Super-Spiked Videopods (EP37): Goodbye Europe, Hello Rest of World
The Energy Transition Needs To Transition
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We return to our sub-theme of "Goodbye Europe, Hello Rest of World" sparked by Barclay's updated Climate Change Statement (here and here), evidence of structural de-industrialization in Germany, and our recent analysis on Norway's resilient overall oil demand despite gasoline erosion due to its electric vehicle (EV) ramp.
With Europe fading as a core driver of global GDP growth, our macro focus is on how key population centers in Asia, in particular China (1.4 billion people), India (1.4 billion people), and the rest of southeast Asia (1.3 billion people) will meet their massive unmet energy needs. Climate policies being pursued in Western Europe, the United States, and Canada that disproportionately and perplexingly negatively impact traditional energy companies in their home regions is one of the key contributing factors to the messy energy transition era. For developing Asia, it remains an open question as to whether American and Canadian oil and natural gas (via LNG) will be part of the solution or will they instead need to rely on the Middle East and Russia.
Barclay's updated Climate Change Statement that promises to stop financing new oil and gas fields and infrastructure expansion is the latest example of a western-world financial institution succumbing to pressure from "climate only" ideologues. It is deeply unfortunate. Germany's ill-advised energy and climate policies are undoubtedly a major contributor to its relatively high power prices and undeniable signs of structural de-industrialization. Norway's rapid EV ramp shows how hard it is to kill overall oil demand—a fact "net zero by 2050" scenarios bizarrely ignore. Ill-advised energy and climate policies from European governments and, increasingly, financial institutions like Munich Re and Barclays (among many others) is contributing heavily to what we call a messy energy transition era—our motivation for creating Super-Spiked.
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⚖️Disclaimer
I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.
📜 Credits
Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.
This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.
Great piece as always Arjun. It’s great to see you fired up about this lunacy. Arjun Murti for Secretary of Energy!!!
I sense a bit more emotion within the first few minutes of your video. I concur. I hate to get down in the dumps early on a Saturday morning, but that which you've revealed here, along with other items I've watched or read the last few days, is extremely troubling.
A week ago today, I drove right by two refineries.....Cheyenne, WY and Sinclair, WY. I get it. There are obvious consequences to fossil fuel extraction, processing and utilization. It's not to be denied. But this climate ideology has simply gone bonkers. A is 100% bad. B is 100% good (clean, green and sustainable!). No debate. End of story.
I'm torn as to how much of this is ignorance vs. purposely deceptive behavior.
The WSJ had an interesting article this morning on the topic of homeowners and auto insurance. Rates are skyrocketing. People are upset. There are obvious reasons why this is happening. Those who need these policies just don't want to accept it. Who wants to pay more for anything? Meanwhile, the climate crazies simply ignore the ultimate secondary and tertiary effects of what they propose. Cost will indeed be one of those things.
Have a great weekend.