Tag: IEA

UAE’s OPEC Exit: Pragmatic Oil Policy, Not ‘Stranded Assets’ Panic

The United Arab Emirates’ announcement on Tuesday that it will leave OPEC and OPEC+ effective May 1st sent shockwaves through the energy world. As the cartel’s third-largest oil producer, with a production capacity approaching five million barrels per day and ambitions to push higher, the UAE was no peripheral player. Abu Dhabi joined OPEC back in 1967 — before the UAE federation existed in its modern form — and the unified UAE carried that legacy for nearly six decades.

From Tilak`s Substack

By Tilak Doshi

The United Arab Emirates’ announcement on Tuesday that it will leave OPEC and OPEC+ effective May 1st sent shockwaves through the energy world. As the cartel’s third-largest oil producer, with a production capacity approaching five million barrels per day and ambitions to push higher, the UAE was no peripheral player. Abu Dhabi joined OPEC back in 1967 — before the UAE federation existed in its modern form — and the unified UAE carried that legacy for nearly six decades.

The exit decision was framed by Emirati officials as a “policy-driven evolution” in pursuit of “long-term strategic and economic vision”. Within hours, a familiar trope emerged among media commentators: the UAE, fearing the inexorable global march towards Net Zero, is racing to avoid ‘stranded assets’. Oil will be left in the ground, you see, because electric vehicles in China and Europe’s Green Deal will soon render the black stuff obsolete.

Watch out for stranded assets!

The stranded assets narrative is the climate alarmists’ weapon of choice. In behavioural economics, the tenet of loss aversion suggests that the fear of a tangible loss is far more effective than hope for putative gains in shaping actions. For over two decades, climate activists and financial pundits have argued that fossil fuels — coal mines, oil and gas fields, pipelines, refineries — would soon suffer the fate of the buggy whip on the eve of the automobile age. The energy transition, they insisted, would ‘strand’ trillions of dollars in hydrocarbon assets as the world turns away from carbon-intensive fuels.

Climate activists have long claimed that technological progress in energy efficiency and renewable energy technologies combined with climate policies pursued by governments around the world will lead to substantial falls in demand for fossil fuels. A Financial Times column in 2020, for instance, claimed that the pursuit of climate change policies would “evaporate” a third of the current value of the big oil and gas companies. If countries met their Paris Agreement commitments and kept to the “no more than 2°C above pre-industrial levels” target, 50% of all coal, oil and gas resources would be “stranded” and, by definition, have zero value. If the stricter 1.5°C maximum is aimed for, then 80% of the world’s fossil fuels would be stranded.

Citing ‘consensus science’ (an oxymoron), climate change models purportedly linking carbon dioxide emissions with ‘climate risk’ are used to calculate the necessary cuts in oil, gas and coal production. Hence BlackRock, the world’s largest asset manager and an early purveyor of the ESG movement, warned over a decade ago that “the majority of fossil fuel reserves will need to be left in the ground” if global warming is not to exceed 2°C. Along the same lines, consultants for the OECD asserted that “vast quantities of resource reserves will need to remain underground in order to stabilise the climate”.

Turning to UAE’s decision to exit OPEC this week, an Oxford don in “energy systems” captured the climate-focused zeitgeist in a commentary published on Wednesday. He argued that as China electrifies transport, demand for oil will “plateau”, and the UAE — already ahead of the Saudis with its 2050 Net Zero target versus Riyadh’s 2060 — is wisely sidestepping the risk of unsellable reserves. This, we are told, explains why the Gulf heavyweight is ditching the cartel’s quotas for production flexibility. The UAE can then, in this narrative, produce oil as rapidly as possible before it goes out of fashion.

A Middle East expert from Rice University’s Baker Institute for Public Policy in Houston commented in Channel News Asia on Thursday that the UAE’s decision to exit “reflects a desire to monetise its reserves and move the oil to market to avoid the risk of stranded assets should global demand fall in any future transition away from fossil fuels. Shorn of the constraints of OPEC quotas… officials in Abu Dhabi will be able to increase production should it wish to do so once the impasse with Iran is broken and the Strait of Hormuz fully reopens.”

To more conventional oil analysts, the “stranded assets” theme is worn and threadbare. Fatih Birol, Chief Executive of the IEA, published the astonishing Net Zero “roadmap” with much fanfare in May 2021, calling for a global stop to all new investments in fossil fuels since they were going to be “stranded” anyway. It duly attracted its share of derision from Gulf oil producers with skin in the game, as in the case of the Saudi oil minister who called the report a sequel to “La La Land”. There is perhaps no player as big as Saudi Arabia that can claim ‘skin in the game’.

