The 'Energy Transition' Will Be Delayed a Bit

Perhaps the most scandalous aspect of environmental ideology is that its religious fervor for the Malthusian apocalypse requires its high priests to ignore data and science. The actual monitoring data for core environmental problems such as air and water quality, deforestation, and other genuine problems show that most environmental problems are improving all around the world, most conspicuously in prosperous nations that have market economies, embrace technological innovation, and protect property rights and the rule of law.

Presenting these data, from credible sources as various as Human Progress, Our World in Data, or Environmental Progress, or figures such as Bjorn Lomborg or Matt Ridley (to name just two), sends environmentalists into a rage of denunciation. For environmentalists, good news is bad news, akin to depriving a fundamentalist fire-and-brimstone preacher of original sin.

This is true even of the grand-daddy of all environmental scares: "climate change." The latest official “consensus” scientific estimates of climate change have been backing away from the most dire climate disaster predictions of a decade ago, though the media never notice, and the relentless climate campaign won’t admit it.

Malthus: Doomed, I tell you, doomed.

It is not just more congenial, but essential, that environmentalism suppresses all data that does not support the urgency of their latest disaster scenarios. The most scandalous example came this week with news that BP (formerly British Petroleum) is weighing whether to discontinue its annual “Statistical Review of World Energy.” This fabulously useful report, which BP has published for 71 years, provides detailed trend data for every country in the world in downloadable spreadsheets, enabling analysts to conduct independent analysis easily, often noting findings that BP omits to highlight in its own write-up. Surprise: BP’s data turns out to be uncongenial to the renewable energy cheerleaders. Therein lies a tale.

Why would BP think of abandoning this well-regarded report, which can’t be a huge expense or labor for a multinational of its size and expertise? The Reuters report that broke this story hints at the problem:

The report has been seen by some BP executives as detrimental to the company's new direction, sources told Reuters... "Put simply, it (Statistical Review) is bad PR," one company source said. The company has in recent years also cut its ties with several oil and gas associations and has sought to raise its profile as a clean energy provider.

Why would a detailed, data-rich report on actual energy trends be “bad PR” for a major oil company? Back in 2000, BP formally rebranded its company initials to stand for “Beyond Petroleum,” accompanied with a $200 million ad campaign conceived by Ogilvy and Mather, featuring splashy public pledges to "go green" to fight climate change. In the immediate term this meant becoming predominantly a natural gas company and phasing out of oil exploration and production along with new investments in wind and solar power.

BP quietly abandoned the “Beyond Petroleum” rebranding after the Deepwater Horizon oil spill in the Gulf of Mexico in 2010 made a mockery of its virtue-signaling pretensions. It also quietly sold off its money-losing wind and solar power divisions, and suddenly returned to expanding oil and gas production.

But BP lately has returned to the fold of climate hysterics, and is once again pledging to become carbon-neutral by 2050 if not sooner, and a full partner in the “energy transition” that is the fever dream of the climate campaign. And that’s where the Statistical Review of World Energy becomes an inconvenience and PR problem: BP’s data show that the “energy transition” isn’t happening. While we are inundated with headlines and advocacy group celebrations of the rapid growth of “renewable energy,” the data show that hydrocarbon energy—especially coal—has been increasing more than renewable energy for the last decade.

Meanwhile, a mountain of energy lies right beneath your feet.

In 2021, BP’s figures show global coal use grew by 6.3 percent, while oil consumption increased 6.1 percent, and global greenhouse gas emissions rose 5.9 percent. Coal accounted for 51 percent of total new electricity generation around the world, and coal even grew in the U.S., after falling (irony alert!) during the Trump administration.

The data for 2022 (BP’s report comes out every year in June) are likely to be even more dismal for the greens, as the disruption of the world’s energy supply has exposed the green energy fantasy. Coal use everywhere is soaring. Right now Germany has a higher electricity carbon footprint than coal-heavy Poland, which is wisely resisted the romantic nonsense of the greens. No wonder the climate campaigners would like to see this bad news suppressed.

The return to energy reality the Ukrainian War has prompted merely sped up the inevitable consequences of green energy diktats by a decade. Suppressing the data demonstrating this reality isn’t going to change that. If BP dumps their annual report to appease their in-house climate campaigners, hopefully a more clear-headed energy company such as Liberty Energy will want to take it over.

The Coming Struggle to Stay Warm

One of the first columns I wrote for The Pipeline almost three years ago employed the metaphor of the irresistible force meeting the immovable object to forecast the likely consequences of Green politics. The irresistible force was the imposition of a policy of Net-Zero carbon emissions upon the populations of the West, in particular those of Anglosphere, and the immovable object was the democratic electorates of these countries.

It might take time, I argued, but when the voters found that Green Deals and such meant higher energy prices, higher taxes, immiseration of the less well-off, and harshly puritan lifestyles for the rest of us, an almighty smash-up would ensue.

And so it has. Indeed, the smash-up has come sooner than I expected, namely this year, and it will almost certainly be harsher because the negative impact of Net-Zero has been aggravated by the Russo-Ukraine war and sanctions adopted by the U.S. and the E.U. in response to it.

To stop train, pull handle. But think first.

What I didn’t expect, however, is that the smash-up would take place in slow-motion. But that is what’s happening.

Almost wherever you look, there’s some not-very-important story that tips you off to a subterranean explosion whose full impact won’t be properly felt for a while. The effect is something like the delayed impact of depth charges or deadpan jokes.

Here, for instance, is the London Daily Telegraph telling us that the Brits will be wearing new styles of underwear this winter—and not because they’re hoping for a more exotic sex-life:

Households are stockpiling thermal underwear to avoid turning on the heating this winter as energy bills spiral. John Lewis, Britain’s biggest department store chain, said shoppers had rushed to buy warmer clothes in recent weeks, with sales of winter thermals having doubled last week compared to a week earlier. Sales of dressing gowns are up 76pc compared to last year.

That’s the precautionary principle reduced to the bare essentials. Like everyone else in the northern hemisphere, ordinary Brits are expecting a chilly winter this year because of the following factors (which didn't start with Mr. Putin’s war); Like most Western governments, the U.K. powers-that-be have neglected to invest enough in energy security because they quite consciously preferred to invest in transitioning from fossil fuels to renewable forms of energy. That is the orthodoxy of Net-Zero (sometimes enforced by treaties) in E.U. countries such as Germany, non-E.U. countries like Britain, and the U.S.

