In the last few years, the energy transition has moved from being a wished-for hypothetical to becoming a large-scale global trend. As this happens, it shakes up our understanding of the future. Some analysts are tempted, already, to define our situation as “
What you are seeing is a massive government-subsidized and mandated investments in Green energy and wide-spread government constraints on investment in fossil fuels. This is not evidence of an energy transition.
You need to focus on outputs, not inputs.
The reality is that green energy is not replacing fossil fuel usage. It is in addition to widespread usage of fossil fuels.
Not true for wealthy Western nations, which is almost entirely where Green energy is being implemented. They heavily penalize fossil fuels with taxes and regulations, and the industry still generates substantial revenue. Green energy does the opposite.
Fossil fuel subsidies are largely among developing nations, particularly in oil-exporting nations, in the form of price fixing/capping (though some people try to change the definition of "subsidy" to claim otherwise). They are really subsidizing consumption, not the industry.
I do oppose all of those subsidies, by the way.
The difference is fossil fuels can easily flourish without subsidies, while Green energy cannot except in unique geographical areas, at least for now.
Look at the scale of the private-sector spending on renewables, $1.6 trillion in one year isn't subsidies. Government subsidies may encourage more building and speed things up (I sure hope they do, that's kind of the point, isn't it?) but the bulk of the funding is from private investors who believe (correctly, IMO) that these investments will be profit-making. That's just Capitalism 101.
No, it is government subsidies of private corporations, as well as government mandates forcing them to make investments. The actual investments would have been much lower without them.
Why? Because they are not profit making without subsidies, except in some unique geographies.
Which is exactly why Greens so strongly support those subsidies and mandates. Without them the entire Green energy transition would collapse.
You can call that capitalism if you want, but it almost entirely about government policy not markets. And private corporations keep lobbying government to keep the subsidies going.
"...wide-spread government constraints on investment in fossil fuels."
Under Joe Biden, the US is on track once again to produce record amount of gas and oil. Boy, do I wish the government was constraining the fossil-fuel industry in any way, but it sure looks like they aren't.
Biden clearly tried hard to constrain pipeline construction and exploitation and drilling on federal lands, but the the necessity of fossil fuels is partially overcoming these constraints.
More examples why the Green energy transition will fail.
Yeah, I guess I'm just laser-focused in the fact that US oil production is going UP and not DOWN. Oh, how I wish Joe Biden was actually doing what you think he is doing.
This analysis, with an obvious green left wing angle, obfuscates or perhaps deliberately deceives by stating that wind and solar are getting cheaper and remains silent about how govt subsidies are creating this unsustainable inversion. After global investment of over $5 trillion, wind and solar have only taken over 3-4% of energy production with fossil still supplying 80% of world energy needs. An astute observer grounded in reality will recognize that this amount of continued investment is unsustainable and fossil fuels will play a huge role well beyond 2050 and into the 22nd century. With the world already close if not at 1.5c temp rise, with no apprent disaster in sight, political will for further wasted low EROI supply will diminish significantly.
No disaster in sight? Already climate pattern is becoming so haywire that record breaking heatwave is already witnessed in Europe, in conjunction with flash floodings across the Global South and its associated food insecurity. We are facing a severe disaster in sight due to overconsumption, and these oil lobbyists are not helping things
One thing to note is overconsumption, which is the actual issue is not addressed in any of these scenarios. According to the current narratives , we're just going to magically move to an entirely different, less efficient energy source and the worlds economies will continue to grow at 2%+- and nobody will have to change their behaviour and habits . Utter nonsense.
Exactly which data would constitute a conclusion of “haywire?” Which data shows humans are causing more change compared to natural climate variation? The major driver of food insecurity is poverty and regional conflicts by oppressive regimes. Lifting people out of poverty will not happen with solar panels. Siting overconsumption shows lack of concern for those less fortunate than yourself and that your real goal is depopulation. Pessimistic and nihilistic views drive folks like yourself to extremist views. Thats much worse for everyone compared to climate change.
"Lifting people out of poverty will not happen with solar panels."
Solar panels are a technology. Can we think of other cases where technology has improved people's lives?
