Spying arrests send chill through Britain’s thriving Hong Kong community

Simon Cheng, a pro-democracy activist from Hong Kong now living in Britain, at the offices of an organization he founded to aid new Hong Kong arrivals, in London on May 20. Hundreds of thousands of Hong Kongers have resettled in the United Kingdom since 2021, including prominent pro-democracy activists — and China has not forgotten them. 

| MARY TURNER / THE NEW YORK TIMES

BY MEGAN SPECIA
THE NEW YORK TIMES
May 27, 2024

LONDON –

Simon Cheng still visibly tenses when he describes his detention in China. In 2019, Cheng, a pro-democracy activist from Hong Kong and a former employee of Britain’s consulate there, was arrested after a business trip to mainland China.

For 15 days, he was questioned and tortured, according to his account. Beijing confirmed his detention but denied he was mistreated. When he was finally released, he no longer felt safe in Hong Kong, and in early 2020, he fled to Britain and claimed asylum.

"It’s not hard to adapt to a new life in the U.K. in some ways," said Cheng, 33. "But also, I can’t move on from the fate of my home city."

His activism — and China’s pursuit of him — did not end once he moved to London. Last year, Hong Kong authorities put a bounty on Cheng and other activists, offering $128,000 for information leading to their arrest. Still, like many Hong Kong activists living in self-imposed exile in Britain, he hoped his newfound distance from the Chinese authorities put him far from their reach.

Last week, three men were charged in London with gathering intelligence for Hong Kong and forcing entry into a British residence. While the men have not yet been found innocent or guilty — the trial will not begin until February — the news of the arrests threw a spotlight on many activists’ existing concerns about China’s ability to surveil and harass its citizens abroad, particularly those who have been critical of the government.


Pro-democracy residents in Hong Kong fill the streets during protests on June 9, 2019, triggered by an extradition law proposed by China. | LAM YIK FEI / THE NEW YORK TIMES

A spokesperson for China’s Foreign Ministry on Friday denounced what he called the "false accusations" and "vile actions" of British authorities in taking the case. Last week, one of the accused men, a British former marine called Matthew Trickett, was found dead in a park while on bail. The death was categorized as "unexplained" by the police, which in Britain refers to unexpected deaths where the cause is not immediately clear, including suicide. During Trickett’s initial court appearance, the prosecutor said that Trickett had tried to take his own life after being charged.

Anxiety over the arrests has rippled through the broader Hong Kong diaspora in Britain, even among those who are not politically active.

"You can kind of expect something like that to happen, but it is still so surreal," said Cheng, speaking from the central London office of Hongkongers in Britain, an organization he founded to aid new arrivals. Pinned on his sweater was a bright yellow umbrella, a symbol of the pro-democracy demonstrations that filled Hong Kong streets in 2014 and again in 2019.

China imposed a draconian national security law in Hong Kong in 2020, granting authorities in the former British colony sweeping powers to crack down on dissent. In response to the law, Britain introduced a new visa for Hong Kong citizens. Since then, at least 180,000 Hong Kongers have relocated through the visa program. Many have rebuilt their lives in Britain, and continue to participate in the pro-democracy movement from afar.



Thomas Fung, who has stayed in Britain since coming from Hong Kong in 2012 to study accounting, and founded a charity that supports political prisoners in Hong Kong, walks in Oxford, England, on May 22. | MARY TURNER / THE NEW YORK TIMES

Britain’s Foreign Office said last week that the recent accusations of intelligence gathering appeared to be part of a "pattern of behavior directed by China against the U.K.," which includes the bounties being issued for information on dissidents.

Thomas Fung, 32, hopes the arrests will mark the beginning of a concerted effort by the British government to combat Chinese repression. "We always knew there was some kind of intelligence, or some spying on people, or just monitoring of what we are doing here," he said.

Fung came to England in 2012 to study accounting. He got a job in Oxford when he graduated and decided to stay. As Hong Kong’s pro-democracy demonstrations swelled, he felt compelled to show his support.

He participated in solidarity protests in London and later volunteered to help newly arrived Hong Kongers resettle. Eventually, he founded Bonham Tree Aid, a charity that supports political prisoners in Hong Kong. The first time his organization’s name was mentioned in a pro-Beijing newspaper in mainland China, he said, "I knew there was no turning back."

Politically active Hong Kongers like Fung and Cheng are not the only ones who fear being targeted by Beijing. Families looking for better education and young professionals seeking job opportunities also feel threatened, said Richard Choi, a community organizer in the south London borough of Sutton.



At the Aquila cafe, a photo of Hong Kong pro-democracy protesters on the wall and Hong Kong-oriented food and drink fare on menu chalkboards, in Leytonstone, England, on May 22. | MARY TURNER / THE NEW YORK TIMES

Sutton is sometimes referred to as "Little Hong Kong" because nearly 4,000 former Hong Kong residents have resettled there since 2021.

Choi, 42, came to London in 2008 for work and now runs a Facebook group for new arrivals in Sutton. He carefully obscures the faces of the community in the photographs he shares, as many fear they are being monitored.

"I feel they are so nervous or have lost trust," he said of the new arrivals. The community became even more nervous, he said, after Hong Kong passed a law known as Article 23 in March that carries penalties including life imprisonment for political crimes, and extends to Hong Kongers abroad.

"Maybe there was a period where people relaxed a bit," Choi said, but those with family in Hong Kong fear that if they return, they could be jailed. "They feel they have to behave and not say anything."

