Germany Comes to Grips with Reality

Germany has long been a bugbear of ours at The Pipeline, because it has spent more than a decade pursuing the most utopian approach to the environment in the developed world. Dubbed die Energiewende (meaning "the energy transition/turning point"), this series of policies and regulations has been ordered toward getting that nation of 83 million people off of all traditional energy sources (oil, natural gas, even nuclear), and completely replacing them with so-called "renewables," and in a much shorter time span than any other similarly disposed country.

That being the case, you will imagine our surprise at seeing reports of the surprisingly hard line that Germany's ruling coalition government — which includes that nation's Green Party — has begun taking against environmentalist protestors. The center of this crackdown has been the tiny, uninhabited hamlet of Lützerath in western Germany, whose handful of structures had been scheduled to be demolished as a nearby coal mine expanded into the area. Unfortunately for all involved, before this plan could be executed Lützerath became a cause célèbre for environmental activists from Deutschland and beyond. A few thousand of them (though the exact numbers are disputed) occupied the area, refusing to leave for well over a year. According to a particularly melodramatic report in the New York Times,

The activists... prepared themselves to defend the half dozen houses and farmyards with their bodies. They barricaded themselves in a complex of barns and other structures. They erected and occupied tall watchtowers. They carved out a tunnel network. They nested in the branches of 100-year-old trees.

As you can imagine, the increasing media attention eventually attracted everyone's favorite environmentalist publicity hound:

(Thunberg was eventually arrested, though the arrest appears to have been staged for propaganda purposes.)

Eventually the authorities had enough and decided to move in. Here is more from the NY Times:

The fight for Lützerath was long, but the end, when it finally came, was quick. In a matter of days this past week, more than 1,000 police officers cleared out the hundreds of climate activists who had sworn to protect the small village, once home to 90 people but no church, which was scheduled to be razed as part of a sprawling open-pit coal mine in western Germany.... For years, environmental activists had hoped to forestall the fate of Lützerath — possibly the last of hundreds of villages in Germany to fall to open-pit mining since World War II. For a while, it seemed that the activists would succeed.

That report's lyrical tone, which makes it sound like they're describing the Fall of Berlin, is ridiculous, although typical of the Times' overwrought, dishonest ideological bent. But the above also serves to downplay the clashes between activists and the police, which became intense at times, judging by footage on the ground:

(The headline above reads: "Attack on the police. The so-called 'friendly' protest in Lützerath.")

These are shocking images, especially since just a short time ago the combatants in this conflict were natural allies. For years now the German government has been working on behalf of these activists to create artificial energy scarcity, with the expectation that wind and solar would step in and fill the void. That had the unintended (though foreseeable) consequence of increasing the country's addiction to Russian natural gas. When the war in Ukraine (and the still-unexplained sabotage of the Nord Stream pipelines) forced them to go another direction, they had no choice but to lean on domestically produced (and carbon intensive) coal. Even the Green Party can see that they can't afford to give that up now.

Which is to say, they've been forced to accept the fact that they've painted themselves into a corner and now they're stuck. Perhaps this will teach them a lesson about the dangers of utopian thinking. But chances are, once the war ends and energy markets stabilize a bit they'll get right back to driving the country into the ground. And, as history shows, utopian thinking is what Germans do best, and most dangerously.

Crazy Energy Ideas? Oz Is the Place

By way of prelude to an even crazier scheme, there’s a crazy scheme inland from Port Hedland in the north of Western Australia. It’s called the Asian Renewable Energy Hub. Leave reality behind. Imagine wind turbines and solar panels covering 6,500 square kms. A desalination plant to produce vast quantities of pure water. Industrial scale electrolysers, supplemented with plants to turn hydrogen into ammonia for safer shipping. And, voila! Magically, affordable green power delivered to foreign shores. And pigs might fly.

The project has metamorphosed since its beginning. It’s got bigger and quite different. It started as 5 gigawatt (GW) project designed to deliver wind and solar power by undersea cable to Indonesia. Now it’s a 26 GW project designed to produce ammonia from green hydrogen for export. It’s gone from the untenable to the unbelievable, you might say. Can’t wait for the next iteration. There will be one. Probably insolvency. Because dreaming things up doesn’t make them so.