It’s a massive enterprise because until recently fossil fuels provided more than 85 percent of total energy to even the most technically advanced economies. In pursuit of this vision of a future of all-renewable energy, Germany has shut down almost all its nuclear power stations, keeps equivocating over whether the shut down the few remaining ones, and ends up relying on “dirty coal” now that cheap Russian energy is as unreliable as "renewables."

California, dreaming...

Over the Pond the Biden administration has been refusing to license oil-and-gas explorations on federal land with the embarrassing result that it has to import oil from Venezuela. And the U.K. government too has banned “fracking” that would exploit the nation's plentiful reserves of natural gas. As a result almost all of these countries are facing the risk of energy shortfalls to the point at which energy “blackouts” and rationing are seriously entertained by utilities and regulators if the winter is severe. California too.

Moreover, the costs of transitioning to renewables are not only high, they are rising. The International Energy Agency has just revised its estimate of the investment needed to limit global temperatures to meet the Net-Zero target under the Paris Accords upwards. That will now rise from the 390 billion dollars annually today to 1.3 trillion dollars a year between now and 2030. If met, those targets would eliminate emissions from the energy sector by 2035 in the advanced world and by 2040 in developing countries. But they are unlikely to be met. On present trends Net-Zero won’t be achieved until 2060—and present trends look too optimistic in the light of the present energy crisis.

The upshot of which is that almost all the West’s governments face slightly different versions of two serious problems: uncertain energy supplies, and existing high indebtedness.

Take energy supplies first. Germany is facing a serious crisis of its fundamental economic model in the post-Ukraine world, Its two foundations were exporting cars to China and importing cheap energy from Russia. For the foreseeable future, neither now looks like a reliable prospect or even a possible one. Berlin must now struggle to replace the Russian energy half-forbidden by the sanctions it supports diplomatically.

Artifacts of an ancient civilization, if Greens get their way.

Similarly, because Britain neglected nuclear investment—its target of 25 percent of energy from nuclear power stations will be reached in 2050!—the country is heavily dependent on imported natural gas which it needs to solve the renewables’ “intermittency problem”: there are days when the wind doesn’t blow nor the sun shine. As Andrew Stuttaford points out, that makes the earlier decision of the U.K. government to close down its biggest natural gas storage capacity an especially shortsighted one. Even the French, who sensibly went nuclear in a big way in the 1970s, now have to spend on repairs and modernization.

What of the second aspect of the crisis: overspending? Two sorts of spending need to be financed here—that for Net-Zero, and that to finance the energy security national governments have neglected. Unfortunately, however necessary they are, they come on top of the massive sums of money that the same governments have already spent during the Covid-19 pandemic on locking down their economies and paying their people to stay at home. That backlog of indebtedness explains why the financial markets are becoming nervous of lending money to governments that don’t make financial responsibility their top priority. Interest rates are rising again in response to rising inflation, and that's a problem for governments that want to borrow money.

We saw that very recently when the British government fell because the markets thought it was adopting a cavalier attitude to debt. That impression was both exaggerated--the U.K.’s national debt as a percentage of GDP is one of the lowest in Europe--and largely the result of rash but trivial political misjudgments by ex-Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng. All the same, the market brought them down because they were planning to add to an already high total of government spending.

Long johns, here we come.

When that happens, every spending program becomes the enemy of every other program. If restoring energy security becomes a priority for governments, then spending on Net-Zero will—and should—come under pressure. After all, Britain's short financial crisis became a political one in part because it was leading to a rise in mortgage payments. Like rising sales of warm thermal underwear, rising mortgage payments are another symptom of the price that the Brits will be paying for ill-judged energy policies. Voters' shoes are beginning to pinch; the immovable object is beginning to stiffen.

Of course, the irresistible force (in the form of support for Net-Zero from an alliance of the establishment and radical Green anarchists) has neither vanished nor much diminished. At almost every stage it has objected to policies that looked likely to prioritize energy security over the transition to renewables. With the arrival of a new prime minister, Rishi Sunak, it has been flexing its muscles to warn him that it will tolerate no lifting of the ban on fracking that the doomed Liz Truss tried to bring about. Net-Zero is an obstruction to restoring the energy security that it undermined in the first place. The circle closes.

My impression is that Sunak is taking his time to assess what Leonid Brezhnev used to call “the correlation of forces.” On the one hand, he has said that he will keep the ban on fracking unless evidence appears that suggests it is not dangerous to the environment; on the other, he has decided not to attend the U.N.’s COP 27 Climate Summit on the grounds that, in effect, he’s got more important things to do in London. My translation: he doesn’t want to attend and be trapped into making commitments on Net-Zero that might later be inconvenient to his overall energy and budgetary policies.

He may also think that Winter when the snow falls and Britain’s bedrooms freeze will be time also when the irresistible force of Net-Zero becomes much less irresistible and the immovable object of voter resistance much more resistant. And irremovable.

Dumb and Dumber, To

Must be the passing years. More things irritate me. For example, the chap at my club’s gym the other day who spent some ninety percent of his time poring over his smart phone. People still wearing masks outside. Then there was the (retired) bishop at my church who had the straightforward job of delivering the sermon at a memorial service for the late Queen Elizabeth. On the throne for seventy years, she had kept her views on political matters to herself. The bishop couldn’t manage it for fifteen minutes. Unmistakably congratulating the new King Charles for his former princely far-sighted views on the environment (go figure), and then clearly signaling his own support for the monarchy, about which there is a lively debate within Australia.

Now I happen to think that Prince Charles’s views on the environment were inane, while agreeing with the bishop that the monarchy has served Australia well. However, whether I agree or disagree is beside the point. The pulpit is for preaching the gospel; and, in this special case, to honour the Queen’s life. It is not for political posturing. Unfortunately, unlike the late Queen, many churchmen are incapable of keeping fittingly shtum. And climate change, in particular, excites their appetites to be heard and seen being virtuous (apropos Matthew 6:5) at whatever cost to Christian good fellowship.

