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Energy

Leading environmentalist apologizes for “The Climate Scare”

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MICHAEL SHELLENBERG IN MARANHÃO, BRAZIL, 1995

In 2019, the Intergovernmental Panel on Climate Change invited Michael Shellenberger to serve as an independent Expert Reviewer of its next Assessment Report.

He’s been named “Hero of the Environment,”  by Time Magazine.  He’s a Green Book Award winner,  He founded  Environmental Progress.  Now… He’s sorry.  

This week, Shellenberger posted this apology on his website.  It’s important.  Really important. 

From Michael Shellenberg


On Behalf Of Environmentalists, I Apologize For The Climate Scare

On behalf of environmentalists everywhere, I would like to formally apologize for the climate scare we created over the last 30 years. Climate change is happening. It’s just not the end of the world. It’s not even our most serious environmental problem.

I may seem like a strange person to be saying all of this. I have been a climate activist for 20 years and an environmentalist for 30.

But as an energy expert asked by Congress to provide objective expert testimony, and invited by the Intergovernmental Panel on Climate Change (IPCC) to serve as Expert Reviewer of its next Assessment Report, I feel an obligation to apologize for how badly we environmentalists have misled the public.

Here are some facts few people know:

  • Humans are not causing a “sixth mass extinction”

  • The Amazon is not “the lungs of the world”

  • Climate change is not making natural disasters worse

  • Fires have declined 25% around the world since 2003

  • The amount of land we use for meat — humankind’s biggest use of land — has declined by an area nearly as large as Alaska

  • The build-up of wood fuel and more houses near forests, not climate change, explain why there are more, and more dangerous, fires in Australia and California

  • Carbon emissions are declining in most rich nations and have been declining in Britain, Germany, and France since the mid-1970s

  • Netherlands became rich not poor while adapting to life below sea level

  • We produce 25% more food than we need and food surpluses will continue to rise as the world gets hotter

  • Habitat loss and the direct killing of wild animals are bigger threats to species than climate change

  • Wood fuel is far worse for people and wildlife than fossil fuels

  • Preventing future pandemics requires more not less “industrial” agriculture

I know that the above facts will sound like “climate denialism” to many people. But that just shows the power of climate alarmism.

In reality, the above facts come from the best-available scientific studies, including those conducted by or accepted by the IPCC, the Food and Agriculture Organization of the United Nations (FAO), the International Union for the Conservation of Nature (IUCN) and other leading scientific bodies.

Some people will, when they read this imagine that I’m some right-wing anti-environmentalist. I’m not. At 17, I lived in Nicaragua to show solidarity with the Sandinista socialist revolution. At 23 I raised money for Guatemalan women’s cooperatives. In my early 20s I lived in the semi-Amazon doing research with small farmers fighting land invasions. At 26 I helped expose poor conditions at Nike factories in Asia.

I became an environmentalist at 16 when I threw a fundraiser for Rainforest Action Network. At 27 I helped save the last unprotected ancient redwoods in California. In my 30s I advocated renewables and successfully helped persuade the Obama administration to invest $90 billion into them. Over the last few years I helped save enough nuclear plants from being replaced by fossil fuels to prevent a sharp increase in emissions

But until last year, I mostly avoided speaking out against the climate scare. Partly that’s because I was embarrassed. After all, I am as guilty of alarmism as any other environmentalist. For years, I referred to climate change as an “existential” threat to human civilization, and called it a “crisis.”

But mostly I was scared. I remained quiet about the climate disinformation campaign because I was afraid of losing friends and funding. The few times I summoned the courage to defend climate science from those who misrepresent it I suffered harsh consequences. And so I mostly stood by and did next to nothing as my fellow environmentalists terrified the public.

I even stood by as people in the White House and many in the news media tried to destroy the reputation and career of an outstanding scientist, good man, and friend of mine, Roger Pielke, Jr., a lifelong progressive Democrat and environmentalist who testified in favor of carbon regulations. Why did they do that? Because his research proves natural disasters aren’t getting worse.

But then, last year, things spiraled out of control.

Alexandria Ocasio-Cortez said “The world is going to end in twelve years if we don’t address climate change.” Britain’s most high-profile environmental group claimed “Climate Change Kills Children.”