Try to think of it this way, it's a device, that, when pointed at the sun, produces electricity. How could this not be a benefit to humanity? (And especially in poor countries that have no oil or gas reserves of their own and must spend scarce hard currency buying gas and oil)
There are transformative technologies and there is just tech. By far the cheapest form of electric production sans subsidies is fossil fuel. Green tech electric production is at least 3 times more expensive than fossill hydro and nuclear. The EROEI for solar and wind is quite low which translates to unsustainability. If solar tech was the panacea for lifting people out of poverty, and building sound power infrastructure, then poor countries would be spending what little they have on this tech vs cheaper gas and oil as you point out. This is not happening because of cold hard physics and economics. Perhaps you shouldnthink of it this way: when the panel is pointed at the sun its capacity factor is only 21% vs a natural gas plant at 93%. That scaling factor is the real benefit to humanity. By far fossil fuels have benefited the most lives, for the longest time in all human history.
1. "when the panel is pointed at the sun its capacity factor is only 21% vs a natural gas plant at 93%."
The fact that one of them requires you to purchase (and maybe even import) fuel doesn't count in favor of the solar panel?
2. "the EROEI for solar and wind is quite low"
And yet utilities keep adding more wind and solar. Wonder why?
3. "By far the cheapest form of electric production sans subsidies is fossil fuel."
Depends on the price of the fossil fuel, doesn't it? Lots of volatility in fossil-fuel prices, meanwhile the cost for wind and solar only goes in one direction - down. Can you see why this might lead a utility to choose renewables over fossil fuels? Or why developing countries might want to go the renewable route rather than sending money out of the country year after year for fossil fuel imports?
4. "By far fossil fuels have benefited the most lives, for the longest time in all human history."
The question isn't which form of energy has been most beneficial in the past, it's what form of energy we should choose for the future.
1-?no because the panel never produces enough to make the ivestmwnt worth it. Lifetime on a panel 20 years. Lifetime on plant 80
2- utilities buy wind and solar for the tax credits - Mid America energy CEO stated 100% of investment paid for by tax credits. Reg Utilities can recoup their capital invest by charging the ratepayers. As Warren Buffett said, they only build wind and solar farms because the the tax credits.
3 -!the price of fossil fuels has been does fluctuate but still remains low compared to cost per btu. The price of wind and solar does not just go down. Otherwise Orstead would not have pulled out of Northeast contract.
4 the question IS what energy has worked best in the past because that informs the future. Bring on fusion and all this becomes moot. Until then physics and economics still support fossil fuels.
So about 5 years worth of the investment in oil and gas, an industry we have been investing in for more than 150 years.
There's an XKCD comic about this, a mathematician sees something that is relatively small but growing at a constant percentage rate, and says, "My God, it's exponential growth!" For the rest of us, the thing needs to get a lot bigger before we see that.
You miss the part about the amount of fossil energy that 5 trillion has displaced. Not much. Exponential? The amount of copper mined by humans is 700mil tonnes. To get to net zero in three decades will require 1.4bil tonnes. Thats 2x the amount ever mined. In three decades. You’re right that growth is not exponential because it’s a pipe dream.
Throughout human history, whenever humans have faced a shortage of a particular resource, what have they done? Thrown up their hands and said the whole thing is impossible? I don't think so. The one thing I have absolute faith in is the ability of engineers to be engineers and to do what engineers do best: Solve problems.
I believe in engineering as well. However magical thinking about how the next big breakthrough in batteries, carbon capture or any other transformative tech is just around the corner is naive. A mixed approach to energy will be the dominant solution well into the next century.
I'm all for breakthroughs, but the batteries we have now are pretty good, aren't they? Allowing electric cars with 200-300 mile range, costs now low enough that utilities can use massed batteries as backup for wind and solar, reducing the need for gas-powered peaking plants (see the article I linked to elsewhere in this discussion about a Vermont utility's "Virtual Power Plant.")
I'm skeptical about carbon capture, but I'm willing to keep my eyes open and simply watch what develops without insulting the advocates of it by calling them naive. But, you know, I have an open mind.
