The 7 most important truths about our energy future

At Jordan Peterson’s ARC (Alliance for Responsible Citizenship) conference I was asked to share the most important truths about our energy future.

I boiled it down to 7. Understand these and you’ll be a better thinker than 97% of energy or climate “experts.”

GIM 7 most important truths

Energy Truth 1

To decide what to do about fossil fuels and other forms of energy, we must carefully weigh their benefits and side-effects.

When evaluating what to do about a product or technology—e.g., a prescription drug—we need to carefully weigh the benefits and side-effects of our alternatives.
But most “experts” just focus on fossil fuels’ negative climate side-effects.
It is particularly crucial to weigh any negative climate side-effects of continuing fossil fuel use against the climate mastery benefits that come with them, as those benefits can neutralize or overwhelm negatives.
E.g., more energy powering heating and cooling, irrigation, building, etc.
Example of fossil-fueled climate mastery overwhelming negative impacts: drought.
Any contribution of rising CO2 to drought has been overwhelmed by fossil-fueled irrigation and crop transport, which have helped reduce drought deaths by over 100 times over 100 years as CO2 levels have risen.¹

Energy Truth 2

Fossil fuels for the foreseeable future will remain a uniquely cost-effective (affordable, reliable, versatile) and scalable source of energy.

Myth: There are no real benefits of continuing fossil fuel use because it can be rapidly replaced by mostly solar and wind.
Truth: Fossil fuels are and for decades will remain uniquely cost-effective: affordable, reliable, versatile—on a scale of billions of people in thousands of places.
Myth: Fossil fuels are being rapidly replaced in an “energy transition” to solar and wind.
Truth: Fossil fuel use is 80% of the world’s energy and still growing despite 100+ years of aggressive competition and 20+ years of political hostility and massive solar and wind favoritism.²
Myth: Fossil fuel use will soon rapidly decline because countries know “green” energy will be cheaper.
Truth: Countries that care most about cheap energy are pro-fossil fuels.

E.g., China, which uses mostly coal to produce “green” tech, has over 300 planned new coal plants designed to last over 40 years.³
Myth: Solar and wind are growing fast by outcompeting fossil fuels with superior economics.
Truth: Solar and wind are growing fast only when given massive government preferences—mandates, subsidies, and no penalty for unreliability—along with crippling government punishments of fossil fuels.
Myth: Solar and wind are now cheaper than fossil fuels.
Truth: For the overwhelming majority of the world’s energy needs, solar and wind either can’t do what fossil fuel can—e.g., non-electricity energy uses such as airplanes or cargo ships—or are far more expensive.⁴
Myth: Solar and wind electricity is getting so cheap that it will lead to rapid electrification of the 4/5ths of today’s energy that is not electricity.
Truth: When you factor in full cost of the 24/7 life support that unreliable solar and wind electricity need, they are far more expensive.⁵
Fossil fuels are uniquely able to provide energy that’s low-cost, reliable, and versatile on a scale of billions of people. This is due to fossil fuels’ combination of remarkable attributes—fossil fuels are naturally stored, concentrated, and abundant energy—and generations of innovation by industry.
There is currently only one energy technology that can match (actually exceed) fossil fuels’ combination of naturally stored, concentrated, abundant energy: nuclear. Nuclear may one day outcompete all uses of fossil fuels, but this will take radical policy reform and generations of innovation and work.

Energy Truth 3

The more cost-effective and scalable energy is, the more human beings can flourish on this naturally deficient and dangerous planet.

Myth: The Earth will be a highly livable place—stable, sufficient in resources, and safe—as long as we don’t impact it too much.
Truth: Earth is very inhospitable—dynamic, deficient, dangerous—unless we have the productive ability to transform and impact it to be abundant and safe.
The more energy is cost-effective—affordable, reliable, versatile—and scalable to billions of people in thousands of places, the more people can use machines to produce the values they need to flourish on this naturally deficient and dangerous planet.
Thanks to today’s unprecedented availability of cost-effective energy (mostly fossil fuel) the world has never been a better place for human life. Life expectancy and income have been skyrocketing, with extreme poverty (<$2/day) plummeting from 42% in 1980 to <10% today.⁶

Energy Truth 4

Given that the vast majority of the world is energy-poor, the world needs far more energy as quickly as possible.

