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Why Bad Climate Legislation Is Worse Than No Climate Legislation

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From Michael Schellenberger

Moderate Democratic Senators Joe Manchin & Krysten Sinema Are Right to Oppose the Clean Energy Performance Program

Progressives are angry that moderate Democratic Senator Joe Machin has reportedly opposed the inclusion of climate-related legislation in President Joe Biden’s budget “This is absolutely the most important climate policy in the package,” said Leah Stokes, a Canadian political scientist who helped write the legislation. “We fundamentally need it to meet our climate goals. That’s just the reality.”

But that’s not the reality. The “Clean Energy Performance Program” is not needed to meet climate goals, and might actually undermine them.

Consider Waxman-Markey. That’s the name of the “cap and trade” climate legislation that passed the House but failed in the Senate in 2010. It had a climate goal of reducing U.S. greenhouse gas emissions by 17 percent below 2005 levels by the year 2020. Instead, the U.S. reduced its emissions by 22 percent.

Had cap and trade legislation passed in the Senate, emissions would have declined less than 22 percent, because Waxman-Markey so heavily subsidized coal and other fossil fuels. As the Los Angeles Times reported at the time, “the Environmental Protection Agency projects that even if the emissions limits go into effect, the U.S. would use more carbon-dioxide-heavy coal in 2020 than it did in 2005.”

The same thing would likely have been true for the Clean Energy Performance Program, which lock in natural gas. Consider France. According to the Commision de Regulation de L’Energie, €29 billion (US$33) billion was used to purchase wind and solar electricity in mainland France between 2009 and 2018. But the money spent on renewables did not lead to cleaner electricity. In fact, the carbon-intensity of French electricity increased.

After years of subsidies for solar and wind, France’s 2017 emissions of 68g/CO2 per kWh was higher than any year between 2012 and 2016. The reason? Record-breaking wind and solar production did not make up for falling nuclear energy output and higher natural gas consumption. And now, the high cost of renewable electricity is showing up in French household electricity bills.

Some pro-nuclear people supported the proposed Clean Energy Performance Program. They claimed it would have saved existing nuclear plants at risk of closure. According to the U.S. Energy Information Administration, the closure of nuclear plants including Diablo Canyon in California, will result in nuclear energy in the U.S. declining by 17% by 2025. If the Program had passed, some pro-nuclear people believe, plants like Diablo Canyon could have been saved.

But the Clean Energy Performance Program would not have saved Diablo Canyon for the same reason it would not have saved Indian Point nuclear plant, which closed in New York, earlier this year: progressive Democratic politicians are forcing nuclear plants to close, and at a very high cost to ratepayers.

If the Clean Energy Performance Program had passed into law, Diablo Canyon’s owner, Pacific Gas & Electric, would simply have passed the $500 million to $1.5 billion penalty imposed by the Program onto ratepayers, along with the other billions in costs related to closing Diablo Canyon 40 years earlier than necessary. The same would have happened with Indian Point.

Where there is political support for saving nuclear plants, state legislators and governors save nuclear plants, as they did in Illinois a few weeks ago, and as they have done in Connecticut, New Jersey, and with up-state nuclear plants in New York. In other states, nuclear plants are protected from cheap natural gas by regulated electricity markets. And now, with natural gas prices rising dramatically, any nuclear plants at risk of closure for economic reasons are no longer at risk.

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What threatens the continued operation of nuclear power plants, and nuclear energy in general, is the continued subsidization of renewables, which the Clean Energy Performance Program would have put on steroids. Under the program, utilities would have received $18 for each megawatt-hour of zero-emissions energy it produces between 2023 to 2030, on top of the existing $25 per megawatt-hour subsidy for wind energy.

Under such a scenario, notes energy analyst Robert Bryce, a wind energy company “could earn $43 per megawatt-hour per year for each new megawatt-hour of wind energy it sells. That’s a staggering sum given that the wholesale price of electricity in New York last year was $33 per megawatt-hour. In Texas, the wholesale price of juice was $22 per MWh.”

