It seems that any meeting between President Joe Biden and Chinese leader Xi Jinping inevitably presents another opportunity to render the U.S. increasingly reliant on China for its energy security.
This week’s meetings at the APEC conference in a suddenly cleaned-up San Francisco were no exception.
One of the most disturbing aspects of the bilateral meetings between the U.S. and China was the looming presence of John Kerry at the table. Kerry serves as Biden’s “climate envoy,” a made-up job that is not even a confirmed position and does not merit a seat at such meetings. But there he was, making sure the President and other U.S. officials toe the line on climate commitments.
Fox News reports that Kerry’s efforts resulted in more security compromising fruit, as State Department officials agreed with their Chinese counterparts to triple down on commitments to further inhibit American energy and national security in the name of climate change. The two governments agreed to “accelerate the substitution for coal, oil and gas generation” with renewables and electric vehicles in the coming years, a pledge that China has already undermined with its implementation of a new round of subsidies for the acceleration of its already-massive expansion of coal-fired power plants in the coming years.
It is the sort of deal China has routinely violated in recent years as it continues to prioritize its own energy security at the expense of stated climate goals. It is also the sort of deal that Kerry, Biden and other Democrats have systematically used over recent decades to render the U.S. increasingly reliant on China for its own energy future.
“The agreement speaks heavily about advancing — doubling down and tripling down on renewables, wind and solar. The majority of them are made in China,” Daniel Turner, the founder and executive director of Power The Future, told Fox News Digital. “It is basically guaranteeing China decades of wealth, guaranteeing America is going to buy their products.”
Turner isn’t wrong, and the effects on climate change from the latest Kerry-led deal will be negligible, if not actually negative given China’s far lower environmental regulations and standards. Even worse, China’s control of the supply chains for most of the parts and metals that go into the making and deployment of renewables and EVs leaves the U.S. and other western nations with a steadily diminishing sphere of geopolitical leverage.
But Americans did receive a bit of positive news in the green energy realm this past week from a seemingly unlikely source: Oil major ExxonMobil. The biggest U.S.-based oil company announced the kickoff of a new project to produce lithium from a deep underground saltwater formation in southern Arkansas called the Smackover.
Somewhat ironically, ExxonMobil will deploy standard oil and gas drilling, production and reinjection technologies and processes to produce, extract and process the lithium. If successful, the project will turn America’s biggest major oil company into one of the country’s biggest lithium companies, too.
This is probably not exactly the model Biden’s regulators, many of whom are alumni of leftist anti-fossil fuel lobby groups, envisioned when they began launching their myriad efforts to subsidize and regulate this artificial energy transition into being, but they should be glad to take the help where they can get it.
Given that the ExxonMobil project will qualify for the tax incentives contained in the Orwellian-named Inflation Reduction Act, the Biden officials will even be able to point to it as a success story related to that costly legislation.
Given that the administration’s own efforts to source domestic supplies of critical energy metals and free their supply chains from Chinese dominance have to this point borne little fruit, the project being mounted by ExxonMobil amounts to a great leap forward.
What it all demonstrates is that all the handshake deals between government Mandarins like Kerry in the world cannot match the power of innovation and ingenuity from America’s private sector. It also demonstrates the absolute necessity of maintaining a healthy and robust domestic oil and gas industry, without which none of this is remotely possible.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
It didn’t make a ton of news in the United States media, but a new study published by the International Energy Agency in mid-October emphasizes the enormous potential roadblock to a successful energy transition posed by a projected need to refurbish and double capacity on global electricity grids.
The study, titled, “Electricity Grids and Secure Energy Transitions,” advises governments that investments in expanding and refurbishing power grids must “nearly double by 2030 to over USD 600 billion per year after over a decade of stagnation at the global level, with emphasis on digitalising and modernising distribution grids.” That level of new investment in just this single piece of the overarching plans for a complete re-tooling of the global energy system is not currently a part of existing policies around the world. Given that most developed countries are already saddled with overwhelming public debt and the lack of means in developing countries, the prospect for a doubling of current grid investments seems dubious at best.
But, if anything, the goals laid out in this IEA missive only become more implausible as one reads through the list. Perhaps the most extraordinary among them is the agency’s estimate that reaching the UN’s goal of net-zero greenhouse gas emissions by 2050 would require the refurbishment, upgrading and build-out of 80 million kilometers of new transmission lines by 2040. For those who struggle with conversion factors, 80 million km is roughly the equivalent of 50 million miles, or 2,000 times the Earth’s circumference.
