11/2/14

On Sunday the IPCC published its latest missive. I believe there is nothing new in this report and that it has been discussed at length already over the last few months, but this was the official publication and was full of pomp and circumstance.

Listening to it at 5:00 a.m. on Sunday morning (BBC World News) was fascinating. First was the introduction by the BBC anchor and correspondent. They were both breathless and from their intonation it was clear that this is it—the final chance for mankind. But more importantly was the introduction to the press conference by Ban Ki Moon, UN General Secretary (UNGS).

In many respects he is the world’s leading diplomat, right? While he is not the most powerful, the status of the UNGS is significant and important.

After about three minutes of his speech, he said the following:

“…at a time when renewable energy is becoming much more economical in world markets…”. That is when I tuned out.

This is a stark lie. It is not “untruth,” as my attempt at being polite in the heading suggests. It is simply a lie. The opposite is the truth.

Both cyclical (recent 25% crude oil price reduction) and secular trends (natural gas fracking revolution) are clearly making this statement not true. Renewable energy is largely used to generate power. As such the alternative cost of power generation from hydrocarbons determines how “economical” the cost of renewable energy is.

On a long-term basis the fracking revolution resulted in a significant, sustainable reduction in the price of natural gas, which is the biggest fuel for power generation. Given such reduction in the main cost of power generation, renewable energy is even further away from becoming economical than it used to be.

Indeed many countries around the world are either curtailing the subsidies for renewable energy, as those are becoming unsustainable given the economy slowdown around the world (Spain and even China are examples of that), and some are facing significant negative consequences of their renewable energy subsidies in making the cost of power so high as to become a serious drag on their economic competitiveness: see Germany as a prime example.

Unfortunately technological progress has not made significant breakthroughs in making renewables more competitive and cannot even keep up with the cost reduction of hydrocarbons. There is not ONE place in this world where renewable can survive without government subsidies and the situation is getting worse, not better.

If a senior official like the UN GS at such a public event needs to resort to lying in order to promote a certain agenda, it makes the entire agenda suspect.