No gas emitted!

From discordance to discourse. I was to be at lunch recently with someone who works within the renewable energy industry (everyone has to earn a living) and yet retains a balanced outlook. We discussed hydrogen harmoniously. Why not. He made the logical point that while blue hydrogen made of natural gas, with CO2 sequestrated, must by definition result in more expensive power than using natural gas directly, green hydrogen faces no such inherent limitation. Thus, conceivably, the price per kilowatt hour of electricity generated using green hydrogen could eventually fall below the corresponding price using natural gas. At the same time, he acknowledged the size of the task and the possibility that it might prove to be infeasible. Indeed, it might.

Cheap green hydrogen. That’s the goal of mining billionaire Andrew Forest in Australia. He’s not alone. He’s part of a global pursuit for a stash of loot; akin to It's a Mad, Mad, Mad, Mad World, if you want to strike a movie parallel. In the movie, if you recall, there was the possibility of only one winner, such was the level of avarice among the competitors. There could be more than one winner in the green-hydrogen stakes. But pointedly not all nations can be the leading exporter of green hydrogen and surely only very few can be among leading exporters. I suspect that a fallacy of composition is afoot. The world isn’t big enough. Be that as it may, notwithstanding the geographical limitations of the world, Australia, according to its governing powers, is on track to be a leader, if not the leader.

Yet, unaccountably, when that esteemed body, the World Economic Forum identified six likely leading candidates for producing green hydrogen, Australia was missing. There was China, the European Union, India, Japan, South Korea and the United States. Come on guys. Where’s Australia? A mere afterthought, as it happens. Appended among Chile, Namibia and Morocco, et al.

But surely, that can’t be right? It was only in September this year that an international conference on green hydrogen was held in Australia’s so-called Sunshine State. Plenty of sun and wide-open spaces in Queensland to plant solar and wind farms in order to power electrolysis; lots of water up north too. Also, I misspoke, pardon my slip. It wasn’t a mere “conference” but a “summit” no less. Hydrogen Connect Summit, it was called. Henry Kissinger comes to mind. There you have it. Australia is surely at the epicentre of the green hydrogen revolution.

Suitable for a "green energy" summit.

Not so fast. I searched. Quickly found summits everywhere; not a conference in sight. The FT [Financial Times] Hydrogen Summit in London in June; the World Hydrogen Energy Summit in India, coming in October; the World Hydrogen Summit in the Netherlands in May; the Asia-Pacific Hydrogen Summit in December 2021; the Hydrogen Shot Summit, courtesy of the U.S. Department of Energy in August/September 2021. No doubt there’s more.

All appear to be part of a chronological series of summits; more planned for 2023. "Summit," as presently defined in the dictionary, is clearly inadequate to encompass the modern-day renewable-energy world. Need a new twist. Let’s say, meetings of government apparatchiks and rent-seekers; particularly in the cause of obtaining taxpayer handouts to fund a fanciful green-hydrogen future.

It's hard to get reliable evidence on relative costs and prices of different hues of hydrogen. There is much noise and vested interest. I prefer to rely on those with a current stake in the game. Santos is Australia’s largest producer of natural gas. Here is its CEO Kevin Gallagher at a conference in June:

If we look at current prices in Australia, hydrogen made in Moomba from natural gas with carbon capture and storage would be about $14 per gigajoule before transport. Green hydrogen made at Port Kembla would be at least $38 per gigajoule before transport – a price Australian manufacturers could not pay.

This price differential quoted by Gallagher is in line with other estimates (e.g., an EIA estimate) which suggest that green hydrogen costs about three times that of blue hydrogen. Now those favouring green hydrogen claim that its cost will fall steeply over time as a result of technological breakthroughs and scale. The first is nothing more than wishful thinking. The second, debatable; when producing green hydrogen at scale is the essence of its predicament. But we’re missing something. We’re comparing dumb with dumberer.

In the ten years from 2011-12 to 2020-21, thus leaving aside this year’s artificial spike, wholesale natural gas prices in Sydney averaged a little over A$6 per gigajoule. Why pay $14 for blue, never mind $38 for green, when you can have it au naturel for single-digit dollars; and especially so, if drilling and fracking were undemonized? That’s the question lost to your average bishop and prince who are gung-ho for green and damn the cost to the hoi polloi.

The Utter Folly of European 'Climate Policy'

Europeans will starve, go hungry and be jobless in large numbers unless the European Union and national politicians do an about-face on climate policy. The United States is not far behind, although has more tools to displace failed leaders than do people under the thumb of the European Union. This winter is but a taste of things to come.

An extensive analysis—50 points—of the folly of "climate policy" is found at wattsupwiththat.com; in sum it evinces there is no “climate emergency,” the goal of Net-Zero by 2050 is “delusional,” neither warranted, feasible, nor politically possible and would be so costly it would “drive a 33 percent average reduction in all government spending on health, housing, education, social welfare, police, climate adaptation, defense, social justice, etc.” As the measurable big decrease in global economic output during the pandemic lockdowns established, slashing living standards will not result in a “measurable decrease atmospheric CO2.” The only feasible means to phase out fossil fuels are technological advances, which means the shift cannot be mandated by government and of necessity the shift will be slow.

In any event, nothing the West can do changes the fact that during the next quarter century “over 80 percent of all increased global emissions” will occur in Asia. Moreover, for decades to come, “Asia, South America, and Africa “will represent over 90 percent of future increases in energy consumption.” Any effort must be global, not nation-by-nation. It’s simply not a first-world issue, and it’s irrational to pretend otherwise.

Women's work.

Also irrational is the pretense that we can limit energy use. We need it for everything and the demand is growing. It may be a surprise to learn that “Global smart phone production uses 15 percent more energy as the automotive industry.... the Cloud uses twice a much electricity worldwide as all of Japan.” This would surely set back on their heels the anti-fossil fuel crowd gathered everywhere in clothes manufactured from petroleum-based materials and coordinating their activities by iPhones, if only someone told them. 

