E.U. Commission: Nukes and Natural Gas are Now 'Green'

Well this is a pleasant surprise: the European Commission -- the executive committee of the European Union -- has decided to propose a plan reclassifying natural gas and nuclear power as "green energy," at least for the sake of investment. From Reuters:

The Commission's proposal would label nuclear power plant investments as green if the project has a plan, funds and a site to safely dispose of radioactive waste. To be deemed green, new nuclear plants must receive construction permits before 2045. Investments in natural gas power plants would also be deemed green if they produce emissions below 270g of CO2 equivalent per kilowatt hour (kWh), replace a more polluting fossil fuel plant, receive a construction permit by Dec. 31 2030 and plan to switch to low-carbon gases by the end of 2035.

The background to this is, of course, Europe's ongoing energy crunch, which has seen record prices per megawatt hour in countries throughout the continent, as wind turbines and solar panels have failed to produce enough electricity to meet winter demand. Germany, which famously went all in on its green energy transition known as die Energiewende roughly a decade ago, has been forced to restart some of its closed, carbon intensive coal-fired power plants to keep up.

And it isn't as if they're actually lying about this -- as much as green activists hate to admit it, the United States has led the world in emissions reduction since the year 2000, largely because the fracking revolution has allowed us to increasingly lean on low-carbon natural gas for our heat and energy needs. Nuclear power, meanwhile, is effectively a zero-carbon power source. Consequently, if you're actually concerned about carbon emissions, natural gas and nuclear should be high up in your proposed power mix. They are as "green" as any first world nation's energy is going get.

Even so, it is worth noting the EC tries to stress that they're not proposing a permanent shift -- "[T]he Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future," according to their statement. That is to say, they consider natural gas and nuclear as "transitional" energy sources whose role is to bridge the gap to their still-inevitable wind-and-solar powered future! Moreover Germany, which still has the largest economy in the E.U., remains fanatically committed to its Energiewende, to such a degree that they've just closed down three of their remaining six operational nuclear power plants, their soaring energy rates notwithstanding. Theoretically, Germany could lead a charge to kill this sensible proposal in the European Parliament, over the objections of France and other nations who have relied on nuclear for decades.

Still, let's focus on the bright side -- Europe's governing class is cracking under the pressure of sky-high energy rates and are being forced to admit that their current way of doing things just isn't working. If this reclassification actually goes through, activists will have a real fight on their hands when they try to change it back in a few years time. And officially classifying natural gas and nuclear as green energy is likely to take so much wind out of the green movement's turbines that it could eventually cease to exist.

Reality Bites the Green Movement

Thomas Friedman had a very strange column -- even for him! -- in the New York Times recently entitled “A Scary Energy Winter Is Coming. Don’t Blame the Greens.” The headline captures pretty well what Friedman obviously wanted to say, namely that the exploding energy prices we are already beginning to see, and the shortages that Europe, especially, is bracing for, are not the fault of the environmentalist movement. But Friedman seemed to struggle making any kind of a case to that effect. Perhaps that's because there is none -- environmentalism really is at the heart of the matter, if not the whole of it. So he just sort of talks around the problem, and his ramblings are ultimately rather revelatory.

Friedman begins by fretting that the mounting crisis will, 1- "[M]ake Vladimir Putin the king of Europe," 2- Empower Iran to build atomic weapons, and 3- (apparently worst of all) cause blackouts in the U.K. during the upcoming U.N. climate conference in Glasgow, embarrassing the all-in-on-wind government of Boris Johnson. Friedman is very aware of how bad things are shaping up to be:

Natural gas and coal prices in Europe and Asia just hit their highest levels on record, oil prices in America hit a seven-year high, and U.S. gasoline prices are up $1 a gallon from last year.

He's concerned about predictions that this might be an especially brutal winter, and quotes with alarm a recent newsletter by market analyst Bill Blain who said simply, “This winter [in Great Britain and Europe] people are going to die of cold." But then Friedman articulates the thought which seems to central to his foreboding: If these concerns are realized, he says, "I fear we’ll see a populist backlash to the whole climate/green movement."

