The COP26 climate conference has ended in Glasgow, and most of the western countries’ political leaders have returned home after paying due homage to the thesis that we must all stop using oil, gas and coal to avoid a climate “catastrophe”. The world’s bankers continued on longer seeking commitments to withdraw critically-needed financing from those who seek to develop more hydrocarbon supplies. People who are well-informed about global energy supply, demand and emissions trends are left scratching their heads in puzzlement as to how the western elites could possibly fail to understand how much at odds their policy announcements are from reality.
Let’s start with the basics of energy consumption, the proximate cause of emissions (70% of the greenhouse gas emissions from oil and natural gas occur at the final combustion stage). After declining in 2020 and early 2021 due to government-imposed anti-COVID measures, global crude oil demand is back up to 100 million barrels per day. This year has witnessed the largest annual growth in oil demand in history, and assuming available supplies, growth will continue in 2022. Natural gas demand similarly is surging in Asia and Europe, amidst concerns that there will not be enough supplies to meet heating and power generation requirements this winter. Coal markets are booming, with China offering to buy as much supply as possible at whatever price necessary though still boycotting coal from Australia for political reasons.
These trends might be excused as short-term reactions to the world’s emergence from the pandemic, but that would ignore the economic trends that are driving demand growth. Sixty per cent of global oil demand arises from the need to fuel 1.45 billion road vehicles, 29,000 aircraft and 54,000 ships. The rest is needed to produce petrochemicals, plastics, cement, lubricants, rubber, agricultural fertilizers, makeup, medicine and 6000 products in 2,000 categories . Natural gas and coal are essential for heating and air conditioning and for the generation of electricity needed for a large and growing list of appliances and conveniences essential to higher standards of living. The world’s population at about 7.7 billion will exceed 8 billion by 2050. Most growth is in Africa and Asia. People in those continents seek higher incomes and more secure energy supplies, and that means more hydrocarbons.
How do the Asians feel about increasing emissions growth? The statistical trends over the period 2010 to 2019, as reported by the BP Statistical Review of World Energy 2021, tell an interesting tale. Over that period, global GHG emissions grew by 14%. Emissions in the Organization for Economic Cooperation and Development (OECD) countries declined by 4%, while those in the non-OECD countries rose by 25%. By 2019, the non-OECD countries accounted for two-thirds of the world’s GHG emissions. China is the world’s largest emitter, no wonder it burns 4.5 billion tonnes of coal, more than half of the world use of 8.5 billion tonnes. China is also the source of the fastest growing emissions as measured in absolute terms (a growth of almost 1.7 billion tonnes per year over the decade. Other Asian countries’ emissions grew even faster in percentage terms – Vietnam 109%; Philippines, 65%; India, 45%; Indonesia 45%; and Malaysia 31%. India’s emissions could exceed those of the United States by 2035. By comparison, the United States led the world in GHG emissions reduction from 2010 to 2019 (i.e. a decline of 466 million tonnes per year), while the European countries as a group reduced emissions by 587 million tonnes per year.
Virtually all major authorities on global energy trends project emissions to grow at least till 2050. As an illustration, if the OECD countries doubled the rate of emissions decline and the non-OECD countries halved their rate of emissions growth, then by 2029 global emissions from fuel consumption would be 36.2 billion tonnes, 5% higher than they were in 2019. All efforts to reduce emissions in a world of poor folks struggling to enhance their standard of living through the use of affordable energy is a very sad joke enjoyed by the Marxist bureaucrats in Glasgow last week. They want to build useless windmills and solar collectors to enrich their Chinese colleagues even though they were no-shows in Glasgow. It all highlights the complete fantasy of 25,000 bureaucrats living well for a week attempting to extort money from the developed world while turning off the very energy that has made that world the envy of them all.
Climate campaigners and the media that support them make extraordinary claims about the pace at which global energy systems can be “transitioned” by government decree, subsidy and taxation to be all-electric, while simultaneously converting energy generation to wind and solar energy, all at acceptable costs and while maintaining adequate standards of reliability and affordability. This is all a pipe dream. These Marxist leaders know full well their plans can only lead to more power for them to ration energy.
It takes very little research to determine how absurd these goals are. To take one example, electric cars are being anointed as the successor to internal combustion vehicles by 2035. Yet, in 2020, electric car sales globally were about 5 million units. Even at an unprecedented rate of growth, it would take many decades to replace the world’s current stock of 1.4 billion vehicles. The US Energy Information Administration recently projected that the US internal combustion car fleet will not peak until 2038. And someone must have forgotten to tell President Biden there is not now nor will ever be enough electric energy produced in the United States to power these vehicles. The most optimistic projection for electric vehicles in America is 10% of the total cars on the road, and we would not bet on that.
What happens when the allegedly irresistible aspirations of climate policy makers and financiers meet the immovable object of the public’s demand for more secure and affordable energy services? In the developing countries, that question has already been answered – governments will bow to the desires of their citizens. In the “free” western countries, is any other outcome imaginable?
We are living in an Alice in Wonderland world. We hope our readers will gain more amusement from it than fear from the ridiculous stories they are fed by the mainstream press every day.