On the heels of his blockbuster 2023 independent film How to Blow Up a Pipeline (worldwide gross: $1,046,811), Swedish Professor of Human Ecology Andreas Malm is planning another fictional drama taking aim at the oil and gas industry. The husband-and-wife protagonists are executives of a global technology juggernaut leading internal sustainability and energy use initiatives.

The main characters leave the tech giant and form a non-profit, securing alliances with others in the climate arena. They produce a study showing that greenhouse gas emissions from data center energy use will be far less than the emissions “enabled” by oil and gas producers’ use of AI.

In the process, the pair’s research leads them to a life-changing realization: Productivity gains by the fossil fuel industry’s use of AI will enable far more CO2 emissions than use of the technology could ever help “renewables” offset.

The study gets accepted and published in a research journal. Climate media amplifies the message.

Their study warns the world that Big Oil and Big Tech, by the use of the latter’s AI, are modern day Bonnie and Claude, robbing the world of a safe, livable atmosphere. Among their recommendations are Orwellian “governance priorities” intended to ameliorate the impending disaster. Indeed, Malm chose Bonnie and Claude for the film’s title.

But don’t rush to search Google for the release dates and theaters near you. While a work of fiction with such a plot narrative could easily emerge from a mind like Malm’s, he has no such effort forthcoming.

We would love to admit that we’re creative enough to have made up the story. But we aren’t, and it is not fiction.

Sorry, for both.

In a May 2020 blogpost, Big Oil in the Cloud, Greenpeace USA called out Google, Amazon, Microsoft and others for aiding and abetting the U.S. oil and gas industry. But for years, few squawked about the role Big Tech has played in “enabling” additional CO2 and methane emissions from fracking, horizontal drilling and the U.S. shale revolution.

In 2024, after a four year “internal advocacy effort,” two Microsoft employees, a husband-and-wife team, left the firm to launch a non-profit. Their mission: to “advance broader research and governance work” regarding artificial intelligence (AI)- “enabled emissions,” in which Big Tech is both force-multiplier and profit-making coconspirator with the oil and gas industry.

Earlier this month, the duo’s new peer reviewed study calculating the impact of CO2 emissions from AI-driven productivity gains in the oil and gas industry was released in Nature Public Journal’s Climate Action. Borrowing an old quip, “we read it, so you didn’t have to.”

Who are the authors? What are the study’s key findings? And what do the authors’ “governance recommendations” tell us about what’s really going on here? Let’s explore the effort to paint Big Tech as an accomplice to Big Oil’s planetary climate destruction, with proposed solutions we’re glad George Orwell and Ayn Rand are not here to see.

Our story begins with the lede from the recent Inside Climate article that brought the effort to our attention (emphasis ours):

The “enabled emissions” that come when oil and gas drillers use artificial intelligence to find and exploit new energy reserves are far more damaging to the climate than the emissions that come from the data centers that power AI platforms, a new study by two former Microsoft employees concludes.

Will and Holly Alpine spent years building AI platforms before founding a nonprofit, the Enabled Emissions Campaign, to hold tech companies accountable for helping expand fossil fuel production. Their study, published in Nature, found that AI tools used by oil and gas companies have made production faster, cheaper and more profitable, expanding output that otherwise wouldn’t happen.”

The oil and gas industry has been using advances in computer technology to produce increasing amounts of oil and natural gas more efficiently and profitably?!? You could have knocked us over with the breeze from a seized wind turbine.

Inside Climate found an official from one nonprofit who chose a term most people associate with criminality to describe the situation (emphasis added):

Clara Vondrich, senior policy counsel for Public Citizen, a nonprofit consumer advocacy group, said in a statement that the new research exposes the tech industry as a lead accomplice to the fossil fuel industry. AI developers are making contracts with oil companies and selling proprietary tools designed for the purpose of speeding up oil production, Vondrich said.

“You can’t make this up,” Vondrich said. “Big Tech companies, self-avowed climate champs for decades, are working hand-in-glove with Big Oil to find, dig, and burn more fossil fuels to make a buck.”