I'm glad he's got his priorities straight.

Tom Friedman, green as ever.

This type of thinking is so typical of the environmentalist approach to the real world problems that arise from the relentless pursuit of their ideological goals. Governments around the world have been giving way to their pressure for years, mandating the transition to unreliable energy sources and creating increasingly onerous regulatory hurdles the traditional resource industry must meet.

But then the wind stopped blowing and the sun didn't shine enough and scaled-back production meant the oil and gas companies didn't have enough product in storage. At which point Friedman & Co. say, not 'We screwed up,' but 'The populists are going to say we screwed up!' It's never the Green movement's fault.

Now, perhaps I'm being unfair to Friedman -- he does suggest that developed nations have attempted to transition to renewables too quickly, and criticizes the clearly foolish decision of the Merkel government in Germany to shut down all of its nuclear power plants by next year ("an overreaction to the Fukushima nuclear accident," he explains). Even so, his solution to the current problem includes "a carbon tax in every major industrial economy" and using nuclear power and natural gas as a bridge to wind and solar power. Sounds like just more of the same to me.

The Coming Energy Crisis This Winter

If you're a regular reader of The Pipeline, you already know about the ongoing energy crunch going on in Europe. If you're not a regular reader, well, you're going to find out about it soon, because looks like come winter, things are going to get rough worldwide.

For an ominous read on the scope of this crisis, check out this Bloomberg piece by Stephen Stapczynski entitled, "Europe’s Energy Crisis Is Coming for the Rest of the World, Too." Stapczynski discusses the fact that, even as so-called "renewable" energy sources get all of the headlines and government investment, the world actually relies on natural gas more than ever. "But," he says:

[T]here isn’t enough gas to fuel the post-pandemic recovery and refill depleted stocks before the cold months.... Inventories at European storage facilities are at historically low levels for this time of year. Pipeline flows from Russia and Norway have been limited. That’s worrying as calmer weather has reduced output from wind turbines... making gas even more necessary. No wonder European gas prices surged by almost 500% in the past year and are trading near record.

Utilities and policymakers are praying for mild temperatures because it’s already too late to boost supplies. The prospect of accelerating energy costs, in conjunction with squeezed supply chains and food prices at decade highs, could make more central bankers question whether the jump in inflation is as transitory as they’d hoped.... “If the winter is actually cold, my concern is we will not have enough gas for use for heating in parts of Europe,” [said] Amos Hochstein, the U.S. State Department’s senior adviser for energy security.

The effects of this shortage go far beyond heating and energy bills. The rising cost of doing business has, for instance, caused fertilizer producers in Europe to scale back production, "threatening to increase costs for farmers and potentially adding to global food inflation." Forecasts suggest a similar scale back for Chinese factories, leading especially to an increase in "global prices for steel and aluminum." Political ramifications have already arrived in Pakistan, where "opposition politicians [are] demanding an inquiry into [natural gas] purchases by the state-owned importer. And of course, countries have started to bridge the natural gas gap with dirtier fuels, most especially coal and heating oil, both affecting their markets and jeopardizing the climate commitments (many of them legally binding) of nations around the world. Stapczynski helpfully mentions that natural gas "emits about half as much carbon dioxide as coal when burned," a fact which most readers will likely never have seen mentioned in a mainstream publication.

Despite being an energy powerhouse over the past few years, the United States is not immune to these forces. Stapczynski points out that American exporters are an important part in the global natural gas supply chain -- they're "poised to ship more LNG than ever as new projects come online toward the end of the year." But years of anti-fracking public policy, including the war on pipelines and ban on leases on federal land enacted by the current administration, have left us in a weakened position. Our own inventories are depleted, and Stapczynski suggests that shale drillers "are reluctant to boost production out of concern that would crimp their profitability and put off investors." Sure, but political uncertainty is also a major driver -- why pump money into ramping up your production when the Biden administration might kneecap your operation in six months time?

Of course, Green Energy advocates will crow that this just proves how essential their products are -- they already are -- but they're wrong. In fact, we are reaping what they have sown.

