The heading give's the rationale for the story, its the thinking process that should be interesting to a discerning reader.

The article is written by an economist I greatly admire in Greg Canavan, when you read this you may pick up some more information about climate alarmism. It is not a climate change article. just like the previous one that has gone unread (so be it) but one that more of the "unwashed" should listen to and understand where we are going.

Why am I publishing these things? because the ignorance around climate alarmism has been lost in the debate about "climate change".Underlined emphasis is mine.

You could see this coming…

I wrote as much in an article for The Insider back in June…

With the coming energy transition, does oil (and other fossil fuel energies) fade off into the sunset, or does it go out with a bang?

Most people I know think the fossil fuel industry is a dead man walking. Demand will relentlessly drop in the years ahead, and prices will fall along with it.

The court rulings and shareholder activism (against fossil fuel companies) will do one thing: make investment in new supply that much harder/more expensive. That wouldn’t be so bad if you think demand was going to drop off a cliff anyway. But it’s not going to happen.

Not unless you believe in fairy tales.

After reading the International Energy Agency’s (IEA) report about how we get to ‘net zero by 2050’, I’m even more bullish on energy prices long term. In my view, the sector will go out with a bang, not a whimper.

Let me explain…

In the document, the IEA provides a few scenarios:

The Stated Policies Scenario (STEPS)

The Announced Pledges Case (APC)

STEPS ‘takes account only of specific policies that are in place or have been announced by governments’. The APC ‘assumes that all announced national net zero pledges are achieved in full and on time, whether or not they are currently underpinned by specific policies’.

It is easy to make a virtue signalling pledge about net-zero emissions by 2050. Especially when you know you’re not going to be around then. But it’s another thing to make it happen.

So the scenario based on ‘announced pledges’ is not realistic. It might sound good, but it’s not realistic to make any investment assumptions based on it.

Let’s look at STEPS, then. This is more realistic because developing nations simply won’t jeopardise their growth by turning away from cheap fossil fuels.

There is strong divergence between the outlook for emissions in advanced economies on one hand and the emerging market and developing economies on the other. In advanced economies, despite a small rebound in the early 2020s, CO2 emissions decline by about a third between 2020 and 2050, thanks to the impact of policies and technological progress in reducing energy demand and switching to cleaner fuels. In emerging market and developing economies, energy demand continues to grow strongly because of increased population, brisk economic growth, urbanisation and the expansion of infrastructure: these effects outweigh improvements in energy efficiency and the deployment of clean technologies, causing CO2 emissions to grow by almost 20% by the mid‐2040s, before declining marginally to 2050.

In advanced economies, energy use falls by around 5% to 2050, despite a 75% increase in economic activity over the period. In emerging market and developing economies, energy use increases by 50% to 2050, reflecting a tripling of economic output between 2020 and 2050.

The global fuel mix changes significantly between 2020 and 2050. Coal use, which peaked in 2014, falls by around 15%. Having fallen sharply in 2020 due to the pandemic, oil demand rebounds quickly, returning to the 2019 level of 98 million barrels per day (mb/d) by 2023 and reaching a plateau of around 104 mb/d shortly after 2030. Natural gas demand increases from 3 900 billion cubic metres (bcm) in 2020 to 4 600 bcm in 2030 and 5 700 bcm in 2050. Nuclear energy grows by 15% between 2020 and 2030, mainly reflecting expansions in China.  

So coal demand falls by 0.5% per year, oil demand grows modestly, while natural gas demand grows 46%! What do you think will happen to prices when activism and regulations make it very hard and expensive to develop new sources of supply?

They’re not going to fall sharply, as the IEA expects, that’s for sure.

Look, long-term forecasts like this are a mug’s game. There are so many moving parts. And it is undeniable that the energy transition is underway in the world’s ‘wealthy’ economies.

But developing economies is another question entirely. China has pledged to be net zero by 2060. Anyone who believes that is an idiot. China has underwritten their growth for the past 20 years by ignoring the West.

Technological breakthroughs will ensure the energy transition continues. But in my view, this will occur with fossil fuel prices rising much higher than anyone thinks possible. That will occur due to robust demand and supply constraints.

Think about it. What better way to force developing nations to join the energy transition than through much higher prices?


You’ve seen the initial evidence of this over the past month, with natural gas spot prices exploding in Asia, Europe, and the UK. The desire to replenish supplies ahead of the Northern Hemisphere winter has also seen coal prices surge to record highs.

