Demand for oil has indeed been robust, the fact is that demand over the last half century has never stopped growing. And it’s expected to continue rising steadily for the foreseeable future.
By JAMES P. PINKERTON for The American Conservative
Here’s something that wasn’t supposed to happen in this era of climate change consciousness: fossil fuel use is rising—soaring, in fact.
Oil prices are up as demand surges, and so oil companies are accelerating new exploration. As we all know, the fracking revolution, which has had to overcome heavy political opposition, has turned the United States into its own Saudi Arabia, erasing what was once quaintly known as the “energy crisis.”
In the meantime, oil company profits are up, and so are their stock prices; investors are, in a word, pumped. As a CNBC headline blared on May 9: “Wall Street is back on the oil bandwagon.” The article quoted one CEO as saying: “The demand growth is soaking up the excess supply. People weren’t expecting the demand growth to be so robust.”
Yet while demand for oil has indeed been robust, the fact is that demand over the last half century has never stopped growing. And it’s expected to continue rising steadily for the foreseeable future.
By the way, the same is true of other fossil fuels. Natural gas consumption is up, too. Even worldwide annual coal consumption, while down in the last few years, is more than double what it was two decades ago.
So what’s going on? If we’re supposed to be transcending fossil fuels, as many experts say we must do for the sake of the climate, then why are we burning more of them than ever before?
The answer is that we suffer from a kind of global cognitive dissonance. The political-media-chattering complex is in a bubble of its own making, telling itself what it wants to hear. Out in the real world, where energy is needed to make the planet’s economy hum, the situation is different.
We might consider, too, the case of property owners in coastal areas who are voting with their own money. Many experts insist that Miami—and indeed much of Florida—will soon be inundated by rising sea levels, and yet the locals, living their lives, don’t seem so concerned.
According to Zillow, home prices in Miami have gone up more than 7 percent in the last year, to a median of $326,000, which is half again more than the national median. All this in a city that sits, on average, just six feet above sea level.
So what gives? Where’s the panic over “Waterworld”? The answer seems to be that people in Miami don’t believe the experts—there’s a lot of that cynicism going around. In addition, folks likely think that, if need be, a mitigation strategy such as sea walls will be developed. After all, the Dutch have been relying on them for centuries; indeed, the Romans mastered seawall-construction 2,000 years ago.
Yet mitigation strategies are out of fashion with the global elite; they prefer green virtue-signaling, mostly disconnected from actual human behavior. Indeed, the dominant dialogue might well have given ordinary news consumers the false impression that countries were actually cutting back on CO2. For example, in June 2015, the leaders of the G-7 countries jointly declared their commitment to the “decarbonization of the global economy over the course of this century.”
Later in 2015, the nations of the world came together to sign the Paris climate agreement, which pledged a “global peaking of greenhouse gas emissions as soon as possible.” Yet as that vague language might indicate, the Paris deal was less than met the eye. It never actually imposed limits on any nation; the agreement was simply the sum total of what each country volunteered to commit to doing.
As we all remember, in 2017, the Trump administration withdrew the U.S. from the agreement—and was greeted with a storm of protest. Yet just about every country has been withdrawing from it, albeit stealthily.
The most obvious case is China, which accounts for more than a quarter of all the greenhouse gas emissions in the world, almost double the total from the U.S. Who thinks that the Chinese, having increased their energy consumption more than a hundred-fold since the 1950s and tripled it just in this century, are really going to reverse course? Does anyone think that its multi-trillion-dollar Belt and Road Initiative is aimed at greening the planet?
Okay, but what about the eco-virtuous Europeans? Well, just read this exasperated headline, which appeared in Foreign Policy magazine last November: “Germany Is a Coal-Burning, Gas-Guzzling Climate Change Hypocrite.” As the article noted, Germany’s carbon dioxide emissions, the highest in Europe, are rising. “Germany is now in serious danger of hitting neither its 2020 nor its 2030 emissions targets,” the piece concluded glumly, “the very benchmarks that it browbeat other nations into adopting at previous climate conferences.” In other words, the Germans enjoy the moral oneupsmanship of climate piety, but not the actual burden of reducing emissions.
