perfect storm: updated Jan 30, 2023

Investments in clean tech deployment in 2022, US$1.1 trillion, were for the first time ever, equivalent to that spent on fossil fuel production.  The story behind these historic stats is that of a current perfect storm and circumstances leading up to the present.

The combination of the Ukraine war; high fuel prices; European Union energy independence and electric vehicle (EV) strategies; the U.S Inflation Reduction Act and Bipartisan Infrastructure Law; China’s new 5-year plan; and tectonic changes in other countries have created the perfect storm for:

  • Renewables to overtake coal by 2027;
  • Strong EV sales in China and Europe while the North American new “normal” EV wait times for delivery ranging from 6 months to 2 years or more; and
  • Intensified climate action plans around the globe.

Paradoxically, the same perfect storm has given rise to oil and gas industry’s 195 fossil fuel carbon bombs underway and planned, many of them in Canada.

Canada’s climate actions do not counterbalance its carbon bombs and are weak.

The complexity of the perfect storm is further amplified by the German energy neurosis.  While Germany is tilting in favour of a green economy, it is simultaneously acquiescent to long-term reliance on gas imports.

All factors considered,

  • opportunities for the green economy and catalysts for new fossil fuels bombs seem to cancel one another out;
  • the U.S. legislative and financial packages skyrocket green economy advantages, up from an existing edge, over Canada; and
  • the perfect storm bottom line on the European green transition remains a mystery.

Renewables number 1 global electrical power source by 2027

New renewables capacity installed between 2022 and 2027 will double, leading to renewables overtaking coal for global power production, as per the International Energy Agency (IEA) report Renewables 2022.

Specifically, world-wide renewables capacity will increase by 2,400 gigawatts (GW) between 2022 and 2027, equivalent to the entire current power capacity of China.  This represents 90% of the new power capacity installed during this period.  More renewables capacity will be installed during these 5 years than in the previous 20.

China is projected to represent nearly half of the new global capacity in this time frame, bringing its cumulative clean energy capacity to 1,070 GW.   Solar and wind will account for 90% of this capacity, with hydropower furnishing the remainder.  That’s equivalent to over 22 times the current power capacity of Hydro-Québec.  By 2025, renewables will hit 33% of China’s power pie, in line with China’s 14th Five-Year Plan on renewables.  That’s amazing, because coal stood at 81% of the pie in 2011.

For the U.S., the Inflation Reduction Act (IRA) objective for the power sector is 100% carbon free electricity by 2035.

The IEA forecasts the IRA will boost clean energy capacity by 25%, compared last year’s IEA projection, before the IRA existed.  That makes for a 74% increase in renewables capacity, or 280 gigawatts, between 2022 and 2027.  Nearly all the new capacity will stem from solar and wind.

These new IEA global projections constitute a 30% increase in the IEA projection of one year ago.

Looking further ahead, Bloomberg New Energy Finance (BNEF) predicts renewables will supply two-thirds of power demand by 2050.  Solar, wind and energy storage will be 85% of the two-thirds.  BNEF forecasts that renewables, combined with the electrification of end uses and improvements in energy efficiency, will result only in a 4% increase in energy demand by 2050.

Since one of the largest markets for natural gas is the electrical power sector, within the next few years gas demand will fall off the cliff.

True, the European Union is desperately turning to immediate alternative gas sources to substitute for Russian gas imports.   But the EU has accelerated their renewables agenda for the medium- and long-term.  The IEA forecast on European renewables capacity is that it will double between 2022 and 2027.

The EU aims for energy independence by 2027 via a rapid migration to a green economy, though the German chaotic energy plans suggest the country may experience trouble in meeting that target.  The danger is that the short-term gas solutions risk becoming long-term, as described in this article’s segment on Germany.

The gas exporters perceive the short-term European energy emergency scenarios as long-term gravy trains.

Global electric vehicles portrait

Since the road transportation sector represents just under half of global petroleum consumption, a significant migration to EVs has far reaching implications for both the oil industry and global emissions.