I think we should be careful how we use the term ‘investment’ as applied to fossil fuel versus renewables. Renewable energy infrastructure is a genuine investment, harvesting an ongoing source of ‘free energy’ and providing long term future income following initial construction. Fossil fuel ‘investment’ is really just continued drilling and pumping, or coal mine extension, into new reserves. In some places the energy return/energy used ratio no longer makes economic sense at global price levels, so it cannot be considered a long term source of income.
The metals and concrete do not last forever. They depreciate and will need to be replaced in 10-50 years depending on what you are talking about. So once the world is 100% green and no growth, one still needs to replace 5-10% of the entire investment every year. Since many companies ignore this by living in the fantasy world of EBITDA accounting, this will be ignored by most people. See this good video (~5:30 in) about EBITDA https://www.youtube.com/watch?v=l82kIjqBtqw&t=329s
You are certainly right that depreciation and amortization are critical factors in sustainability of plant and equipment. What is more striking to me is the complete failure to take into account external diseconomies by many market participants and pundits (the costs to society that are not incorporated into market decisions), in some cases even denying that they exist. Alex Epstein, a guru of this school of thought, provides a good example of this. If we take 5-10% depreciation a year to be the cost of infrastructure sustainability, that is completely overshadowed by the cost of climate-related impacts on infrastructure, political conflict, and environmental sustainability. These are existential threats which are greater by orders of magnitude.
Exactly, the costs are already being felt in increased intensity of storms, wild fires, droughts and heat waves. I'd like to see us find a way to recoup some of these costs from the oil industry, since they're mainly responsible.
I have commented elsewhere that a grassroots campaign should be started for citizens, insurance companies and infrastructure providers to collaboratively litigate against the fossil fuel industries for climate related damages and criminal negligence. The FFI knew from their research in the 70’s that their activity raised the risks of climate change damage, but they denied and suppressed that knowledge. Now, some properties are uninsurable and some infrastructure will be abandoned prematurely. The costs must be sheeted home to the culprits!
What is the basis for considering Russia's role in providing hydrocarbons and gas to the world markets on a reducing trend? Especially with the deals in Iraq and Iran, etc. With Russia winning the war in Ukraine and the west and especially US humiliated, why the scenario of reduced Russian influence has traction? And with KSA and China establishing a swap line for rials/renembi?
You don't include time constraints in your otherwise good analysis. There is a precipitous result if we damage our planet beyond human needs . It appears the fossil fuel makers and big burners say it's too late ; so they say let's changeover slowly, and hope for a geo-engineered solution. Certainly , we are doomed as specie ,if we move at current speed.
This is encouraging: Indonesia, currently a major user of coal, is making major investments in renewables, at least $20 billion by 2030. The article also mentions a previously-announced $15 billion plan from Vietnam.
Thanks as always, Adam. I learned from this piece. That said: you pass over the U.S. electoral politics with "The green wing of the Biden administration justifies this as a political necessity." But that's the whole ballgame! The Dems have pushed decarbonization to the electoral breaking point. Your top-down analysis of the political sway of concentrated fossil fuel players doesn't matter if voters themselves are the core support for cheap gasoline at the pump and cheap natural gas powering the grid overnight.
Steven Chu, former Secretary of Energy, recently suggested what kids should say to parents about climate change, and notably his comments toe the line of a post-growth economy (cued):
I have learned to take the IEA "estimates" with a grain of salt as they are based on what for the most part are "heroic" assumptions. Reality is that there are many obstacles in the way of solar and wind farms, as hoped for as they might be, from acquiring land to permitting, to construction and supply lines, and financing - not to mention politics which may the biggest obstacle of all. And my list doesn't include the changes and expansion the Grid must undergo, which is formidable. Bottom line we need to have REALISTIC plans that address all of these obstacles. I have yet to see anyone lay out a global plan as to HOW the energy transition will be accomplished, who does what, and at what COST. Maybe you have the answer but I am not optimistic that COP 28 will accomplish this - though I am sure they will set some inspiring goals.