Keep that in mind come winter.

Heinrich's New Mexican Boondoggle

Earlier this summer Senator Martin Heinrich (D-N.M.), one of the most ardent environmentalists in national politics, wrote a typically brainless Op-Ed in the New York Times on electrification and the push for net-zero in the Democrats' multi-trillion dollar infrastructure bill. Over at Capital Matters, Paul Gessing of the Rio Grande Foundation does us all a favor by thoroughly demolishing it.

Gessing opens with an important clarification --

Unfortunately, in Heinrich’s parlance, “electrification” does not mean bringing much-needed electricity to impoverished corners of our country, including the Navajo Reservation right here in New Mexico. No, the legislation he’s pushing in Congress — and the funding he’s advocating in the infrastructure bill, specifically — do nothing of the sort. By “electrification,” the senator means that he’d like federal, state, and local governments to phase out or completely ban your natural-gas stove, oven, and furnace, thus requiring you to use electric heat and stoves.

Which is partly to say that the bill itself is almost the antithesis of an infrastructure bill. Instead of putting government money towards what were once called "internal improvements" with the goal of raising the standard of living and improving economic conditions in neglected parts of the country, this bill ignores those forgotten places while seeking to lower standards of living and weigh down the economies across the board. This is what the Left calls "equity."

Gessing points out that, until a few years ago, environmentalist groups such as the Sierra Club actually supported natural gas, due to its cleanliness compared to coal. He mentions that Barack Obama even touted its potential for reducing atmospheric CO2. But now major American cities like Sacramento, Seattle, and New York have begun the process of banning natural gas in new construction.

The environmentalists had it right the first time. As regular Pipeline readers know, the United States has led the world in carbon emissions reduction since the year 2000.  Senator Heinrich and his allies, meanwhile, imagine that it can be entirely replaced with electricity generated by so-called renewable resources. That would be quite the trick, considering the fact that only about "10 percent of current electricity production comes from wind, solar, and geothermal combined" while this proposed transition "would increase U.S. electricity consumption by 40 percent." No surprise that Germany's attempted wind and solar transition has resulted in an increased reliance on coal, not to mention skyrocketing energy rates.

It's worth noting that the politicians pushing these policies are often working against the interests and preferences of the citizenry. The majority of people even in liberal cities want natural gas because it is "clean, affordable, and reliable energy," in Gessing's phrase. And Heinrich's home state of New Mexico is a major natural gas producer -- his own constituents would suffer if his preferred policies were fully enacted! In saner times, the residents of these communities would simply vote the bums out, but nowadays extreme partisanship protects activists masquerading as representatives.

It's quite the boondoggle. Just like Senator Heinrich's electrification proposals.

PennEast Pipeline Beats New Jersey at SCOTUS

Legal eagles might find today's Supreme Court decision, in PennEast Pipeline Co. v. New Jersey, compelling, contending as it does with a tension between the exercise of eminent domain on the one hand and a state's sovereign immunity as guaranteed by the 11th amendment on the other. For a layman like myself, one smart enough not to have attended law school, the discussion makes my eyes glaze over. However, the case might have some important ramifications in the ongoing dispute between the environmentalist movement and the oil and gas industry in the months and years ahead, and we would do well to be aware of it.

PennEast Pipeline Company LLC, a joint venture of energy producers including Enbridge Inc., South Jersey Industries Inc, and New Jersey Resources Corp, has been constructing a 116-mile pipeline that would transport as much as one billion cubic feet of natural gas per day from Pennsylvania's Marcellus Shale and serve customers in both Pennsylvania and New Jersey.

After having secured the Federal Energy Regulatory Commission's approval, the company began acquiring the land along the pipeline's planned route, making use, where necessary, of a provision in the U.S. Natural Gas Act which allow resource companies to utilize federal eminent domain authority. However, some of that land belonged to the state, and the administration of Governor Phil Murphy, a Democrat, refused to hand it over, contending that only privately owned land can be acquired in this way.