This is where the perfect storm comes in.  No one, purchasers and vehicle manufacturers alike, anticipated the avalanche of demand for EVs.  In Canada, the current wait time for many EV models can be as long as 2 years or more, depending on the desired model.

Globally, plug-in sales captured 17% of the vehicle market in September 2022.  That is double the percentage of 2021 at 8.3%.  A doubling again in 2023 would bring global plug-in sales to 30%.  Those vehicle manufacturers that do not keep up with this trend, may experience a Kodak-like downfall.

The preceding percentages do not tell the whole story.

Electric vehicles: Soaring in China and Europe

China’s 2022 plug-in portion of new vehicle sales in October came in at 29%, fully electric, or battery electric vehicles (BEVs), 22%.  Not only is this considerable in terms of local market share, but also in view of total EVs sold in China are greater than in the rest of the world.

Notably pertinent, China is a major global exporter of EVs.  For EV sales in Europe in September 2022, exports from China acquired 11% of the market.  An irony of sorts, Tesla’s Shanghai factory is China’s largest EV exporter.  Other exporting brands from China are BYD and SAIC, while Xpeng, NIO and Great Wall have global expansion plans.

For Europe, plug-in 2022 sales up to October reached 22% of the new vehicle market, 13% BEVs.  That said, there are variances among European countries.

Norway is way ahead of the pack with plug-ins 2022 taking up about 87.9% of sales, BEVs 81.5%.  As of January 1, 2023, all Hyundai Motor Norway vehicles on the market will be fully electric.  One stride away, Volkswagen will offer only BEVs in Norway, beginning January 1, 2024.

While Norway is hard to beat, in September 2022 Ireland reached 37% plug-ins and 29% BEVs.

German 2022 plug-in sales up to September 2022 captured 32% of the national vehicle portrait, BEVs 19%.

Though projections are inherently different, depending on the sources, it has become increasingly apparent that EV dominance will likely occur in Sweden, Ireland, China, and Germany by 2028 or before.

Electric vehicles in North America: U.S. set to catapult ahead of Canada

Thanks to vehicle legislative and policy initiatives in China and the European Union, China and Europe are way ahead of North America for EV and battery production capacity, availability and sales.

EVs were 6% of new vehicle U.S sales, 18% in California, between July and September 2022.

In Canada, sales of plug-ins in the 2022 third quarter (Q3) reached 9.5% of the new vehicles market.  In the provinces with legislated zero-emission vehicle sales targets plus and rebates, BC and Québec, the percentages of Q3 2022 plug-in sales were 19.9% and 13.3% respectively.  Ontario, without any provincial incentive program, registered 7.6% in Q3 2022.

Weighed against the impressive advances in zero emission vehicle (ZEV) sales in China and through much of Europe, Canada’s requirements that 20% of new vehicle sales be ZEVs by 2026, 60% by 2030 and 100% by 2035, appear to do no better than aligning with global momentum.

Lax Canadian ZEV mandates confer automakers extended time to sell greater numbers of the more profitable internal combustion engine vehicle (ICEV) models, while lowering stranded assets risks for ICEV production lines and R & D facilities.  This is strikingly disturbing since the growth of numbers of high emission sport utility vehicles (SUVs) nullified emission reductions progress from ZEVs in 2021.  Perhaps Canada bowed to pressure from the automakers to stretch out the time period for the expansion of manufacturers’ EV capacity and market in North America.

California, with roughly the same population as Canada, obliges automakers to achieve ZEV targets for passengers vehicles at 35% by 2026 and 68% by 2030.

The bigger North American story is U.S legislative initiatives for one of the world’s most ambitious climate plans, with EV manufacturing and the battery supply chain embedded.

The US$369 billion for climate action under the more than 700-page U.S Inflation Reduction Act (IRA) has generated a race for the U.S. to close the gap with China on EV manufacturing and battery production, and to a lesser extent, with Europe.  This leaves Canada scratching its head on how to catch up with the U.S.