Some in the diaspora remain vocal pro-democracy activists despite the risks. "I am very proud of my identity as a Hong Kong person,” said Vivian Wong, who moved to London in 2015 and opened a restaurant, Aquila Cafe, in east London in 2021.

The restaurant serves popular Hong Kong dishes and has become a place where members of the diaspora can gather for events and support one another. Inside, a noisy kitchen is run by chefs from Hong Kong slinging out steaming bowls of shrimp wonton soup and plates of crispy Hong Kong French toast stuffed with salted egg yolk.

Photographs of protests line the walls, and the blue flag of British Hong Kong flies over the cash register. Wong knows these symbols are seen by China as provocative, but she remains steadfast in her opposition to Communist rule.

"They try to threaten us," she said, "but I am not afraid."

Catherine Li, 28, moved to London in 2018 to study theater. She began organizing solidarity protests in London in 2019. For a time, she used a pseudonym online to hide her identity. But when some of her political art went viral, she felt she could no longer hide and began using her real name.

Her political views have left her at odds with her family back in Hong Kong, and she knows that she risks arrest if she were to return. "It took me a long time to accept that," she said, a tension she explores in her one-woman show, "In an Alternate Universe, I Don’t Want to Live in the U.K."



Catherine Li and partner Finn Lau, both pro-democracy activists from Hong Kong who met and live in Britain, at a cafe in London, on May 21 | MARY TURNER / THE NEW YORK TIMES

Despite those difficulties, Li said she had found a sense of community in London.

It is where she met her partner, Finn Lau, 30, after he resettled in the city in 2020. Their lives are now a busy balance of their day jobs — Li as a video game tester and actress, Lau as a building surveyor — and activism.

Lau was among the eight dissidents for whom Hong Kong authorities offered a bounty last July. He and the others on the list have been warned that they will be "pursued for life."

And he has not always found London to be a haven. He was brutally attacked under suspicious circumstances by masked men in London in 2020. His face still bears the scars.

Lau believes the attack was related to his activism, but the police told him it was probably a hate crime. The investigation was closed after a few weeks. He has also been approached by fake journalists he suspects were working on behalf of the Chinese government.

The arrests in London this month have given him new hope after being frustrated by what he saw as British inaction to a growing Chinese threat.

"It’s the first real, critical action from British authorities to take the threats to Hong Kong people seriously," Lau said.

This article originally appeared in The New York Times © 2024 The New York Times Company

'Suckers' and 'losers': Montage of Trump disrespecting troops goes viral for Memorial Day

David Edwards
May 27, 2024

Donald Trump with members of the U.S. military (Photo via AFP)

A video montage of Donald Trump disrespecting service members went viral on Memorial Day.

In a Monday social media post, The Daily Show show shared clips recalling how Trump considered fallen troops "suckers" and "losers."

"Never forget how much Trump respects the troops," the sarcastic caption read.

"Trump has faced major criticism for not reaching out to the families of four U.S. soldiers," MSNBC's Stephanie Ruhle says in one clip. "He has played golf at least four times since these young men were killed."

One grieving widow recalled, "The president said that [her husband] knew what he signed up for."

"He couldn't remember my husband's name," she added.

In another clip, Trump suggests former Sen. John McCain (R-AZ) shouldn't be considered a war hero "because he was captured."

"I like people that weren't captured, OK?" Trump says in the video.

Watch the video below from The Daily Show.

• The War for Profitability Within the Wind Industry
• 
  
• By Felicity Bradstock - May 25, 2024
• 
  
• After facing setbacks due to supply chain disruptions and quality issues with large turbines, major wind energy companies are fighting to return to profitability.
• 
  
• Companies like Orsted and Vestas are seeing positive signs of improved financial performance, while Siemens Gamesa is undergoing restructuring to fix quality issues and boost its wind business.
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• The global demand for wind energy remains strong, but companies must prioritize thorough testing and navigate supply chain volatility to succeed in the long run.
• 
  

The wind energy industry has fallen into a rut, as several major companies have been plagued with setbacks due to supply chain and quality control issues. Now, wind energy majors are looking to reshape their business to ensure that they can become profitable fast. As countries around the globe transition to green, these companies have a major role to play in developing renewable energy operations, however, they will have to prove they are up to the job after experiencing performance and profitability issues during the post-pandemic period.

Several major wind energy developers have faltered in recent years due to a variety of challenges. Firstly, during and following the pandemic, supply chains were severely disrupted, causing many wind companies to fall behind in developing new projects. Secondly, these supply chain disruptions and the growing demand for materials associated with renewable energy operations meant that the prices of turbines increased significantly. Thirdly, several wind energy firms have been racing to develop the biggest, most efficient turbines in recent years. As they accelerated the production and rollout of these giant turbines, there were several reports of malfunctions, and much of the equipment needed to be recalled. 

The world's biggest offshore wind farm developer, Denmark’s Orsted, has seen profits fall in recent years due to rising inflation, interest rate hikes, and supply chain delays. However, in May, Orsted announced that its gross profit before interest, tax, depreciation, and amortization - excluding new partnerships - increased by 8 percent from the same period the previous year to $1.08 billion. This followed the stepping down of the company’s finance and operations chiefs last November, as well as the pausing of its dividend payouts. Orsted’s CEO Mads Nipper stated, “I am confident that we are on track to deliver on our business plan going forward.” 

