In today’s fascinating new media world, where social media updates us every second on anything relevant, our attention span gets weird. Especially under lockdown, when those streams are our only entertainment that isn’t on Netflix. Things I pay attention to in the ‘news’ are bifurcated, or maybe tri-furcated: sensational, bombastic stories like for example anything Trump did; localized things that impact my little world directly; and pictures of gorgeous beaches that it feels like I’ll never see again. Some rich degenerate posted in my social media feed live pictures from Bora Bora the other day, and I almost threw my computer into the compost bin. Just a typical January, I suppose, but the fact remains that it takes something exceptional these days to break through the thousand-ring circus that passes for our ‘news’ flow these days.
Some things understandably don’t get much attention, if they are near misses. Even bad news feeds don’t report on what didn’t happen. But maybe someone should start. While we stand here in the glow of our ‘energy transition’, which so far looks like trillions of dollars of government money and incentives wrapped around ever-increasing hydrocarbon consumption, the rest of the world is grappling with a beast that many over here refuse to admit even exists.
In December, China took extra measures to ensure adequate natural gas and coal supplies to meet potential cold weather, including planned rationing and ordered for coal mines to increase production. The country recorded an 11 percent increase in power consumption in December compared to the prior year, with 20 provincial power grids showing double-digit growth.
A good-armed stone’s-throw away in Japan, power utilities in early January were desperately seeking fuel oil to meet record power demand amid a shortage of LNG. “We have received emergency requests from power utilities for fuel oil supply at a level significantly exceeding our supply plan,” said an official.
Hey look, India, Pakistan and Bangladesh are joining the party. Gas distributors are facing an ‘emergency situation’, and have, in the past few weeks, cut off gas supplies due to low gas pressure, a result of an inability to secure supplies. One Pakistani gas distributor noted that prices LNG prices have not just gone wild, but that the fuel simply isn’t available: “For the last few tenders, we didn’t get any response from suppliers.” They too are on the hunt for heating oil to meet demand. So is India: “We have not been able to build inventory of fuel oil,” said an official from an Indian refinery. “[The] situation is completely different from what it was after COVID-19 outbreak…no one can afford LNG at this rate.”
Oh, ok, I know. BORING. Who cares about those odd foreigners and their oh-so-last-century energy systems. Let’s talk about fun stuff. Have you seen the price of Tesla stock? Are you getting rich off Bitcoin and lunatic IPOs, and your green investment fund?
People, look up. Eyes up here. The world’s economy is making a lurching turn, like a drunk outside the bar with arms outstretched flailing wildly for some support. Consider some of the bigger macro pieces.
Governments are flooding the world with money in an effort to keep economies going – not just from the pandemic, but in general.
Small businesses are being decimated, replaced by Walmart and Amazon and not much else. Hundreds of billions in small-business equity, and owners’ life savings, is simply evaporating into nothingness. Hundreds of thousands, if not millions, of related occupations are being destroyed and may never return.
Meanwhile, we (or governments) have lost sight of the fact that cheap energy equates directly with increased standards of living. Cheap energy affords us everything we have now, and fuels endless innovation. The question then also bears repeating, ad nauseam: is ‘new’ energy really cheap if it operates only when it feels like it, for several hours a day, maybe, if the weather is right? If you can get a car for half price but can only use it from noon to four pm, or if the wind blows, is it really cheap?
Oh, there we are again. BORING. Who cares? The hot money is elsewhere. Governments are funnelling all that money towards the new programs of the day, and I won’t even say the word because haters gonna hate even harder. The west appears not to care about the underlying price of energy, because we think we have it all figured out, we don’t need those dirty fuels, and we can afford to throw out anything we want anyway because we’re the rich west.
Oh, but it is expensive. Germany, a country that has gone arguably the farthest to take a huge economy down the green path, pays among the highest energy costs in the world (not THE highest energy costs in the world, that upper echelon includes the likes of Rwanda, Sierra Leone and Burkina Faso – but Germany’s is the highest in the G20). And they are only partway to going green, and they still rely on the hydrocarbons burned by neighbours in times of heavy need.