Manchin is joined in his opposition to the Plan by moderate Democratic Arizona Senator, Krysten Sinema, and understandably so. The legislation would cost Arizona ratepayers nearly $120 billion in additional electricity costs, according to energy analysts Isaac Orr and Mitch Rolling of the American Experiment. “This would result in a 45 percent increase in electricity prices by 2031, compared to 2019 rates,” they note.

As troubling, the Clean Energy Performance Program would increase dependence on solar panels made in China by incarcerated Uighyr Muslims living in concentration camps and against whom the Chinese government is committing “genocide,” according to the U.S. State Department. New research shows that China made solar panels cheaper through the use of forced labor, heavy government subsidies, and some of the dirtiest coal in the world. The Program would have done nothing to shift production of solar panels back to the U.S.

Nor would the legislation have done anything to internalize the high cost of solar panel waste disposal. Most solar panels become hazardous waste, and create dust from heavy metals including lead, as soon as they are removed from rooftops. A major study published in Harvard Business Review earlier this year found that, when the high cost of managing toxic solar panel waste is eventually accounted for, the true cost of solar electricity will rise four-fold.

As troubling, the continued expansion of weather-dependent renewables will increase electricity costs and blackouts across the United States, as they did in California and Texas. Those renewables-driven blackouts were likely on Senator Manchin’s mind when he made his decision to oppose the Clean Energy Performance Plan. He certainly knows about the problems of renewables in Texas and California, since I discussed them directly with Manchin when I testified before his committee earlier this year.

A better approach would be for Congress to seek nuclear-focused legislation to expand nuclear from its current 19% of U.S. electricity to 50% by 2050. It should take as a model the British government’s announcement yesterday that it would put nuclear energy at the center of its climate plans. Global energy shortages triggered by the lack of wind in Europe have led nations to realize that any efforts to decarbonize electricity grids without creating blackouts must center nuclear power, not weather-dependent solar and wind.

Environmental Progress and I met with British lawmakers in 2019 to advocate for a greater focus on nuclear. At the time, many British energy analysts, as well as ostensibly pro-nuclear climate activists, Mark Lynas and George Monbiot, were telling the public that their nation did not need more nuclear, as Britain could simply rely more on wind energy, and natural gas. Now, electricity prices are skyrocketing and factories are closing in Britain, due to a bad year for wind.

It was a strange experience to be alone in Britain, without support from supposedly pro-nuclear Britons, in urging lawmakers to build more nuclear plants, but I was similarly alone in many other parts of the world, and got on with the task. Happily, one year later, former Extinction Rebellion spokesperson Zion Lights joined me in advocating for nuclear, and quickly forced the government to agree to a nuclear build-out.

Today, in the U.S., there is a growing grassroots movement for nuclear energy, one which saved nuclear plants, twice, in Illinois, and other states, and is gearing up to save Diablo Canyon nuclear plant in California. Doing so will require a new governor, since the current one, Gavin Newsom, made closing the plant a feature of his sales pitch to powerful environmental groups, including Sierra Club and Natural Resources Defense Fund which are, like Newsom himself, heavily funded by natural gas and renewable energy companies that stand to benefit from the Diablo’s destruction.

Leadership at the national level will need to come from Senators Manchin and Sinema. While a significant amount of electricity policy is determined by the states, the Senate can play a constructive role in maintaining the reliability, resiliency, affordability, I testified to Senator Manchin and other committee members. Senator Sinema is from Arizona, a state with the largest nuclear plant in the U.S., Palo Verde, and which is a model of how to make electricity both low in emissions, and in costs.

With the Clean Energy Performance Program now apparently dead, the Congress, led by Manchin and Sinema, should take policy action to not only keep operating the nuclear plants that have been critical to preventing power outages in recent years, but also expand them.

