Originally published at CFACT

By Ronald Stein

Ambassador for Energy & Infrastructure, Irvine, California

The Environmental, Social and Governance (ESG) factors climbing up the agenda in the banking industry to divest in fossil fuels is a desire to reach a world like that in the 1800’s, when the world was previously “decarbonized”. 

Back in the 1800’s, we had no coal or natural gas power plants, and we had not discovered crude oil as something that could be manufactured into usable products. Life was hard and dirty, and most people never traveled 100-200 miles from where they were born, and life expectancy was short.

Today, there is a lost reality that the primary usage of crude oil  is NOT for the generation of electricity, but to manufacture derivatives and fuels which are the ingredients of everything needed by economies and lifestyles to exist and prosper. Energy realism requires that the legislators, policymakers, and media that demonstrate pervasive ignorance about crude oil usage understand the staggering scale of the decarbonization movement.

The efforts to cease the use of crude oil could be the greatest threat to civilization, not climate change, resulting in billions of fatalities from diseases, malnutrition, and weather-related deaths.

In the worldwide frenzy to achieve the goal for “net zero” emissions, over the last 5-10 years, “ESG”–standing for Environmental Social Governance–has gone from an acronym that virtually no one knew or cared about, to a cultishly embraced top priority of financial regulators, markets, and institutions around the world.  Today, the ESG divesting efforts are applying to all 3 fossil fuels of coal, natural gas, and crude oil.

The Net-Aero Banking Alliance developed with the support from the United Nations, now includes seven of the largest and most influential banks in the United States, including BOA, Citi, J.P. Morgan Chase, Morgan Stanley, Goldman Sachs, Wells Fargo, and Amalgamated Bank.

Allowing banks to collude to reshape economies so that they are in line with the preferences of banks and other financial institution is a very dangerous precedent.  The American people never voted to give banks this sort of control over our country.

The domino effects from tinkering with the supply chain of crude oil, is supply shortages and soaring prices for thousands of products that support the economies of the world. Products based on oil are the basis of the entire medical industry, all branches of the military, airports, electronics, communications, merchant ships, container ships, and cruise liners, as well as asphalt for roads, and fertilizers to help feed the world. Fossil fuel shortages encourage inflation as it imposes serious damage on the energy and raw materials infrastructures.

Climate alarmism seems to be inexhaustible and if history is any guide, ESGers admitting their mistakes and rushing to undo the damage is not at the top of the list of likely responses. Thus, by divesting in crude oil infrastructure we can look forward to supply shortages of thousands of products manufactured from oil and crippling power prices and unreliable supplies to meet the demands of society.

The oil products that reduced infant mortality, extended longevity to more than 80+ and allowed the world to populate from 1 to 8 billion in less than two centuries, is now required to provide the food, medical, and communications to maintain and grow that population. How can world leaders consciously support the demise of crude oil that would take us back to the 1800’s when life was hard, dirty, and short?

Today, with all the products manufactured from oil, according to the United Nations the global population of centenarians 100 years old or older is projected to grow from more than 500,000 in 2021, to exceed 2 billion in 2050.

We already know that the poorer developing countries, currently without the usage of the 20^th century products manufactured from crude oil, are experiencing about 11,000,000 child deaths every year due to the unavailability of the fossil fuel products used in wealthy countries.

More than 70 per cent of those child fatalities in developing countries are attributable to six causes: diarrhea, malaria, neonatal infection, pneumonia, preterm delivery, or lack of oxygen at birth. About 29,000 children under the age of five – 21 each minute – die every day, mainly from preventable causes.

Without replacements for those derivatives manufactured from crude oil, there will be gigantic reductions in living standards of the population in the current healthy and wealthy countries as the world migrates back to the pre-1900 era, and any attempt to develop the colonial countries would come to a dead stop.

“Net zero” will be taking us back to a time before 1900 when the world had not yet discovered the benefits to society from the 3 fossil fuels. Net-zero policies are demonstrably precipitating ever more serious, unsustainable socio-economic and environmental damage, with several advanced economies routinely experiencing blackouts, and steeply escalating electricity prices that are leading to class-based electricity poverty, excess winter deaths, organized social and political pushback and ever more violent confrontations.

Before the 1900’s we had NONE of the products used in the medical industry nor any of the 6,000 products from oil and petroleum products.  By ceasing oil production and fracking, the supply chain to refineries will be severed and there will no need for refineries as they will have no crude oil supply to manufacture derivatives and intotransportation fuels demanded by the world’s heavy-weight and long-range infrastructures of aviation, merchant ships, cruise ships, and militaries.