BORING. Tesla is now worth more than the rest of the big auto manufacturers in the world – combined. Now, that’s exciting, right? Forget hydrocarbons, everyone is getting rich in tech. How rich? And how easy? Consider this. Elon Musk, earlier this month, tweeted that his followers should “Use Signal”. He was referring to an encrypted messaging app put out by a nonprofit organization. But his followers reacted with the same boisterous and enthusiastic mindlessness with which they seem to greet a lot of things – they stampeded into the market and bought the first thing they could find called “Signal”, including an unknown little company that saw its share price rise by 438 percent in one day. All due to mistaken identity.
Think about this high level. The countries listed at the outset – China, India, Japan, Pakistan, and Bangladesh – account for about 3.3 billion people, and they collectively chew their fingernails to the elbow when cold snaps hit.
Here in the west, our politicians, whom we vote in, take the ideology and dream-like visions of activists and turn them into government policy, saddling citizens with soon-to-be staggering energy bills for the very act of living our routine lives. Ask Ontario and California how they like it, and listen well, because we’re all going to get it soon.
And the “climate”, to use the dimwitted shortcut that is now standard terminology – how’s it faring? Surely all that money being vacuumed out of consumers’ pockets and redirected to Tesla stock is going to achieve the UN’s goals, now, right, goals which are coming to define our economies?
Well, what do you think? Weigh the needs and aspirations of those 3.3 billion people mentioned, and the fact that they are building solar, wind, coal and natural gas infrastructure as fast as they can to meet rising demand (from all those new Teslas, presumably). Does no one care about emissions? Why yes, they do. They care deeply. But that care does not compete with the care for the fuel that keeps seven billion people alive, no matter what people write on signs.
Here in the west, we have been insulated/blessed by an extremely well-established fuel creation and distribution system. It works so well that absolutely no one cares. See if you can find a citizen on any street in North America that will give you a thought at all on the possibility of a natural gas shortage. Say the words “fuel oil” and you’ll get a cow’s blank stare. Home heating? It just happens. Full supermarkets? Duh, what other kind is there? Green energy? Of course! Who wouldn’t rather get their power from the wind and the sun? What kind of idiotic question is that?
So our ‘leaders’ bow to the tiny vocal mob, because they don’t understand ‘fuel oil’ either. They have no context of global energy. They know a mob when they see one, and they don’t like mobs. Mobs protest and wave signs and shut down railways, and then things get uncomfortable and cost votes. Here you go, mobs. And yes, often those are the same mobs that take their hard-earned dollars and slap them down on a stock they’ve never heard of because they erroneously thought one of their heroes had recommended it. You can tell it’s often the same crew by their same mindless devotion to the latest ‘investing trends’ that they don’t understand either, but Jim Cramer said it was good, so I’ll place my life’s savings on red, please.
Meanwhile, a year ago those blockaded rail tracks almost caused Quebec to run out of propane, in winter, and propane is desperately needed to heat many buildings including hospitals and seniors homes. The year before, in January 2019, Rhode Island ran short of natural gas due to excess demand, declared an emergency, cut off 7,000 customers, and officials pleaded “Newporters are urged to reach out and check in on friends and family & to seek shelter at an area hotel.”
BORING. And look at the bright side – free taxi service! “Anyone in need of transportation to the shelter may reach out to the Newport Police Department at 401 847-1306 to arrange a ride.”
Who cares? Stuff always works out. Don’t listen to the fossil fuel shills. We’ve got trillions headed for new technology, we don’t need that old junk anymore.
In fact, those panicked efforts to line up hydrocarbons happened the week before last. The following week, energy news was dominated by Biden’s cancellation of Keystone XL. Activists celebrated, and the news swooped in to see what Greenpeace and Environmental Defence and all the other professional haters had to say. Their glee was radiant. Progress, they said.
‘Fiddling while Rome burns’ turns out to be a really handy analogy.
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Read more insightful analysis from Terry Etam here, or email Terry here.
