September 2022: Green Mess

Replacing fossil fuels with renewable energy is not possible. Here is why.

Cars, trucks, ships and airplanes would need to be powered by batteries or hydrogen. These require electricity, which presumably would come from solar and wind.

All in all, we would need to build an electricity production capacity of 36,000 Twh. That requires 586,000 new renewable power stations. To get a sense of proportion, the world currently has only 46,500 power stations. By the way, if we wish to replace the existing power stations as well, simply multiply the number of renewable stations by 3.6.

Now, these power generation technologies are intermittent. The sun is not always shining and the wind does not always blow. So we need a few weeks of energy storage to smooth their energy output.

Building all these EVs, hydrogen vehicles, ships, planes, solar, wind and energy storage require metals.

Here is a table with the quantity of each metal that is required to produce ONLY THE FIRST GENERATION of these. For proportion sake, we can compare these quantitates to how much was produced in 2019 and how many years of production these quantities represent.

The renewable energy story was simply “too good to check”. And with the “Inflation Reduction Act” dedicating $369 Billion to making it come true, the prices of these and other metals are going to go to the moon, and soon.

Meanwhile, down on earth, energy from oil and other fossil fuels is still the lifeline of the economy. All other products and services are dependent on it for their production or transportation. Fertilizers are also downstream products of fossil fuels.

The vilification and punishment of fossil fuels discouraged investment in their exploration and production. And fossil fuel reserves are shrinking, fast. New oil discoveries peaked in 1960. Oil reserves peaked in 1985.

Over the Summer the Biden administration released oil from the Strategic Petroleum Reserve. The releases are scheduled to end by November, just in time for Winter (or the Midterm elections).

Beginning in November, demand is forecast by EIA to exceed supply. However, this forecast does not take into account Europe’s sanctions on Russian oil, which may reduce supply even more.

The bottom line is that fuel prices could skyrocket this Winter and crush the global economy. Despite that, and thanks to the “Inflation Reduction Act”, some metal prices are going to explode even more.

You can prepare for the coming long and hard "Global Winter” by positioning yourself correctly. “Forewarned is forearmed”.