Interesting times

Those of you who have been around long enough know I like to see things from a funny perspective, which I have noted more than once is a coping mechanism that the world we live in today makes necessary. I like to think I still have a couple of decent decades to live and I’m not cutting that time short because a lot of people in power are stupid or deliberately bad for our health.

Sometimes, however, it becomes quite hard to see the funny side and this week has been one of those times. This week has been overloaded with demonstrations of outrageous arrogance, hypocrisy, and other unpleasant forms of human behaviour.

Of course, I must start with Antonio Guterres’ slamming of Big Oil for demonstrating “grotesque greed” and his call on governments to tax the hell out of that industry because they made huge profits from higher oil prices.

In response to the news, my friend David Blackmon accurately noted that Guterres is not saying a word about the profits of Big Tech or Big Pharma, or indeed any other industry that occasionally or regularly enjoys windfall profits because of how markets work — and are made to work by people such as Guterres himself.

Far be it for me to defend any large company, regardless of the industry. Normally, the larger a company becomes, the more harmful its effect on everything it touches because it acquires the power to influence the lives of millions of people directly and indirectly and power corrupts. But here we have a case of singling out one industry or rather the biggest players in that industry and blaming them for making money by selling their products.

Imagine someone accusing Mattel of making too much money from selling toys on some particularly good year. It would sound preposterous. If it’s Big Oil, however, everything’s allowed, including blatant self-contradiction: you’ll remember, of course, that not that long ago Guterres said investment in more oil and gas production was “delusional” because soon enough we won’t need them.

That’s the same man who said investment in coal was “stupid” just as coal prices were skyrocketing due to a severe imbalance between supply and demand, on track to hit a record, which many are now forecasting, including Guterres’ friends from the IEA.

That the secretary-general of the UN has become a mouthpiece for a loud ideological group is clear enough and it is quite sad because once upon a time many of us believed the UN was a benevolent organisation.

I’m sure its many arms still do a lot of good in humanitarian aid, for example, or education, only not where energy is concerned, unfortunately. Guterres is on repeat about renewables and getting increasingly rude on anything other than renewables, Greta-style. Who would’ve thought it would come to this?

Meanwhile, G7 continues to “consider” ways of putting a cap on Russian oil prices. Frankly, this was a rare ray of humour sunshine this week as far as energy news goes. G7 has been considering for, what, more than a month now?

Besides some bombastic and highly moralistic statements, the consideration exercise has so far failed to produce any result. Unless you count the EU’s and the UK’s actual rollback of anti-Russian sanctions, which, I believe, is the opposite of what G7, the EU and the UK all wanted to do. Reality bites and sometimes it bites in the tender regions.

While Justin Trudeau keeps on considering price caps with his six G7 friends, environmentalists are protesting the construction of any LNG export terminals on Canada’s east coast. The protests are happening weeks before a visit to Canada of Germany’s Chancellor, Olaf Scholz, who’s basically going there to ask for, yes, gas.

While everyone wonders where that Gazprom turbine is and whether it will get back home to its compressor station, and while it acquires an increasingly mythical status, Germany is working on its future energy security and Canada is working on reaffirming its reputation as a reliable partner to Europe and its biggest economy. If only it wasn’t for those environmentalists who apparently do not understand that gas is only bad when it is used locally. If it’s exported to help a friend, it’s good.

Canadian environmentalists, however, are weak beer, as we say down here. The pros are, expectedly, in Europe. One such pro is Rabobank’s CEO, Barbara Baarsma, who suggested in a radio interview that households are given a sort of carbon wallet to track their emissions. Sounds like a fake? Nope. I studied Dutch years ago for a while and remember enough to understand the headline. Not fake.

The Swiss are even bigger pros. Some climate experts there have proposed a carbon budget for everyone. That’s right, everyone in Switzerland will have a carbon emission allowance and when they run out of this allowance they would have to buy additional “emission rights”, per the report I read.

How will the emission rights work? By putting a second price on products, in emissions. Ingenious, I thought. What an elegant way to steer people to consuming low-emission products.

It’s quite likely we will be seeing more examples of such elegant or perhaps not so elegant ways of steering people to consuming certain goods and not others. Electricity is one of those that would involve less elegant methods simply because of the urgency of cutting consumption. High prices will do the trick there neatly, though.

Speaking of high prices, I was not stunned to learn that the EU’s exemplary, ahead-of-deadlines gas storage filling rate is coming at a cost ten times the usual. Per a Reuters report, the EU’s gas caverns are 70% full already but the price for that is 50 billion euros so far, compared to 5 billion euros normally. But we’re moral.

Back to the steering towards more sustainable behaviour. It appears the steering is not working as expected in EVs in the U.S.. A recent survey among 2,000 people showed only a minority would buy an EV despite various people in the public space arguing that high petrol prices will cause a rush to buy EVs. Perhaps prices would need to go higher but, unfortunately, they have actually been on the decline.

I was surprised to see President Biden claim credit for this decline since I fail to remember any measures his administration took to cut prices, unless you count lashing out at the oil industry for “profiteering” and threatening windfall taxes and investigations. I was also surprised at the fact I still had capacity available to get surprised.

Interesting times we live in and they are likely to become even more interesting as winter approaches here in the northern hemisphere. In the southern hemisphere I hear Australia passed a new climate change bill binding the country to reduce emissions by 43% from 2005 levels by 2030. I wonder how that will square with the friend-shoring of critical metals and minerals.