Greenwashing is easy to see in hindsight, Ms. Vondrich. Hopefully you’ve learned to pick up the signs earlier next time.

The oil and gas industry was using computer technology to fight against the natural decline in oil and gas fields, increase productivity, optimize inputs, strategically prioritize prospecting sites, and much more for decades. 3-D seismic, logging, geosteering, microseismic mapping, processing/analysis/monitoring of gargantuan amounts of data, and too many other valuable compute functions to list eventually combined with hydraulic fracturing and horizontal drilling and other field innovations to “enable” a lot of additional CO2 emissions many years before “AI.”

Consider just the last 18 years shown in the U.S. oil and natural gas production graphs below. Oil production has more than tripled. Natural gas production more than doubled.

Every molecule of oil and natural gas pulled out of the ground over this period was burned somewhere, meaning computer technology played a critical role in all of the “enabled emissions” from increases in U.S. oil and gas production since 2008. And most of the increase was long before “AI” ever entered the American lexicon.

Who area the founders of the Enabled Emissions Campaign (EEC) and co-authors of the study? As the non-profit’s website notes:

“Holly and Will Alpine are leaders in Responsible AI and sustainability with 14 years of combined experience at Microsoft. During a four-year internal advocacy effort, they mobilized thousands of colleagues, convened forums, engaged senior leadership, and authored influential memos—efforts that contributed to the launch of Microsoft’s Energy Principles. In 2024, recognizing the limits of internal advocacy and the need for systemic climate reform, they left to launch the Enabled Emissions Campaign and advance broader research and governance work across the sector.”

On EEC’s website, Mrs. Alpine’s bio notes that, “she founded and led both the company’s global Community Environmental Sustainability program as well as the Employee Engagement program.” Mr. Alpine’s bio states that “At Microsoft, he led the development of Responsible AI platform features, co-founded Green Software Engineering initiatives like the open-source Carbon Aware SDK, and co-authored Microsoft’s Accelerating Sustainability with AI playbook.”

EEC defines enabled emissions as “the additional greenhouse gas emissions that occur when advanced technologies—like AI, IoT, and cloud computing—make fossil fuel extraction and production economically or technically feasible.” It describes its efforts as work “one of the most consequential and least examined dynamics in climate and technology — building the research base, governance frameworks, and cross-sector coalitions necessary.”

The organization lists the following as “Allies”:

• Amazon Employees for Climate Justice

• Friends of the Earth

• Beyond Fossil Fuels

• 350(.org) Seattle

• Climate Rights Coalition

The Alpine’s co-authored the new study, AI-driven productivity gains enable more CO₂ emissions than they avoid in a global energy–economy model, with a Research Associate Professor in Global Economic Analysis at Purdue University, and an independent researcher/consultant with a PhD in industrial engineering.

The authors find that the production gains enabled by the oil and gas industry’s use of AI “pushes back peak supply expectations” and extends “the (oil and gas) industry’s economic viability.” At the same time, the technology acts to avoid emissions through innovations in methane detection and efficiency gains in power generation.

Using a computed general equilibrium model, the research team projected AI-driven productivity gains in both fossil fuels and renewables. The predominant consequences were categorized as “enabled and avoided” emissions.

Under parallel adoption scenarios – where AI is adopted equally by the oil and gas and “renewables” industries - the study finds (emphasis ours):

• AI-driven productivity increased net global annual CO₂ emissions by 0.47–1.8 Gigatons (Gt), equivalent to 1.2–4.8% of total global energy-related CO2 emissions in 2024.

• Enabled emissions (0.6–2.4 Gt CO₂ annually) exceed the IEA’s 2025 datacenter emissions estimates (0.18 Gt CO₂ annually) by 3.3–13.3X, and its projected 2035 datacenter emissions (0.3–0.5 Gt CO₂ annually) by 1.2–8X.

• With uniform productivity shocks applied simultaneously across fossil fuel and renewables pathways, renewables productivity gains must exceed fossil gains by approximately 4–5X for net emissions to break even.