Barclays PLC dropped a bombshell white paper in February titled ‘Transition Realism: A Stranded Asset Perspective on the Energy Transition’. The report pulls no punches. After years of being lectured that fossil fuels are the quintessential stranded assets — trillions in oil, gas and coal reserves doomed to remain unused underground as the world races to Net Zero – we now learn that the real risks now lurk in the renewable sector. “Stranded-asset risk is becoming system wide. … Historically, stranding meant coal plants. Today, renewables facing multi-year interconnection queues, curtailment and congestion risks are increasingly likely to be impaired.”

The question of national interest

The UAE has chafed for years under OPEC quotas that capped its output at around 3.4 million barrels per day while its sustainable capacity sits at 4.8 million and climbing. Abu Dhabi National Oil Company (ADNOC) has invested heavily to expand, only to be restrained by OPEC quotas under Saudi-led discipline.

The Iran war and the closure of the Strait of Hormuz have compounded the frustration. UAE exports able to bypass the Hormuz chokepoint via the Habshan-Fujairah pipeline have a capacity to transport 1.5-1.8 million barrels of oil per day. By exiting OPEC, the UAE gains the freedom to ramp up on its own terms, redirect capital to secure export routes and align more closely with the US whose shale revolution has already done more to erode cartel power than any UN climate conference ever could. But in the short run, the UAE is constrained by the pipeline capacity until the Strait of Hormuz is released from blockades.

Climate zealots cannot see a sovereign nation’s rational self-interest without projecting their own apocalyptic fantasies onto it. The UAE is not some farsighted convert to the renewables revolution, nor is Saudi Arabia the dim-witted Arab cousin stubbornly clinging to a dying fossil fuels industry. Both are hard-nosed pragmatists operating in a world where oil demand remains robust, geopolitics trumps virtue-signalling and government promises of distant Net Zero targets are worth about as much as the paper they’re printed on.

The real story, buried beneath the stranded-assets hysteria, is one of production quotas, regional rivalries, wars and blocked maritime chokepoints for oil and gas trade, and the enduring power of market realities over green ideology. US fracking — 13.2 million barrels per day in January 2026, up from 5.4 million in 2010 — has achieved what decades of diplomatic arm-twisting could not. OPEC’s 2014 attempt to flood the market and crush American oil and gas producers backfired spectacularly, forcing US shale to become profitable at $50-$60 per barrel.

This is well below the fiscal break-even oil price for most OPEC members, that is, the price that helps balance government budgets. IMF projections indicate that Saudi Arabia requires roughly $95 per barrel to balance its 2025 budget, while the UAE maintains a lower breakeven around $50 per barrel.

And yet the stranded-assets mantra persists. Even as physical Brent crude spikes above $110 amid the Hormuz disruptions — reminding everyone that energy security is not a luxury but a necessity — the Oxford academic and his ilk insist the UAE is acting on long-term demand decline. Never mind that China’s electrification is built on a coal-fired grid that shows no sign of rapid decarbonisation. Government pledges 25 or 30 years out are worth less than used Tesla batteries.

The UAE, sitting atop some of the world’s lowest-cost oil reserves, is hardly about to abandon that absolute advantage on the altar of UN target ‘commitments’ for carbon mitigation. Saudi Arabia’s continued commitment to oil is no act of denialism either. Both Gulf powers understand what Western elites refuse to: global fossil fuel demand is not plateauing. The UAE’s exit is about flexibility — production policy, export security, and foreign policy autonomy — not a sudden conversion to the Church of Climate.

The UAE has distanced itself from cartel constraints while deepening US ties, a move accelerated by the Iran war which exposed the limited nature of the six-nation Gulf Cooperation Council solidarity. UAE Presidential adviser Anwar Gargash said the Gulf states supported each other logistically in the crisis, but he lambasted their political and military response: “The GCC’s stance was the weakest historically, considering the nature of the attack and the threat it posed to everyone.” Riyadh, for its part, retains the swing-producer role and the fiscal buffers to weather volatility. Neither are ‘unenlightened’; both are playing the long game in a multi-polar energy market where US shale, not solar panels, has humbled OPEC+.

Climate delusions vs petrostate statecraft

The broader lesson is one of persistent delusion. Anti-fossil fuel advocates have spent years portraying every market signal — OPEC cuts, price spikes, producer exits — as proof of their eschatology. Qatar left in 2019 for gas focus; Angola in 2024 over quota disputes; Ecuador and others before them. These were pragmatic adjustments, not harbingers of stranded reserves.