When PennEast took the state to court, the Murphy administration argued that the 11th amendment-guaranteed sovereign immunity protected it from being sued by a private entity. The majority, in an opinion written by Chief Justice Roberts (joined by Justices Breyer, Sotomayor, Alito, and Kavanaugh), disagreed, accepting PennEast's defense that their use of eminent domain flowed directly from the federal government.

Roberts argued that the right of the federal government to use eminent domain for the construction of essential infrastructure was well established, that there was nothing stopping it from delegating that power to a private company, and that "[a]lthough nonconsenting States are generally immune from suit, they surrendered their immunity from the exercise of the federal eminent domain power when they ratified the Constitution."

This doesn't mean that the pipeline will definitely be completed. As Greg Stohr points out in Bloomberg, PennEast "still must secure state-level permits, something that may prove difficult in [liberal] New Jersey." But this case is still has the potential to be significant, limiting as it does the ability of left-wing activists to kill major infrastructure projects they couldn't stop at the federal level simply by pumping money into local politics.

Will this precedent affect, for instance, Enbridge's other big pipeline project, which has seen Michigan holding all of eastern Canada hostage just to make a point? It's a hopeful sign.

The Fake News of 'Beyond Coal'

When one happens to be a scientist with an expertise in environmental issues like yours truly, one has the opportunity to digest a disturbing number of misleading, eye-rolling headlines in the mainstream media as heavily-biased journalists vainly attempt to present accurate information about environmental issues.

Even by that ridiculously low bar, the headline that appeared in the May 5 edition of the Chicago Tribune rates as the most misleading, unscientific and mindlessly hysterical that I have ever seen. A major metropolitan newspaper in the United States actually printed the following:

Burning natural gas is now more dangerous than coal.

Pollution from natural gas is now responsible for more deaths and greater health costs than coal in Illinois, according to a new study highlighting another hazard of burning fossil fuels that are scrambling the planet's climate.

Researchers at Harvard University found that a shift away from coal during the past decade saved thousands of lives and dramatically reduced  from breathing particulate matter, commonly known as soot. But the numbers declined only slightly for gas, another fossil fuel that by 2017 accounted for the greatest  risks.

About half the deaths from soot exposure that year can be attributed to the state's reliance on gas to heat homes and businesses, the study found. Coal is more deadly only when used to generate electricity.

The alarming findings raise questions about whether Gov. J.B. Pritzker's proposed transition to a zero-carbon economy would move fast enough in phasing out the use of gas—not only to blunt the impacts of climate change but also to ensure Illinoisans breathe clean air.

The term “fake news” hardly covers it. This is “farcical news,” “fanciful news,” “delusional news,” etc. Yeah, journalists are not scientists. I get it. But, how sad it is to consider there is not one editor at the Trib who might have enough passing knowledge to think something like “that really doesn’t sound right, maybe we should take a second look.”

The essence of the Trib’s story, written by staff enviro-propagandist Michael Hawthorne, may be summarized thus:

Hawthorne does not actually use the accepted environmental terms “fine particulate” and “PM-2.5” in his story. Instead, he calls fine particulate “soot.” Certainly, that’s a much more appealing term to someone attempting to create a narrative, but it has little to do with reality. When you call in a chimney sweep to remove actual soot from your fireplace, almost none of the black gunk he or she will brush off is anything close to 2.5 microns in aerodynamic diameter.

Anyway, the problem with this particular narrative is the same one that always occurs when people with an agenda attempt to dragoon science into supporting their political agenda: they use that portion of the science that helps them and ignore (willingly or ignorantly) any of the science that disproves their premise.

I can accept that the amount of PM-2.5 generated though the combustion of natural gas now exceeds the amount of PM-2.5 generated by through the combustion of coal. At least theoretically. The amount of PM-2.5 generated by the combustion of natural gas is relatively so tiny that it is very, very difficult to accurately measure using accepted EPA test methods. In the enviro-biz, one errs on the side of caution, meaning that PM-2.5 emission rates attributed to natural gas are likely inflated.

