You knock some forms of energy out of the market and the price of the energy that’s left goes up. How about that? From Chris MacIntosh at internationalman.com:
As of 2019, almost 6% of Europe’s electricity was generated by burning wood chips (trees), which is almost twice the amount of electricity generated by solar.
Roughly 30% of the wood-chips came from Russia.
Sanctions have put a halt to this and additional supply cannot be made up by the US and Canada (the other two big wood-chip suppliers to Europe). You probably know where we are heading here… About 2% of Europe’s base load electricity production is gone, putting additional demand on electricity generated by gas, coal and nuclear.
Burning wood is quite literally retarded, but these muppets have decided in their wisdom that wood chips are actually “green”. In any event, they’ve now lost 30% of this wonderful “green, renewable” energy source.
Gas can’t be increased (for obvious reasons) and neither can nuclear (those nuke plants that haven’t been shuttered are operating at full capacity). So that leaves coal, which needs to come from South Africa, the US, Indonesia, or Australia — not that there was much spare capacity from these producers even before the sanctions went on… and that was with Russian thermal coal exports. Oh, what a pickle!
When looking at the components of European energy, it is literally impossible to come away without a view that their energy crisis has no realistic viable solutions on the horizon.
The stupidity compounds. From Doug French at mises.org:
While Americans angrily grit their teeth while filling their gas tanks, the very first United States special presidential envoy for climate said:
This year, we have to implement those promises and what it means is that we have to decarbonize the power sector five times faster than we are right now. We have to deploy renewables five times faster than we are right now. We have to transition to electric vehicles about 20 times faster than we are right now. And we have to fully transition to a resilient Net Zero economy faster.
If reality was beyond his reach before, John Kerry surely lost touch when he married into the Heinz condiment colossus in 1995. He talks as if he were ordering lunch from his harried house staff, “Faster, Jeeves. Can’t you hurry up and decarbonize already?” All of this service to the country has left Kerry clueless as to physics, not to mention economics.
“And to say it is to expose a level of ignorance that is scary,” the green cartoon chicken known as Doomberg told Tony Greer on Real Vision:
Actually, that our politicians would think despite all the evidence before them, that somehow, we can wave a magic wand and accelerate the adoption of electric vehicles by a factor of 20 when we don’t have enough lithium, nickel or cobalt to even support the current growth trajectory. It’s just crazy. Where’s the diesel going to come from to mine all the cobalt and nickel and lithium that we’re going to need?
The only way you can make renewable energy competitive with fossil fuels is to artificially elevate the price of the latter. From Joshua Phlipp and Frank Fang at The Epoch Times via zerohedge.com:
As Americans bear the brunt of a sagging economy, the Biden administration appears to be framing this as a good thing, believing that citizens will be better off in the future if current supply shortages and high gas prices spiral out of control.
The United States, according to President Joe Biden, is in the midst of an “incredible transition”—one that will pave the way for a green economy.
While the administration may tout the benefits of a sustainable future, the question remains as to what will happen to average Americans while this “transition” takes place.
More importantly, what’s the endgame of all this that Americans don’t know about?
Biden, during a May 23 joint press conference in Japan with the country’s Prime Minister Kishida Fumio, used the word “transition” to seemingly admit that soaring gasoline prices are just part of his administration’s overall plan for moving from hydrocarbons to renewables.
“When it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger and the world will be stronger and less reliant on fossil fuels when this is over,” Biden said.
The comment seems to suggest that ensuring the country’s gas supply is not high on Biden’s agenda, though the administration did announce to release of 1 million barrels of crude oil a day for six months between May and August.
Recent outlooks published by the International Energy Agency (IEA) and Energy Information Administration (EIA) paint a clear picture that global energy needs are going to rise significantly in the decades to come, reflecting population growth, more nations progressing out of poverty, and the expansion of transportation and technology systems worldwide. Products derived from crude oil will continue to satisfy a significant share of this growing demand.
