Even now, they won't listen
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First, a warmup:
And here’s how I originally started this post:
THE REAL GLOBAL WARMING CRISIS: Congressional subcommittee hearings are typically pretty hum-drum affairs, stage-managed by the majority staff to present a favored narrative on a given issue.
But this morning’s hearing before the House Energy and Commerce Committee’s energy subcommittee is likely to be hugely different. The witnesses are stacked three-to-one in favor of Electric Vehicles (EVs) specifically and climate change/global warming Greenie policies more generally.
The one witness who is not an advocate of the conventional wisdom of the Greenies is Institute for Energy Research (IER) President Tom Pyle. His prepared testimony, which you can read here, is as concise and factual a description of how and why gas prices are skyrocketing and almost certainly will continue to do so for the foreseeable future.
And that means the day will inevitably come when the real global warming crisis is every family having to choose between driving or staying warm/cool at home.
Pyle’s prepared testimony is 10 pages, far too long to do it justice on a blog site, but it’s an excellent, point-by-point refutation of the EV crowd’s “arguments” — political rants untethered from facts, actually — including the cost of such cars, the regulatory and legal hurdles to be overcome before our energy supply infrastructure can be built to accommodate the 35% — minimum — increase required to power a national fleet of electric cars (and that’s ignoring the increasingly strident calls for electric houses and factories), complete dependence on China for the minerals and rare earths required to accomplish the switchover, and so on. I’ve been yelling about all this for a couple of decades now; not that my voice or opinion matters, but over those years I’ve linked to serious articles by serious scientists and other experts; it’s not as though people don’t know what’s coming.
Pyle brings those arguments all together in one single document, and it’s worth reading, if only so that you can say “i told you so” when you’re huddled under a blanket staring at a cold, dead car in your driveway.
… Studies indicate that to meet anything like net zero by 2050, we will need a high voltage transmission system anywhere from 35% to 100% larger than we have now. A rapid build like that – keep in mind being done at the same time as replacing our current system, about 70% of which is in the last half of its useful life – relies on a couple of assumptions.
First, it assumes that the administrative and permitting processes that have slowed, stopped, or otherwise precluded linear energy projects for decades are suddenly going to change just because one political side now favors such projects.
That seems unlikely. It is more likely that the pathologies our governments have created over the last 50 years with respect to permitting infrastructure will be durable for at least another few years.
… As I am sure you know, the Department of Defense recently released a report titled, “Securing Defense-Critical Supply Chains.”11 The report states:
China dominates the global advanced battery supply chain, including lithium hydroxide (94 percent), cells (76 percent), electrolyte (76 percent), lithium carbonate (70 percent), anodes (65 percent), and cathodes (53 percent). Even materials and components manufactured domestically often have reliance on China-produced precursors or are fragile suppliers and single point failures within the supply chain. As electrification is expected to accelerate dramatically by 2030, reliance on China will grow and China’s relative cell dominance is projected to remain stable.
It’s not just the mining or production of the minerals. China dominates critical mineral processing, leading the world in copper, lithium, nickel, cobalt, and rare earth processing. Currently, the best batteries and electric motors for electric vehicles use all of these minerals.
Last year, the International Energy Agency produced a report on critical minerals. The IEA reported that “current production of many energy transition minerals is more geographically concentrated than that of oil or natural gas.”12
The United States could, of course, mine and process many of those materials. But mines typically take a decade or more to permit, and the current Administration – having recently rejected the Twin Metals mine13 in Minnesota and been sturdy opponents of other mines, including Pebble, Rosemont, and others – is unlikely to rush to approve any new mines at all, and certainly not anywhere near the number that we would need to reduce our dependence on communist China.
The effect of propaganda on investment
We have been told for over forty years that renewables were on the cusp of providing a large percentage or our energy. The facts suggest something different.
In 1981, coal produced 22 percent of the energy we consumed, natural gas produced 27 percent, petroleum produced 43, hydropower produced 4 percent, and nuclear produced 4 percent.23 In 2021, after decades of subsidies and mandates to boost their use, renewables produced 12.4 percent of the energy America consumed24—an increase of just 8 percent in forty years.
A significant part of our current problem is the endless repetition of the propaganda about the utility of alternative sources of energy, the possibility of net zero greenhouse gas emissions, and the inevitability of an “energy transition”. These foundational myths have led directly to higher energy prices for Americans.
Those involved in finding and producing the fuels that power the world – coal, oil, and natural gas – are concerned that our government might be serious about creating an electricity system entirely dependent on solar or wind power or outlawing gasoline or diesel-powered cars or trucks. How can anyone blame them when that is all they hear?
Consequently, these businesses have underinvested in oil and natural gas over the last several years. In 2014, the world spent about $490 billion finding and producing oil and natural gas. In 2021, that number was just $220 billion.
Just to be sure that everyone knows what they think about affordable and reliable energy, this Administration has sought to institutionalize the thematics of the ESG movement and made sure that its appointees to the Securities and Exchange Commission, Treasury, and other financial regulators are committed advocates of the notion that climate change might pose some special kind of business or financial risk.
As intended by its advocates, this creation of ideological tests for investing has spooked investors, complicating the ability of energy projects to access capital.
It has not helped that financial companies like BlackRock, which will make money off whatever the federal government does to increase the price of energy and which has already said it will not invest in oil and natural gas projects because of government policies, have installed their allies on the boards of energy companies (like Exxon).25 That has also made energy companies less likely to invest in oil and natural gas energetically and without hesitation.
The fundamental thesis that the world will soon transition away from coal, oil, and natural gas is wrong. Traditional fuels are and will be essential to our way of life and standard of living for decades to come.
Government needs to avoid creating an environment in which people and companies hesitate to invest in finding and producing affordable and reliable energy.
Conclusion
The cancellation of the Keystone pipeline, the de facto lease suspension, the weaponization of financial regulators, the proposed taxes on energy and the tax credits given to unreliable energy sources, and even this very hearing are all part of the same effort. They all purposefully seek to create an environment in which it is difficult to invest in oil and natural gas.
Wide swaths of the elected government and administrative state have decided that investments in oil and gas must be minimized and eventually eradicated. There must be steady downward pressure on oil and gas investments. Even as recently as two weeks ago – at the height of the Administration scrounging around for liquified natural gas they could send to the EU – the Federal Energy Regulatory Commission issued two policy statements making it clear that the hurdles to permit LNG terminals and their feeder pipelines would be getting higher, not lower.
