Column: Power projections for 2023? If Canada presents LNG-starved Germany a coloured pencil drawing of inexperienced hydrogen plans as an alternative, do not trouble predicting something


Terry Etam

Happy New Year everyone, even though 2023 is in full swing. Type A has the goals set for 2023 and is no doubt already pursuing them with all his might. (We) Type Bs now wander aimlessly through gyms, rationalizing abandoned resolutions and teasing regulars by dozing off on the machines.

In the energy world, resolutions take second place to forecasts. Everyone does them, which is fine – it’s always good to hear other people’s thoughts, but the pseudo-precision and urgency can get kind of insane. A quick Google search for “energy predictions for 2023” yields – Forbes (the business people are always brave): “8 follow-up energy predictions for 2023.”

Wood Mackenzie (global consulting firms put food on the table/Ferraris in the garage by projecting an aura of cultivated omniscience): “Ten predictions for 2023.” The Motley Fool (investment website): “3 bold oil market predictions for 2023.” Gizmodo (pop culture site with the motto “Tech.Science.Culture” and therefore certainly pop culture deep energy thinkers): “The Year Ahead in Energy – 2023 we will see the first real movement in a global energy transition.” Tell us everything about it, culture writer. And circumvent the fact that oil, gas and coal are all at record consumption levels.

The clickbait headlines didn’t pull me in, except, ironically, for Gizmodo – their predictable high-intensity/low-knowledge attack on hydrocarbons is of more interest than most because it aligns with Western political thinking. You may be clueless, but we have to watch out for those bollards. You may be in an auditorium of a hundred towering intellectuals, but you’ll give your attention to a single idiot with a bomb strapped to his head.

Ironically, the hydrocarbon haters provide the most clues to the future because they write what legislators make—a scary thought, but true (more on that in a moment).

As for the real energy world, I have no damn idea what’s going to happen.

Some things seem likely – apparently Russia will move on to Russia, embark on a mind-bending path of murderous but bumbling destruction (they apparently “occupy” the troops with another half million reluctant sacrificial lambs), bent on something that makes sense in their brains, but no one else. The whole war is almost unimaginable, like handing an army over to the craziest person on the internet.

Russia could have used the money spent destroying Ukraine to build an impenetrable wall, saving hundreds of thousands of lives and endless misery, but chickens don’t write novels either.

As for energy, the invasion was predicted to turn global energy markets upside down like nothing else. A year ago there were many predictions about how many millions of barrels a day of Russian oil would be lost from world markets, because who would want to trade it.

Turns out a lot of people would — Russian oil production ended the year after a brief dip in spring 2022 at production levels similar to 2021. Russia closed a gas pipeline to Europe (Nord Stream 1) as a bargaining chip, prompting someone to mysteriously Wisely blew it up really well (still miss you SCTV). These events were going to be even more catastrophic – I certainly thought so – but then strange things happened like Germany building an LNG terminal in 5 months. I didn’t see that coming.

China held on to a bizarre zero-Covid policy for much longer than anyone could have imagined, including Communist Party leaders who seemed more than a little shaken when the well-controlled populace began torching prison camps and rampaging barricades. limit found.

Now China is reopening at a dizzying pace, which should impact hydrocarbon demand unless something else significant happens, which seems more than likely. At least that’s what futures prices for commodities say, with both oil and gas prices showing significant weakness recently.

In late 2021, Europe was headed for a natural gas crisis – long before Putin’s invasion – due to a shortage of available supplies in what should theoretically be one of the big stories of 2022. However, the EU decided it loved natural gas after all and jumped into action, buying up all available LNG (Japan says LNG will be sold out by 2026) and rolling out a cool trillion new fossil fuel subsidies (you have to love the irony) to make their own deter citizens from rioting.

Germany must have set a record of sorts for building an LNG import facility in five months in what will go down in history when a “rapid energy transition” turned out to be the utter farce that any serious/knowledgeable person in the industry would want knew it would be.

Speaking of farce, a recent vacation brought me to one of those places where you can end a useless but relaxing day with some TV, and the TV choices were BBC, Fox News or CNN/MSNBC. Fox, CNN and MSNBC were terrible; Flipping around was like chatting up a divorcing couple who loathe each other, so headed over to the BBC in hopes of something more cerebral, which is where I found – an end-of-the-year interview with Greta Thunberg herself.