The world needs much more energy.
Billions of people lack the cost-effective energy they need to flourish. 3 billion use less electricity than a typical American refrigerator. 1/3 of the world uses wood or dung for heating and cooking. Much more energy is needed.⁷
Myth: Poor countries will “leapfrog” fossil fuels and go right to solar and wind.
Truth: No rich country has been able to abandon fossil fuels even at huge cost, while every dramatic increase in wealth has involved fossil fuels: Japan, Singapore, South Korea, China, etc.

Poor countries are not guinea pigs.
The desperate lack of life-giving, cost-effective energy means that any replacement for fossil fuels must not only provide energy to the 2 billion who use significant amounts of energy today but to the 6 billion who use far less. Rapidly eliminating fossil fuels would be mass murder.
Summary: Fossil fuels are a near-term irreplaceable source of the scalable energy humans need to flourish.
With fossil fuels billions more people can have the opportunity to flourish. Without them, billions of energy-starved people plunge into poverty and early death.

Energy Truth 5

Any negative climate side-effects of our massive fossil fuel use so far have been completely overwhelmed by their climate mastery benefits—as evidenced by the 98% decline in climate disaster deaths over the last 100 years.

Myth: We are more endangered than ever by climate because of fossil fuels’ CO2 emissions.
Truth: We have a 98% decline in climate disaster deaths due to our enormous fossil-fueled climate mastery abilities: heating and cooling, infrastructure-building, irrigation, crop transport.⁸
Myth: Even if climate-related disaster deaths are down, climate-related damages are way up, pointing to a bankrupting climate future.
Truth: Even though there are many incentives for climate damages to go up—preferences for riskier areas, government bailouts—GDP-adjusted damages are flat.⁹

Energy Truth 6

Mainstream climate science predicts levels of warming and associated climate changes that human beings can continue to master and flourish with.

Myth: Even if we’re safe from climate now, we can expect future emissions to lead to disaster.
Truth: Since today’s unprecedented safety exists after 100+ years of rising CO2, and with 1° C warming, we should be skeptical that further CO2 rises will somehow overwhelm us.
Climate mastery is so powerful that for CO2 emissions to be apocalyptic enough to justify rapid fossil fuel restriction, let alone elimination, they’d need to have unprecedented impacts like:
- Seas rising feet per decade
- Storms becoming 2 times more powerful
Science shows nothing like this.
Myth: Future warming is ominous because heat-related death is already such a catastrophic problem.
Truth: Even though Earth has gotten 1°C warmer, far more people still die from cold than heat (even in India)! Near-term warming is expected to decrease temperature-related mortality.¹⁰
Myth: Future warming is ominous because it will be worst in hot areas.
Truth: The mainstream view in climate science is that more warming will be concentrated in colder places (Northern latitudes) and at colder times (nighttime) and during colder seasons (winter). Good news.¹¹
Myth: Future warming will accelerate as CO2 levels rise.
Truth: Mainstream science is unanimous that the “greenhouse effect” is a diminishing effect, with additional CO2 leading to less warning.

Even IPCC’s most extreme, far-fetched scenarios show warming leveling off.¹²
Myth: We face catastrophically rapid sea level rises, which will destroy and submerge coastal cities.
Truth: Extreme UN sea level rise projections are just 3 feet in 100 years. Future generations can master that. (We already have 100 million people living below high tide sea level.)¹³
Myth: Hurricane intensity is expected to get catastrophically higher as temperatures rise.
Truth: Mainstream estimates say hurricanes will be less frequent and between 1-10% more intense at 2° C warming. This is not at all catastrophic if we continue our fossil-fueled climate mastery.¹⁴
Myth: We face catastrophic increases in dangerous wildfires, an “Earth on fire.”
While the media increasingly reports on fires and draws connections to warming, the world burns less than 20 years ago and far less than 100 years ago. Fire danger primarily depends on human mastery.¹⁵
Summary: Continuing fossil fuel use will lead to levels of warming and other changes that we can master and flourish with.
Policy implications
- Energy freedom —> CO2 levels rise, life continues to get better and better
- Net zero —> CO2 levels rise more slowly, billions of lives ruined

Energy Truth 7

A policy of energy freedom, including but not limited to fossil fuel freedom, is the fastest path both to more plentiful energy and to more cost-effective alternatives.