• Across every adoption scenario tested, net emissions fall only when AI’s fossil fuel gains are zero.

• AI-driven grid and energy efficiency improvements barely move the needle, cutting only about 0.1 Gt of CO2 per year, even under the most optimistic scenario.

The authors find AI to be “a bidirectional productivity amplifier: the same capabilities that optimize renewables generation and end-use efficiency also sustain and expand the economic viability of fossil fuels, with asymmetric emissions consequences.”

The Alpine’s are not alone in such findings. A 2025 “AI-powered analysis” of oil field performance data by Wood Mackenzie found that (emphasis added):

“Better recovery from existing fields could yield an additional 470 billion to over 1,000 billion barrels of oil, easily wiping out the 300 billion barrels supply gap to 2050 under our base case demand outlook.”

Burning an extra 1 trillion barrels of AI-assisted oil would certainly constitute a lot of “enabled emissions!”

As such, the study offers five “governance” priorities. The first will be very familiar to long-time followers of CO2 and “climate change” policy (all emphasis below ours):

• Because price signals alone moderate but do not reverse the directional outcome, carbon pricing should operate as part of a broader portfolio that includes supply-side constraints on AI-enabled fossil productivity gains. (read: a carbon tax)

Another hints at the real game (mentioned as well in the first):

• Where governance regimes pursue AI-driven renewables productivity gains, it should pair them with supply-side constraints on AI enabled fossil productivity.

But we actually saved the author’s first recommendation - the “best” - for last. It dispenses with the hinting, and says the quiet part out loud:

• Governance regimes must recognize enabled emissions as a distinct policy-relevant category and constrain AI-enabled increases in fossil fuel productivity.

Because their modeling finds that AI’s power to increase productivity in the oil and gas industry is far greater than its ability to improve productivity associated with “renewable” energy, their answer is simply to have governments constrain the oil and gas industry’s use of the technology by diktat (or have Big Tech do so under voluntary, industry-wide governance regimes).

But don’t worry. The authors assure us that “such constraints are well established as a necessary complement to demand-side interventions in achieving net emissions reductions.”

Some of the study’s findings are not surprising or even controversial. Computing technology/AI helps improve the production of/economics for oil and gas, which could extend the life of some fields and change the economic viability of others. The lessons U.S. oil and gas operators have learned in the field by trial and error, capital torching and then discipline, and with decades of help from improving computer technology, have seen extremely limited application outside North America, and more emissions will result as the field expertise and technology spread to other geologic basins around the world.

The embedded infrastructure that provides 86% of world primary energy consumption has scale and incentive. These reinforce the incumbent energy system and handicap “renewables.”

It is not the least bit surprising that “enabled emissions” from AI’s contribution to oil and gas production exceed those of a single sector’s (data centers) electricity use, as the latter only amounts to ~1% (for now!) of U.S. electricity consumption. Nor is it surprising that “renewables” would have to achieve 4-5 times more productivity gains from AI as hydrocarbons just for net emissions to break even, and that even a high carbon tax would only narrow gap.

Perhaps the study sheds light on a harsh reality that even the “Levelized Cost of Energy” (LCOE, a metric we detest for its omissions) can’t paper over. The graph below shows the LCOE for onshore wind from 2009 – 20025. The drop from nearly $140/Megawatt hour (MWh) to below $40 between 2009 and 2021 was impressive. But the flattening in the trend well before the costs began rising after 2021 is unmistakable.

The same is true for utility-scale solar photovoltaic. The graph below shows the trend for the same period as for onshore wind above.

Do these two graphs suggest that the “renewable energy” industry is bumping up against the physical limits of wind and solar? If so, we fail to see how AI can overcome those limits and achieve the 4-5X faster productivity gains that the study finds would be necessary just for net emissions to break even.

We are fortunate that our subscriber base includes many industry practitioners. We asked two petroleum geophysicists, each with decades of field experience before and since hydraulic fracturing/horizontal drilling took off in the U.S., for their reactions to the Inside Climate article and the study findings summarized therein.

The first commented that (emphasis ours):

“..they treat production gains as if only AI could achieve them. I would guess humans could have found them, but not so fast.