In addition, both Brent crude and West Texas Intermediate oil prices recently broke out to multiyear highs.

The supply side issue I discussed a few months ago is now a reality. A recent Bloomberg article highlights the extent of the issues:

Oil explorers need to raise drilling budgets by 54% to more than half a trillion dollars to forestall a significant supply deficit in the next few years, according to Moody’s Investors Service Inc.

Crude and natural gas drillers chastened by last year’s unprecedented collapse in demand and prices haven’t responded to the recent market rebound as the industry typically does by expanding the search for untapped fields. While international crude and U.S. gas have risen more than 50% and 120% this year, respectively, drilling outlays are only forecast to increase by 8% globally, Moody’s said in a report Thursday.

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          • Ah yes "Our ABC" that pillar of fair and balanced reporting - diverse in everything except thought and opinion. One thing I agree with you on Tad is confirmation bias, your post is a good example of this.  You demonise, dismiss and ridicule anything to do with NewsCorp while blindly supporting the views presented by the ABC/Guardian and Fairfiax media.  Talk about the pot calling the kettle black.  Rather than call out others with regards to confirmation bias, why don't you work on your own.

            • Because Newcorp is blatantly, unabashedly biased to the point where they report complete and utter untruths (e.g. Sky News and Fox News in the US)

              The ABC has a definite left leaning but to compare the ABC with Newscorp is ridiculous!

              • But the subject matter goes beyond this BM, what do you think and why?

            • Parratim, If you believe what you wrote, there's no helping you. It's not your fault though, heroin dulls the senses

            • Parra Tim I hope you watched the ABC program that aired tonight and would welcome any comment around ABC bias or whether it was a well-balanced presentation on how Politics from both sides works in our political culture

              We have a popular Premier before a corruption hearing. Maybe it is well worthwhile to consider the content of this program with the content of how politics work as revealed in this program

              Also consider this comment from the Guardian who are following the days events.

              "On Tuesday the commission revealed that an official inside the NSW treasury department wrote that Berejiklian had asked for a funding proposal for a shooting range and clubhouse put forward by the Australia Clay Target Association to be “brought forward” to the committee in December 2016."

              We need a Federal Anti-corruption commission to keep both sides honest so that governance is in the interests of the voters who elect them.

              You may also find this of interest as well


              Bannon and other top Trump officials face legal peril for defying subpoenas | Steve Bannon | The Gu…
              Developments in select committee’s move to secure Bannon’s conviction come as Trump files lawsuit blocking the release of his White House re
              • Tad I haven't watched the program.  My opinion with regards to Gladys B is that she should have stepped down and resigned after the initial icac hearings in early 2020, parts of her testimony reflected poorly on her character.  Having said that, looking back at how she handled Covid I'm glad she didn't. 


    • Randy, we have to be careful how we interpret all the facts noted in that ABC article. What we are in fact seeing is an energy crisis that is the short term result of fossil fuel prices being driven very high. Effectively the crisis is in prices not supply. The higher prices go, the more energy costs are like a big tax on consumers. 
      But the surge in prices is due to the inadequacies of coal and oil to respond to exogenous natural and market factors. Oil supply from the Gulf of Mexico and wind in Europe have both been affected by climate factors caused by carbon emissions. Deep irony in each case. But a bunch of other semi unconnected factors, like China's coal boycott of Oz, or surging 2022 demand after depressed 2020-21, push prices up in a context of fossil fuels not being as resilient as its backers claim. 
      The real question is whether we will continue to adopt short term fixes for short term problems because such fixes continue business as usual and executives can thus get bonuses? Or do we look long term and keep the commitments to decarnonization? Put differently, do we bail out big energy companies without tagging those bail outs to decarbonization? Or do we just bail them out no strong attached, which amounts to rewarding fossil fuel corps poor contingency planning?

      • Privatisation of community services is also a big tax on consumers.Letting big mining companies bail out of exhausted projects with out cleaning up their mess is a huge tax on taxpayers as well. Dealing with health and environmental health is a huge taxi taxpayers 

  • Dont worry Pops.

    Agenda 30 is on the way. No middle class citizen will own anything soon - only allowed to rent.

    Come hell or highwater, the carbon reduction goals will be met.

    'You will own nothing and you will be happy'

    Klaus Schwab - Founder World Economic Forum

    • Help me where you can Heisen, you have a view that goes beyond the thinking of the zealots.

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