Adorability maximus

“Stupidity maximus” is the diagnosis that the family teen makes every time she encounters something that doesn’t fit with her idea of, well, non-stupid things. Teens are so irreverent, aren’t they?

We adults tend to be more generous, especially when stupidity happens to be entertaining and it is my pleasure to report that this week has produced a rich crop of adorable and funny non-smartness. It warms the heart that so many people work hard to keep us all entertained.

The IEA is full of such people and headed by an especially dedicated labourer of adorability maximus. Last week, that labourer warned OPEC+ to not withhold oil supply for too long because it could exacerbate the global inflation problem.

“It’s up to them to decide what they’re going to do, but at this very fragile situation of the global economy, the least that the countries, especially oil-importing developing countries would need is high oil prices, which in turn would push the inflation numbers up,” Fatih Birol said.

Now, such a warning would suggest that there is plenty of demand for oil, which would be the actual reason for higher prices should supply remain constrained by voluntary caps. Yet less than a week after that warning, the IEA reported that it now expected oil demand this year to grow more weakly than previously forecast.

Oil demand growth this year, the IEA essentially said, was nothing to write home about. Obviously, prices fell on the news — even though the IEA supply projection was even lower, meaning a deficit of about half a million barrels daily. In other words, the world’s formerly trusted energy agency first tried to convince OPEC+ to boost production and then it took care to pressure prices, which would only motivate OPEC+ to stick to its production cuts and keep supply tight — while still projecting a supply deficit. Just writing about it makes me feel dissociative.

Fascinatingly, oil demand may yet surprise but not for the reasons you might think. Reuters has it that some refiners in the U.S. who had turned their refineries into biofuel plants were now switching back after federal biofuel blending mandates failed to live up to biofuel makers’ expectations.

“U.S. renewable diesel production capacity nearly quadrupled following the coronavirus pandemic from just 791 million gallons a year in 2021 to 3 billion gallons by 2023, as refiners sought ways to survive the transition away from their petroleum-based products,” Reuters wrote this week.

Together with biodiesel, the production capacity of the country has reached 5 billion gallons — and demand is only about to grow to 4.5 billion gallons by next year. Trust the government to take care of you, right? They should’ve just asked EV makers but more on that later.

Because demand is lower than supply and not about to skyrocket any time soon, some bio- and renewable diesel producers are already going out of business. And others are reverting to being oil refiners because apparently there’s still money in that. Who’d have thought it?

“The crux of the matter is that market participants convinced themselves that 'if we build it, the EPA will mandate it'. That didn't happen,” one University of Illinois professor in agricultural and consumer economics told Reuters. Imagine building a whole industry hinging entirely on government mandates. That’s beyond adorable.

So is the FT’s concern about Europe’s weather troubles summed up in the beautiful German word Dunkelflaute. That’s when there’s little sun and no wind, so panels and turbines are not producing anything much. And it makes two wonderful German words adopted by other languages for lack of such succinct descriptions of important phenomena. The other one’s Schadenfreude and I must admit I am experiencing copious amounts of that as I read about the EU’s Dunkelflaute headache.

If you believe the FT, which uses the phrase “unabated fossil fuels” in the Dunkelflaute story and I find this adorable, it’s not that much of a headache. We just need to build more batteries where we can store all the excess wind and solar electricity that installations generate during peak wind and sun, and then use that during the still, dark periods. FT and its battery solution, people. Just build a lot of those and we’re all set.

Other options suggested in the story are pumped hydro, which is also weather-dependent so that makes it sub-optimal, and — you knew this was coming — hydrogen storage. But apparently that’s too expensive and inefficient, so I guess we’re stuck with batteries, whose costs have been shyly omitted from the report.

I myself have a simpler solution. We just won’t use electricity during the still, dark spells. What’s one week without electricity? Seriously, think about it. It will be like a break from modern life that will only remind us to treasure it appropriately. And think of the emissions that will be saved from not using any electricity for a week. Simple, elegant and, most importantly, climate-friendly.