The IRA being a thick brick, clean tech sectors are still working on figuring out what it all means.  It doesn’t help that the U.S. government is still engaged in defining the devil in the details.  Guidelines on labour-related eligibility requirements were only made public on November 29, 2022.

What is clear is the battery supply chain segments of IRA and the Bipartisan Infrastructure Law (BIL) offer the U.S. the North American advantage.

To this effect, the IRA tax credits apply to all stages of the battery production and supply chain in North America such that one can stack up the credits (add them up).   The stacking up tax credit ceiling is 40% before 2024, and rises to 80% after 2026.

Assuring North American, but primarily U.S., dominance in all things related to batteries, the rebate for EV buyers is US$7,500 provided that there is compliance with critical minerals, battery components plus other requirements.  These requirements encompass stipulations that a certain percentage of battery components must be assembled or manufactured in North America, 50% before 2024, increasing to 100% by 2028.

In the absence of all of these essentials, the rebate is only US$3,750 so long as it meets the critical mineral exigencies outlined in the article Critical minerals: Global and Canadian developments.

Concerning BIL, it allots US$7 billion from 2022 to 2026 to support the U.S. battery supply chain, with US$3 billion for battery material processing and US$3 billion battery for manufacturing and recycling.  Additional funds related to recycling are US$200 million for a battery design, recycling, and reuse program; along with US$110 million for battery collection and recycling programs.  Among research eligibility criteria, there is “advanced transportation technologies.”

The supply of EV batteries is one of the keys to augmenting EV sales and addressing the long wait times for deliveries of many EV models to consumers.  The shortage of batteries is linked to EV demand being greater than the supply.

On the manufacturing of clean energy and clean transportation products, the IRA offers US$60 billion worth of incentives.  Specifically for clean tech manufacturing, the IRA dedicates US$10 billion in tax credits.  Another US$20 billion in loans are assigned to build new clean vehicle facilities.  Lastly, an additional US$2 billion in grants support the conversion of conventional auto manufacturing assembly sites to produce EVs.

This may leave Canada with gargantuan highly complex tasks for achieving equivalency with the U.S. advantages in Budget 2023.

While awaiting the details of greater Canadian symmetry with U.S. legislation, ask yourself why it is that, even before the IRA and BIL approvals, wholly new zero-emission vehicle (ZEV)-related North American facilities — not talking about modifications to existing plants — are overwhelmingly in the U.S.

Granted, the $5 billion Stellantis and LG Energy Solution joint venture to set up a battery production facility in Windsor, Ontario is an entirely new coup for Canada.  However, that project was announced in March 2022, before the much unanticipated adoption of the IRA in August 2022.  And this doesn’t compare to the order of magnitude of battery-related existing and planned projects in the U.S., as per the information on U.S battery activities below.

So too, in January 2021, before the IRA was passed, was the GM decision to retool its Ingersol, Ontario plant at a cost of $1 billion to produce the BrightDrop electric vans.  GM expects this plant to produce 50,000 vans annually by 2025.

Nonetheless, the new U.S. legislation will, from here on, reinforce a trend to-date in favour of investments in the U.S. over Canada.

Why has the U.S. state of Georgia become the home for to 30 electric vehicle (EV) projects involving 18,100 employees since 2020?  By 2022, Georgia had been selected for 51 EV manufacturing and battery facilities.  In November 2022, information was released on a US$2.57 billion FREYR Battery plant to produce battery cells in Coweta County, Georgia.  Now, existing and under construction battery plants in the state include 4 Georgia counties.

Shouldn’t one take notice of the recent Hyundai announcement to invest US$5.4 billion in Georgia for a facility to annually produce over 900,000 EV Power Electric systems and 450,000 Integrated Charging Control Units?  The new plant will generate 1,500 jobs, jobs added to the 1,200 Hyundai employees in the state.

How about the Rivian US$5 billion investment for a second EV plant in 72 km east of Atlanta, Georgia?  Rivian hopes to annually produce 400,000 EV RIT pick-ups and RIS SUVs at the 1.86 million square metres Georgia site, with 13 buildings spread across 2,000 acres.  The campus will employ around 7,500 people.