The world’s most influential green journalist, Bill McKibben, called climate change the “greatest challenge humans have ever faced” and said it would “wipe out civilizations.”

Mainstream journalists reported, repeatedly, that the Amazon was “the lungs of the world,” and that deforestation was like a nuclear bomb going off.

As a result, half of the people surveyed around the world last year said they thought climate change would make humanity extinct. And in January, one out of five British children told pollsters they were having nightmares about climate change.

Whether or not you have children you must see how wrong this is. I admit I may be sensitive because I have a teenage daughter. After we talked about the science she was reassured. But her friends are deeply misinformed and thus, understandably, frightened.

I thus decided I had to speak out. I knew that writing a few articles wouldn’t be enough. I needed a book to properly lay out all of the evidence.

 And so my formal apology for our fear-mongering comes in the form of my new book, Apocalypse Never: Why Environmental Alarmism Hurts Us All.

It is based on two decades of research and three decades of environmental activism. At 400 pages, with 100 of them endnotes, Apocalypse Never covers climate change, deforestation, plastic waste, species extinction, industrialization, meat, nuclear energy, and renewables.

Some highlights from the book:

  • Factories and modern farming are the keys to human liberation and environmental progress

  • The most important thing for saving the environment is producing more food, particularly meat, on less land

  • The most important thing for reducing air pollution and carbon emissions is moving from wood to coal to petroleum to natural gas to uranium

  • 100% renewables would require increasing the land used for energy from today’s 0.5% to 50%

  • We should want cities, farms, and power plants to have higher, not lower, power densities

  • Vegetarianism reduces one’s emissions by less than 4%

  • Greenpeace didn’t save the whales, switching from whale oil to petroleum and palm oil did

  • “Free-range” beef would require 20 times more land and produce 300% more emissions

  • Greenpeace dogmatism worsened forest fragmentation of the Amazon

  • The colonialist approach to gorilla conservation in the Congo produced a backlash that may have resulted in the killing of 250 elephants

Why were we all so misled?

In the final three chapters of Apocalypse Never I expose the financial, political, and ideological motivations. Environmental groups have accepted hundreds of millions of dollars from fossil fuel interests. Groups motivated by anti-humanist beliefs forced the World Bank to stop trying to end poverty and instead make poverty “sustainable.” And status anxiety, depression, and hostility to modern civilization are behind much of the alarmism

Once you realize just how badly misinformed we have been, often by people with plainly unsavory or unhealthy motivations, it is hard not to feel duped.

Will Apocalypse Never make any difference? There are certainly reasons to doubt it.

The news media have been making apocalyptic pronouncements about climate change since the late 1980s, and do not seem disposed to stop.

The ideology behind environmental alarmsim — Malthusianism — has been repeatedly debunked for 200 years and yet is more powerful than ever.

But there are also reasons to believe that environmental alarmism will, if not come to an end, have diminishing cultural power.

The coronavirus pandemic is an actual crisis that puts the climate “crisis” into perspective. Even if you think we have overreacted, Covid-19 has killed nearly 500,000 people and shattered economies around the globe.

Scientific institutions including WHO and IPCC have undermined their credibility through the repeated politicization of science. Their future existence and relevance depends on new leadership and serious reform.

Facts still matter, and social media is allowing for a wider range of new and independent voices to outcompete alarmist environmental journalists at legacy publications.

Nations are reverting openly to self-interest and away from Malthusianism and neoliberalism, which is good for nuclear and bad for renewables.

The evidence is overwhelming that our high-energy civilization is better for people and nature than the low-energy civilization that climate alarmists would return us to.

The invitations from IPCC and Congress are signs of a growing openness to new thinking about climate change and the environment. Another one has been to the response to my book from climate scientists, conservationists, and environmental scholars. “Apocalypse Never is an extremely important book,” writes Richard Rhodes, the Pulitzer-winning author of The Making of the Atomic Bomb. “This may be the most important book on the environment ever written,” says one of the fathers of modern climate science Tom Wigley.

“We environmentalists condemn those with antithetical views of being ignorant of science and susceptible to confirmation bias,” wrote the former head of The Nature Conservancy, Steve McCormick. “But too often we are guilty of the same.  Shellenberger offers ‘tough love:’ a challenge to entrenched orthodoxies and rigid, self-defeating mindsets.  Apocalypse Never serves up occasionally stinging, but always well-crafted, evidence-based points of view that will help develop the ‘mental muscle’ we need to envision and design not only a hopeful, but an attainable, future.”

