When all of us, at some point in the distant future, are able to pause to catch our breath and reflect on the causes of the widening energy crisis, it seems more likely that the past week will be seen as a key moment when the reality of the crisis is. The face of the world began to appear. It has been a week that has seen the repeal of the national fracking ban, extraordinary speech by the leader of the United Nations, and some very outspoken statements by two top CEOs.
It was also the week that saw the release of a new study detailing the alarming possibility that a continent could run out of a major energy commodity.
Will Europe run out of gas this winter?
On Wednesday, energy analytics and intelligence firm Enverus released a new study titled “Hope for a Key to ‘Normal Winter’ for European Gas Outlook.” A summary emailed to the draft findings states that “if colder-than-expected weather hits, northwest Europe could run out of natural gas by March 2023.”
“Our scenarios show that a failure to adequately ration gas supplies this winter will mean European countries will deplete stocks by February 2023 if winter temperatures are below normal,” said Krishna Sapkota, senior associate at Enverus Intelligence.
Sapkota goes on to note that if EU countries succeed in implementing the 15% demand cuts which are their stated targets, they can exit the upcoming winter with natural gas stocks remaining at similar levels last April. If the continent is experiencing what is considered a “normal” winter in terms of temperatures.
The truth is, we should all hope for such an ordinary winter.
UK lifts ban on hydraulic fracturing
Early Thursday, UK officials announced the repeal of the 2019 ban on hydraulic fracturing – or “fracking” – of shale natural gas. Sky News Business and Energy Secretary Jacob Rees-Mogg was quoted as saying that strengthening UK energy security is an “absolute priority” in light of Putin’s “unlawful invasion of Ukraine and energy militarization”.
The ban was imposed due to concerns about seismic tremors from such operations, after years of anti-fracking activity in the UK. Like other European countries, UK policymakers have decided that such concerns outweigh concerns about energy security, which will be inevitable curtailment as the nation chooses to forego the development of its known mineral resources in favor of importing its needs from other countries whose interests are not necessarily aligned with the UK.
But now, the energy crisis in buildings and the huge costs to ordinary citizens and the British economy have caused a rethinking of that energy security equation. Thus, a ban that was deemed necessary only 3 years ago now seems somewhat less relevant. Nothing makes reality begin to emerge more reliably and quickly than a major crisis.
Damon refuses to take the Road to Hell”
Jamie Dimon, CEO of JP Morgan, told congressional investigators at another show-trial-like hearing this week that his bank would not hold back from making new investments in major oil and gas development projects, telling members when asked this question “Certainly not, and that would be Road to Hell for America.
When asked about his thoughts on the progress of the energy transition, Damon was crystal clear. “We don’t get this right,” he said frankly. The world actually needs 100 million barrels of oil and gas per day, and we need it for 10 years. To do this, we need an adequate investment in the oil and gas complex.
“Investing in the oil and gas complex is good for reducing CO2, because as we’ve all seen, because oil and gas prices have gone up, especially for the rest of the world, I’ve seen everyone come back to coal. Not just poor countries like India, Indonesia, and Vietnam, but rich countries like Germany and France. and Holland”.
Dimon’s answers are in stark contrast to the investment narrative focused on environmental, social and corporate governance that has prevailed since the beginning of efforts by Western governments to advance this energy transition. It comes as another indication that the reality of the unintended consequences of such policy actions is starting to emerge in the major banks.
The head of the United Nations lampast fossil fuel companies
Another set of notable observations this week came from United Nations Secretary-General Antonio Guterres, who has been a leading proponent of the political decisions in the West that led to the current energy crisis. second. Guterres’ comments, which were delivered to the UN General Assembly on Tuesday, stand in stark contrast to Dimon’s, most prominently in the minister’s decision not only doubling back on the ESG-focused narrative and the harsh rhetoric of climate warning, but also calling for the punishment of any Someone walks away from that novel.
Guterres acknowledged that the world’s governments are “stuck in massive global dysfunction,” and accused fossil fuel companies of “enjoying hundreds of billions of dollars in subsidies and windfall profits while household budgets shrink and our planet burns.”
Supreme Education Council. General called that these industries and their “enabling elements” should be punished with tougher taxes and regulations, adding, “This includes banks, private equity, asset managers and other financial institutions that continue to invest and ensure carbon pollution.”
Thus, as the consequences of premature efforts by Western governments primarily trying to support an early transition into reality begin to come true, we see one of the world’s leading advocates of those efforts point the finger at the same old guys.
Aramco CEO criticizes governments’ failure to plan
On the same day that sec. Guterres delivered his rambling remarks, and the CEO of the world’s largest oil company was effectively dismantling them, point by point. Speaking at the Schlumberger Digital Forum in Lucerne, Switzerland on Tuesday, Aramco CEO Amin Nasser charged global policymakers with what he described as failing to properly plan for this energy transition.
“Perhaps most pernicious is the idea that contingency planning can be safely ignored,” Nasir said in part. “Because when you shame oil and gas investors, dismantle oil and coal power plants, fail to diversify energy supplies (especially gas), oppose LNG receiving stations, and reject nuclear power, your transition plan better be right.
Instead, as this crisis showed, the plan was just a series of sandcastles swept away by waves of reality. Billions around the world now face access to energy and the cost of living consequences that are likely to be severe and long-term.”
The truth about the energy crisis has begun, along with the consequences that a growing number of observers can see coming into the world like a fast freight train. The question now is whether there is time left to clear the tracks before the locomotive arrives.