GWPF Newsletter: Green Europe faces gas shortages and energy crisis as winter looms

 

Forget Net Zero: Fossil fuels will constitute 50% of global energy mix by 2050, analysts predict

In this newsletter:

1) Green Europe faces gas shortages and energy crisis as winter looms
GWPF Energy, 1 September 2021
 
2) Forget Net Zero: Fossil fuels will constitute 50% of global energy mix by 2050, analysts predict
GWPF Energy, 1 September 2021
3) Wind turbine makers struggle to profit from wind energy boom as costs rise
GWPF Energy, 1 September 2021

4) German Greenflation climbs to highest since 2008 on rising energy costs
Bloomberg, 30 August 2021

5) Jordan McGills: Biden’s oil and gas pullout
National Review, 26 August 2021
 

6) Question the Dogma: Guy Faulkner’s climate sceptical song
GWPF, 1 September 2021

Full details:

1) Green Europe faces gas shortages and energy crisis as winter looms
GWPF Energy, 1 September 2021
 
The cost of natural gas and electricity is surging across Europe, reaching records in some countries, as the devastating impacts of rising carbon taxes, renewable energy subsidies and fracking bans are hitting home.

In Europe, plans to decarbonise the economy to Net Zero are playing a significant part as utilities are forced to pay near-record prices to buy carbon permits. The ban on fracking has led to serious shortages of domestic natural gas production. The result is super-charged electricity prices and rising inflation, a growing cost burden Europe’s already struggling households now have to foot.

Unsurprisingly, Russia, which has heavily promoted anti-fracking campaigns all over Europe, is using the looming energy crisis to its own advantage.

 

Europe is facing a natural-gas shortage just as Russia is completing a controversial pipeline to Germany, increasing President Vladimir Putin’s leverage over the continent’s energy flows.

Europe’s gas stores are at their lowest levels for years after demand rebounded from a pandemic-induced low that had led producers to slash output. As a result, prices are hitting record levels and utilities are firing up coal-fired power stations to keep their own costs down.

Despite this, Russia, Europe’s biggest gas supplier, has declined to book big additional flows through pipelines in Ukraine, which are running below full capacity.

A large share of Russian gas exports to Europe transits through neighbor Ukraine, but that is expected to change after Russia completes construction of the Nord Stream 2 pipeline, which the company running the construction expects to happen this month. This will allow Moscow to export directly to Germany and bypass Ukraine and Poland, whose governments are critical of Moscow.

The U.S. fears Russia will use Nord Stream 2 to wield influence over Europe and punish pro-Western Ukraine and other countries that the pipeline circumvents by depriving them of the transit fees they charge on Europe-bound Russian gas, raising gas prices or potentially starving them of gas altogether. But the Biden administration waived sanctions on the project in May as it sought improved ties with Germany.

Full story ($)
 
2) Forget Net Zero: Fossil fuels will constitute 50% of global energy mix by 2050, analysts predict
GWPF Energy, 1 September 2021
 
Energy analysts predict that fossil fuels will still constitute 50% of the global energy mix by 2050.

According to The Intergovernmental Panel on Climate Change (IPCC) “limiting global warming to 1.5°C would require rapid, far-reaching and unprecedented changes in all aspects of society.” Specifically, “Global net human-caused emissions of carbon dioxide (CO2) would need to fall by about 45 percent from 2010 levels by 2030, reaching ‘net zero’ around 2050.”

While many Western governments and businesses have turned the Net Zero target into a legally binding goal, it is almost certain to fail, ending in an economic and geopolitical disaster, as we at the GWPF and other analysts have warned for some time.

Now, energy analysts at the Norwegian consultancy DNV are warning policy makers that the entire Net Zero agenda is built on sand, predicting that coal, oil and gas will still constitute 50% of the global energy mix by 2050. 

Nobody should say they haven’t been warned.

The world has missed the chance to turn the global coronavirus pandemic into an opportunity to accelerate the energy transition, as Covid-19 recovery packages are focusing on protecting, rather than transforming, existing industries, according to DNV.
 
