Connect with us
[the_ad id="89560"]

Energy

Achtung: Learning from Germany’s energy shambles: Terry Etam

Published

19 minute read

From the Frontier Center for Public Policy

By Terry Etam

No one interviews mechanics about the challenge of an energy transition. In fact, the voices of the many that maintain the system get accused of disinformation for pointing out mechanical realities like “That isn’t gonna work.”

In 1880, a great author, Mark Twain, whom you may never hear spoken of again because he had the audacity to write in the vernacular of the day, wrote an extremely funny essay called The Awful German Language. “Surely there is not another language that is so slipshod and systemless, and so slippery and elusive to the grasp…There are ten parts of speech, and they are all troublesome…Now let the candidate for the asylum try to memorize those variations, and see how soon he will be elected…In German, a young lady has no sex, while a turnip has…a tree is male, its buds are female, its leaves are neuter; horses are sexless, dogs are male, cats are female-tomcats included, of course; a person’s mouth, neck, bosom, elbows, fingers, nails, feet, and body are of the male sex, and his head is male or neuter according to the word selected to signify it…My philological studies have satisfied me that a gifted person ought to learn English (barring spelling and pronouncing) in thirty hours, French in thirty days, and German in thirty years.”

I have no idea if his synopsis is sound, but I do know it is funny as hell and it comes leaping to mind upon any contemplation at all of Germany’s current energy mess. I can’t think of a better turn of phrase than to describe it as slipshod and systemless and slippery and elusive to the grasp.

The lunacy began more than a decade ago, but it took a few years before serious consequences started to appear. They are here now, in full force. Primary among them was the decision to shut down all nuclear power in the country with no suitable base load replacement other than… coal, the last imaginable energy source one could imagine Germany purposely pursuing after a decade of their energy transition shouting. In what had to have been a staggeringly embarrassing moment, the German government even went as far as destroying a village to expand a coal mine. In 2023, not 1923.

To be fair, Germany’s energy demise was hastened by the Russian war and subsequent loss of Russian gas (and to be even more fair, I recognize that as a Canadian I have absolutely no moral high ground to ridicule anyone else’s government). As The Economist put it: “By weaponising the natural gas on which Germany’s mighty industrial base relies, the Russian president is weakening the world’s fourth-biggest economy and its third-biggest exporter of goods.”

But that was an accelerant, and not the match. For more than a decade, Germany has been not just turning away from fossil fuels faster than possible, it has fed mightily into the global narrative that fossil fuels were last century’s news. The overarching anti-hydrocarbon stance, that to maintain a cent in any fossil fuel investment was to risk good money on soon-to-be ‘stranded assets’, has been allowed to take over the public discourse as a fact, with no opposition from even the likes of those now in a very bad spot for allowing these concepts to take root as modern energy givens.

The German war on hydrocarbons is all the more peculiar because of the way in which the country has wrapped almost its entire industrial strategy around them. A physicist named Shaun Maguire outlined it well on Twitter, and thank heavens for people with weird fascinations. (@shaunmmaguire: “I’ve been obsessed with the chemicals industry since I was a kid.”)

Mr Maguire wrote an illuminating thread on Germany’s economy and its relationship to both energy and chemicals (an epic quote right off the top: “Germany’s decision to shut down their nuclear facilities was one of the stupidest political decisions in history. Most of their economy is based on turning energy into chemicals.”).

A profile of Ludwigshafen points out some startling facts. First, the place is enormous. BASF, the massive chemical company, has a ten square kilometre facility in the city with its own transit system.

Ludwigshafen consumes about as much natural gas as Switzerland. The output from Ludwigshafen, per BASF’s website, supports: Agriculture, Automotive/Transportation, Chemicals, Construction, Electronics/Electric, Energy & Resources, Furniture & Wood, Home Care and Industrial/Institutional Cleaning Solutions, Nutrition, Packaging & Print, Paints & Coatings, Personal Care/Hygiene, Pharmaceuticals, Plastics & Rubber, Pulp & Paper, and, finally, Textiles, Leather & Footware. The website has pull-down menus for each category that outline a dizzying array of pretty much everything you’ve ever laid your hands on that wasn’t breathing, photosynthesizing, or dug out of the ground.

Those huge natural gas pipelines flowing into Germany are the very lifeblood of German industry, as much or more so than anywhere else. In many places, without natural gas people would simply freeze. In Germany, they would freeze in many square miles of abandoned petrochemical factories. Sure, it would be steampunk-cool way to go, but other than that there would be nothing aesthetic about it.

Last year, I stood slack-jawed in wonder at news that Germany had constructed an LNG import terminal in 5 months flat (an LNG-Importeinrichtung – feminine). How on earth… it takes a year to get a permit for anything in the western world. How could they build her so fast?

