Global energy demand outpacing renewable energy development

By Bruce Lantz

Those focused on the need to reduce fossil fuel consumption – can you say ‘EV’? – need to take a breath and step back.

Then perhaps they would see that just like Rome wasn’t built in a day, achieving a carbon-free atmosphere won’t happen overnight, or by 2030 or 2050 or whatever date is currently in fashion for the political bigwigs who aren’t doing their part to lead by example.

Then they might see, if they’re willing to honestly look, how their grandiose aspirations and the idiotic regulations that go with them, are hurting the very people they’re supposed to represent, plunging the world into scary territory with no end in sight. And making North America at least, and Canada in particular, trouble spots instead of the best places in the world to live.

As global energy demand increases and new renewable energy development is not keeping pace, more natural gas is needed. Those pushing to reduce greenhouse gas (GHG) emissions faster ignore this reality. Concurrently, dictators and autocrats are moving to solidify their power, sometimes using energy as a weapon. Amid this turmoil, Canada remains reluctant to fulfill its unique position to help the globe’s looming energy insecurities through more natural gas production.

A barrage of solemn pronouncements shouldn’t mislead Canadians into thinking that the use of natural gas is almost at an end. Yes, a bevy of extreme environmentalists and the politicians who pander to them have been known to assert that the end of natural gas as a fuel is close at hand. But the more thoughtful members of the left will admit that natural gas will continue in a limited role as a bridge fuel as the world races toward using renewable energy exclusively and achieves net-zero. These are ambitious assertions, without solid links to reality.

However, the future of natural gas is upbeat. In addition to future demand, it’s a fact that GHG emissions would quickly be reduced by half if coal consumption was replaced with natural gas.

After all, the world contains significant natural gas reserves, and many countries have the infrastructure to produce, process, distribute and consume natural gas. It’s also a fact that more and more countries are building either liquefied natural gas (LNG) export or import terminals.

Certainly something has to give. The world is going to consume more energy each year as populations grow and become more affluent. While the use of alternate energy sources such as solar, wind, hydro and geothermal signals progress toward reducing the use of fossil fuels, reaching net-zero won’t happen overnight and meanwhile anomalies exist. Consider this: Does it seem logical that Venezuela, with the most oil reserves in the world, features gasoline selling at C$0.29 per litre while Canada, in third place, offers gas at $2.155 a litre and the United States, ranked #9, at C$1.582 a litre? And let’s not even talk about Libya, where people can buy gas for C$0.04 per litre.

The notion that worldwide fossil fuel and coal consumption can be reduced through carbon pricing and taxation has flaws. Although a reduction in such consumption is desirable, it won’t occur as quickly as we might like and will take stringent, though logical, measures that so far seem beyond the mindset of Canada’s political leaders.

Let’s face it. If we took oil out of the ground in Canada, for example, sold it to a Canadian refinery and widely distributed the final product across Canada, fuel prices could be exponentially lower than they are today. Of course, we’d still have to deal with government fees and taxes but that’s an issue for another day. In the U.S. President Joe Biden’s administration is moving in this direction, easing regulations, releasing petroleum reserves and eyeing restarting idle refineries to hopefully lower the price of fuel.

Canada has no one but itself to blame for its current woes regarding gasoline and diesel prices. While the nation boasts the third-largest oil reserves in the world, foreign entities are left to mine those resources and then – in the case of United States companies – sell the products and services back across the border. All because Canada either fails to recognize its resource wealth or regulates it almost out of existence. Yet the nation has the highest per capita rate of consumption of fossil fuels in the world.

Now we are left with costs, with gasoline above C$2 per litre and diesel equally high, that especially hurt our low-income citizens, seniors and veterans, even as the pandemic-inspired restrictions are lifted which should be bringing a time of joy and relief. Oil now hovers around US$120 a barrel and its cost makes up 39% of the price of regular gasoline; 35% is taxes, 20% is refining costs, and 6% goes for distribution and marketing. Of that, gas stations collect about 10 cents a litre.

If this is allowed to continue and prices and inflation escalate further – and Barclays recently forecast the price surge to continue at least through 2023 – the nation will be plunged into an economic Depression rivalling that of the 1929-39 era and its citizens into individual states of depression. That could mean more citizens turning to crime and other anti-social behaviours as their situation becomes more hopeless. How can government turn a blind eye to this? How can politicians focus instead on pie-in-the-sky policies promising (foolishly) a carbon-free future in a few decades? Perhaps because high consumer prices mean little to those buoyed by high incomes and expense accounts – all at the expense of taxpayers.

One would think those at our nation’s helm would now be pulling out all the stops to support the oil and gas industry, to reduce the need to import at higher prices from other nations. In fact, in a perfect world, other nations in need would devote their energies and finances to pulling out our resources to benefit the world and keep it from spiraling further down the rabbit hole. What is needed are partnerships involving industry, government and technological innovators to not only develop and produce alternatives to fossil fuels, but to reduce the carbon footprint of the fuels needed to get the world to that net-zero point.