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Energy

The 7 most important truths about our energy future

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17 minute read

From EnergyTalkingPoints.com

By Alex Epstein

At Jordan Peterson’s ARC (Alliance for Responsible Citizenship) conference I was asked to share the most important truths about our energy future.

I boiled it down to 7. Understand these and you’ll be a better thinker than 97% of energy or climate “experts.”

GIM 7 most important truths

Energy Truth 1

To decide what to do about fossil fuels and other forms of energy, we must carefully weigh their benefits and side-effects.

  • When evaluating what to do about a product or technology—e.g., a prescription drug—we need to carefully weigh the benefits and side-effects of our alternatives.

    But most “experts” just focus on fossil fuels’ negative climate side-effects.

  • It is particularly crucial to weigh any negative climate side-effects of continuing fossil fuel use against the climate mastery benefits that come with them, as those benefits can neutralize or overwhelm negatives.

    E.g., more energy powering heating and cooling, irrigation, building, etc.

  • Example of fossil-fueled climate mastery overwhelming negative impacts: drought.

    Any contribution of rising CO2 to drought has been overwhelmed by fossil-fueled irrigation and crop transport, which have helped reduce drought deaths by over 100 times over 100 years as CO2 levels have risen.1 drought deaths

Energy Truth 2

Fossil fuels for the foreseeable future will remain a uniquely cost-effective (affordable, reliable, versatile) and scalable source of energy.

  • Myth: There are no real benefits of continuing fossil fuel use because it can be rapidly replaced by mostly solar and wind.

    Truth: Fossil fuels are and for decades will remain uniquely cost-effective: affordable, reliable, versatile—on a scale of billions of people in thousands of places.

  • Myth: Fossil fuels are being rapidly replaced in an “energy transition” to solar and wind.

    Truth: Fossil fuel use is 80% of the world’s energy and still growing despite 100+ years of aggressive competition and 20+ years of political hostility and massive solar and wind favoritism.2 primary energy consumption by fuel

  • Myth: Fossil fuel use will soon rapidly decline because countries know “green” energy will be cheaper.

    Truth: Countries that care most about cheap energy are pro-fossil fuels.

    E.g., China, which uses mostly coal to produce “green” tech, has over 300 planned new coal plants designed to last over 40 years.3

  • Myth: Solar and wind are growing fast by outcompeting fossil fuels with superior economics.

    Truth: Solar and wind are growing fast only when given massive government preferences—mandates, subsidies, and no penalty for unreliability—along with crippling government punishments of fossil fuels.

  • Myth: Solar and wind are now cheaper than fossil fuels.

    Truth: For the overwhelming majority of the world’s energy needs, solar and wind either can’t do what fossil fuel can—e.g., non-electricity energy uses such as airplanes or cargo ships—or are far more expensive.4

  • Myth: Solar and wind electricity is getting so cheap that it will lead to rapid electrification of the 4/5ths of today’s energy that is not electricity.

    Truth: When you factor in full cost of the 24/7 life support that unreliable solar and wind electricity need, they are far more expensive.5 TX freeze 2021

  • Fossil fuels are uniquely able to provide energy that’s low-cost, reliable, and versatile on a scale of billions of people. This is due to fossil fuels’ combination of remarkable attributes—fossil fuels are naturally stored, concentrated, and abundant energy—and generations of innovation by industry.
  • There is currently only one energy technology that can match (actually exceed) fossil fuels’ combination of naturally stored, concentrated, abundant energy: nuclear. Nuclear may one day outcompete all uses of fossil fuels, but this will take radical policy reform and generations of innovation and work.

Energy Truth 3

The more cost-effective and scalable energy is, the more human beings can flourish on this naturally deficient and dangerous planet.

  • Myth: The Earth will be a highly livable place—stable, sufficient in resources, and safe—as long as we don’t impact it too much.

    Truth: Earth is very inhospitable—dynamic, deficient, dangerous—unless we have the productive ability to transform and impact it to be abundant and safe.

  • The more energy is cost-effective—affordable, reliable, versatile—and scalable to billions of people in thousands of places, the more people can use machines to produce the values they need to flourish on this naturally deficient and dangerous planet.
  • Thanks to today’s unprecedented availability of cost-effective energy (mostly fossil fuel) the world has never been a better place for human life. Life expectancy and income have been skyrocketing, with extreme poverty (<$2/day) plummeting from 42% in 1980 to <10% today.6 Poverty headcount

Energy Truth 4

Given that the vast majority of the world is energy-poor, the world needs far more energy as quickly as possible.