Vestas, another Danish wind major, announced this year that it was back in black after a couple of bad years. The company’s annual report put the return to profitability down to its commercial and operational discipline. Vestas achieved a full-year operating profit before special items of $249 million, compared to a loss of $1.2 billion the previous year. The firm’s CEO Henrik Andersen stated, “Continued geopolitical volatility as well as slow permitting and insufficient grid build-out across markets are expected to cause uncertainty in 2024.” Nonetheless, Vestas expects to achieve a full-year operating profit margin before special items of between 4 percent and 6 percent, compared to 1.5 percent in 2023 and minus 8 percent in 2022. 

Elsewhere, big changes for Siemens’ wind unit could improve the company’s outlook. This month, Siemens shares increased by 13 percent after the German company increased its yearly forecast and announced that the CEO of its wind turbine unit would be replaced as part of restructuring efforts. The outbound unit CEO Jochen Eickholt told the board he will step down as part of a mutual agreement with the company on 31st July, to be replaced by Vinod Philip. Siemens Energy CEO Christian Bruch said in a statement. “In a very difficult situation at Siemens Gamesa, Jochen laid the central foundations for the urgently needed reorganization and new start within Siemens Energy. It is only fair to emphasize that the causes of the quality problems did not fall under his tenure as CEO.”

Bruch emphasized Siemens’ plans for restructuring and long-term strategic development aimed at boosting profits. The company has seen greater stability in its wind business this year, as well as a growth in demand for power grid equipment, pointing towards an increase in earnings. The firm expects to achieve a revenue increase of between 10 percent and 12 percent and a profit margin before special items between negative 1 percent and positive 1 percent, compared to the previous estimate of between negative 2 percent and positive 1 percent.

Bruch stated, “We are tackling the things in wind. We have been working over the last two years on a lot of things. Jochen launched a lot of the right activities in terms of this operational turnaround. We knew it was going to take years for us to really get it back on track.” He added, “Going forward, we are going to be active in onshore and offshore. We are going to focus the business on offshore more. We hammer down on the volume product in offshore.”

Siemens is also working hard to fix its quality control issues to ensure that new project developments run smoothly, with no equipment recalls. Rushed development was cited as one of the main reasons for quality control issues with Siemens’ onshore equipment last year. The firm is deciding whether to increase onshore product cycles to ensure the equipment undergoes rigorous testing processes. 

While the wind energy sector is still struggling to make a profit in the face of several complex challenges, recent improvements in the wind divisions of several industry majors suggest progress is being made. The global demand for new wind energy projects is strong, however, wind energy companies must ensure that sufficient testing and quality control is carried out for project development, rather than rushing to meet the growing demand. Further, the volatility of both material prices and global supply chains could lead to further disruption, which must be considered by the companies. 

By Felicity Bradstock for Oilprice.com

• The World’s Big Bus Electrification Plan
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• By Felicity Bradstock - May 26, 2024
• 
  
•  
• Electric buses are projected to be adopted faster than electric cars due to government support for green public transport.
• 
  
• With shorter routes, electric buses can rely on charging stations at depots, making them more practical than electric cars initially.
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• From school districts to entire countries, ambitious targets are being set for electric bus adoption with a focus on decarbonization.

Buses could overtake passenger cars when it comes to EV adoption, as countries worldwide race to make their public transport greener to support decarbonisation efforts. In addition, reports have found that shifting away from a reliance on private vehicles to shared public transport could reduce greenhouse gas emissions by up to two-thirds per passenger, per kilometre. Therefore, recent estimates suggest that global public transport capacity needs to double by 2030 to meet the Paris Agreement climate aims. As the demand for electric cars increases, so too does the demand for electric buses and other forms of passenger transport, with huge a sharp uptake of EV bus fleets for public and private use expected in the decade. 

In 2023, it was predicted that around half of the world’s bus fleet would be entirely battery-powered by 2032, as well as around three out of every four buses sold by that time. Meanwhile, the global EV fleet of private vehicles is only expected to reach 50 percent by around a decade later, and electric truck and scooter uptake is taking longer. 

Most electric bus orders were coming from China until recently, but since 2022 there has been a surge from other parts of the world. Lots of the orders are coming from the local level as the current range of electric buses is more suited to local routes, allowing for charging at dedicated bus stations rather than third-party charge points on longer routes. In Berlin, the local government aims to switch 1,600 diesel buses for 1,700 electric buses by the end of the decade. Meanwhile, New York hopes to make its 5,800-bus fleet all-electric by 2040. 

In Europe, the electric bus market is expanding rapidly in line with EU aims for a green transition. There are up to 87 million regular bus users across Europe, showing the impact that a shift to electric could have on decarbonization efforts. The region saw a 53 percent growth in electric bus registrations in 2023, with 6,354 registered in the EU, as well as Norway, Iceland, and Switzerland. More than 42 percent of city buses were zero-emission, both battery electric and hydrogen, marking a sharp increase from just 15 percent in 2020. 

In the U.S., school and university districts are taking particular interest in electric buses. Oakland became the first school district in the U.S. to switch all its buses to electric, with 74 in total. In May, The Oakland Unified School District announced it was partnering with the student transport company Zum to sell power stored in EV batteries back to the California utility grid. It will be the first school district to test vehicle-to-grid (V2G) bidirectional charging, which allows school buses to send the power in their batteries back to the grid via Zum’s charging points. The company estimates that around 2.1 GW hours of energy could be sent from batteries to the grid every year through this project. If successful, the project could be expanded countrywide to cover a fleet of around 10,000 school buses. Cities such as San Francisco and Los Angeles could soon follow suit, followed by other districts in California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, Missouri, Nebraska, Pennsylvania, Tennessee, Texas, Washington, Utah, and Virginia. 