That is the equivalent of all the transmission capacity built by mankind in history, and the IEA says it must be accomplished in just 17 years for this energy transition to succeed. IEA notes that achieving this extraordinary goal – among other improbable propositions laid out in the report – will require “secure supply chains and a skilled workforce,” neither of which currently exists.
How will this massive expansion in necessary skilled workers be achieved? The report doesn’t really say.
How will those supply chains – almost all of which are currently dominated by a single country, China – be secured? The report says only “Governments can support the expansion of supply chains by creating firm and transparent project pipelines and by standardising procurement and technical installations.” Sounds easy, right? But the U.S. congress has a hard time just agreeing what day of the week it is: The thought that it will suddenly develop the ability to engage in that sort of complex thinking and legislating in a constructive way is absurdly unlikely.
The report then somewhat hilariously points to another elephant residing in the energy transition’s living room, noting that governments all over the world need to streamline their energy permitting processes to accommodate this massive grid expansion. Again, using the U.S. congress as an example, West Virginia Senator Joe Manchin has spent the last 19 months trying to put together enough votes to approve legislation that would address just a small portion of what is really needed in this realm and had no success, with no real prospects of that changing until, at best, 2025, when the next congress will be sworn into office.
Think about this in the context of a story I wrote in June about the TransWest Express transmission project, which had finally received its final permits from the federal government. This is a line that is about 1300 miles long, designed to carry electricity generated by Wyoming wind farms to customers on the West coast. The punch line on this single transmission project is that the permitting process took 17 years to achieve. Assuming no new litigation arises, it will now take about another 3 years to complete and place into service.
Like so many of the work products published by the IEA in recent years, this report’s findings seem to be motivated mostly to help achieve political goals based mainly on wishful thinking, with little consideration given to long-ingrained dynamics at play in the real world. Even if overwhelming debt burdens and resource and supply chain challenges could be just wished away, the political impediments to achieving these unrealistic goals seem destined to force a day of reckoning for the entire energy transition plan.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
Is the much-hyped “energy transition” starting to crumble at its foundations now? In recent weeks we have seen the following:
Ford Motor Company warns investors its electric vehicle division will lose $4.5 billion in 2023;
Reports that China has commissioned another 50 GW of new coal-fired electricity generation capacity;
The British government led by Prime Minister Rishi Sunak beginning to back away from absurdly aggressive transition timelines amid public outcry over rising energy bills and other deprivations;
The German government continuing to reactivate mothballed coal plants and facilitating new mining for coal;
The Scottish government forced to admit it has facilitated the felling of 16 million trees in this century to make way for new wind farms;
The Japanese government moving to reinvigorate its own coal-fired power sector;
Global demand for crude oil rapidly growing and outpacing supply growth, surprising all the supposed experts;
The U.S. Department of Energy forced to admit its initial estimate of consumer “savings” from converting from gas stoves to more expensive electric models was grossly overstated.
This list could go on and on, but the macro view is clear: Everywhere one looks, the aggressive timelines and heavily subsidized plans for a rapid transition are falling apart. Nowhere is the dynamic becoming clearer than in the wind industry.
In an Aug. 7 report titled “Wind Industry in Crisis as Problems Mount,” the Wall Street Journal catalogues $30 billion in planned investments in new wind projects in the U.S. and elsewhere that have now been delayed due to an expanding variety of factors. “After months of warnings about rising prices and logistical hiccups, developers and would-be buyers of wind power are scrapping contracts, putting off projects and postponing investment decisions,” the story says, emphasizing that the problems are becoming especially severe in the offshore wind business that has been so heavily promoted by the Biden administration.
I wrote a story in July detailing the fact that some of the so-called “Big Oil” companies have recently made big inroads into the offshore wind business, winning bids in the U.S. and Germany for licenses to develop large projects. But the Journal’s story quotes Anders Opedal, CEO of Norwegian oil giant Equinor, saying, “At the moment, we are seeing the industry’s first crisis.”
Along with British oil major BP, Equinor has plans in place to develop three wind farms off the Atlantic coast of New York, but recently warned state officials they would need to renegotiate power prices or the projects would not be able to obtain the needed financing. This demand by the two oil companies echoed a call by traditional wind developer Orsted in June for more subsidies from the U.K. government if its planned projects in the North Sea are to remain viable.
