by alternatives like EVs and hydrogen cars are almost certainly overly optimistic. The rapidly faltering market demand for EVs strongly supports that likelihood.

Al Ghais also contends that a “realistic view of demand growth expectations necessitates adequate investments in oil and gas, today, tomorrow, and for many decades into the future.” That contention stands in contrast to the IEA report released in May, 2021, in which IEA Director Fatih Birol urged an immediate halt in all new investments in the finding and development of new oil resources in order to fight climate change. By August of that year, Biral was comically urging oil companies to increase their oil production in order to help re-balance an undersupplied global market.

Episodes like that have led many to question whether IEA bases its projections related to oil markets on data or on wishful thinking. The validity of such questions was only reinforced when Birol announced early this year that the agency’s mission was being expanded into outright advocacy for promoting the energy transition.

So, who is right? We’ll find out in 2030, but the smart money is on the group with billions riding on the answer.

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.

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Artificial Intelligence

Trump’s New AI Focused ‘Manhattan Project’ Adds Pressure To Grid

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From the Daily Caller News Foundation

By David Blackmon

Will America’s electricity grid make it through the impending winter of 2025-26 without suffering major blackouts? It’s a legitimate question to ask given the dearth of adequate dispatchable baseload that now exists on a majority of the major regional grids according to a new report from the North American Electric Reliability Corporation (NERC).

In its report, NERC expresses particular concern for the Texas grid operated by the Electric Reliability Council of Texas (ERCOT), where a rapid buildout of new, energy hogging AI datacenters and major industrial users is creating a rapid increase in electricity demand. “Strong load growth from new data centers and other large industrial end users is driving higher winter electricity demand forecasts and contributing to continued risk of supply shortfalls,” NERC notes.

Texas, remember, lost 300 souls in February 2021 when Winter Storm Uri put the state in a deep freeze for a week. The freezing temperatures combined with snowy and icy conditions first caused the state’s wind and solar fleets to fail. When ERCOT implemented rolling blackouts, they denied electricity to some of the state’s natural gas transmission infrastructure, causing it to freeze up, which in turn caused a significant percentage of natural gas power plants to fall offline. Because the state had already shut down so much of its once formidable fleet of coal-fired plants and hasn’t opened a new nuclear plant since the mid-1980s, a disastrous major blackout that lingered for days resulted.

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To their credit, Republican Texas Gov. Greg Abbott, the legislature, ERCOT, and other state agencies have invoked major reforms to the system designed to prevent this scenario from happening again over the last four years. But, as NERC notes, the state remains dangerously short of dispatchable thermal capacity needed to keep the grid up and running when wind and solar inevitably drop off the system in such a storm. And ERCOT isn’t alone: Several other regional grids are in the same boat.

This country’s power generation sector can either get serious about building out the needed new thermal capacity or disaster will inevitably result again, because demand isn’t going to stop rising anytime soon. In fact, the already rapid expansion of the AI datacenter industry is certain to accelerate in the wake of President Trump’s approval on Monday of the Genesis Mission, a plan to create another Manhattan Project-style partnership between the government and private industry focused on AI.

It’s an incredibly complex vision, but what the Genesis Mission boils down to is an effort to build an “integrated AI platform” consisting of all federal scientific datasets to which selected AI development projects will be provided access. The concept is to build what amounts to a national brain to help accelerate U.S. AI development and enable America to remain ahead of China in the global AI arm’s race.

So, every dataset that is currently siloed within DOE, NASA, NSF, Census Bureau, NIH, USDA, FDA, etc. will be melded into a single dataset to try to produce a sort of quantum leap in AI development. Put simply, most AI tools currently exist in a phase of their development in which they function as little more than accelerated, advanced search tools – basically, they’re in the fourth grade of their education path on the way to obtaining their doctorate’s degree. This is an effort to invoke a quantum leap among those selected tools, enabling them to figuratively skip eight grades and become college freshmen.

Here’s how the order signed Monday by President Trump puts it: “The Genesis Mission will dramatically accelerate scientific discovery, strengthen national security, secure energy dominance, enhance workforce productivity, and multiply the return on taxpayer investment into research and development, thereby furthering America’s technological dominance and global strategic leadership.”

It’s an ambitious goal that attempts to exploit some of the same central planning techniques China is able to use to its own advantage.

But here’s the thing: Every element envisioned in the Genesis Mission will require more electricity: Much more, in fact. It’s a brave new world that will place a huge amount of added pressure on power generation companies and grid managers like ERCOT. Americans must hope and pray they’re up to the task. Their track records in this century do not inspire confidence.