Also, one of the things I like about the IEA reports is that they look at multiple scenarios, and lay out what's likely to happen under each one, but they're not saying which scenario is most likely to happen. Seems like it's still too early to tell, although I do hope we can still get on the net-zero track in time.
One of the other shortcomings of IEA projections is that they make no attempt to account for adaptation and innovation out to the 2050 mark. Last time I checked my history books we humans were pretty good at adapting to change and coming up with innovative solutions to problems. I'm optimistic that we will see at least some innovation over the next 20 years.
Lots of innovative things being done to alleviate the challenges to the grid, here's a program in Vermont that puts a Tesla PowerWall in your house, charged by your own PV panels, under an agreement to allow the utility to draw on the battery as-needed. They're calling it a Virtual Power Plant, and the Vermont system is now at 40MW capacity. Less need to use gas-powered peaking plants, the grid becomes more resilient and decentralized. Yes, there are challenges, but engineers will do what engineers always do: Solve problems.
The analysis is fundamentally well done except that it does not take into account the near zero interest rates in the 2010-2021 timeframe. Many businesses (from food to football) seem to have grandiose plans that were hatched when 10 year Tbills were under 2%. Those days will never return.
It is bad in the sense that the money and resources squandered in this work could have been spent in a much better way. Many of the stupid green things were funded with super low interest rates. That world will never come back.
I've noticed the naysayers here seem to be pretty focused on this question of whether wind and solar are really cheaper than fossil fuels. But if you're an electric utility, you don't need renewables to be the cheapest, just cheap enough so that you can make a profit selling the electricity they produce.
Plus, you've got the fact that prices for fossil fuels fluctuate wildly. Can you see why a regulated electric utility might see that as a problem? And would prefer wind and solar because the long-term costs are more predictable?
Finally, the trends are pretty clear: Costs for renewables drop, year after year. The cost of fossil fuels may drop, but then they rise again and who can predict where the costs will go? Given all that, is it really hard to see why so many utilities are going in the direction of renewables?
Hold on a second. "Squandered" suggests we spent money on a solar farm, but then the money is wasted because the solar farm didn't produce anything, or it produces so little that the income can't cover the purchase cost over the expected lifetime of the installation. You can argue about what it costs, but pretty clearly the energy generated by wind and solar does pay for the installation costs, because utilities keep installing the darn things, don't they?
You write, “The future of America’s oil industry no longer encapsulate the global energy transition problem. To think in those terms is an anachronistic hangover of the 1980s and 1990s. But it does matter.”
The latest in a series of adverts from BP on various British media claims that they have increased the proportion of their investment in renewable energy from 3% in 2019 to 30% in 2023. Describing their policy as 'and not or', continued investment in North Sea Oil is portrayed as 'Backing Britain'! Is the renewables investment claim credible? Is BPs approach really significantly different from the 'marking time' strategy you show to be more widespread among the big companies? If so, what is the explanation/back story?
You misinterpret the data.
What you are seeing is a massive government-subsidized and mandated investments in Green energy and wide-spread government constraints on investment in fossil fuels. This is not evidence of an energy transition.
You need to focus on outputs, not inputs.
The reality is that green energy is not replacing fossil fuel usage. It is in addition to widespread usage of fossil fuels.
Fossil fuels have been and still are massively subsidized, so I’m not sure I agree with you on that point. Thumbs up on focusing on output.
Not true for wealthy Western nations, which is almost entirely where Green energy is being implemented. They heavily penalize fossil fuels with taxes and regulations, and the industry still generates substantial revenue. Green energy does the opposite.
Fossil fuel subsidies are largely among developing nations, particularly in oil-exporting nations, in the form of price fixing/capping (though some people try to change the definition of "subsidy" to claim otherwise). They are really subsidizing consumption, not the industry.
I do oppose all of those subsidies, by the way.
The difference is fossil fuels can easily flourish without subsidies, while Green energy cannot except in unique geographical areas, at least for now.
Isn’t China a leader in implementing solar?
Yes, and they are doing it with massive subsidies.
That is how Communism works.
The problem with subsidies is that eventually you run out of other people's money.
