There is a very useful article in The Economist which says that people all over the world, but especially in the USA, are starting to comprehend that climate change is real. But, the article says, and it’s a big BUT, “amid the clamour is a single, jarring truth. Demand for oil is rising and the energy industry, in America and globally, is planning multi-trillion-dollar investments to satisfy it.“
Here’s the dilemma:
- “According to ExxonMobil, global oil and gas demand will rise by 13% by 2030. All of the majors, not just ExxonMobil, are expected to expand their output. Far from mothballing all their gasfields and gushers, the industry is investing in upstream projects from Texan shale to high-tech deep-water wells. Oil companies, directly and through trade groups, lobby against measures that would limit emissions;” but
- “The trouble is that, according to an assessment by the IPCC, an intergovernmental climate-science body, oil and gas production needs to fall by about 20% by 2030 and by about 55% by 2050, in order to stop the Earth’s temperature rising by more than 1.5°C above its pre-industrial level.“
Here’s the key point. The Economist, which believes that climate change is both very real and a threat to us all, says that : “It would be wrong to conclude … [as many who respond to climate change as if it was a new children’s crusade do] … that the energy firms must therefore be evil … [rather, the article says] … They are responding to incentives set by society.” That’s right, we, you and I and Canada’s environment minister, too, need and want more and more oil … no matter what we might say and even believe about climate change we want to live a 21st century life, we do not want to return to 15th century subsistence agriculture. And we cannot blame the Chinese and Indians for wanting the same thing.
Plus, the article says, “The financial returns from oil are higher than those from renewables. For now, worldwide demand for oil is growing by 1-2% a year, similar to the average over the past five decades—and the typical major derives a minority of its stockmarket value from profits it will make after 2030. However much the majors are vilified by climate warriors, many of whom drive cars and take planes, it is not just legal for them to maximise profits, it is also a requirement that shareholders can enforce.” That last bit is called fiduciary duty and it is a legal requirement that says that the management of the giant oil companies MUST manage the corporate affairs in the best interests of the shareholders … and the shareholders are, very often, your (and my) pension funds.
So, there we are: you and I need and want more and more oil and the big oil companies are duty bound to deliver results for their owners, also you and me, so, no matter what the IPCC and Catherine Mckenna might say, we’re going to get it.
The Economist concludes that “The next 15 years will be critical for climate change. If innovators, investors, the courts and corporate self-interest cannot curb fossil fuels, then the burden must fall on the political system. In 2017 America said it would withdraw from the Paris agreement and the Trump administration has tried to resurrect the coal industry. Even so, climate could yet enter the political mainstream and win cross-party appeal. Polls suggest that moderate and younger Republicans care. A recent pledge by dozens of prominent economists spanned the partisan divide … [but] … The key will be to show centrist voters that cutting emissions is practical and will not leave them much worse off. Although the [US Democratic Party’s] emerging Green New Deal raises awareness, it almost certainly fails this test as it is based on a massive expansion of government spending and central planning (see Free exchange). The best policy, in America and beyond, is to tax carbon emissions, which ExxonMobil backs. The gilets jaunes in France … [and opposition led by Doug Ford and Andrew Scheer, in Canada] … show how hard that will be. Work will be needed on designing policies that can command popular support by giving the cash raised back to the public in the form of offsetting tax cuts. The fossil-fuel industry would get smaller, government would not get bigger and businesses would be free to adapt as they see fit—including, even, ExxonMobil.“
I believe The Economist is engaging in wishful thinking. Look at this graph …
… there is no sign that light vehicle (mostly passenger car) production will decline any time soon. There is also no indication that electric cars, powered by energy generated by wind or solar sources as opposed to carbon based fuels like coal, will make a huge dent in the market. The petroleum powered automobile will still rule the road by 2030 and, likely, by 2050, too, especially in East and South Asia where nearly half the world’s population lives.
Human beings want the “good things” that the modern world offers; oil and gas power many of those “good things” which include automobiles, warm (or cool) houses, refrigerators and so on.