There is something in the air: a pushback against the charge to net zero, come hell or highwater.
Yesterday, Shell said it would 'stabilise' its production; Exxon Mobil, separately, said they didn't think society would bear up to the sacrifices necessary to hit net zero by 2050. Others in government have expressed scepticism about the cost of that process, not least when under-developed nations are unlikely to be in any great hurry to close up the cheap energy production which is a) making them rich and b) powering a vast increase in living standards.
We have written many times in City A.M. that the cost of going green is more significant than people realise, even in an environmental sense. Indeed, in many ways - as Ed Conway, whose book Material World comes out today, has made clear - hitting net zero targets will require a sizable plundering of the raw materials that many believe should stay firmly in the ground. The amount of copper required in today's generation of wind turbines is no joke. On the financial side, the hit to household budgets and living standards could well be dramatic.
Net zero by 2050 is, of course, the product of political grandstanding. It's a noble and worthy aim but it's fundamentally arbitrary. Far better would be for governments, diplomats and campaigners to mirror the pragmatism we are starting to see from the big energy majors, who have dumped the hairshirt and are now being honest about the fact that - despite their desires to go green - society wants cheap reliable energy and it wants it now.
In the UK, the road to a greener future goes through the energy companies and the City of London. The capital is already a European hub for green finance and will remain in pole position for some time. Governments would be better to set aside the net zero cheerleading and instead look realistically at what the energy mix might be in a few years' time.
By CityAM
CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and… More
Russia Discovers Massive Oil and Gas Reserves in British Antarctic Territory
Five Countries With the Cleanest Energy Grid Globally
Canada's Oil and Gas Industry Soars to New Heights
U.S. Leverages Saudi-Israeli Relations to Isolate Iran
Aramco’s Q1 2024 Results: Saudi Arabia is at a Dangerous Tipping Point
Comments
Even a partial energy transition will never succeed without huge contributions from natural gas and to some extent nuclear energy and coal. Moreover, net-zero emissions can never be achieved in 2050 or 2100 or ever.
There is an emerging pushback that is gaining momentum against the incessant charge to net zero. There is also a growing scepticism about the feasibility, the costs involved and the sacrifices society has to endure to hit net zero by 2050.
What society and the global economy want is cheap reliable energy and they need it now. Therefore, a more pragmatic approach, balancing the desire for cheap, reliable energy with the drive towards green energy, should be adopted by governments and environmentalists.
And this pragmatic approach is to reduce carbon emissions from fossil fuels and not the actual use of fossil fuels.
We are now in an era of energy diversification where renewables have to compete with other energy sources for a share. The higher their share, the less fossil fuels will be used for electricity generation.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert
"The road to net zero could potentially involve significant financial costs to households, as well as the extensive use of raw materials that many argue should remain in the ground." So they have a problem extracting minerals that are mined and reused forever as opposed to mining fossil fuels that are burned and turned into toxins and GHGs. Now there's a full lack of sense. And no mention about the cost to NOT switch as quickly as possible.
"A more pragmatic approach, balancing the desire for cheap, reliable energy with the drive towards green energy, should be adopted by governments and advocates." The more pragmatic approach is to drop oil and gas as fast as possible.