Natural gas and coal prices in Europe and Asia just hit their highest levels on record, oil prices in America hit a seven-year high and U.S. gasoline prices are up $1 a gallon from last year. If this winter is as bad as some experts predict — with some in the poor and middle classes unable to heat their homes —I fear we’ll see a populist backlash to the whole climate/green movement. You can already smell that coming in Britain.
Friedman’s prediction of a scary winter isn’t entirely his own. He credits a financial newsletter by Bill Blain for tipping him off about what Europe is facing. I’m going to quote more of this than Friedman does for reasons that will become obvious.
The UK and Europe are in the direct firing line of the coming energy storm. The security of energy supplies has never looked less certain. In the UK, neglected storage means we have the capacity to story 3-4 days of Gas…
…it will be mightily embarrassing for the Boris Johnson Government if the first UK power outages occur during the COP26 Climate Circus in Glasgow in November.
COP26 has driven the Government’s agenda and ambition to be seen as more green, more carbon neutral and more ESG than anyone else. I’ve heard tales of cabinet ministers throwing sweary hissy fits when asked to support policies that don’t immediately square with green policies perceived as vote winners.
As I’ve written many times – ESG is well intentioned, but perhaps the most dangerous force in Economics today.
ESG stands for Environmental, Social and Governance. It’s basically a way to factor environmentalism, equity and other progressive goals into market decisions about investing. So what Blain is arguing here is that, while well intentioned, the focus on meeting ESG goals has created a looming disaster this winter for Europe, one which he predicts will have a body count. [Emphasis in original.]
The brutal reality is we can’t decarbonise the global economy overnight. Over 30 years.. perhaps! Through the transition period we will still need power and energy derived from the old dirty hydrocarbons. Powering up EVs, making the fuel for hydrogen planes and trains, will all require hydrocarbon derived energy. That’s fact…
ESG has evolved into a religion, a high church of environmental orthodoxy. Its heretical to suggest ESG can’t work unless we evolve towards a cleaner energy ecosystem by continuing to burn hydrocarbons. A crisis this way comes: for all the posts on Linked-In boasting about green investments, or the industry awards for Green Bond of the year, or the multitude of certificates one can earn on ESG investments – it will all count for nothing this winter.
This winter – people are going to die of cold.
I don’t think that piece could be any clearer. Blain is saying that this winter will be a disaster because there’s too much focus on unrealistic green energy goals right now instead of more realistic planning for a transition to green energy that will take several decades. Friedman leaves most of that out even though he seems to agree it’s largely true. Later in his piece he writes:
America has enough oil and natural gas to meet its own needs for now, but its ability to export liquefied natural gas to help others is limited, especially when every utility in Europe and Asia is trying to meet newly minted environmental, social and governance standards for clean energy and therefore is desperate to import natural gas…
Sadly, in an overreaction to the Fukushima nuclear accident, Germany decided in 2011 to phase out all of its nuclear power by 2022 — nuclear power stations that in the year 2000 generated 29.5 percent of Germany’s power generation mix. All of that has to be replaced by wind, solar, hydro and natural gas, and there is just not enough now.
Who supported the shutdown of nuclear plants in Germany? The Green Party did and has always been against the construction of new plants that Friedman says are the only realistic path to a green energy future.
So Friedman is criticizing decisions the Greens supported and relying on a financial newsletter which explicitly blames the looming problem on the religious fervor to meet green ambitions, yet his headline is literally “Don’t Blame the Greens.” And the end of his piece never really tries to deliver on the claim in the headline. Instead he goes on a tangent about how Iran might use the crisis this winter to threaten the world’s energy supply. It’s interesting as a side note but when it comes to who is to blame for the looming disaster, that seems pretty clear.