Thread by @politicalham

1/In this innocent tweet, Mr. Chomyn (a prominent Alberta UCP conservative) exposes for all to see what is wrong with the conservative energy worldview:

He misunderstands the fundamentals of the energy transition.

This is a big deal, Albertans.

https://twitter.com/Citizen004/status/1357893070621052928

2/What's really happening:

The global energy system is being transformed by a vast army of new energy technologies centred on clean, abundant, and cheap electricity.

Wind, solar, batteries, and EVs are just the tip of the iceberg.

There are thousands more behind the scenes.

3/What conservatives think is happening:

That the energy transition is driven by policy.

Which, in turn, is driven by govts.

It follows, then, that political ideology and political action are to blame for Alberta's woes.

Change govts, you save AB's oil/gas economy.

4/Conservatives think that if they can defeat the "radical leftist eco-terrorists" influencing politicians like Justin Trudeau, they can stop or seriously slow down the energy transition.

That's why they deny climate change and why they extoll the virtues of fossil fuels.

5/I interviews hundreds of energy/climate experts from around the world every year.

When you combine the dramatic cost declines of new energy tech (eg batteries with huge investments in new industries (eg EV mfging) combined with rapidly changing consumer preferences...

6/...it's easy to see that govts aren't the big issue.

I can confidently say that AB conservatives like Chomyn haven't got a clue what is coming for Alberta.

The energy transition is going to punch Alberta in the face, steal its lunch $, and leave it crying in the schoolyard.

7/Sadly, it doesn't have to be this way. There is still time for Alberta to adapt and pivot to the low-carbon future, perhaps even preserve much of its hydrocarbon economy.

But the window is rapidly closing.

And conservatives like Chomyn are to blame for the inaction.

Chad gets it.

Albertans, be like Chad.

8/Lest you think this is a partisan thread, let's consider @RachelNotley's energy worldview.

If the AB conservatives are stuck in the 20th century, Notley is stuck in the 2000s, viewing everything through a climate change lens.

I interviewed her in 2019 for my book.

9/Her energy worldview hasn't changed a whit since then.

How often do you see her making public speeches or comments about the energy transition?

Did she talk about it during the 2019 AB election?

She did not.

In fact, she did a terrible job defending her own policies.

10/Notley's view of energy/climate is light years ahead of Kenney and 99.9% of Alberta's energy sector, but still deficient.

And hardly visionary. Or even current.

She's the best of a bad bunch when it comes to energy and that's the most we can say about her and the NDP.

11/Here is the fundamental equation (don't @ me math nerds, you know what I mean) that is the dagger through the heart of Albert oil:

20% to 35% - thermal efficiency of an internal combustion engine (peak, won't change)

~90% - thermal efficiency of an electric motor

12/How can inefficient ICE compete with electric? Look at the energy densities of gasoline vs. batteries.

ICE can waste 80% of the energy in a litre of gasoline because there's just so much energy there.

But gasoline's energy density is set in stone at 34.2 MJ/L.

13/Now look at the change in battery energy density over time. The red diamonds are the line we're interested in.

Of all the variables in the last 3 tweets, only battery energy density can change.

And battery energy density is set to rise another 50% before 2030.

14/Now look at battery prices. This chart is from BloombergNEF's most recent battery price survey for EV battery packs.

But here's the mind-blowing numbers:

$101 by 2023 (at this cost, the sticker price of an EV will be equal to an ICE car)

$58 by 2030

$30 to $40 by 2040

15/But we're not done yet. Look at the cost curve for wind and solar power. Unsubsidized wind is now 2.6 to 5.4 cents/kWh and solar is 3.1 to 4.2 cents/kWh.

Renewables are now the cheapest way to generate electricity and prices are expected to decline further by 2030.

16/To sum up:

ICE is locked in: thermal efficiency won't improve, energy density is set in stone.

But look at EVs: 3-4x more efficient, rising energy density, and falling fuel costs.

Using 2018(!) data, it was already 1 cent/km cheaper to drive an EV.

energi.media/canada/costs-o…

17/Cheap petroleum and the internal combustion engine killed horses and coal/steam for transportation 100 years ago.

Electric motors + high-density batteries + cheap electricity are already doing the same to ICE.

Oil is a sunset industry.

Adapt or die, Alberta.

18/Postscript:

Alberta shouldn't only start to worry when oil demand drops from 100MM b/d to 90MM or to 70MM or to 50MM.

It should have begun to worry in 2010. Why?

Two reasons (there are more, but let's stick to two on this lovely Saturday).

19/The "displacement" argument (only worry when X amount of oil demand is destroyed) ignores "disruption."

O&G co's can't raise capital. If they can't the cost of capital is higher.

Restrictive policies (eg climate) are making it harder to do business.

20/The O&G industry is losing public support. Check out @abacusdataca surveys. Canadians are quickly moving from positive support for oil/gas/pipelines to neutral. Not opposition, but not support.

21/So, while oil may not begin to be displaced in global energy markets for a few years yet, the oil industry is already being disrupted in many, many ways.

And the 2020s will be the most disruptive decade of this energy transition.

22/If Alberta waits for displacement before it gets serious about adapting to the energy transition, the game is already lost.

What if, as some argue, we've already hit "peak oil demand" and displacement has already started?

I'll let you do the math.