What are “energy freedom policies”?
Government actions to protect the ability of producers to produce all forms of energy and consumers to use all forms of energy, so long as they don’t engage in reasonably preventable pollution or endangerment of others.
Energy freedom policies include:
- Protecting the freedom to develop fossil fuels and other forms of energy. E.g., deep geothermal development.
- Protecting the freedom to use fossil fuels and all other forms of energy. E.g., “decriminalizing nuclear.”
Energy freedom policies are more likely to lead to long-term emissions reductions.
Because they accelerate the rate at which nuclear and other alternatives become globally cost-competitive. (The only moral and practical way to reduce global emissions.)¹⁶
Fact: The 2 biggest instances of CO2 reduction have come from energy freedom policies:
- Nuclear: Freedom led to cost-effective and scalable nuclear power until the “green” movement virtually criminalized it.
- Gas: Freedom led to significant substitution of gas vs. coal.
“Net zero by 2050,” by failing to recognize the unique benefits of fossil fuels, is catastrophic when barely implemented and would be apocalyptic if fully implemented.
Energy freedom gives billions more people the energy they need to flourish and unleashes truly cost-effective alternatives.

References

UC San Diego – The Keeling Curve
For every million people on earth, annual deaths from climate-related causes (extreme temperature, drought, flood, storms, wildfires) declined 98%–from an average of 247 per year during the 1920s to 2.5 per year during the 2010s.

Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).

Population estimates for the 1920s from the Maddison Database 2010, the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, the population is assumed to have grown at a steady rate.

Population estimates for the 2010s come from World Bank Data.

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Energy Institute – Statistical Review of World Energy
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As of July 2023, China has over 300 new coal-fired power stations in various planning and construction phases. Global Energy Monitor – Coal Plant Tracker, Coal Plants by Country (Power Stations)
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Alex Epstein – The ultimate debunking of “solar and wind are cheaper than fossil fuels.”
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U.S. Energy Information Administration – Hourly Electric Grid Monitor
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World Bank Data – Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population)
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IEA – Access to affordable, reliable, sustainable and modern energy for all
Robert Bryce – A Question of Power: Electricity and the Wealth of Nations

↩
UC San Diego – The Keeling Curve
For every million people on earth, annual deaths from climate-related causes (extreme temperature, drought, flood, storms, wildfires) declined 98%–from an average of 247 per year during the 1920s to 2.5 per year during the 2010s.

Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).

Population estimates for the 1920s from the Maddison Database 2010, the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, the population is assumed to have grown at a steady rate.

Population estimates for the 2010s come from World Bank Data.

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Roger Pielke Jr. – Weather and Climate Disaster Losses So Far in 2022, Still Not Getting Worse
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Zhao et al. (2021)
Bjorn Lomborg – Climate Change Saves More Lives Than You’d Think

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NOAA – Climate change rule of thumb: cold “things” warming faster than warm things
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IPCC AR6, WG1, chapter 4
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IPCC AR6, WG1
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NOAA – Global Warming and Hurricanes
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Roger Pielke Jr. – What the media won’t tell you about … Wildfires
↩
Reuters – Analysis: China no closer to peak coal despite record renewable capacity additions
Reuters – India rejects net zero carbon emissions target, says pathway more important

Alex Epstein – A pro-human, pro-freedom policy for CO2 emissions

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Related Topics:#7MostImportantTruthsAboutEnergyFuture #AlexEpstein #EnergyTalkingPoints

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Alberta

Official statement from Premier Danielle Smith and Energy Minister Brian Jean on the start-up of the Trans Mountain Pipeline

Published on May 1, 2024

Government of Alberta

Alberta is celebrating an important achievement for the energy industry – the start-up of the twinned Trans Mountain pipeline. It’s great news Albertans and Canadians as this will welcome a new era of prosperity and economic growth. The completion of TMX is monumental for Alberta, since this will significantly increase our province’s output. It will triple the capacity of the original pipeline to now carry 890,000 barrels per day of crude oil from Alberta’s oil sands to British Columbia’s Pacific Coast.