Doesn’t really matter though, since the amount of PM-2.5 emissions that can be tied to electrical generation of any kind is trivial. Based on the last verified National Emissions Inventory (NEI) of 2017, the total amount of PM-2.5 emissions generated across America was 5,706,842 tons/year. Of that, EPA attributed 107,270 tons/year of fine-particulate emissions to fossil fuel combustion used to generate electricity. That’s less than 2 percent of all national PM-2.5 emissions.

Wondering about the biggest source of PM-2.5 emissions? Glad you asked. The 2017 NEI attributes 4,188,615 tons/year of PM-2.5 emissions to “Miscellaneous Sources.” That’s a shade over 73 percent of the total. Miscellaneous sources are non-industrial, non-transportation related sources of all kinds. In this case, the vast majority of miscellaneous sources consist of wildfires – many of which are the result of pitifully irresponsible forest management in blue states like California – and natural erosion.

Back in the nineties and early 2000s, environmental NGOs like the Sierra Club were all-in supporting natural gas. They recognized that natural gas combustion was inherently cleaner than coal combustion and that the amount of greenhouse gas produced using natural gas was far lower than that amount of greenhouse gas produced using coal on a per megawatt generated basis. They gleefully accepted donations from natural gas producers in order fund initiatives like the Sierra Club’s “Beyond Coal” campaign.

Chesapeake Energy, the nation’s second largest natural gas producer, was a big Sierra Club supporter back then, presumably because Chesapeake executives hoped that going “beyond coal” would help their bottom line. They didn’t have the foresight to see that once the enviros actually went beyond coal, natural gas would be the next target of opportunity. I’ve been told by people I trust that several Chesapeake shareholders were something less than pleased when the Sierra Club pivoted from being a natural gas supporter to a natural gas opponent, which is where they and most of their fellow environmental NGOs remain today. In the business of environmental advocacy, as is the case with any other big business, one has to follow the money.

It’s a disappointing story, but I fear that Chesapeake will be far from the last company to jump at the bait when an environmental NGO offers them absolution in return for thirty pieces of silver.

Trouble in the Land of Enchantment

Throughout the 2020 presidential campaign, candidate Joe Biden was rarely left on his own to articulate his economic plan for recovering the pandemic-wounded economy. He and his surrogates so routinely punted on details of his vision for recovery that one might have mistaken them for the 2020 offensive line of the Dallas Cowboys…or worse, the Chargers. Those who voted for him presumed that any Biden plan would include job creation since jobs are foundational to any economic recovery... but even more so after a summer of BLM building-burning and pandemic-driven lock downs.

Oil and gas industry workers were particularly fretful about how a Biden administration would "Build Back Better" when Democrat hostility has underpinned every reference to their industry. They knew well that their industry would bear the brunt of whatever plan the administration eventually conjured up. After all, Biden had promised to end fracking during the second debate…a moment of inadvertent candor that created a momentary panic within his campaign.

By popular demand!

Within days of taking office, it was not job creation that illuminated his path to recovery. Instead, he presented a plan for cutting jobs…. lots of them. President Biden signed an executive order canceling construction of the XL Pipeline. Almost immediately 11,000 direct jobs are on the chopping block for elimination, with an estimated 60,000 additional indirect jobs that will potentially be eliminated. These are well-paying, blue collar jobs. The kind of jobs that represent real economic impact.

Then, days later, it happened again. The Biden administration announced another executive order that will cause further economic destruction. The order directs the Department of the Interior to suspend new oil and natural gas leasing on public lands and offshore waters, concurrent with a comprehensive review of the federal oil and gas program. According to the press release, the order "will help restore balance on public lands and waters, create jobs, and provide a path to align the management of America’s public lands and waters with our nation’s climate, conservation, and clean energy goals.”

Together these orders portend negative economic implications, reverse positive environmental trends and weaken national security by negatively affecting energy security of the U.S., an achievement of the Trump administration that unquestionably changed the geo-political landscape.