About Michael Shellenberger

Michael Shellenberger is a Time Magazine “Hero of the Environment,”Green Book Award winner, and the founder and president of Environmental Progress.

He is author of the best-selling new book, Apocalypse Never (Harper Collins June 30, 2020), which has received strong praise from scientists and scholars. “This may be the most important book on the environment ever written,” wrote climate scientist Tom Wigley. “Apocalypse Never is an extremely important book,” says historian Richard Rhodes, who won the Pulitzer Prize for The Making of the Atomic Bomb. “Within its lively pages, Michael Shellenberger rescues with science and lived experience a subject drowning in misunderstanding and partisanship. His message is invigorating: if you have feared for the planet’s future, take heart.”

Additional Reading:

Why Biden’s Climate Agenda Is Falling Apart

Nuclear Plant Closures And Renewables Increase Electricity Prices & Unreliability, Testifies Michael Shellenberger to U.S. Senate

China Made Solar Cheap With Coal, Subsidies, And “Slave” Labor — Not Efficiency

Why Everything They Said About Solar Was Wrong

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Oil and gas in the global economy through 2050

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From the Canadian Energy Centre

By Ven Venkatachalam

The world will continue to rely on oil and gas for decades to come, according to the International Energy Agency

Recent global conflicts, which have been partly responsible for a global spike in energy prices, have cast their shadow on energy markets around the world. Added to this uncertainty is the ongoing debate among policymakers and public institutions in various jurisdictions about the role of traditional forms of energy in the global economy.

One widely quoted study influencing the debate is the International Energy Agency’s (IEA) World Energy Outlook, the most recent edition of which, World Energy Outlook 2023 (or WEO 2023), was released recently (IEA 2023).

In this CEC Fact Sheet, we examine projections for oil and natural gas production, demand, and investment drawn from the World Energy Outlook 2023 Extended Dataset, using the IEA’s modelled scenario STEPS, or the Stated Policies Scenario. The Extended Dataset provides more detailed data at the global, regional, and country level than that found in the main report.

The IEA’s World Energy Outlook and the various scenarios

Every year the IEA releases its annual energy outlook. The report looks at recent energy supply and demand, and projects the investment outlook for oil and gas over the next three decades. The World Energy Outlook makes use of a scenario approach to examine future energy trends. WEO 2023 models three scenarios: the Net Zero Emissions by 2050 Scenario (NZE), the Announced Pledges Scenario (APS), and the Stated Policies Scenario (STEPS).

STEPS appears to be the most plausible scenario because it is based on the world’s current trajectory, rather than the other scenarios set out in the WEO 2023, including the APS and the NZE. According to the IEA:

The Stated Policies Scenario is based on current policy settings and also considers the implications of industrial policies that support clean energy supply chains as well as measures related to energy and climate. (2023, p. 79; emphasis by author)

and

STEPS looks in detail at what [governments] are actually doing to reach their targets and objectives across the energy economy. Outcomes in the STEPS reflect a detailed sector-by-sector review of the policies and measures that are actually in place or that have been announced; aspirational energy or climate targets are not automatically assumed to be met. (2023, p. 92)

Key results

The key results of STEPS, drawn from the IEA’s Extended Dataset, indicate that the oil and gas industry is not going into decline over the next decade—neither worldwide generally, nor in Canada specifically. In fact, the demand for oil and gas in emerging and developing economies under STEPS will remain robust through 2050.

Oil and natural gas production projections under STEPS

World oil production is projected to increase from 94.8 million barrels per day (mb/d) in 2022 to 97.2 mb/d in 2035, before falling slightly to 94.5 mb/d in 2050 (see Figure 1).

Source: IEA (2023b)

Canadian overall crude oil production is projected to increase from 5.8 mb/d in 2022 to 6.5 mb/d in 2035, before falling to 5.6 mb/d in 2050 (see Figure 2).