  • The world needs much more energy.

    Billions of people lack the cost-effective energy they need to flourish. 3 billion use less electricity than a typical American refrigerator. 1/3 of the world uses wood or dung for heating and cooking. Much more energy is needed.7 primitive biofuel use

  • Myth: Poor countries will “leapfrog” fossil fuels and go right to solar and wind.

    Truth: No rich country has been able to abandon fossil fuels even at huge cost, while every dramatic increase in wealth has involved fossil fuels: Japan, Singapore, South Korea, China, etc.

    Poor countries are not guinea pigs.

  • The desperate lack of life-giving, cost-effective energy means that any replacement for fossil fuels must not only provide energy to the 2 billion who use significant amounts of energy today but to the 6 billion who use far less. Rapidly eliminating fossil fuels would be mass murder.
  • Summary: Fossil fuels are a near-term irreplaceable source of the scalable energy humans need to flourish.

    With fossil fuels billions more people can have the opportunity to flourish. Without them, billions of energy-starved people plunge into poverty and early death.

Energy Truth 5

Any negative climate side-effects of our massive fossil fuel use so far have been completely overwhelmed by their climate mastery benefits—as evidenced by the 98% decline in climate disaster deaths over the last 100 years.

  • Myth: We are more endangered than ever by climate because of fossil fuels’ CO2 emissions.

    Truth: We have a 98% decline in climate disaster deaths due to our enormous fossil-fueled climate mastery abilities: heating and cooling, infrastructure-building, irrigation, crop transport.8 climate disaster deaths

  • Myth: Even if climate-related disaster deaths are down, climate-related damages are way up, pointing to a bankrupting climate future.

    Truth: Even though there are many incentives for climate damages to go up—preferences for riskier areas, government bailouts—GDP-adjusted damages are flat.9 weather losses

Energy Truth 6

Mainstream climate science predicts levels of warming and associated climate changes that human beings can continue to master and flourish with.

  • Myth: Even if we’re safe from climate now, we can expect future emissions to lead to disaster.

    Truth: Since today’s unprecedented safety exists after 100+ years of rising CO2, and with 1° C warming, we should be skeptical that further CO2 rises will somehow overwhelm us.

  • Climate mastery is so powerful that for CO2 emissions to be apocalyptic enough to justify rapid fossil fuel restriction, let alone elimination, they’d need to have unprecedented impacts like:
    • Seas rising feet per decade
    • Storms becoming 2 times more powerful

    Science shows nothing like this.

  • Myth: Future warming is ominous because heat-related death is already such a catastrophic problem.

    Truth: Even though Earth has gotten 1°C warmer, far more people still die from cold than heat (even in India)! Near-term warming is expected to decrease temperature-related mortality.10 fewer cold deaths

  • Myth: Future warming is ominous because it will be worst in hot areas.

    Truth: The mainstream view in climate science is that more warming will be concentrated in colder places (Northern latitudes) and at colder times (nighttime) and during colder seasons (winter). Good news.11 warming pattern

  • Myth: Future warming will accelerate as CO2 levels rise.

    Truth: Mainstream science is unanimous that the “greenhouse effect” is a diminishing effect, with additional CO2 leading to less warning.

    Even IPCC’s most extreme, far-fetched scenarios show warming leveling off.12

  • Myth: We face catastrophically rapid sea level rises, which will destroy and submerge coastal cities.

    Truth: Extreme UN sea level rise projections are just 3 feet in 100 years. Future generations can master that. (We already have 100 million people living below high tide sea level.)13 sea level projections

  • Myth: Hurricane intensity is expected to get catastrophically higher as temperatures rise.

    Truth: Mainstream estimates say hurricanes will be less frequent and between 1-10% more intense at 2° C warming. This is not at all catastrophic if we continue our fossil-fueled climate mastery.14 hurricane projections

  • Myth: We face catastrophic increases in dangerous wildfires, an “Earth on fire.”

    While the media increasingly reports on fires and draws connections to warming, the world burns less than 20 years ago and far less than 100 years ago. Fire danger primarily depends on human mastery.15

  • Summary: Continuing fossil fuel use will lead to levels of warming and other changes that we can master and flourish with.

    Policy implications

    • Energy freedom —> CO2 levels rise, life continues to get better and better
    • Net zero —> CO2 levels rise more slowly, billions of lives ruined

Energy Truth 7

A policy of energy freedom, including but not limited to fossil fuel freedom, is the fastest path both to more plentiful energy and to more cost-effective alternatives.