Renewables and present battery technology are just not going to get Europe anywhere close to energy self-sufficient . . . and freedom from Russian energy. From Daniel Lacalle at mises.org:
Europe is not going to achieve a competitive energy transition with the current interventionist policies.Europe does not depend on Russian gas due to a coincidence, but because of a chain of mistaken policies: banning nuclear in Germany, prohibiting the development of domestic natural gas resources throughout the European Union, added to a massive and expensive renewable rollout without building a reliable backup.
Solar and wind do not reduce dependency on Russian natural gas. They are necessary but volatile and intermittent. They need backup from nuclear, hydro, and natural gas for security of energy supply. Dependency on these backup sources rises in periods of low wind and little sun, just when prices are highest.
“Solar goes to zero for twelve hours a day, and that is guaranteed. The wind blows sometimes, and sometimes it does not, also guaranteed. They both depend on weather, which is 100% out of human control. They are on their best day a supplement,” wrote a Navy pilot follower.
European energy was in crisis that renewables couldn’t address before Russia invaded Ukraine. From Irina Slav at oilprice.com:
Europe has been aggressively pursuing a clean energy future and the end of fossil fuels, but Russia’s invasion of Ukraine has highlighted the shortcomings of renewables.
The soaring prices of key metals and the length of time it takes to implement renewable energy projects have meant Europe is turning to fossil fuels to solve its energy crisis.
The EU is planning to replace Russian gas with LNG imports, coal, and even fuel oil, with a relatively small amount of the gas to be replaced by wind and solar.
Germany is preparing for gas rationing. France’s power grid operator is asking consumers to use less electricity. In the UK, protests are breaking out over the latest electricity price hike that plunged millions of households into what one local think tank called fuel stress. Europe has a serious energy problem.
The problem dates back years and points to a persistent complacency on the part of European governments that whatever happens, there will always be gas from Russia. After all, even during the Cold War Russia pumped billions of cubic meters of gas to European countries. Now, things are different, and it’s not just because of the war in Ukraine.
The sun doesn’t always shine and the wind doesn’t always blow, but in Europe particularly, backup sources of power have been decommissioned. From AG Metal Miner at oilprice.com:
Renewable energy has taken center stage in the global fight against climate change.
The energy crisis in Europe has highlighted some of the challenges the world is facing in the global energy transition.
It is becoming increasingly clear that fossil fuels will remain a key part of the energy mix for years to come.
In 2018, a pair of us on the MetalMiner team attended the “premier aluminum conference in Europe” — Aluminum 2018 Dusseldorf. Although Dusseldorf felt like a charming Ohio blue collar town with good beer, one of us left the event with a deep cough (obviously pre-Covid). Oddly enough, the weather alert app kept displaying daily ozone levels in the “high” or “extremely high” range. As a puzzled American, one of us appeared confused and the other, thankfully knowledgeable. The cough comes down to the type of energy now used in Germany, coal. MetalMiner’s European colleague quickly explained that after the Japanese Fukushima nuclear disaster, Germany implemented a plan to shut down its entire nuclear operations no later than 2022. In hindsight, that decision by Germany appears both foolish and ironic. Foolish because Germany has lost its negotiating power (pun intended) with Russia for which it relies. It’s ironic because the country already had “clean energy” but now must turn back to dirty energy to avoid blackouts.
In the meantime, while the world watches the Russian invasion and also the impact of sanctions, (we’ll venture a guess that they will have minimal impact), the MetalMiner analyst team discussed Europe’s energy situation and the impact on various metals markets.
On stability of the electric power grid in Europe
Have you ever stood in a field and felt a constant breeze for hours with no interruption at all? Well, we haven’t either. However, if you think wind comes and goes how about relationships with other countries like Russia? Perhaps one can conclude that renewables serve best as supplemental energy sources, certainly not primary sources. When Texas needed to fly helicopters with jet fuel derived from oil to thaw out windmills, clearly the grid did not perform as planned. This begs the question: will the move to green energy continue and will it pull up metals prices needed to support green energy initiatives? If the trend does not continue, one might expect a sharp reversal for several metals.