A new forecast of the energy transition from Norway’s DNV has warned that even if all electricity was ‘green’ from this day forward, the world will still fall a long way short of achieving the 2050 net zero emissions ambitions of the COP21 Paris Agreement.
 
DNV has today released its annual Energy Transition Outlook, now in its fifth year and launched two months before COP26 takes place in Glasgow. The outlook provides an independent forecast of developments in the global energy system to 2050.
 
Electrification might be on course to double in size within a generation and renewables are already the most competitive source of new power. However, DNV’s forecast shows global emissions will reduce only 9% by 2030, with the 1.5 degrees Celsius carbon budget agreed by global economies being exhausted by then….
 
Reductions in utilising fossil fuels have been “remarkably” fast, however these sources, especially gas, will still constitute 50% of the global energy mix by 2050 – making the need to invest in and scale up hydrogen and carbon capture and storage all the more important.

Full post
 
3) Wind turbine makers struggle to profit from wind energy boom as costs rise
GWPF Energy, 1 September 2021
 
The Wall Street Journal is reporting that wind turbine makers are facing a quadrupling of transportation costs and increases in steel, copper, aluminum and carbon fiber prices, making wind turbines ever more expensive.

 

In sharp contrast to claims by the renewables lobby, the costs of wind energy is not falling, empirical data shows.
 
Politicians, lobbyists and academics are in thrall to the idea that renewable generation must benefit from the huge economies of miniaturisation and scale that have characterised consumer and high tech electronics. Hence they believe that capital and operating costs will, indeed must, fall rapidly as the industry grows. The more intelligent (a small number) understand that such cost reductions don’t apply to the portion of costs that go to civil engineering works, etc which tend to account of more than 50% of total costs.
 
What the WSJ report emphasises is that wind turbines are little more than huge great assemblies of steel and other materials. Larger scale is the reverse of miniaturisation – the steel, etc has to be bigger and stronger to cope with the stresses. Neither has there been – or can there be – any major reduction in the scale of the generators required to produce the output; that technology is more than a century old.
 
The belief that the costs of wind generation will inevitably fall over time is about as reasonable as believing that hydro generation costs will fall. Anyone with any knowledge of electricity economics knows that hydro costs are a function of the geology and topography of the site, i.e. they are largely determined by site-dependent factors. In the longer term the same must be true for wind generation.
 
While there may be temporary – and relatively minor – reductions from adopting more efficient technologies the fundamental physical and engineering factors cannot be repealed.
 
********
 
Wind-Turbine Makers Struggle to Profit From Renewable-Energy Boom

The world’s appetite for green energy is greater than ever, but that isn’t translating into big profits for some of the companies behind the boom.

Top wind-turbine makers are struggling with lower earnings as rising raw- material costs, problems shipping the hulking machines, and uncertainty over the future of U.S. subsidies pressure their businesses.

Siemens Gamesa Renewable Energy SA and Vestas Wind Systems A/S, two of the largest global manufacturers, reduced profit forecasts for the remainder of the year. General Electric Co. GE 0.21% , another leading turbine manufacturer, reported year-over-year growth in turbine sales but hasn’t turned a profit in that segment this year.

Globally, wind production has been growing as the renewable energy source becomes more economically competitive with fossil fuel sources of electricity such as coal and natural gas and as countries begin taking steps to address the causes of climate change.

Demand for turbines this decade is expected to be roughly double demand in the previous 10 years, according to estimates from the consulting and data firm Wood Mackenzie. But companies face an array of challenges in manufacturing and moving the increasingly large turbines, whose blades alone span more than 100 feet apiece.

A quadrupling of transportation costs and increases in steel, copper, aluminum and carbon fiber prices will likely drive wind-turbine prices up by 10% over the next 12 to 18 months, according to Wood Mackenzie.

Full story ($)
 

4) German Greenflation climbs to highest since 2008 on rising energy costs
Bloomberg, 30 August 2021

German inflation jumped to its highest level since 2008, driven by energy and higher costs passed on by businesses.

