Renewables: As Ironic Today as 20 Years Ago
Written by Matthew McKean, CEO and co-founder of Frontieras North America (LinkedIn)
Let me be clear -- as if I am shouting from a mountain top -- we are in an energy crisis that is only just beginning. This energy crisis will be long and painful and result in a global recession that is due in large part to insufficient, expensive and unreliable energy.
For the context of this blog, I think it is important to understand our current situation, what has led us down this “green” path two decades in the making, and more importantly what will allow us to emerge as a stronger energy-rich society.
To explain our current situation, it would be easy to point the finger at a pandemic, Russia’s conflict with Ukraine, or more recently, POTUS blaming big oil’s greed for our nation’s energy shortcomings. But that would be shortsighted. As an avocational historian, I believe that you must analyze the past to truly understand how a new market like the renewable energy category can be established on a global basis moving forward. I believe that you need three things to be successful in launching a new market – a crisis or cause, a strong platform to execute your message and a value-differentiated solution to an existing offering.
Cause
Today we discuss addressing the climate under the moniker of Environmental, Social, and Governance (ESG). Ironically enough, this message is not from Greenpeace or a single government, but rather the capital markets. Applying the ESG term towards the climate allowed its creators, aka the financial and hedge fund industry, to categorize and capitalize on a new type of emerging technology. To be successful, they recognized the need to have a solution. This solution became “renewable” technology, including wind and solar.
Today, large publicly traded organizations have deployed ESG initiatives to pander to the investment community. Governments and advocacy groups have used ESG and the climate to rally their base, while industry pundits have built careers speculating on what is going to occur if action is not taken. It is my belief that the ESG and renewable market provides the government a positive PR story, while at the same time dispensing favors that include taxpayer-funded subsidies and tax preferences to a supposedly “green” industry.
POTUS’s recent letter to big oil was simply a ploy to divert the attention away from the growing energy crisis. I contend that today’s energy shortcomings are not about greed but poor policies that have resulted in leading energy companies to limit production, stop investing in new technologies and forcing the shutdowns of functioning power plants. All the while, the U.S. government is holding up the renewable market with subsidies and pro-renewable legislation that is forcing a market to be created.
Platform
The platform for ESG and the rise of renewable technology has been reliant on both the United States and Governments around the world. Governments have been meticulous in their support of renewables by both funding its development and at the same time waging a war against the established energy producers.
To help foster renewable energy and the growth of the market, the government has delivered enormous subsidies, pro-tax preferences and purchasing mandates from other governments across the globe.
While governments have been funding the renewable market, they have also been waging a battle against the established energy producers and indulging what I call the “Green Thiefs”. This offensive campaign by the government is evident by the increasing regulation, a lack of support, punitive laws and PR campaigns to migrate the world from hydrocarbon-based energy to renewables.
Alternative Solution
The third and perhaps most important pillar in creating a market is to have a viable alternative that meets supply and demand. Despite the government and private sector’s best efforts, the renewable market has failed to meet these criteria. The exuberance to embrace renewable energy has led us to today’s energy crisis and has countries back peddling to embrace the use of hydrocarbon-based energy.
For the energy market to be successful, it must produce an outcome that is affordable, available and abundant. Despite the government’s best-efforts in the past 20 years, wind and solar power production still represent little more than a fraction of global energy production today. The government has failed to create a renewable market that can stand on its own merits. Global economies had been able to balance the demands of the green thieves while supporting their populations. However, that is no longer the case as demand is outpacing supply and the market is turning to proven technology.
The lack of education by the general population related to building and maintaining renewable energy sources is ironic. Country sides are littered with gigantic windmills that are in fact produced by the very energy that they are trying to replace. Specifically, turbine construction and installation depend on fossil fuels. Diesel-powered earth movers and cranes clear sites, dig foundations, transport components, and assemble the massive structures. Energy produced by coal is critical to the creation of concrete and forge steel that make up the foundations for towers. In fact, hydrocarbon-based fiberglass is used to build a typical modern land-based 170-foot wind turbine blade. And these massive wind blades have a limited lifespan, so they are starting to fill up the landfills as they begin to fail. Solar panels also negatively impact the environment with their manufacturing and transportation, the allocation of land for their installation, and the efforts needed to maintain, decommission, and dispose of them.
The impact of embracing renewable energy has left the United States and other countries back peddling from their general support of renewables as their citizens are left without power to heat their homes and produce food. The current President is not solely to blame for today’s situation, although he is perpetuating the story that renewables are the way forward. This “renewable” market is currently a house of cards that is being exposed across the globe on a daily basis, as oil and electricity prices rise daily and inflation continues to move higher.
To learn more about Frontieras North America and its patented Energy Solution FASForm please visit us at www.Frontieras.com.