Now I know. They had to. The bedrock of Germany’s mighty industrial base depended on it.

There are no grounds for entertaining the thought that Germany is incapable of designing, building, and operating an optimal energy system. It is crazy to think otherwise; Germany is collectively a formidable engineering talent.

Yet it is equally crazy to shut down a bunch of nuclear reactors with no suitable backup base load power (and remember, the nuclear plants were put on the boat to Valhalla before Russian antics).

Some of Germany’s current energy plans are equally as crazy, such as being short of power and simultaneously activating a mass conversion to electrical heat pumps. Whatever you do in an electrical grid, the one thing you don’t want to do is increase demand peaks. An overarching goal should be to reduce them, because the highest possible load, the point of maximum demand, sets the capacity need for the entire system. If on the coldest, highest demand day of the year, a system needs 1,000 units, it needs to be built and maintained to provide 1,000 units, even if the average demand is only half that.

Germany’s heat pump rollout plan is a scheme that will do exactly the wrong thing. It will significantly increase demand at the exact worst time. It is like taking the example above and resetting the peak to 1,200 units, even if the average remains at 500. The entire system now needs to be able to provide 1,200 on demand.

What happens if it doesn’t? Well, what do you think happens if there is a power failure during the coldest snap of the year, when wind and solar output are low, or if reliance on wind/solar is too great and they can’t perform? It will be catastrophic.

So you might be driven to madness trying to unravel this knot, because on the face of it Germans can’t both be engineering-competent and simultaneously run their energy system into the ground.

The answer to this impossible scenario, how such a contradiction can exist in reality, is due to two things: the politicization of the energy system, and the failure of that energy system to explain and defend itself.

Politics, as we know, is where logic goes to die. Popularity means power; and you can gain popularity in general by keeping citizens happy (hard to do, always something to complain about), or by terrifying them. It should not be a surprise that out of that swamp (one rude Trump-derived nomenclature that I can’t disagree with) comes a plethora of committees and committee decisions made by people for whom reality will always be steamrolled by the quest for popularity (there are exceptions that prove this rule, showing up about three times per century somewhere on the globe).

Thus we get governments fighting to eliminate hydrocarbons for political reasons; because they want to be seen as ‘being on the right side’, and because one side has been so much better at it (more on that in a second), being ‘an environmentalist’ is now colloquially equivalent with being anti-hydrocarbon.

Stuck in the middle of the fear mongering are the plumbers, the farmers, the mechanics, the drivers, the people that actually keep the wheels turning, the ones with their feet grounded in reality and not in armchair-industrialism. Included in that camp are the ones that check the valves and drill the wells that keep the world’s fuel flowing. Others can argue about what it will look like in 40 years, but for the hands-on people, the story is all about today.

But those voices get lost in the noise storm. No one interviews mechanics about the challenge of an energy transition. In fact, the voices of the many that maintain the system get accused of disinformation for pointing out mechanical realities like “That isn’t gonna work.” Capable, knowledgeable people that point out the rising risks of an unreliable electrical grid are shouted down as ‘fossil fuel shills’ or agents of misinformation.

Sadly then, we are forced to live with these pile-driving spasms of bad decisions as part of a political process, democracy, that most would never abandon. And hey, it’s not easy for participants either – Imagine the chaos between the ears of German Chancellor Olaf Scholz, coming to Canada seeking more LNG, then sitting at a press conference listening to Justin Trudeau say there is no business case to be made for LNG to Germany, and being unable to speak against such gibberish because Climate, knowing full well he would go to another country to get an assured supply (and he did, Qatar).

One can’t help but summon sympathy for Mr. Twain’s German-themed bewilderment when hearing what has happened thus far in 2024. Germany recently approved $44 billion in new expenditures to build brand new gas-fired power plants (pacifying their supporters by declaring that the plants must be able to burn hydrogen and are ‘expected to’ do so by 2040 – not hard to spot the weasel words, is it). Note that new natural gas power plants can not be blamed on Russia, because this is just more consumption and not a replacement for supply. To rub salt in the Energiewende-wound, Bloomberg via Yahoo chimes in with the headline, “Germany’s Budget Chaos Leaves Green-Energy Projects in Limbo.” Seems that they found $44 billion for natural gas easily enough though. What was that transition stuff about, again?

Such mystifying behviour is at least partially explained by the second reason that energy system contradictions can exist – the dumbfounding size of the energy education deficit, and for that the hydrocarbon industry can at least partly look in the mirror, because the energy system has not done enough to explain and defend itself.