In the meantime, this winter Europeans are getting to see first hand the folly of the "climate change" cult thinking of the European Union and its national leaders. They are already seeing food and energy shortages and the beginning of deindustrialization. In a series of tweets Alexander Stahel, CIO of a Swiss investment management firm, sets out a number of developments in various European countries, to flesh out what news summaries do not—the desperate near- and long-term consequences of Europe’s “gigantic structural” problem. Here are a few examples.

As prices increase, along with scarce food, limited transport options, and winter heating, it’s easy to see why unrest in Europe is growing. The Yellow Vests in France have been demonstrating against, inter alia, rising fuel costs and austerity measures for almost four years. (The most recent French complaint about the emissions mandates involve the E.U.’s ban on an insecticide needed to deal with a beetle that devastates mustard plants.)

In the Netherlands, farmers have been protesting and blocking roads with their tractors for almost three years because of proposals to limit industrial fodder and livestock production to lower emissions from the nitrogen cycle. More recently, protests have against energy shortages have cropped up in Belgium where thousands of people have been protesting against the huge rise in the cost of living, driving “rising food prices, startling energy bills and frustration with politicians and employers.”

And then there’s Italy, where conservative firebrand Giorgia Meloni is poised to occupy the prime minister’s office after the recent elections saw her Brothers of Italy party surge to power. Meloni is more concerned with battling Europe's coming energy crisis than she is with "climate change," and has called for the EU. member states to work together to solve the problem before the problem solves them: "We need a common solution at the European level to help firms and families," she said in a statement. "No member state can offer effective and long term solutions on its own." Meloni's position on "climate change" already has the Left terrified, and its slander machine going full blast:

Giorgia Meloni, leader of the neo-fascist, right-wing populist Brothers of Italy party, is poised to become Italy’s first woman prime minister. This is as much a victory for feminism as Margaret Thatcher’s premiership in the UK, which is to say that it is no victory at all. Meloni boasts the familiar spate of ultra-conservative views with a few terrifying twists: not only has she called Mussolini a “good politician,” she also aligns herself with the white nationalist “great replacement” conspiracy theory. While her fascist leanings and the threats her ascent poses to human rights have been widely discussed, Meloni’s stance on environmental issues has been left relatively uninterrogated... it seems that Italy’s next government will be pursuing the promise of nuclear power and leaning into domestic natural gas extraction. Renewable energy forms, like solar and wind, are decidedly absent from the agenda. Meloni’s party has also criticised the EU’s ban on combustion engine cars by 2035 as “a sensational own-goal” and is likely to support junior coalition partner Matteo Salvini’s call for an Italian referendum to overturn the decision.

Also women's work.

Ursula Von der Leyen, president of the European Commission, threatened the Meloni coalition with "consequences" if it “veers from democracy,” which is rather ironic as there’s nothing particularly democratic about the Commission, the executive branch of the European Union, both of which are self-perpetuating sclerotic bureaucracies. Her threat reminds that the Commission has called upon the Union’s council to suspend 7.5 billion Euros from Hungary for “corruption.” Poland has said it will oppose such sanctions and criticized Von der Leyen’s not so veiled threats as did several Italian political leaders.

I don’t know if the present energy crisis will be enough to lead more countries to exit the European Union, which has, as we saw with Brexit, lots of tools to rein in unwilling members from so doing, but it just might if the winter is cold enough and the E.U. continues its suicidal foolishness and arrogance.

From Hearings to Hogwash

With gas prices now broadly lower than a few months ago, and believing it is tactically valuable with mid-terms just over fifty days out, Democrats have resumed their attacks against the oil and gas industry. Apparently believing that Americans are thirsting for the unimaginative narrative that oil and gas industry greed is responsible for creating higher gas prices and concomitant economic malaise, they are heading for a mighty miscalculation. They prefer to ignore the plainly failed Biden policies that are creating the current market conditions responsible for record inflation and higher prices for everything from gasoline to Gatorade, and instead toreturn to tactics that offer symbolism over substance.

We've just witnessed two days of hearings by two separate committees eager to get back to the boring bloviations by politicians and academics. Together, the Committee on Oversight and Reform and the House Natural Resources Subcommittee on Oversight and Investigations offered feigned outrage about oil and gas producers, and misstated facts and re-framed realities. The strategy of each committee was slightly different, but the tactics and overarching objective remained the same. Use whatever means necessary to hamper, intimidate, denigrate, and dismantle the most important sector of the U.S. economy—energy—to destroy the economy and force a change of behavior by the American people that would never be possible if the Democrats' political ideas were taking the country in a positive direction.

Acknowledged by leaders of both parties prior to January 2020 as the most important driver of economic vitality, inexpensive and abundant energy has now become a whipping boy for Leftists. Extracted using low-impact techniques, innovative processes, advanced technological engineering and a well-paid workforce, the American oil and gas industry delivers the safest and most cleanly produced oil and gas in the history of the world. But from the start, Biden has issued a steady stream of executive orders intended to hamstring the industry, limit supply so as to drive prices up, and give broad regulatory authority to agencies to investigate and in some cases arbitrarily punish those who ignore his demands to produce energy from "renewable" energy sources. All in complete denial of reality: that alternative energy sources such as  wind and solar are neither reliable, nor capable of meeting the energy needs of this country. 

America held hostage: Congress suspected.

Since Biden entered office, there has been an orchestrated effort by the president’s advocates, agency leadership, and committees on the Hill to denigrate, and if necessary, delegitimize opposing political views, industries, and economic activity. Agencies have been granted unprecedented investigatory powers through executive orders at the Security and Exchange Commission, the Energy Department, and Department of Justice through their "environmental justice"  initiatives, while congressional committees issue a blizzard of subpoenas. Legal energy-related businesses and even truth itself have come under the scrutiny of hostile officials who forget they work for American taxpayers.

During this week’s hearings by the Committee on Oversight and Reform, chairwoman Carolyn Maloney (D-NY) asserted that oil companies should somehow not be in the business of oil and gas production. Instead, they should direct their oil and gas revenue toward alternative power generation activities… which do not create sufficient revenue to keep the companies viable. By her lights, Exxon should be using investor capital to not maximize revenue from its core business activity. All while ignoring legal obligations Exxon has to investors and while ignoring the role the administration has had in obliterating America’s energy production capabilities through deliberately destructive policy prescriptions. 