Wherever you look now in Western countries there are mind-blowing projects on drawing boards. Utopian plans to green the world, to become world leaders, to save the planet; all creating jobs galore. Governments have their messy fingers in them all, with taxpayer money in their saddlebags to reward corporate high-flyers and billionaires whose delusions of green grandeur would in past times have had them institutionalised. These days they don’t stand out. All of the great and good have been captured by the climate cult. Apropos the Cheshire Cat’s observation, “we’re all mad here.”

“Imagination is the only weapon in the war with reality.”

I’d like to feel I’m exaggerating for effect. Sadly, I don’t think so. Which brings me to a second scheme; the even crazier one, to which I referred above. This one is called the Australia-Asia Power Link project from the onomatopoeically-named Sun Cable Company. This indeed is an awe-inspiring visionary scheme, far more ethereal than anything before it; in fact, beyond anything yet dreamt up in the whole wide world. Truly, we Australians are now leading the way down the rabbit hole to our own Wonderland. Hold onto your hats.

What we have here is a project to supply solar-powered electricity to Singapore; apparently, 15 percent of Singapore’s needs 24x7 and, presumably, at a competitive price. I assure you I am not about to make anything up. Have a look at the company’s site, if, understandably, you don’t believe me.

The project, on paper, is situated deep in the Outback in the Northern Territory, about 200 kms north of Tennant Creek (pop. ≈3000) and 800 kms south of Darwin. Envisaged, surely only possible in fevered minds, is the biggest solar array in the world covering 12,000 hectares, generating 3.2 GW of electricity. The biggest battery in the world by far (in Darwin) storing between 36 and 42 GWh of power. The longest continuous submarine cable in the world by far, measuring 4,200 kms which, in turn, joins the 800 km cable between the project site and Darwin. It’s described as a A$30+ billion project. A joke. Multiply that by 10, I’d say, and still run out of money with no completion in sight. Imagine you’re in an Australian pub explaining it. “Pull the other one, mate.” It simply wouldn’t pass the pub test.

Take the battery. The biggest one I could find in the world was the Moss Landing Energy Storage Facility in California; claiming to store 1.6 GWh. The Sun Cable battery is about 25 times the size. And it needs to be. Sunshine in Tennant Creek averages about 11 hours a day. That’s a lot. New York averages less than 7 hours. Still, 11 hours leaves 13 hours to fill. Do the sums. Power required 3.2 GW for 13 hours equals 42 GWh. Phew! Just made it. Mind you, the minimum monthly daily sunshine in Tennant Creek is less than 10 hours. Oops! Need a bigger battery.

Take the cable. According to the European Subsea Cables Association:

The NorNed cable between Norway and the Netherlands [at 580km] is the longest submarine power cable in the world… with a capacity of 700MW. However, the very latest cable technology has the potential capability of reaching up to 1,500km.

So they say. What do they know? They ain’t seen nothing yet. Sun Cable is going to build a cable carrying 3.2 GW across the bottom of 4,200 km of deep sea; and they’ve worked out how to lay it and repair it too. Yep!

"Why, sometimes I've believed as many as six impossible things before breakfast."

Unsurprisingly, Sun Cable was placed in voluntary administration on January 11. The CEO and founder is still pleading its case. The Northern Territory government remains jejunely optimistic. And the Commonwealth government in the guise of Chris Bowen, federal Minister for Climate Change and Energy, remains upbeat; seeming to think it’s just a matter of “corporate restructuring.” Really? Dumb thy name is climate-change government ministers.

Reportedly, the principal backers, mining billionaire Andrew (Twiggy) Forest of Fortescue Metals and tech billionaire Mike Cannon-Brookes of software company Atlassian, fell out; having different views on funding, among other things. Funding, an issue? I wonder why. Surely investment banks would be lining up to pour billions into this moolah-sucking chimera.

To sum up. A pie-in-the-sky-project has bit the dust. Don’t think for a moment that anything will be learnt. Not in this generation. I saw some press speculation that Twiggy might buy it out and convert it to making (hypothetical) green hydrogen, of which he is especially fond. Maybe. That’s pie-in-the-sky too but at least it avoids the need to smash world records on laying submarine cable and installing humongous batteries. Methinks, in desperation, where and when will this madness ever end?