  • What are “energy freedom policies”?

    Government actions to protect the ability of producers to produce all forms of energy and consumers to use all forms of energy, so long as they don’t engage in reasonably preventable pollution or endangerment of others.

  • Energy freedom policies include:
    • Protecting the freedom to develop fossil fuels and other forms of energy. E.g., deep geothermal development.
    • Protecting the freedom to use fossil fuels and all other forms of energy. E.g., “decriminalizing nuclear.”
  • Energy freedom policies are more likely to lead to long-term emissions reductions.

    Because they accelerate the rate at which nuclear and other alternatives become globally cost-competitive. (The only moral and practical way to reduce global emissions.)16 China and India increasing emissions

  • Fact: The 2 biggest instances of CO2 reduction have come from energy freedom policies:
    • Nuclear: Freedom led to cost-effective and scalable nuclear power until the “green” movement virtually criminalized it.
    • Gas: Freedom led to significant substitution of gas vs. coal.
  • “Net zero by 2050,” by failing to recognize the unique benefits of fossil fuels, is catastrophic when barely implemented and would be apocalyptic if fully implemented.

    Energy freedom gives billions more people the energy they need to flourish and unleashes truly cost-effective alternatives.

References


  1. UC San Diego – The Keeling Curve

    For every million people on earth, annual deaths from climate-related causes (extreme temperature, drought, flood, storms, wildfires) declined 98%–from an average of 247 per year during the 1920s to 2.5 per year during the 2010s.

    Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).

    Population estimates for the 1920s from the Maddison Database 2010, the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, the population is assumed to have grown at a steady rate.

    Population estimates for the 2010s come from World Bank Data.

  2. Energy Institute – Statistical Review of World Energy

  3. As of July 2023, China has over 300 new coal-fired power stations in various planning and construction phases. Global Energy Monitor – Coal Plant Tracker, Coal Plants by Country (Power Stations)

  4. Alex Epstein – The ultimate debunking of “solar and wind are cheaper than fossil fuels.”

  5. U.S. Energy Information Administration – Hourly Electric Grid Monitor

  6. World Bank Data – Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population)

  7. IEA – Access to affordable, reliable, sustainable and modern energy for all

    Robert Bryce – A Question of Power: Electricity and the Wealth of Nations

  8. UC San Diego – The Keeling Curve

    For every million people on earth, annual deaths from climate-related causes (extreme temperature, drought, flood, storms, wildfires) declined 98%–from an average of 247 per year during the 1920s to 2.5 per year during the 2010s.

    Data on disaster deaths come from EM-DAT, CRED / UCLouvain, Brussels, Belgium – www.emdat.be (D. Guha-Sapir).

    Population estimates for the 1920s from the Maddison Database 2010, the Groningen Growth and Development Centre, Faculty of Economics and Business at University of Groningen. For years not shown, the population is assumed to have grown at a steady rate.

    Population estimates for the 2010s come from World Bank Data.

  9. Roger Pielke Jr. – Weather and Climate Disaster Losses So Far in 2022, Still Not Getting Worse

  10. Zhao et al. (2021)

    Bjorn Lomborg – Climate Change Saves More Lives Than You’d Think

  11. NOAA – Climate change rule of thumb: cold “things” warming faster than warm things

  12. IPCC AR6, WG1, chapter 4

  13. IPCC AR6, WG1

  14. NOAA – Global Warming and Hurricanes

  15. Roger Pielke Jr. – What the media won’t tell you about … Wildfires

  16. Reuters – Analysis: China no closer to peak coal despite record renewable capacity additions

    Reuters – India rejects net zero carbon emissions target, says pathway more important

    Alex Epstein – A pro-human, pro-freedom policy for CO2 emissions

Business

Trump’s ‘Liberation Day’ – Good News for Canadian Energy and Great News for WCSB Natural Gas

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By Maureen McCall

April 2 was ‘Liberation Day’ according to U.S. President Donald Trump.  While the announcement of U.S. reciprocal tariffs was not good news for many countries, Trump’s announcement also had some good news for Canadian Energy companies – 0% tariffs.  Some tariffs against Canada are still in place, but for now, no energy sector tariffs against Canada underscores the importance of Canadian energy to the Trump administration.