That is all I hoped for in writing it. If you’ve made it this far, I hope you’ll agree that it’s perhaps not as strange as it seems that a lifelong environmentalist, progressive, and climate activist felt the need to speak out against the alarmism.

I further hope that you’ll accept my apology.

 

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Alberta

The beauty of economic corridors: Inside Alberta’s work to link products with new markets

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From the Canadian Energy Centre

Q&A with Devin Dreeshen, Minister of Transport and Economic Corridors

Devin Dreeshen, Alberta’s Minister of Transportation
and Economic Corridors.

CEC: How have recent developments impacted Alberta’s ability to expand trade routes and access new markets for energy and natural resources?

Dreeshen: With the U.S. trade dispute going on right now, it’s great to see that other provinces and the federal government are taking an interest in our east, west and northern trade routes, something that we in Alberta have been advocating for a long time.

We signed agreements with Saskatchewan and Manitoba to have an economic corridor to stretch across the prairies, as well as a recent agreement with the Northwest Territories to go north. With the leadership of Premier Danielle Smith, she’s been working on a BC, prairie and three northern territories economic corridor agreement with pretty much the entire western and northern block of Canada.

There has been a tremendous amount of work trying to get Alberta products to market and to make sure we can build big projects in Canada again.

CEC: Which infrastructure projects, whether pipeline, rail or port expansions, do you see as the most viable for improving Alberta’s global market access?

Dreeshen: We look at everything. Obviously, pipelines are the safest way to transport oil and gas, but also rail is part of the mix of getting over four million barrels per day to markets around the world.

The beauty of economic corridors is that it’s a swath of land that can have any type of utility in it, whether it be a roadway, railway, pipeline or a utility line. When you have all the environmental permits that are approved in a timely manner, and you have that designated swath of land, it politically de-risks any type of project.

CEC: A key focus of your ministry has been expanding trade corridors, including an agreement with Saskatchewan and Manitoba to explore access to Hudson’s Bay. Is there any interest from industry in developing this corridor further?

Dreeshen: There’s been lots of talk [about] Hudson Bay, a trade corridor with rail and port access. We’ve seen some improvements to go to Churchill, but also an interest in the Nelson River.

We’re starting to see more confidence in the private sector and industry wanting to build these projects. It’s great that governments can get together and work on a common goal to build things here in Canada.

CEC: What is your vision for Alberta’s future as a leader in global trade, and how do economic corridors fit into that strategy?

Dreeshen: Premier Smith has talked about C-69 being repealed by the federal government [and] the reversal of the West Coast tanker ban, which targets Alberta energy going west out of the Pacific.

There’s a lot of work that needs to be done on the federal side. Alberta has been doing a lot of the heavy lifting when it comes to economic corridors.

We’ve asked the federal government if they could develop an economic corridor agency. We want to make sure that the federal government can come to the table, work with provinces [and] work with First Nations across this country to make sure that we can see these projects being built again here in Canada.

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Energy

Why are Western Canadian oil prices so strong?

Published on

Macdonald-Laurier Institute By Rory Johnston for Inside Policy

While Canadian crude markets are as optimistic as they’ve been in months regarding US tariffs, the industry is still far from safe.

Western Canadian heavy crude oil prices are remarkably strong at the moment, providing a welcome uplift to the Canadian economy at a time of acute macroeconomic uncertainty. The price of Western Canadian Select (WCS) crude recently traded at less than $10/bbl (barrel) under US Benchmark West Texas Intermediate (WTI): a remarkably narrow differential (i.e., “discount”) for the Canadian barrel, which more commonly sits around $13/bbl but has at moments of crisis blown out to as much as $50/bbl.

Stronger prices mean greater profits for Canadian oil producers and, in turn, both higher royalty and income tax revenues for Canadian governments as well as more secure employment for the tens of thousands of Canadians employed across the industry. For example, a $1/bbl move in the WCS-WTI differential drives an estimated $740 million swing in Alberta government budget revenues.

