Energy Production And Consumption: The Seen And The Unseen Francis Menton
https://www.manhattancontrarian.com/blog/2020-7-9-energy-production-and-consu
Over the past several days, you have probably seen multiple articles reporting on reverses suffered in the U.S. courts by developers of pipelines to transport oil and natural gas. In one case, a Federal District Court even ordered an existing, operational pipeline to shut down pending further environmental review. The multiple court decisions have been covered in the New York Times, Washington Post, LA Times, CNN, and every other large news source that you can think of.
Meanwhile, on June 19 the BP oil company issued its annual Report titled “Statistical Review of World Energy,” this version covering the year 2019. I’ll bet you haven’t seen anything in the news about that one. I make that bet because, aside from one article in Forbes magazine, every piece that I can find covering the BP Report appears in some sort of specialized or industry publication.
If you just see what appears before you in your news feed, you could be forgiven for getting the impression that producers of fossil fuels are on the run and will shortly be driven from the scene. But if you take the time to look, you can find the real picture in the BP Report. In summary, world production and consumption of fossil fuels continue their steady and inexorable aggregate growth (although with ongoing substitution of natural gas for coal). Despite all you have read about plans to reduce or eliminate CO2 emissions, in fact those emissions continue to grow from year to year. Production from “renewables” also has been growing, but at a pace insufficient to result in any reduction in use of fossil fuels. Indeed, it’s not clear that any amount of increases in intermittent wind and solar sources can result in reductions in use of fossil fuels, since the wind and solar sources require full backup from dispatchable sources. Meanwhile, the market shares between and among the energy sources barely shift from year to year.
As to the various recent court decisions relating to pipeline construction, here is a brief summary:
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On Monday July 6, Judge James Boasberg of the U.S. District Court for the District of Columbia issued a ruling in a case involving the Dakota Access Pipeline. The Dakota Access Pipeline, which has been in operation since May 2017, delivers oil from the Bakken production region in North Dakota to a large terminal in Illinois, from which the oil gets shipped on to various refineries. Judge Boasberg ordered that the pipeline must now shut down in August pending the generation of a full Environmental Impact Statement from the Army Corps of Engineers. The gist of the ruling is that the environmental reviews that formed the basis for approval of the pipeline did not rise to the level of a full EIS, which the judge found to be required in this case on the basis that the pipeline in question was sufficiently “controversial.”
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Also on Monday July 6 came a ruling from the U.S. Supreme Court in a case involving another pipeline in the same general region, this one called Keystone XL. Keystone XL is a proposed addition to a pre-existing pipeline (Keystone) that takes oil from the province of Alberta, Canada down to refineries in the southern United States. A federal District Judge in Montana (Brian Morris) had issued a ruling invalidating a nationwide Clean Water Act permit that had enabled some dozens of pipeline projects including Keystone XL to proceed. The Supreme Court’s order stays Judge Morris’s ruling “except as it applies to the Keystone XL pipeline.” So Keystone XL is blocked for now (pending review of Judge Morris’s decision by the Ninth Circuit), but the other dozens of projects are off the hook, at least for the time being, and as to this one issue.
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And then there was the Supreme Court ruling back on June 15 upholding the permit for another pipeline — the Atlantic Coast Pipeline running from West Virginia to the Atlantic Coast — to cross the Appalachian Trail. This one would seem on its face to be a victory for the pipeline developer. However, the opponents immediately announced that the proposed pipeline was “still lacking 8 permits,” all of which they promised to challenge. On July 5 the developers of the ACP — Dominion Energy and Duke Energy — announced that they were abandoning the project.
So does it sound like the fossil fuel pipeline business is down for the count? In fact these litigations just involve a small part of the overall picture. Something called the Pipeline and Hazardous Materials Safety Administration (had you ever heard of that?) tracks the total mileage of pipelines for oil and natural gas in the country. Their latest data (2019) show 224,000 miles of existing pipelines for oil in the U.S., and some 2.577 million miles for natural gas. And both oil and natural gas can also be transported by rail or by truck if need be. Rail and truck are both more expensive and more dangerous, but since the railroads and the highways already exist, there is no call for new federal permits or for Environmental Impact Statements.
What then are environmental groups trying to accomplish by fighting every new pipeline project tooth and nail? You would have to ask them. My principal suspicion is that they need to be able to show some kinds of “victories” to please their donors, and pipeline litigation over various permits is the one place where they can find some of these “victories.” My second suspicion is that environmentalists regard the higher costs and prices resulting from rail and truck transport as a good thing. But how about the increased frequency of accidents and explosions that come from transporting fuels by rail and truck? You would think that bona fide environmentalists would care at least a little about this, but they don’t. Somehow, they have convinced themselves that these pipeline litigations are going to “save the planet,” or something.
On to the BP Report. The basic story is that fossil fuel consumption continues its unstoppable growth, with small declines in the U.S. and OECD countries swamped by increases in China and the rest of the developing world. Here’s the summary for oil consumption:
Oil consumption grew by 0.9 million barrels per day (b/d), or 0.9% slightly lower than the 10-year average of 1.3% p.a.. Growth was led by China, where demand rose by 680,000 b/d, the largest increase in the country’s demand since 2015. Elsewhere in the developing world, growth was below average, with Iran (180,000 b/d) the only major exception. OECD demand fell by 290,000 b/d, the first decline since 2014.
And on the production side, the U.S. massively increased its output of oil, forcing large cutbacks on places like OPEC and Russia:
The US posted the largest increase [in oil production] of any country for the third consecutive year, with its output rising by a massive 1.7 million b/d, although this was down from the record increase in 2018 (2.2 million b/d). There was also significant growth from Brazil (200,000 b/d) and Canada (150,000 b/d), although in the latter’s case, this was a pronounced slowdown in growth compared to 2017 and 2018. OPEC production fell by 2 million b/d, the group’s steepest decline since 2009.
Litigious environmentalists have had essentially zero success in trying to stop the “fracking” revolution that has massively increased production of both oil and gas in the U.S.
Natural gas in 2019 had even larger increases in consumption and production than did oil:
Global natural gas consumption growth averaged 2% in 2019, below its 10-year average and down sharply from the exceptional growth seen in 2018 (5.3%). In volume terms, demand grew by 78 billion cubic metres (bcm), led by the US (27 bcm) and China (24 bcm).
And, despite the Paris Climate Agreement and other such meaningless pieces of paper, global carbon dioxide emissions continue once again to go up not down:
Emissions [of CO2] rose by 0.5%, although slower than their 10-year average, it only partially unwound the unusually strong growth of 2.1% seen in 2018.
I have no idea what they mean by saying that the prior increase in emissions had been partially “unwound.” It’s not like there was any decrease. Some years the emissions go up faster, and some slower; but every year they go up. As Robert Rapier noted in his Forbes piece about the BP Report, “Since the negotiation of the 1997 Kyoto Protocol to curb emissions, [annual] global carbon dioxide emissions have risen by 50%.” The fact is that the developing countries are going to get their air conditioners and refrigerators and computers and automobiles, and they are going to use fossil fuels to do it, and there is nothing we can do to stop them. Indeed, it would be immoral to try to stop them. In the face of that, any marginal decreases in emissions that we might achieve are completely insignificant.
Finally, the so-called “renewables” — wind and solar — showed some substantial increases in production, but from a tiny base. The result was that their effective market share barely budged. A chart in the Introduction shows an increase of 3.2% in wind and solar output, but that only increased their market share by 0.5% to 5% of primary energy production.
Didn’t presidential candidate Joe Biden say that he intended to eliminate all use of fossil fuels? How can anybody take this guy seriously?
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