Europe tried to go “green” for energy, and now faces a cold dark future.
Quotes:
Handwaving about more factories and better batteries in the future is irrelevant to the task of what can be built now to keep economies, businesses, and people alive.
On average, economies the size of the U.S. and EU store one or two months’ worth of coal, oil, or natural gas. Stowing away such quantities of hydrocarbons is relatively easy and inexpensive. Advocates of the energy transition propose that building more batteries can store excess energy from solar and wind installations. But matching the energy value of the two months’ worth of natural gas Europe now has in storage would require building $40 trillion worth of batteries, which would take all the world’s battery factories combined about 400 years to produce.
Consider Europe’s rush to increase gas imports from non-Russian sources by installing some 20 liquified natural gas import terminals. The terminals will cost a total of about $15 billion and deliver enough fuel annually to produce a quantity of electricity that would require building $200 billion of wind turbines. Those hypothetical wind turbines, of course, would still require natural gas backup for wind droughts—that is, trillions of dollars of batteries.
These realities are why Liz Truss, the new U.K. prime minister, has announced that the country will pursue shale gas and oil. Naysayers, including Britain’s chancellor of the exchequer, said earlier that fracking wouldn’t solve the energy crisis because even it would take up to a decade to extract sufficient volumes. Obvious and true, but the point is to forge an energy path that gives businesses enough confidence about the future to deploy capital today. And that confidence will rest on whether planners see a future with sufficient, resilient, and cheap energy.
The existential economic issue facing Europe in the aftermath of the twenty-first century’s first energy war, is whether the continent can fully rebuild many of the energy-intensive industries already shut or facing stoppages. (Certain classes of machinery, notably some in glass and steel manufacturing, can be irreparably damaged if shut down.) Whether such businesses decide to risk deploying capital to reopen involves speculation about whether foreseeable energy supplies will be both reliable and cheap. If the answer is found in locations in Asia, or Africa, and even Russia, that’s where those supply chains, jobs, and economic benefits will migrate.
Comment:
What a great irony of history it will be if the countries from which poor migrants are now fleeing by the million into rich Western Europe are the very ones that will be prosperous in the future when Europe has become a ruin.