Worldwide investment in developing the “liquid” fossil fuels, as already reported in EIR, has been driven down by more than half since 2016, from approximately $800 billion/year to $500 billion in 2019 and to just $350 billion projected as the total for 2021; while coal investment is a battle between Green New Deal finance and national resistance, strongest now in China and the United States. Now a report just issued by the English-language business website Quartz reports the next shoe has fallen: Discoveries of oil and gas have dropped to their lowest level in 75 years. Those totaled 20 billion barrels of oil equivalent in 2016, but have not been above 15 billion since, and in 2021 look like just 4.7 billion barrels equivalent. That is the lowest worldwide amount since 1946.
The report, partly sourced to Rystad Energy, says that capital expenditure commitments in the oil and gas industries are now “scarce” both for new exploration and for new investment in existing fields, which tend to lose about 7% of production annually without such new investment. Total worldwide production of these “liquid” petrochemicals has already fallen by about 8%.
Coal production for electric power, however, has risen in 2021 by about 9%, as unhappily reported by the British/Davos-dominated International Energy Agency. This increase is accounted for by China, the United States, and to a smaller extent Russia, all in defiance of the Green New Dealers and FLOP26. Coal power has jumped from 15% to 27% of all U.S. electricity production. But it is in China where economic progress was really prioritized not only to provide more coal power but to lower its price.
In October, facing an early cold weather snap and serious power shortages caused by coal shortages, China’s National Development and Reform Commission (NRDC), according to a detailed account in Global Times Dec. 27, “rolled out 16 policies papers in just eight days to ensure coal supplies, ramp up coal production and crack down on coal prices. The State-owned Assets Supervision and Administration Commission of the State Council … held three meetings in two days addressing the same matter. Starting from October 19, the NDRC issued guidelines to guide coal prices to return to a reasonable level. Multiple inspection teams were dispatched to cities and ports across China to oversee the campaign on the ground. By October 21, major coal producers had openly pledged to strictly observe a price ceiling for thermal coal and ensure coal supplies.” The account repeatedly emphasizes that China was caught in the process of downsizing coal production, just before Glasgow FLOP26, and immediately reversed that. “Five mines under [the firm] SCCG that were originally downsizing also rapidly intensified trial operations, while relevant mining licenses were still in the process of being applied and some infrastructure work still underway, to ensure the enough coal could be dug out from the mines, and that the output could timely fill up gaps in the inventories as they are shipped away and the chain of supply and demand could be sustained and stabilized.” The government succeeded by regulatory action in putting price curbs on coal while production was ramped up. There is no longer a shortage, or power shortages, in the economy.
The article was “Amid Global Energy Crunch, China’s Economic System Prevails Again.” (https://www.globaltimes.cn/page/202112/1243517.shtml)