We are excited that Canada’s biggest and newest oil pipeline in more than a decade, can now bring oil from Edmonton to tide water in B.C. This will allow us to get our energy resources to Pacific markets, including Washington State and California, and Asian markets like Japan, South Korea, China, and India. Alberta now has new energy customers and tankers with Alberta oil will be unloading in China and India in the next few months.

For Alberta this is a game-changer, the world needs more reliably and sustainably sourced Alberta energy, not less. World demand for oil and gas resources will continue in the decades ahead and the new pipeline expansion will give us the opportunity to meet global energy demands and increase North American and global energy security and help remove the issues of energy poverty in other parts of the world.

Analysts are predicting the price differential on Canadian crude oil will narrow resulting in many millions of extra government revenues, which will help fund important programs like health, education, and social services – the things Albertans rely on. TMX will also result in billions of dollars of economic prosperity for Albertans, Indigenous communities and Canadians and create well-paying jobs throughout Canada.

Our province wants to congratulate the Trans Mountain Corporation for its tenacity to have completed this long awaited and much needed energy infrastructure, and to thank the more than 30,000 dedicated, skilled workers whose efforts made this extraordinary project a reality. The province also wants to thank the Federal Government for seeing this project through. This is a great example of an area where the provincial and federal government can cooperate and work together for the benefit of Albertans and all Canadians.

Canadian Energy Centre

North America LNG project cost competitiveness

Published on May 1, 2024

Todayville

Construction workers look on at the FortisBC Tilbury LNG expansion project in Delta, B.C., Monday, Nov. 16, 2015. CP Images photo

From the Canadian Energy Centre

By Ven Venkatachalam

Lower costs for natural gas, shipping and liquefaction give Canada an edge in the emerging global LNG market

Worldwide concerns about energy security have put a renewed focus on the international liquefied natural gas (LNG) industry. The global demand for LNG is expected to increase over the next few decades.

Global demand growth will be driven primarily by Asian markets where the need for LNG is expected to increase from 277 million tonnes (MT) in 2025 to 509 MT by 2050 (see Figure 1). By 2050 the demand for LNG in Europe will be 83 MT and in Africa 20 MT. In South America too, demand will increase – from 13 MT in 2025 to 31 MT in 2050.

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.

In North America (Canada, Mexico, and United States) a number of LNG projects that are either under construction or in the planning stages will benefit from the rise in global LNG demand.

North American LNG production is expected to grow from 112 MT in 2025 to over 255 MT by 2050 (see Figure 2). In Canada, the LNG projects under construction or in the planning stages include LNG Canada Phases 1 & 2, Woodfibre LNG, Cedar LNG, the Tilbury LNG expansion, and Ksi Lisims LNG. Canada’s LNG production is expected to grow from just 2 MT in 2025 to over 43 MT by 2050. In the United States production is projected to increase from 108 MT in 2025 to 210 MT in 2050.

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.

This CEC Fact Sheet uses Rystad Energy’s Gas and LNG Markets Solution¹ to benchmark the cost competitiveness of LNG projects that are under construction and proposed in Canada compared to other LNG projects under construction and planned elsewhere in North America. (Note that the content of this report does not represent the views of Rystad Energy.)

The LNG cost competitiveness benchmarking analysis used the following performance metrics:

LNG plant free-on-board (FOB) cost break-even;
Total LNG plant cost (for delivery into Asia and Europe).

