And the World moves on…. (or why Alberta needs to pay attention to the way other people are getting their energy)

When I was a child, I was privileged in that I got to travel to Jamaica and Barbados to see my relatives. The trips were amazing; and, each time I went down, I learned more about the Caribbean. At some point, in the 1980s and 1990s, my education about my ancestral homeland included conversations about the Caribbean’s dependence on imported Natural Gas, Oil and Coal to provide power to run many parts of their infrastructure including their transportation network, the telecommunication network and their electricity grid. It was easy to see that the Caribbean, as a whole, paid lots of money to ensure that every organization – including but not limited to businesses, hospital, government agencies and universities – could operate computers, cars, trucks and everything else that the modern world needs. Even Individuals with very little economic power would have to compete in the International Marketplace because they would have to pay the American Dollar equivalent to have the natural gas to heat their water, power their stoves and provide electricity.

At the time, this seemed crazy to me. This was especially true when in elementary and high school that it was possible to generate power from the Sun, the Wind and the Sea. If Solar, Wind and Tidal Power were possible and the Caribbean had those in spades, then why was it not being used? When one asks questions, sometimes the answers are not easy or nice; and the answers I was given by those people letters behind their names – people  with Masters Degrees, Doctorates, Diplomas and Designations – were hard. There was the issue of upgrading the antiquated Infrastructure that many islands had. Upgrading the Transportation, Electrical and Telecommunication Infrastructure would take millions, if not billions, of dollars and that type of money was not available. Yet, that was not the end of the problems. At that time, renewable generation technology was terribly inefficient and bulky. Battery storage capacity then was merely a fraction of what it is today. Just think about it this way, while I was playing in the waves in Jamaica and Barbados – in the 1980s – people like John B. Goodenough and Akira Yoshino were working on developing, harnessing or improving the Lithium Ion battery technology. It was only in 1991 did Sony release the first commercially viable Lithium Ion battery and we have been tinkering with it ever sense to get to the point that we can consider the “electrification” of the world. Or put differently, while there had been attempts in the 1970s to create Wind Farms in Jamaica, a lot of pieces were not in place in the 1970’s, 1980’s or 1990’s to make the jump to a Caribbean that could use the Sun, the Wind and the Sea to power their economy.

Well, time has now passed. This year I heard the CEO of New Fortress Energy talk about their plan to “help customers lower costs and reduce emissions by replacing oil-based fuels with natural gas”. Their aim is simple: they want to be the “world’s largest provider of carbon-free energy power” and transitioning customers from oil to natural gas is merely the first step.

What caught my ears was the next sentence: the places in which they were operating.  New Fortress Energy is working to enter the Brazilian market using some techniques that they had used to enter the Jamacian Market. It was at this point that I stopped. Four years ago, I had highlighted this very problem to those Alberta residents who would listen. Or out differently, the world uses Oil in different ways. While it is true that the majority of the World’s Oil use goes to transportation, it is equally true that Oil is used to provide electrical power. Consequently, the issue for Alberta is that the electrification of the transportation system is as equally problematic as the Greening of the Electrical Distribution System. Accordingly, jurisdictions will inevitably switch their energy usage – from using primarily Coal & Oil, to primarily using Natural Gas & Renewables, to primarily using Energy Conservation & Renewables –  there will be fewer customers who will use our major exports: Coal, Oil and Natural Gas. Four years ago, when I said this I was dismissed. The Caribbean and other similar economies were small pieces of the pie, I was told. They were not indicative of a larger trend; and, besides, the Caribbean was small and out of the way.

Well, it turns out that the Caribbean may be small but it is a place where large American companies can experiment. For, New Fortress Energy has done just that and they are expanding. New Fortress Energy has three facilities in Jamaica, one in Puerto Rico as well as one each in Mexico and Nicaragua. Further, as I noted earlier, they are planning to move into Brazil. Now, this change will not end Oil’s Reign anytime soon. However, it does fall in-line with a pretty evident trend: the incremental replacement of the various fossil fuel exports that Alberta’s economy depends on.

For all intents and purposes, Norway is banning the Electric Car by 2025; and, between 2030 and 2040, most of the G7 will follow suit. What makes things worse is that by 2040, most citizens who live in G20 countries will be driving a hybrid, a BEV or PHEV powered electric car. This means that Fossil Fuel Markets are already on the downturn.

But it doesn’t end there because Governments are pushing hard. Germany is pouring money into their COVID Green Recovery Plan which means the subsidization of the decarbonization of their economy as well as the further development of a “green natural gas” market. China is pouring billions into the development of Electric Cars. Europe, Japan and South Korea will be “carbon neutral” by 2050 and China is aiming to be so by 2060. In the States, where Climate Change has not been on the radar, 6 States generate 40% of their electricity by wind; and, the US has seen a tripling of their wind power production over the last decade. Admittedly, this means that just over 7% of the US electrical needs are met by wind power; however, that will significantly increase as the Biden Administration actually sets mandates and rules around GHG emissions. 

All of this leads back to one simple idea: the cost, capital, knowledge and wisdom advantages of fossil fuels have now dissipated. When I was a kid, in the 1980, when compared with a coal or oil plant, it was more expensive to build, maintain and run a solar or wind farm. Now the economics have been reversed. Throughout the world, in many competitive, non-subsidized bidding processes; solar generation projects and wind farms have repeatedly won.  Now, we are seeing the same trend in less developed, less rich economies throughout the Caribbean and Latin America. Fewer buyers of fossil fuel products will certainly lead to a slow but certain amount of excess oil, coal and natural gas products. Is the Alberta Legislature ready for such a tread? The truth is that they probably are not ready to accept the evidence or the truth; and every Alberta citizen will be poorer for it. 

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