The green agenda forces nations that adopt it to run their economies and defense capabilities with one hand tied behind their back. From Rupert Darwell at realclearenergy.org:
Vladimir Putin’s inflammatory speech, in which he set out his aim to reconstitute the Russian empire and blamed Lenin for its demise, and his decision to back this up with a full-scale invasion of Ukraine, signals the return of geopolitics. Until now, Western leaders have been saying that the biggest threat to the world is climate change. Now comes Putin armed with nuclear weapons, tanks, and thousands of troops declaring his intent to overthrow Europe’s post-Cold War order. The dilemma for the West: you can’t win a geopolitical conflict lasting years or decades with an economy powered intermittently by wind turbines and solar panels.
From the start of the Biden presidency, tensions existed within the administration between geopolitical realists, notably Secretary of State Antony Blinken, and climate hawks led by the president’s climate envoy John Kerry, who saw friendly relations with China as an essential ingredient for any global deal on the environment. Although Blinken’s position that Chinese expansionism is the biggest threat to the interests of the United States now has the upper hand, the administration’s anti-fossil-fuel policies will progressively degrade America’s capacity to prevail against its geopolitical adversaries.
Expanded pipeline infrastructure is critical to American energy security. One of the Biden administration’s first actions was cancelling the license for the Keystone XL pipeline. Thanks to inadequate infrastructure connecting New England to the rest of the country and the century-old Jones Act – requiring that all goods moving by water between American ports travel on ships built, owned, and manned by Americans – the winter of 2018 saw Russian liquefied natural gasbeing brought ashore in Boston Harbor. Currently, the Securities and Exchange Commission (SEC) is mulling a climate disclosure rule. The intent is to strengthen the hand of Wall Street and woke institutional investors to impose, in effect, an embargo on investment in domestic oil and gas production. The logic appears to be that domestically produced oil and gas incurs climate risk, whereas imported energy from beyond Wall Street’s writ does not. And just last month, the Pentagon released a net- zero plan for the army, which would see it relying on an all-electric, non-tactical vehicle fleet by 2035.
American shale oil is filling in the European green energy gap. From Daniel Lacalle at dlacalle.com:
In October, the governments of Austria and The Netherlands warned of the risk of a “great blackout”. Soaring natural gas prices, lack of security of supply and a challenging outlook of pipeline deliveries from Russia made the governments exceedingly nervous about the chances of providing cheap and reliable energy for homes in winter.
However, an unexpected ally has prevented an energy crisis in Europe and, ironically, it is an ally that was banned in most European nations: Shale gas.
About half of the record U.S. Liquefied Natural Gas volumes shipped in December 2021 went to Europe, up from 37% earlier in 2021, according to the U.S. Energy Information Administration.
While most European nations banned the exploration and development of domestic natural gas resources many years ago, the United States has plenty and competitive supplies thanks to the shale oil and gas revolution, which has made the country almost energy independent. Domestic natural gas production has exceeded U.S. demand by about 10%, according to Reuters.
There is a lesson for the U.S. here. Many European energy policies have been ideologically directed, and massive energy subsidies and political intervention have not strengthened the competitiveness of the economy, secured energy supply, or even reduced significantly carbon emissions.
Plus, new Environmental Progress Analysis finds German emissions rose in 2021 and in will rise again in 2022
Between 2017 and 2021, Environmental Progress and I researched and published dozens of articles, testified before Congress, and authored a book, Apocalypse Never, arguing that weather-dependent renewables were making electricity increasingly unreliable and expensive, and making the United States, Europe, and Asia, dangerously dependent on natural gas. In response, there was an organized and somewhat successful effort by progressive climate-renewables activists to cut off our funding, censor us on Facebook, and prevent me from testifying before Congress.
But now, one of the biggest boosters of natural gas and renewables, media giant Bloomberg, whose owner, Michael Bloomberg, is directly invested in natural gas and renewables, has published an article conceding and substantiating almost every single point we have made over the years. “Europe Sleepwalked Into an Energy Crisis That Could Last Years,” screams the headline. The article concludes that the crisis was “years in the making” because Europe is “shutting down coal-fired electricity plants and increasing its reliance on renewables.”
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