Oct 21, 2020
Welcome to Finance and Fury, the Say what Wednesday edition.
This week is another great Question from Phuong.
“What do you think about the future energy plans for Australia
and the world in general?
I heard about the Government’s plan to build some gas station?
do you think this is green energy and does it help with economic
growth? I know we have some share in Uranium and lithium. do you
think Australian Gov will ever consider nuclear energy?”
Thanks for the great question – pretty big topic – a lot of
governmental energy policies are focused on climate change and CO2
emissions - Covered a lot of the background to this topic in
previous episodes over the years – some of these were titled:
- What is the real danger behind Climate Change? – went through
the history of the climate change narrative – from back with global
cooling in the 60s and the organisations behind constructing the
narrative and who benefits
- Climate Agreements – An effective CO2 reduction strategy, or a
money-making scheme? – looking at the financial incentives and
economics of climate policies for big business
- Pay more in taxes, electricity prices and costs of goods, or
the climate will change! - focusing on why CO2 is presented as the
culprit and what this leads to in your everyday life – in this I
did look at the better already available solutions that are being
ignored
- Global Infrastructure plans in the name of climate change - Why
then are the recommendations focused on changing Government
accounting practices and risk-measures, along with opening the
floodgates for redistribution spending?
- So if you want some more context – recommend going back and
searching for those titles -
However - In this episode – look at what is green energy, and
what the future of the energy market in Australia may look like and
why – versus what I think is the optimal outcome – next SWW episode
– look at if the Aus Government plans, called the Gas-fired
recovery can help with economic growth and the green energy
plans
What is Green energy – it is considered renewable energy –
- Renewable energy is energy that is collected from renewable
resources - which are naturally replenished on a human timescale –
these include under the definition energy sources such as sunlight,
wind, rain, tides, waves, and geothermal heat – but why not gas and
oil?
- A lot of people think that these are finite – lingering fallacy
from the peak oil theory initially from 1956 – but the
geologist who came up with this worked for Shell and was
probably trying to create artificial demand for oil – which worked
–
- However – there is a lot of information that actually backs up
the idea that Earth is actually an oil-producing machine – the idea
of oil being a fossil fuel – getting its name based around the
assumption that oil and gas comes from decomposing dinosaurs and
organic material now seems ridiculous – this the label is a
misnomer – all the research from the last decade found that
hydrocarbons are synthesized abiotically
- In other words all the data implies that hydrocarbons that make
up oil and gas are produced chemically from carbon found in Earth's
mantle – that is self-reproducing
- Science magazine and Nature magazine have released studies
on this - calls the product of this process an "unexpected
bounty " of "natural gas and the building blocks of oil
products." – which the earthy naturally produces on an ongoing
basis – oil and gas reservoirs replenish themselves
- The definition of human timescale is where the definition of
renewable is narrowed down - Oil and Gas actually renews the
reservoirs over time – we aren’t running out of oil and gas – they
are technically renewable energies by the definition if you take
human to be a generation or more –
- Engineering and Technology magazine says "with the use of the
innovative technologies, available fossil fuel resources could
increase from the current 2.9 trillion barrels of oil equivalent to
4.8 trillion by 2050, which is almost twice as much as the
projected global demand."
- But that number could even reach 7.5 trillion barrels if
technology and exploration techniques advance beyond the current
projections – so oil and gas are naturally renewable
- this nomenclature aside – there is the argument of
environmental damage and CO2 emissions
When it comes to the future of energy – what is considered green
energy in the form of renewables with solar and wind is a major the
key policy focus from the unelected global entities like the UN,
world bank, WEF and their likes – but the focus is on the reduction
of CO2 emissions
- In the UNs Agenda 2030 – Started in 2015 – a part of this is
the Paris Agreement – tool used for countries to meet the
sustainable development goals through reducing carbon
emissions
- you have Sustainable Development Goals 7, 9 and 13 which focus
on this topic of what they consider green energy–
- SDG 13: Climate action - "Take urgent action to
combat climate change and its impacts by
regulating emissions and promoting developments
in renewable energy."
- SDG 7 - Affordable and Clean Energy - "Ensure access to
affordable, reliable, sustainable and modern energy for
all”
- SDG 9 - Build resilient infrastructure, promote inclusive and
sustainable industrialization and foster innovation
- Solutions provided – Continue developing Solar/Wind as the way
forward, and tax CO2 emissions to price it out of competition -
Australia Target under the Paris agreement – Emission reduction of
50% p.p. – May as well be a tax on the population to achieve this
in this timeframe to disincentivise the use of energy that produces
CO2
- Main intention is to not just deal with heavy polluters (that
is a policy that is working) – we already have heavy environmental
protections
- This target is completely different - outcomes here is the
target - 45% emission reduction target – not policy of how – but
what – Governments are demanding almost half the emissions to go –
this is going to cost a lot – indirect through taxes and pass on
costs to make green energy more cost competitive
- independent modelling – shows that there will be impact of
$9,000 a year for the average Australian worker, at the cost of
360,000 jobs or more
- Climate is the most misunderstood topic – listen to honest
scientist – they say they don’t know what is happening – the
climate changes naturally – nothing new here – been happening for
4.5 billion years – times in the past CO2 was going down but temps
were going up – nobody knows why – but listen to UN – they
guarantee that if you are reducing CO2 emissions by the target this
will reduce the rise in temperature by 1.5 degree - so give all the
energy regulation and money to them – but this is the way energy
policies are progressing
- The future of energy is all about focusing on reducing CO2 -
but why is co2 used?