President Trump announced new tariffs on April 2nd, which he dubbed “Liberation Day” with a 10% baseline tariff for all U.S. trading partners, to go into effect on April 5th. He also announced more reciprocal tariffs against the “worst offenders,” which will go into effect on April 9th but no tariffs on Canadian energy were announced.

Trump’s Reciprocal Tariffs Announcement

Alberta Premier Danielle Smith celebrated the win which she says is precisely what she has been advocating for from the U.S. Administration for months.

“The United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian Federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. Administration. It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including 0% tariffs on energy, minerals, agricultural products, uranium, seafood, potash and a host of other Canadian goods.”

This is great news for Canadian energy producers, especially natural gas producers who are experiencing dramatic growth in the Montney.

At this year’s S&P Global CERAWeek, Mike Verney, Executive Vice-President of petroleum reserves with McDaniel & Associates Consultants Ltd. had great news for Canadian companies.

McDaniel’s study, commissioned by the Alberta Energy Regulator (AER), reported data indicating that Alberta has proven natural gas reserves of 130 trillion cubic feet (TCF), compared to previous provincial estimates of only 24 TCF. According to the study, if probable gas reserves are added in, the overall figure is 144 TCF.

As reported in the Financial Post, Verney said “We’re growing like mad in the Montney. The major natural gas plays in the U.S. are actually declining versus the Montney that is actually growing.”

This message was echoed by Michael Rose, the Chairman, President and Chief Executive Officer of Tourmaline Oil,  Canada’s largest natural gas producer during his keynote address at the SPE Canadian Energy Technology Conference and Exhibition last month in Calgary.

Not a Sunset Industry

Michael Rose – Chairman, President and Chief Executive Officer of Tourmaline Oil

Rose opened his keynote speech with optimism saying: “This is not a sunset industry- it is closer to sunrise than sunset” and spoke about Canada’s compelling opportunity for natural gas production as well as Tourmaline’s successes.

Reuters reports that analysts are wondering about the U.S.’s ability to meet the demand growth of booming liquefied natural gas (LNG) projects and also to meet huge domestic demand for natural gas-fired electricity generation to supply new data centre growth. Canada’s resources in Alberta’s Deep Basin and the North East BC Montney will be a huge supply source.

Deep Basin and the Montney are where the most competitive gas plays are found, and where Tourmaline operates as well as producing oil in the Peace River Triassic Lake.

Rose credits technology development and the building and ownership of midstream infrastructures as keys to affordability and profitability for Canadian companies which can control costs by controlling more of the production cycle. In addition, AI optimization has helped the company increase production. He also pointed out the environmental advantage of natural gas production. Since society needs the energy density of hydrocarbons to power industries, natural gas is the best choice as it is “the cleanest member of the fossil fuel stack.” He quoted Arjun Murti– 30 year Wall Street research analyst, buy-side investor, and advisor covering the global energy sector now with Veriten.com who asserts that there is no real energy transition and the only thing humans have actually transitioned off in the energy world is whale oil.

Rose said that 2022 statistics indicated the world set a record for all sources of energy. He pointed out that coal was supposed to replace wood 200 years ago, and it still hasn’t while wood, which has been renamed as biomass is still 7% of the overall energy stack.

The Golden Age of Gas

Rose’s natural gas outlook to 2028 in Canada was rosy saying gas “never looked better.” Beyond 2028 also looks good with a proliferation of electricity generation planned to feed data centre growth. In Alberta alone, 15 projects are in queue which will create a material increase in demand. In the U.S. however, some large U.S. natural gas supply basins have reached a tipping point with only 50% estimated ultimate recovery (EUR) left. Rose reported that drilling inventory is an issue in the U.S. but not in Canada. For example, Tourmaline has over 20 years of Tier 1 drilling inventory left while its U.S. peers don’t have the same luxury. He noted that U.S. M&A is currently driven by a quest for inventory. He noted that U.S. companies will chase profitable acquisitions in a quest for inventory to lower future costs saying “Things are still cheap in Canada.”

Canadian Resources – Will we ever be an energy superpower?

With global exploration down sharply, focus has turned to the WCSB where in the case of the Montney, only 5% has been produced so far.

“All you hear about is the western Canadian sedimentary basin and it is a monster, and it is the gift that keeps on giving, but we’re actually blessed with multiple other opportunities. Like the U.S., a number of them are off limits for government policy reasons, but certainly changes are in order.”