At the state level, the implications are grave. Wells on federal and trust lands account for about 20 percent of the nation’s oil production, and less of its gas output. However, the companies that own these leases pay taxes, based on production. These fees help fund millions of dollars of the budgets of a number of western states and Indian tribes including Wyoming, Utah and New Mexico where the federal lands are located. Of those states perhaps New Mexico and the Ute Indian tribe will be most negatively impacted by the second of these two Executive Orders.

New Mexico hardest hit?

According to the New Mexico Oil and Gas Association and the American Petroleum Institute’s (API) new analysis, there will be profound negative consequences for New Mexico if a ban on federal leasing and public lands takes effect. New Mexico, which accounts for 57 percent of federal onshore oil production and 31 percent of onshore natural gas production, is projected to lose more than 62,000 jobs by 2022 and more thereafter, This represents more than five percent of all the jobs in the state by 2030. With nearly 40 percent of the state’s budget funded by natural gas and oil production, a ban puts at risk more than $1 billion of federal revenue sharing which helps support New Mexico’s entire budget. New Mexico voters chose candidate Biden to be President Biden. If the oil and gas industry were a nose, the voters of New Mexico just cut it off to spite its own face.

Because of the Biden administration’s attack on U.S. energy production, the implications are also environmentally detrimental. Currently, the U.S. is a net exporter of energy. This was achieved by oil and gas extraction from shale. Natural gas has proven the driver of unprecedented lower emission levels. In fact, the levels have been so low, the Americans led emissions reductions when compared to the bloviating bunch of dooms day Paris Climate Accord signatories.

By removing the ability for the U.S. to produce domestic energy, two things occur. First, the use of coal, which had been on the decline in the U.S. will not end up being retired, as is the current plan. Next, coal generation, according to the API’s analysis, will initially increase by 6 percent under a permit ban, and will continue to increase by 15 percent in 2030. As a result, CO2 emissions will increase by an average of 58 MMT and will continue rising, ultimately representing a 5.5 percent increase by 2030.

Finally, there are the national economic impacts of the proposed permit ban. Immediately following implementation of the federal leasing restrictions, U.S. economic growth will slow. Lower U.S. energy production and higher energy prices will reduce GDP by a cumulative $0.7 trillion according to the API analysis.

It is clear that the Biden administration does not value U.S. economic superiority, nor the impact a strong economy has on our citizens. Instead, the administration seeks to weaken the country by undermining the most foundational element to innovation and economic vitality -- inexpensive and abundant energy, delivered by those working in the oil and gas industry.

Whether it's due to the political and financial debts President Biden and his family and many in the administration have to China, the influence of contributors and environmental extremists, or even more sinister motivations, doesn't matter. As an industry, we must defend our country against the madness of unmaking America. We must engage in the arena of ideas, engage in our state legislators to push back against these attacks and ensure it we drive our own narrative. There is not “someone else” who will do it for us. We must do it on behalf of this great country… to save our industry and save our county.

Toyota Chief on Electric Cars: Slow Down!

The Observer reports on some very striking comments by Toyota Motor Corporation president Akio Toyoda, on the topic of Electric Vehicles. EVs are hot right now, with the automotive industry investing heavily in them, and governments throughout the world (prominently, as The Observer mentions, those of Great Britain and California) looking to aid their development by banning the sale of gasoline and diesel engines in the not-too-distant future.

But Mr. Toyoda is not convinced that they are the answer. At a recent press conference, he pointed out a few problems with the projected shift to EVs. First, he claimed that “the current business model of the car industry is going to collapse" if the industry shifts to EVs too quickly. No word on whether he thinks that the oft-discussed 10-15 year timeline put forward by activists in and out of government falls into that category, but it wouldn't be surprising if that is exactly what he had in mind.

Next, he pointed out that "Japan [for one] would run out of electricity in the summer if all cars were running on electric power." There just isn't enough electricity to go around, especially with battery technology being what it is. He estimated that "the infrastructure needed to support a 100 percent EV fleet would cost Japan between 14 trillion and 37 trillion yen ($135 billion to $358 billion)," a hefty percentage of GDP for a famously stagnant economy like Japan's.

