Fantasy Versus Reality In Woke-Land – Watts Up With That?

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Fantasy Versus Reality In Woke-Land – Watts Up With That?

From the Manhattan Contrarian

May 06, 2021 / Francis Menton

JP Morgan Chase – It’s hard to find a company that “woke up” more than this. Under the prominent CEO Jamie Dimon, JPM consistently positions itself in its corporate statements at the most exquisite end of the politically correct spectrum.

But the reality can be difficult. In their email a few days ago, the Global Warming Policy Foundation referred to JPM’s annual energy paper 2021. The paper comes from JPM Asset and Wealth Management Group. The lead writer is a guy named Michael Cembalest who appears to have his ear to the bottom of the global energy business. The bottom line is that all of the talk about a “deep decarbonization” of the global economy for the foreseeable future is a ridiculous fantasy. Fossil fuels don’t go away for long, if at all. Are carbon emissions to the atmosphere increasing? Better get used to that.

Once again, this “deep decarbonization” thing is a case of really “smart” people fooling you or maybe yourself. or rather both.

First, let’s look at some of the extreme problems encountered in JPMville’s executive suites. This is not limited to questions of “climate”, but also extends to other common topics such as “systemic racism”. On the subject, here is JPM CEO Jamie Dimon, as quoted in Forbes in October 2020:

“Systemic racism is a tragic part of American history. We can do more and better to dismantle systems that have spread racism and widespread economic inequality, especially for blacks and Latin Americans. It has been a long time since society addresses racial inequalities in more tangible and meaningful ways. “

Meanwhile, JPM’s high-level statements in the climate arena wholeheartedly endorse the idea that we’re going to save the planet by funding a bunch of wind turbines or something. Last October, JPM issued a grand statement with the pompous title “How one of the largest banks in the world plans to fight climate change”. Abstract:

Climate change is one of the most pressing problems facing humanity. It is imperative that businesses and governments act. Achieving the goals of the Paris Agreement, which aims to limit increases in the global average temperature, would allow us to take a big step towards a safer, greener and more sustainable future. . . . In order for the world to achieve net zero greenhouse gas emissions by 2050, it will need to accelerate new technologies that are not yet generally commercially available or economically viable. . . . Our company, JPMorgan Chase, announced this month that we will be aligning our financing portfolio with the Paris targets.

A few weeks ago, on April 15, JPM announced a big new plan to advance climate action and sustainable development with around $ 2.5 trillion in investments:

JPMorgan Chase aims to fund and enable more than $ 2.5 trillion over a 10 year period – beginning this year through the end of 2030 – to advance long-term solutions that address climate change and lead to sustainable development contribute. . . . This long-term goal complements the company’s Paris-focused funding strategy and will help accelerate the transition to a low-carbon economy by promoting measures that identify a path to net zero emissions by 2050

Wow, that sounds great! Or is this all just a cynical attack on some of the upcoming government subsidies with no discernible impact on the climate or even fossil fuel use? Let’s take a look at the annual energy paper 2021 for some insights. The document is not short (42 pages) and certainly does not fall under the “climate skepticism” category, but it does contain some notable doses of stubborn realism that are usually completely absent in this area.

From the summary:

Our main focus this year: Why is the transition [away from carbon-based fuels] takes so long? Far-reaching decarbonization plans assume massive changes in electric vehicles, power transmission networks, industrial energy consumption and carbon sequestration, but face headwinds that are often overlooked by energy futurists. As shown below, many previous predictions for the transition to renewable energy were too ambitious because they ignored the energy density, disruption, and complex realities of established energy systems. . . .

Maybe these “energy futurists” are just kidding?

President Biden has just announced a new GHG emissions target: a 50% decrease by 2030 from the 2005 baseline. This very ambitious target implies a decarbonisation rate over the next 10 years that is four times faster than in the last 15 years. Even with the amount of money the administration wants to allocate for this task, this is an enormous hurdle. . . .

The even more important and bigger question: Even if the US is successful, what about everyone else? In the past 25 years, developed countries have relocated much of their carbon-intensive production of steel, cement, ammonia and plastics to developing countries. . . .

Loudly proclaiming that you’ve made some (small) savings in carbon emissions while moving most of your energy-intensive manufacturing – this is a great way to fool yourself.

The world is becoming more energy efficient every year, but emissions continue to rise. . . .

It’s those annoying Chinese, Indians, and Africans who think they should be able to have electricity, cars, and air conditioning just like you.

How is the global energy transition going? Overall, the overall impact of nuclear, hydropower, and solar / wind power generation has reduced global fossil fuel dependency from ~ 95% of primary energy in 1975 to ~ 85% in 2020. In other words, the energy transition will take a long time and a lot of money. . . . [T]The IEA continues to assume that 70 to 75% of global primary energy consumption can be covered by fossil fuels in 2040. Why don’t rapid declines in the price of wind and sun lead to faster decarbonization? As we shall discuss, renewable energy is still mainly used to generate electricity and the share of electricity in final energy consumption on a global basis is still only 18%.

Yes, all of these thousands of wind turbines and solar panels covering the landscape are hoping, at best, to replace a minority of a sector that itself initially only accounts for 18% of energy consumption. Why are we spending (wasting) these many trillions of dollars?

Beyond the summary and into the details of the paper, there are many great tidbits. A section on “Transfer Realities” shows how environmentalists, like any other energy developer, encounter the same obstacles in getting “renewable” electricity to where it is needed:

While MIT and Princeton anticipate rapid growth in transmission infrastructure, actual development can be a hornet’s nest for site challenges and legal costs, even as projects are built after years of planning. Let’s start with HydroQuebec’s plan to sell hydropower to the United States. . . . Take Northern Pass, a 1.1 GW transfer project to bring hydropower from Quebec to the Northeast via New Hampshire (80% over existing priority or subway lines). . . . [A] The New Hampshire Site Committee blocked the Northern Pass. . . . Massachusetts is now trying to import Canadian hydropower via Maine (“New England Clean Energy Connect”), but has already encountered an injunction due to contradictions from environmental organizations. . . .

And so on and so on and so on.

Then there is the holy grail of carbon capture and storage, sometimes known as CCS. Hey, why not just take all that dangerous CO2 and bury it in the ground somewhere? The paper deals with some practical realities:

After 20 years of planning and guesswork, the carbon capture and storage (CCS) systems stored only 0.1% of global CO2 emissions by the end of 2020. . . . The highest ratio in the history of science: the number of scientific papers written on CCS divided by the practical implementation. . . . Expanding Princeton CCS to sequester only 15% of current US greenhouse gas emissions would require infrastructure with a throughput greater than the volume of oil flowing through US distribution and refinery pipelines, a system that took over 100 years to build. . . . Capturing 25% of global CO2 through direct air capture would require 25% -40% of global electricity generation plus 11% -17% of primary energy.

And then there is my favorite line throughout the paper starting on page 28:

We recommend investors stick to oil and gas for the time being.

Read the full article here.

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