Look at the scale of the private-sector spending on renewables, $1.6 trillion in one year isn't subsidies. Government subsidies may encourage more building and speed things up (I sure hope they do, that's kind of the point, isn't it?) but the bulk of the funding is from private investors who believe (correctly, IMO) that these investments will be profit-making. That's just Capitalism 101.
Every time a government seriously cuts back on the subsidies and mandates, private investment in Green energy goes down.
And most importantly, it is not lowering global carbon emissions or fossil fuel usage.
No, it is government subsidies of private corporations, as well as government mandates forcing them to make investments. The actual investments would have been much lower without them.
Why? Because they are not profit making without subsidies, except in some unique geographies.
Which is exactly why Greens so strongly support those subsidies and mandates. Without them the entire Green energy transition would collapse.
You can call that capitalism if you want, but it almost entirely about government policy not markets. And private corporations keep lobbying government to keep the subsidies going.
"...wide-spread government constraints on investment in fossil fuels."
Under Joe Biden, the US is on track once again to produce record amount of gas and oil. Boy, do I wish the government was constraining the fossil-fuel industry in any way, but it sure looks like they aren't.
I said constraints, not elimination.
Biden clearly tried hard to constrain pipeline construction and exploitation and drilling on federal lands, but the the necessity of fossil fuels is partially overcoming these constraints.
More examples why the Green energy transition will fail.
So it's a "constraint" where oil and gas production go up instead of down?" That's quite a "constraint" you've got there.
Yes, a virtual prohibition on exploration and drilling on public land is a constraint.
Stopping construction on specific pipelines is a constraint.
Not sure why you cannot see that.
Yeah, I guess I'm just laser-focused in the fact that US oil production is going UP and not DOWN. Oh, how I wish Joe Biden was actually doing what you think he is doing.
Yes, that is yet more evidence that the Green energy policies fail to accomplish their goals.
I am sure that if you think hard about it, you will come up with many more examples of failure.
This analysis, with an obvious green left wing angle, obfuscates or perhaps deliberately deceives by stating that wind and solar are getting cheaper and remains silent about how govt subsidies are creating this unsustainable inversion. After global investment of over $5 trillion, wind and solar have only taken over 3-4% of energy production with fossil still supplying 80% of world energy needs. An astute observer grounded in reality will recognize that this amount of continued investment is unsustainable and fossil fuels will play a huge role well beyond 2050 and into the 22nd century. With the world already close if not at 1.5c temp rise, with no apprent disaster in sight, political will for further wasted low EROI supply will diminish significantly.
No disaster in sight? Already climate pattern is becoming so haywire that record breaking heatwave is already witnessed in Europe, in conjunction with flash floodings across the Global South and its associated food insecurity. We are facing a severe disaster in sight due to overconsumption, and these oil lobbyists are not helping things
One thing to note is overconsumption, which is the actual issue is not addressed in any of these scenarios. According to the current narratives , we're just going to magically move to an entirely different, less efficient energy source and the worlds economies will continue to grow at 2%+- and nobody will have to change their behaviour and habits . Utter nonsense.
Exactly which data would constitute a conclusion of “haywire?” Which data shows humans are causing more change compared to natural climate variation? The major driver of food insecurity is poverty and regional conflicts by oppressive regimes. Lifting people out of poverty will not happen with solar panels. Siting overconsumption shows lack of concern for those less fortunate than yourself and that your real goal is depopulation. Pessimistic and nihilistic views drive folks like yourself to extremist views. Thats much worse for everyone compared to climate change.
"Lifting people out of poverty will not happen with solar panels."
Solar panels are a technology. Can we think of other cases where technology has improved people's lives?