The UAE’s departure, the largest and most consequential since the cartel’s founding, weakens OPEC+ materially and reputationally, but it does so because of internal rifts, US supply abundance and regional conflict — not because Abu Dhabi’s planners have swallowed the IEA’s Net Zero Kool-Aid.

As the Hormuz crisis underscores, the world still runs on oil. Brent’s surge to over $110 after UAE’s exit notice was not a panicked farewell to fossil fuels but a reminder of supply vulnerability. The UAE will produce more, invest in bypass infrastructure and contribute to stability “in a measured and responsible manner”, as its statement noted. It appreciates OPEC’s past efforts while moving on. That is statesmanship, not surrender to the green transition fairy tale.

The climate establishment’s inability to see this reveals more about the ideology of its adherents than about Gulf energy strategy. They project their own wishful thinking — EU Net Zero by 2050, China’s miraculous pivot to renewables, an early plateau to global fossil fuel demand — onto rational actors who understand that energy abundance underpins prosperity and security.

Stranded assets? The only things truly at risk of stranding are the trillions squandered on intermittent renewables that cannot replace hydrocarbons at scale without massive economic losses. The UAE knows this. So does Saudi Arabia. It is high time the West’s virtue-signalling policymakers stopped lecturing them.

Dr Tilak K. Doshi is the Daily Sceptic‘s Energy Editor. He is an economist, a member of the CO2 Coalition and a former contributor to Forbes. Follow him on Substack and X.

The Oil Demand Outlook COP28 Leaders Would Hate

Oil producers slammed the IEA for manipulating data.

  • The International Energy Agency said in its recent oil report that oil consumption is close to peaking, thanks to transition efforts and energy efficiency gains.
  • Goehring and Rozencwajg: In 12 of the past 14 years, the IEA has underestimated oil demand by an average annual of 820,000 barrels per day. 
  • Goehring and Rozencwajg: “If the IEA’s error were a country, it would be the world’s 21st largest oil consumer,”.

By Irina Slav

This week, a report from a climate organization warned that emissions from the combustion of hydrocarbons are set for a record this year.

This is despite the massive buildout of wind and solar capacity, hundreds of billions of investments in alternatives of hydrocarbons, and pledges for a lot more.

There appears to be a gap between stated goals and ambitions and reality. It might be more difficult to see looking at the oil futures market, but it is there. And it may be getting deeper.

Like emissions, oil demand rose this year. Yet the International Energy Agency said it is close to peaking, thanks to transition efforts and energy efficiency gains.

Oil producers slammed the IEA for manipulating data.

The investment world was divided. And some recalled the Jevons Paradox as proof that the hopes being pinned on energy efficiency, especially as it related to oil demand, were empty ones.

In their latest quarterly market commentary, contrarian natural resource investment managers Goehring and Rozencwajg did just that: they reminded everyone watching COP28 and listening to all the talk about efficiency and demand for hydrocarbons that gains in the former never lead to a decline in the latter. 

“It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth.” This is what William Stanley Jevons, a British economist and logician, wrote in the 19th century. He was talking about coal. Close to 200 years later, the paradox still stands.

Yet it is not just the mistaken belief that greater energy efficiency would lead to lower consumption of hydrocarbons that has led Goehring and Rozencwajg to predict that oil demand is set to continue strong for more than a decade yet. There is also an issue with the IEA’s demand forecasts: they have been underestimating oil demand for more than a decade.

In 12 of the past 14 years, the IEA, according to the investment firm, has underestimated oil demand by an average annual of 820,000 barrels per day. This is quite a substantial amount when something as important as oil demand is being estimated.

“If the IEA’s error were a country, it would be the world’s 21st largest oil consumer,” Goehring and Rozencwajg wrote. But this error can create a false narrative on the futures market that could end in a nasty surprise for many.

The IEA said in its latest World Energy Outlook that tripling generation capacity from wind and solar and other low-carbon sources must go hand in hand with an annual rate of energy efficiency improvements of 4%.

What it did not say is that even if this annual rate of efficiency gains is achieved, it will only lead to more energy demand, which would translate into more oil and gas demand. This is because the new low-carbon sources of energy that transition advocates favor cannot compete with hydrocarbons on supply reliability, at least not yet.

While all this is happening, the oil industry is not investing enough in future production, not least because of the transition pressures applied to it by activists, governments, and financing institutions.

