Taken from Bank of England report
Terry Ettam
There are several ways to “understand things.” You know how to read, you probably know how to add, and you know a lot of things.
There are things you can “know” without formal study or experience. You may know that being shot can be painful, but unless the demographics here change significantly, you're unlikely to experience it.
Some things are best understood only through personal experience; hearing them, being warned about them, is a start, but sometimes you don't really understand something until you “feel it in your bones.” The old adage about not touching a hot stove is one of them. Children hear this and obey it, just as they obey their parents, but the real education begins the moment they actually touch the stove. Then things become clear.
The same goes for energy. A lot has happened in the past decade, and there has been intense speculation about what people thought they knew, especially about the energy transition, and not just that, but energy itself – where it comes from, how it gets there, who is responsible for it, How tough it really is on offer.
New Zealand recently taught us a wicked lesson in understanding the gap between being told not to touch a stove and touching it.
A few years ago, their young, idealistic and globally dynamic leader, Jacinda Ardern, instituted a ban on oil exploration in New Zealand. The legislation is cutting-edge energy policy thinking and is in line with the views of many global leaders whose ears are filled with talk about how oil and gas properties are quickly becoming stranded assets. These policy advocates “know” this and impart their knowledge to visionary leaders. Want to be a department store manager and run a country like this, or… Do you want to go down in history as one of the brave men who saved the world from rising temperatures? Pandering to political egos is tantamount to shooting fish in a barrel, so off they go, gleefully enacting an anti-hydrocarbon agenda everywhere.
Fast forward a few years and New Zealand has hit the hot spot. You can see the moment it happens. In a June 9 article titled “Government reverses ban on oil and gas exploration” (thanks to Dan Tsobouchi for tipping off; his research and results have been invaluable), the New Zealand government talks about a shocking discovery: oil and gas exploration Natural gas fields deplete over time. As they put it: “When the previous government introduced the exploration ban in 2018, it not only halted the exploration needed to find new resources, but also reduced investment in the further development of our known gas fields that sustain our current levels. In a separate document, the government said this: “The latest oil reserve data show that natural gas reserves are declining. Less natural gas can be produced than previously thought. The decline in natural gas reserves, known as proven and probable reserves It’s due to a lack of certainty among producers that they can’t economically extract gas from their fields…”
Better late than never, I guess. But this new lightbulb is only part of the equation. New Zealand's roads illustrate how wrong many energy assumptions are.
The West has had some success in reducing emissions, which some see as evidence that the “energy transition” is working. Indeed, a large amount of renewable energy is generated, which helps reduce the consumption of other fuels.
But the reality is more complicated than that. The United States has significantly reduced emissions by replacing coal-fired power generation with natural gas. This is not part of the energy transition. Well, that's part of the logical energy transition, but that's not what Ardern had in mind.
Another confusing factor is that while emissions may have declined in the West and energy use has not increased materially (more on that later), the fact is that our consumption patterns are still as powerful as ever; Walmart is still stuffed Amazon can deliver an incredible amount of almost anything to your door within 24 hours…all of which points to a fact that isn't discussed much, which is that we just outsource everything to developing countries to produce, and then we get annoyed when they build the power supply in a way that suits them. Many globalists seem to be bad at global thinking.
And then, as we saw in New Zealand, Western leaders simply don't understand energy production, at least not hydrocarbon production. There is an assumption that oil companies will likely be hounded/prosecuted/regulated/protested and that they will continue to invest enough to maintain production (even if the IEA states that no new investments will be allowed to meet climate goals). Wrong. Hydrocarbon companies will not invest in jurisdictions that make their lives too miserable. As a result, New Zealand's attitude changed drastically.
More important than energy depletion, however, is the neglect of global energy consumption trajectories. Not just oil and gas consumption, but energy consumption from all sources. It is important to keep these trajectories in mind when considering energy policy.