Why are Canadian oil prices so strong today? It’s due to the perfect storm of three distinct yet beneficial conditions:

  • Newly sufficient pipeline capacity following last summer’s start-up of the Trans Mountain Expansion pipeline, which eliminated – albeit temporarily – the effect of egress constraint-driven discounting of Western Canadian crude;
  • Globally, the bolstered value of heavy crudes relative to lighter grades – driven by production cuts, shipping activity, sanctions, and other market forces – has benefited the fundamental backdrop against which Canadian heavy crude is priced; and
  • The near elimination of tariff-related discounting as threat of US tariffs has diminished, after weighing on the WCS differential to the tune of $4–$5/bbl between late-January through early March.

We break down each of these factors below.

A quick primer: differentials, decomposed

Before we dive in, let’s quickly review how Canadian crude pricing works. WCS crude is Canada’s primary export grade and is virtually always priced at a discount to WTI, the US benchmark for oil prices, for two structural reasons outlined below. More accurately referred to as the differential (in theory, the price difference could go both ways), this price difference is a fact of life for Canadian crude producers and sits between $11–$15/bbl in “normal” times. Over the past decade, WCS has only sported a sub-$10/bbl differential less than 10 per cent of the time and most such instances reflected unique market conditions, like the Alberta government’s late-2018 production curtailment and the depths of COVID in early 2020.

The structurally lower value of WCS relative to WTI is driven by two main structural factors: quality and geography.

First and very simply, WCS is extremely heavy oil – diluted bitumen, to be specific – in contrast to WTI, which is a light crude oil blend. Furthermore, WCS has a high sulphur content (“sour,” in industry parlance) compared to the virtually sulphur-free WTI (“sweet”). WCS crude requires specialized equipment to be effectively processed into larger shares of higher-value transportation fuels like diesel as well as the remove the sulphur, which is environmentally damaging (see: acid rain)l; so, WCS is “discounted” to reflect the cost of that additional refining effort. Quality-related discounting typically amounts to $5-$8/bbl and can be seen in its pure form in the price of a barrel of WCS is Houston, Texas, where it enjoys easy market access.

Second, Western Canadian oil reserves are landlocked and an immense distance from most major refining centers. Unlike most global oil producers that get their crude to market via tanker, virtually all Canadian crude gets to end markets via pipeline. So, this higher cost of transportation away from where the crude is produced (aka “egress”) represents the second “discount” borne by the relative price of Canadian crude, required to keep it competitive with alternative feedstocks. Transportation-related discounting typically amounts to $7-$10/bbl and can be seen in the difference between the price of a barrel of WCS in the main hub of Hardisty, Alberta and the same barrel in Houston, Texas.

Moreover, transportation-related discounting is worse when pipeline capacity is insufficient, which has so frequently been the case over the past decade and a half. When there isn’t enough pipeline space to go around, barrels are forced to use more expensive alternatives like rail and that adds at least another $5/bbl to the required industry-wide pricing discounting – because prices are always set at the margin, or in other words by the weakest barrel. In especially acute egress scarcity, the geographic-driven portion of the differential can blow out, as we saw in late-2018 when the differential rose to more than $50/bbl before the Alberta government forcibly curtailed provincial production to reduce that overhang.

Additionally, the election of US President Donald Trump – and, specifically, the threat of US tariffs on Canadian exports – has introduced a third factor in the differential calculation. Over the past few months, shifts in the WCS differential have also been reflecting the market’s combined handicapping of (i) the probability of tariffs hitting Canadian crude and (ii) the rough share of the tariff burden borne by Canadian exporters.

All three of these factors – global quality, egress availability, and market anticipation of tariff US risk – have shifted decisively and strongly in favour of WCS over the recent weeks and months.

More pipelines, fewer problems

The first reason that Canadian oil prices are remarkably strong at the moment is sufficient pipeline capacity. The perennial bugbear of Western Canadian oil producers, pipeline capacity is, quite unusually, sufficient thanks to last summer’s start-up of the Trans Mountain Expansion Project (TMX). TMX is the largest single addition to Western Canadian egress capacity in more than a decade and, since TMX entered service last summer, the transportation-related differential has remained low and stable, eliminating the largest and most common drag on Canadian crude pricing.