Consumer prices rose 3.4% in August, significantly faster than the 2% the European Central Bank aims to achieve sustainably for the euro area. Earlier on Monday, Spain reported a rate of 3.3%.

So far, policy makers have argued that the current inflation surge is temporary and largely reflects one-off effects. Yet an aggravating supply squeeze is prompting more and more firms to raise charges, a trend that could produce more permanent price pressures.

Inflation imported into Germany is running at 15%, the fastest in four decades, putting a price tag on the difficulties businesses are facing to secure inputs. Selling-price expectations rose to a record in industry, retail trade and construction in the euro area, according to a survey....

 
5) Jordan McGills: Biden’s oil and gas pullout
National Review, 26 August 2021

Joe Biden underestimated the ferocity with which the Taliban would retake Afghanistan. He’s made a similar miscalculation on energy and geopolitics, too, leaving us naked as an adversary seizes the advantage.
 
The Biden administration is on its knees.
 
As of this writing, it is pleading with the Taliban to spare the lives of the Americans remaining in Kabul. It is pleading with the airlines to help with the evacuation effort. And it is also pleading with Saudi Arabia and Russia to put more oil onto the global market and reduce the upward price pressure that Americans have felt at the gas pump this summer.
 
Much like the fiasco in Afghanistan, the new energy crunch should shock us. But neither should come as any surprise.

For two years on the campaign trail, Joe Biden told us exactly how he viewed the American oil and gas industry. Soon after entering office, he put his party’s agenda into action.

Among other moves, President Biden has nixed a key North American pipeline-expansion project, paused new oil and gas leasing on federal land, and initiated another round of environmental analysis on parcels in a promising Alaska region in which leases had already been awarded.
 
Bloomberg’s Jennifer Dlouhy reported in July that the administration will soon permanently rule additional federal oil and gas fields out of bounds and raise royalty rates on producers, making the existing drilling more costly.

Biden’s energy-policy orientation is a 180-degree turn from that of his predecessor. Where Biden seeks to constrain, Trump sought to liberate and leverage, shrewdly linking America’s energy-production capabilities with its foreign policy.

Amid the foreign-policy failure in Afghanistan, President Biden should rethink his oil and gas pullout.

While the president has decided to move on from the hard realities of global-energy geopolitics, the rest of the world has not. Indeed, the Biden administration must recognize that the energy policy of our chief geopolitical rival, China, brooks no such self-sacrifice.

In pursuit of Xi Jinping’s articulated worldview, the Chinese state will now more assertively direct the evolution of its economy, ensuring that China gets strong after decades of getting rich.
 
On energy and other key economic areas, this means becoming more self-sufficient. The objective is achieved, in part, through additions of non-hydro renewables. (Such sources draw China plaudits from credulous wind and solar boosters in the West.) But, like it or not, China is meeting more of its incremental energy needs through additions of oil and gas than through wind and solar.

According to the 2021 BP Statistical Review of World Energy, China used an additional 1.04 exajoules of non-hydro renewable energy in 2020, compared with 2019. That is an impressive figure — until you read that it used an additional 1.36 exajoules of oil and natural gas.
 
Over the past 30 years, China’s oil and gas consumption has risen steeply. The pace has not slackened, even as China’s overall economic-growth rate has slowed. China now uses 50 percent more oil and 100 percent more natural gas than it did just ten years ago.

This has created an uncomfortable dependency on foreign oil and gas for Beijing. So whereas President Biden has aimed to corral the American industry, Xi Jinping has done just the opposite, spurring China’s national oil companies (NOCs) to ramp up production.
 
Since a 2018 Xi directive aimed at shoring up China’s energy security, leading NOCs PetroChina, Sinopec, and China National Offshore Oil Corporation have constructed thousands of new oil and gas wells in Xinjiang and Sichuan and in the South China Sea — often encroaching upon the internationally recognized economic zones of its littoral neighbors. According to the International Energy Agency, the 2019 upstream splurge constituted a 23 percent spending increase for the firms and yielded a production jump of 50,000 barrels of oil per day.

