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The Energy Report: Only The Beginning

Published 05/18/2021, 12:28 PM
Updated 07/09/2023, 06:31 AM

Crude oil prices surged to a two-year high, and that may be only the beginning if the International Energy Agency (IEA) gets its way. The IEA seems to believe that the only way to meet the carbon goal is to immediately stop funding any investment in fossil fuels. This will create sharply higher prices and shortages for oil and gas while they call for the end of the internal combustion engine and pour billions of dollars in investment in alternative energy. The best way to achieve these goals is a form of economic terrorism that will cause the most economic pain for the poor of this world.

The IEA says: “The world has a viable pathway to building a global energy sector with net-zero emissions in 2050, but it is narrow and requires an unprecedented transformation of how energy is produced, transported and used globally. They point to using “behavior change,” which means that it will force oil and gas prices to soar, therefore, forcing people to forgo their cars and either buy an electric car or walk or ride a bike. Of course, the cost of charging your electric car will be more than your gas car at that point and won’t be guaranteed reliable as it will be powered by interruptible power sources. Of course, in the IEA world, only the rich will be able to afford a car, so most of us won’t have to worry about it.

The IEA says that, “Climate pledges by governments to date – even if fully achieved – would fall well short of what is required to bring global energy-related carbon dioxide (CO2) emissions to net-zero by 2050 and give the world an even chance of limiting the global temperature rise to 1.5 °C.” They say that, “Our Roadmap shows the priority actions that are needed today to ensure the opportunity of net-zero emissions by 2050 – narrow but still achievable – is not lost. The scale and speed of the efforts demanded by this critical and formidable goal – our best chance of tackling climate change and limiting global warming to 1.5 °C – make this perhaps the greatest challenge humankind has ever faced,” said Fatih Birol, the IEA executive director. “The IEA’s pathway to this brighter future brings a historic surge in clean energy investment that creates millions of new jobs and lifts global economic growth. Moving the world onto that pathway requires strong and credible policy actions from governments, underpinned by much greater international cooperation.”  In other words, the U.S. needs to cough up more money.

They say that, “Building on the IEA’s unrivalled energy modelling tools and expertise, the Roadmap sets out more than 400 milestones to guide the global journey to net-zero by 2050. These include, from today, no investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants. By 2035, there are no sales of new internal combustion engine passenger cars, and by 2040, the global electricity sector has already reached net-zero emissions.”

Should we sell out to this panic report from International Energy? First of all, the IEA long-term forecasts have been far from accurate. Do we think that this radical plan is needed when it is unclear that their forecasts for the long term are correct? We are gambling with the life and well-being of billions of people around the globe at a time where climate alarmism is out of control. That is not to say that we shouldn’t be reasonable for our planet and the earth! We should be. Yet, climate science and the doomsday predictions in the past have been way off the map. We need an approach that is reasonable and must include nuclear energy.

The IEA says that, “Our pathway calls for scaling up solar and wind rapidly this decade, reaching annual additions of 630 gigawatts (GW) of solar photovoltaics (PV) and 390 GW of wind by 2030, four times the record levels set in 2020. For solar PV, this is equivalent to installing the world’s current largest solar park roughly every day.” Of course, that will take a lot of land, which will leave people with less land for food production that will add to inflation and potential hunger in a world where food prices will become more expensive.

The IEA says that, “Hydropower and nuclear, the two largest sources of low‐carbon electricity today, provide an essential foundation for transitions. As the electricity sector becomes cleaner, electrification emerges as a crucial economy‐wide tool for reducing emissions. Electric vehicles (EVs) go from around 5% of global car sales to more than 60% by 2030.”

The IEA is wanting to take a historic gamble betting on technologies that do not even exist. That’s right. The IEA says that to reach, “net-zero by 2050 requires further rapid deployment of available technologies as well as the widespread use of technologies that are not on the market yet. Major innovation efforts must occur over this decade to bring these new technologies to market in time. Most of the global reductions in CO2 emissions through 2030 in our pathway come from technologies readily available today. But in 2050, almost half the reductions come from technologies that are currently at the demonstration or prototype phase.

So let us be clear. You are going to be expected to give up your car and everything powered by gas or oil and then pay sharply higher bills for energy for a plan that will only work if technologies that do not exist come into existence and then happen to work. Let that sink in.

The IEA plans want to make oil and gas unaffordable so we will be forced into alternatives. So that means you have to be long oil and gas for the long term and at the same time you have to get ready for decades of inflation and economic pain. We will reduce our standard of living and create more poor. To save the planet we need a more measured approach that takes into account the people that live on the earth. We can’t allow this pain to hurt them when we are already moving towards a cleaner carbon-free world that will allow carbon to be reduced and allows people to live in a growing economy.

In the short term, we may get a lesson in fossil fuel tightness. While this week’s data, showing the reopening of the global economy, means that supplies are going to be tight. Air travel is coming back. Bloomberg News reports that, “the U.S. airports are the busiest since the pandemic began — the strongest sign yet of a domestic travel revival that’s leading the way in jet fuel’s comeback this summer. Bloomberg says that, “Passengers checking in through security at U.S. airports surged to 1.85 million on Sunday, the highest since early March 2020, according to Transportation Security Administration data. The flurry of travellers making their way through airport terminals has steadily climbed for the past month and is now only about 30% lower than levels the TSA saw at the same time in 2019. And we haven’t even reached the U.S. Memorial Day holiday weekend yet, the unofficial start of summer travel.

Crude oil prices are also watching Iran negotiations. Reuters reports that, “As the United States searches for a path back to the 2015 Iran nuclear deal, it is tiptoeing through a minefield laid by former U.S. President Donald Trump. The mines are Iran-related sanctions Trump imposed on more than 700 entities and people, according to a Reuters tally of U.S. Treasury actions, after he abandoned the nuclear deal and restored all the sanctions it had removed. Among these, Trump blacklisted about two dozen institutions vital to Iran’s economy, including its central bank and national oil company, using U.S. laws designed to punish foreign actors for supporting terrorism or weapons proliferation. Removing many of those sanctions is inevitable if Iran is to export its oil, the biggest benefit it would receive for complying with the nuclear agreement and reining in its atomic program.

Of course, why is the Biden administration so focused on allowing Iran to sell oil when they are still looking to end fossil fuel and restrict U.S. drilling energy producers on federal lands?

Natural gas prices are popping as summertime temperatures hit at a time when production is down and LNG exports are up!

 

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