Try to think of it this way, it's a device, that, when pointed at the sun, produces electricity. How could this not be a benefit to humanity? (And especially in poor countries that have no oil or gas reserves of their own and must spend scarce hard currency buying gas and oil)
There are transformative technologies and there is just tech. By far the cheapest form of electric production sans subsidies is fossil fuel. Green tech electric production is at least 3 times more expensive than fossill hydro and nuclear. The EROEI for solar and wind is quite low which translates to unsustainability. If solar tech was the panacea for lifting people out of poverty, and building sound power infrastructure, then poor countries would be spending what little they have on this tech vs cheaper gas and oil as you point out. This is not happening because of cold hard physics and economics. Perhaps you shouldnthink of it this way: when the panel is pointed at the sun its capacity factor is only 21% vs a natural gas plant at 93%. That scaling factor is the real benefit to humanity. By far fossil fuels have benefited the most lives, for the longest time in all human history.
1. "when the panel is pointed at the sun its capacity factor is only 21% vs a natural gas plant at 93%."
The fact that one of them requires you to purchase (and maybe even import) fuel doesn't count in favor of the solar panel?
2. "the EROEI for solar and wind is quite low"
And yet utilities keep adding more wind and solar. Wonder why?
3. "By far the cheapest form of electric production sans subsidies is fossil fuel."
Depends on the price of the fossil fuel, doesn't it? Lots of volatility in fossil-fuel prices, meanwhile the cost for wind and solar only goes in one direction - down. Can you see why this might lead a utility to choose renewables over fossil fuels? Or why developing countries might want to go the renewable route rather than sending money out of the country year after year for fossil fuel imports?
4. "By far fossil fuels have benefited the most lives, for the longest time in all human history."
The question isn't which form of energy has been most beneficial in the past, it's what form of energy we should choose for the future.
1-?no because the panel never produces enough to make the ivestmwnt worth it. Lifetime on a panel 20 years. Lifetime on plant 80
2- utilities buy wind and solar for the tax credits - Mid America energy CEO stated 100% of investment paid for by tax credits. Reg Utilities can recoup their capital invest by charging the ratepayers. As Warren Buffett said, they only build wind and solar farms because the the tax credits.
3 -!the price of fossil fuels has been does fluctuate but still remains low compared to cost per btu. The price of wind and solar does not just go down. Otherwise Orstead would not have pulled out of Northeast contract.
4 the question IS what energy has worked best in the past because that informs the future. Bring on fusion and all this becomes moot. Until then physics and economics still support fossil fuels.
"global investment of over $5 trillion"
So about 5 years worth of the investment in oil and gas, an industry we have been investing in for more than 150 years.
There's an XKCD comic about this, a mathematician sees something that is relatively small but growing at a constant percentage rate, and says, "My God, it's exponential growth!" For the rest of us, the thing needs to get a lot bigger before we see that.
You miss the part about the amount of fossil energy that 5 trillion has displaced. Not much. Exponential? The amount of copper mined by humans is 700mil tonnes. To get to net zero in three decades will require 1.4bil tonnes. Thats 2x the amount ever mined. In three decades. You’re right that growth is not exponential because it’s a pipe dream.
Throughout human history, whenever humans have faced a shortage of a particular resource, what have they done? Thrown up their hands and said the whole thing is impossible? I don't think so. The one thing I have absolute faith in is the ability of engineers to be engineers and to do what engineers do best: Solve problems.
I believe in engineering as well. However magical thinking about how the next big breakthrough in batteries, carbon capture or any other transformative tech is just around the corner is naive. A mixed approach to energy will be the dominant solution well into the next century.
I'm all for breakthroughs, but the batteries we have now are pretty good, aren't they? Allowing electric cars with 200-300 mile range, costs now low enough that utilities can use massed batteries as backup for wind and solar, reducing the need for gas-powered peaking plants (see the article I linked to elsewhere in this discussion about a Vermont utility's "Virtual Power Plant.")
I'm skeptical about carbon capture, but I'm willing to keep my eyes open and simply watch what develops without insulting the advocates of it by calling them naive. But, you know, I have an open mind.
Yes, that's right 👍
I think we should be careful how we use the term ‘investment’ as applied to fossil fuel versus renewables. Renewable energy infrastructure is a genuine investment, harvesting an ongoing source of ‘free energy’ and providing long term future income following initial construction. Fossil fuel ‘investment’ is really just continued drilling and pumping, or coal mine extension, into new reserves. In some places the energy return/energy used ratio no longer makes economic sense at global price levels, so it cannot be considered a long term source of income.