A December 2020 report from China’s State Council Information Office describes the policy’s fundamentals clearly. The paper explains that China “has intensified efforts for the exploration and exploitation of oil and gas resources” and “works to increase reserves and production, so as to be more self-sufficient in oil and gas.”

“Focusing on its strategic industrial goals, China has rolled out a project on oil and gas technology whose emphasis is making breakthroughs in petroleum geology theory and key technologies for high-efficiency exploration and exploitation,” the document states.
 
While broadcasting wind, solar, and battery investments internationally and touting a meaningless carbon-neutrality pledge for four decades into the future, China has simultaneously engaged in a policy of realistic resource acquisition. And it has done so openly, as members of the Western chattering class ooh and aah over the shiny distraction of solar panels.

Joe Biden underestimated the ferocity with which the Taliban would retake Afghanistan. He’s made a similar miscalculation on energy and geopolitics, too, leaving us naked as an adversary seizes the advantage.

 

6) Question the Dogma: Guy Faulkner’s climate sceptical song
GWPF, 1 September 2021

Guy Faulkner has been a semi-professional musician and composer all his life. He is ‘very unhappy with the climate debate – because there isn’t one. Dissenting views are excluded. I have found the ‘cancel culture’ mentality particularly upsetting, hence my song ‘Question the dogma’
 

click on the poster above to listen to the song

Question the Dogma

By Guy Faulkner

I’ve eaten too much, drunk too much,
What can I say about saving the planet?
Do I need to go vegan?

Beer and spirits, steaks and burgers,
What can I have before they ban it?
I’m not going to be beaten.

Mother Earth is the new religion,
Windmills spread across the land,
Let’s drown our sorrows, have a party,
While we can.

Droughts and floods, fires and storms,
Is that what you get when the world warms?
Are coastal cities sinking?

They say we’re all doomed, apocalypse looms,
Let’s frighten the children and build some tombs,
What on earth are they thinking?

No one wants to question the dogma,
Believing the science is understood,
They’re all soaked in righteousness and feel so good.

The stats are skewed, the plans are laid,
They’re not to inform but to persuade.
It’s politics, not science.

We’ve got to change, rearrange
Our way of living and spend, spend, spend.
It’s all upfront, not deferred.

Someone has to question the dogma,
Stimulate a real debate.
There is another point of view which needs to be heard.

****

Although I am only half a scientist, having trained for agriculture and recently retired as an agricultural journalist, I became unhappy more than 20 years ago with the way that ‘global warming’ was being portrayed, feeling that solar activity and natural variability were more important factors than human CO2 emissions. Two years ago, with more time on my hands, my patience snapped. I determined to read up about what sceptical scientists were saying.

It has become clear to me that terrestrial climate change is incredibly complex and not well understood. In reality nobody knows what will happen over the rest of the 21st century. It could well be that the world will begin to cool again in the years ahead and that would be very bad news for humanity. The world would struggle to feed 7.6 billion people, let alone 9-10 billion.

Crop yields have risen sharply and steadily ever since WWII. While this is largely due to plant breeding successes and improved agronomy, I would suggest that at least 10% of the gains have been due to the increase in atmospheric carbon dioxide. Commercial greenhouses pump in air containing 800-1200 parts per million CO2 in order to boost yields. The contention that CO2 is a pollutant seems nonsensical to me.

I am very unhappy with the climate debate – because there isn’t one. Dissenting views are excluded by, for example, the BBC and the New Scientist magazine. There are plenty of environmental concerns which I share, but the CO2 obsession has moved into the political arena and is charging down avenues which I fear will cost the earth, create a multitude of severe practical problems and ultimately fail to achieve more than a minimal reduction in global temperature.

I have been a semi-professional musician and composer all my life and have found the ‘cancel culture’ mentality particularly upsetting, hence the song. I was very fortunate that Guy Barnes was available to sing it.

Guy Faulkner

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.