Rivian’s first plant is located in Normal, Illinois.  Though 5 times smaller than the planned Georgia facility, the Illinois location underwent two expansions.

Other companies that have chosen Georgia for EV technologies are the school bus manufacturer, Bluebird, and one of the 5 major global manufacturers of EV batteries, SK Innovation.

The Vietnamese EV start-up, VinFast, which entered the Vietnam local market in 2021 with its E34, is miraculously already up to speed to serve global markets.   By November 2022, VinFast made public its intention to invest a minimum of US$4 billion in its first North American assembly plant in Chatham County, North Carolina.

Further on battery production, Georgia and South Carolina have welcomed 5 major multi-billion dollar battery production projects recently.

One of the battery production projects announced post the IRA coming into effect, in January 2023, is the Honda and LGES joint venture (JV) in Fayette County, Ohio, near Jeffersonville.  For the first phase the JV, known as the L-H Battery Company, will invest US$3.5 billion for a facility that would create 2,200 new jobs.  When all stages are completed by 2024, the total JV financing will amount to US$4.4 billion.

Among other U.S. battery production news, are the following projects.

Ford and SK Innovation have a Memorandum of Understanding for BlueOval SK battery cells and arrays manufacturing in Kentucky and Tennessee.

Stellantis NV has a battery plant under construction in Indiana.

Also in Indiana, Samsung will be building a battery production site.

KORE POWER has plans for a lithium-ion battery cells manufacturing in Buckeye, Arizona

Not long ago, Redwood Materials revealed its intentions for a US$3.2 billion battery recycling facility in Charleston, South Carolina.

Now, the one to watch for the fallout of the IRA and BIL is Volkswagen. The Volkswagen Group (several brands including VW, Audi, Porsche and SEAT) has plans for 6 battery plants across Europe and 16 EV assembly plants worldwide.

Back in March 2022, Volkswagen revealed it would be investing US$7.1 billion to produce BEVs in North America.

Prior to the Biden administration legislation, indications of a Volkswagen EV North American manufacturing preference for the U.S. rolled out with an US$800 million expansion of its Chattanooga, Tennessee facilities.  Now with the IRA and Bill adopted, it is most plausible that all future North American Volkswagen EV manufacturing and battery production will be in the U.S.

With production of the Volkswagen ID.4 sold out for 2023, a second EV manufacturing plant is under review, possibly in Chattanooga as well.

Second, Volkswagen EV research is undertaken at two Center of Excellence locations, one in Chattanooga and the other in Belmont, California.

Third, a Battery Engineering Lab for testing and validating batteries began operation in May 2022 at the Chattanooga plant Engineering and Planning Center.

The IRA and BIL have a solid existing base to propel the U.S. EV activities at a stunning pace.

Most of the above projects were made public prior to the IRA and BIL.  Primarily preceding the unexpected approval of the IRA in August 2022, by the third quarter of 2022, US$210 billion worth of cumulative investments in the U.S. EV sector were divulged.  The battery portion of these investments is US$54 billion for the construction or expansion of 37 battery production plants.

Carbon bombs: The oil and gas industry perfect storm response

Though in 2020, Shell, Total Energies, ExxonMobil and others were writing down assets to the tune of tens of billions each, the German non-profit organization, Urgewald, review of 512 oil and gas companies disclosed that these firms currently have plans for initiating the production of 230 billion barrels of oil equivalent (bboe) of untapped resources before 2030.  Urgewald surmises that 655 out of 685 upstream companies it surveyed, 96% have expansion plans.

A frightening projection in the same league is the CleanTechnica estimate that there are at least 195 carbon bombs underway and planned.  This is equivalent to the entire CO2 emissions from China over a decade.

A carbon bomb is defined as a fossil fuel endeavour that engenders a billion or more tonnes of CO2 over its existence, about the same amount of emissions of 18 years of current global emissions.  Canada, the U.S. and Australia are amid the countries with the most prominent carbon bombs.

