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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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The Real Reason Why Oil And Gas Is Here To Stay

  • The real reason why global climate targets are doomed to fail has barely been touched on.
  • The wealthiest 1% account for 15% of the world's emissions--more than twice the emissions generated by people in the bottom 50%.
  • When it comes to conserving energy and lowering carbon footprints, focusing on the UHNWIs will provide the most bang for the buck.
Offshore Oil rig

The rallying cry around global climate initiatives grew increasingly boisterous leading up to COP26 this year. The media posited what bold, new goals would be set. Others questioned the likelihood that those claims would be fulfilled. But the real reason why global climate targets--including those set at COP26--are doomed to fail has barely been touched on: cognitive dissonance and superconsumers–and it's why the oil and gas industry can likely rest easy.

In oversimplified non-psychiatry-speak terms, cognitive dissonance is when we feel some angst over the disconnect between how we wish to see ourselves versus how we really are. In order to ease the angst over this incongruity, we must give ourselves a fair dose of dishonesty.

Economics and Science

Sure, there are troubles with the economics and science of renewables (or green energy if you prefer, although the terms are not synonymous) that many have assumed would bring the world closer to our worthy emissions goals. Renewables are expensive, and in some cases, the science isn't quite there. This category would include the minerals and metals mining required to support renewables–which, under no circumstances can be considered renewable (these are finite resources) and certainly not "green". It would also include battery storage requirements, battery recycling, solar panel and wind turbine recycling, issues with diverting water for hydropower, and the pesky problem with handling nuclear waste. Those are all legitimate problems that may or may not have a solution in the future. But, at least it's possible that someday, those issues will be resolved. 

But there are other issues–some might say bigger issues–that are only whispered about and discussed in unpopular circles by unpopular people--issues that will make the world's climate goals seem like pie in the sky thinking, whatever the media headline of the day. 

The Gluttonous 1%

Let's start with a rather unpopular but absolutely factual issue that is a major obstacle in meeting climate targets. You can focus on how we're producing energy, or you can focus on consuming energy. Focusing on the former is more palatable, if not scientifically complex and pricey. Focusing on energy consumption, on the other hand, is often met with immediate resistance--understandably so. Yet, it has a far simpler solution and is much less expensive. But it is a likely go-nowhere solution because if the world is truly to affect consumption, it must focus on a very specific group of individuals: the superconsumer.

Who are the superconsumers?

Analysts love to cite facts and figures about which country per capita is responsible for the greatest amount of oil and gas consumption–or energy consumption–or has the highest carbon footprint. Aside from the fact that those figures are routinely disputed, those analysts lose sight of a wildly different perspective: further drilling down into precisely who the heavy consumers are within those nations.

A UN report from last December shows exactly who those people are: they are the world's wealthiest 10%, who the UN alleges make up 50% of the world's carbon footprint. The wealthiest 1% account for 15% of the world's emissions--more than twice the emissions generated by people in the bottom 50%.

Now, this isn't to shame all those jet-setting superconsumers and energy wasters. Nay, it is merely to point out the fallacy in thinking that the other 90% of the world's population--representing a mere 50% of the world's carbon footprint--has the ability to carry the world into our greener tomorrow. 

Such thinking is popular yet foolish. 

According to the UN, the global rich would have to cut their carbon footprint by 97% to stave off climate change. That the rich exact a higher carbon footprint on the world–or that income and the size of one's carbon footprint is correlated–is not new. It is also not popular.

Setting carbon goals that focus on Average Joe instead of those superconsumers is like trying to curb teen social media use by banning Twitter instead of Snapchat or TikTok.

And here's an unsurprising factoid--those superconsumers don't live in Africa. 

Most of the world's wealthy–or rather, the ultra high net worth individuals (UHNWIs)–are centralized in just a handful of places, overwhelmingly in North America and Europe, according to Knight Frank's 2021 Wealth Report, making the sham of COP26 delegates squeezing lower-income countries who are just starting to master energy security courtesy of coal power rather hypocritical. And it's particularly rich coming from bigvoiced climate crisis purveyors whose annual private jet miles dwarfs many well-to-do people's annual salaries. 

For perspective, it's important to point out here that a 17,000-pound Lear private jet gets about 4 mpg. 

IEA Roadmap For the Commoner

That didn't stop the IEA earlier this year from coming up with their roadmap to net-zero, for the commoner. This report is chocked full of all the quirky things "we" can all do to diminish our carbon footprint (like keep our homes at blah degrees, etc.). The only "rich" referred to in this report is in relation to countries.  

Yet, when it comes to conserving energy and lowering carbon footprints, focusing on the UHNWIs will provide the most bang for the buck–and analysts know it.

Give Them What They Really Want--A Life of Excess

Of course, that is extremely unlikely to happen, and this is where that bit of cognitive dissonance comes in. In theory, we would all like to reduce our carbon footprint. We would like to meet climate targets and lower emissions. We are also enamored with the rich and famous. We love excess. And for all the GenZ protests and lawsuits targeting big oil and gas in climate champion Greta Thunberg's name, there are many times more starstruck Kim Kardashian followers that just can get enough of the socialite's planet-wrecking life of excess–from which the socialite seems immune from ridicule. 

GenZers are infatuated with Tesla's, though most have little desire to understand how Musk is mining for those metals or where those spent batteries will reside a decade from now. They are captivated with Greta's passion for the climate, yet worship fashionistas, celebrities, and royalty at whom Greta would frown. It is here, in our own hearts and mind, where the climate battle will be waged, for the world will likely never push these superconsumers to downgrade their carbon footprint to match those in third-world countries who rely on dirty coal. In time meantime, one will likely be continually frowned upon for failing to live up to the world's climate agenda, while the other will get a pass.

