Challenging “Net Zero”

Coming in 2023: A Painful Return to Energy Supply Reality

Gwyn Morgan
January 9, 2023
In Germany, coal-fired electricity plants are being recommissioned and floating liquefied natural gas import facilities are being connected to pipelines. The UK recently even decided to construct a new coal-fired electricity plant. Meanwhile, nuclear energy is experiencing a worldwide renaissance, with dozens of facilities under construction or approved. In country after country, the cold realities of energy supply and national need are reasserting themselves and even decidedly left-wing governments are acting with pragmatism. Every government, that is, except Canada’s, points out Gwyn Morgan. Here the Liberal-fuelled frenzy to impose the technically impossible and economically ruinous “net zero” energy regime continues to gather momentum. Canada must be edged off this path, Morgan warns, before it is too late.
Challenging “Net Zero”

Coming in 2023: A Painful Return to Energy Supply Reality

Gwyn Morgan
January 9, 2023
In Germany, coal-fired electricity plants are being recommissioned and floating liquefied natural gas import facilities are being connected to pipelines. The UK recently even decided to construct a new coal-fired electricity plant. Meanwhile, nuclear energy is experiencing a worldwide renaissance, with dozens of facilities under construction or approved. In country after country, the cold realities of energy supply and national need are reasserting themselves and even decidedly left-wing governments are acting with pragmatism. Every government, that is, except Canada’s, points out Gwyn Morgan. Here the Liberal-fuelled frenzy to impose the technically impossible and economically ruinous “net zero” energy regime continues to gather momentum. Canada must be edged off this path, Morgan warns, before it is too late.
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My 2021 year-end column entitled “Fossil Fuel Follies” focused on the bizarre impacts of the great march by “net-zero” green energy zealots to replace the approximately 84 percent of global energy supplied by crude oil, natural gas and coal with wind turbines and solar panels. Some were so ridiculous as to be humorous, but there’s nothing funny about the enormous damage inflicted by pursuit of this technically impossible goal that became evident in 2022.

Germany’s delusional campaign to power its economy mainly with wind and solar electricity – which included shutting down its efficient non-emitting nuclear power plants, like RWE’s “Emsland” plant in Lingen, shown at top – while also preventing development of domestic natural gas – one of innumerable “anti-fracking” protests is shown at bottom – made Germany severely vulnerable to manipulation and coercion by energy-rich Russia and its autocrat, Vladimir Putin. (Source of photos: (top) AP Photo/Martin Meissner, file; (bottom) Friends of the Earth Germany)

Exhibit #1 last year was Germany. That country’s ill-conceived policy of decommissioning its zero-emission nuclear plants – the last of which were to close in 2022 and 2023 – combined with its aversion to developing domestic natural gas resources (featuring a ban on hydraulic fracturing or “fracking”) and its failing attempt to power a modern industrial economy mainly with unreliable wind and solar power left Germany with no alternative but to import Russian natural gas. Russia’s contemptible invasion of Ukraine in February pushed Germany into a classic Hobson’s Choice: help fund Russia’s murderous invasion by continuing to import Russian gas or devastate the economic and personal wellbeing of Germany’s citizens. Fully aware of the enormous power that Germany’s need for Russian gas gave him, President Vladimir Putin lowered gas flows, driving European gas prices to stratospheric levels.

Events of 2022 also demonstrated the impact of another fossil fuel folly that similarly increased the Russian dictator’s power. Years of net-zero-inspired policies discouraging capital investment in traditional energy sources had reduced crude oil supply replacement in Western countries, leaving markets dependent on the so-called OPEC plus coalition. OPEC+ accounts for approximately 45 percent of the world’s current 99.9 million barrels per day of crude oil production, and Russia is a key member. OPEC+ meets regularly to set production targets and thereby manipulate global crude oil prices. The Ukraine crisis revealed just how narrow the global oil supply margin had become. Then came the shocking realization that most of that small margin was in Putin’s hands.

OPEC+ coalition countries produce nearly half the world’s crude oil. Russia is a key member, exerting influence over global energy markets by helping the cartel manipulate oil pricing. In the photo, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman, at left, confers with an aide before an OPEC meeting in Abu Dhabi in 2019, beside Russia’s then-Energy Minister Alexander Novak at right. (Sources: (map) iea.org; (photo) AP Photo/Jon Gambrell)

Nearly all Western countries were already producing at full capacity. The main exception was Canada, a country with the world’s third-largest oil reserves and the resource potential to greatly increase production beyond its rate of approximately 4 million barrels per day. Urgent calls went out for help to loosen Putin’s grip on oil supply. But it was impossible for Canada to contribute because Prime Minister Justin Trudeau had presided over a seven-year anti-oil-industry pogrom, thwarting multiple export pipelines that could have helped supply countries now dependent on Putin’s blood oil.