Not sure all the metals, diesel and concrete going into renewables was free energy.
Metals and concrete are investments, not consumables
The metals and concrete do not last forever. They depreciate and will need to be replaced in 10-50 years depending on what you are talking about. So once the world is 100% green and no growth, one still needs to replace 5-10% of the entire investment every year. Since many companies ignore this by living in the fantasy world of EBITDA accounting, this will be ignored by most people. See this good video (~5:30 in) about EBITDA https://www.youtube.com/watch?v=l82kIjqBtqw&t=329s
You are certainly right that depreciation and amortization are critical factors in sustainability of plant and equipment. What is more striking to me is the complete failure to take into account external diseconomies by many market participants and pundits (the costs to society that are not incorporated into market decisions), in some cases even denying that they exist. Alex Epstein, a guru of this school of thought, provides a good example of this. If we take 5-10% depreciation a year to be the cost of infrastructure sustainability, that is completely overshadowed by the cost of climate-related impacts on infrastructure, political conflict, and environmental sustainability. These are existential threats which are greater by orders of magnitude.
Exactly, the costs are already being felt in increased intensity of storms, wild fires, droughts and heat waves. I'd like to see us find a way to recoup some of these costs from the oil industry, since they're mainly responsible.
I have commented elsewhere that a grassroots campaign should be started for citizens, insurance companies and infrastructure providers to collaboratively litigate against the fossil fuel industries for climate related damages and criminal negligence. The FFI knew from their research in the 70’s that their activity raised the risks of climate change damage, but they denied and suppressed that knowledge. Now, some properties are uninsurable and some infrastructure will be abandoned prematurely. The costs must be sheeted home to the culprits!
What is the basis for considering Russia's role in providing hydrocarbons and gas to the world markets on a reducing trend? Especially with the deals in Iraq and Iran, etc. With Russia winning the war in Ukraine and the west and especially US humiliated, why the scenario of reduced Russian influence has traction? And with KSA and China establishing a swap line for rials/renembi?
You don't include time constraints in your otherwise good analysis. There is a precipitous result if we damage our planet beyond human needs . It appears the fossil fuel makers and big burners say it's too late ; so they say let's changeover slowly, and hope for a geo-engineered solution. Certainly , we are doomed as specie ,if we move at current speed.
It's infuriating how easily the denialists switched from "It's not happening" to "OK, it's happening, but too late to do anything about it now!"
This is encouraging: Indonesia, currently a major user of coal, is making major investments in renewables, at least $20 billion by 2030. The article also mentions a previously-announced $15 billion plan from Vietnam.
https://www.reuters.com/sustainability/climate-energy/indonesia-launches-20-bln-renewable-energy-investment-plan-2023-11-21/
Thanks as always, Adam. I learned from this piece. That said: you pass over the U.S. electoral politics with "The green wing of the Biden administration justifies this as a political necessity." But that's the whole ballgame! The Dems have pushed decarbonization to the electoral breaking point. Your top-down analysis of the political sway of concentrated fossil fuel players doesn't matter if voters themselves are the core support for cheap gasoline at the pump and cheap natural gas powering the grid overnight.
Steven Chu, former Secretary of Energy, recently suggested what kids should say to parents about climate change, and notably his comments toe the line of a post-growth economy (cued):
https://www.youtube.com/watch?v=A4LE-SGLAMU&t=4988
I have learned to take the IEA "estimates" with a grain of salt as they are based on what for the most part are "heroic" assumptions. Reality is that there are many obstacles in the way of solar and wind farms, as hoped for as they might be, from acquiring land to permitting, to construction and supply lines, and financing - not to mention politics which may the biggest obstacle of all. And my list doesn't include the changes and expansion the Grid must undergo, which is formidable. Bottom line we need to have REALISTIC plans that address all of these obstacles. I have yet to see anyone lay out a global plan as to HOW the energy transition will be accomplished, who does what, and at what COST. Maybe you have the answer but I am not optimistic that COP 28 will accomplish this - though I am sure they will set some inspiring goals.