Ritu Narayan, the CEO of Zum, stated “We at Zum strongly believe it is time to move beyond pilots and deploy sustainability solutions at scale. Converting the Oakland Unified school bus fleet to 100 percent electric with virtual power plant capability is the right step in that direction.” 

In the Middle East, Qatar is even more ambitious in its electric bus aims, having launched an autonomous electric passenger transport pilot program, with the hope of a larger rollout of the vehicles in the coming years. In February, Qatar’s Ministry of Transport and the company Mowasalat unveiled the country’s first self-driving electric bus. The pilot project ran on a route in the capital city of Doha, with the aim of analyzing data for the wider rollout of the technology. The buses are capable of carrying up to eight passengers and traveling at a speed of up to 40 km per hour. The bus is fitted with advanced onboard sensors, high-definition cameras, lasers, and ultrasonic radars to make it autonomous. 

In addition, Qatar’s Lusail Bus Depot recently won the Guinness World Record Certificate for becoming the largest electric bus depot in the world, with a capacity for 478 buses. The country aims to shift to a 100 percent electric bus fleet by 2030, including some autonomous bus routes. This echoes goals across the region, with countries such as the United Arab Emirates and Saudi Arabia also aiming for the widespread electrification of public transport over the next decade. 

As the global demand for private EVs is growing, so too is the demand for electric buses. Governments worldwide are looking for ways to decarbonize in line with climate pledges and an overall green transition, which includes transitioning public transport away from fossil fuels to green fuels and clean electricity. We can expect to see a sharp increase in the global electric bus fleet over the coming decades, as local and national governments worldwide invest heavily in the sector.

By Felicity Bradstock for Oilprice.com

• G7's Awkward Climate Finance Secret
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• By Alex Kimani - May 26, 2024
• 
  
• What most like to call climate finance is, in fact, not so much help for the world's poorer nations.
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• Reuters: Germany, Japan, France, and the United States are among the wealthy countries that offered developing nations loans and transition deals that ultimately benefited companies and organizations in those same wealthy countries.
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• The Stanford data provision program for journalists showed that the four G7 countries listed above struck loan deals related to the energy transition worth at least $18 billion with developing nations.

The finance ministers of the G7 group are meeting this week to discuss, among other global issues, climate finance and how to make more money available to the poorer nations of the world that transition advocates argue suffer most of the ill effects of industrialization.

It turns out, however, that what most like to call climate finance is, in fact, not so much help for the world's poorer nations. Instead, it is a tool to enrich G7 entities—and saddle the poor nations with debt.

Reuters made the revelation in a detailed expose in which it said that Germany, Japan, France, and the United States were among wealthy countries that offered developing nations loans and transition deals that ultimately benefited companies and organizations in those same wealthy countries while adding to the debt load of the developing nations.

After reviewing UN data and speaking to a variety of analysts, climate activists, and government officials who took part in climate finance negotiations, Reuters reported that G7 members had, as a matter of course, offered developing nations loans at market rates and instead of grants.

Data provided by the Big Local News—the Stanford data provision program for journalists—showed that the four G7 countries listed above struck loan deals related to the energy transition worth at least $18 billion with developing nations. Of these, Japan offered the most, at $10.2 billion, followed by $3.6 billion in loans offered by France, $1.9 billion offered by Germany, and $1.5 billion provided by the United States.

Related: China Threatens 25% Car Tariff Against US, EU Moves

Reuters points out in its expose that lending at market rates is not standard practice when, allegedly, trying to help a poor nation tackle the alleged effects of catastrophic climate change. Yet market rates are exactly what Japan, France, Germany, the U.S. and other G7 members asked of their borrowers.

Not only this, but the investigation that Reuters conducted showed that lenders often attached conditions to their loans, namely that the recipients of those loans hire certain companies to do the work that the money was supposed to enable. Essentially, this meant not only did the lenders benefit from the repayment of the loans—plus market-rate interest—but they also gave a leg up to their own companies instead of letting the borrower decide on the best deal.

Reuters quoted one activist as calling this "deeply reprehensible" and saying that "Climate finance provision should not be a business opportunity,". Liane Schalatek, from German environmentalist NGO the Heinrich-Boll Foundation, also said that instead of bringing in profits, climate finance should "serve the needs and priorities of recipient developing countries."

Yet this statement has a problem—because many climate change activists and transition champions in government and the NOG sector are presenting the energy transition precisely as a profit opportunity. Investors are being convinced that investing in solar development companies or green hydrogen research would not only help the planet but make them money, too. And governments in developing countries are being told that the transition will protect their economies from devastating future losses caused by unmitigated climate change—hypothetically.

So, it appears that those G7 governments that were doing the loan deals, were simply taking advantage of the opportunities that the energy transition presented to them. That this put developing nations that cannot afford to take the same advantage is an unfortunate fact that will no doubt be used by leaders in those nations to strike back against the West's pressure on them to avoid developing their natural hydrocarbon resources and go right to the wind and solar stage of energy supply.

Many African leaders have already expressed quite understandable outrage at conditions attached to loan finance provided by the IMF and the World Bank, which essentially tie the provision of these loans to certain transition commitments. Now, with the Reuters investigation, the outrage may well become louder—and perfectly justified.

The nations of the so-called "global south are experiencing a new wave of debt caused by climate finance," a former Ecuadorian climate change official told Reuters. What the statement suggests is a confirmation of the above claim that wealthy nations—or rather their governments and large corporations—are taking advantage of the opportunity that the energy transition presents, just not in the sense possibly envisioned by climate activists.

Not only this, but these governments and corporations are offering more loans than grants, the Reuters investigation showed, with the amount of climate debts provided to poor and middle-income nations so far representing 54% of total climate finance under the international target of $100 billion—which the world has failed to live up to.

So, it appears that some of the most vocal government supporters of the energy transition may have more than one kind of motivation for supporting the transition. It is quite an awkward revelation as developing countries step up their pressure on the wealthy world to pay for what activists argue is climate change of its own making.

It becomes even more awkward in light of the fact that while those governments and corporations were doing the lending and attaching the strings, the living standard of their own nations declined—in no small part thanks to those governments' focus on climate change above all else.

By Irina Slav for Oilprice.com

• • Coal's Decline Accelerates as Natural Gas and Renewables Boom
  • 
    
  • By Robert Rapier - May 27, 2024
  • 
    
  • Coal consumption has declined by 13.0 quadrillion BTUs since 2000, while natural gas consumption has increased by 13.4 quadrillion BTUs.
  • 
    
  • Renewable energy consumption has increased by 8.4 quadrillion BTUs over the same period.
  • 
    
  • Technological advancements, economic factors, and policy initiatives are driving efforts to reduce carbon emissions and promote cleaner energy sources.
  • 
    

  The U.S. energy landscape has undergone a remarkable transformation since 2000. The changes reflect broader economic, technological, and policy trends that have influenced the nation’s energy mix.

  One area that has experience significant upheaval is the consumption patterns of coal, natural gas, and renewables. This is the story of that transformation.

  Early 2000s: Dominance of Coal

  At the beginning of the 21st century, coal was the dominant energy source for electricity generation in the United States. In 2000, coal consumption stood at 22.6 quadrillion British thermal units (BTUs), reflecting its widespread use in power plants across the country. This was primarily a reflection of coal’s relatively low cost and abundance in the U.S.

  Natural gas consumption was also substantial at 23.3 quadrillion BTUs, but it was primarily used for heating and industrial processes. However, it would soon be a rapidly growing fuel for electricity generation. Renewable energy, including hydroelectric, wind, solar, and biomass, contributed a modest 5.7 quadrillion BTUs.

  Mid-2000s: Rise of Natural Gas 

  Coal consumption remained relatively stable, peaking slightly in the mid-2000s before beginning a gradual decline. Renewables started to gain traction, largely due to increased investments in wind and solar energy.

  Late 2000s and Early 2010s: Shift Toward Cleaner Energy

  The late 2000s and early 2010s marked a significant shift towards cleaner energy sources. This period saw a rapid decline in coal consumption, dropping to 20.8 quadrillion BTUs by 2010, as environmental regulations tightened, and the economic advantages of natural gas became more apparent.

  

  Coal Natural Gas Renewables 2000 to 2023. Data Source: EIA. ROBERT RAPIER

  Natural gas consumption reached 24.7 quadrillion BTUs in 2010, benefiting from its lower carbon emissions and cost-effectiveness. Renewable energy continued its upward trajectory, reaching 7.6 quadrillion BTUs in 2010, spurred by federal and state incentives, technological advancements, and decreasing costs.

  Mid-2010s: Accelerated Decline of Coal and Rise of Renewables

  The trend towards cleaner energy sources accelerated in the mid-2010s. By 2015, coal consumption had fallen sharply to 15.7 quadrillion BTUs, while natural gas consumption continued to climb, reaching 28.3 quadrillion BTUs. Renewables saw significant growth, with consumption rising to 10.0 quadrillion BTUs, driven by substantial increases in wind and solar power capacity.

  Late 2010s to Early 2020s: Dominance of Natural Gas and Renewables

  The late 2010s to early 2020s solidified the dominance of natural gas and renewables in the U.S. energy mix. By 2020, coal consumption had plummeted to 10.7 quadrillion BTUs, reflecting the ongoing decommissioning of coal-fired power plants and a shift towards cleaner energy.

  Natural gas consumption reached 32.6 quadrillion BTUs in 2020. Natural gas played a role both as firm power (power on demand), in addition to a role in balancing intermittent renewable energy sources.

  Renewables saw remarkable growth, with consumption reaching 12.1 quadrillion BTUs in 2020, highlighting the significant contributions of wind, solar, and biomass energy.

  Recent Trends: Continued Growth of Natural Gas and Renewables

  In 2023, coal consumption bounced back a bit, while natural gas consumption grew to a record 36.5 quadrillion BTUs. Renewable energy consumption reached a record 14.7 quadrillion BTUs in 2023, reflecting ongoing investments in renewable energy infrastructure and the increasing role of wind and solar power in the national energy grid.

  Conclusions

  The period from 2000 to 2023 has seen a dramatic transformation in the U.S. energy landscape. Coal consumption declined by 13.0 quadrillion BTUs, while natural gas consumption increased by 13.4 quadrillion BTUs. Renewable consumption increased by 8.4 quadrillion BTUs over that period

  However, it should be noted that these comparisons are not apples-to-apples. When coal or natural gas are burned for power, most of the energy (60% to 70%) is lost in the conversion to electricity as heat. However, that is not the case for renewables. Thus, it can be said that a BTU of coal or natural gas consumption is not directly comparable to a BTU of renewable energy consumption when electricity is the measure being discussed.

