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Daily Caller

The Silly Peak Oil Debate Rages On

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6 minute read

From the Daily Caller News Foundation 

 

By David Blackmon

“What the Outlook underscores is that the fantasy of phasing out oil and gas bears no relation to fact,” said OPEC Secretary General Haitham Al Ghais

Analysts and professionals in the global energy space have long debated the prospects for reaching peak demand for crude oil. It is an issue that has long sparked debate, some of which becomes emotional among highly invested stakeholders on one side or the other.

In recent years, such stakeholders risk developing cases of whiplash when considering the competing perspectives about this “peak oil” matter published by OPEC and the International Energy Agency (IEA).

IEA has spent the last 12 months predicting an earlier advent of the peak oil phenomenon than pretty much any other experts envision, saying it will come about sometime in this decade, no later than 2030. Not surprisingly, the agency’s analysts doubled down on that projection in its most recent monthly Oil Market Report.

In a section titled “When the Music Stops,” the IEA focused on short-term factors like slowing demand growth in China, where oil consumption has declined year-over-year for the past four months. Noting that Chinese demand growth has slowed to an estimated 180,000 barrels per day (bpd) across 2024, the agency leaned on that data point as a reason to lower its estimated global demand growth to 800,000 bpd.

The same section also pointed to the isolated slowing of U.S. gasoline-deliveries growth in June — a factoid that could simply be statistical noise — as support for its annual growth forecast. But a slowdown in crude demand growth is no surprise, given that economic growth has been slowing throughout 2024. This direct cause-and-effect phenomenon has been a consistent aspect of oil markets across history. It is also a short-term factor whose impact will ultimately be diminished by subsequent events.

In contrast, OPEC’s projections over the past year regarding near-term global demand growth and the anticipated peak in oil demand have reached diametrically opposite conclusions. Last summer, the cartel projected global growth in crude demand for 2024 would be a robust 2.25 million bpd. Slowing economic growth has led OPEC’s analysts to lower that initial prediction over the past two months, but only to 2.1 million bpd — more than double that of both IEA and the U.S. Energy Information Administration (EIA).

Where the concept of peak oil demand is concerned, OPEC has held to an even more oil-bullish stance, stating its projections do not see that threshold being reached anytime during its projection timeframe through 2050. In its annual Global Outlook published last week, OPEC sees oil demand growing by that year to 120 million bpd, a rise of 18 million bpd from current levels.

“What the Outlook underscores is that the fantasy of phasing out oil and gas bears no relation to fact,” said OPEC Secretary General Haitham Al Ghais in the forward to the report.

Al Ghais also pointed out the fact that: “Over the past year, there has been further recognition that the world can only phase in new energy sources at scale when they are genuinely ready, economically competitive, acceptable to consumers and with the right infrastructure in place.” This undeniable reality means that projections of oil demand in the transportation sector being crushed by alternatives like EVs and hydrogen cars are almost certainly overly optimistic. The rapidly faltering market demand for EVs strongly supports that likelihood.

Al Ghais also contends that a “realistic view of demand growth expectations necessitates adequate investments in oil and gas, today, tomorrow, and for many decades into the future.” That contention stands in contrast to the IEA report released in May, 2021, in which IEA Director Fatih Birol urged an immediate halt in all new investments in the finding and development of new oil resources in order to fight climate change. By August of that year, Biral was comically urging oil companies to increase their oil production in order to help re-balance an undersupplied global market.

Episodes like that have led many to question whether IEA bases its projections related to oil markets on data or on wishful thinking. The validity of such questions was only reinforced when Birol announced early this year that the agency’s mission was being expanded into outright advocacy for promoting the energy transition.

So, who is right? We’ll find out in 2030, but the smart money is on the group with billions riding on the answer.

David Blackmon is 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.

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Former Acting ICE Director Says Biden Admin’s Border Policies Empower Cartels, Undermine National Security

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From the Daily Caller News Foundation 

 

By Mariane Angela

Former Acting Immigration and Customs Enforcement (ICE) Director Tom Homan criticized the Biden administration’s border policies Friday on Fox News, arguing that they empower criminal cartels and undermine national security by allowing millions of immigrants into the country.

