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Energy

Tech giants’ self-made AI energy crisis

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9 minute read

For years tech giants have been helping climate catastrophists shut down reliable fossil fuel electricity. Now the grid they’ve helped gut cannot possibly supply their growing AI needs.

For years tech giants have been helping climate catastrophists shut down reliable fossil fuel electricity, falsely claiming they can be replaced by solar/wind.

Now the grid they’ve helped gut can’t supply their growing AI needs.¹

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  • For the last decade, tech giants such as Apple, Microsoft, Meta, and Google have, through dedicated anti-fossil-fuel propaganda and political efforts, promoted the shutdown of reliable fossil fuel power plants in favor of unreliable solar and wind.
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  • Tech giants have propagandized against reliable fossil fuel power plants by falsely claiming to be “100% renewable” and implying everyone could do it. In fact, they have just paid utilities to credit them for others’ solar and wind use and blame others for their coal and gas use.²
  • In addition to their “100% renewable” propaganda, tech giants directly endorsed people and policies who shut down reliable fossil fuel power plants.E.g., The RE100 coalition, including Google, Apple, Meta, and Microsoft, advocates for policies to “accelerate change towards zero carbon grids at scale by 2040.”³
  • Companies’ propaganda that solar/wind could rapidly replace fossil fuels has proven false. 

    Statewide blackouts in California (2020) and Texas (2021) were caused by the failure of solar/wind—which can go near zero at any time—to make up for lack of reliable fossil fuel capacity.

  • Thanks in significant part to tech giants’ advocacy, we have now shut down enough reliable power plants to be in a nationwide electricity crisis. 

    For example, most of North America is at elevated/high risk of electricity shortfalls between 2024-2028.⁴

  • The anti-fossil-fuel, pro-unreliable solar and wind political climate that tech giants have fostered is getting much worse, as the Administration has pledged to further reduce reliable electricity supply via power plant shutdowns and add artificial demand through EV mandates.

    Biden’s EV mandate: a dictatorial attack on the American driver and the US grid

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    APR 22
    Biden's EV mandate: a dictatorial attack on the American driver and the US grid
     

    Biden’s de facto mandate of over 50% EVs by 2032 is a dictatorial attack on the American driver and the US grid that will 1. Force Americans to drive inferior cars. 2. Place massive new demand for reliable electricity on a grid that is declining in reliable electricity supply.

     

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  • While for years tech giants didn’t seem to have any concern about the electricity supply disaster their propaganda and policies were bringing about, they are now very interested because of the accelerating power requirements of computing, above all the hyper-competitive AI space.
  • To function at its potential, AI requires massive amounts of power. E.g., state-of-the-art data centers can require as much electricity as a large nuclear reactor.⁵
  • Electricity demand from US data centers already doubled between 2014 and 2023. Now with the fast growth of energy-hungry AI, demand from data centers could triple from 2.5% to 7.5% of our electricity use by 2030, according to Boston Consulting Group.⁶
  • In large part due to AI, nationwide electricity demand is projected to skyrocket. Official 10-year projections for the US have summer and winter peak demand rising by over 79 gigawatt and over 90 gigawatt. 90 gigawatt is equivalent to adding the entire power generating capacity of California (!)⁷
  • Given the woeful underpowered grid that AI giants have helped bring about, dramatically rising demand from AI will not only contribute to massive electricity shortages, but it will also destroy a lot of potential for AI to occur in the United States.
  • Limited and expensive electricity will force data centers to operate with higher cost or lower capacity within the US—or take a performance hit in the form of increased latency (which can drastically reduce the value of the product) by moving offshore.
  • Not only is offshoring data centers destructive from an economic standpoint, it also poses a substantial security risk. E.g., Building a data center in China—which we already depend on dangerously for critical minerals—gives the CCP physical power over more parts of our economy.
  • Economically, data centers are a gold mine of opportunities.Globally, data centers employed 2M people full-time in 2019, many in high-skill/high-pay jobs—and this number is forecast to increase nearly 300K by 2025.

    Our gutted grid will cost many Americans these opportunities.⁸

  • In the face of woefully inadequate electricity supply for their AI goals, tech giant CEOs are finally speaking up about the lack of power. 

    E.g., Meta CEO Mark Zuckerberg said in an interview that energy will be the #1 bottleneck to AI progress.

  • It is not enough for tech giants to warn us about the lack of reliable power. They need to take responsibility for their anti-fossil-fuel advocacy that helped caused it. And they need to support energy freedom policies that allow all fuels to compete to provide reliable power. 

    End preferences for unreliable electricity

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    DECEMBER 14, 2022
    End preferences for unreliable electricity
     

    Today’s grids are being ruined by systemic preferences for unreliable electricity: 1) no price penalty for being unreliable 2) huge subsidies for unreliables 3) mandates for unreliables Congress should end these now. The Opportunity America, given its combination of abundant domestic energy resources, technological ingenuity, and free-market competition, has …

     

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  • An example of a tech giant influencer not taking any responsibility for causing the electricity crisis is BlackRock CEO Larry Fink, who pushed companies and governments to adopt “net-zero” policies using mostly solar/wind, but now admits they can’t power AI data centers!
  • A better attitude toward electricity was expressed by OpenAI CEO Sam Altman: “There will always be people who wait and sit around and say ‘we shouldn’t do AI because we may burn a little more carbon’… the anti-progress streak” and this “is something that we can all fight against.”⁹
  • America faces a choice. We can either continue our current trajectory, descend into a Third World grid, and become totally inhospitable for AI, or we can adopt energy freedom policies and become a world leader in both AI and electricity.
  • Share this article with tech giant CEOs and tell them to publicly apologize for damaging our grid and to commit to energy freedom policies.Google: @sundarpichai ([email protected])
    Apple: @tim_cook ([email protected])
    Meta: @finkd ([email protected])
    Microsoft: @satyanadella ([email protected])

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Michelle Hung contributed to this piece.

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“Energy Talking Points by Alex Epstein” is my free Substack newsletter designed to give as many people as possible access to concise, powerful, well-referenced talking points on the latest energy, environmental, and climate issues from a pro-human, pro-energy perspective.

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.

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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.

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