This is a hard one. It triggers love and hatred. There are several sub-stacks I follow that discuss this: Doomberg (not always but sometimes, quite often and excellent); Environmental (very, very good with a slightly dark, comedic aspect); Robert Bryce (also excellent).
Let’s assume we agree - not everyone will, but hey - that we (mankind) have contributed to a warming climate. Let’s assume we agree that a warming climate is producing some pretty horrendous outcomes that are costing us a lot of money. What do we do? We jump straight into a discussion of energy transition. For some, this means shutting down carbon-based energy right now and going to 100% renewable. Happiness. For others, this means an actual transition. The first is just crazy and I am not going to discuss why because it should be obvious. The second leads to a conversation about how long the transition should take. That’s a reasonable topic.
Let me lay out my position early on. I think burning coal is better than burning wood; burning oil is better than burning coal; gas better than oil and nuclear better than all the above. I care about the planet ONLY because it is the place I live, where my children live and, hopefully, where my grandchildren live. I assume most people care about it for the same reason. I think we need to treat the planet with some respect ONLY because it is smart to husband this valuable resource so it can continue to be a pleasant place to live. Otherwise, I don’t care about the planet. The planet will be fine whatever we do to it. If we burn it up, it will regenerate over some long period of time and move on into whatever the next state is. I don’t think we have a moral obligation to the polar bears. They are nice to have and behold but they sink or swim with mankind. I don’t rate them as highly as my children or grandchildren. They are part of the puzzle but not my main concern.
Carbon-based energy will be with us for a long time to come. The developing world has a right to wonder why they should throttle back on their use of carbon fuels to develop their economies after the developed world has helped itself and prospered by exploiting them. This came through very clearly at COP 28. So, we had better get serious about figuring out a way to contain and mitigate the effects of warming and admit that warming is not going to slow down very much by attaching ourselves to unrealistic goals for containing it. Carbon capture and sequestration is a great idea. Let’s figure it out and roll out at scale.
You can’t have a sensible energy policy involving determining the right balance for a transition if you insist on screaming at folks who sensibly note that reliance on carbon-based fuels is not going away anytime soon. It just isn’t an adult conversation.
It is, however, entirely sensible and appropriate to have opposing views on this. It’s fine to have Greta Thunberg doing what she does as long as she isn’t running the show. People need to be able to heat their homes in winter, cool them in summer, fertilize their land to provide food to feed their families. Renewable energy is not going to get this done at scale in the near or even medium term future. It doesn’t mean it doesn’t have a role to play. We just need to think it through and factor in all the data, including making sure we don’t overload the electrical grid ahead of being able to source the equipment to reinforce and extend it (think supply chains for transformers). These things should be obvious. We should pay attention to the relative costs of gas and electricity in providing energy to homes and businesses before we decide to shut down the installation of gas equipment as a matter of principle. We should consider how Europe managed to cope with the shutting down of its Russia-based energy sources before we demonize the production and export of LNG from the US to Europe. It is entirely appropriate to have located COP 28 in the UAE, thereby emphasizing the fact that carbon-based energy has a key role to play and will for a long time.
I spend and have spent a lot of my professional energies helping companies source tax credits offered to help raise capital to build renewable energy projects. Probably not all of the projects should get built, but, on balance, probably most should. I would love to spend time sourcing more credits to support more nuclear facilities, but I only have a finite amount of time left to do what I do and this can’t be my main focus. There will be some creative destruction and the government will make mistakes - Solyndra - but this doesn’t mean they don’t have a valuable role to play. I would prefer the government articulate a cogent energy policy and draw up realistic plans for an energy transition factoring in carbon- and non-carbon energy sources. If I were king...
Doomberg rightly describes energy as the master resource. Without it, we are back to the dark ages. With it, there is a present and a future. We’ll go into the Inflation Reduction Act in a subsequent post. For the time being, I will end with a photo illustrating the insanity of an unplanned energy transition:
It is, as the substack authors of environmental point out, the ultimate metaphor for Germany’s self-inflicted energy chaos: the utility RWE knocking down wind turbines to expand the Garzweiler lignite mine. Lignite, of course, is the lowest quality, dirtiest form of coal with the least energy-density usable for electricity generation on earth.