Speaking of elegance, Microsoft had a lapse in that recently. It had to admit that its Scope 3 emissions had gone up by a stunning 31% over the past four years “due to indirect emissions from the construction of data centers,” per CNBC.

The company mea culpa-ed meticulously, blaming its unique position as a leader on the cloud computing market for the increased emissions and then presenting its not very elegant solution: force its suppliers to use 100% green energy.

In other words, if any of Microsoft’s “select scale, high volume suppliers” want to keep doing business with this behemoth of net-zero targets, they’d better start making their chips using 100% solar or get dropped as suppliers. I, for one, can’t wait to see how this ends.

I also can’t wait to see how Microsoft’s $10-billion deal with Brookfield Asset Management will end. The asset manager agreed to build 10.5 GW of wind and solar capacity for Microsoft’s needs between 2026 and 2030. I suppose neither of the parties has heard about Dunkelflaute. Or rather they have heard about it. They know a lot of “unabated fossil fuels” will need to be used to power those data centres. They simply don’t talk about it. It is unseemly.

What is seemly, meanwhile, is causing a freakout in the transition camp by warning that a Trump win in November could cost the noble endeavour $1 trillion in lost investments. This is exactly what Wood Mackenzie did this week, possibly for lack of anything more substantial to do.

“It is not likely that the IRA will be fully repealed,” David Brown, director of Wood Mac’s transition research arm, said. “However, a second Trump presidency would likely issue executive orders that would abandon the 2035 net zero target for the power sector, establish softer emissions goals from the EPA, and issue tax credit regulations that could favour blue hydrogen.”

So much for the transition being economically better and more profitable than preserving the status quo — within anyone’s lifetime. The song’s still on for the long-term economic sense of a transition and Wood Mac is dutifully singing it because it’s too convenient to ignore — none of us will be alive in 80 years to see just how badly that particular forecast failed.

Personally, I suspect Wood Mac inadvertently helped Trump’s re-election chances with that warning, especially since it includes the suggestion that a potential Republican administration could — gasp — try to do something about U.S. debt. Imagine that — a government trying to rein in a debt pile of cosmic proportions. When everyone knows that the correct attitude to debt is to just generate more of it to fund more wind and solar, and let future generations worry about the repayment part.

Speaking of generations, Millennials and Gen Zers are turning into a huge disappointment — for EV makers. According to a new J.D. Power survey, these two generations are growing cold towards EVs, which is worrying because it is also these two generations that are the biggest fans of electric cars.

To be honest, I think J.D. Powers is being GenZerily dramatic. So 5% fewer Millennials want to buy an EV now versus last year and 2% fewer GenZers are very likely to buy one, big deal. There’s still 24% of GenZers and 32% of Millennials who would go electrically mobile if given half a chance. Or an actually affordable EV.

That last train sailed this week, however, when the White House announced 100% tariffs on Chinese EVs. It’s tough, having to pursue both higher EV numbers and lower Chinese EV numbers because Chinese EVs are clearly the wrong kind, affordable as they may be. Because Chinese state subsidies for the EV industry are bad, unlike U.S. subsidies for the EV industry, which are good — just ask Janet Yellen. It all makes perfect sense. Too bad a growing number of people don’t want any EVs — this year’s the first when attraction to EVs has dropped since 2021.

At the risk of ruining everyone’s mood for the weekend, I’m afraid we must end on an even gloomier note than changing generational attitudes towards electric cars. Because coal still accounts for a greater share of the U.S. electricity generation mix than wind and solar. Despite all the efforts to kill it. Despite the success of these efforts in greatly reducing its share in the mix. Still, coal generation has remained stubbornly existent, at 15.6% of the total over the first four months of the year.

It’s about to get worse, too. Because, as Reuters grimly informs us, “coal-fired generation routinely climbs from now through September as power firms must boost supplies to meet elevated electricity demand for air conditioning during the hottest months of the year.” Take a tissue on your way out.