As soon as I sat down at our usual table, Camp, my long-time companion on these Thirsty Thursdays, had the topic all ready to dish out. Vicky lost no time to serve us a cold one and after we wet our whistles Camp was off: ‘On Halloween, Italy and the UK will jointly host world leaders in Glasgow for the 26th COP-Conference on Climate Change to talk about a course towards net global carbon emissions to reach zero by 2050. As the world’s leaders prepare to commit (or not) to this 30-year plan, an energy scare seems to be unfolding.’ Camp paused for effect.
‘Carry on,’ I said. ‘You have my attention.’
‘Since May 2021 the price of oil, coal and gas has soared by 95%. Britain, one of the two hosts of the summit, has turned its coal-fired power stations back on, American petrol prices have hit $3 a gallon, blackouts have engulfed China and India, and Vladimir Putin has just reminded Europe that its supply of fuel relies on Russian goodwill. As the world economy has cranked back up after the Covid slowdown, demand has surged even as stockpiles have run dangerously low. Oil inventories are only 94% of their usual level, European gas storage 86%, and Indian and Chinese coal below 50%. The squeeze is on and prices are still going up. Factor in the intermittent nature of some renewable power because of too little wind or droughts that have failed to fill reservoirs like Lake Mead and floods in Asia that impede coal supplies.’
‘Sounds like the making of a perfect storm,’ I said.
Camp was on a roll now: ‘Energy investment on renewables is running at half the level needed to meet net-zero by 2050. Everybody knows that the supply and demand of dirty fossil fuels needs to be reduced. Also, each year, governments around the world spend about half a trillion dollars to subsidize and depress the price of fossil fuels, more than three times the renewables subsidies. Fossil fuels still make up 83% of primary-energy demand, a long way from net-zero. First the mix must shift from coal and oil to gas which has less than half the emissions of coal. Many developing countries, particularly in Asia, need to bridge their energy supply until renewables have ramped up enough. Preferably they will shift to LNG, as they ditch their coal fired generators. Which means pipelines, tankers and plants but too few projects are coming on stream.’
‘I guess we missed the boat here in BC,’ I said, since only one such plant is being built and thanks to our complicated licencing and permitting bureaucracy, taking years and involving many stakeholders and First Nations, we can’t seem to attract any investors; in fact, they are pulling out billions of dollars as we speak, like the Australian Woodside Petroleum Ltd. and Chevron Canada.’
‘Another problem is geopolitics,’ Camp said. ‘As rich western countries quit fossil-fuel production, autocracies with fewer scruples and lower costs, including the one run by Putin, are ramping up the supply. The share of oil output from opec plus Russia is predicted to rise from 46% today to 50% or more by 2030. Don’t forget Russia supplies over 40% of Europe’s gas needs and as the Nord Stream 2 pipeline comes on line, Putin’s leverage will grow both east and west of mother Russia.’
‘You don’t sound very optimistic that real action will take place at this summit,’ I said. ‘We need more than words.’
‘It will all be in the fine print. Many countries will commit to net-zero pledges but have no plan of how to get there, nor how to finance it.’ Camp said. ‘As usual, just follow the money.’
‘This is thirsty talk Camp,’ I said and just like magic, Vicky arrived with two lovely, golden refreshments.
‘Solving the problems of the world boys?’
‘Not today. We let some others do the heavy lifting for a change. All we can do is lift this pint and hope for the best.’