Worth noting that it is a lot cheaper to generate the electricity a given vehicle needs on site -- that is, within the vehicle itself, as a gasoline powered combustion engine does -- than producing it elsewhere and transporting to the car.

And, following up on that point, he called attention to the fact that "most of the country’s electricity is generated by burning coal and natural gas, anyway," so the stated goal of leaving fossil fuels behind by shifting to EVs isn't going to happen. In his words:

The more EVs we build, the worse carbon dioxide gets… When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?

Unfortunately the answer to that question is probably "No," both for the politicians and the propagandists in the media.

Pacific Gas? and Electric

Earlier this month, just as the hand of winter tightened her grip across some of the most prolific oil and gas regions in America, city officials in San Francisco demonstrated the disregard they have for the free market and unmasked the contempt they have for hard-working Californians. Fortunately, the oil and gas industry has the opportunity to stand in the gap and protect the future of free markets through continued delivery of low cost, abundant energy.

In what is yet another chapter in the effort by local and state leaders to create government dependence through the methodical dismantling of the free market, the city’s Board of Supervisors voted unanimously to ban the use of natural gas in new commercial and residential construction in San Francisco. That means natural gas stoves, furnaces, water heaters and appliances will no longer be permitted. Rather, builders will be required to install electric (or solar) powered appliances and heating equipment, fueled by more costly electricity or insufficient solar power.

This is curious since California is a net importer of power, meaning the state does not have enough local power generation capabilities to meet the power demand. Hence the decades of rolling brownouts across the state that plague California’s summers. According to government data, natural gas and solar are the two most prevalent sources of electricity generation in California; however, solar generation is non-dispatchable.

Grid operators have been using natural gas and, to a lesser extent, electricity imports from neighboring areas to contend with changes in demand. San Francisco city government, therefore, just made using natural gas illegal, while mandating the use of already scarce electricity which is generated from natural gas and hydro-electric (dams) sources located outside of California. It feels like some kind of drunken game of Twister doesn’t it?

It's all fun and games until the power goes out.

City officials cited cost savings, public health benefits and a fervor to reduce greenhouse gas emissions for the move. None of the officials were able to explain how electricity, more expensive and more scarce than natural gas, would produce cost savings.

In fact, depending upon the market, it costs about 30 percent more to operate electric appliances compared to natural gas appliances. Nor could the officials articulate the "standard" by which public health benefits were being measured by this mandate. San Francisco is after all, the city where human feces and hepatitis C-infected drug addicts are strewn about the streets in equal measure, with nary a city health official in sight. If ‘public health benefit’ in San Francisco were a ship, it would be called the Titanic.

In its vote, San Francisco joined nearly forty other California cities which have also banned natural gas in new commercial and residential construction. These actions stand alongside similar efforts around the country. In Washington state, for example, the state, in defiance of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration, sought to ban oil trains transporting oil and gas from North Dakota’s Bakken fields to ports and refineries located along the western shores of the state.

Or the efforts by the Center for Biological Diversity to dismantle four hydro-electric dams on the Snake River in Washington state. Or the effort of Michigan governor Whitmer’s to permanently close Line 5 of the Enbridge pipeline that moves oil to refineries in the region.

Even the most casual observer would deduce that it must be green zealotry that in fact underpins these dreadfully anti-market efforts. During all of this, however, it is notable, that the rates of greenhouse gas emissions are below what would have been required by the infamous Paris Climate Accord. And the U.S. hasn’t even been aligned with the carbon gas-emitting signatory countries for at least four years. These lower emissions rates have been the direct result of the move from coal to natural gas.

The objective becomes increasingly clear then. While asserting concern for climate change, green zealots actually are more interested in control…. control of just about everything. They seek to increase the cost of producing and using these otherwise inexpensive fuels through rules and mandates. Government is artificially manipulating the market in an effort to force consumers and industry into accepting a more expensive, but less desirable quality of life.

Control freaks unite!