As a result, Goehring and Rozencwajg write, “When the realization dawns that oil and gas demand is not in free fall, investors will be forced to confront how little the industry has invested to offset declines.” This will lead to a reversal in investor thinking and a rush to buy into oil and gas. Needless to say, this will not exactly be bearish for prices.

The rush will likely be a stampede, too, because of something else that tends to get overlooked amid all the transition commitment noise. China is the biggest wind, solar, and EV market. India has major ambitions in all three areas. Yet these two countries alone represent the biggest driver for oil, gas, and coal demand. And their role in global hydrocarbon demand growth is only going to become bigger.

Emerging markets as a whole currently account for 45% of global GDP. By 2040, this will rise to 53%, representing 70% of global GDP growth. And these markets are energy intensive, meaning energy demand will be rising over the next 17 years, at least, efficiency gains and all. With that, demand for hydrocarbons will be rising, too, whatever commitments current governments make at the COP28.

The reason for that last prediction is evident in the report on emissions cited earlier: when energy demand grows, so does hydrocarbon demand because they can supply energy quickly in the form of liquid fuels and reliably in the form of baseload electricity generation.

Predictions from the IEA and other transition-oriented outlets seem to assume that a reversal in these processes is possible. They seem to assume that it is possible to cut energy demand in the developed world by a significant percentage.

It is quite likely that these assumptions are wrong because they go against fundamental truths about human civilization, such as the fact that going from comfort to forced discomfort is not something many would readily embrace, to put it mildly. The implications of basing investment decisions on wrong assumptions should be obvious enough—as many offshore wind investors realized earlier this year.

By Irina Slav for OilPrice.com.

Why We Are Still Searching For Fossil Fuels, BBC

The BBC presented another La La Land report.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

The BBC want to know why the world is still exploring for oil, gas and coal:

https://www.bbc.co.uk/programmes/m001sr6f

It is just as well that we are still exploring, because if we don’t the world’s economy would soon collapse.

Given the fact that the world still gets 82% of its energy from fossil fuels, and that energy demand continues to increase year on year, there is simply no possibility that we could quickly switch to an all renewable economy.

And this ignores the fact that we will still continue to need fossil fuels for non-energy use.

BP Energy Review

The BBC seem to think that if we stop drilling now, it won’t affect us for decades; that we have “plenty of fossil fuels” already available to us which will last for years. But life is not like that.

Every year, new capacity comes on stream. But every year, older capacity is shut down, or its productivity rapidly diminished. Typically oil and gas fields have between 20 and 40 years of significant production, and as we have seen in the North Sea output has been tailing off for as few years. If no new capacity is brought on, we could potentially lose a quarter of the world’s supply within a decade or so.

According to the IEA, 5.9 mbd of net additional oil capacity is projected to come on line by 2028, but this will only be enough to meet demand. In other words, this is net of the loss of existing capacity. The gross capacity addition is probably double this number.

Annual oil consumption is 97 mbd, so if the BBC got its way the world would be facing a serious shortage of oil within a few short years. The economic and social consequences of this would be catastrophic.

Richard Bilton, who presented this Panorama in La La Land report, has absolutely no experience of or qualifications in energy or economics. According to his BBC resume, his background is mainly in social affairs.

Perhaps next time the BBC might get a journalist who actually understands the energy sector to present Panorama programmes on fossil fuels.

EPRINC report reveals IEA Net Zero Roadmap as a Green mirage

Two years ago, efforts by climate activists and Environmental, Social, and Governance (ESG) investors to block investment in oil and gas production by Western companies appeared to have received a seal of approval from no less an authority than the International Energy Agency (IEA), when it published Net Zero by 2050: A Roadmap for the Global Energy Sector.

From  CFACT

By Rupert Darwall 

Two years ago, efforts by climate activists and Environmental, Social, and Governance (ESG) investors to block investment in oil and gas production by Western companies appeared to have received a seal of approval from no less an authority than the International Energy Agency (IEA), when it published Net Zero by 2050: A Roadmap for the Global Energy Sector. As a result, attempts to achieve net zero carbon emissions (NZE) by 2050 became central to the “E” in ESG, and the IEA’s net zero roadmap has come to define the NZE baseline for energy companies.