Well, it’s better to listen to the Bickersons; it’s always good to hear counterpoints to your own thinking. Who knows, maybe I had missed something relevant and frame shifting.

nope On the contrary; My first reaction was perplexity that an airhead like this had been challenged as a global icon of hope. The BBC interviewer himself was at times perplexed when Greta responded to a typical climate policy question with fits of giggles that kept her doubled over for an uncomfortably long time (at several points the interviewer seriously asks how such a question could possibly provoke uncontrollable laughter, to which he found no usable one answer received).

Greta also deflected every possible political question – the interviewer, originally from India, asks if it’s wrong if his mother flies over to him; Greta replies, “Of course not, people should do what they want.” (Huh? Drive like a gas car?). The interviewer urges her to either support or condemn nuclear energy (she refuses because if she took sides, “people would focus on that and not the climate emergency” (another huh?).

But as I watched the end of the interview, any scorn was replaced with outright pity. Greta is still a child. A child who was frightened by the adults around her, so frightened that she made it her life’s work to fight the demon her guides are convinced lives under her bed.

The interview left me with a queasy feeling of injustice to Greta, a youngster who is/was genuinely afraid of the future and who weaponized that fear as the cornerstone of a global activist marketing strategy.

The only reason to bring up the interview is the direct connection to the Gizmodo article, which ties directly to the current mindless politics our leadership is touting. The most prominent and clear example (among many candidates) was Trudeau’s announcement that there was no business case for sending Canadian LNG to Germany and that Canada would help its desperate Germanic friend by supplying, ta da, green hydrogen. (Shortly thereafter, Germany signed an LNG supply deal with Mexico, a country that doesn’t even have enough gas to export but is smart enough to pipe US/Canadian natural gas onto ships via Mexican ports and pipelines.) The Trudeau was -proposal stunning in its brazen and heartless stupidity; It would take a decade for all three levels of Canadian government to work out the regulatory framework and challenges of green hydrogen production. there is currently no mechanism or infrastructure to transport hydrogen to Germany; and Germany has the same tools as Canada anyway, possibly more – plenty of renewable energy, water, and a motivated workforce (our government’s rationale for why it makes so much more sense for Canada to develop an entirely new industry that doesn’t currently exist anywhere in the world instead of building pipe and LNG export terminals).

The stupidity of Germany’s visit/rejection is sadly and terrifyingly the best guide for what 2023 could bring. Important energy policy decisions are made without common sense and relevant expertise.

The world is in an energy crisis – global demand for natural gas, oil and coal is at all-time highs, the industry remains an investment pariah in many circles, and poor countries cannot compete with the rich for their fuels of choice – and yet it stands western leadership with their foot flat on the ground of the energy transition, even though the steering wheel has fallen off in their hands. Funding the development of new technologies is fine, but crucial, as an addition/advancement to/the current energy system, not as a replacement. 29dk2902l

I had thought an actual energy crisis would break the spell on Western leadership, but apparently not — not until it lands violently at home.

Here in North America, particularly with natural gas, consumers and industry are benefiting massively (and producers are suffering) from the inability to sell our natural gas at global prices. North America therefore currently enjoys a somewhat artificial advantage over the rest of the world.

With adequate infrastructure, North America could make a major contribution to meeting global LNG needs, and North American producers would see a price strong enough to stimulate development, but still below global prices (unless LNG terminals are springing up like dandelions). Additionally, NA producers are advancing emissions reduction programs at a rapid pace – both the US and Canada will see the backbone of carbon sequestration centers emerge in industrial heartlands from the Gulf of Mexico to Fort McMurray within a few years. The pace of these developments is dizzying considering the challenges of new infrastructure construction. But that is why any “energy transition” must start with the full weight of the hydrocarbon sector behind it and integrated into it – because that sector consists of trillions worth of already existing infrastructure. Think of the “reuse” in “reduce, reuse, recycle” folks…

The lack of affordable energy is a wrecking ball that will wreck economies wherever the impact is felt. Warm weather gives reprieve for a while; Europe is now looking good for natural gas for the winter. Problem solved!

I look forward with morbid fascination to 2023, when the relentless forces of reality will bring mighty blows to the heads of what history will show as the worst energy architects of all time. I guess that’s a prediction…but I’m sticking with it; It’s hard to imagine a more likely path.

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Read more insightful analysis from Terry Etam here or email Terry here.

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