Border Patrol has encountered more than 7 million migrants at the southern border since the Biden-Harris administration took office, according to Customs and Border Protection. Homan said that the U.S. will continue to face significant illegal immigration unless former President Donald Trump returns to office.

“They’re not going anywhere, unless President Trump’s back in the White House,” Homan told Laura Ingraham, talking about an influx of migrants from Venezuela, Nicaragua, and Cuba. “Then they’re bringing thousands a day through the CBP1 app … Historic numbers. Mexico stepped up enforcement a little bit. Why? Because they don’t want President Trump to be president. You know who else don’t want President Trump to be president? The criminal cartels in Mexico who are making billions of dollars every month.”

The CBP1 is an app used by migrants seeking asylum to preschedule appointments for processing at the US-Mexico border, according to American Immigration Council.

“The government of Mexico don’t want President Trump to be president because the gravy train’s over. The terrorist organizations around the world who are using the southwest border as an entry point in this country, they don’t want President Trump to be president either,” he added.

Thousands of illegal migrants and other non-citizens convicted of serious offenses such as homicide and sexual assault are currently at large in the U.S, according to federal data disclosed in a letter on Wednesday. The letter, addressed to Republican Texas Rep. Tony Gonzales, indicates that there were over 662,566 non-citizens with criminal records on the Immigration and Customs Enforcement (ICE) national docket as of July 21, encompassing both detained individuals and those not in custody.

Venezuelan gang called Tren de Aragua is reportedly exploiting the Biden-Harris administration’s border crisis to expand its operations into the United States, with experts indicating that immigration authorities are unable to identify members of this group prior to their arrival on American soil.

During a forum hosted by Oprah Winfrey on Sept. 19, Vice President Kamala Harris gave an evasive response when asked about her strategy for tackling illegal immigration. She referenced her tenure as California’s Attorney General and a prosecutor, then shifted to discussing the failure of a bipartisan border bill, but never directly addressed the issue.

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EXCLUSIVE: Investment Giants Leveraged Red State Universities’ Endowment Funds To Back Anti-Oil Agenda, Report Finds

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From the Daily Caller News Foundation 

 

By Jason Cohen

Several asset managers leveraged two major Texas university systems’ endowment funds to advance anti-fossil fuel shareholder proposals in 2022 and 2023, according to a report from the conservative watchdog group American Accountability Foundation (AAF).

BlackRock-owned Aperio Group, Cantillon, former Vice President Al Gore-chaired Generation Investment Management, GQG Partners and JP Morgan Asset Management collectively manage approximately $4 billion for The University of Texas/Texas A&M Investment Management Company (UTIMCO) as of July, which handles the university systems’ endowments. Despite the company’s policy against it and Texas’ status as the leading crude oil and natural gas-producing state, UTIMCO’s asset managers backed over 150 shareholder resolutions under the environmental, social and governance(ESG) umbrella, including proposals that could undermine the oil and gas industry, according to documents AAF obtained through a public records request and shared exclusively with the Daily Caller News Foundation.

“Once again, woke ESG ideology has infected a public institution and hijacked its money for their own purposes. This is an outrageous betrayal of the public’s trust,” AAF president Thomas Jones told the DCNF. “[Republican Texas] Gov. Greg Abbott must take immediate action to end this nonsense. He must shake up the leadership at UT/A&M that let this happen and use his influence with UTIMCO to ensure that it never happens again.”

UTIMCO told the DCNF that the ESG and diversity, equity and inclusion (DEI)-related votes violate “a long-standing policy that prohibits using the endowments’ economic power to advance social or political agendas” and that a review found they consist of 0.3% out of around 45,000 proxy votes in recent years. The endowment manager added that it has since modified its guidelines after finding the violative votes and will impose them on all of its third-party investment managers before future proxy votes, and revoking voting authority for those that cannot follow them.

The company’s asset managers voted in favor of a total of 159 shareholder proposals between them that include “racial and gender pay gap reports, efforts to defund conservative candidates and pro-business trade associations, radical climate policy, targeting of gun purchasers, and proabortion initiatives,” according to the watchdog.

UTIMCO oversees the largest public endowment fund in the U.S., managing over $76 billion as of Aug. 31.