'Climate' Scam in Oz Goes from Bad to Worse

As a major producer and exporter of thermal coal and natural gas, with lots more to be tapped, Australia is well placed to ride out the forlorn pursuit of renewables. Instead, Australia’s governments fancifully see themselves leading the daring quest to save the planet. Accordingly, policies of uncommon futility and inanity ensue. Two prime examples came to malodourous fruition in the lead up to Christmas. Christmas gifts, if you will, for a population which richly deserves all that it gets having swallowed the climate scam hook, line and sinker.

The Energy Security Board (ESB), just one of a multiplicity of climate-change authorities, had an integral part in the derring-do. Alas, though full of activists, the ESB didn’t stay the course. Bizarrely, common sense won out. The ESB oversaw a scheme, called the “capacity mechanism,” intended to ease Australia through the transition from fossil fuels to wind and solar. The scheme calls for payments to energy providers in order that they might have capacity at the ready when renewables failed to deliver. Natural gas was very much in the mix, as you would expect, as also was coal for the time being. A detailed design of the scheme was to be delivered to federal and state governments in early 2023.

Spot the problem? The envisaged use of fossil fuels in the transition is not nearly pure enough for these clean-climate times. And, last August, the ESB was given a damn good telling off by pedigreed greens and lost its carriage of the capacity mechanism – sullied and shamed by its continued flirtation with coal and gas. Each state decided that it would do its own thing and that thing did not include “dirty” coal or gas.

No coal, please, we're Australian.

At this point, sane people might think that they're being gaslighted. Surely, a shortfall of wind and sun must be met with a flow of baseload power. Logically, that’s where gas-fired peaking plants might fill the breach. Apparently not. Pumped hydro is envisaged, though it is missing in action. Batteries are envisaged, though their effect is trivial in the scheme of things. Green hydrogen is envisaged, though it is pipedream. Finally, interstate power swaps are envisaged; based on massive overbuilding of not-yet-built wind and solar farms and thousands of not-yet-built kilometres of transmission infrastructure. And, still, what will happen during evenings of extensive wind droughts? Cold candlelit suppers ahead.

It’s senseless. But, best to remember, when it comes to climate policies, it’s never so bad that it can’t get worse. And so it is that Australia’s government, headed by Anthony Albanese of the far left of the left-wing Labor Party, recently had a well-worn idea which had proved popular among the apparatchiks in communist Eastern Europe.

Natural gas and coal prices have soared in recent times, as they have throughout the world. Consequently, the Australian Department of Treasury forecast that electricity prices would rise by 56 percent over the period to June 2025 and gas prices by 44 percent. What to do, when you’ve foolishly promised repeatedly that electricity prices would fall? Encourage new supplies of coal and gas? For example, give the go ahead to the Narrabri project which promises to deliver vast quantities of coal-seam gas to the domestic market. Certainly not. To wit, a spokesperson from Santos commenting on the continuing impasse:

Since 2012, Santos [Australia’s largest producer of natural gas] has spent more than $1.5 billion trying to get our Narrabri Gas Project approved and developed; a project that is 100 percent committed to the domestic gas market.

Heck, more dirty gas is needless when socialist economics has the answer. When prices rise too much for comfort impose price caps. Consequently, without meaningful consultation, the federal Government rushed through legislation before Christmas; titled, in true newspeak fashion, the Energy Price Relief Plan. This capped the price of gas at A$12 per gigajoule for one year with a permanent regime to ensure gas prices are set on “reasonable cost-plus basis.” Whatever that means in Newspeak.

Of course, the legislation also gives the government power to compel gas producers to supply gas at the capped price. Socialists have their playbook and know how nasty profiteering capitalists will try to wriggle out of supplying their products at below market value. Separately, the states of Queensland and New South Wales have agreed to cap the price of black coal to $125 per tonne and lose royalties; in exchange for lots of free federal money.

Role model for the future.

To show how far-gone things have gotten rotten down under, the head of Treasury Steven Kennedy supported the idea of price controls. No surprise that he was recognized in 2016 for outstanding public service in the area of climate-change policy. Climate activists have infiltrated every aspect of Australia’s public life.

Kevin Gallagher, CEO of Santos, described the legislation as a form of "Soviet-style nationalization.”

