READ THIS (YOU WILL UNDERSTAND)
This is quite simply one of the best papers (from JP Morgan) we have read in quite some time. For once, someone finally puts some objective numbers to the pixy land forecasts of the IEA and their woke brethren.
Why Zero Emissions Won’t Work
One chart that I’d like to highlight: why zero emissions won’t work.
The answer is because emerging markets account for a sizable and growing chunk of emissions, and they ain’t going to be told what to do by the “West”.
I highlighted this in a previous issue of Insider Weekly and we discussed that a continued push to make it so will result in snot flying in a big way (i.e war). But pictures help put things into perspective.
Curtailing emissions means curtailing economic growth in most parts of the world. Good luck on the West getting emerging markets to agree to that!
Past Performance Is No Guarantee Of Future Results
Past performance is no guarantee of future results. It is the mantra we money managers have to include in all our materials (pointy shoes need to be kept happy), but let’s just take a look at past performance, shall we?
Here we have previous “forecasts” from the pointy shoes as to “renewable energy transitions”:
These clowns’ forecasts were clearly way out of touch with reality. That would be funny if it weren’t for the fact that the current clutch of bedwetting hysterical eco snowflakes recent “forecasts” were not much, much, much worse. But they are.
Remember also that the emerging markets are still largely energy starved, meaning they have not reached living standards anywhere near that of the developed/Western world.
Living standards are inexorably tied to energy consumption. Destroying the latter impacts the former., and you’re talking about human lives here where, when we’re talking developing nations, it’s not a mere fact of having to pull on another woolly jumper but a matter of food tonight… or no food tonight.
I found this, too. All a lot of things we already knew but with additional granularity. Here’s something worth thinking about. Both the US and China use fossil fuels for over 80% of their primary energy needs, and much hoo-ha has been given to China for their “EV transition” which accounts for roughly 17% in autos (which compares to the US at 3%).
Go China, you planet saving heroes!
China's EVs Require 57% Coal
We have badgered you, fine folk, many times with this. It is now time to do so again. EVs require electricity, so let us look at industrial primary energy usage, which in the US is 27% and in China is, wait for it, 57%. So you know that much heralded 17% EV penetration in China. You know what it’s powered by? Coal (57% of it)!
Muppets. What else? Well, we’re 100% heading into an energy crisis, but on a granular level this “green” vegan eating, LGQBT fair trade, safe space world is going to require enormous infrastructure for electricity.
Simply put, we’re not going to have enough transmission capacity.
The pointy shoe’d “intellectuals” over at Princeton pulled out their models (read last week’s issue for more on “models” from academics) and published a snazzy energy proposal for 2050 ensuring they popped in that overused and absurdly nonsensical buzzword “net-zero”.
It is what they called their report. No kidding. Well, I can tell you what IS a zero, and it is the probability we reach any of their hallucinations mentioned.
Here is Princeton’s “net-zero” as a graphical representation.
It would require a 14X buildout of wind and solar, together with a 5X buildout of transmission capacity...
In any event, based on these hallucinations, what is missed (aside from the pictures of freezing people and starving babies) is what will be required to bring these hallucinations into a magical existence.
It would require a 14X buildout of wind and solar, together with a 5X buildout of transmission capacity. That is because wind and solar are intermittent.
The folks at Princeton, being highly “edumacated” haven’t forgotten that building out this currently missing transmission mechanisms costs money. They’ve neatly “forecast” this for us.
Yay! It is almost certainly wildly inaccurate and will cost at least twice these “forecasts,” but at least it will give you a sense of the enormous capital that needs to be thrown at this boondoggle.
Ridiculous Energy Storage Costs
So moving right along on the buffet table of stupid, let’s look at the storage of all this electricity.
Instead of going with John Kerry’s “yet to be discovered technologies,” we’ll shoot with that which we actually know we have here and now, shall we? Call me unreasonable, but that’s just how my little brain operates since attempting to quantify that which doesn’t exist I find too hard.
Everyone knows that Elon has and is saving the skies with his Tesla powerpack.
So we’ll contrast that to… oh I dunno, some of these. Good old oil storage tanks.
Did you see what I did there? I snuck in a sunset photo at the same time. Sneaky.
Well, they both look similar. On the one hand we’ve tanks and on the other what looks like white shipping containers. Well, where they differ is this.
It costs about $15 per barrel to buy an oil storage tank. In order to store an amount of electricity equal to the energy in that one barrel of oil, which is approximately 1,700 kWh, it will cost $510,000 based on the $300 per kWh cost of the Tesla megapack.
You don’t need me to tell you that this is just plain stupid. It is unscientific, ideologically driven green madness.
But hey, the show must go on… and so it will. As I’ve mentioned too many times to remember now, what we’re seeing is the Western world ceding economic power to those who simply stand still.
These “projections” being made, while being absurdly ambitious with astronomical capex costs associated, would mean that natural gas demand by the grid would decline by -13%. What? Yup!
Lastly and then I’ll leave this one alone, here is a chart showing the various demand projections by the respective interested parties.
How To Profit From The Madness
You will notice that there is a significant gap. That gap is where we make a isht load of money on being long non-Western energy.
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