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Energy wise, how do you even describe 2024?

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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.

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Automotive

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

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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

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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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