By Dave Wilkin
Affordable energy sits at the very foundation of modern economies, underpinning the lifestyle we enjoy today.
The past quarter-century has seen rapidly rising energy and fossil fuel consumption as billions of people have risen out of energy poverty and into middle-class and above lifestyles. This is positive, but it came at the price of steadily rising emissions with increasingly concerning consequences. Time is now running down for the enormous structural changes that will be needed if the world is to reach the ambitious emissions targets being set.
Unfortunately, the energy transformation choices, costs, and implications are poorly understood by most people. The picture has become more clouded by academics and politicians who mostly don’t have experience working in the energy industry and thus lack firsthand knowledge, or they have other interests. A climate-emergency narrative pushed consistently by the media is drowning out other voices and obscuring a fuller understanding of the energy transition big picture.
Rhetoric aside, the key question remains: what transition path will countries choose? Too slow a global transition to clean energy means increasing emissions and rising demand for more coal and more costly unconventional oil and gas to meet steadily growing energy demand. Too rapid a transition by prematurely curtailing fossil fuels before affordable viable alternatives are in place will lead to severe economic damage while condemning billions of people to continuing energy poverty, meaning a world less fair and geopolitically less stable. The ideal path chosen should achieve a balance and be sustainable, thus real-world trade-offs are needed. The ramifications of choosing poorly are enormous, carrying the highest possible stakes.
A major early warning of the impacts of imbalance is now playing out in Europe, the world’s champion for rapid energy transition. A significant energy crisis is unfolding there as natural gas and coal prices have spiked over 400 per cent, pushing electricity prices far higher and fueling consumer price increases not seen since 2008. With winter fast approaching and fossil fuel storage levels at unusual lows, the crisis is expected to worsen, bringing further economic disruption to recovering economies and hardship to many more families and businesses.
It’s not just confined to Europe either. Many other countries, most notably China and India, are also feeling the impacts of fossil fuel supply shortages and spiking energy prices, causing roaming power blackouts as systemic supply-demand imbalances take hold.
Inappropriate government energy policy, environmental activism, and ESG investor pressures have all taken their toll by reducing needed fossil fuel investments necessary to maintain adequate supply in the face of rising demand.
Europe’s energy crisis is the biggest wake-up call yet on the consequences of poor energy transition planning. Europe has been closing down coal, gas, oil and even nuclear power generation for well over a decade, replacing it mostly with intermittent wind and solar power while simultaneously becoming more dependent on Russian natural gas. The past cold winter lowered fuel inventories, and a less windy and dry summer significantly reduced renewable power generation, placing further demands on fossil fuels. It’s surprising to see such stunningly poor energy planning from some of the wealthiest and most technically advanced countries in the world. For other nations watching, Europe’s attempt at a rapid transition is not the model to follow.
Yet, even in the face of this crisis, EU politicians and even the International Energy Agency are predictably calling for a faster transition led by much more wind and solar power. This crisis was not only foreseeable but inevitable, as most climate and energy policies have long been designed to drive fossil fuel prices higher. The obvious problem of course is the real hardship caused when sufficient, dependable alternatives aren’t in place. Note that EU power grid average share for wind plus solar is 18 per cent, and fossil fuels are about 40 per cent share (three-quarters of all primary energy). Recently California and Texas, both with wind/solar shares similar to Europe, also experienced significant power grid stresses and rolling blackouts.
As the consequences of poor planning and flawed policies bite hard, the 26th UN Climate Change Conference (COP26) in Glasgow (UK) should be interesting to watch to see what is learned from the crisis and what changes may follow. My guess is most western country leaders attending will ignore the obvious and justify an even faster transition away from fossil fuels. There are some clear signs of dissent though. Norway, Europe’s largest oil and gas producer, is planning to grow their oil and gas industry. In the US, President Biden’s aggressive climate agenda looks in jeopardy as US energy prices spike and resistance builds. Further, China’s President Xi Jinping and India’s PM Narendra Modi remain uncertain to attend and Russia’s president Vladimir Putin will not attend. Combined, these countries generate over 55 per cent of global energy related CO2 emissions. A disappointment to many, no doubt.
Canadians need to understand the unvarnished truth on the energy choices ahead, the costs involved, the limitations and ramifications if we are to successfully navigate the turbulent waters and to seize the real opportunities presented. Current Canadian federal government climate and energy policy has us moving down a similar path as Europe, but at a far higher cost. Prematurely rapidly shuttering our large oil and gas sector would be an unprecedented self-inflicted catastrophe.
