Guest “Don’t blame green schist for the energy crisis it is causing” by David Middleton
Alessandro Blasi is a geophysicist and Special Advisor to the IEA Executive Director, International Energy Agency. His LinkedIn posts are at all times informative and well-founded… Well… Almost at all times…
This bit is priceless…
The 1st is to make analysis correctly and never take the shortcut of simply pointing the finger in direction of the clear transition as the principle reason for present vitality disaster.
Mr. Blasi urges folks to not blame the “transition” to scrub vitality sources for the present “energy crisis.” Larry the Cable Guy would say, “I don’t care who you are, that’s funny right there!”
The purpose why we're on this vitality disaster is a scarcity of funding in fossil gas assets because of the pretend “transition” to scrub vitality sources. The completely pretend transition from fossil fuels to Unicorn mud has brought about the best misallocation of capital since alchemy was thought of a science.
Mr. Blassi’s LinkedIn publish included a hyperlink to this Economist article:
Natural-gas shortages threaten governments’ inexperienced targets
Why will we abruptly have looming pure gasoline shortages?
The world was warned about this final yr…
COAL | NATURAL GAS | OIL 10 Dec 2020
Looming provide hole requires trillions of {dollars} in funding by ailing oil and gasoline trade, IEF warns
Author Herman Wang
Editor Alisdair Bowles
Commodity Coal , Natural Gas, OilLondon — The oil and gasoline trade must overcome its pandemic-induced retrenchment and increase funding by no less than 25% yearly over the subsequent three years to stop a extreme provide crunch that might ship costs skyrocketing and tip the worldwide economic system again into disaster, in line with an intergovernmental company.
Even with the potential for peak demand nearing, the world will lack sufficient manufacturing capability to satisfy its projected wants if oil corporations don't urgently exchange depleted reserves and develop new fields, the International Energy Forum mentioned in a Dec. 10 report.
“Without sufficient investment, a reduced supply of oil and gas could lead to greater market volatility and higher prices, slowing the global economic recovery and jeopardizing energy security and international goals,” mentioned the IEF, which collaborated with Boston Consulting Group on the examine.
Warnings of a looming provide hole aren't new, and certainly, each producing and consuming international locations are largely united on the problem. Dating again to the oil worth stoop that started in 2014, the International Energy Agency and OPEC have each sounded the alarm that upstream capex within the trade was inadequate to satisfy future demand.
There has by no means been an vitality transition. We simply add extra sources of vitality to the combo, to feed an ever-growing demand for vitality.
[…]
S&P Global Platts
Why aren’t oil & gasoline corporations ratcheting up CapEx as shortly because the world allegedly wants us to?
- Wall Street is demanding that we train capital self-discipline and give attention to shareholder return as an alternative of progress… And most of us are high-quality with that as a result of we bear in mind 2014.
- The Climatariat/vitality transition/fossil gas divestment “axis of doofuses” is working 24/7/365 to restrict our entry to capital.
Unless we pledge allegiance to the ESG (Environmental, Social, Governance) Agenda…
Feb, 2020
S&P sees tight entry to capital for vitality corporations not addressing ESG
Author Jodi Shafto
Theme EnergyAccess to capital might turn into more and more tougher for oil and gasoline corporations failing to satisfy environmental targets, S&P Global Ratings mentioned.
Even because the world strikes towards cleaner vitality choices, the demand for fossil fuels will proceed to develop. Still, buyers are rising reluctant to fund corporations that fail to handle the environmental impacts of fossil gas exploration and manufacturing, Ratings mentioned throughout a Feb. 5 webinar.
S&P Global Ratings supervisor Luke Shane mentioned this challenge has already moved to the forefront and can proceed to develop in significance. Some smaller banks, principally in Europe, are dropping out of a number of the revolver and credit score syndications — loans supplied by a gaggle of lenders who work collectively to supply credit score to a big borrower — seeking to scale back publicity to corporations which can be heavy polluters, he mentioned.
Further, tons of of worldwide buyers have joined an initiative backed by the United Nations that goals to combine environmental, social and governance requirements into funding follow.
Principles for Responsible Investment asks signatories to publicly commit to think about ESG points in funding evaluation and decision-making processes, be energetic house owners, and incorporate ESG points into their possession insurance policies and practices. Signatories additionally agree to hunt applicable disclosure on ESG points by the entities wherein they make investments, promote acceptance and implementation of the ideas throughout the funding trade, work collectively to boost effectiveness in implementing the ideas and report on their actions and progress towards implementing the ideas, in line with the group’s web site.
Shane mentioned the initiative requires that signatories have ESG standards built-in for 50% of the property beneath their administration. “This is clearly going to have an impact on capital access going forward,” he mentioned. Noncompliance or failure to signal the settlement might consequence within the delisting of asset managers — “clearly something they don’t want,” Shane mentioned.
As entry to capital tightens, corporations might have to discover mergers and acquisitions, shrinking the variety of exploration and manufacturing corporations working to satisfy the demand for oil and pure gasoline that's nonetheless anticipated to develop regardless of the push towards cleaner vitality.
Most forecasts for oil demand mission continued progress underpinned by vitality demand, S&P Global Ratings senior director Simon Redmond mentioned through the webinar. The world has a selection between utilizing much less vitality or discovering a greater means of coping with the air pollution that arises from utilizing fossil fuels, he mentioned.
Fossil fuels, nonetheless, are used to satisfy 75% of world vitality demand, and it'll take a very long time for non-fossil fuels to make up any important proportion of that vitality demand, Redmond mentioned. If just for that purpose, the demand for fossil fuels will develop for no less than 10 years for oil and longer for pure gasoline.
[…]
S&P Global Market Intelligence
We can discover and produce the oil & gasoline that the worldwide economic system relies upon upon… We may even do that whereas constructing out carbon seize utilization and storage (CCUS) operations… However, the extra effort now we have to expend on appeasing activists like Blackrock’s Larry Fink, the much less effort we are able to commit to discovering at producing the oil & pure gasoline shortly sufficient to keep away from near-term provide shortages.
Until Wall Street, governments and idealistic fools comprehend the truth that there has by no means been an vitality transition… Nor will there ever be an vitality transition, the grotesque misallocation of capital will proceed to worsen this self-inflicted “energy crisis.”
This is from the Energy Information Administration’s 2020 International Energy Outlook, revealed in October 2020:
It’s essential to notice that the EIA lumps hydroelectric in with renewables. If I used to be placing the chart collectively, I'd have segregated them. I'd have additionally not included biofuels with petroleum liquids… But you couldn’t see their contribution to the chart even when you segregated them.
While the unique title highlights the projected improve in renewable vitality, notice that no different vitality sources considerably decline over the total projection interval, not even coal, which was then projected to prime its 2014 peak by 2048.
If I plot the very same information as a stacked space chart (like I'd plot manufacturing information from an oil subject), I get a completely completely different headline.
We’ve by no means transitioned from one type of vitality to a different; we simply pile new sources on prime of the outdated sources and use them extra effectively, with much less influence on the atmosphere. We burn nearly as a lot biomass now as we did once we began burning coal; we simply now not depend on whale oil as a serious part of that biomass.
About the Author
For these probably unfamiliar with me, I've been a geologist/geophysicist within the US oil & gasoline trade since May 1981… Working for corporations most of you've gotten by no means heard of.
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