Consider Alex Epstein for example, a one-man energy-education army that has amassed a huge following. He’s written great books, and even appeared before congress, largely because he has taken the time and effort to point out the colossal benefits that hydrocarbons have brought humanity. Humanity as we know it wouldn’t exist without the hydrocarbon system, nor would most (or all) of the technological innovations we enjoy. Mr. Epstein spells this out, of his own accord, to far greater effect than the entire industry has in the past 30 years.

Many of those energy points are not hard to make, such as this foundational one that even Big Oil CEOs seem unable to articulate: “If one wishes to ascribe certain negative characteristics to hydrocarbon usage, it is only rational to consider the benefits that are derived from same.” And yet the opponents of hydrocarbons have done such a resoundingly thorough and effective job of amplifying any negativity that that simple statement is heard almost nowhere, except by Alex and a handful of others. Those earning massive pay stubs should be leading the charge, and they just aren’t. Not effectively anyway.

A general recognition of the boundless value of current fuels is coming; the question is, now much pain until that becomes commonly understood. The reality is that hydrocarbon usage continues to grow and set record consumption levels, including coal, and will for a long time. The evidence is pretty stark and clear, even for the likes of the IEA that predicts an imminent demise in hydrocarbon demand over and over and over, then keeps re-upping demand estimates as they happen.

A great number of innovative ideas are making their way to market that will start making inroads on how we deal with energy and industry. But until proven at scale, the existing system needs to be protected from frightened mobs, and someone needs to explain reality to them.

We all know what’s going to happen; an energy transition will happen over the next century at a realistic pace as new technology/nuclear/whatever becomes dominant. The challenge is: How much damage will be done before our elected representatives start choosing optimization, as opposed to whatever it is they’re doing now?

Terry Etam is a columnist with the BOE Report, a leading energy industry newsletter based in Calgary.  He is the author of The End of Fossil Fuel Insanity.  You can watch his Policy on the Frontier session from May 5, 2022 here.

Alberta

New children’s book demonstrates how the everyday world is connected to natural resources

Published on

From the Canadian Energy Centre

‘Today’s youth have the opportunity to lead us into the future with innovative solutions for environmental challenges’

After a 24-year career in oil sands land reclamation, author Tanya Richens is sharing her knowledge with young minds.

Her new book, From the Earth to Us: Discovering the Origins of Everyday Things, explores the relationship between natural resources and the things we use in everyday life, from computers and water bottles to batteries and solar panels.

“There is a gap in society’s understanding of where things come from. We are a society driven by consumerism and immediate gratification. We order something online, and it arrives on our doorstep the next day. We don’t stop to think about where it really came from or how it was made,” Richens says.

“There’s an ever-increasing societal position that mining is bad, and oil is even worse… But there’s a simple hypocrisy in those beliefs, since so many things in our lives are made from the raw materials that come from mining and oil and natural gas,” she says.

The book, illustrated by reclamation artist Shannon Carla King, follows young Hennessy Rose and her Cavalier King Charles Spaniel Riley on a trip to a children’s summer camp.

Hennessy’s mom is a guest speaker on the origin of everyday items and the relationship between humans and the earth. Through detailed explanations of items surrounding her, Hennessy’s mom teaches the kids how rocks, minerals, oil and gas from the earth are used to power and aid our lives, creating items such as building supplies, food and hair products, camping and sports equipment, and cell phones.

Author Tanya Richens poses with her two books for children about natural resources. Photo for Canadian Energy Centre

“I thought a simple and fun book explaining the raw materials needed to make everyday items would be valuable for all ages,” Richens says.

“When people feel personally connected to natural resources, they are more likely to promote sustainable practices. Today’s youth will have the opportunity to lead us into the future with innovative solutions for environmental challenges.”

Richens‘ career began with Alberta Environment, where she was a coordinator of reclamation approvals in the oil sands. She oversaw technical reviews of oil sands reclamation applications, communicated with statement of concern filers, coordinated public hearings and provided support for legislative changes.

She moved from government to Suncor Energy, ensuring the company’s compliance on reclamation projects and led initiatives to obtain reclamation certificates. She now works as an independent consultant.

Drawing on her wealth of experience in the field, Richens’ first book, Adventures in Land Reclamation: Exploring Jobs for a Greener Future, seeks to excite kids aged 9-12 years about jobs related to the environment and land reclamation.

Hoping to get From the Earth to Us into the hands of teachers, Richens is heading to the Edmonton Teachers Convention in late February. She says the book supports multiple learning outcomes in Alberta’s new science curriculum for grades 3, 4, 5 and 6.

“Ultimately, I’d like people to understand and acknowledge their individual part in the need for mining and oil and natural gas development. Until the naivety and hypocrisy in the world is addressed, I’m not sure that real environmental change is possible.”

Richens’ books can be purchased on her website at tcrenvironmental.com.