Divesting is already impacting supply shortages of jet fuel as reported by Energy Information Administration (EIA), as less production and more demand have reduced U.S. jet fuel inventories since 2014 for the 23,000 commercial airplanes and 20,000 Private jets.

The IEA report points out that the demand growth for plastics and fertilizer are outpacing the demand growth for steel, aluminum, and cement. Petrochemical product demand has nearly doubled since 2000 and the U.S. and Europe use twenty times as much plastic and ten times as much fertilizer as India, Indonesia, and other developing countries on a per-capita basis. A decarbonized world without the three fossil fuels of coal, natural gas, and crude oil CANNOT manufacture any of those petrochemicals from a wind turbine or solar panel.

As Environmental, Social and Governance (ESG) divesting in fossil fuels progresses, the short memories of petrochemicals’ golden goose contributions to societies are leading the world to an era of Extreme Shortages Guaranteed (ESG) like we had in the decarbonized world in the 1800’s! 

Ronald Stein, P.E.

Ambassador for Energy & Infrastructure

http://www.energyliteracy.net/

Guest “Irony can be so ironic” by David Middleton

Norway Announces Record Oil & Gas Revenues in 2021

January 14, 2022 by David NikelHome » News from Norway » Norway Announces Record Oil & Gas Revenues in 2021

In spite of the climate crisis, Norway’s love affair with petroleum seems to be continuing. Never before has the country enjoyed such high revenue from its oil and gas industry.

The Norwegian Petroleum Directorate said 2021 had been a “great year” for oil and gas in Norway. Oil and gas production has remained high as both demand and prices have increased.

The news was announced by the Norwegian Petroleum Directorate’s Ingrid Sølvberg at the presentation of their annual resorts. As pointed out by our friends at the Barents Observer, “she did not mention the word ‘climate’ even once.”

It’s the latest chapter in Norway’s very visible conflict between its desire to be a leader in the green shift while remaining one of the world’s biggest producers of oil and gas.

Norway’s oil and gas industry in numbers

In the final quarter of 2021, Norway’s oil and gas exports reached more than NOK 100 billion (USD $11.5 billion) per month. That’s almost three times more than in the same period the previous year.

Production of oil in 2021 increased to 102 million standard cubic meters and natural gas to 113 billion cubic meters. Norway has now extracted approximately half of all oil and gas resources available on the Norwegian continental shelf.

[…]

Life in Norway

Irony #1

Despite racking up $11.5 billion/month in oil & gas export revenue, Norwegians pay more for gasoline than almost every other nation on Earth.

Irony #2

In part, due to exorbitant gasoline prices, EV sales are booming in Norway, particularly Tesla vehicles manufactured in Red China.

January 03, 2022 09:53 AM

EV sales rose 48% in Norway last year, led by Tesla

Electric cars made up nearly two thirds of overall registrations

Reuters

OSLO — Sales of electric cars in Norway rose by 48 percent last year, ensuring that almost two out of every three new vehicles were battery powered and making Tesla the top selling brand.

Seeking to become the first nation to end the sale of gasoline and diesel cars by 2025, oil-producing Norway exempts full-electric vehicles from taxes imposed on models using internal combustion engines.

Tesla took an 11.5 percent share of the overall car market, making it the number one brand for the first time on a full-year basis ahead of Volkswagen with 9.4 percent.

The U.S. automaker on Sunday reported record quarterly deliveries that far exceeded Wall Street estimates, riding out global chip shortages as it ramped up China production.

[…]

Automotive News Europe

Norway compensates for the exorbitant gasoline prices by massively subsidizing EV purchases.

The Norwegian EV incentives:

* No purchase/import taxes (1990-)

* Exemption from 25% VAT on purchase (2001-)

* No annual road tax (1996-2021). Reduced tax from 2021. Full tax from 2022..

* No charges on toll roads or ferries (1997- 2017).

* Maximum 50% of the total amount on ferry fares for electric vehicles (2018-)

* Maximum 50% of the total amount on toll roads (2019)

* Free municipal parking (1999- 2017)

* Parking fee for EVs was introduced locally with an upper limit of a maximum 50% of the full price (2018-)

* Access to bus lanes (2005-).

* New rules allow local authorities to limit the access to only include EVs that carry one or more passengers (2016)

* 50 % reduced company car tax (2000-2018). Company car tax reduction reduced to 40% (2018-) and 20 percent from 2022.

* Exemption from 25% VAT on leasing (2015)

* Fiscal compensation for the scrapping of fossil vans when converting to a zero-emission van (2018)

[…]

The progressive tax system makes most EV models cheaper to buy compared to a similar petrol model, even if the import price for EVs are much higher. This is the main reason why the Norwegian EV market is so successful compared to any other country.