The largest oil and gas companies will be spending US$103 million per day over the coming decade.

Thus far, for the next ten years, Shell, Chevron, Total Energies and others, have committed US$166 billion of investments in new oil and gas projects.  Many of these projects span over decades.

Both the IEA and the International Institute for Sustainable Development have determined that no new oil and gas projects should be approved to stay within the Paris Agreement 1.5°C target.

More down to earth, why are oil and gas firms ignoring the nearing possibilities of peak oil and gas?

Even BP has acknowledged a world less dependent on fossil fuels is nearing.  Spencer Dale, BP Chief Economist said the Ukraine war has “permanently dented fossil fuel demand.”  The BP Energy Outlook 2023 acknowledges the lasting global impacts of the war in Ukraine and the Inflation Reduction Act.  The Outlook views the migration to EVs significantly impacting half of the traditional oil demand and renewables hurting the gas electric power market, one of the largest longstanding users of natural gas.

Notwithstanding BP’s Outlook, the trajectory of the oil and gas sector has not changed.

A Carbon Tracker analysis of 35 of the largest oil and gas companies revealed that the bonuses for executives go up with greater production.

ExxonMobil links 41% of executive pay to production and Shell, 20%.  Other companies reviewed by Carbon Tracker have similar practices.

At first sight, production-related bonuses run contradictory to executive “Transition Positive” incentives to migrate to clean energy, while decreasing fossil fuel production.  There may not be any discrepancy when one takes a closer look.  It seems shifts to low carbon alternatives, as defined by the industry, may actually augment fossil fuel production.  Most important, broader corporate objectives can override less aggressive low carbon objectives.

A common industry description of a low carbon business activity is that of gas sector expansion as a “bridge fuel.”  The sector is fully aware that gas-related methane emissions, especially from shale sources, renders this fuel as bad as coal.

If this sounds totally confusing, maybe it is supposed to be.  Whatever, it is apparent that growth in oil and gas production trumps all other considerations.

Kathy Mulvey of the U.S. Union of Concerned Scientists described the messaging of the oil and gas sector as “a well-established playbook that includes greenwashing with misleading or outright false claims about their climate-related actions.”

Of course, shareholders are equally focused on oil and gas production growth.

Canadian carbon bombs 

At the COP27 UN November 2022 conference of climate change, Canada rejected the insertion in the conference final statement, the phasing out of oil and gas production.  The Canadian government explanation of this stance is consistent with Canada’s 2030 Emission Reduction Plan (ERP) to put a cap on oil and gas emissions, and not on production.

The Canadian government’s justification of its position for omitting a cap on production is such that some provinces would contest the federal intervention in the courts.  This rationale is weak.  The same provinces contested the federal carbon tax and the Supreme Court ruled in favour of the federal government.

This federal discarding of restrictions on production conveniently aligns with the carbon capture utilization and storage (CCUS) fantasy that emissions can be reduced while production is increased, thanks to the support of $5 to $7 billion in subsidies for CCUS by 2030.  These subsidies are integrated in Budget 2022.  A brief description of clean tech tax credits were presented in the Fall Economic Statement 2022.

The Pathways Alliance, a CCUS consortium of 6 oil sands producers, will surely benefit from the Canadian government’s CCUS support.  The consortium is currently bombarding Canadian media with eco-responsible messages implying that the oil sands emissions can be reduced by millions of tonnes of CO2 annually.   These ads make no mention of production increases.

Yet CCUS projects around the globe have not met targets for emissions reduction, costs and timelines.  And all CCUS projects are energy intensive.

All this seems to be a greenwashing exercise to distract public attention from Canada’s carbon bombs.

Canada has more than a dozen carbon bombs when one includes the burning of fossil fuels in the definition.  About 75% of fossil fuel related emissions are related to consumption.  The remaining 25% is associated with extraction, refining, fuel pipeline transportation and other upstream considerations.

