The energy crisis is a taste of what the IEA has in store for us – Are you excited about that?
By Paul Homewood
Biden might call it “Putin’s bull run,” but the root cause of our energy crisis has been brewing for several years now.
Tilak Doshi details how the oil and gas sector in the West has been starved to invest in this field Forbes article. Government climate policies, pressure on banks from governments, central banks and regulators not to lend to fossil fuel companies, activism by active investors Ecological, hedge-fund awakenings and judicial decisions all contribute to a gradual decline in new investment.
Instead, oil companies are happier using their surplus cash for dividends and stock buybacks, or pouring money into the heavily subsidized green bottom. Anything for an easy life!
Unsurprisingly, supply is tight and prices soar.
But for now the imbalance is still very small – we can still buy those things after all. The scary thing is that this massive shock to the global economy is just a test of what the Church Climate Alert has available to us.
We need only recall what the IEA suggested last year:
And this is from the horse’s mouth:
An immediate ban on all new oil and gas projects would be absolutely catastrophic for the global energy market.
According to the anti-fossil fuel Global Witness, such a ban would quickly lead to significant production cuts. By 2030, it will be reduced by 40%:
https://www.globalwitness.org/en/campaigns/oil-gas-and-osystem/overexposed/
Einstein didn’t need to figure out what effect this would have on markets, prices, and consumers. At least as world demand will continue to grow, with or without the Paris Agreement.
It will be impossible to predict how much the price will rise, as we will be in completely uncharted territory. What is certain is that those who do not have enough energy will have to leave.
Those of us old enough will recall the oil crisis of 1974, caused by the oil embargo, which led to the Arab-Israeli War. Global prices tripled, but global oil production actually increased slightly in 1974, (although for some reason it fell 5% in 1975). However, we are on the verge of distributing petrol in the UK; I still remember getting the meal coupons.
Less memorable, for some reason, is Oil crisis of 1979, ended by the Iranian revolution, which reduced oil production by 4%. Crude oil prices doubled, at the same time there was a shortage of gasoline and long queues at petrol stations. This energy crisis is in large part the cause of the global economic downturn of the early 1980s.
But both of these short-term crises are tea parties compared to the global shock that IEA policies will cause. The previous crises were quickly started by new oil fields being brought into production to make up for the shortfall. For example, global oil production was 22% higher in 1979 than in 1972, before the Arab-Israeli War.
But in the world of the IEA, there will be no such recovery, only a prolonged and continuous contraction. In the IEA’s fantasy world, this doesn’t matter because we will get all the energy we need from wind and solar power.
But in the real world, the results would be horrifying. So far we have only talked about abstract numbers, however, with such a decline in the energy supply, the effects will go far beyond our wallets, or even a tiny fraction. Cut. There will certainly be civil disorder and riots, poverty and famine. Societies will be destabilized and governments toppled.
And all in the name of an unfounded fear.
Fortunately, I suspect that most of the world will refuse to follow the West in its suicidal path. But if they were ever in doubt, the past 12 months have certainly been a warning of what lies in store.
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