Meanwhile, the House Natural Resources Subcommittee on Oversight and Investigations was continuing with its ongoing investigation of public relations firms’ role in "spreading climate change denial.” According to reports, chairman Raúl Grijalva (D-AZ) and subcommittee chair Katie Porter (D-CA) have been seeking documents from several private companies detailing their work for oil and gas producers and industry trade associations. These are legal companies being told they need to turn over their client documents to the government for partisan political reasons. This is intended to have a chilling effect on professional-services providers who work in the oil and gas industry, and is a tactic intended to promote fear and to coerce participation in inane hearings like these. To their credit, the companies declined the request to participate in the charade.

Don't forget unicorn farts.

While the committees are using their tactics of coercion, so too is the administration. The director of the National Economic Council, Brian Deese, is a former BlackRock executive who enthusiastically embraces the dubious environmental, social and governance (ESG) construct which intendeds to re-orient investor capital toward what are described as “global goals” that include the funding of businesses and industries that align with BlackRock’s economic interest and political worldview, even if in defiance of the best interest of their clients. Like committees’ subpoena threats against private citizens running their private companies, the ESG concept is similarly intended to change corporate behavior. If the corporations have the acceptable ESG score, determined by their political adversaries, they get the capital they need to run their companies, If not, as is happening with the oil and gas industry, the companies have difficulty accessing the capital these ESG advocates control.

As the energy industry goes, so goes American capitalism. You've been warned.

THE COLUMN: Virtue Über Alles

For first time since the end of the Second World War, continental Europe is facing shortages: of food and, crucially, of energy. During the war, as the tide inexorably turned against National Socialist Germany after the disastrous battle of Stalingrad in 1943, the Third Reich was ground to powder by the Stalinist U.S.S.R. and the Western allies, principally the United States, with some help from a reeling Great Britain. The brutal winter of 1944-45 saw the Germans reduced to salvaging firewood from the wreckage of their principal cities and eating the animals in the zoos in order to survive.

Germany and Britain now face another tough winter, but this time the crisis is of their own making. Deluded by their Leftist parties, including the so-called "Greens" (like watermelons, green on the outside, communist red on the inside), and frivolously stampeded by a cataclysmic earthquake/tsunami in a country 5,600 miles away, the panicked Europeans suddenly abandoned their nuclear facilities while simultaneous pivoting away from reliable sources of energy in order to pursue quixotic fantasies of "renewable" energy that will never come true. What did socialists use before candles? Electricity.

Atomische Narrheit.

Europe is in the middle of an energy crisis. Uncertainty over the flow of natural gas owing to Russia’s war in Ukraine has caused a spike in prices. The price of natural gas has soared to as much as $500 per barrel of oil equivalent, 10 times the normal average, fueling fears of winter shortages and cold homes.

Key commodities have already been affected. Fertilizer production, which requires large inputs of natural gas, is being shut down due to high prices. Manufacturers are hoarding glass in anticipation of future shortages. Climate change has made the situation worse, as a historic drought is drying up Europe’s rivers and cutting into hydroelectric capacity. The rising cost of energy has driven a spike in inflation in the United Kingdom, while Germany has suffered the worst inflation since the 1970s energy crisis.

What happened? The quote above from Foreign Policy partially explains how they got here (and, if things continue, the U.S. will not be far behind), but the real reason is: prosperity, combined with virtue-signaling neo-Luddism. The dreadful toll of death and destruction of the war, combined with the success of European reconstruction under the Marshall Plan, which saved the devastated economies of western Europe, left Europe with two debilitating by-products: the rise of pacifism as an anti-nationalist force and the abjuration of war as a means of foreign policy; and a false sense of economic security, under which they were free to chase their own chimeras of "soft power" and "progressive" living without any heed to reality.

The Europeans should have learned from their own history, but of course they never do. The Oxford Union's "King and Country" debate of 1933, a fateful year in European history, turned out to be one of the high points of British pacifism. Having been bled dry by the Somme and other horrific battles in World War I, and also having lost the cream of their manhood in the process, the Union passed the motion that "this House would not in any circumstances fight for King and Country." Winston Churchill who never saw a war he didn't want to fight, knew that war with Hitler was unavoidable, and was aghast at the surviving, whinging chaff of England's crop, the sons of the cowards, conscientious objectors, and those otherwise unfit to serve. Six years later, however, they were doing exactly that.

26th June 1945: perfidious Albion.

After the war, with Germany in ruins and Britain fully emasculated, the kinder, gentler, socialist side of the European character immediately came to the fore. Churchill was chucked out of office just a few months after VE Day. Pulverized and bifurcated, Germany abandoned militarism and undertook its Wirtschaftswunderor "Economic Miracle." (Now foolishly replaced by the Energiewende, or Energy Turning Point.) France, under de Gaulle, went its own idiosyncratic, Gallic way. Nobody wanted to fight any more: it was cheaper and easier to let Uncle Sam, in the form of NATO, to guarantee the defense of Europe against the emerging Soviet bear. 

As Europe rebuilt it found itself with serendipitous upgrades in its 19th-century infrastructure, including modern electrical grids, fossil-fuel home heating, widespread adoption of automobiles (called PKWs in German, for Personenkraftwagen). Within a span of less than three decades, Western Europe was probably the nicest place to live on the planet, with modern conveniences nestling side-by-side with ancient monuments, high culture available to all thanks to government subsidiaries, and food prepared by the great chefs of the old Continent. In such a lotus land, there were no consequences to living as if there were no consequences.

Meanwhile, the U.S. had become bogged down in Lyndon Johnson's War in Vietnam, race relations steadily worsened, crucial provisions of the American constitution were abrogated by an act of Congress, blacks rioted anyway, cities burned, whites fled, unprivileged boys died in rice paddies, prominent political figures were assassinated, the borders were thrown open, and the feminist movement—in its deleterious sociological and economic effects, the American equivalent of the Euro-pacifist movement—took firm hold both of the workplace and the ballot box. Thus were the consequences of living as if there were no consequences from fundamentally transforming the country from the victor in World War II into a pitiful, helpless giant.

As America foundered, Europe prospered. But now that the Rev. Wright's chickens have come home to roost, the great Republic is now just a shadow of its formerly muscular and confident self, brought low by the cultural sappers of the Frankfurt School and the winds of social change from the backsides of Barack Obama and Joe Biden. Some may, and do, see this as a good thing (and indeed the Obama/Biden administrations have been predicated on it). Others, now being demonized by an increasingly demonic Robinette, do not. Those people, in case you haven't noticed, are now enemies of the state.

And as in Europe, those opposed, Iago-like, to safe, secure, ever-cleaner, cheap, and reliable energy are striving for the upper hand in the U.S.A. They know it's the death blow against the hated enemy: the land of their birth, the land that gave them shelter from Hitler, the land that opposed both national and international socialism. So watch your food prices soar, watch them outlaw your private gasoline-fueled cars and mandate electric vehicles with a limited cruising range that can be circumscribed by the flip of a switch at Government Central, and which can't be powered at all when the grid fails. Watch them herd you into high-rise ant-farm collectives, into which you can be confined at Washington's whim, and where ants are very much on the menu. Watch them laugh as you forage for roots and berries and bust up your pianos to burn in your fireplaces, should you be allowed to have a fireplace. Welcome to the Great Reset, comrade!

And watch yourself voting for them, again and again and again until they don't need you to vote anymore. Sure, it makes you feel good. But it makes them feel even better, and that's all you really need to know. Credo in un dio crudel. You've been warned. 

The Trudeau Economy: Smoke & Mirrors

It was rather surprising, several months ago, when Statistics Canada released their Labour Force Survey for 2021 and it showed record job growth. During a pandemic that saw Canada's federal and provincial governments adopt some of the harshest lockdowns and other restrictions in the western world? How?

Well, a new study by the Frasier Institute goes pretty far towards answering that question. The report, "Comparing Government and Private Sector Job Growth in the Covid-19 Era," found that more than 86 percent of those new jobs were in the public sector. Overall, government employment increased by 9.4 percent. Meanwhile, private sector employment remained essentially flat. “Pretty much all of the net job growth, since the start of the pandemic, has been driven by growth in the government sector,” said the study's co-author, Ben Eisen.

In their write-up on the paper, the National Post further notes that, "adjusted for population growth, the share of workers 15 years old and up employed in the private sector also saw a decline, from 49.3 percent to 48.2 percent."

The government added 366,800 new jobs during the Covid-19 pandemic, the report says, while the private sector was only responsible for adding 56,100.

Now, many government jobs are necessary for the functioning of modern, first-world nations. But, in general, they add no value to a nation's economy. When close to 90 percent of a nation's job growth—366,800 new jobs to 56,100—is in the public sector, that nation's economy is in a dangerously sclerotic state.

So, why has Trudeau gone to war with farmers and the natural-resource and energy sectors, again?

Boris Gives an Energized Curtain Speech

Yesterday Boris Johnson ceased to be the United Kingdom’s Prime Minister. A few days beforehand, in the dying days of his power, as the curtains swayed above the stage, about to descend and extinguish his premiership, the Old Pretender staged one last show of defiance and self-justification. And to the shock of the commentariat, it wasn’t the exercise in empty rhetoric and jokey bonhomie they were expecting.

Quite the contrary, Johnson announced an $800 million energy investment by the government in nuclear power; mildly rubbished the reintroduction of “fracking” for natural gas that his successor, Liz Truss, has promised; and strongly defended his “Deep Green” record of transitioning from fossil fuels to “renewables” like wind and sun in pursuit of the goal of Net-Zero carbon emissions by 2050.

It didn’t sound like the speech of a man who was bowing out of public life. More than that, Boris was defending the record of his premiership on the very energy and environmental issues on which he’s accused by many Tories of betraying his and their conservatism. He was painting his record red-white-and blue, running it up the mast, and betting that in the end they would salute it.

Why didn't I think of this before?

In other words he’s not given up all hope of returning to Downing Street. Maybe not today, maybe not until the Tories have suffered an election defeat under its new leadership in two years, but not too long after that when he calculates the Tories will have abandoned their recent but growing opposition to Net Zero austerity.

Consider the real meaning of his three main points above:

First,  some critics see his decision to invest $800 million in nuclear power and his praise of the Sizewell C nuclear plant as a renunciation of his “Green” switch to renewables. That’s not entirely true. Unlike the Greens or even Labour and European social democrats, the U.K. Tories have no ideological objection to nuclear power as such. It simply wasn’t a priority in the fight against global warming, and besides it was horrendously expensive. So it became the neglected child of their family of energy policies.

They did little or nothing about it until the combination of rising inflation, higher energy prices, and Putin’s invasion of Ukraine changed the cost calculations and made energy security a much more important element in the total policy blend. But since no other party had done much about nuclear power since the early 2000s, that let Boris off the hook. His embrace of nuclear power now means that he can add an extra strand to the U.K.’s energy mix and so reduce the risk of blackouts and rationing as it transitions to Net-Zero. Plus, hyping his commitment to nuclear power means he can’t be accused of being a fanatical Greenie. Altogether, a clever mix, but maybe too clever.

Second, Boris criticized “fracking” of natural gas that the new prime minister, Liz Truss, proposes to introduce. That’s a natural headline story in the Guardian where it can be translated as “New Tory PM attacked by old Tory PM.” But there’s less in it than meets the eye. According to the Daily Telegraph, Treasury officials, in expectation of the new PM, have already started work on a program of encouraging the production of oil and gas in Britain that will include lifting the ban on fracking.

Given the current world energy shortage, that policy is likely to go ahead—especially since one company has told the Treasury that it believes it can deliver “fracked” gas to the market as early as next year. Until now, however, fracking has been unpopular in the areas where companies were proposing to do it. Environmentalist groups are strongly opposed to it. Long term, it’s not a political certainty.

Farewell but not goodbye?

So Boris (who has been on both sides of this issue) criticized it in a very tentative way: ““If we could frack effectively and cheaply in this country, that would be possibly a very beneficial thing. I’m just, I have to say, slightly dubious that it will prove to be a panacea.” This statement is almost a definition of hedging your bets. In three year’s time, he can jump either way on fracking. If fracking seems to work, he says: “All I said was that it isn’t a panacea.” (And it isn’t, by the way, since a panacea is cure-all.) If it fails, he’ll shake his head and say: “Well, I always had my doubts.”

