“Thank you Doug Sheridan. Thank you Alex Epstein. Thank you Robert Bryce. Thank you David Siegel. And many others…. The great middle is coming your way on the polarized energy/climate issue.”
Doug Sheridan, an energy consultant with EnergyPoint Research in Houston, has tens of thousands of followers on LinkedIn. He is an energy realist and speaks truth to power on energy and climate in a scholarly tone. And his message is resonating well in the mineral energy sector and beyond.
I was struck by his recent post describing the growing recognition of the vital role of mineral energies (vs. dilute, intermittent, infrastructure-heavy, government-dependent wind and solar). Sheridan piggybacks on an article by the U.S. reporter for the Financial Times, Derek Brower.
Sheridan’s post follows:
Derek Brower writes in the FT, pro-oil voices are suddenly bolder, swatting aside environmentalists for having the gall to worry about the climate during a global energy crisis. For every pink-haired teenager gluing herself to a wall, a shouty cohort of Twitter blowhards is ready to mansplain how petrochemicals made the glue she used. Nevermind that the International Energy Agency (IEA) says if the world is to avoid the worst of climate change, no new fossil fuel projects can be tolerated, period.
But with energy prices soaring, oil execs believe the calamity has revealed the naivety of a hasty energy transition. Mostly, they make these comments in private. But Chevron’s CEO, Mike Wirth, recently spelt them out publicly, saying western policy and discourse around energy had been skewed too heavily toward the climate—and that fossil fuels will run the show for decades.
Govt’s had sent a different signal and investors listened, Wirth argued. The result was too little cash flowing into fossil fuels, something climate activists had long sought. The outcome now hinders their cause as higher prices from tight supplies trigger social unrest, backlash against climate policy, and gov’ts subsidizing consumption.
Meanwhile, Wall Street’s souring on fossil fuels has left private capital—untroubled by ESG metrics—to fund new drilling. Harold Hamm last week announced a take-private deal for Continental Resources, a shale pioneer. Hamm wants the freedom to invest without the encumbrances of outsiders.
Meanwhile, in a speech last week, Biden outlined once again measures he’s taking to make it cheaper for Americans to consume fossil fuels, including his call on shale oil producers to “ramp up production now”.
To Sum It Up: Amid rampant inflation, war and a deepening energy crisis, it seems the climate problem is being overshadowed. But it isn’t going away—and nor are young activists who care. The next protest might involve something stronger than tinned soup and a target less protected than a Van Gogh.
Our Take 1: Brower is the FT’s lead energy reporter, so his chagrin over the tides shifting against unending protests of fossil fuels is notable. As far as we can tell, his main contention is that because Just Stop Oil is being heavily criticized for its tactics, we should (rightfully) expect to see even more radical manifestations of their anger in the future. That opinion might resonate with his peers, but it’s woefully out of step with how the majority of the global population expects the issue to be debated and managed.
Our Take 2: There are compelling reasons for the shift in sentiment that Brower laments—including principles of physics and markets that aren’t going away. If he, Biden, Just Stop Oil or anyone else wants to understand why this backlash was inevitable, we’d recommend two books: Vaclav Smil’s “Energy and Civilization” and Javier Blas’s “The World for Sale”. It’s all there in black and white.
Thank you Doug Sheridan. Thank you Alex Epstein. Thank you Robert Bryce. Thank you David Siegel. And many others. The great middle is coming your way on the polarized energy/climate issue.