Source: IEA (2023b)

Canadian oil sands production is expected to increase from 3.6 mb/d in 2022 to 3.8 mb/d in 2035, and maintain the same production level till 2050 (see Figure 3).

Source: IEA (2023b)

World natural gas production is anticipated to increase from 4,138 billion cubic metres (bcm) in 2022 to 4,173 bcm in 2050 (see Figure 4).

Source: IEA (2023b)

Canadian natural gas production is projected to decrease from 204 bcm in 2022 to 194 bcm in 2050 (see Figure 5).

Source: IEA (2023b)

Oil demand under STEPS

World demand for oil is projected to increase from 96.5 mb/d in 2022 to 97.4 mb/d by 2050 (see Tables 1A and 1B). Demand in Africa for oil is expected to increase from 4.0 mb/d in 2022 to 7.7 mb/d in 2050. Demand for oil in the Asia-Pacific is projected to increase from 32.9 mb/d in 2022 to 35.1 mb/d in 2050. Demand for oil from emerging and developing economies is anticipated to increase from 47.9 mb/d in 2022 to 59.3 mb/d in 2050.

Source: IEA (2023b)

 

Source: IEA (2023b)

Natural gas demand under STEPS

World demand for natural gas is expected to increase from 4,159 billion cubic metres (bcm) in 2022 to 4,179 bcm in 2050 (see Figures 6 and 7). Demand in Africa for natural gas is projected to increase from 170 bcm in 2020 to 277 bcm in 2050. Demand in the Asia-Pacific for natural gas is anticipated to increase from 900 bcm in 2020 to 1,119 bcm in 2050.

Source: IEA (2023b)

 

Source: IEA (2023b)

Cumulative oil and gas investment expected to be over $21 trillion

Taking into account projected global demand, between 2023 and 2050 the cumulative global oil and gas investment (upstream, midstream, and downstream) under STEPS is expected to reach nearly U.S.$21.1 trillion (in $2022). Global oil investment alone is expected to be over U.S.$13.1 trillion and natural gas investment is predicted to be over $8.0 trillion (see Figure 8).

Between 2023 and 2050, total oil and gas investment in North America (Canada, the U.S., and Mexico) is expected to be nearly U.S.$5.6 trillion, split between oil at over $3.8 trillion and gas at nearly $1.8 trillion (see Figure 8). Oil and gas investment in the Asia Pacific, over the same period, is estimated at nearly $3.3 trillion, split between oil at over $1.4 trillion and gas at over $1.9 trillion.

Source: IEA (2023b)

Conclusion

The sector-by-sector measures that governments worldwide have put in place and the specific policy initiatives that support clean energy policy, i.e., the Stated Policies Scenario (STEPS), both show oil and gas continuing to play a major role in the global economy through 2050. Key data points on production and demand drawn from the IEA’s WEO 2023 Extended Dataset confirm this trend.

Positioning Canada as a secure and reliable oil and gas supplier can and must be part of the medium- to long-term solution to meeting the oil and gas demands of the U.S., Europe, Asia and other regions as part of a concerted move supporting energy security.

The need for stable energy, which is something that oil and natural gas provide, is critical to a global economy whose population is set to grow by another 2 billion people by 2050. Along with the increasing population comes rising incomes, and with them comes a heightened demand for oil and natural gas, particularly in many emerging and developing economies in Africa, the Asia-Pacific, and Latin America, where countries are seeing urbanization and industrialization grow rapidly.


References (as of February 11, 2024)

International Energy Agency (IEA), 2023(a), World Energy Outlook 2023 <http://tinyurl.com/4nv9xyfj>; International Energy Agency (IEA), 2023(b), World Energy Outlook 2023 Extended Dataset <http://tinyurl.com/3222553b>.

