One of the curses of the twenty first century is Group Think, the way a certain narrative is promoted by a small group of activists and gains enough traction that any attempt to put forward an alternative viewpoint is shot down in flames. Nowhere is this more apparent than in the thorny arena of climate change. Should we blame Al Gore, the guy who tells us he invented the internet and now trots around the globe in his private plane telling us his inconvenient truth? I’m tempted to cut some slack to the Just Stop Oil kids as we were all young and idealistic once. My problem is with the politicians who have latched onto climate change as a virtue signaling Trojan Horse by which they can cut a swathe through our freedoms and force us all into lives of poverty as we wait for the sun to shine of the wind to blow.

If you are watching this video, you owe your current standard of living to fossil fuels. They drove the industrial revolution with reliable and cheap energy that has driven our factories, schools, hospitals and laptops for generations. As development reaches other parts of the world like China, India and Africa, they too want to benefit from the same rising living standards that we now take for granted. Western leaders seem to think that we have a duty to cut back our own energy use as some kind of penance, even suggesting reparations for pollution we caused in previous centuries. What kind of madness is this? These governments are already broke. If they were companies they’d have to call in the receivers as they are trading insolvent. But no, they want to go deeper in debt so that we can give money to a country like China while it opens up new coal mines and coal fired power stations as fast as its slave labour can be made to work.

Underpinning this political shitshow is a fundamentally flawed approach. Instead of starting with the assumption that fossil fuels are bad and must be replaced, why has no one asked the obvious question? How can we continue using fossil fuels but make massive reductions in the pollution they generate? On a recent visit to Dubai I met a Canadian engineer who has been through the entire production and refining process that takes crude oil and turns it into the petrol you put in your tank. By studying each of the scores of processes involved and making extensive use of electrification at each stage, his company has managed to eliminate 99% of emissions from the manufacturing process. Incredibly, he was finding it hard to get a hearing with political leaders because they are hell bent on a 100% switch to renewables such as solar and wind power. The cost of these alternative energy sources may be falling but even the most egotistical leaders cannot guarantee that the sun will shine and the wind’s gonna blow. These systems will make South Africa look like a paragon of energy security.

What’s been fascinating to watch in the last twelve months is the speed with which Western leaders have flip-flopped once the realistic prospect of power cuts emerged from the tragedy in Ukraine and the fall-out from sanctions on Russia. Angela Merkel’s ill-judged policy of nuclear decommissioning and almost total reliance on Russian energy has been turned on a sixpence. You can imagine the Teutonic site foreman rushing up to the dismantling team and shouting ‘whoa lads, stop taking the reactor apart. Can you, err, put it all back together again please?’ The energy crisis has also challenged politician’s attitude towards the major oil producers. For years they’ve been vilified for destroying the planet and pressurized to spend more and more of their R&D funds on alternative energy sources. The group think of ESG now infects the big asset managers like Blackrock and they have been deliberately reducing or avoiding investments in companies that they perceive to be out of step with the Green Is Good narrative.

They’ve all had to change their attitude in the light of ‘events, dear boy, events’. It puts me in mind of the well known Mike Tyson quote – ‘everyone has a plan until he gets punched in the face’. It’s all very well extolling the virtues of alternative energy while we rely on fossil fuels to keep the lights on. If a big bad dictator decides to turn off the pipeline our arrogance suddenly turns to vulnerability.  So now the evil oil companies are asked to pump out more of the black stuff. Their products are in bigger demand than ever and 2022 becomes a record year for profits. The six biggest companies made $200 billion last year. You and I might call that capitalism. Our socialist leaders call it unacceptable and impose windfall taxes on top of the massive hike in corporation tax already arriving in April.

Joe Biden’s laughably named Inflation Reduction Act will throw hundreds of billions of newly printed dollars at subsidizing green energy companies, distorting the market every bit as much as China’s state owned companies do in the Peoples Republic. However, there is a sign of some realism entering the boardrooms of the oil majors as energy security rises up the agenda. BP’s CEO Bernard Looney (I’d have gone to the Deed Poll, wouldn’t you?) committed back in 2020 that the company would reduce oil and gas production by 40% by the end of this decade. The share price has languished ever since that announcement almost three years ago. He has now announced that the cut back will be reduced to 25%, and the share price has immediately rallied by 10% to its highest level for years.

This is the dilemma being discussed in the board rooms of the oil majors. How much do we invest into the uncertain future of renewable energy where the technologies required are not yet there? No one can be certain what the results of the energy transition will be so why should these companies hurt their shareholders by diverting profits to green projects? One example of this uncertainty is the drive to switch us to electric cars. It’s all very well imagining that we should all buy Teslas but the charging infrastructure is twenty years behind where it needs to be. Two of my neighbours here in Portugal have electric Audis which are frequently going back to the main dealers in Lisbon. Garages have teams of mechanics, not electricians, so the skills needed to find and fix electronic issues simply aren’t there. The result is long calls to Germany to carry out remote surgery as and when the skilled resources are available.

While it is political kryptonite, I can’t help thinking that the opinion of Chevron CEO Mike Wirth is the uncomfortable truth. In an interview with the FT he said ‘the reality is fossil fuel is what runs the world today. It’s going to run the world tomorrow and five years from now, ten years from now and twenty years from now”.  So why don’t we focus as much on cleaning up fossil fuels as on investment in embryonic technologies that are yet to provide energy security at a level which would enable us to abandon coal and oil?

In my opinion, hybrid cars that combine an internal combustion engine with harnessing self generated electrical power represent an effective compromise. The ultimate expression of this can be seen in Formula 1 motor racing, where cars with a 1.6 litre internal combustion engine just like the one in your Volkswagen Golf can generate 1000 brake horse power when synched with their sophisticated electronic systems. If this kind of technology is applied to fuel economy we could massively reduce emissions at the point of use. I’ve already described how the technology exists to eliminate emissions in the manufacturing process. If our leaders would step down from their flawed group think, apply some common sense and look at practical engineering solutions that already exist, we could make massive, measurable progress by the end of this decade.

Hold on, did I just suggest that our political leaders need to apply some common sense. Excuse me a moment, I just need to pop a few of these naivete pills.

Ah, that’s better. I’ll see you next time.