Make no mistake about it: Developing these offshore wind projects doesn’t come cheap. Orsted pulled out of a competitive bidding auction in Germany last month for government licenses to develop 7 GW of new offshore wind capacity when BP and French oil major TotalEnergies ran the final bids up to almost $14 billion.
“Orsted very deliberately chose not to pay record high concession prices for new offshore projects in Germany,” Orsted CEO Mads Nipper said in a post on LinkedIn. Orsted objected to the process that awarded the licenses based on the willingness of developers to pay the government for the right to develop — the same process used in oil and gas leasing all over the world — rather than the government offering more and more subsidies to incentivize development.
Therein lies the central conundrum for this subsidized transition: At some point, wind, like solar, electric vehicles and all the other rent-seeking solutions being promoted in this energy transition will have to become viable without an expectation of permanently rising subsidies, since governments already seeing their credit ratings downgraded due to overwhelming debt won’t be able to just keep printing money forever.
But, at the present moment, the business models in play do not appear to be headed for that outcome. And that’s why this energy transition seems to be falling off the rails.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
During her May 15 speech to The Beyond Growth Conference held by the European Parliament, European Commission President Ursula Von Der Leyen, citing a 1970s de-growth plan published by the Club of Rome, made reference to the European Union’s “social market economy” five times in a span of less than 150 words.
A “social market economy,” of course, is a reference to the sort of central economic planning engaged in by authoritarian socialist governments throughout history. “And this is exactly why we put forward our European Green Deal,” Von Der Leyen told the conference. “Building a 21st century clean-energy circular economy is one of the most significant economic challenges of our times.”
The agenda of the Beyond Growth Conference focused on devising plans to manage the destruction of economic growth that is a centerpiece of the real agenda of the energy transition. Limitations on energy minerals and other resources required by wind, solar and electric vehicles, and on the ability to continue printing trillions of debt-funded dollars and Euros in a vain attempt to subsidize them to the scale required to displace fossil fuels inevitably means the forcing of common citizens in the Western world to scale down their standards of living and limit their mobility to meet the net-zero by 2050 goals being dictated at the global level. Thus, the need for the EU to move “beyond growth” and back to a more primitive mode of living.
Rising recognition and acceptance of these limitations, along with the success by Western governments in enforcing authoritarian edicts on their populations during the COVID-19 pandemic, is now leading to a rapid evolution in the overarching narrative and talking points related to the energy transition. The former energy transition narrative of “we will scale up renewables and EVs and you won’t even notice the difference in your daily lives” has been transformed to “we will scale everything down and you will just have to live with it” with stunning speed during 2023.
A report titled “The Urban Mobility Scorecard Tool: Benchmarking the Transition to Sustainable Urban Mobility” issued by the World Economic Forum in May is another great example. Based largely upon a 2017 UC Davis report titled “3 Revolutions in Urban Transportation,” the WEF report advocates for authoritarian governments to force the reduction of the numbers of vehicles on the road from the current global estimate of 1.45 billion to just 500 million. The UC Davis report went largely unnoticed in 2017 because the climate alarmist lobby had not been sufficiently emboldened at that time to publicly discuss its real goals. But that mask is now coming off.
The authors of the WEF report claim citizens who can no longer own cars would still be allowed to move away from their planned cities of the future, but only via “shared transport,” i.e. electric buses and a new network of thousands of miles of high-speed rail. But California has clearly shown that thoughts of building a huge network of tens of thousands of miles of new high-speed rail in the western world in the next 27 years is a complete fantasy. California’s own high-speed rail boondoggle, originally proposed 27 years ago in 1996, has seen its budget blossom from $8 billion to over $130 billion, and still hasn’t managed to lay a single mile of rail.
The real world simply does not conform itself to fantasies like this plan, and everyone at the WEF is fully aware of that reality. Thus, what this plan really amounts to is a scheme to enable the speeding-up of implementation of socialist/authoritarian governments in the West to enforce the new restrictions on the lives of common citizens, an effort that began to accelerate during the COVID pandemic. Authoritarian governments always endeavor to restrict the free flow of information outside of approved propaganda, and restricting mobility is a key means of achieving that goal.
As we see the EU and the WEF now freely admitting, economic de-growth and forcing citizens of Western nations to live smaller, less prosperous lives are the real end goals of this energy transition. The narrative has officially shifted, and we would do well to take them at their word.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