For this reason, the RealClear Foundation asked the Energy Policy Research Foundation, Inc. (EPRINC) to conduct a forensic analysis of the IEA’s major reports on net zero and assess the likely economic impact of a cessation of investment in new oil and gas fields. EPRINC’s analysis conclusively demonstrates that the IEA’s assumptions are unrealistic, internally inconsistent, and often support the case for increased hydrocarbon fuel production. In reality, the IEA’s net zero roadmap is a green mirage that will dramatically increase energy costs, devastate Western economies, and increase human suffering. As such, investment managers and banks that use other people’s money to advance this anti-investment agenda violate their fiduciary obligation to maximize returns for retirees, investors, and shareholders.

The fundamental assumption underlying the IEA’s net zero roadmap is that the superiority of alternatives to hydrocarbons—principally wind and solar (nuclear barely gets a look in) — will cause demand for coal, oil, and natural gas to wither away. Nonetheless, progressive groups seized the IEA’s report to justify — indeed, to require — a ban on investment in new oil and gas projects. Climate Action 100+, a group of 700 investors with over $68 trillion in assets under management, hailed the report as a “watershed moment” and highlighted the call from the “relatively conservative IEA” for an immediate end to new investment in fossil fuel extraction. Similarly, As You Sow, a not-for-profit climate activist investor, described the IEA NZE report as groundbreaking. For the 2023 proxy season, As You Sow filed shareholder resolutions at five of the largest U.S. banks, pressing them to align their financing activities with achieving net zero by 2050. Those resolutions all failed, but last year, a resolution filed at the ExxonMobil annual meeting by Ceres, another activist investor and a founding partner of Climate Action 100+, cited the IEA net zero report and requested the company’s board to produce an audited report on the impact of applying the IEA’s net zero assumptions on the company’s financial statements. The resolution received the support of 51.0% of voting shareholders.

The IEA itself highlights the dire consequences of unilateral action designed to suppress supply. “Reducing fossil fuel investment in advance of, or instead of, policy action and clean energy demand would not lead to the same outcomes as in the NZE Scenario,” the IEA warned in its World Energy Outlook 2022. “If supply were to transition faster than demand, with a drop in fossil fuel investment preceding a surge in clean technologies, this would lead to much higher prices — possibly for a prolonged period”— an accurate description of the world we’re now living in.

Instead, the IEA subscribes to the Friedrich Engels theory of renewable energy: like the state under communism, demand for oil and gas will wither away. Based on its presumption of demand obsolescence, the IEA foresees low and falling hydrocarbon prices: $35 a barrel for oil in 2030 (around half its current level); and, for natural gas, $2.1 per million Btu (MMBtu) in the U.S. and $2.0 in the EU in 2030. History tells us that these forecasts are fanciful. In the 318 months since January 1997, there were only 26 months when the price of natural gas in the U.S. was less than $2.10—and seven of those were in 2020 when demand was suppressed due to the Covid pandemic.

Failure to invest in increased supply is far more likely to result in upwardly spiraling prices as demand increasingly exceeds supply, as the Biden administration understood when it used the Strategic Petroleum Reserve for the nonstrategic purpose of tamping down gasoline prices. EPRINC compares the net zero supply deficit with the IEA’s Stated Policies Scenario (STEPS). Based on historical price elasticities of demand, the 35% supply differential for both oil and gas could see prices more than tripling on the net zero pathway. Whether price increases of this magnitude cause a recession or a depression, they will have a significant negative impact on global growth.

The other side of this coin is the relative cost of wind and solar energy. “Ever-cheaper renewable energy technologies,” the IEA claims, “give electricity the edge in the race to zero.” Yet the IEA’s own numbers demonstrate the inferiority of its post-fossil fuel energy future as it will require enormous increases in capital, labor, and land to produce less energy.

By 2030, the IEA’s net zero pathway will use an additional $16.5 trillion of capital. More investment should make labor more efficient. Not with clean energy. Renewables require nearly 38.5% more labor and global energy employment rising by nearly 25 million. Yet this new energy system produces 7% less energy, implying a calamitous 33.0% fall in energy output per employee. If that’s not bad enough, solar and wind require an area equivalent to the combined size of California and Texas, and bioenergy for electricity production, an area the size of France and Mexico combined.

No theory in growth economics says that more inputs of land, labor, and capital for less output is a formula for sustained economic growth. Quite the opposite. The IEA’s net zero pathway reverses a process that has been underway since the dawn of the Industrial Revolution of society obtaining more outputs for fewer inputs, making the world unambiguously poorer and having the worst impact on billions of people in the world’s poorest nations. And this is before considering renewable energy’s own negative environmental impacts. This leaves decarbonization as the sole potential benefit of deploying wind and solar. If there is an economic case for net zero, neither the Intergovernmental Panel on Climate Change nor the governments that adopted net zero targets have yet to conduct a proper cost-benefit analysis to prove it.