By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on December 21 2021 said:
    Not a day passes without claims being made by experts, analysts and organizations prominent among them the International Energy Agency (IEA) about climate change, global energy transition, net-zero emissions, peak oil demand and the end of oil.

    Whilst some claims about climate change are credible enough with rising sea levels, wild-fires, heatwaves and extreme weather events already wreaking havoc everywhere, others are either unsubstantiated or controversial. Still, Environmental science has yet to establish unequivocally whether these were caused by human beings using fossil fuels or as a result of natural developments or both.

    Environmentalists who call for an abrupt end to fossil fuels and a sudden adoption of renewable energy fail to recognize the obvious lack of logic in this. On their own, renewables aren’t capable of satisfying global demand for electricity and energy because of their intermittent nature. While the process of global energy transition will continue to move forward, a total energy transition is an illusion. Even a partial one will never succeed without huge contributions from natural gas and nuclear energy.

    The notion of net-zero emissions is a myth. It will never be achieved in 2050 or 2100 or ever. How could net-zero emissions be achieved when 10% of the world’s wealthiest who happen to live mostly in the United States and Europe account for 50% of the world’s emissions while the remaining 90% of the world’s population account for the other 50%?

    Of recent times various claims were made about peak oil demand with the forecasts varying from late 2020s to 2040’s. But how could there be a peak oil demand with the world’s population projected to rise from 7.9 billion today to 9.7 billion by 2050 and the global economy projected to grow in size from $91 trillion in 2021 to $245 trillion also by 2050 without oil?

    There could never be a post-oil era either throughout the 21st century and probably far beyond. It is very doubtful that an alternative as versatile and practicable as oil, particularly in transport, could totally replace oil in the next 100 years and beyond.

    That is why oil and gas are here to stay.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Manuel LANZA on December 21 2021 said:
    There are over 5,000 products made off Oil and Trucks/Buses can't run on batteries but Nat Gas which is more efficient.
  • DoRight Deikins on December 22 2021 said:
    Oh, Julianne, I think I love you! (Don't tell my wife. OK, too late. I told her.) I have not read such a classic expose in recent memory, not counting the Bible which is filled with the same sort of exposure of the hypocrisy of the rich and famous. (You know, like the classic "Yes, but who is my neighbor?")

    Wait! Does this mean that Al (Gore the poor) is going to have to give up his Bombardier Global 7500? How about if he just sends it on one trip across the Atlantic to pick up his wine in France from his chateau and the Black Sea caviar from Crimea [special gift from our dear friend, Vladimir], rather than two separate trips? And he could trade the BG7500 in on an 8000 which is 8% more efficient, so I hear. I mean if anyone needs a private jet it's him. How's he going to threaten and coerce (didn't that use to be illegal?) those banks into stopping their funding for those companies that don't play his game.

    And speaking of the difference between 'renewable energy' and 'green energy'. The last time I passed by Al's mansion in Tennessee, it appears that he has gone all green. At least from the smoke coming out his chimneys, it appears that he is burning very, very green wood.

    All kidding aside, it seems that the emperor's new clothes are taking much of the world's GDP. And I have learned a new acronym, UHNWI (Ultra High Net Worth Individual). Plus I always thought of cognitive dissonance in terms of 'buyer's remorse', but quite clearly yours is a more full definition. Thanks.

    "Note that the richest one per cent account for more than twice the combined emissions of that from the poorest 50%." Wow! And " the world's wealthiest 10%, who the UN alleges make up 50% of the world's carbon footprint." Ouch!

    Julianne, May you have a Merry Christmas and a Blessed New Year. And may you keep writing.
  • independence01776 d on December 28 2021 said:
    Key point on consumption and therefore who creates greenhouse gasses is spot on in this article. My family is certainly in the top 10%, perhaps 1%. And though we've reduced our use of gas for transportation and home by about 80%, (100% in the next 5 years) we still travel via jet, buy lots of products made from energy produced with fossil fuels, etc. And since consumption is going to continue the best way to manage the process is to place a cost to carbon use.

    So the issue is really not overwhelming at all. It's called a carbon tax.

    Today, a carbon tax would put a larger burden on the non wealthy than the wealthy, and the greatest burden would be on the poor. So it's not politically palatable in the democracies and not wise anywhere. But as the transition to renewable wind and solar and batteries continues and the minority today of 14% of our energy becomes the majority in a decade or so, placing a carbon tax will become the norm and will impact those who consume the most more than the other 90%.

    We are watching the price of renewable energy decline rapidly. In 2022 we are starting to see the first commercial manufacture of multiple layer solar panels. Panels that will capture a larger range of the photons of light the sun provides, increasing panel efficiencies by another 50% and dropping installation cost by the same as a result. In a decade we are talking electricity prices at 1 to 2 cents per kW almost anywhere in the world.

    As for battery storage and solar material issues, those are non issues (today) for anyone who has been following the technology developments for recycling those products, which are relatively easy to recycle and recover over 95% of the original minerals today at cost comparable to mining new minerals.

    Today, renewable, clean energy represents 14% of the worlds total energy consumption.
    From 2010 to 2020, solar and winds share of energy production grew 1% per year. From 2018 thru 2020, it grew at over 2%. For the rest of this decade it will be over 3% per year.
    By 2030 it will represent 40%. We will soon see carbon taxes in nations and states that are on the leading edge of the clean, green sustainable energy curve and that will spread as prices for renewables continue to drop and more and more people come to depend on them.

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