[It] will result in companies needing fiscal stability agreements with the government before new gas supply projects can take investment decisions in order to secure capital, just as would be the case if they were operating in Argentina, Venezuela or Nigeria.

Meg O'Neill, CEO of global oil and gas producer Woodside and chairman of the Australian Petroleum Production and Exploration Association, made the point that price controls will lessen investment and drive supply out of the marketplace. I wonder where she got that strange idea. Probably from economics 101. In any event, it doesn’t seem to have yet penetrated the minds of the geniuses who form the Labor government’s brain trust. Woodside claimed that contractual talks to supply gas to twenty customers had been suspended. Shell made a similar point. Not surprising. How can supply contracts be finalized when no one knows what the regulated price will be in twelve months’ time?

Socialists wear mind-limiting blinkers. How else to arrive at simplistic solutions and think them sublime? Unseen effects of their superficial solutions, as the 19th-century French Economist Frédéric Bastiat put it, are studiously ignored. The rest of us are condemned to live them out. "Where did you put the heavy sweaters and candles Ma?"

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 'Climate Change' Casino—and the Risks Thereof

There's a lot of risk involved in "global warming." The first and most basic is whether it will occur at all according to the model put forward by the United Nations IPCC. The public can actually wager on whether it's unfolding as officially predicted. "Last week, MyBookie unveiled odds on global warming. Yes, you can bet on the Earth’s 2020 global land/ocean temperature index being greater than or less than 2019’s 0.99 degrees Celsius. Right now, the “no” is a surprising favorite at -700. A “yes” gets you +400."

A more sophisticated version of theory verification uses long-short equity funds.  "The concept is simple: Investment research turns up expected winners and losers, so why not bet on both? Take long positions in the winners as collateral to finance short positions in the losers." If climate change really exists then those who follow the model will do better than the deniers and one can make money wagering in contrasting pairs. According to an investor document seen by Bloomberg:

[Finance veteran] Carrasquillo and her former CPPIB colleague Savironi Chet have joined AllianceBernstein Holding to start a hedge fund called 1.5 Degrees, named after scientists’ warning that the Earth could warm by that much within the next two decades. The long/short equities fund is expected to start trading this quarter... '1.5 Degrees' aims to make high single digit returns by focusing on climate change opportunities and companies benefitting or losing out from events such as rising sea levels, shifting consumer preferences and increased greenhouse gas emissions.

You can't win if you don't play!

Still another approach is to utilize weather risk contracts of the sort traded at the Chicago Mercantile Exchange (CME) to hedge against definite outcomes. "The use of derivative markets for hedging climate-related risk has been around for over 25 years... By indexing CME Weather futures and options, it makes it possible to trade weather in a way comparable to trading other index products such as stock indexes." (A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security).

A more general measure of climate fear is the level of property and casualty insurance that people, not just activists, buy. Although McKinsey recommends buying insurance they can't even put a number on it. "McKinsey research shows that the value at stake from climate-induced hazards could, conservatively, increase from about 2 percent of global GDP to more than 4 percent of global GDP in 2050. And the risks associated with climate change are multiplying..."

This is disconcertingly vague. In the absence of definite projections so much insurance may be required to protect against the nebulous magnitudes of climate change that some observers fear the whole industry may collapse.

As companies and investors get to grips with the risks of rising global temperatures, climate stress testing is becoming more commonplace across many parts of the world — with eye-opening results for insurers. France’s central bank, for example, released the first results of its climate stress tests earlier in 2021: It found that natural disaster-related insurance claims could increase up to five-fold in the nation’s most affected regions. That would cause premiums to surge as much as 200 percent over 30 years.

In fact preparing against "global warming" creates other risks associated with wind and solar power under-production,  principally the higher likelihood of blackouts. To hedge against crippling outages, provision for keeping dirty fossil-fuel backup generator sets must be made. Moreover there are independent risks inherent to renewables themselves. They are often dependent on exotic material like rare earths (much of it controlled by China) without which green technology could rapidly grind to a halt. They can cause environmental damage by their operation. Solar panel arrays are toxic unless disposed of carefully and wind farms generate a continuous low-level hum that can cause multiple health problems including ruined sleep, headaches, dizziness, vertigo, nausea, depression, irritability, and panic episodes.