This leaves ESG-focused investment managers in a tight spot. In its World Energy Outlook 2022, the IEA implicitly conceded that ESG investment managers exerting pressure on oil and gas companies to align their investment programs with net zero are contributing to the current macroeconomic malaise of high inflation and weak growth. These investment managers have fiduciary obligations to current and future retirees, savers, and shareholders to maximize their returns. They do not have a mandate to use other people’s money in an effort to avert what they believe might be a planetary catastrophe by destroying corporate value and throwing the free-market growth machine into reverse.

There is a geopolitical dimension to NZE. The IEA’s net zero roadmap sees OPEC’s share of the global oil market rise from 37% to 52% in 2050, “a level,” the IEA says, “higher than at any point in the history of oil markets.” Where non-OPEC producers —pressured by ESG investors — follow the net zero profile of steeply declining oil production while OPEC producers maintain investment, OPEC’s share would rise to an astounding 82% by 2050. Wittingly or otherwise, ESG investors are undermining the security interests of the West during a period of rising geopolitical tensions when the West is having to relearn a painful lesson on the strategic importance of energy security.

Nearly 50 years ago, Henry Kissinger gave his Pilgrim Speech that led to the creation of the IEA. Kissinger defined the goal of the new energy group as “the assurance of required energy supplies at reasonable cost.” The IEA could have chosen to remain faithful to its original mandate. In seeking to become a cheerleader for net zero, the IEA has allowed itself to be used as a tool for climate policy extremism, has misled policymakers, and has endangered the world’s economy and Western security, forsaking the purpose for which it was created.

The EPRINC report, “A Critical Assessment of the IEA’s Net Zero Scenario, ESG, and the Cessation of Investment in New Oil and Gas Fields,” published today, can be downloaded here. 

This article originally appeared at Real Clear Energy

Author

  • Rupert DarwallRupert Darwall
  • Rupert Darwall is a Senior Fellow at the RealClear Foundation.

A Comprehensive Critique Of Net Zero Fantasies

As yet another example of a bureaucracy gone completely nuts, consider the International Energy Agency. IEA started out in the 1970s as a consortium of Western nations organized to counteract the oil price shocks imposed by OPEC in those years.

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From The MANHATTAN CONTRARIAN

By Francis Menton

As yet another example of a bureaucracy gone completely nuts, consider the International Energy Agency. IEA started out in the 1970s as a consortium of Western nations organized to counteract the oil price shocks imposed by OPEC in those years. That seemed reasonable enough. But somewhere along the line, gradually, the mission, let us say, evolved. Today, IEA is fairly described as a center of advocacy for elimination of fossil fuels from the world’s energy supply.

In May 2021 IEA published a big Report with the title “Net Zero by 2050: A Roadmap for the Global Energy Sector.” You might get the impression from the title and some of the text that this could be just a few helpful “how to” tips on reducing emissions. But you don’t need to get too far into the document to figure out that it’s really another one of those crazed demands for immediate desperate action to save the planet from impending doom — the difference being that this one is directly funded by essentially every major Western government. From the Foreword:

We are approaching a decisive moment for international efforts to tackle the climate crisis – a great challenge of our times. The number of countries that have pledged to reach net‐zero emissions by mid‐century or soon after continues to grow, but so do global greenhouse gas emissions. This gap between rhetoric and action needs to close if we are to have a fighting chance of reaching net zero by 2050 and limiting the rise in global temperatures to 1.5 °C. Doing so requires nothing short of a total transformation of the energy systems that underpin our economies.

Now, two years later, along comes a serious group with a comprehensive critique of the IEA’s Report. The critical group is the Energy Policy Research Foundation, which has been funded in this project by the Real Clear Foundation (the people behind Real Clear Politics). The EPRF has produced its own Report, with a date of June 2023, titled “A Critical Assessment of the IEA’s Net Zero Scenario, ESG, and the Cessation of Investment in New Oil and Gas Fields.” This Report is 75 pages long, and well worth a look. The lead author is named Batt Odgerel; and the editor is Rupert Darwall.

The main themes of this EPRF Report are much in line with some oft-repeated mantras from this website: ignorant bureaucrats, this time from IEA, are seeking to force transformation of a highly complex energy supply system, with no idea of what the replacement will be, whether it will work, or how much it will cost. My only real criticism of this EPRF Report is that the authors adopt a serious and high-minded tone, rather than the scorn and ridicule that would be more appropriate for a critique of IEA’s incompetent and amateurish efforts.