The best metric of US shale is that, in the last 15 years, a typical US shale well’s production is up 2.5x (that is part acceleration and part recovery), while the cost to drill and frac is down 10-30%. On a production cost per barrel basis that is a 70% reduction. And that is mostly innovation without AI.”

Another gave us a perspective for how long the oil and gas industry has been using computers to enhance productivity well before anyone ever uttered the term “artificial intelligence,” going back to the decades after Shell geologists discovered the “bright spot” anomalies in seismic data that would come to be known as “direct hydrocarbon indicators” (DHIs):

The problem with DHIs is that there is always more than one combination of lithology and fluid that will give rise to the observed reflection event, at least as seen by the human eye (problem of non-uniqueness).

Beginning in the late 1990s, at our firm (a legacy U.S. oil major), we were already experimenting with machine learning techniques that leveraged the power of computers to reduce the non-unique problem by discriminating and classifying seismic signatures in ways that the human eye could not discern. This was long before the term “AI” became part of the general lexicon. Continued development of these machine-learning techniques has already contributed greatly to exploration success in places like Guyana, where low-dip stratigraphic traps add geologic risk that must be overcome with increased confidence in the geophysical analysis of DHIs.

In addition to that, the continued success of exploration efforts in the deepwater Gulf of Mexico has been greatly enhanced by steady improvements in the image fidelity of the seismic data. Imaging below complex salt bodies, which used to be blurry at best, is now amazingly crisp and clean. Two things have facilitated this. One is modern data acquisition, which often involves placing recording nodes directly on the seabed instead of dragging them through the water on a streamer. The other is the continued evolution, driven by the affordability of computing power, of data processing algorithms that require fewer and fewer mathematical assumptions to be made in the name of time and expense. The full waveform equations have been known for decades, but the computing power required to solve them without simplifying assumptions began to be unlocked with racks of GPUs and cloud technology.

Continuing, he noted the relentless, capital-intensive, boundary-pushing physical experimentation in the field, married with computer technology well before AI:

The big increase in US oil production happened between 2007 and 2015, and that was trial-and-error stuff done by operators in the field: George Mitchell combining hydraulic fracturing with horizontal drilling, endless experimentation with proppant loads, pump rates, sand size, carrier fluids, perforation schemes, and target windows. The experiments were, and continue to be, refined with the use of observational technologies like microseismic surveys and wellbore fiber optics. That experimentation and boundary-pushing continues today with extended-reach laterals (EQT recently drilled a Marcellus lateral with a lateral length of 29,070 feet), u-turn laterals, and next-generation surfactants. AI will help operators query and make sense of the vast amount of data collected during operations and production and mine it for strategies and techniques that add small increments to the recovery factor.”

The Alpine, etal study is a nice mental exercise. But the analysis and its governance recommendations fail to deal with some practical realities.

As our industry veterans noted, the U.S. oil and gas industry has a history of using computer technology to improve productivity that long predated the use of the term AI. The graphs above showing U.S. crude and petroleum products and natural gas production after 2008 make clear most of the tripling of oil production and doubling of natural gas production occurred well before AI’s current iteration.

The study uses a Computed General Equilibrium (CGE) model. The model captures how productivity shocks from AI adoption effect oil and gas vs. “renewables.” It is, as the author’s state, “a consequential (rather than attributional) framework.”

As such, a CGE cannot causally disentangle the specific emissions enabled by post-2020 modern AI production and/or efficiency gains from well over two decades of earlier digital technology applications in the oil and gas industry. A CGE can’t discern between future emissions from the diffusion of pre-AI computer-based productivity enhancements to oil and gas fields outside the United States vs. those “enabled” only by AI in those same fields.

The chances of “carbon tax” legislation in America any time soon are Slim and None. And Slim left town on the 4:40 p.m. Greyhound to Midland.