Norwegian EV policy

Irony #3

Norway’s EV subsidies are funded by oil & gas export revenue and are not even close to “carbon neutral.”

Norway an EV role model? Their pathway is expensive and paid for with oil & gas exports

June 4, 2021 by Schalk Cloete

Norway is an EV leader thanks to a generous pot of tax incentives. Today, battery-electric cars make up more than half of all new car sales in Norway. Schalk Cloete takes a detailed look at what those incentives cost, and how many tonnes of CO2 they avoid. In short, Norway – a major oil and gas exporter – needs to sell over 100 barrels of oil (which emits 40 tonnes of CO2) to pay for the tax breaks it gives EVs to avoid one tonne of CO2. And Norway’s electricity is almost completely clean thanks to hydro power, so the CO2 avoidance costs will be higher in other countries. In other words, most countries cannot take this pathway to achieve EV dominance. It’s very expensive, and paying for it – certainly in Norway’s case – emits large amounts of carbon. Cloete is therefore very critical of some of the hype around EV targets. He wants to see the emphasis shift to behaviour change that reduces car use. And instead of being an EV leader, Norway should consider being a leader in turning oil and gas into low-carbon fuels.

I love living in Norway. It’s a beautiful country with nothing other than the weather to complain about. But this Nordic dream comes with a sizable oil stain; a foundation built on 50 years of lucrative hydrocarbon exports.

From official data, I estimate that Norway has sold fossil fuels amounting to roughly 44 billion barrels of oil equivalent – a CO₂ legacy in the vicinity of 15 gigatons. Norwegian production costs are attractively low, so we can reasonably assume a profit of $23/barrel to reach a cool $1 trillion in historical cumulative hydrocarbon profit (resource rent, to be more precise).

[…]

CO₂ avoidance costs

The best thing about BEVs in Norway is that electricity comes almost completely from clean hydropower. This means that BEV emissions relative to conventional cars come only from battery manufacturing.

…paid for by selling barrels of oil

[See graph below]

From the above graph, a BEV like the ID4 with an 80 kWh battery will avoid about 15 tons of CO₂ relative to an HEV when electricity emits no CO₂ (zero well-to-tank fuel cycle emissions for the BEV). Relative to a PHEV, the saving is about 6 tons of CO₂.

Hence, in total, the CO₂ avoidance cost of incentivising people to buy the ID4 in Norway is $36,500/15 = $2,400/ton relative to the RAV4 and $23,300/6 = $3,900/ton relative to the RAV4 Prime.

For perspective, each barrel of oil that Norway sells to help finance these large tax breaks emits about 0.43 tons of CO₂ upon use. Making the $2,400 required to avoid one ton of CO₂ with the ID4 at the previously assumed resource rent of $23/barrel requires the sale of 104 barrels (45 tons of CO₂). Relative to the RAV4 Prime, it comes to 73 tons of oil CO₂ per ton of CO₂ avoided. These numbers reveal the Norwegian BEV revolution to be little more than a band-aid on a 50-year oil legacy.

[…]

EnergyPostEU

Schalk Cloete is a fan of EV’s, he’s a “research scientist dedicated to sustainable development” and he supports decarbonizing Norway’s oil & gas exports. I haven’t checked his numbers (nor do I have time to do so); but they don’t seem unreasonable. If he is correct, Norway’s EV subsidies result in the export of 45 to 73 tons of CO₂ emissions for every 1 ton of avoided domestic emissions.

This works for Norway. They have abundant cheap ($0.14/kWh) electricity due to their world class hydroelectric resources and infrastructure. They have world class oil oil & gas resources; which they efficiently exploit. They have a relatively small population. They can probably afford to do this for many more years to come.

Is natural gas petroleum? Generally no, although it is usually associated with petroleum.

Petroleum is defined as:

A broadly defined class of liquid hydrocarbon mixtures. Included are crude oil, lease condensate, unfinished oils, refined products obtained from the processing of crude oil, and natural gas plant liquids. Note: Volumes of finished petroleum products include non hydrocarbon compounds, such as additives and detergents, after they have been blended into the products.

EIA

I would have captioned the graph as “Actual and projected sale of oil & gas 1971‐2022.”

Is it hypocritical for Norway to export 45 to 73 tons of CO₂ emissions for every 1 ton of avoided domestic emissions? No. It’s just good business – for Norway. This model won’t work very well for the rest of the European EV bandwagon.

Is it ironic? Fracking A it is!

Irony can be so ironic!

Is it hilarious that climate alarmists and social justice warriors are stupid enough to think that Norway is saving the planet? Frack yeah!

Larry the Cable Guy would say: