“A New Year, and a New Energy Page” By Terry Etam
“The fortress that was “energy talk” five years ago, the one the likes of which Mark Carney stood atop the ramparts of, is crumbling rapidly.”
A New Year, and a New Energy Page
January 7, 2025 7:11 AM
To be clear up front, there’s not much below about The Great Ottawa Sinkhole. Everyone from Uganda to Inuvik is analyzing that train wreck, and no one needs yet another take.
In the spirit of moving on from a bad dream, time to take a look at 2025 from other vantage points. First off, let’s take a pulse: Is anyone out there still interested in stuff not generated by AI? Because that this is. (No apologies for such awkward sentences; they are now a necessity to prove this is human-derived ((or possibly misplaced (parenth)eses as well), until at least AI finds a way to mimic everything, at which time human differentiation may only be possible by conspicuous slander of AI’s power players, the sort of thing they’d never allow their own AI machines to spew for fear of AI lawyers that will comb everything and sue everyone including other AI lawyers (real or bot) and at which point we all probably take up arms and start attacking anything with wires. You all know this is coming, eventually.)
But anyway here we are in a new year, a time that always triggers weight loss resolve and “I’ll be better” enthusiasm that we could just as easily attempt to implement any other day of the year but never do. Same with predictions. It’s just human nature I guess, and it’s the same human nature that lines up to buy $50 million lottery tickets but not $8 million ones so why fight it. But on the other hand, it does make sense to take stock of things, including the energy world, in case it helps people frame their “visions”. A lot has been happening lately behind the headlines.
For some of you, none of what is below is news; serious energy junkies follow the same torrent of energy information. But definitely not everyone. One must be kind of deranged to invest the time to take it all in, or they must tap a circle of knowledgable people that read a seriously wide breadth of publications, and have the good grace to flag items of interest and pass them along. Some of us exhibit both characteristics, and hence this column. Every day the info flow brings a dozen things I never knew, and there is a chance you may not have either. (It is unnerving to realize just how far off the road the info-seeker can wander; in an attempt to understand regional US gas prices/price drivers, I now possess a spreadsheet that contains daily temperature min/max’s at Chicago’s Midway Airport going back to 1928, which is a bit odd, both my possession thereof and the existence of the records, because I don’t think they even had planes back then. The information may or may not be useful, but unfortunately I have historical precedent that it will crowd out more useful information in my limited mental library, but that is beyond my control. Apparently).
Just by standing in this flow though, one can definitively feel the change in conditions, that the energy world, particularly the hydrocarbon sector, is about done grovelling to justify its existence. (Not all of us grovelled; you know who you are. PP is not happy, understandably so.) The fortress that was “energy talk” five years ago, the one the likes of which Mark Carney stood atop the ramparts of, is crumbling rapidly. We all knew it was coming, or at least those of us that provided the energy that keeps the world ticking new, and maybe it was the catalyst of Trump’s second coming or maybe it was just reality but anyway it’s here. It seems as though everyone all at once has shaken their head to escape a stupor and realized that fuel supplies are rather important.
I mention Mark Carney not just because his spectral skeletal form now glides silently and ambitiously around the corridors of power, but because he was one of the global architects of the global rapid-energy-transition narrative, and was smart enough to know that a forced energy transition would require attacking not fuel providers, but the institutions that financed the energy world, and thus he created the Glasgow Financial Alliance for Net Zero, or GFANZ, which touted at its formation or zenith that it had trillions under its umbrella with the clear implication that the new world order was here, and who in their right mind disputes the impeccable tailored global banking crowd with the Lego haircuts. At any rate, like much of what we’re shown as inevitable that turns out be mirage, they’re all quitting: Goldman Sachs, Wells Fargo, Citigroup and Bank of America all dropped out in December, Morgan Stanley dropped out in 2025.
This pendulum’s swing was underway before Trump won the election, and is simply accelerating now. The realities of human existence remain stubbornly in place, and immemorial: We will burn whatever we need to to keep warm and keep building things; we will do whatever we need to to get food and shelter; and once our income levels rise to a sufficient state of excess over daily needs, we will go buy stuff and travel everywhere and drink beer. So now we see countries everywhere scrambling for energy of any sort. We obviously need to return to an “all of the above” energy landscape simply to meet the requirements of global citizens. If we’d all accepted that fact five years ago, maybe we wouldn’t be so polarized, but that expensive fiasco can’t be undone.
Here are a few more examples whose appearance would have been inconceivable a few years ago, but are now becoming common. Two professors at New York University, one of whom includes the title/slogan/marketing device ‘Climate Justice’ in her little autobiographical cluster of headlines she wants the world to know about her, penned a remarkable article entitled “The Energy Transition that Couldn’t” that includes the following comments: “Dominant intellectual frameworks persist until their limitations in describing reality become undeniable, paving the way for a new paradigm. The idea that the world can and will replace fossil fuels with renewables has reached that point.” Full respect to them for doing so, given the dominant culture in academia – the one that is responsible for upholding those ‘dominant intellectual frameworks’ – there is a strong likelihood that one or both will have their heads slammed into a hallowed table sometime soon.
Over in Vermont, legislators, including Democrats, are backtracking on aggressive climate legislation, with one noting, “I think voters asked us to focus on their wellbeing over the allure of being some kind of national leader in an abstract sense.” Another Democrat added: “Staying focused on affordability, I think, is key…If we can figure out a policy that helps make energy more affordable for Vermonters and oh, by the way, it’ll also help the climate — amazing.”
Amazing indeed. Now, part of the reason for the backpedaling may be that these same legislators, in passing phantasmagorical emissions reduction laws, baked in the right of activists to sue the government if they fail to meet certain targets by 2030. In Vermont’s case, it is universally acknowledged that those targets will not be met, and do not wave a red flag in front of litigious activists. Hoist by their own petard, indeed. (The very same publication on the very same day notes that the state’s lawsuit against big oil – for providing them fuel – is proceeding after dogged years of determination. Now won’t that be something, come 2030, if activists successfully sue the state for not reducing emissions at the same time that activists successfully sue oil companies for providing their fuel. It will be a room full of aggressive and confused lawyers in a weird standoff.)
But whatever. It’s not good, and never has been, to wallow in these pools of misery, and therefore it is actually exciting to be entering 2025 and in the energy business. It matters not what type of energy, because it is becoming increasingly clear that “all the above” types of energy are welcome and needed.
And it’s not just conventional energy requirements that are underpinning this new respect for all energy forms; several new energy-consumption giants have arrived and are not going away any time soon. All indications are that they will keep growing at alarming rates.
Take the cryptocurrency phenomenon. No one cares what you or I think about the stuff, it is happening and growing. Fartcoin may be funny but when some kid TikToks a minute’s worth of his new Lambo that the stuff earned him, maybe he thinks it’s funny for far different reasons than the bystanders. Bitcoin is $100,000, and with major governments and institutions jumping aboard, it may well go much higher, which means the power requirements will accelerate. (Proponents say that BTC mining is unique because it can be located anywhere and thus can utilize waste energy, such as from flared gas, which is definitely true; but it is also true that 2 GW of new BTC mining capacity was added in the heart of Texas, and those GW will consume as much as ten million homes would, and there are many more like it under development).
Talk of AI data centres is so ubiquitous that a friend in the gas marketing industry summed it up well after a day’s meetings: “if I hear one more thing on data centres I’m just going to grab the mic out of the speakers hand and throw it across the room.” Apologies, friend, plug your ears: Microsoft just announced that they’re going to spend $80 billion on data centres in 2025. They spent $50 billion in 2024, a number that unnerved analysts then. Google also spend $50 billion in 2024, no firm word yet on 2025 but it could well be in that range. Meta spent $40 billion in 2024 and expects significant growth as well. Amazon had 2024 capital expenditures of an eye popping $75 billion, a majority of which is AI related.
Things are moving so fast in the AI field that not only is it turning calm and intelligent people into mic-throwing angst, but also the forecasts – aggressive as they are – can’t even keep up. In May 2024, Forbes predicted AI spending could hit $200 billion in 2024, an aggressive forecast – and yet these four companies alone did nearly $200 billion in AI spending. There’s also…everyone else. And next year they’re all promising significant growth in AI spending. Get ready for many more flung microphones.
Bitcoin and AI are relatively new phenomenon on the power demand scene; a decade ago neither were on anyone’s radar as problematic from a power consumption perspective (AI wan’t a concern even 18 months ago). They are additive, and they are global, and they are big. Companies that five years ago pledged to run on nothing but emissions-free power now only want to talk about how big their AI capital budgets will be.
Up here in the Great White North, it might be a glorious dawn of a new era, particularly if the Ottawa Sink Hole keeps living up to everyone’s hopes. Canada’s competitive advantages are numerous, but a bedrock of them is access to affordable and abundant energy. Building on top of that as a critical component is the necessity of being able to develop our products and get them to market.
That is the engine of the Canadian economy, and if you don’t believe it check out one of those provincial equalization maps that shows vas sums flowing form the west to everywhere else. And that’s just equalization, the taxes and jobs created benefit the entire nation.
It’s good to catch a whiff of freedom on the air, even if the walls aren’t down yet. It’s only a matter of time.
But beyond that, let’s hope that a sense of positivity returns to sweep the land. A certain slice of the population will be disappointed at the current shift in politics; don’t crap all over them for no reason. Just move on. Stop hating, start building, move forward. It feels way better.
It’s all happening as expected, more or less – an energy transition isn’t quite so simple. Find out what readers knew years ago in The End of Fossil Fuel Insanity – the energy story for those that don’t live it, and want to find out. And laugh. Available at Amazon.ca, Indigo.ca, or Amazon.com.
Read more insightful analysis from Terry Etam here, or email Terry here.