The world WILL wheep – “Peak Oil-Hysteria” the new Peak-Oil

Manhattan Contrarian Announces The Arrival Of “Peak Oil-Hysteria” — Manhattan Contrarian

https://www.manhattancontrarian.com/blog/2021-11-3-manhattan-contrarian-announces-the-arrival-of-peak-oil-hysteria

Eugene van den Berg, Nov 2021

WSJ writes:

I think it’s been a big mistake, quite frankly,” Mr. Biden said Tuesday on the sidelines of the summit. “The rest of the world is going to look to China and say, what value add are they providing? They’ve lost an ability to influence people around the world and all the people here.”He said he felt the same way about Russia. “Literally, the tundra is burning,” Mr. Biden said of Russian President Vladimir Putin. “He has serious climate problems and he is mum on his willingness to do anything.

The truth and reality is, China gets it. Without fossil fuels, it’s much harder, costly, and more challenging to transition to net-zero.

China seems to have adopted a two-pronged strategy around duality. Keep on relying on fossil fuels whilst developing Renewable Energy. It’s a phased approach.

China is rated high on the “food chain” concerning electric vehicle (EV) developments. Yet, it still has to set a legislative date when the country will ban the sale of Internal Combustion Engines (ICE) in the future.

Excluding the impact that China may have on global oil demand, the graphic below depicts what the reduction in the demand for oil may look like considering EV legislated cut over future dates. The analysis includes the bold ambitions of Ford and General Motors announced earlier in 2021.

The demand for oil will not disappear instantly. Mankind is the “Siamese Twin” of energy. Without energy, poverty eradication efforts will fail. Without oil, the quality of life will be substantially lower.

A very big part of what is being missed, in all climate change adaption and transition policy and discussion, is the undeniable fact that what we are looking to transition to, being RE, has many obstacles still to be solved around storage, reliability, and replacing baseload. Solving those are more important compared to the effort being invested in sizing up Green House Gas emissions reduction targets.

On top of that, electric grids require massive expansion and capital to expand capacity to feed and support the increase in demand stemming from charging needs. That’s not the issue but rather a consequence.

What’s different with this energy transition compared to when society transitioned from horse and carriage to the ICE, was that what we transitioned to was cheap and in unlimited supply.

In comparison, RE energy is free from the sun and wind. However when the sun shines and when the wind blows. The current global energy crisis, yes it’s driven mainly by low investment in fossil fuels since 2015, and compounded by lower wind occurrence to drive reliance on RE wind.

CNN’s Fareed Zakaria sums it nicely. We need an energy transition strategy. Even if the world can reduce GHG emissions the reality is the world still depends on ~84% of its energy needs forthcoming from fossil fuels.

The question is how much RE is required to fully replace fossil fuels? RE investment and expansion still have a long way to go.

We are undeniably in a compounding energy crisis. It’s merely the beginning gauging the recent rise in electricity production costs in the US and Europe.

Put the climate hysteria to the side and develop policies and strategy that embraces duality as the world transitions to RE.

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Eugene Van Den Berg

Eugene is an accomplished Analyst, Accountant, Controller, CFO, and Corporate Finance expert with many years of diverse finance and accounting experience across different industries. He is a knowledge- and information worker with a passion to solve complex financial management problems and processes. Eugene is passionate about finance and economics and enjoys blogging about interesting economic aspects of current times