What if Green Energy Isn’t the Future?

What if Green Energy Isn’t the Future?

There’s a reason Warren Buffett decided to bet $10 billion on the future of oil and natural gas.

"In the U.S., utilities, furiously but without fanfare, have been adding billions of dollars of massive oil- and natural-gas-burning diesel engines to the grid."
https://si.wsj.net/public/resources/images/ED-AY628_Mills_G_2019051... 540w
A gas-filtration system atop a well managed by Anadarko in Pennsylvania, Sept. 8, 2012. PHOTO: ROBERT NICKELSBERG/GETTY IMAGES

What’s Warren Buffett doing with a $10 billion bet on the future of oil and gas, helping old-school Occidental Petroleum buy Anadarko, a U.S. shale leader? For pundits promoting the all-green future, this looks like betting on horse farms circa 1919.

Meanwhile, broad market sentiment is decidedly bearish on hydrocarbons. The oil and gas share of the S&P 500 is at a 40-year low, and the first quarter of 2019 saw the Nasdaq Clean Edge Green Energy Index and “clean tech” exchange-traded funds outperform the S&P.

A week doesn’t pass without a mayor, governor or policy maker joining the headlong rush to pledge or demand a green energy future. Some 100 U.S. cities have made such promises. Hydrocarbons may be the source of 80% of America’s and the world’s energy, but to say they are currently out of favor is a dramatic understatement.

Yet it’s both reasonable and, for contrarian investors, potentially lucrative to ask: What happens if renewables fail to deliver?

The prevailing wisdom has wind and solar, paired with batteries, adding 250% more energy to the world over the next two decades than American shale has added over the past 15 years. Is that realistic? The shale revolution has been the single biggest addition to the world energy supply in the past century. And even bullish green scenarios still see global demand for oil and gas rising, if more slowly.

If the favored alternatives fall short of delivering what growing economies need, will markets tolerate energy starvation? Not likely. Nations everywhere will necessarily turn to hydrocarbons. And just how big could the call on oil and natural gas—and coal, for that matter—become if, say, only half as much green-tech energy gets produced as is now forecast? Keep in mind that a 50% “haircut” would still mean unprecedented growth in green-tech.

If the three hydrocarbons were each to supply one-third of such a posited green shortfall, global petroleum output would have to increase by an amount equal to doubling the production of the Permian shale field (Anadarko’s home). And the world supply of liquid natural gas would need to increase by an amount equal to twice Qatar’s current exports, plus coal would have to almost double what the top global exporter, Australia, now ships.

Green forecasters are likely out over their skis. All the predictions assume that emerging economies—the least wealthy nations—will account for more nearly three-fourths of total new spending on renewables. That won’t happen unless the promised radical cost reductions occur.

For a bellwether reality-check, note that none of the wealthy nations that are parties to the Paris Accord—or any of the poor ones, for that matter—have come close to meeting the green pledges called for. In fact, let’s quote the International Energy Agency on what has actually happened: “Energy demand worldwide [in 2018] grew by . . . its fastest pace this decade . . . driven by a robust global economy . . . with fossil fuels meeting nearly 70% of the growth for the second year running.”

The reason? Using wind, solar and batteries as the primary sources of a nation’s energy supply remains far too expensive. You don’t need science or economics to know that. Simply propose taking away subsidies or mandates, and you’ll unleash the full fury of the green lobby.

Meanwhile, there are already signs that the green vision is losing luster. Sweden’s big shift to wind power has not only created alarm over inadequate electricity supplies; it’s depressing economic growth and may imperil that nation’s bid for the 2026 Winter Olympics. China, although adept at green virtue-signaling, has quietly restarted massive domestic coal-power construction and is building hundreds of coal plants for emerging economies around the world.

In the U.S., utilities, furiously but without fanfare, have been adding billions of dollars of massive oil- and natural-gas-burning diesel engines to the grid. Over the past two decades, three times as much grid-class reciprocating engine capacity has been added to the U.S. grid as in the entire half-century before. It’s the only practical way to produce grid-scale electricity fast enough when the wind dies off. Sweden will doubtless be forced to do the same.

A common response to all of the above: Make more electric cars. But mere arithmetic reveals that even the optimists’ 100-fold growth in electric vehicles wouldn’t displace more than 5% of global oil demand in two decades. Tepid growth in gasoline demand would be more than offset by growing economies’ appetites for air travel and manufactured goods. Goodness knows what would happen if Trump-like economic growth were to take hold in the rest of the developed world. As Mr. Buffett knows, the IEA foresees the U.S. supplying nearly three-fourths of the world’s net new demand for oil and gas.

Green advocates can hope to persuade governments—and thus taxpayers—to deploy a huge tax on hydrocarbons to ensure more green construction. But there’s no chance that wealthy nations will agree to subsidize expensive green tech for the rest of the world. And we know where the Oracle of Omaha has placed a bet.

Mr. Mills is a senior fellow at the Manhattan Institute and a partner in Cottonwood Venture Partners, an energy-tech venture fund, and author of the recent report, “The ‘New Energy Economy’: An Exercise in Magical Thinking.”

Views: 67

Comment

You need to be a member of Citizens' Task Force on Wind Power - Maine to add comments!

Join Citizens' Task Force on Wind Power - Maine

Comment by Paul Ackerman on May 23, 2019 at 9:16am

Oh but the geniuses on the Rockland City Council have announced they are saving the world by instituting a "green plan to combat climate change" for the entire city to be powered 100% by "renewable energy by 2040" --no matter what it means to the residents and businesses. Absolute idiocy.

It is as if Ocasio-Cortez's stupidity has infected the minds of all these moonbats and they are certain THEY have the path to perfection by telling the city (and anyone who goes there for work/businesses/pleasure) that you will have to pay for this insanity,one way or another.

Given that Dragon Cement is in Thomaston right next door,and FMC/Dupont is in Rockland --the two largest taxpayers in the area,and great employers,I wonder how long it will be before they get forced out by the crazies ?  But these morons on the city council don't care-- it is more about making Maine a theme park than being able to live/work here as people have for centuries.

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

Not yet a member?

Sign up today and lend your voice and presence to the steadily rising tide that will soon sweep the scourge of useless and wretched turbines from our beloved Maine countryside. For many of us, our little pieces of paradise have been hard won. Did the carpetbaggers think they could simply steal them from us?

We have the facts on our side. We have the truth on our side. All we need now is YOU.

“First they ignore you, then they laugh at you, then they fight you, then you win.”

 -- Mahatma Gandhi

"It's not whether you get knocked down: it's whether you get up."
Vince Lombardi 

Task Force membership is free. Please sign up today!

© 2019   Created by Webmaster.   Powered by

Badges  |  Report an Issue  |  Terms of Service