If burning fuel is part of the calculations, Canada’s carbon bomb projects would emit more than 39 billion tonnes of CO2 equivalent, 8 times Canada’s carbon budget to achieve net-zero-emissions by 2050.

To reach Canada’s 2030 emissions reduction target, Canada must limit its emissions to 5 billion tonnes between now and 2050.  Current data suggests Canada alone will boost global aggregate temperatures up to 3-4°C.

Of the Canadian carbon bombs, 5 are oil sands projects in progress.  Production for these projects continue to go up, peaking in the 2030-2040 timeframe, and continuing to the end of this century.

As for the Bay du Nord offshore oil project, off the coast of Newfoundland, it bodes difficult to assess whether it is a carbon bomb.  That’s because there are no official numbers on the production potential.  They range from 300 to 500 million barrels, the former the estimate of the Impact Assessment Agency of Canada, while the latter a revised projection of the promoter, Equinor.

A Newfoundland offshore oil project less mentioned in the media is the White Rose project for which the projected production was originally estimated at 400 million barrels.  The updated estimate is 436 million barrels.  Since 90% of petroleum is burned, mainly in the transportation sector, emissions related to the White Rose project will amount to 169 million tonnes of emissions total emissions, equivalent to the annual emissions of 68 million vehicles.

But wait there’s more off the Newfoundland coast!  In the 2023 coming weeks 12,000 metres² will likely be approved for oil exploration in a zone critical to the protection of biodiversity.  ExxonMobil Canada, BP Canada Energy Group and Equinor are the stakeholders concerned.  The request for proposals in question occurred in 2022 for 100,000 m².   Four other requests for proposals are anticipated by 2029.

Three, potentially four, more carbon bombs are represented by Canadian shale gas projects.  The Montney shale gas project in northeastern BC and northwestern Alberta is one them.  The composition of the gas in question is 90% methane.  The Montney production won’t peak before 2050.  These deposits have the potential for emitting 13.7 gigatonnes of CO2 equivalent.

The CoastalGas Link, the pipeline to transport Montney gas to the LNG Canada liquification and storage terminal at the port of Kitimat, will be another major source of methane, once construction is completed and operation begins.  Here lies new potential for pipeline methane leaks.

The U.S. Environmental Protection Agency (EPA) data indicates the order of magnitude of gas pipeline leaks of methane is humongous.  EPA records show that there were 2,600 gas pipeline leaks in the U.S. between January 2010 and October 2021, spewing out 753 cubic metres of methane.  That is tantamount to the global warming impact of the annual emissions of 2.4 million cars.

Two other shale gas carbon bombs underway are the Duvernay and Spirit River projects in Alberta.

The three remaining Canadian carbon bombs are BC coal projects, in progress or awaiting environmental assessments.  This may come as a surprise since the Canadian government has plans for phasing out coal for electricity generation.  But these plans exclude metallurgical coal for steel production.

While at 8% of global emissions are associated with steelmaking, it doesn’t have to be that way.  Electrification of the industry is an option.

In January 2022, SAAB announced it will invest US$4.8 billion between 2022 and 2030 to achieve a zero-emission footprint by 2030 by replacing fossil dependent steelmaking with mini-mill electric arc furnaces and rolling mills technology.  The transition will result in a greenhouse gas emissions reduction of 8 million tonnes of CO2/year.  The outcome of this corporate decision will be a 10% decline in Sweden’s emissions and 7% in Finland.

Six global banks, Citi, Crédit Agricole CIB, ING, Société Générale, Standard Chartered, and UniCredit, have joined the Sustainable STEEL Principles.

In spite of the low carbon steel alternative, Canada is the third largest producer of metallurgical coal.

German balancing act 

In July 2022, the German government adopted 5 laws, 593 pages in total, to accelerate increases in renewables capacity.

The recently adjusted renewables targets are 80% by 2030 and a nearly 100% by 2035.  Presently, at the end of 2022, renewables account for about 50% of the country’s power supply.

Complimenting Germany’s push for a rapid transition to a green economy, at a December 2022 meeting of European Union energy ministers, plans were endorsed to fast-track approvals for clean energy projects and the transmission grids to transport these new energy sources.