What risk? The science is settled!

Renewable energy devices are also prone to damage from weather events. Windmills are torn apart by high winds, acres of solar panels are toasted by brush fire.  The answer? Insure it. There is insurance against the sun not shining.  There is insurance against the wind not blowing. Would there were insurance against the public going broke. There is in a way: as Brits face a massive increase in energy bills, largely as a result of wind power shortfalls, Labour wants BP and Shell to pay for the no-show of renewables:

The UK government is coming under mounting pressure to increase taxes on oil and gas companies, including BP and Shell. The aim: to help British households cope with skyrocketing energy bills. The main opposition Labour Party this weekend called on Prime Minister Boris Johnson to impose a windfall tax on companies pumping oil and gas from the North Sea, saying that the money raised could be used to cut roughly £200 ($272) from soaring household bills.

That there are risks everywhere is not surprising, except to those who regard the climate future as exact, settled science. Risk is in fact another way of expressing our lack of knowledge about the exact probability of each outcome of or whether we have actually anticipated all possible outcomes. Indeed it would be impossible to create all the bookie bets and insurance policies associated with risk management cited here were it not for the presence of uncertainty. A market for bets requires something which isn't completely known, hence the odds as an incentive to bet.

Far from being a sure thing, there is much that is unsettled about the way the earth's climate works. Although these knowledge gaps may be denied by governments and many in the media, they are tacitly admitted by the risk management instruments contrived to deal with them. These force us to quantify climate prediction in specifics that show up the uncertainties lurking behind the bureaucratic façade of infallibility. The official global warming forecasts are neither as definite nor precise as they are made out to be, and though officials have gone to great lengths to conceal doubt, they have not been able to hide risk, which is the shadow of doubt.

Green is the New Black

The entire industrial world is suffering from needless energy shortages caused by efforts to  precipitously switch from conventional  fossil fuels. It’s not true that simply mandating a switch from reliable power sources to intermittent wind, sun, and water will make the change workable when we need it. There’s scarcely a place in the modern world that will not be feeling the high cost and discomfort of a shortage of energy supplies and their increasingly soaring prices. Lebanon already is. Due to a shortage of oil, the two power plants that supply 40 percent of that country’s electricity simply shut down recently.

It’s an extreme case, but even the United Kingdom, the E.U., the U.S., and China are running up against diminishing ability to obtain the necessary energy supplies to keep things running smoothly. Nature has a way of fouling up such plans. Some of the shortages are due to accidents, like the cutting of an undersea cable to the U.K.; some are due to flooding of mines (China has closed down some mines because of it);some are due to draught in other places like America’s West which at the best of times has limited hydropower; some is due to extreme cold or lack of wind that has limited wind power; some is due to hurricanes which shutdown Gulf oil refineries.

These things are not exceptional occurrences, but reasons why redundancy must be built into energy planning. But most of these shortages are due to green policies and stupid political choices, ironically shutting down oil and gas-fired power plants and fossil fuel exploitation and transport at the demand of the greens, who grossly overestimate both global warming and the ability of air, sun, and water to take their place. Indeed, just today the Biden administration announced a new federal project to develop wind farms in American waters, including one near New York City.

Hard to kill King Coal.

Ironically, this means coal -- the dirtiest possible fuel -- is back in huge demand. The U.S. has lots of it, but the greens forced closing of most of the mines and mining is today a highly skilled job requiring substantial training. The miners who left for other work, are not easily replaced so that source is now not readily available to take up the demand.

Despite an import ban on Australian coal, China relented and has begun unloading Australian coal because of an extreme power crunch. Coal is now in demand in Europe as gas prices soar and the E.U.’s energy policies are in large responsible:

The ideological split will drive a wedge between the European Union, a long-time champion of a coal phaseout, and corporate interests as market conditions favour gas-to-coal switching. The switching ratio has slid in coal’s favour in the last weeks of June 2021 and judging by the current futures structure, it will stay in place until at least Q2-2022...

The current coal demand surge should force the European Union to reconsider its position on coal -- as polluting as it might be, it could still help alleviate energy crunches across Europe when the situation demands it. As things stand today, the upcoming four years would see at least seven countries phasing out coal: Portugal (2021), France (2022), UK (2024), Hungary, Italy, Ireland and Greece (all 2025). As Europe has seen nine consecutive year-on-year increases in aggregate coal burns, perhaps more switching flexibility and less bans could still be the way forward.

