Why the Net Zero Agenda Won’t Work

Your energy bills have skyrocketed in order to subsidise bird-killing wind turbines that don’t work. You may think it’s just silly and those pushing this agenda are simply delusional, but this is actually part of the Net Zero agenda to deliberately deindustrialise (and thereby impoverish) the West, while China and other countries unashamedly continue to capitalise on the huge economic prosperity afforded by the use of fossil fuels.


We are reminded of the below words of wisdom…

We noticed lately an uptick in analysis and commentary that is questioning the climate change narrative. Pieces like this one:


Clearly this climate change narrative/ideology too shall pass like every fad, but it will take time. This is ok. It just means that we will see the fossil fuel sector (oil, gas, coal, and related services) continually outperform the S&P 500 over the next 10+ years.

Take China… It Doesn’t Care…

I assure you, China doesn’t care about the ESG nonsense. What’s interesting is China’s dependency on coal – some 64% of their electricity comes from coal.

China produces (from domestic sources) about 85% of the coal it consumes (granted, this includes both coking and thermal coal).

With respect to coal, China has two big problems, and few appreciate the magnitude of the problems.

Firstly, China only has 35 years of coal reserves at today’s consumption levels, and secondly, the grade of those reserves is deteriorating. In other words, it is taking more coal to produce the same amount of heat.

Not only this but China wants to increase coal-fired power stations by 20-30% over the next 10 years or so. Where is all this coal going to come from if the volume and quality of China’s reserves are deteriorating?

This Bloomberg article highlights the deterioration in China’s coal grades.


From the article:

China’s coal imports, including low-grade lignite, climbed to an all-time high of 44 million tons in August, while domestic production of 382 million tons was also a record for the time of year. Imports over the first eight months have nearly doubled to 306 million tons, more than the country usually takes in a whole year.

The increases in supply come as the government seeks to avoid the power shortages that have crippled the economy in recent years. China’s rush to extract more coal has also degraded the quality of its domestic output so that more fuel is needed to generate the same amount of heat.

When energy security is discussed, few pay second thought to coal (particularly in light of today’s climate change ideology). China is going to have to source an increasing amount of coal from other countries, and there is only a few they can source it from (unlike oil).


How about the US? Only 17 days left ?!

While US government shutdowns make the headlines, quietly in the background the US only has 17 days of supply left in its strategic reserve.

Apart from the obvious (the US for all intents and purposes has no strategic oil reserve), there is a hell of a lot of buying that has to occur to build those reserves up. In other words, we aren’t going to see any selling pressure hereon in from the strategic reserve but rather a whole lot of buying. We suspect that Vlad Putin is well aware of this.

Would this be an opportune time to hit back at the US? Rockets, bombs, tanks — that is the way old fashioned wars were played. Yeah, it is still how regional conflicts are played, but wars on a global scale are likely to be fought using energy as the weapon of choice.

What is going on here?


We know it is just a chart but when we have seen this before (and we have seen a lot), “9 times out of 10” it has resulted in significant upside occurring within the following 12 months.

And finally, the Cherry on the Cake…

Europe’s Carbon tax goes on full speed. I know, you just can’t make this stuff up.


The climate change ideology force is strong…

The European Union has been accelerating its push to become the first climate-neutral continent. A new policy coming into force on Sunday will be a first step toward nudging other parts of the world to follow suit.

The measure will eventually place a levy on carbon-intensive imports so that European companies forced to comply with the continent’s strict climate laws won’t face unfair competition from producers outside the bloc. From Sunday, the start of the first phase of the so-called Carbon Border Adjustment Mechanism, importers from six carbon-intensive industries will be required to start reporting on their emissions.

This just leads to higher costs, more inflation, higher interest rates, and the like. Not to mention more companies shifting operations away from Europe.

We’ll see more of this.


Speaking of the “alternative energy” theme, you don’t have to be a technical analyst to figure out this isn’t bullish.


Source:MSCI World Alternative Energy Index

We think a whole lot more pain is coming, especially when folks realize that the renewable energy theme doesn’t work (as they were led to believe).

Investment implications?

Here is an index we created. It is the Dow Jones Global Titans Oil & Gas Index (30 of the world’s biggest oil and gas stocks like Exxon, Shell, Total, etc.) vs the DJ Global Titans Index (top 50 stocks in the world).


Let’s cut to the chase: the next 10 years will see a repeat of 2000-2010. The outperformance may well last for a lot longer than this. The essence is that we don’t have to be concerned at all about energy related stocks underperforming the general stock market for a very long time.