Also, one of the things I like about the IEA reports is that they look at multiple scenarios, and lay out what's likely to happen under each one, but they're not saying which scenario is most likely to happen. Seems like it's still too early to tell, although I do hope we can still get on the net-zero track in time.
One of the other shortcomings of IEA projections is that they make no attempt to account for adaptation and innovation out to the 2050 mark. Last time I checked my history books we humans were pretty good at adapting to change and coming up with innovative solutions to problems. I'm optimistic that we will see at least some innovation over the next 20 years.
We already are! (example below)
Can't see example. Can you describe?
Below this, Vermont utility builds "Virtual Power Plant" out of linked-together Tesla Powerwalls in people's basements.
Got it and good example. How do you scale it and do you really think IEA builds this kind of innovative adaptation into their models?
Lots of innovative things being done to alleviate the challenges to the grid, here's a program in Vermont that puts a Tesla PowerWall in your house, charged by your own PV panels, under an agreement to allow the utility to draw on the battery as-needed. They're calling it a Virtual Power Plant, and the Vermont system is now at 40MW capacity. Less need to use gas-powered peaking plants, the grid becomes more resilient and decentralized. Yes, there are challenges, but engineers will do what engineers always do: Solve problems.
https://www.newyorker.com/news/daily-comment/the-next-power-plant-is-on-the-roof-and-in-the-basement
The energy transition ignores the science and maths of energy.
You misspelled math. :)
Very interesting information, thank you!
The analysis is fundamentally well done except that it does not take into account the near zero interest rates in the 2010-2021 timeframe. Many businesses (from food to football) seem to have grandiose plans that were hatched when 10 year Tbills were under 2%. Those days will never return.
Is that good or bad for green energy and combating climate change?
It is bad in the sense that the money and resources squandered in this work could have been spent in a much better way. Many of the stupid green things were funded with super low interest rates. That world will never come back.
Squandered how? You spend money on a wind farm or solar farm that pumps out electricity for decades to come, how is that not a wise investment?
I suggest that you read this Substack post about true costs of wind and solar. This writer is worth paying for his insight.@Doomberg https://doomberg.substack.com/p/debunking-levelized-cost-of-energy
I've noticed the naysayers here seem to be pretty focused on this question of whether wind and solar are really cheaper than fossil fuels. But if you're an electric utility, you don't need renewables to be the cheapest, just cheap enough so that you can make a profit selling the electricity they produce.
Plus, you've got the fact that prices for fossil fuels fluctuate wildly. Can you see why a regulated electric utility might see that as a problem? And would prefer wind and solar because the long-term costs are more predictable?
Finally, the trends are pretty clear: Costs for renewables drop, year after year. The cost of fossil fuels may drop, but then they rise again and who can predict where the costs will go? Given all that, is it really hard to see why so many utilities are going in the direction of renewables?
When you buy a car, do you need it to be the cheapest car, or is it enough that it's reasonably priced and does what it's supposed to do?
Hold on a second. "Squandered" suggests we spent money on a solar farm, but then the money is wasted because the solar farm didn't produce anything, or it produces so little that the income can't cover the purchase cost over the expected lifetime of the installation. You can argue about what it costs, but pretty clearly the energy generated by wind and solar does pay for the installation costs, because utilities keep installing the darn things, don't they?
Thanks for this! 🙏🏽
You write, “The future of America’s oil industry no longer encapsulate the global energy transition problem. To think in those terms is an anachronistic hangover of the 1980s and 1990s. But it does matter.”
What are you trying to say here?
I open this up to anyone who thinks that they can prove that solar and wind replace coal and other fossil fuels. Prove it:
https://frompovertytoprogress.substack.com/p/prove-that-solarwind-replaces-fossil
The latest in a series of adverts from BP on various British media claims that they have increased the proportion of their investment in renewable energy from 3% in 2019 to 30% in 2023. Describing their policy as 'and not or', continued investment in North Sea Oil is portrayed as 'Backing Britain'! Is the renewables investment claim credible? Is BPs approach really significantly different from the 'marking time' strategy you show to be more widespread among the big companies? If so, what is the explanation/back story?