But with that, I’ll select a few choice quotes. Key excerpt from the Foreword:

The Energy Policy Research Foundation’s analysis conclusively demonstrates that the IEA’s assumptions are unrealistic, internally inconsistent, and often support the case for increased hydrocarbon fuel production. The whole of the IEA net zero roadmap pivots on the assumption that the plunging cost of wind and solar will destroy demand for oil and gas. If that does not hold, the whole roadmap goes up in smoke. But as this report shows, the IEA’s own analysis contradicts its assumption on the economic superiority of renewable energy. In reality, the IEA’s “net zero roadmap” is a green mirage that will dramatically increase energy costs, devastate Western economies, and increase human suffering. As such, investment managers and banks that use other people’s money to advance this anti-investment agenda are violating their fiduciary obligation to maximize returns for retirees, investors, and shareholders.

I would only add to that that if the IEA were right that “plunging cost of wind and solar will destroy demand for oil and gas,” then there would obviously be no need or reason for a government-forced energy transition. It would happen on its own via private investment.

Here from the EPRF Report is the status on how the so-called “energy transition” is going, about 20 years into the crash program of governments to transform the energy economy:

According to BloombergNEF, over US$6.5 trillion (nominal) has been invested worldwide in the energy transition (excluding investment in power grids) between 2004 and 2022, but the share of non-hydro renewables was just 6.7% of total global primary energy consumption in 2021.

And here’s the accompanying chart:

IEA seems to think that electric vehicles will save the world because they have “zero emissions” and their costs will rapidly plunge. Here is a chart from the EPRF Report on costs of the main materials for EV batteries (which are the main component of an EV):

And as to EVs being “zero emissions”:

China leads the world in EV sales and manufacturing, but it also consumes a large amount of coal. In 2020, coal accounted for 60.6% of China’s primary energy demand and 63.3% of its electricity production, meaning that EVs powered by electricity generated in China indirectly emit substantial GHG emissions.

And finally, there’s the small problem that much or most of the technology assumed by IEA in its net zero transition scenarios either has not been demonstrated at scale or, more often, hasn’t even been invented yet:

“Energy Technology Perspectives 2023” (ETP-2023), one of the IEA’s flagship reports, acknowledges that “getting to net zero is not possible without more innovation”. According to the report, under the NZE scenario, about 50% of all emissions reductions in 2050 come from technologies that are at prototype or demonstration stages today.

There’s much, much more in this Report should you have the time and inclination. Anyway, many thanks to EPRF and the Real Clear Foundation for putting in some effort to expose the ridiculousness of the campaign to force an end to fossil fuels before anyone has a clue what is going to replace them.

The IEA’s comedy data

From time to time, I take a look at other people’s estimates of the levelised costs of renewable power, particularly offshore wind. The merchant bank Lazard has been a source of particular amusement, their figures being so far divorced from reality as to be entirely laughable.

From Net Zero Watch

By Andrew Montford

From time to time, I take a look at other people’s estimates of the levelised costs of renewable power, particularly offshore wind. The merchant bank Lazard has been a source of particular amusement, their figures being so far divorced from reality as to be entirely laughable.

Another oft-cited source on the subject of levelised costs is the International Energy Agency (IEA), whose latest opus on the subject was published a couple of years back. For comedy value, this is right up there with Lazard. Here is their data table on offshore wind.

Followers of the renewables scene will immediately notice that the capacity factors given are extremely optimistic. They are just about plausible as first-year figures, but certainly not as lifetime averages, which would be expected to be in the mid-30s. Extraordinarily, the IEA claims that “the only technology where efficiency losses have a systematic effect is solar PV”. Here is the UK offshore wind output data by turbine size and year of operation.

Meanwhile, the IEA’s levelised cost figures are staggeringly low. At a 3% cost of capital, the numbers cited for the US fall to around £20/MWh, which is roughly one sixth of what offshore windfarms cost in the UK.

But there’s a second problem here. While 14 (unnamed) windfarms are outlined for the US, unfortunately, out in the real world, Uncle Sam has only got round to building two, both tiny pilot plants. Block Island, the larger of the two, has been so staggeringly expensive it makes even the UK ones look cheap.

So where is the IEA getting these numbers for US offshore windfarms from? I have no idea.

It’s the same for some of the other countries too. France opened its first commercial offshore windfarm only last year, while Australia has yet to open even one! The temptation is to assume that the IEA’s numbers are entirely fictional.