  On the other hand, renewable energy is not firm power. Natural gas can be used to completely replace a coal-fired power plant. Renewables are better suited to serve marginal demand in a decentralized fashion. As a result, renewables and natural gas have worked well together to cause the massive decline in coal consumption this century.

  These trends are expected to continue as technological advancements, economic factors, and policy initiatives drive further efforts to reduce carbon emissions. The U.S. energy sector is poised for a future where renewables play a central role, supported by natural gas as a flexible and reliable energy source.

  By Robert Rapier 

• 
  

The High Cost of Moving Industry Offshore

By Gail Tverberg - May 27, 2024

Moving industrialization offshore can look like a good idea at first. But as fossil fuel energy supplies deplete, this strategy works less well. Countries doing the mining and manufacturing may be less interested in trading. Also, the broken supply lines of 2020 and 2021 showed that transferring major industries offshore could lead to empty shelves in stores, plus unhappy customers.

The United States started moving industry offshore in 1974 (Figure 1) in response to spiking oil prices in 1973-1974 (Figure 2).

Figure 1. US industrial energy consumption per capita, divided among fossil fuels, biomass, and electricity, based on data from the US Energy Information Administration (EIA). All energy types, including electricity, are measured their capacity to generate heat. This is the approach used by the EIA, the IEA, and most researchers.

Industry is based on the use of fossil fuels. Electricity also plays a role, but it is more like the icing on the cake than the basis of industrial production. Industry is polluting in many ways, so it was an “easy sell” to move industry offshore. But now the United States is realizing that it needs to re-industrialize. At the same time, we are being told about the need to transition the entire economy to electricity to prevent climate change.

In this post, I will try to explain the situation–how fossil fuel prices have spiked many times, including 1973-1974 (oil) and more recently (coal in 2022). I will also discuss the key role fossil fuels play. Because of the key role of fossil fuels, a reduction in per-capita fossil fuel consumption likely leads to a transition to fewer goods and services, on average, per person. A transition to all electricity does not seem to be feasible. Instead, we seem to be headed for increased geopolitical conflict and the possibility of a financial crash seems greater.

[1] When fossil fuel supplies become constrained, prices tend to spike to high levels, and then fall back again.

Economists and energy analysts have tended to assume that fossil fuel prices would rise to very high levels, allowing extraction of huge amounts of difficult-to-extract fossil fuels. For example, the International Energy Agency (IEA) in the past has shown forecasts of future oil production assuming that inflation-adjusted oil prices will rise to $300 per barrel.

Instead of rising to a very high level, fossil fuel prices tend to spike because there is a two-way contest between the price the consumers can afford and the price the sellers need to keep reinvesting in new fields to keep fossil fuel supplies increasing. Prices oscillate back and forth, with neither buyers nor sellers finding themselves very happy with the situation. The current price of the benchmark, Brent oil, is $81.

[2] Historical data shows spiking oil and coal prices.

Figure 2. World oil prices, adjusted to the US 2022 price level, based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute.

When world oil prices started to spike in the 1973-1974 period, the US started to move its industrial production offshore (Figure 1). The very low inflation-adjusted prices that prevailed up until 1972 no longer held. Manufacturing costs climbed higher. Consumers wanted smaller, more fuel-efficient vehicles, and such cars were already being manufactured both in Europe and in Japan. Importing these cars made sense.

More recently, coal prices have begun to spike. Coal prices vary by location, but the general patterns are similar for the types of coal shown.

Figure 3. Coal prices per ton, at a few sample locations, based on data shown in the 2023 Statistical Review of World Energy prepared by the Energy Institute. Prices have not been adjusted for inflation.

Before China joined the World Trade Organization (WTO) in 2001, coal prices tended to be below $50 per ton (figure 3). At that price, coal was a very inexpensive fuel for making steel and concrete, and for many other industrial uses.

Figure 4. World coal consumption per capita, based on data of the 2023 Statistical Review of World Energy prepared by the Energy Institute, except for 2023, which is based on an estimate by the IEA.

After China joined the WTO, China’s coal consumption soared (Figure 4), allowing it to industrialize. Figure 3 shows that the extra demand initially pushed coal prices up a little. By 2022, coal prices had soared. At present, coal prices are part-way back down, perhaps partly because higher interest rates are dampening world demand for coal.

Natural gas prices also soared in 2022, at the same time as coal prices. Both coal and natural gas are fuels that are burned to produce electricity. When the coal supply is constrained, utilities will try to purchase more electricity produced by burning natural gas. However, it is difficult to store much natural gas for future use. Thus, a shortage of internationally traded coal can simultaneously lead to a shortage of internationally traded natural gas.

Having oil, coal, and natural gas prices spiking at the same time leads to inflation and to many unhappy citizens.

[3] The 1997 Kyoto Protocol encouraged the trend toward moving industry to lower-cost countries.

In Figure 1, I show a dotted line at 1997. At that time, an international treaty stating that the participating countries would limit their own CO2 emissions attracted a lot of attention. An easy way to limit CO2 emissions was by moving industry overseas. Even though the US did not sign the treaty until later, the treaty gave the US a reason to move industry overseas. We can see from Figure 1 that US industrialization, as measured by the energy per capita required to industrialize, began to fall even more rapidly after 1997.

[4] There were many reasons besides the Kyoto Protocol why Advanced Economies would want to move industry overseas.