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444,000 semi-loads of food? Just another day on planet Earth

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From the Frontier Centre for Public Policy

By Terry Etam

At 100 million b/d, the world consumes a billion barrels of oil every ten days. Eleven billion barrels of recoverable reserves will meet the world’s needs for about 110 days, or just under four months. And global demand continues to grow.

The scope of this discussion goes far beyond oil demand. It is imperative that people understand energy demand, and particularly so on a global scale.

A friend of mine, always with a keen eye on interesting things, passed on an interesting quote from the CERA Week energy conference the other week. The head of the International Energy Forum mentioned a surprising statistic, as quoted by Javier Blas on Twitter: “Heathrow airport in London uses more energy than the whole African nation of Sierra Leone [population ~8.5 million].” Yikes!

Here’s another one that turned up randomly in the feed by a credible source: “If we keep growing our energy usage (2.9% CAGR last 350 years) we will use more energy in the next 25 years than in all prior human history. 3x in 39 years and 9x by the end of the century.”

Energy is an amazing topic, both sources and uses. The sheer scale of what we require for our present lifestyle is mind-blowing when placed in concrete contexts like above. In the abstract, the numbers don’t mean anything. The world consumes over 100 million barrels of oil per day. So what? Is that a lot? Sure it’s a big number but so is 8 billion people. Either stat is hard to wrap one’s head around.

Consider the following with respect to oil consumption/production: ExxonMobil made waves recently for a large oil discovery offshore Guyana, in an era when there aren’t that many discoveries being made (the flip side of the demand for oil/gas companies to return money to shareholders means exploration generally takes a back seat). Reuters picked up the story: ExxonMobil announced a new discovery, one of 30 since 2015, in a 6.6 million acre area that to date has been found to hold 11 billion barrels of recoverable oil, which also equals the country’s total. The results are significant, moving Guyana up to 17th on the world’s petroleum reserve rankings, similar to Norway, Brazil, or Algeria.

Now compare that number to consumption. At 100 million b/d, the world consumes a billion barrels of oil every ten days. Eleven billion barrels of recoverable reserves will meet the world’s needs for about 110 days, or just under four months. And global demand continues to grow.

The scope of this discussion goes far beyond oil demand. It is imperative that people understand energy demand, and particularly so on a global scale.

Look at this history of global energy consumption chart from Our World in Data:

It’s nuts. But it coincides very well with the rising standard of living attained by humanity, particularly in the west, an increase the rest of the world wants to emulate.

Consider the following statistics if you think that trajectory is going to slow down or reverse any time soon.

Africa has about 1.2 billion people, or roughly 15 percent of the earth’s population. Yet Africa accounts for 2 percent of global air traffic. By contrast, Europe has a population of about 740 million, and accounts for 31 percent of global air traffic.

What if Africans decide they want to live like Europeans, air-travel-wise, which is not just justified on moral grounds but actually more functionally logical, because Europe covers only 1/3 of Africa’s size of 30 million square kilometres?

What if the rest of the world wants to enjoy air conditioning to the extent the US does (and why on earth wouldn’t they)? According to the US Energy Information Agency, nearly 90 percent of US households use air conditioning, and virtually every office building does as well. The US has about 130 million households for 330 million people, or about 2.5 people per household. If Africa had a similar ratio, they would have 480,000,000 households, and if a similar proportion had AC there would be 430,000,000 households with AC. It’s safe to say that today in Africa the number of households with AC is far closer to zero than 90 percent. (Even communists/hardcore socialists support near-universal air conditioning, though they call it a ‘right’ by way of that fuzzy but firm ‘gimme that’ appropriation way of theirs.)