Trudeau’s shameful answer to those calls for help revealed our country to be an impotent imposter on the global stage. During the prime minister’s trip to Latvia in March, a reporter asked whether Canada could help make up for the oil supply reductions. His response: “We will be there to support, as the world moves beyond Russian oil and indeed beyond fossil fuels, to have more renewables in our mix.” As I stated in a column following his visit, this breathtakingly bizarre answer came as innocent Ukrainians and their beautiful country were being ravaged by a tyrant who was also threatening the world with nuclear Armageddon.

Trudeau’s answer was triply ludicrous. First, Germany (and other European countries) specifically needed additional fossil fuel supplies – not imaginary “renewable” energy. Second, they needed help right now, while Trudeau was musing about dreamed-of projects that might be built in 10 or 20 years. Lastly, even if Canada were to succeed beyond Trudeau’s wildest dreams in adding vast amounts of green power, this could never help Europe: electricity from wind turbines in Alberta or solar panels in B.C.’s sunny Okanagan simply can’t be sent across the Atlantic Ocean.

Even if Canada’s “green transition” succeeds beyond its advocates’ wildest dreams, none of this could help Europe, since electricity from Alberta wind turbines (top) or B.C. solar panels (bottom) cannot be transmitted across the Atlantic Ocean. (Source of bottom photo: SkyFire Energy)

In any event, even as the windmills of the former substitute drama teacher’s mind were spinning fantasies about hydrogen plants in Newfoundland, world oil prices soon skyrocketed to a staggering US$120 per barrel. Prices have since fallen, but they are still vulnerable to manipulation by OPEC+ (the cartel’s most recent production cut was announced in October) and the International Energy Agency projects world crude oil demand will increase by 1 million barrels per day annually. The global oil supply/demand margin will continue to be small, with virtually all of it in the hands of OPEC+. Crude fuels over 95 percent of all transportation of goods and people. And it is now clear there is no other viable alternative. Likewise, the natural gas supply/demand margin will remain narrow, and as with oil it is clear that modern industrial economies cannot function without natural gas for heating and industrial processes.

Twenty twenty-two will go down in history as the year when the net-zero fantasy hit hard and very costly reality. Among many examples: Germany has spent over 264 billion Euros – 7.4 percent of its GDP – just on subsidizing energy prices for hard-hit consumers and institutions. And Germany is hardly alone; as the accompanying chart shows, virtually every country in Europe has been doing the same on a somewhat less ruinous scale.

Trying to buy their way out: As energy prices skyrocketed due to dependence on Russia – the photo shows prices in Euros per litre at a gas station near Frankfurt in September, i.e., well over Cdn$3 per litre – European countries began heavily subsidizing their citizenry’s energy costs. (Source of photo: AP Photo/Michael Probst)
How ironic that the net-zero fantasy has empowered a despicable despot named Vladimir Putin. But it has also fuelled the aggressions of another ruthless dictator. Chinese President Xi Jinping has been lauded by the net-zero ideologues for his promises to reduce emissions. In reality, he has authorized the building of over 200 carbon-spewing coal-fired power plants which supply cheap power to his factories. China is now responsible for 27 percent of global greenhouse gas emissions (compared to 11 percent for the U.S. and 6.4 percent for Europe) and continues to increase its use of fossil fuels without restraint. The accompanying chart illustrates the trend of electricity generation from coal in key countries including China. Xi’s promises, in other words, are pure propaganda crafted to give climate-obsessed Western elites the talking points they crave.

Equally destructive, North American and European politicians worshipping at the net-zero altar have implemented policies mandating costly and unreliable wind and solar power generation, combined with escalating carbon taxes. This regrettable combination makes it impossible for many of the West’s factories to compete, leaving consumers no choice but to buy Chinese goods. China uses those enormous revenues to, among other things, produce weapons intended for global military dominance and to manufacture the very solar panels and wind turbines that Canada’s government insists we install. Who could ever have imagined that the legacy of the West’s net-zero policies would leave two dictators in control of global energy security and the supply of manufactured goods?

The other ruthless dictator: The green-friendly rhetoric of Xi Jinping is belied by China’s actual behaviour, which includes importing ever-more crude oil and constructing coal-fired electricity plants without restraint, making China by far the world’s largest greenhouse gas emitter, all while it profitably exports solar panels and wind turbine equipment to credulous Western nations.

As we look ahead, the West’s focus must be aimed at avoiding debilitating fossil fuel shortages. That doesn’t mean the net-zero crowd will toss in the towel. They will continue to advocate starving the energy-producing sector of the funds needed to replace, let alone grow oil and natural gas production. But when the cost of driving your car and heating your home starts taking an oversized portion of disposable income, and when oil-endowed despots continue their predatory behaviour, those net-zero voices should increasingly meet deaf ears. Canada simply must turn off the net-zero path or we will eventually experience a similar crisis as Europe – although ours will be entirely self-inflicted.

Gwyn Morgan is a retired business leader who was a director of five global corporations.

Source of main image: IRINA SHI/Shutterstock.com.

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