Here are some interesting statistics from our world of data. From 1965 to 2023, some temporal reference points for changes in annual energy consumption during this period:
- Vietnam from 786 kWh -> 13,744 kWh or +1,648%
- India from 1,239 kWh –> 7,586 kWh +512%
- China from 2,122 kWh –> 33,267 kWh +1468%
Considering that Africa and Asia have a combined population of about 6 billion, they not only mine/manufacture everything for the West, but also increase their own consumption. Looking at Africa's still meager totals; one gets the impression that this is unpopular and that a continent with rising economies is willing to publish numbers like elsewhere.
We can see the impact of Western energy/emissions farms during the same period:
- Germany: 39,050 –> 38,052 kWh -1%
- UK: 42,711 –> 28,501 kWh -33%
- United States: 76,117 kWh -> 77,028 kWh +1%
Our world of data makes this clearer by dividing it into larger categories that are easy to understand and relevant:
- High-income countries: 38,446 kWh –> 52,831 kWh +37%
- Low- and middle-income countries 926 kWh –> 6,067 kWh +555%
- Upper-middle-income countries 8,373 kWh –> 29,987 kWh +258%
While the West appears to have taken a breather compared to the rest of the world, that may be about to change again and the West may begin another growth spurt. We do love our data/videos/instagram/you name it. Take Texas, for example. As Kinder Morgan noted in the second-quarter conference call transcript, the Texas grid operator (the largest U.S. power market) forecasts that 152 gigawatts of generation will be needed by 2030, 85% higher than the 2023 peak. GW grew by 78%. What's so alarming about this growth is that just last year, Texas grid operator ERCOT forecast demand in 2030 at “only” 111 gigawatts. That’s some tweaking in just one year.
Over the past 20 years, U.S. electricity demand has grown about 0.5% per year. Recent estimates show that U.S. electricity demand has grown between 2.6% and 4.7% annually over this decade. As a result, U.S. utilities plan to add 133 new natural gas plants over the next few years, according to a report in Natural Gas Daily cited by KIM. On top of that, natural gas exports to Mexico are expected to increase by 50% in the next few years, U.S. LNG exports will increase by approximately 15 bcf/d, and AI forecasts natural gas demand to be between 5 and 15 bcf/d.
Developing countries will do whatever they can to meet their growing energy needs, and they will make no apology for doing so. India recently (and proudly) announced record coal production because they need it, plus the U.S. Energy Information Administration predicts that India’s natural gas consumption will triple by 2050, from about 7 bcf/d in 204 increased to nearly 24 bcf/d.
Not only are we letting artificial intelligence do everything in the West, but we're also seeing random weirdness that no one saw coming, like: Chick-fil-A, a giant and delicious purveyor of fast food, is launching a streaming The media service offers “family-friendly, mostly unscripted programming.” It's what you've been waiting for: ChickenTV! Because we can!
That’s what we humans do when we have abundant and affordable energy – we do it all. Just when we think we've done it all, someone invents ChickenTV. This happens to almost everyone who gets the chance. Wealth brings choice in many things…even the drive to pursue simplicity. A wealthy enlightened Westerner who decides to live “off the grid” will spend hundreds of thousands to build/outfit their modern lair with every comfort and solar and battery array. It goes without saying that these lifestyle choices have little in common with African villagers, who also live “off the grid” because they don’t have a grid. Not to provoke anyone here; the point is that no one who can afford it will go back to a life of real scarcity, which actually reflects a lack of energy rather than lower energy consumption in daily life.
Well-intentioned people often join the debate and point out that this consumption model is unsustainable. I don't know if that's true; it seems likely that we'll run out of some critical materials and we'll need to manage water and habitat very carefully. But just screaming into the social media void that we need to stop this will accomplish nothing at all except lead to more mental breakdowns. Such is the case with some aspects of human nature, we need to be running in the same direction to change the direction of the group. Just stand in front of it if you want, and good luck.
What the world desperately needs—energy transparency. There were also a few laughs. Learn about the end of fossil fuel madness,Can be found in Amazon Canada, Indigo.caor amazon.com.
Relevant