There were many reasons to move industry overseas besides spiking oil prices and concern over CO2 levels. With such a change, customers in the US (and European countries making a similar change) gained access to lower-cost goods and services. With the money the customers could save, they were able to buy more discretionary goods and services, which helped to ramp up local economies.

Also, industry tends to be polluting. Smog tends to be problem if coal is burned, or if diesel with high sulfur content is burned. Mining tends to produce a lot of toxic waste. Moving this pollution offshore to poorer countries would solve the pollution problem without the high cost of attempting to capture this pollution and properly store it.

Furthermore, business-owners in the United States could sense the opportunity to grow to be truly international in size if they moved much of their industry overseas.

[5] All the globalization and moving of industry overseas had a downside: more wage and wealth disparity.

In a matter of a few years, the economy changed to provide fewer high-paying factory jobs in the United States. Increasingly, those without advanced education found it difficult to provide an adequate living for their families. The high incomes were disproportionately going to highly educated workers and the owners of capital goods (Figure 5).

Figure 5. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

[6] Part of what caused the growing wage and wealth disparities in Figure 5 was the growing industrialization of China (Figure 6).

China, with its growing industrialization, could outcompete whole industries, such as furniture-making and garment-making, leaving US workers to find lower-paid jobs in the service sector. Similar outcomes unfolded in the EU and Japan, as industrialization started moving to different parts of the world.

Figure 6. Industrial production in 2015 US$, for the United States, the EU, Japan, and China, based on World Bank Industrial Production (including construction) data. These amounts are not per capita.

[7] The indirect impact of the Kyoto Protocol was to move CO2 emissions slightly away from the Advanced Nations. Overall, CO2 emissions rose.

Figure 7. Carbon dioxide emissions from energy utilization, based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute. These amounts are not per capita.

Anyone who expected that the 1997 Kyoto Protocol would reduce world CO2 emissions would have been disappointed.

[8] The direct use of fossil fuels plays a far more important role in the economy than we have ever been taught.

Thanks to the direct use of fossil fuels, the world can have paved roads, bridges made of steel, and electricity transmission lines. It can have concrete. It can have pharmaceutical products, herbicides, and insecticides. Many of these benefits come from the chemical properties of fossil fuels. Electricity, by itself, could never provide these products since it has been stripped of the chemical benefits of fossil fuels. Electricity is also difficult to store.

With the benefit of fossil fuels, the world can also have high-quality steel, with precisely the composition desired by those making it. With only electricity, it is possible to use electric arc furnaces to recycle used steel, but such steel is limited both in quantity and quality. US production of steel amounts to 5% of world supply (primarily using electric arc furnaces), while China’s production (mostly using coal) amounts to 50% of world supply.

I highly recommend reading the article, Trapped in the Iron Age, by Kris De Decker. He explains that the world uses an enormous amount of steel, but most of it is hidden in places we can’t see. Today, with the US’s limited steel-making capability, the US needs to import most of its steel, including steel pipes from China to drill its oil wells. We cannot see how dependent we have become on other countries for our basic steel needs.

China and India have both based their recent growth primarily on rising coal consumption. This is what has kept world CO2 emissions high. The US is now exporting coal to these countries.

[9] Citizens of Advanced Economies are easily confused about the importance of fossil fuel use because they have never been taught about the subject and because their worldview is distorted by the narrow view they see from within their homes and offices.

Figure 8. Electricity consumption as a percentage of total energy consumption by US sector, based on the data of the US EIA. Amounts are through 2023.

Figure 8 shows that the sector with the highest share of electricity use is the commercial sector. This includes uses such as stores, offices, and hospitals. The most visible energy use is lighting and operating computers, which gives the perception that electricity is the greatest energy use. But these businesses also need to be heated, and heat is often produced by burning natural gas directly. Businesses also need back-up for their electrical systems. Such back-up is typically provided by diesel-powered generators.

Residential usage is similar. It is easy to see the use of electricity, but heat is generally needed during winter. This is often provided by natural gas or propane. Natural gas is also often used in hot water heaters, stoves, and clothes dryers. Occasionally, wood is used to heat homes; this would go into the non-electricity portion, as well.

The thing that most people do not realize is that industrial use and transportation use are extremely large sectors of the economy (Figure 9), and these sectors are very low consumers of electricity (Figure 8). Also, if the US and Europe were to re-industrialize to produce more of our manufactured goods, our industrial sectors would need to be much larger than they are today.

Figure 9. US Energy Consumption per capita by sector based on data of the US EIA. Amounts are through 2023.

In recent years, electrical consumption as a percentage of total energy consumption for the industrial sector has averaged about 13% of the total (Figure 9). Industries typically need high heat levels; such heat can usually be achieved at lowest cost by burning fossil fuels directly. Wikipedia claims, “Electric arc steelmaking is only economical where there is plentiful, reliable electricity, with a well-developed electrical grid.” An electric grid, powered only by intermittent electricity from wind turbines and solar panels, would not qualify.

In Figure 8, electricity consumption as a percentage of total energy consumption for the US transportation sector rounds to 0%, for every year. Even the amount of biomass (ethanol and biodiesel) used by the transportation sector doesn’t have much of an impact, as shown in Figure 10.

Figure 10. US transportation energy by type through 2023, based on data of the US EIA. Biomass includes ethanol and any biofuels made to substitute for diesel.

A major issue is that transportation is a broad sector, including trucks, trains, planes, and boats, in addition to private passenger autos. Also, I expect that the only electricity that would be considered in the transportation energy calculation would be electricity purchased from an away-from-home charging facility. Electricity used when charging at home would likely be part of residential electricity consumption.