It’s no secret that the cleanest most reliable fuel – nuclear -- was murdered by the greens (except in France where Macron refuses to shut it down). Then natural gas, the second cleanest, became their target, so now many places are desperate for coal, the dirtiest option.

Was there any point to the war on fossil fuels? Probably not. Judith Curry, one of the most reliable climate researchers, explains how even the Intergovernmental Panel on Climate Change (IPCC) admits finally that the dire climate models off of which they were working were in substantial error.  The latest report from the IPCC indicates previous models were predicting a hotter climate than warranted.

A substantial number of the CMIP6 models are running way too hot, which has been noted in many publications. In its projections of 21st century global mean surface temperatures, the [report] provides ‘constrained’ projections (including climate models with reasonable values of climate sensitivity that reasonably simulate the 20th century).

GCMs [Global Climate Models] clearly have an important role to play particularly in scientific research.  However, driven by the urgent needs of policy makers, the advancement of climate science is arguably being slowed by the focus of resources on this one path of climate modeling.  The numerous problems with GCMs, and concerns that these problems will not be addressed in the near future given the current development path, suggest that alternative frameworks should be explored.

The shortage of energy supplies is causing food prices to rise, in fact, everything from food to  gasoline to heating and cooling is becoming more expensive. Inflation is not the only rational worry connected to energy shortages. Scarcities in everything from adhesives and paints to auto parts  are already showing up. Russia which is now a major natural gas supplier for Europe  is not only growing richer for the reduction of its usual  energy sources from elsewhere (and Europe’s incomprehensible reduction of its conventional sources) but it has now a more powerful lever to bend the gas dependent E.U. to its will. 

The Russians are coming, the Russians are coming.

Polling to date has shown people are generally in accord with their propagandized perception of the ill-considered green agenda, but unwilling to pay higher prices and undergo impoverishment to fund it . Expect continued pressure on the government leaders who bowed to the green propaganda (often because it allowed them to shovel government revenues to favored friends and donors) to now shift gears. Even the pork-rich proposed budget framework of the Democrats, contains a unanimously adopted provision to bar implementation of the Green New Deal, an amendment to prevent the promulgation of regulation to ban hydraulic fracturing -- fracking -- which made this country a global leader in oil and gas production, and two amendments barring the Agriculture Department from denying financing to fossil-fuel burning power plants and regulating emissions from farm animals.

It’s a small beginning to what will likely be a multi-national citizen pushback against this nonsense. The one thing politicians worldwide prize over everything else is retaining their personal power, and it’s looking more and more like the Green New Deal will either falter or a lot of political leaders who fell for this irrational program will be shortly out of office.

Welcome Back, Carter

I mentioned in my last post that environmentalist policies have been a major driver of the energy crisis that's currently eating up Europe. We are now beginning to see the same dynamic play out in North America.

West Texas Intermediate crude, America's oil benchmark, is trading at just under $80 per barrel, double what it was a year ago. Average gasoline prices in the U.S. are at their highest point in seven years. After years of having to compete with lean, mean North American resource companies, OPEC is back in the driver's seat and enjoying profits that come at the expense of American and Canadian producers who have been cursed (by their own customers, no less) with environmentalist governments. Justin Trudeau actually got reelected on the promise to continue to increase taxes on heat and energy in a cold country just before the winter. (Not that his opponent even attempted to hold him accountable). Joe Biden was cagier about his actual plans while campaigning, but the pledges were there for those that had ears to hear.

The nations of OPEC, whatever their other problems, have a better instinct for self-preservation than that.