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.

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Daily Caller

EXCLUSIVE: Here’s An Inside Look At The UN’s Disastrous Climate Conference

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From the Daily Caller News Foundation

By Audrey Streb

The United Nations’ annual climate conference concluded Saturday, and some critics in attendance told the Daily Caller News Foundation that it was a chaotic affair.

After Thursday’s fire forced an evacuation and temporarily halted the talks, COP30 was prolonged by an extra day. Corporate media outlets and green groups critiqued the final agreement reached on Saturday, arguing that it did not do enough to restrict carbon emissions. The environmental groups claimed the resolution departed from COP28’s declaration which called for an end to fossil fuels.

Hosted in Belém, Brazil, COP30 provoked backlash after developers razed the Amazon rainforest ahead of the climate talks and China worked to seize the spotlight in America’s absence. Craig Rucker, co-founder and president of the conservative nonprofit known as the Committee for a Constructive Tomorrow,(CFACT) told the DCNF that this year’s UN climate talks were especially chaotic and disorganized.

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“I’ve been to 27 of the 30 conferences. … What you see on the ground is just how chaotic it’s gotten. There was a certain chaos in the past, but this was particularly disorganized because they picked a venue that I think was unsuited for all the delegates that were coming in,” Rucker told the DCNF in an interview. “They wanted to emphasize the rainforest, yet hypocritically, they’re chopping them down to accommodate delegates flying in on private jets.”

The UN did not respond to the DCNF’S request for comment.

Rucker and Marc Morano, who publishes CFACT’s ClimateDepot.comventured into the Amazon rainforest to investigate the four-lane highway initially reported by BBC in March. Rucker told the DCNF that Brazil was “still cutting and burning. We heard the chainsaws ourselves, and this is something they [the Brazilian state] try to keep [quiet].”

The highway, known as Avenida Liberdade, was shelved multiple times in the past due to environmental concerns but revived as part of a broader push to modernize Belém ahead of COP30, according to the outlet. State officials say the development efforts will leave a lasting legacy, including an expanded airport, new hotels and an ungraded port to accommodate cruise ships.

The Brazilian state denied that the highway was built for the climate conference, noting that plans for the road were underway as early as 2020 — well before Brazil was selected to host COP30, Reuters reported in March.

President Donald Trump sharply criticized the conference for deforesting portions of the Amazon to ease travel for environmentalist attendees. The U.S. did not send an official delegation this year.

Democratic California Gov. Gavin Newsom and Democratic Rhode Island Sen. Sheldon Whitehouse attended the talks, where they denounced the Trump administration’s energy policies and absence.

A top United Nations official reportedly directed Brazilian authorities to address concerns including leaky light fixtures, sweltering heat and lackluster security at the conference, according to Bloomberg News. Days later, the fire broke out.

Morano also documented water pouring from vents, and Rucker told the DCNF that attendees were not allowed to flush toilet paper as the venue “didn’t have a septic system.”

Rucker also recalled what he described as elitism, noting that delegates were in the “blue zone” while other attendees and indigenous groups were relegated to the “green zone.”

“The blue zone is where the official delegates go, the people that are from Spain, Portugal, Brazil. … And these are the people that make the decisions,” Rucker said. “The indigenous people, they say, don’t have a voice allowed in there. That’s partially why they crashed it.”

Though COP30 did host several events featuring indigenous voices, some native groups stormed the COP30 venue the first week, demanding their voice be heard by the UN.

Rucker told the DCNF that China seemed to have become a “new leader” on the environmentalism and green energy front at the climate conference, though the oriental nation is “pumping out with two coal plants per week.”

Recent media reports have hailed China as a giant in building out “renewables,” though China is far from dependent on intermittent resources like solar and wind as it also churns out new coal plants and is the world’s top emitter.

“They genuinely looked at China as the world leader on climate change,” Rucker noted, branding it as “totally bizarre.”

Rucker recalled that upon the entrance of the “blue zone,” there was a “very impressive Chinese booth.”

Additionally, a statue demeaning Trump stood outside COP30, according to Reuters, as well as a horned jaguar-dragon hybrid statue with its hands gripping the globe. The fanged construction purportedly represented China and Brazil partnering to protect the rainforest.

“The statues are purely political statements: one symbolizes how communism is alive and well in Brazil and China, and the other is a misguided attempt to shame or critique Trump,” Director of the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute Sterling Burnett told the DCNF. “Trump’s promotion of fossil-fuel development and broader use — especially encouraging developing countries to tap into affordable energy — will do more to help children in poor countries than all the climate agreements and green energy scams combined.”

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