In today’s Money Morning… coal in China and India… cold rain in Germany… an ironic opportunity… what is our plan B… and so on…
Last week, the Australian House of Commons passed Australia’s first climate change bill in a decade.
The new bill promises to reduce greenhouse gas emissions by 43% by 2030 (above 2005 levels) and reach net-zero targets by 2050.
How?
Well, no one is sure yet.
The bill rests primarily on strengthening the powers of the Climate Change Agency.
whatever that means…
Anyway, it looks like we’ve finally joined the “battle against C02”.
We are a little behind internationally because the previous administration has not taken action on this matter.
Their position was that if big countries like China and India didn’t come to the party, they wouldn’t care what we did.
And look like them or hate them, they have a point on this…
Coal for China and India…
The fact is…
There are no signs that China or India are slowing down on fossil fuels.
In 2021, China, the largest emitter, has commissioned 56% of the new capacity of global coal-fired power plants.
Similarly, India is the world’s third largest emitter and relies on coal for 70% of its electricity generation.
As in China, the current priority is cheap and reliable energy.
as reported in clean energy news:
‘The surge in demand has led to electricity distribution in Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Jharkhand, Bihar, Goa, Telangana, Andhra Pradesh, and Karnataka. All industrial and agricultural areas are affected. The situation could get even worse. The summer peak demand season has not yet arrived.
‘Looking ahead, some players are suggesting a return to coal to avoid chronic power shortages.
‘The state-owned NTPC, India’s largest power company, reportedly At the end of this month, it signed a contract to build a 1.32 GW coal-fired power plant in Orissa, eastern India.
‘If confirmed, this will be NTPC’s first coal expansion project in six years. The company could also aim to revive two of his stalled projects in Lara and Singrauli, according to media reports.‘
No doubt many countries — especially the poor — We are turning back to coal for energy.
And you really can’t blame them.
Who tells them we cannot enjoy a higher standard of living with the energy we have just spent a century on?
Not only that, but in an increasingly uncertain world, coal is a very safe choice for most countries.
and we think it is No For other types of fuel.
Consider the current situation in Germany…
german cold shower
Germany has made a long transition to renewable energy and thought Russian gas would fill the gap.
they thought it was very safe — nuclear generator.
Now they have cold showers!
As the BBC reported last week:
‘The German city of Hannover turned off heating in all public buildings and switched to cold water showers because of the gas crisis in Russia.
‘For the first time in a big city, hot water supply has been cut off after Russia slashed Germany’s gas supply.
‘Germans have been told to expect significant gas cut measures and surcharges on energy bills.‘
I shake my head…
So how could a European industrial powerhouse be in such a position?
German news site The Local said:
“”Da hat die Politik mal wieder ihre Hausaufgben nicht gemacht’— “Again, politicians haven’t done their homework!”‘
This is what happens when you leave energy policy to incompetent bureaucrats and mediocre politicians.
And that’s a wake-up call for the rest of us to pay close attention.
Then there’s an elephant in the room…
Even with the best will in the world, can the world achieve these goals?
If so, we’re going to need a huge boom in these industries…
ironic occasion
Ironic for the Green Party…
If we want to move to a renewable future, we need to do a lot of mining first.
I talk a lot!
For example, as this chart from the International Energy Agency shows, if you want to produce enough batteries to meet your goals, you need the materials to make them.
That’s 50 times more than lithium, 60 times more than nickel, and 17 times more than cobalt needed for a starter.
This table shows the amount of copper required.
The average electric car contains four times more copper than a gasoline car. As noted above, battery demand is set to skyrocket.
We are talking about a significant increase in the need for multiple raw materials across the board if we are to replace fossil fuels in line with our goals.
Finding large deposits that meet these predictions is not easy, especially over a short period of just eight years.
And I’m guessing we’re nowhere near it.
Then I have this chart:
As you can see, China dominates the downstream production of electric vehicle batteries.
Given how strained international relations between the United States and China are right now, this seems like a very unreliable partner for securing our energy future.
Again, creating the infrastructure to convert raw materials into useful battery components is no small feat.
Approvals, funding decisions, manufacturing testing, and other processes take years to complete.
In short, the 2030 timetable looks very optimistic…
what is our plan B?
But what if the reality of the transition to renewable energy is taking much longer and more expensive than expected?
What if there isn’t enough coal, oil, or gas to support the migration?
Are we headed for a cold shower future?
Are we willing to live with super-high energy costs for years to come?
Morally speaking, are we willing to accept that already poor countries have to pay more for energy with all the hardships they bring?
These are all realities that have to be accounted for if you don’t do your homework on energy.
There is no “green” bullet that makes this transition easy and painless.
Here’s a great interview with Kyle Bass and Wil VanLoh, CEO of Quantum Energy Partners, detailing many of the issues that need to be addressed.
I highly recommend giving a watch to get information about this.
After all, this is too important an issue to leave to tribal politics…
good investment,
 |
Ryan Dins
Editor, morning of money
Ryan is also an editor crypto capitalThis service exceeds the hype When Hatred of the rapidly evolving world of cryptocurrencies. Ryan believes a region will be the most disruptive force in the way the world works since the Internet. Click here for information on how to subscribe.
