AEP’s Latest Fossil Fuel Rant
By Paul Homewood
AEP is off on one of his usual rants again:
We know what a stranded fossil state looks like. It took five years for the halving of oil prices to defund Venezuela’s rentier petro-regime and reduce what used to be Latin America’s richest country to a humanitarian basket case.
Once the downward spiral began, it became self-feeding and unstoppable. The economy has contracted by two thirds. Nearly five million people have left the country since 2018. It is the world’s largest refugee crisis after Syria.
Brent oil prices today far exceed Venezuela’s extraction costs, but that is irrelevant. What matters is the ‘fiscal break-even cost’ needed to sustain the socialist Chavista machine. The International Monetary Fund thinks this is over $200 a barrel.
The Orinoco tar sands – the world’s largest crude reserves on paper – produce high-cost dirty crude that will never be viable in the post-Paris era of decarbonisation. They are worthless.
Venezuela is the first to go of RBC Capital’s ‘fragile five’, but several others are heading towards social collapse and sovereign insolvency.
Behind them in this grim parade come the big beasts of the Persian Gulf, and arguably Russia since it depends on fossil revenues to cover 60pc of its budget.
The timing of this massive geopolitical upset is subject to hot dispute. Yet there can no longer be any doubt that the twin-pincers of draconian carbon curbs and plummeting renewable costs will sweep away much of the old energy order, and that markets will bring this forward demolition job soon enough with Schumpeterian ferocity.
BLAH BLAH!
I think you can guess the rest!
Back in the real world fossil fuel consumption has been rising in leaps and bounds:
BP Energy Review
Despite the rapid rise of renewable energy 49 to 561 Mtoe a year, it has been dwarfed by an increase of 3620 Mtoe in fossil fuel consumption.
It has nothing to do with cost or carbon tax, nothing else has been found to replace fossil fuels, and is highly unlikely to in the next couple of decades.
Beyond that, who knows what the world will look like?
AEP still clings to the belief that citizens will demand an end to fossil fuels. But he is evidently confusing a handful of eco rag, tag and bobtails with real people, who need to travel to work, heat their homes and even have a job to go to. They certainly won’t be happy when the reality of the green agenda hits home.
Indeed, we only have to look at the gilets jaune to see that.
As with all of his fossil fuel rants, AEP fails to explain just how modern economies can run on highly intermittent and unreliable wind and solar power. He has ths child like belief that we can get all of the energy we need from batteries!
But perhaps he might believe what the Committee on Climate Change had to say in its Net Zero Plan a few months ago:
Exhibit 1
https://notalotofpeopleknowthat.wordpress.com/2019/06/16/net-zero-power-scenarios/
Even the CCC accept that we will still need a large amount of gas fired power in 2050. Indeed actually more than now, as it is currently running at 119 TWh.
It can only be classified as “Carbon Free” because it is assumed to be be fitted with carbon capture technology. Regardless of whether that can work or not, we will still need lots of natural gas.
Exhibit 2
https://notalotofpeopleknowthat.wordpress.com/2019/06/16/net-zero-power-scenarios/
We will also still need large amounts of natural to convert to hydrogen, for heating our homes and industrial use. Again this will require CCS technology. The CCC recognise that the power grid simply would not be able to cope with the winter peak demands for heating, if all heating was electrified.
Other countries also recognise the realities. That is why Germany is so desperate for the new Nordstream 2 gas pipeline, which will enable it to double volumes of imported gas from Russia.
What I find strangest in AEP’s rants is his confusion. At one level he is claiming that renewables will become so wonderfully cheap that the bottom will fall out of the oil market. But then he will go on to talk about the need for draconian carbon taxes, politically enforced divestments and St Greta.
Well, which is it?
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
And now BP claim that “net” carbon zero is attainable by 2050. “Net” is equivalent to buying mediaeval indulgences. CEO’s name is appropriately Looney. As the Tel journo says, meaningless corporate promises. BP have little to no control over those who buy their fossil fuels.
Oil/Methane are fossil fuels?
Hydrocarbons would be more descriptive, and true.
Time to sell up and buy Exxon shares where there isn’t a Looney in charge.
Read that this morning and assumed it was 1st April.
Well with the government embarked on a plan to use even more natural gas than at present make huge amounts of hydrogen and also still run gas generation with gas and hydrogen peaking, then capture and bury all the CO2 in old gas and oilfields, Mr Looney could be quids in. Lobby lobby lobby. Thank you Mr Gummer.
There appears to be one message coming through in AEP’s piece that I can agree with. That the green movement, if its policies are successful, will make life more unpleasant for lots of people around the world, with the impact affecting the poorer groups first and hardest.
Since an underlying principle of “saving the planet” is reducing the population, impacting the poorest first and hardest is, as the saying goes, not a bug but a feature. “These people”, as we all know, breed like rabbits so getting rid of them is an obvious route to take.
Don’t, whatever you do, try arguing population with a Malthusian. The UN projection that population will peak mid-century, a contention supported (with evidence) by Hans Rosling in his book ‘Factfulness’, only leads to them sticking their fingers in their ears and humming loudly. The cult of Malthus and the cult of Climate were made for each other. Neither is susceptible to reason.
Until the Industrial Revolution, population was limited by available resources, and the poor were similarly poor wherever or whenever they lived, having just enough income to survive. A Roman peasant was about as similarly poor as a mediaeval European peasant or a Chinese peasant of empire period. The population had a tendency to stabilise at the level supported by the available resources. So wars, famines and plagues might knock the population back, but they soon re-expanded to the level permitted by the resources, and then became stable.
Then something happened with the Industrial Revolution and populations in many countries stopped expanding to the resources, but instead living standards rose. This didn’t happen everywhere, and so is known as the Great Divergence. Many countries expanded their populations rather than their income per capita in response to this major technical change. It is only quite recently that there has been material income per capita growth outside the core of developed countries.
It isn’t quite what Malthus said. But it is what many modern economists mean by “Malthusian” – the expansion of the population to the level of the resources, and a consistent level of poor people who have only just enough income to survive. Malthusian is what happened most times, most places, and quite why we are lucky enough to live in a non-Malthusian society remains a matter of dispute.
There are some subtleties. For example during the course of the middle to late the 20th century, especially in places like sub-Saharan Africa, the very poor got even poorer, because modern technologies reduced the level of resources needed to survive. If you are interested, there is a book called “A brief economic history of the world” by Gregory Clark, but it isn’t an easy read, and not all of it is good.
“the impact affecting the poorer groups first and hardest.”
We must take our consolations where we can.
Thank you for that post, Ivan. I’ll follow up on Clark’s book. Always happy to learn! 🤓
Its interesting that the comments on this article are mainly critical of factual accuracy and the blind acceptance of climate change. Scanning through the 300 or so comments I would say about 90% disagree with AEPs conclusions. Of the 10% that support AEP you can see the same names appearing. Gives me some hope that sceptics are winning, all we need to do now is organise ourselves to bring down COP26. (Hope the spat between Sturgeon and Boris escalates)
It is tedious for a poster to air all disagreements from the false beginnings of a policy when there are so many steps in between. In this case, it would be a story lasting over 30 years!
It is better to keep to the point in question in order to not dilute the argument.
We only need to break one link in the argument for the logic of the proposal to be destroyed, though I am assuming a lot of the Climate Alarmists.
BBC R4 TODAY made it a rule that they would not host sceptics like Lawson because he was not qualified, yet they are happy to interview stupid XR women (this morning) who are obviously not qualified. Words fail me.
Is it really a surprise any longer? What would be a surprise – earth-shattering shock more accurately – if the BBC did allow anyone with knowledge on any of their programmes. So enjoying the bleating over proposing to make the licence fee a civil matter not a criminal one.
And what qualifications does St Greta have?
Complain, complain. The BBC have to log these complaints, we must push back
Rubbish joke warning .Question : Why don’t XR women need to be qualified?
Answer : Because 97% of scientists agree with them .
Presumably that’s Harrabin’s excuse too. Although I see he is now an Honorary Fellow at St Catharine’s Cambridge according to his twitter handle.
@Harry Passfield
they are very clearly thumbing their noses at you – it isn’t going unnoticed
TrustPilot the “community review” site has them at 91% BAD
“It has nothing to do with cost or carbon tax, nothing else has been found to replace fossil fuels, and is highly unlikely to in the next couple of decades.”
What that means is any but a cosmetic attempt to ‘urgently’ lower carbon fuel emissions to net-zero will fail. The fuel shortages plus government rationing will send costs sky-high. Green Deals and ‘bold’ political action are becoming colorless. The ‘climate emergency’ will be replaced with a transportation crisis?
COP26..Off Topic new head is Alok Sharma….he has a Physics degree can probably understand the science and is pro third runway at Heathrow……Is the tide turning?
Sharma was born in Agra, India, but moved to Reading with his parents when he was five years old.[3] He was raised in the Reading suburbs of Earley and Whitley Wood and attended Reading Blue Coat School in Sonning[4] and the University of Salford, from where he graduated with a BSc in Applied Physics with Electronics in 1988.[5]
No, he’s just another climate drone.
In a speech last month, at a UK-Africa investment summit, he spoke of the “undeniable implications” of climate change.
https://www.bbc.co.uk/news/science-environment-51491538
Groupthink takes over….Look up Asch conformity experiments. they are on youtube. Africa actually needs low cost reliable electricity supply….Coal fits the bill.
From App’s rubbish: “Prof Scholten said we are moving quickly to an unrecognisable global order where there are no longer energy importers and exporters. Most countries will be ‘prosumers’, generating their own needs locally, first with solar, wind, and batteries, and in the next phase with such technologies as green hydrogen”. Spot the error? Since when have batteries (or hydrogen, for that matter) been generators?
Batteries and solar panels do not transport anything very far for very long. Certainly not across oceans and continents.
It ironic that, in the mid-60s, it was our Geography teacher that strenuously emphasized to us that electricity was not a fuel.
But they will be importing wind turbines and solar panels…so they will be at least as dependent on imports.
AEP is right about Venezuela becoming bankrupt but the cause is not the lowering of the price of oil, although that has to be a factor, it is America’s embargo on helping their oil production capacity and the Marxist policies which extended state expenditure beyond sane levels. Venezuela’s oil industry should be very profitable enterprise fully capable of supporting most of the economy, even at these oil price levels, but lack of investment, political interference and plain bad management, not to mention the usual corruption, has cut production to a ridiculous level. America has not helped and will not help until this marxist regime goes.
Chavez took over in Venezuela in 1999 at the end of a period where Venezuela and Saudi and Iran (and even Iraq, despite sanctions) had been indulging in a massive oil price war, based on going for market share by undercutting each other in supplying the US. The country was reasonably wealthy, despite the sub $10 oil price for their oil, and PdVSA was reasonably competently run with the aid of some Western expertise contracted in. The elite were however a little too complacent about appeasing those living in the barrios.
The first thing Chavez did was to sign a deal with the Saudis to stop the price war, because he thought it would help fund his socialist revolution to jack prices and cut production. Production has fallen dramatically since Maduro took over, despite prices being much higher that when Chavez came to power. It’s about allowing corruption and incompetence to dominate the oil industry. Emergency assistance has been sought from the Russians and Chinese, who have tied up payments in oil, leaving the Venezuelans with next to no income. Of course, they have now lost much of their US market, which had been tied in because their oil requires particular refinery configurations to process it, because much of it is heavy, napthenic (i.e. lacking in paraffins) and sulphurous. Few refineries are configured to run it.
AEP doesn’t have a clue about this it seems.
Having worked in Venezuela when Chavez was in power and later – my take is that the “Socialists” are mostly simply dimwitted thuggish larcenists with an amazing capacity for nepotism.
They had plenty of capable engineers and petroleum professionals – but the utter tossers that Chavez + chums filled PDVSA with had to be seen to be believed – farcical hardly covers it. Many colleagues collected what they could and ran away…. USA, Spain, UK, Canada etc.
They also had a rather unpleasant tactic of expropriating property from people they arbitrarily deemed to be enemies of the revolution.
Look at what’s happening in South Africa – the socialist ANC’s version of ‘crony capitalism’ has brought all of the state-owned enterprises into bankruptcy. The worst of all is the monopoly electricity system, which cannot earn enough to pay the interest on its debts. This over-staffed monstrosity cannot even rationalise, for fear of the government-embedded unions. So, there is a suggestion that pension funds be used to fill the bottomless pit of debt!
We keep hearing in the daily propoganda that “many people” are very concerned about Climate Change and yet the UN’s own poll puts Climate Change as the respondents last priority.
http://data.myworld2015.org/
The latest USA poll shows it as second to last concern
It would appear that the governments do not have the backing of the people.
Harry , you have to complain to the BBC. We all do as much as possible
Sid: Complaint registered thus:
“I listen to BBC R4 Today every day. Last year, Lord Lawson was interviewed regarding climate change and was able to give an authoritative alternative view. This caused so much uproar amongst climate extremists, who seem not to be able to accept any form of criticism of their cause, that the BBC and Today decided never to have him on the program again on the pretext that he was not qualified to talk about ‘climate’ (not that that stops Roger Harrabin expressing his views on it when he only has a degree in English).
However, this morning the Today program decided to interview someone from Extinction Rebellion and, without any balance, allowed her to talk at length about the so-called ‘climate emergency’.
My complaint is that this person was not vetted to see if they were ‘qualified’ to talk on the subject at hand (climate). Lord Lawson was eminently more qualified to comment.
BTW: I used to be able to check the programme’s running order on line. I note that this is no longer available to me – unless you have redesigned the R4 website and moved it somewhere else.”
No acknowledgement as yet…
Have a Case Number now.
I complained about the Thatcher program, they always use her as a green ‘poster child’ of 1988 but must know that she recanted in 2003.
No reply yet
When respectable parties ignore the major concerns of the populace the populace turns to disreputable parties. See the gullets Jaune, Trump, Sien Feighn, the BNP. And this happens whether the disrepute comes from style or substance.
If reputable parties ignore the public on heating and transport costs expect upsets. The upset may if we are lucky result in a government that uses crude language. It could result in genocide.
To avoid this reputable parties need to pay attention to the concerns of the electorate, and give up on the gaslighting.
Pat,
The move away from traditional political parties is well explained in Ref. 1 where the authors argue that the main causes are down to the “Four Ds” of distrust, destruction, deprivation, and de-alignment. I would add a 5th D, “Doing Dumb Things” i.e political parties going counter the the interests of their intended electorate.
Reference 2 shows how Washington, Brussels and London are the three capitals where lobbying is most prevalent and therefore where ordinary electors’ interests (as opposed to the interests of ‘rent-seekers’) are most excluded from influencing those in power.
Reference 3 shows how in the realm of energy policy, “rent-seekers” have been able to influence energy policy to the detriment of consumers (i.e. where governments are led to choose losers, while losers are very good at suborning governments).
In short, many Western countries are in a bad place democratically in matters of energy policy, possibly none worse so than the UK. Watch out for COP 26 to bring nothing but bad news for ordinary consumers but lots of virtue signalling opportunities and grandstanding for our political leaders.
References.
1. R. Eatwell & M. Goodwin, “National Populism – The Revolt Against Liberal Democracy”, Pelican, 2018.
2. T. Cave & A. Rowell, “”A Quiet Word – lobbying, crony capitalism and broken politics in Britain”, Vintage, 2015.
3. D. Helm, “The Carbon Crunch”, revised & updated edition, Yale, 2015.
Regards,
John Cullen.
‘arguably Russia since it depends on fossil revenues to cover 60pc of its budget.’
Russia has massive long term gas contracts with China and Europe. Germany for one will be dependent on that supply when its nuclear and coal plants have gone. Can’t run major industries on random wind power.
If they are so sure that carbon capture will be a viable technology, then why bother with wind and solar in the first place?
The CCC proposes, in the above table, up to 175 GW generation by renewables of which offshore wind is the most part, but all the others add up to 85 GW. Hydrogen is to power HGVs, shipping as well as industry apparently. Perhaps the peaking plant will run on it diverted from industry. Where is the missing 80+ GW going to come from in the event of a two week lull in the winter at zero temperature? Have I missed something?
Only ever take advice from someone who has become rich by giving his advice. That’s not AEP