Continue Reading

Energy

Federal Government Suddenly Reverses on Critical Minerals – Over Three Years Too Late – MP Greg McLean

Published on

From Energy Now

By Calgary MP Greg McLean

Government in Full Reverse

Canada-U.S. Trade Relations is obviously the most pressing issue facing Canadians today.

It’s important to remember how we arrived at this point, but also to question the sincerity of the Liberal Ministers and leadership contenders who are now posing solutions, such as:

  • We need to diversify our resource trade
  • We need to build pipelines and infrastructure to get our exports to tidewater
  • We need to streamline our regulatory burden that stands in the way of development
  • We need to halt the escalating carbon tax
  • We need to reverse the capital gains tax increase

The Liberals are turning themselves inside out on the policy choices they have made over nine years, and put Canada in a precarious economic position vis-à-vis our trade position.

If you believe what they are saying now, these Liberal Ministers and leadership contenders are saying that Canada needs EXACTLY THE OPPOSITE of what they have delivered over these past nine years.

I can’t comment on whether these NEW Liberal policy positions completely lack sincerity, or whether they are the result of a ‘deathbed conversion’, but nine years of moving in the exact opposite direction to their new words has led Canada to where it is today – and that is nine lost years for Canadians, our prosperity, and our role in a complex world.

Below is another example of a specific morphing of a Liberal policy – to the one I helped put forth – 3 ½ years ago – regarding Canada’s policy on critical minerals.


Minister Late to Critical Mineral Strategy

Here’s a gem of wisdom from December’s Fall Economic Statement:

Canada will work with the United States and other likeminded partners to address the impacts of non-market policies and practices that unduly distort critical mineral prices.  This includes ensuring that market participants recognize the value of critical minerals produced responsibly, with due regard for high environmental standards and labour practices.

Then, on January 16th, the following from Canada’s Natural Resource Minister, Jonathan Wilkinson:

During a panel discussion in Washington on Wednesday, Natural Resources Minister Jonathan Wilkinson proposed that enforcing a floor on metals prices could be “one of the centerpieces of the conversations we would then be having at the G7” summit later this year.

Western nations have long warned that China’s dominance in everything from nickel to lithium has let the country’s producers flood the market with supply, thereby keeping prices artificially low for competitors. Wilkinson has touted price floors as a way to combat that market control.

What a great idea!

Here’s the relevant excerpt from June, 2021, from a dissenting report on the Natural Resources Committee, when I served as my party’s critic, in contrast to the government’s critical minerals approach at that time:

Recommendation 4: Coordinate with our allies to establish a dedicated supply stock of critical minerals, possibly through a physical storage and floor pricing mechanism for visibility and pricing purposes.

Excerpt: Canada is too small of a market to undertake this effort on its own, but it can play a key role with its longstanding leadership as the mining jurisdiction of choice in the world. Canada’s pre-eminent role as a financing jurisdiction for international mining is well understood. Although we are at the early stages of losing this historical leadership to Australia, acting quickly to solidify Canada’s leadership will be a strong signal. Australia and Europe have already established critical mineral strategies to offset the dominance of the market that China has exerted. At the very least, Canada’s coordination needs to include the United States, and probably Mexico (through CUSMA), as the ongoing funding of a critical mineral supply may require backstopping developments with a price amelioration mechanism. In essence, a floor price to ensure the protection of critical mineral developments from manipulating price volatility – and which has held back developments, or caused the insolvency of several of these developments, due to non-transparent world market pricing mechanisms. … Establishing a steady supply of these critical minerals will lead to more value-added opportunities, in conjunction with our trade partners.

FULL REPORT

Conservative Dissenting Recommendations

My question to the Minister:  ‘What took you so long?’

This approach was presented three and a half years ago – and the Government chose to ignore it then.  

No surprise now, perhaps, as we’ve seen this Minister flip-flop on so many of the nonsense policies he’s put forth or acquiesced in at Cabinet:

  • The Clean Electricity Regulations (still opaque)
  • Canada’ role in shipping hydrocarbons to the world
  • Building energy infrastructure

To say nothing of the various Cabinet decisions he has been a part of that have led to Canada’s current weak negotiating position with our allies.  We effectively have not had a Minister of Natural Resources under his tenure.

Nothing topped it off more succinctly than his speech at the World Petroleum Show, held in Calgary in September 2023, when his remarks on behalf of the Government of Canada left industry participants around the world questioning whether the Minister was ‘tone-deaf’ or if, in fact, he knew anything about natural resources.

It seems his move to the position I promoted – three and a half years ago – shows that he’s finally listening and learning (or un-learning his previous narratives, perhaps)– but it’s quite late in the day.  Time and our future have been wasted.

Continue Reading

Trending

X