Third, Boris said: :

Tell everybody who thinks hydrocarbons are the only answer and we should get fracking and all that: offshore wind is now the cheapest form of electricity in this country… Of course it’s entirely clean and green.

That’s the moment when Boris threw aside caution and declared that his embrace of Net-Zero policies to defeat global warming will prove to be correct. Politically speaking, it may be a fair bet. The political and cultural establishments will welcome it and congratulate themselves on bringing the populist to heel.

But what will be the effect of his approach in the real world? Wind and sun are cheap forms of energy if you ignore the costs of investing in technologies that capture them and if you dismiss the costs of building the stand-by power stations they require when the wind fails and sun doesn’t shine. And if you do that, then you will produce blackouts and create a need for rationing.

Boris’s speech was sharply criticized by the man who resigned from his government last December because of its “direction of travel” (i.e., stationary) and who is now rumored to be a candidate for Liz Truss’s Cabinet in charge of deregulating the over-regulated U.K. economy: (Lord) David Frost. In his weekly Telegraph column, Frost made the point that Boris’s approach (and indeed, Boris’s personality) are rooted in an avoidance of dealing in advance with the inevitable trade-offs that good policy-making needs. Boris even gave a name to this approach: cakeism, when he said during the Brexit negotiations: “My policy is to have my cake and eat it." And though written before Boris spoke, Frost’s article reads like a reply to it:

For example, on energy, the underlying problem is not Vladimir Putin (though he’s made it worse) but poor policy giving us a grid that can’t reliably supply enough power when the wind doesn’t blow or the sun shine, leaving us exposed to very high spot prices for gas and the kindness of (semi-)friends for power through the interconnectors. The basic trade-off is that if we want more renewables, we will have a more unreliable and expensive grid, and probably rationing; if we want security of supply, we need more, and more modern, gas power stations and probably some coal ones, but this will affect the path to net zero. It won’t do to say we can have both – that net zero remains the goal but there will be no rationing.

Boris's curtain speech shows he has grown a little more prudent--but only a little. Today, he declares he will eat his cake now and hope to still have it in three years. But if he returns to Downing Street on that manifesto, he'll soon be eating his cake in the cold and the dark.

Diary of an Acclimatised Beauty: Concoursing

Surprisingly I couldn’t get anyone to go join me at this year’s Salon Privé. It’s not a ‘must-do' but I didn’t expect a flat ‘no’ across the board. Daddy and Judith are in Italy, my school chums are everywhere but London, and even my ex, Patrick, is in New York watching tennis. So it will just be me and my Gemma Chan squiggle dress.

I’m hoping the tone will not be dour given the likely end of the fuel-powered car. It’s early days but with California promising to ban this planet-killing transport, the world is likely to follow. And follow they should. I was an early adopter having purchased a Tesla car and solar panels well before Elon Musk bailed on California. As to blaming cars for the demise of our planet… Daddy and I have gone round and round on this subject. He likes to remind me that Britain was once a peninsula of continental Europe until the Channel was flooded by rising sea levels about 8,000 years ago—well before cars. But as I’ve explained to him—we can’t just ignore the science, no matter what history says.

This way to the egress, Boris.

I budgeted two hours drive to Blenheim which should be sufficient except for traffic getting out of London due to all the stupid bike lanes. Of course I’m not saying that bicycling is stupid, only putting so many lanes in an already-congested city has just made for more traffic. And stalled traffic means more CO2. Plus no one is really using the lanes anyway. So was it any wonder Boris got caught cycling outside of his own proscribed covid-zone? It was also his bright idea that bikes become ‘as commonplace as black cabs and red buses’. I mean, really! No one would get anywhere.

It took me a while to find the non-preferential parking, which meant a ten-minute walk to the main entrance on one’s choice of grass or gravel. UGH! Obviously some man with wide feet and a love for sensible shoes had managed this. Making a quick trip to the ladies' I sorted myself out, but I overheard complaints about people having taken the train to Hanborough where there was no taxi rank. Seriously? It was the car event of the season and everyone was walking way more than they wished.

Making my way to the gallery I met an American who introduced himself as ‘Ken’. I was hoping he’d be a candidate to talk about making cars carbon-neutral but he seemed only to want to talk about his ’54 Corvette mule car that he’d shipped over. Oh how he went on about this particular 'vette—and his other 250 cars. I had half a mind to ask if he, like Prince Charles, had any that ran on leftover wine and cheese but thought better of it. My guess of course, was no because he mentioned if you’re lucky you’ll see flames come out of the back end. FLAMES! Not exactly carbon-neutral. I tried easing into a meaningful conversation but it was no use. He didn’t know who I was, he didn’t know who my clients were, and he was impressed by shooting flames.

By contrast the next person I met was Bill Ford, of the Model-T Fords. The Fords didn’t pre-date the Churchills but at an event like this he was no less impressive. Also he knew who I was, and announced that he, too, was an environmentalist. Why had I spent so much time talking to Mr Fire-Butt? Bill had grown up with many thinking his family the enemy. To a lesser degree I had carried the guilt of a father who was the top geophysical engineer in the oil industry. Talk about kismet! I was sure we’d partner in some way to move toward carbon neutrality in the automotive industry. This was exciting. I quickly dazzled him with the work I’d done, and my near-encyclopaedic knowledge of the issue at hand. He didn’t interrupt so I continued on explaining my position and the path we needed to take in order to avoid extinction.

Don't blame me, Greenies.

He led me into the Aviva Pavilion and excused himself briefly. I texted my father to tell him the good news. Daddy texted back ‘Hold your horses’.

What?? ‘THIS IS DIVINE PROVIDENCE!’ I texted back.

‘I doubt it’. Was his response. ‘I’m not saying you can’t find common ground and achieve your end but talk to him about something YOU know. Like traffic jams. And how Boris has it all wrong. Tell him that four billion clean cars is still four billion cars on the road. Tell him that restrictions on movement in the name of global warming is not the answer’.

What? OMG NO! Daddy had it all wrong. When Bill came back I told him I owned one of the first Teslas. Bill beamed and said ‘Then you understand! Clean cars alone are not the solution’.