“UTIMCO’s mission is to ‘generate superior long-term investment returns to support The University of Texas and Texas A&M University Systems,’ yet these votes endorse political agendas that run contrary to the Systems’ best interests,” American Energy Institute CEO and former Republican Texas state Rep. Jason Isaac told the DCNF. “By supporting proposals that harm American energy producers, UTIMCO’s fund managers are violating their fiduciary responsibility.”

Texas leads the nation in crude oil and natural gas production and in 2023 was responsible for 43% of crude oil output, according to the U.S. Energy Information Administration. However, AAF found many examples of UTIMCO’s asset managers voting in favor of proposals aimed at reducing greenhouse gas emissions (GHG) emissions and other actions to mitigate so-called climate change, which the watchdog alleges comes at the expense of producing value for investors.

For instance, at ExxonMobil’s May 2023 yearly shareholder meeting, Aperio Group voted in support of a proposal to recalculate its GHG emissions to account for the assets it has sold. The resolution asserted that “the economic risks associated with climate change exist in the real world rather than on company balance sheets” and argues that the investments ExxonMobil sells may lower emissions on paper but that they fail to actually help achieve the goal of keeping global temperatures from rising by 1.5 degrees Celsius — which is an objective of the 2015 Paris Climate Agreement — potentially exposing the company and its stakeholders to what it calls “climate risk.”

Some of Aperio Group’s clients have access to customize their individual proxy voting policy, according to BlackRock. BlackRock itself voted against this ExxonMobil proposal on behalf of most of its clients.

AAF’s “report on UTIMCO’s investment practices should alarm every Texan who values our state’s proud oil and gas industry,” Texas Railroad Commissioner Wayne Christian told the DCNF. “It’s outrageous to see Texas university investments being used to support radical ESG agendas, decarbonization, and dangerous policies like Net Zero and the Paris Accord, which threaten our energy independence and economy. We must put an end to the woke political agendas that undermine the very foundation of Texas’ success and ensure our investments align with the values of hard-working Texans.”

Moreover, at defense contractor Raytheon Technologies’ yearly shareholder meeting in May 2023, J.P. Morgan Asset Management backed a proposal urging the company to publish a report on efforts to reduce GHG emissions in alignment with the Paris Climate Agreement.

“Raytheon Technologies creates significant carbon emissions from its value chain and is exposed to numerous climate-related risks,” it states. “Failing to respond to this changing environment may make Raytheon less competitive and have a negative effect on its cost of capital and shareholders’ financial returns.”

Isaac told the DCNF that UTIMCO’s “managers are discriminating against fossil fuel” companies through ESG investing based on the definition of “boycott” in Texas’ Senate Bill 13, which Abbot signed in 2021 and the former representative said he helped create.

The bill defines boycotting energy companies as refusing to engage or ending business with a company involved in fossil fuels “without an ordinary business purpose.” It also specifies actions aimed “to penalize, inflict economic harm on, or limit commercial relations with a company because the company” does business related to fossil fuels and fails to “pledge to meet environmental standards beyond applicable federal and state law.”

Isaac added that the asset managers “should be held accountable and placed on Texas’ list of “financial companies that boycott energy companies,” which mandates Texas public investment entities subject to SB 13 “avoid contracting with, and divest from, these companies unless they can demonstrate this would conflict with their fiduciary duties.”

The S&P Global Clean Energy Index, which includes companies that engage in energy production from renewable sources, has fallen about 7% so far in 2024, while the S&P 500 Energy Index, which features many oil and gas companies, has risen close to 3% in that same time.

Louisianans’ pension funds were similarly leveraged to push climate-related proposals within publicly traded companies, the DCNF reported in April, based on another public records request by AAF.

“UTIMCO’s asset managers’ apparent promotion of leftist objectives, including ESG, is extremely troubling and contrary to Texas law banning boycotts and discrimination against fossil fuels. The legislature must exercise oversight and hold UTIMCO accountable,” Republican Texas state Rep. Brian Harrison told the DCNF. “Governmental bodies, including their proxies, should not pursue objectives that harm the Texas economy and go against our values.”

Cantillon, GQG Partners, Texas A&M and Abbot’s office did not respond to the DCNF’s requests for comment. Aperio Group, Generation Investment Management, JP Morgan Asset Management and the University of Texas declined to comment.

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