[9] The narrative saying that we can transition to an electricity-only economy, powered by intermittent wind and solar electricity, has major holes in it.

One major issue is that the pricing of wind and solar tends to drive out other electricity providers, particularly nuclear. Intermittent wind and solar are given “priority” when they are available. This leads to very low or negative prices for other electricity providers. Nuclear is particularly affected because it cannot ramp up and down, in response to prices that are far below its cost of production.

Nuclear is a far more stable source of electricity than either wind or solar, and it is also a low-carbon source. As a result, economies end up worse off, in terms of electricity supply per capita, and in stability of available supply, when wind and solar are added.

Figure 11. US per capita electricity generation based on data of the US Energy Information Administration. (Amounts are through 2023.)

Figure 12. Electricity generation per capita for the European Union based on data of the 2023 Statistical Review of World Energy, prepared by the Energy Institute. Amounts are through 2022.

Another issue is that wind turbines and solar panels are made with fossil fuels and repaired using fossil fuels. Without fossil fuels, we cannot maintain electricity transmission lines and roads. Thus, wind turbines and solar panels are as much a part of the fossil fuel system as hydroelectric electricity and electricity made from coal or natural gas.

Also, as discussed above, only a small share of the economy is today operated using electricity. The IEA says that 20% of 2023 world energy supply comes from electricity. The amounts I calculated as “Overall” in Figure 8 indicate an electricity share of 18%, which is a bit less than the IEA is indicating for the world. Figure 8 shows an early upward trend in this ratio, but no upward trend since 2012. Fossil fuels are being used today because they have chemical characteristics that are needed or because they provide the energy services required in a less expensive manner than electricity.

Even in the early days of the Industrial Revolution, wind and waterpower provided only a small portion of the total energy supply. Coal provided the heat energy that both industry and residences needed, inexpensively. Wind and waterpower were not well adapted to providing heat energy when needed.

Figure 13. Annual energy consumption per head (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Wrigley, in Energy and the English Industrial Revolution.

If we are short of inexpensive-to-extract fossil fuels, relative to today’s large population, we certainly could use some new inexpensive source of stable electricity supply. But this would not solve all our energy problems–we would still need a substantial amount of fossil fuel supplies to grow our food and keep our roads repaired. But if a new type of electricity production could reduce the demand for fossil fuels, it would make a larger quantity of fossil fuels available for other purposes.

[10] Practically everyone would like a happily-ever-after ending, so it is easy for politicians, educators, and the news media to put together overly optimistic versions of the future.

The narrative that CO2 is the world’s biggest enemy, so we need to move quickly away from fossil fuels, has received a great deal of publicity recently, but it is problematic from two different points of view:

(a) The feasibility of moving away from fossil fuels without killing off a very major portion of the world’s population seems to be virtually zero. The world economy is a dissipative structure in physics terms. It needs energy of the right kinds to “dissipate,” just as humans are dissipative structures and need food to dissipate (digest). Humans cannot live on lettuce alone, or practically any other foodstuff by itself. We need a “portfolio” of foods, adapted to our bodies’ needs. The economy is similar. It cannot operate only on electricity, any more than humans can live only on high-priced icing for cakes.

(b) The narrative about the importance of CO2 emissions with respect to climate change is quite possibly exaggerated. There are many other things that would seem to be at least as likely to cause short-term shifts in temperatures:

• Lack of global dimming caused by less coal dust and reduced sulfur compounds in the atmosphere; in other words, reducing smog tends to raise temperatures.
• Small changes in the Earth’s orbit
• Changes in solar activity
• Changes related to volcanic eruptions
• Changes related to shifts in the magnetic north and south poles

Politicians, educators, and the news media would all like a narrative that can explain the need for moving away from fossil fuels, rather than admit that “our easy to extract fossil fuel supply is running out.” The climate change narrative has been an easy approach to highlight, since clearly the climate is changing. It also provides the view that somehow we will be able to fix the problem if we take it seriously enough.

[11] Today, we are in a period of conflict among nations, indirectly related to not having access to enough fossil fuels for a world population of 8 billion. There is also a significant chance of financial collapse.

In my opinion, today’s world is a little like the “Roaring 20s” that came shortly before a major stock market crash in 1929 and the Great Depression of the 1930s. After the Great Depression, the world entered World War II. There is huge wage and wealth disparity; energy supplies per capita are stretched.

Today, NATO and Russia are fighting a proxy war in Ukraine. Russia is a major fossil fuel producer; it would like to be paid more for the energy products it sells. Russia could perhaps get better prices by selling oil and other energy products to Asian customers instead of its current customer mix. At the same time, the US claims primary leadership (hegemony) in the world but, in fact, it needs to import many goods from overseas. It even needs supply lines from around the world for weapons being sent to Ukraine. The Ukraine conflict is not going well for the US.

I do not know how this will work out. I am hoping that there will not be a World War III, in the same way that there was a World War II. All countries are terribly dependent on each other, even though there are not enough fossil fuels to go around. Perhaps countries will try to sabotage one another, using modern techniques, such as cyber warfare.

I think that there is a substantial chance of a major financial collapse in the next few years. The level of debt is very high now. A major recession, with lots of collapsing debt, seems to be a strong possibility.

[12] A presentation I recently gave to a group of actuaries that touches on several of these issues, plus others.

My presentation can be found at this link: Beware: The Economy Is Beginning to Shrink

By Gail Tverberg via Our Finite World

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