‘Uhhhhh…correct!’ I said. ‘Four billion clean cars is still four billion cars’.

‘YES!’ He roared.

‘And…restrictions on movement in the name of global warming is not the answer’.

‘THANK YOU!’ He said. ‘You know, the freedom to move about the country is by far the greatest thing my grandfather, Henry, created. I aim to preserve that, so obviously I’m against banning cars, and we both agree that more bikes and more smart cars is just—more. Unfortunately some are trying to ban the very thing my grandfather created—the freedom to move about the country. If we allow this next they’ll be rationing energy. Yet global gridlock will stifle productivity. Maybe we need underground roads.

‘Correct’. I said again, baffled.

'Would you be interested in partnering with me on an interconnected system of intelligent transport?'

’‘I would indeed’, I said. And that is all I said. Because clearly I could not have said it better myself. Wait 'til I tell Daddy...

In Britain, the Time Bell Rings

Observing the United Kingdom sailing headlong into a sea of troubles over energy and inflation, a cynic might well say: “Lucky Boris Johnson—he was forced out of power at exactly the right moment. Someone else will now have to carry the can.” It’s true that Britain’s economic troubles, which were already growing, have metastasized dramatically in the last few months, two in particular—a general rise in all-round inflation to 10 percent and a still sharper rise in regulated gas and electricity prices from $2,331 now to $4,237 in October and $5,026 in January.

Together they add up to a massive “cost of living crisis.” And because they grow out of deeply-rooted problems and self-destructive policies in the U.K.’s long-term economic strategy, it will take time and tough remedies to eradicate them.

As always, however, there seems to be an inexhaustible supply of people lining up to carry the can. About a dozen senior Tories put forward their names to succeed Boris at the start of the Tory leadership election. They were whittled down to two of Boris’s ministers—former Chancellor Rishi Sunak and current Foreign Secretary Liz Truss—who are fighting a battle of debates on economic policy across the country in front of Tory voters and activists. We’ll know the result by September 5, with Truss now the favorite.

Truss: ready to lead?

[My own snapshot take: she’s the better bet on supply-side and de-regulation policies to improve productivity and revive British industry; he’s the safer pair of hands on financial and budgetary policies to restore a stable financial framework that would help the economy to expand without overheating. But both should be more prepared to cut state spending and borrowing.]

Whoever wins the premiership then, however, will have to face a general election within about 28 months. Given the severity of Britain’s problems, the Tories will undoubtedly face an uphill battle. That means Sir Keir Starmer, Leader of the Opposition, must now be taken seriously as a potential prime minister.

And indeed Sir Keir, a progressive left-wing lawyer before entering politics, whose usual pained expression is that of a man who has just swallowed a live fish out of politeness at a diplomatic dinner, and who has been struggling to make an impact on the electorate, has been given a shot in the arm and buoyancy in his step by the crisis.

Labour is demanding the recall of Parliament to debate the “cost of living crisis.” That’s quite a shrewd demand since Johnson is now a “caretaker” Prime Minister who constitutionally has to leave all major decisions to September the 5th and his successor. Starmer's attack on the Tories as a “do nothing” government in the face of the cost of living crisis then carries more weight. By contrast, he was able to step up to the plate with his own remedies in a speech that was better received than any earlier efforts and proposed solutions that according to opinion polls are in tune with the popular mood.

Those solutions—an energy price “freeze” paid for by the $34 billion proceeds of a higher windfall tax on oil and gas producers— are not new. They have been kicking around the Labour party’s thinking on energy since two leaders ago. And when Rishi Sunak himself was chancellor only a few months back, he introduced a much milder $6 billion version of the same thing which he delicately called a “temporary, targeted energy profits levy” of 25 percent. (It came accompanied by a 90 percent tax relief for firms that invest in oil and gas extraction in the U.K.)

Starmer: I can see No. 10 from here.

The problem with such “concessions” to opposition attacks and the popular mood is that they concede the principle without satisfying the demand. Worse, they make Labour’s proposals look like common sense to which the Tories are offering only a miserly response.

Commonsense is a rare and valuable commodity in public life, but economics is one of the very few areas where it can’t be applied wholesale. Commonsense suggests that we should charge lower fares for railway journeys at rush hours when the trains are crowded and uncomfortable. Economists respond that we should charge higher fares then and lower fares at off-peak times to encourage people to travel in less crowded and more comfortable conditions at all times. If we ignore them, commonsense ensures that we end up strap-hanging for hours in cattle cars.

In the same way the economically sensible response to higher energy prices is to devote state assistance to cash subsidies to the consumer—with larger subsidies going to poorer people for whom energy is a bigger proportion of their total spending. People then get to decide whether to devote this increase in their income to energy, to food, or to their other household needs. They know those needs better than “the Man in Whitehall.”

Given this full responsibility over how to spend their total income, they would be free to change their behavior by, for instance, using less power than usual. Moreover, high electricity prices, for instance, would give them further encouragement to do so, thus reducing demand for electricity, oil, and making a gradual start to solving the energy crisis in general.

O, lucky man!

So much for the demand side. On the supply side, as long as prices remain high—and any decline would likely be gradual—energy companies would have the incentive of high profits to search for new oil and gas fields and to re-open old ones closed in response to regulation. (We already see that happening.) Even as demand was being moderated by high prices, supplies of energy would be encouraged and increased by them. The energy market would come into balance, and other things being equal, prices would fall.

Which is why a windfall-profits tax is both mistaken economically and unjust ethically. A bold claim, I hear you say. But as it happens, with help from an old friend and colleague, Philip Lawler, I wrote a classic article on the Case against a Windfall Profits Tax thirty-three years ago. Originally I “ghosted it” for the U.S. Treasury Secretary, William Simon, who a few years later gave me permission to publish it under my own name which I have now done in National Review and the Spectator Online.

Immediately on entering office in 1981, Ronald Reagan blew away a  ramshackle maze of overlapping agencies and bureaucratic bafflegab; de-controlled energy prices and production; and led the world into a sustained three-decade boom floating on a sea of cheap oil and gas. It looks as if the Brits have decided to go in the opposite direction—and if Labour wins in 2024, with their foot on the accelerator.