But even with their green bona fides, Biden and Trudeau can't catch a break from Team Gaia. Despite a looming energy crisis, the eco-warriors are refusing to back down in their battle against Enbridge Line 5. The pipeline, which brings petroleum products from Alberta to Ontario by way of Michigan, has been the subject of protests and a simmering legal dispute with Michigan's Governor, Gretchen Whitmer. Here's what I wrote about the stakes in this fight back in May:

Some 540,000 barrels of Canadian oil and natural gas pass through Line 5 every day, between 40 and 50 percent of Ontario and Quebec's total supply.... It has been referred to as the “spinal cord of Ontario’s infrastructure,” and through Ontario, to Quebec and points further east as well. A shutdown would have devastating consequences for consumers in eastern Canada, leading to fuel shortages and price spikes. And then there's the effect on employment -- the government of Ontario estimates that killing Line 5 would cost that province 5,000 jobs directly and indirectly almost 25,000. Whitmer's own constituents would be effected as well -- half of the propane used to heat homes in Michigan passes through Line 5, and a great deal of oil bound for Ohio and Pennsylvania besides. But that's nothing like the effect a shutdown would have on Canada's two largest provinces.

All of that is still true, but this is running a lot hotter than was expected back then because we're seeing "fuel shortages and price spikes" as well as depressed employment numbers while Line 5 is still up and running!

Consequently, the Trudeau government have now invoked the Transit Pipeline Treaty of 1977 in court with the hope of sidestepping the local authorities in Michigan so they can begin negotiating directly with the Biden Administration about the future of Line 5. But who knows if that will improve the situation? After all, the same activists who have Gov. Whitmer's ear also have powerful friends in the White House, and then president hasn't exactly shied away from screwing over our neighbors to the north.

It's become almost a cliché to say the 1970s are back, what with rising crime, stagflation, and especially an energy crisis, while a feckless liberal president blames everyone but himself. But as John Robson has pointed out, what we're going through now is worse in one important respect:

[A]t least in the 1970s it was done by accident, through policies that achieved the opposite of what their architects hoped and expected. This one is deliberate. They said they would get rid of fossil fuels, mocked those who protested that it would cause economic disaster, and now that it is they’re doubling down. They really mean it.

We're getting a glimpse of the future they've been planning. If we don't change course, it's going to get a lot worse.

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.

Renewables: Is There Anything They Can't Do?

From the Wall Street Journal:

Natural gas and electricity markets were already surging in Europe when a fresh catalyst emerged: The wind in the stormy North Sea stopped blowing. The sudden slowdown in wind-driven electricity production off the coast of the U.K. in recent weeks whipsawed through regional energy markets. Gas and coal-fired electricity plants were called in to make up the shortfall from wind. Natural-gas prices, already boosted by the pandemic recovery and a lack of fuel in storage caverns and tanks, hit all-time highs. Thermal coal, long shunned for its carbon emissions, has emerged from a long price slump as utilities are forced to turn on backup power sources.

The episode underscored the precarious state the region’s energy markets face heading into the long European winter. The electricity price shock was most acute in the U.K., which has leaned on wind farms to eradicate net carbon emissions by 2050. Prices for carbon credits, which electricity producers need to burn fossil fuels, are at records, too... At their peak, U.K. electricity prices had more than doubled in September and were almost seven times as high as at the same point in 2020. Power markets also jumped in France, the Netherlands and Germany.

So the transition to so-called renewable energy has really been raking European energy markets over the coals. Literally, in fact, as coal-fired power plants are having to increase production to meet energy demands. And it's making Russia into a one nation OPEC, the only country in the region with an excess of natural gas which will happily export it.... for some significant diplomatic concessions.

Quite the bind the E.U. finds itself in. Perhaps they might consider changing course, accepting that shutting down their natural gas and nuclear power plants, not to mention banning fracking, is a mistake?

Doesn't sound like it! Reuters --

Record high power prices in European Union countries show the bloc must wean itself off fossil fuels and speed up the transition to green energy, the EU's top climate change official said on Tuesday.

That official -- first vice-president of the European Commission Frans Timmermans, who has appeared in these pages before, always singing the same one-note tune -- argues that, in fact, it is because they haven't transitioned quickly enough that things are so bad! "Had we had the Green Deal five years earlier, we would not be in this position because then we would have less dependence on fossil fuels and on natural gas," he said.

Never mind that the transition itself helped create the shortage by causing a shortage of the fuels that, for the foreseeable future, the continent continues to run on. That, and the fact that the wind doesn't always blow and the sun sometimes fails to shine.

Anyway, you heard it from Frans first -- renewable energy causes problems that can only be solved by... more renewable energy. Is there anything it can't do?

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.