- All for Energy and resource control – helps as well to siphon
trillions of dollars out of people into the UNs pockets as well –
Control of money, control over our lives –
- CO2 can be monetized on both ends – you can tax the CO2
producers – you can also give carbon credits to green energy
providing companies – there is a massive financial incentive –
- CO2 is a financial market – the carbon trading turnover was at
$214 billion last year – which was a growth of 34% from the
previous year
- The average price of a carbon credit rose by $10 over the past
year – from $18 to $28 per tonne
- This is a relatively new scheme – was only implemented 15 years
ago – but as these policies grow – this market will grow to be as
large as any share market
- Finances – Paris Agreement - Article 9 – Deals with the Finance
Transfer – projects towards low greenhouse gas emissions and
development
- P1- Developed countries shall provide financial resources to
assist developing countries
- P3 - mobilizing climate finance from a wide variety of sources,
instruments and channels, noting the significant role of public
funds
- The agreement builds on the financial commitments of the 2009
Copenhagen Accord, which aimed to scale up public and private
climate finance for developing nations to $100 billion a year by
2020
- The Copenhagen pact also created the Green Climate
Fund to help mobilize finance using targeted public dollars.
- The Paris Agreement established the expectation for a higher
annual goal by 2025 - put mechanisms in place to achieve that
scaling up from $100bn.
- Green Climate Fund – Collects money (Country taxes) – Give it
to accredited entitles – they spend on projects
- Entities – HSBC Holdings, Africa Finance Corp, European Central
Bank, mainly gov or private banks
- Energy is a big business – you have massive oil companies – but
these may have seen their best days as behind them – as the new
energy industry is all about carbon credits – which the banks
backing these carbon policies are going to benefit massively from –
- Does come back to some form of corporate welfare – as companies
are given carbon credits if they show that they are renewable
companies
- So the future of energy is all about monetising a carbon market
– having businesses that can subsidise themselves through being
given carbon credits to turn around and sell – to entities like the
EU emissions trading system
- In addition – solar and wind turbines will be implemented – but
this will take a long time to achieve – cant occur overnight – and
probably no way to get rid of carbon emissions fully as our energy
needs are increasing
- There is massive levels of divestment from coal and gas – i.e.
super funds and other investment managers not investing in these
industries – creates a lack of equity funding
- On top of this – it means that the amount of capex and
expansion that these companies can conduct is limited
- The focus and future of energy seems to be focused on ignoring
these industries and then finding other sources such as solar
- In a perfect world – everything would be solar and at no cost
to the person – but we don’t live in a perfect world
What I think it the optimal solution -
- For me – the Solution shouldn’t be to put financial strain on
the population (tax and removal of cheaper energy sources),
- Simple solution – Divert all the funding to Nuclear or Thorium
reactor technology and roll those out
- We need more energy for the future- solar and wind can’t keep
up – even spending billions won’t help
- Thorium is a radioactive element that can be used in a new
generation of nuclear reactors as an alternative source of fuel for
the generation of electricity - Safer than conventional
uranium-based reactors – does not contain enough fissile
material to initiate a nuclear chain reaction. As a
result, it must first be bombarded with neutrons to produce the
highly radioactive isotope uranium-233
- Thorium is more abundant in nature than uranium. It is
fertile rather than fissile, and can only be used as a fuel in
conjunction with a fissile material such as recycled
plutonium. Thorium fuels can breed fissile uranium-233 to
be used in various kinds of nuclear reactors.
- still a degree of risk – you can get burnt – if you watched
Galen Windsor – see him holding radioactive materials and only
issue was burning his hand if he were to hold it too long – but no
contamination
- people are worried about nuclear energy due to things like
Chernobyl or Fukushima – the Nuclear Chemist Galen Windsor goes
through this in online lectures – recommend that you go and search
his name – has a hour and 30 minute lecture online from back in
1985 – explains a lot
- Thorium is abundant in Australia 18% of world supply
- Environmentalism in the name of climate change is stopping this
- environmental concerns with the mining, handling and storage of
radioactive materials
- But Nuclear or thorium power is a CO2-free energy
source at point of generation produced. This is two orders of
magnitude less than coal, oil and natural gas, and is
comparable to emissions from wind and solar power
- most power production outside of solar is simply turbines
moving – most like coal or nuclear is done through using boiling
water – wind and hydro is through moving the turbines from both
wind and naturally moving water
- What I would hope our energy market turns into is a nuclear
thorium-based energy system – but many countries like France are
reducing their nuclear power plants – for some reason
- So there isn't a move towards nuclear energy -
Next week – look at the gas fired plans – if this is green
energy as well as if this can help the Australian economy
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