The objective of this LNG cost competitiveness benchmarking is to compare the competitiveness of Canadian LNG projects against those of major competitors in the United States and Mexico. The selection of other North American LNG facilities for the benchmark comparison with Canadian LNG projects (LNG Canada, the Tilbury LNG Expansion, Woodfibre LNG, Cedar LNG, and Ksi Lisims LNG) is based on the rationale that virtually all Canadian LNG plants are under construction or in the planning stage and that they compare well with other North American LNG plants that are also under construction or are being planned between 2023 and 2050. Further, to assess the cost competitiveness of the various LNG projects more accurately, we chose only North American LNG facilities with sufficient economic data to enable such a comparison. We compared the cost competitiveness of LNG coming from these other North American projects with LNG coming from Canada that is intended to be delivered to markets in Asia and Europe.

1. Rystad Energy is an independent energy research company providing data, analytics, and consultancy services to clients around the globe. Its Gas and LNG Markets Solution provides an overview of LNG markets worldwide. The Solution covers the entire value chain associated with gas and LNG production, country and sector-level demand, and LNG trade flows, infrastructure, economics, costs, and contracts through 2050. It allows for the evaluation of the entire LNG market infrastructure, including future planned projects, as well as the benchmarking of costs for LNG projects (Rystad Energy, 2024).

Comparison of LNG project FOB cost break-even (full cycle)

Figure 3 provides a comparison of the free-on-board (FOB) cost break-even for LNG facilities under construction or being planned in North America. FOB break-even costs include upstream and midstream costs for LNG excluding transportation costs (shipping) as seen from the current year. Break-even prices assume a discount rate of 10 percent and represent the point at which the net present value for an LNG project over a 20- to 30-year period becomes positive, including the payment of capital and operating costs, inclusive of taxes.

Among the selected group of North American LNG projects are Canadian LNG projects with an FOB break-even at the lower end of the range (US$7.18 per thousand cubic feet (kcf)) to those at the higher end (US$8.64 per thousand cubic feet (kcf)).

LNG projects in the United States tend to settle in the middle of the pack, with FOB break-even between US$6.44 per kcf and US$8.37 per kcf.

Mexico LNG projects have the widest variation in costs among the selected group of projects, ranging from US$6.94 per kcf to US$9.44 per kcf (see Figure 3).

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.

Total costs by project for LNG delivery to Asia and Europe

The total cost by LNG plant includes FOB cost break-even, transportation costs, and the regasification tariff. Figure 4 compares total project costs for LNG destined for Asia from selected North American LNG facilities.

Canadian LNG projects are very cost competitive, and those with Asia as their intended market tend to cluster at the lower end of the scale. The costs vary by project, but range between US$8.10 per kcf and US$9.56 per kcf, making Canadian LNG projects among the lowest cost projects in North America.

The costs for Mexico’s LNG projects with Asia as the intended destination for their product tend to cluster in the middle of the pack. Costs among U.S. LNG facilities that plan to send their product to Asia tend to sit at the higher end of the scale, at between US$8.90 and US$10.80 per kcf.

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.

Figure 5 compares total project costs for LNG to be delivered to Europe from select North American LNG facilities.

Costs from U.S. LNG facilities show the widest variation for this market at between US$7.48 per kcf and US$9.42 per kcf, but the majority of U.S. LNG facilities tend to cluster at the lower end of the cost scale, between US$7.48 per kcf and US$8.61 per kcf (see Figure 5).

Canadian projects that intend to deliver LNG to Europe show a variety of costs that tend to cluster at the middle to higher end of the spectrum, ranging from US$9.60 per kcf to and US$11.06 per kcf.

The costs of Mexico’s projects that are aimed at delivering LNG to Europe tend to cluster in the middle of the spectrum (US$9.11 per kcf to US$10.61 per kcf).

Source: Derived from Rystad Energy, Gas and LNG Markets Solution.

Conclusion

LNG markets are complex. Each project is unique and presents its own challenges. The future of Canadian LNG projects depends upon the overall demand and supply in the global LNG market. As the demand for LNG increases in the next decades, the world will be searching for energy security.

The lower liquefaction and shipping costs coupled with the lower cost of the natural gas itself in Western Canada translate into lower prices for Canadian LNG, particularly that destined for Asian markets. Those advantages will help make Canadian LNG very competitive and attractive to markets worldwide.