And if the market won’t accept this objective? That depends entirely upon the importance the oil and gas industry places on its own future. The industry must be willing to chart its own course and communicate its own narrative if it wants to stop this sinister effort.

Laws and rules like these represent actual threats to the very foundations of the industry and to a free society. Local and state governments across the country seek to wrestle our free-market decisions from us and mandate the quality of life we will be permitted to enjoy. If the industry fails to respond, the next reasonable steps will include outright bans according in accordance with this Orwellian worldview.

These 1984-esque realities will not impede leaders and their cohorts. They will continue to live as they desire. The rules and bans aren’t for them after all. Think Michigan's Whitmer whose husband went boating during its state lockdown, or California governor Newsom’s French Laundry group birthday party during his state’s lockdown. They and their cohorts will assuredly keep using their gas appliances they’ve prohibited others to use in the coming years, while also feeling superior. After all, they recycle, drive Teslas, provide their own canvas bags when shopping at Whole Foods and wear Lululemon leggings while they work out their status anxiety on their Peloton bikes.

As an industry, oil and gas needs to commit to pushing back on these attacks. Inexpensive energy is imperative for a thriving economy, manufacturing excellence, economic mobility, job creation and a future of prosperity. The industry needs to take back control from the preaching class and remind them that their lifestyles have been brought to them by the men and woman of the oil and gas industry. 

What's that Carbon Tax Gonna Cost?

Last week the Trudeau Government announced their brand new anti-climate change initiative, which included a significant hike in the carbon tax. As we discussed at the time, the plan is to increase the current tax of $30 per ton by $15 per year until settling (for now) at $170 per ton.

This is a big increase, but to most people those numbers seem entirely theoretical. A ton of carbon emitted sounds like a lot, and the average Canadian probably sees those numbers and figures that, since his car and furnace together don't emit that much, this doesn't affect him. Of course, this is exactly how Trudeau wants people to approach the issue.

But to set the record straight, Kris Sims of the Canadian Taxpayers Federation has helpfully scaled those numbers down to the individual level. Here's what she came up with:

Right now, the federal carbon tax is at $30 per tonne, resulting in a tax of 6.6 cents per litre for gasoline and 8 cents per litre for diesel.... At those rates, filling up a minivan costs nearly $5 extra in the carbon tax, filling a light duty pickup truck costs $8 more and a super duty diesel pickup costs $14 more.... So, now that the feds are going to increase the carbon tax to $170 per tonne, what happens to these everyday costs?

This hike will put the carbon tax up to more than 37.5 cents per litre for gasoline, 45 cents per litre for diesel and 32.8 cents per cubic metre for natural gas. That means that very soon it will cost you $27 extra to fill up a minivan, $45 extra for a light duty pickup truck and $204 extra to fill just one diesel fuel cylinder on those big rig trucks that deliver everything from furniture to food across the country. Remember: this is just for the carbon tax. This doesn’t include the cost of the fuel, other taxes, the GST or the incoming second carbon tax that Trudeau’s government is creating. How many people have an easy extra $45 to fill up their trucks to go to work?

What, me worry?

And that's just for your vehicle. What about keeping your house warm? Sims lays that out as well:

When it comes to heating a home with natural gas, the carbon tax often costs more than the actual fuel being used. Homeowners in British Columbia sent the Canadian Taxpayers Federation their natural gas bills to show the costs. One of the bills showed an average-sized home in Gibsons using 466 cubic metres for one winter month last year, resulting in a carbon tax bill of $35. The homeowners had only used $27 worth of natural gas....

With a carbon tax of 32.8 cents per cubic metre of natural gas, it would cost that homeowner in Gibsons $150 extra in the carbon tax for just one winter month’s worth of natural gas. Based on the average annual use of natural gas in new Canadian homes, it would cost homeowners more than $885 extra in the carbon tax.

Canada is, of course, one of the most northerly nations in the world, but Gibsons, B. C., the town she uses as an example, is hardly one of the coldest areas in the country. In places like Moose Jaw, Saskatchewan; Winnipeg, Manitoba; and Arnprior, Ontario, those numbers are going to look at lot worse.