The biggest challenge will be to stay on this trend and not get knocked out by the lure of the beauty of Miss Volatility or all of the “the world is coming to an end” banter we are subject to daily.

It’s not About Saving the Planet, It’s the Big Daddy We Need to Look For


Don’t tell Greta, but the hits keep coming for wind projects…

For perspective, $4 billion equals about 28 billion DKK. Orsted’s equity is 76 billion DKK, so that $4 billion hit is equivalent to some 37% of its market cap. How the hell did they get it that wrong? Perhaps we can just put it down to delusional expectations that pervaded in the wind industry and still pervade today.

Remember: your energy bills have skyrocketed in order to subsidise bird-killing wind turbines that don’t work. You may think it’s just silly and those pushing this agenda are simply delusional, but this is actually part of the Net Zero agenda to deliberately deindustrialise (and thereby impoverish) the West, while China and other countries unashamedly continue to capitalise on the huge economic prosperity afforded by the use of fossil fuels.

None of this has anything to do with saving the planet, and everything to do with demolishing our standard of living, demolishing our economic prosperity and transforming the former middle class into a neo-feudal peasant class.

  • From Wall Street Silver: “Net Zero was never viable. It is impossible to completely remove CO2 from our energy needs and overall economy. Politicians are just now beginning to realize that. Just about every modern technology requires oil, natural gas and/or coal in order to function. Many of the metals required need to be mined and new deposits are often remote with no access to the electric grid.”
  • Then there’s this from The Travelling Scientist: “The Paris accord interestingly promotes “non-fossil biocarbon-based” CO2 sources as being okay and counts towards net zero… so cutting trees and burning wood is no problem to the regulators, and becoming ever more popular to meet regulations companies are even patting themselves on their backs in their quarterly reports for doing so.”
  • And this from James Melville: “The unethical truth of net zero. Around 40,000 child slaves in Congo work in hazardous conditions in cobalt mines, with inadequate safety equipment and for very little money. The cobalt is used in many products – including electric car batteries.”

A Thought Experiment

Here’s something that I’d not thought about before, but hear me out on this because with the neocons puffing up their chests and threatening armageddon, it may be worth considering the “how.”

US refineries (total) only store about 40 million gallons of military-grade jet fuel (not commercial grade) at any given time, or about 36,400 flight hours for an F/A-18E/F Super Hornet launched from an aircraft carrier. For 40 x -18s per carrier, this is about 910 flight hours. A carrier holds roughly 3 million gallons of fuel for its wing, about 68 flight hours per bird. Now, consider that a notional mixed complement of 20 x F-35s and 20 X F-15EXs operating out of Kadena AFB would consume about 62,400 gallons per hour combined.

Thus, just a single carrier wing and a single AFB wing’s complement of fighters (80 combined) theoretically all operating at once would drink 106,400 gallons per hour. So, the net stores of military jet fuel immediately available from US refiners above the global contingency supplies managed by the Defense Logistics Agency at any time represents about 375 net flight hours for one carrier and one air wing.

Put another way, this is less than 16 days of high intensity air operations by far fewer assets than the US would throw into an all-out theatre conflict in the Pacific Rim. DLA Energy ended FY2022 with 1.68 billion gallons of on hand inventory of jet fuel to serve the entire DOD combined inventory of 14,000+ aviation assets (cargo, fighter, rotary wing, bombers, drones, tankers, and recon). This begs the question: how fast would two theatres of conflict burn through all contingency supplies of fuel? And what does DOD do when the well runs dry?

The jets in question will run on anything this side of cooking oil. The question is, how will DLA be able to move product from points of production to the point of use?

How about refuelling?

What happens when Turkiye and Saudi Arabia shut down Western abilities to use their military bases in the region? Or even if they simply hinder the actual supply of fuel to these bases?

Once again, there is no political security without energy security. We may be about to find out exactly how important that actually is.

Look for the Big Daddy not the Narrative

Multiple narratives are being used (as shown in the comic above), but they missed out the big daddy in the graphic. Climate change. We know full well (because serious looking men on the telly tell us) that climate change is the biggest threat to mankind and that by not showering and eating bugs you can save the planet.

It escapes most people that while this is being suggested billions of dollars are being spent bombing the isht out of Ukraine and now Gaza, emitting more CO2 than entire countries emit in decades. Aside from the mandatory bug-eating, we’re told that something else is the saviour.

Renewables. The touted saviour. The proverbial man on a white horse. Except, the man has already fallen off the horse.