My next article in this energy mini-series takes a closer look at the global energy big picture to better understand what lies ahead. Watch for it!
Dave Wilkin is a Professional Engineer, with a master’s degree in Electrical Engineering from the University of Toronto. His career spans 45 years in IT, banking, energy and consulting. He lives in Huntsville, Ontario.
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I commend Dave, Oliver and Ross for maintaining a fact-based and respectful conversation on this important topic. We are seeing far too much of the opposite elsewhere.
Dave correctly points out the significant costs and disruption that are accompanying a transition from fossil fuel. I feel that what should be added to the discussion is a look at the costs and implications for society of not making that transition quickly enough.
I spent most of my career as a Professional Engineer working with Environment Canada on reducing releases from the energy sector, primarily the fossil fuel-based portion of that. Estimating the costs of measures to control releases was relatively easy. Estimating the cost of failing to do so was always much more difficult. The result was usually that we, as a society, waited until a problem was so serious that it could no longer be ignored. By then, the costs of dealing with the problem were always much greater. By about the mid-1990’s we started to see some important developments in our ability to address that situation. These merit discussion.
I will approach the folks at Doppler about writing an article on dealing with both sides of the equation – the costs of protecting the environment, and the costs of a failure, or delay, in doing so. Sound decisions must consider both. Perhaps that can become a useful addition to this series.
Thank you Dave for the commentary as there are many parts of your piece that provide valuable information and credible data. Somewhat obvious from folks commenting part of the issue is ‘dug in’ positions in the energy/climate debate & discussion. People get hardened to their beliefs and readily go to battle in defense of their opinion(s).
Everyone knows that over time increasing energy will come from non fossil fuel sources and the facts seem to be pointing to it likely taking somewhat longer than many folks prefer. Fossil fuels will be part of our & future generations energy mix at least for the next 30 years (like it or not) so we need to stop attacking sides and work together on medium term and much longer term strategies that align with our realities.
Carbon capture and small nuclear are just a few of the many focuses that need to evolve.
Everyone is on the same side – we want a healthier climate. Let’s put our collective effort into not taking sides but contributing enabled thinking and commitment that does not jeopardise the destination.
Dave, again thank you for your commentary – well written article imbedded with many essential facts.
In order to limit climate change we need to reduce our reliance on fossil fuels. Right now most people burn gasoline in their vehicles and natural gas in their home heating systems. It would be good if everyone could stop using FFs right now, but that is not a realistic option, and no reasonable person would suggest it.
According to the IPCC we need to reduce our GHG emissions by 50% by 2030 to keep warming to 1.5C. The best way to get there is to stop burning FFs in our cars and our homes. We have 8 years to cut our emissions in half. It is possible, and it is necessary. I have already done it. So can you!
How will you cut your emissions in half?
Oliver, I just saw your comment. I am more than willing to engage on any discussion on energy related issues. Re your specific question, I am not a climate expert, so I will refrain from passing judgement on specific models and targets derived from them. Generally though there is no question in my mind that the climate is warming, and we are most likely the primary driver of that.
I do know a lot about energy though. So ask any questions you may have on it and I will attempt to answer them.
Dave, you took the time to write a commentary, but you don’t seem to want to discuss the issues. I’m disappointed, but I will watch for your next effort.
Thank you for the response!
I agree that people should know what it will take to address the climate crisis and the energy transition.
I have a suggestion: let’s have a reasoned, fact based public discussion here on Doppler!
Here is my first question to you: Do you agree with the IPCC conclusion that we need to reduce our CO2 emissions 50% by 2030 in order to keep global warming to 1.5C?
Oliver, my main point is people need to understand what it will actually take to get there and to make the right choices as we move forward.
The cost are enormous. Trusting politicians to tell the truth is folly, it only leads to disappointment.
Dear Dave,
The UN Intergovernmental Panel on Climate Change (IPCC) is the leading scientific authority on global warming and climate change. They have stated a clear goal: the world must reduce global CO2 emissions by 50% by 2030. The only way we can achieve this goal is to reduce (and eventually eliminate) the combustion of fossil fuels. We have eight years to cut emissions in half…that seems like an emergency to me!
Good article Dave. Ideally we would have a global organization (sort of like a global OPEC) in which the major players would cooperate in planning a realistic global transition of all energy types to acheive emission targets. The International Energy Agency already has knowleagable reps from 200 countries. Perhaps COP 26 will give them a bigger role to play.