Finally, it’s worth noting that at the time of the report’s publication, half of the world’s offshore wind capacity was in the UK, where hard data on the (very high) costs and the (rapidly deteriorating) operating performance is freely available. Strangely though, the IEA has chosen to include not a single windfarm from these shores.

Go figure.

EV Illusions

No one can really say whether widespread adoption of EVs will cut carbon emissions.

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

No one can really say whether widespread adoption of EVs will cut carbon emissions.


A dozen states have joined California and many countries in passing legislation to ban the sale of conventional cars and push everyone into electric vehicles (EVs), many within the decade. Similarly, in a feat of regulatory legerdemain, the U.S. Environmental Protection Agency has proposed emissions rules that would effectively require automakers to sell mostly EVs. And of course, the ill-named Inflation Reduction Act, a.k.a. the Green New Deal, gushes subsidies across the EV ecosystem.


The rush to subsidize and mandate EVs is animated by a fatal conceit: the assumption that they will radically reduce CO2 emissions. That assumption is embedded orthodoxy not just among green pundits and administrators of the regulatory state but also among EV critics, who take issue with a forced transition mainly on grounds of lost freedoms, costs, and market distortions.


But the truth is, because of the nature of uncertainties in global industrial ecosystems, no one really knows how much widespread adoption of EVs could reduce emissions, or whether they might even increase them. (And no, this has nothing to do with the truth / joke that Teslas are coal-fired when fueled at night in many places.) While grid realities will indeed matter more than most realize, the relevant and surprising emissions wildcard comes from the gargantuan, energy-hungry processes needed to make EV batteries. This is one of those technical issues that tends to attract slogans, simplifications, and illusions of accuracy; a better understanding requires some patience.


EV emissions realities start with physics. To match the energy stored in one pound of oil requires 15 pounds of lithium battery, which in turn entails digging up about 7,000 pounds of rock and dirt to get the minerals needed—lithium, graphite, copper, nickel, aluminum, zinc, neodymium, manganese, and so on. Thus, fabricating a typical, single half-ton EV battery requires mining and processing about 250 tons of materials. (These figures hold roughly true for all lithium chemistries.) For the carbon-counters tracking such things, the global mining and minerals sector uses 40 percent of all industrial energy—dominated by oil, coal, and natural gas—and that’s before we take into consideration the massive expansion that would be required to supply all the battery factories planned for widespread EV adoption.


The inherent uncertainties about calculating real-world EV emissions arise from myriad “known unknowns” about mining and refining activities. Those all happen elsewhere, upstream, before assembly at a battery or EV factory—that is, before the first mile driven on a grid-supplied kilowatt-hour. Of course, a conventional car also has upstream emissions, though these derive mainly from steel and iron, which account for 85 percent of its weight. For conventional cars, those upstream emissions are a minor factor; burning gasoline dominates the CO2 footprint. But the need for far more materials, and different types, dominates an EV’s total footprint. Production of those metals, such as copper, nickel, and aluminum, uses on average three to ten times more energy per pound than does steel production. All the other EV minerals are similarly energy-intense.


The International Energy Agency (IEA) flagged these realities in a 2021 report. While that report focused on the inadequacy of the supplies of “energy minerals” (something that has since, finally, become widely known), the researchers noted that upstream CO2 emissions from fabricating an EV can “vary considerably across companies and regions.” Indeed. Changing the source of copper or nickel, for example, can lead to doubling or more than tripling those metals’ emissions intensities, depending on a facility’s age, process types, and locations. Building an EV requires several hundred more pounds of copper than building an internal-combustion car.


Assumptions about aluminum matter too, because EVs also typically require several hundred pounds more of that material, and two-thirds of global aluminum production comes from coal-fired grids in China, Russia, and India. (The U.S. produces just 2 percent.) In general, refineries in China, which account for 50 percent to 80 percent of global “energy minerals” supply, have emissions 1.5 times greater than those in the European Union or U.S.


A review of dozens of studies of upstream emissions revealed that the bottom-line estimates of EV lifecycle emissions varied by fivefold. It gets worse. That same review found that, across those studies, the median size of the battery assumed for the analyses was 30 kilowatt-hours. But the overwhelming majority of U.S. EVs bought last year sported batteries two to three times bigger. Tripling battery size triples the upstream emissions.


None of these variabilities appears in government forecasts for “zero emissions” cars. In fact, the range of upstream emissions is so wide that it renders meaningless any use of an average number to calculate an EV’s overall carbon footprint. But that’s what analysts do, whether at the IEA or EPA.


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