Now add in India, with another 1.4 billion people, and do the same math. A billion air conditioners  worth of global demand is not a ridiculous estimate, not when considering Pakistan, Bangladesh, Indonesia, parts of South America… in addition to Africa, India…

Consider even food, and the logistical magnum opus required to keep countries food-riot-free. A typical western website says that the average person consumes 3-4 pounds of food per day. Let’s say the rest of the world isn’t so lucky, and we’ll call it 2.5 pounds per day for a global average (each new cruise ship drags the world average up considerably). There are 8 billion of us schlepping around planet earth. A semi trailer can carry about 45,000 pounds of cargo. So every day, the equivalent of about 444,000 semis full of food are forklifted out of trucks and down the gullets of 8 billion upturned mouths. Every freaking day, without a break.

And that’s just food. What about IKEA. And Costco. And Home Depot. And Walmart. And all the other stuff in our world.

And billions more people are striving to fill up the SUV (yes, everywhere you go, SUV) at their local Costco/Home Depot/Walmart, as soon as one arrives in their community.

Ah hell, I give up. The scale of all this stuff is unfathomable. And yet it all gets where it needs to go, every day, as long as there’s energy.

Any singular household staple must be there, in abundance, or all hell breaks loose. Remember Covid > toilet paper? What happens as soon as there is even a rumour of a shortage? Social deviants, which are harder to eradicate than (and just as useful as) STDs, get into gear and begin hoarding in order to resell at a profit. It just happens, one of the unfortunate costs of living in a free society. (I’m not suggesting that those people should be found and beaten with a tire iron, but then again I’m not suggesting that they shouldn’t.)

When we think of energy consumption, we tend to think of our hilariously comfortable lives in western nations, where supermarkets are perpetually full, where gasoline and heating fuels are available 24/7/365 at reasonable prices, where flying wherever and whenever we want, with minimal hassle, is one step away from being viewed as a human right. We are correct in that our energy consumption per capita in the west is very high. But on an outright total consumption basis, individual country statistics are pretty wild. And saddening, in some ways.

First the wild part: You would expect (or I did anyway) the US to be either at the top of the consumption pile or close; it is and has been an economic juggernaut for a century. But not even close: in 2022, the US consumed about 96 exajoules of energy, which is a lot – that number equals the consumption of India, Russia, Japan and Canada combined. But way out in front is China, with 2022 consumption of 159 exajoules. No one should be surprised China leads the world in renewables installation and coal fired power plant construction. They need it all.

Where it gets sad is to wander further down the list to the lowest consumers. The site linked above shows a graphic of the world, with each country colour-coded for total energy consumption. The lowest on the colour scale is a pale yellow representing 20 exajoules per year. The scale rises up through blues and towards a dark navy which represents China at the top of the heap.

Most African countries, and some South American ones, do not even warrant a definition in the legend at all, and are simply greyed out. They have so little energy consumption they hardly even make it onto the raw data table. Hundreds of millions of people live like that. But only as long as they have to.

It is very sobering to see how much of the world lives, and how very far they are from the West’s standard of living. The West’s leaders push the concept of ‘electrify everything’, a concept that only makes sense if one is looking no further than their backyard and has zero feel for the true global situation. In much of the world, they would just as happily get behind the slogan ‘electrify anything’.

It is hard to imagine this energy consumption trajectory falling; we’d be very lucky if it stayed flat. But that seems like an unrealistic hope. The developing world clearly has every incentive and right to advance towards the West’s standard of living, and if they get close global energy consumption will head off further into the stratosphere. Here in the West, we play cute little games like a forced switch to EVs, while ignoring almost totally any common sense commentary on the subject (For example, Toyota’s 1:6:90 rule which states that for the same amount of raw materials to manufacture one EV, Toyota can make six plug-in hybrids or 90 hybrids, and in doing so would achieve 37 times the emissions reduction of a single EV. Yet Toyota is scorned for such logic on the grounds that “Toyota’s reluctance to fully embrace EVs can hinder innovation in the EV industry.” Note that there is no challenge to the facts themselves, just a bruising of the ego of the think tanks.)

Anyone that provides energy of any kind should roll up their sleeves, there’s a lot of work to be done, and those who wish to hunt for energy villains will get run over, in due course.

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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