Without TMX, the Western Canadian oil industry would be suffering an all too familiar and increasingly acute egress crisis. Acute egress shortages would have dwarfed the threat of US tariffs and pushing differentials, in stark contrast to today, far wider – the spectre of provincial production curtailment would not have been out of the question. And it is also important to note that this pipeline sufficiency is inherently temporary. Current pipeline sufficiency will likely only last another year or two at most and then Western Canadian egress will require additional expansions to avoid the resurrecting of egress-scarcity-driven differential blowouts.

Heavy is the crude that wears the crown

The second reason that Canadian oil prices are remarkably strong now is the unusually strong global market for heavy crude. Heavy crude grades (e.g., Iraqi Basra Heavy and Mexican Maya), medium crude grades (e.g., Dubai and Mars), and high sulphur fuel oil (used in global shipping) have all seen their value rise relative to Brent and WTI benchmarks, which both reflect lighter, sweet grades of crude.

For WCS, the differential has narrowed from more than $10/bbl at the end of 2023 to around $2.8/bbl under WTI. The bolstered value of heavy crudes relative to lighter grades is being driven by a host of factors including ongoing OPEC+ production cuts (much of which came in the form of heavier crude grades), strong shipping activity, and tighter sanctions against traditional suppliers of heavy shipping fuel like Russia and more recently Venezuela.

What tariff threat?

Finally, the most acute and volatile reason that Canadian oil prices are remarkably strong at the moment is the near elimination of US tariff-related discounting. The US imports more than half of its total foreign oil purchases from Canada and Canadian crude has long enjoyed tariff-free access to the US market. Tariff-related pricing pressure began in earnest in late-2024 as Canadian crude markets tried to build in an ever-evolving handicapping of that tariff risk following Trump’s initial tariff threats. Tariff-related discounting grew stronger from mid-January through February with the excess geographic WCS differential rising to nearly $5/bbl (see chart above and read “Canadian Crude Drops Tariff Discount” for more on the logic of this measure).

After a months-long rollercoaster of “will he/won’t he” uncertainty around the imposition of US tariffs on Canadian crude imports, USMCA-compliant exemptions and broader US official chatter regarding potential outright Canadian crude exemptions have allowed markets to reduce the (roughly) implied probability to effectively zero. This factor alone narrowed the headline WCS differential in Hardisty, Aberta, by $3–$4/bbl over the past month.

Conclusion

Canadian oil prices are so strong today because just about everything that can be going right is going right. WCS differentials are benefitting from a perfect storm of (i) unusually sufficient pipeline capacity, (ii) exceptionally strong global heavy crude markets, and (iii) a near elimination of US tariff-related discounting. Together, these factors are lifting the relative value of Canadian crude oil exports, and this is a boon for Canadian oil industry profits, provincial royalty income, income tax receipts, and employment in the sector.

Looking ahead, WCS differentials may narrow by another dollar or two as this beneficial momentum persists. However, the balance of risk is now tilted towards a reversal (i.e., widening) of differentials over the coming year as OPEC+ begins to ease production cuts and Western Canadian production continues to grow without the hope of any new near-term pipeline additions. While Canadian crude markets are as optimistic as they’ve been in months regarding US tariffs, the industry is still far from safe – given the volatility of policy coming out of the White House, there is still a chance that this near-erasure of tariff risk from Canadian crude pricing may have come too far, too fast.

If and as tariff concerns fall away, egress sufficiency (i.e., pipeline capacity) will resume its place as king of the differential determinants. At the current rates of Western Canadian production growth, Canada is set to again overrun egress capacity – after the relief provided by the start-up of TMX – over the next year or two at most. While Canada may have dodged a near-term bullet to crude exports destined for the US, this situation serves to only emphasize the continued challenges associated with current pipeline infrastructure. It would be prudent for Canadian politicians to begin shifting their current concerns towards the structural, and entirely predictable, threat of renewed egress insufficiently coming down the pipe.


About the author

Rory Johnston is a leading voice on oil market analysis, advising institutional investors, global policy makers, and corporate decision makers. His views are regularly quoted in major international media. Prior to founding Commodity Context, Johnston led commodity economics research at Scotiabank where he set the bank’s energy and metals price forecasts, advised the bank’s executives and clients, and sat on the bank’s senior credit committee for commodity-exposed sectors.

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