Some of the undeveloped basins in Canada which Rose referred to as “forbidden basins” are located on the West Coast and in the lowlands in Quebec. The tariff issue may be changing attitudes towards oil and gas development in those areas. Dealing with an unsupportive Federal Government for the last decade has made capital attraction difficult. Routine talk about phasing out Oil and Gas and the series of regulations, bills and initiatives that have stalled basin development and new pipelines have taken its toll. It has discouraged capital from flowing into the sector – a period that Rose said “ felt like an endless hurricane.”

So what is the right path forward?

The challenge for industry and policymakers is finding the right balance between energy and the environment according to Rose. He advises that setting unrealistic goals and timelines that are not based in science/technology or economics won’t work, and notes a shift away from the time frame set by net zero.

“We look at the whole environment, air, land and water, and we develop plans to improve performance in all three. We have a group of young engineers working on what amounts to an embedded clean tech business within our company, and I think they’re having a lot of fun doing it.”

One of Tourmaline’s longest initiatives, is the conversion of drilling rigs from diesel to natural gas, using field gas for fuel. The result is that projects have an improved economic return as well as reduced emissions. Rose says this year, Tourmaline will cross a “200 million barrier” and will have displaced 200 million litres of diesel and save $200 million including the makeup gas used. He says they like to think of it as a drill bit to burn initiative.

Mike Rose still had an optimistic view of the path forward for energy companies that is certainly more relevant after yesterday’s “Liberation Day” announcement from Trump.

“We’ve missed 10 years of opportunities,” Rose said. “It would have made us so much stronger than we are today as an industry and a country. Still, late is better than never. The only thing I’ll say about tariffs is that they are just another curve ball. We’ve had nothing but curve balls for 10 years, and we’ll figure out how to hit this one too. Given how integrated both countries’ energy systems are and will continue to be, I think a great narrative that just might appeal is: ‘Let’s make North America the world’s preeminent energy and oil and gas superpower’.”


Maureen McCall is an energy professional who writes on issues affecting the energy industry.

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Canadian Energy Centre

Saskatchewan Indigenous leaders urging need for access to natural gas

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Piapot First Nation near Regina, Saskatchewan. Photo courtesy Piapot First Nation/Facebook

From the Canadian Energy Centre

By Cody Ciona and Deborah Jaremko

“Come to my nation and see how my people are living, and the struggles that they have day to day out here because of the high cost of energy, of electric heat and propane.”

Indigenous communities across Canada need access to natural gas to reduce energy poverty, says a new report by Energy for a Secure Future (ESF).

It’s a serious issue that needs to be addressed, say Indigenous community and business leaders in Saskatchewan.

“We’re here today to implore upon the federal government that we need the installation of natural gas and access to natural gas so that we can have safe and reliable service,” said Guy Lonechild, CEO of the Regina-based First Nations Power Authority, on a March 11 ESF webinar.

Last year, 20 Saskatchewan communities moved a resolution at the Assembly of First Nations’ annual general assembly calling on the federal government to “immediately enhance” First Nations financial supports for “more desirable energy security measures such as natural gas for home heating.”

“We’ve been calling it heat poverty because that’s what it really is…our families are finding that they have to either choose between buying groceries or heating their home,” Chief Christine Longjohn of Sturgeon Lake First Nation said in the ESF report.

“We should be able to live comfortably within our homes. We want to be just like every other homeowner that has that choice to be able to use natural gas.”

At least 333 First Nations communities across Canada are not connected to natural gas utilities, according to the Canada Energy Regulator (CER).

ESF says that while there are many federal programs that help cover the upfront costs of accessing electricity, primarily from renewable sources, there are no comparable ones to support natural gas access.

“Most Canadian and Indigenous communities support actions to address climate change. However, the policy priority of reducing fossil fuel use has had unintended consequences,” the ESF report said.

“Recent funding support has been directed not at improving reliability or affordability of the energy, but rather at sustainability.”

Natural gas costs less than half — or even a quarter — of electricity prices in Alberta, British Columbia, Ontario, Manitoba and Saskatchewan, according to CER data.

“Natural gas is something NRCan [Natural Resources Canada] will not fund. It’s not considered a renewable for them,” said Chief Mark Fox of the Piapot First Nation, located about 50 kilometres northeast of Regina.

“Come to my nation and see how my people are living, and the struggles that they have day to day out here because of the high cost of energy, of electric heat and propane.”

According to ESF, some Indigenous communities compare the challenge of natural gas access to the multiyear effort to raise awareness and, ultimately funding, to address poor water quality and access on reserve.

“Natural gas is the new water,” Lonechild said.

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