So now what of another big emitter, India? Interestingly, in the Paris agreement, India never promised to reduce its CO2 at all; it merely pledged to reduce its energy intensity per unit of GDP. India might well be on track to keep its promise, but that’s not the same as actually reducing CO2.
Not surprisingly, atmospheric carbon dioxide levels have continued to march upward. As we have seen, the people of the world, with or without their betters’ blessing, are burning lots of fossil fuels.
But wait! What about renewable energy? Don’t renewables have the potential—the destiny, even—to be game changers? To be sure, we are bombarded with optimistic proclamations about renewables—but the reality is much different. It is, you might say, an inconvenient truth that renewables account for only 12.5 percent of world energy consumption, and that number is projected to rise only as high as 18 percent in 2050.
We might note that of those renewable sources, almost half comes from hydropower, which is not popular among greens. Meanwhile, solar power, the environmentalist fave, accounts for just 1.3 percent of all U.S. energy production.
Moreover, as Michael Shellenberger, president of the group Environmental Progress, emphasizes, this thimbleful of solar power has come about only because of enormous subsidies. As he explains, per unit of energy generated, renewables receive 94 times more subsidies than nuclear power and 46 times more than fossil fuels.
It’s worth stipulating that Shellenberger is an unorthodox figure: he strongly supports, for example, nuclear power, a no-no to most greens. Yet if he is correct in his calculation that solar and wind have benefited from a cool $2 trillion in subsidies just in the last decade and yet still amount to almost nothing energy-wise—well, that tells us something. It’s not that renewables are a bad idea; it’s just that they don’t have the oomph needed to run a city or factory, especially when it’s cloudy or not windy.
The point here is not to make fun of the earnest efforts of those who think that anthropogenic climate change is an urgent issue. Yet at the same time, we must be honest with ourselves: if we need the energy, we’re going to use it. High-minded rhetoric aside, actual environmental policies will never amount to an economic suicide pact.
Indeed, ambitious visionaries are looking to more energy usage. Amazon’s Jeff Bezos said recently that a human being in an industrial civilization uses 11,000 watts a day, a number that will continue to rise. And of course, if Bezos’ ambitions for humans in space are realized, energy consumption will rise all the more.
Oh, by the way: if we want it, and we will, there’s a lot more energy to be found. For instance, a 2013 report from the Institute for Energy Research found that the total value of oil and gas under federal lands and waters was $128 trillion. That is to say, six times the national GDP, six times the national debt, 30 times the annual federal budget, and 120 times the annual deficit. Are there legitimate policy concerns vexing such exploitation? You bet. Will they be worked through, using, say, horizontal drilling? You can bet on that, too.
Moreover, fantastic fossil fuel abundance is hardly limited to the United States. We now know, for instance, that some $60 trillion of oil and gas sits under the South China Sea. So it’s no wonder that People’s Republic of China is fortifying its position there—it now owns all that energy. Indeed, all over the world, fossil fuel wealth is to be measured not just in trillions of dollars, but in quadrillions. Some people might be happy leaving all that wealth to lie fallow—but most won’t.
Okay, so then what about climate change? Most likely, we’ll deal with that problem the way we’ve dealt with the energy problem—with better technology. We’ve mitigated plenty of troubles in the past; we can mitigate this one, too, and not just with seawalls. Last year at TAC, this author wrote about one obvious solution: carbon capture and storage.
The bottom line is that humanity is hungry for energy. Or, some might say, humanity is greedy for it. Yet either way, it’s clear: we’re going to use this energy abundance. Well-meaning environmentalists can play a vital role in cleaning up our consumption, but they won’t be able to stop it.