On emergency actions to reduce gas consumption, Germany passed the Substitute Power Plant Standby Act allowing the shutting down of gas power plants to reduce gas consumption.  This Act, in sync with other mandatory measures plus incentives, aims to curtail German gas demand by 20%. This encompasses building heating system maintenance and operation stipulations, coupled with subsidies for having 6 million heat pumps installed by 2030.

While this sounds good so far, the Russian decision to cut Nordstream 1 gas flow to Germany has created an immediate crisis. Energy transitions take time.  Especially, since gas serves 27% of Germany’s current energy requirements.

The current energy crisis has given rise to German plans for 6 floating liquified natural gas (LNG) terminals, floating storage and regasification units (FSRU).  Also, there may be as many as 3 onshore LNG terminals to come at a later date.  The goal is to end Russian gas imports by Summer 2024.

The first FRSU in Wilhelmshaven received its first LNG ship in early December 2022, the Norwegian-flagged Höegh Esperanza.  The other 5 are expected to become operational in 2023.

While German utility firms claim LNG terminals are critical to the country’s power needs, these terminals can hook Germany on LNG for many decades to come.  This may be environmentally many times worse than Russian gas imports due to energy required to cool the gas for shipping.  At the destination countries, there are the additional methane emissions associated with regasification and major leaks during the production, transport and storage of LNG.

Germany has indicated that the LNG terminals will eventually be used to import green hydrogen.  Unfortunately, with the conversion of clean energy to hydrogen entailing a 30-40% energy loss, a diversion of massive amounts of clean energy production, and a plethora of application technological impediments and inefficiencies, the credibility of this premise is suspect.  If the green hydrogen is converted back to electricity, the energy loss is a whopping 75%!

Not surprising, gas exporting countries, Canada, the U.S. and Qatar are pushing hard to be Germany’s energy saviors.

Among other nations proposing to come to the fossil fuel rescue of Germany and Europe at-large are several African countries.

Summing up, the German legislation and policies, together with IEA document Renewables 2022 prognostication plus EV sales, imply the green transition will have the medium- and long term edge over fossil fuels.  Political fortitude and the success rate of climate actions will determine the lifecycle and future plans for floating and onshore LNG terminals.

U.K. first new deep coal mine in 30 years

In December 2022 the U.K. government approved the first new deep coal mine in 30 years, the Woodhouse Colliery project in Whitehaven, northern England.  Once in operation, this mine will emit 400,000 tonnes of emissions annually, the equivalent of 200,000 additional cars on the road.  This undermines the country’s net-zero by 2050 goal.

Given the coal from this mine has a high sulphur content and is in excess of U.K. steel industry needs, it will be exported.

The takeaway

The perfect storm has everything in place for a transition to a green economy within this decade.

The main hurdles for a rapid green transition are two-fold.

The first is that there are countries, Canada and Germany cases in point, that are concurrently supporting action on climate change, while locking-in engagements on fossil fuels.

Planned increases in the Canadian production of oil and gas and lame EV objectives do not auger well for Canada to meet an emissions target for the first time in its history.

Amplifying Canada’s green economy challenges is the complexity of counterbalancing the U.S. IRA and BIL.  The U.S. legislation dilemma for Canada is compounded by a robust existing U.S. green economy momentum.

The second big hurdle is the fossil fuel industry tunnel version of the perfect storm, bringing in opportunities for augmenting production exponentially, trillions in profits and rewards for industry executives and shareholders.

What then is the bottom line?

The dominance of renewables through to 2027 and beyond, together with the substantial increases in EV sales, bode for peaks in oil and gas nearby.  Be that as it may, the projections for the timing of these peaks vary considerably.

Simultaneously, others expect doing the same thing over and over again will produce different results, as per Einstein’s definition of insanity.

Does this constitute a revolution in progress?

One might find consolation in recognizing bumpy paths are to be expected for colossal global transitions, as has been the matter of women’s rights.


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