The study fails to acknowledge that this is more a demand story than a technologically-driven supply one. As one of our veterans noted, “today, the "enabler" of emissions is demand.” We can’t reconcile the fact that some of the very people claiming today that AI will supercharge fossil fuel supply are the same ones who have been telling the world oil consumption will peak in the next fears then decline steadily. They have to believe one side of their propaganda or the other, but not both.

Finally, constraining one industry’s use of technology - by government diktat, or the tech industry’s own voluntary “self-governance” - to allow another to catch up and surpass it is either Orwellian or a chapter right out of the sequel to Atlas Shrugged. Or both. And the worst part? Neither would work.

The oil and gas industry is one of the world’s most technologically sophisticated. Leading firms have surely built in-house AI expertise and developed their own proprietary systems in a way that would render any such efforts futile. We asked one of our industry veterans for his thoughts on that question:

“The train has left the station, the cat’s out of the bag, the genie has escaped the bottle, and the cover is blown. Absent a real ideologue like Ed Milliband, along with executive and legislative branches to back him up, I don’t see those governance priorities gaining much traction.”

We close by noting what this is really all about. Show data center energy-related CO2 emissions are a fraction of the oil and gas industry’s “enabled emissions” from gains using AI. Give data centers cover, then paint Big Tech as an “accomplice” to Big Oil in the “climate catastrophe.”

Having done so, justify taking away Big Evoil’s use of AI to let “renewable energy” catch up.” Add a new, computer-modeled justification for an old losing argument – greater government control over hydrocarbon energy, and a carbon tax to boot - in order to “level the playing field” with “renewables” and “save the planet and humanity.”

Restricting permissible uses of AI to “renewables” in the energy sector will not save wind and solar from hitting their physical limits. It will not solve community opposition to “renewable energy” projects. And it damn sure won’t cause the wind to blow at the ideal speed 8,760 hours per year, or the sun to shine at night.

It may be fashionable to view Big Oil and Big Tech as Bonnie and Claude, robbing the world’s stable atmospheric bank. But prohibiting any industry that powers 86% of the human endeavor from using AI to increase production and efficiency is a bad idea while billions are still trying to reach western living standards. That won’t stop the Enabled Emissions Campaign and its allies from trying.

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Before entering Germany’s national parliament and primary legislative body (the Bundestag) in 1998, former Chancellor Olaf Scholz was an attorney. He practiced labor law in Hamburg.

Former Canadian Prime Minister Justin Trudeau received Bachelor’s degrees in English literature and education. He dabbled in engineering classes at Montréal’s École Polytechnique, and others in environmental geography. Trudeau later taught French, humanities, and drama. And elementary school math.

Teaching is an important and fine calling, and good teachers are underpaid. But teaching primary and secondary school doesn’t prepare one for the role of political leader of a G7 nation making critical decisions involving complex engineering, scientific, and economic matters .

Engineering, energy, physics and economics were just not Justin Trudeau’s or Olaf Scholz’s thing. Unfortunately, 2022 was not a good time for Canada and Germany to be led by people with little expertise in those areas.

In the summer of 2022 Putin’s war in Ukraine had driven European oil and natural gas markets to painful levels for industry and the continent’s citizens. As a result, European political “leaders” spent the spring and summer scouring the earth, from Africa to Alberta, in search of relief.

Russia’s war in Ukraine poured kerosene on an already burning European energy market. Much of the damage was self-inflicted (e.g., Germany’s Energiewende). Between September 2021 and January 2023, the European Union and United Kingdom and Norway governments spent over €651 billion subsidizing fuel and energy “to shield consumers from the rising energy costs” they had largely created.

Putin intentionally reduced natural gas supplies. The EU fruitlessly sanctioned Russia and planned to phase out Russian oil and natural gas. Germany needed liquified natural gas (LNG), especially after finding no meaningful help in Africa or anywhere else.

The western Canadian province of Alberta is blessed with an abundance of oil and natural gas. So, in August 2022, Scholz and a contingent of German Charlaticians™ and business leaders went to Canada.

A 2025 reserve study conducted by McDaniel and Associates Consultants for the Alberta Energy Regulator concluded that Canada ranks 9^th in the world in recoverable natural gas reserves. (U.S. Energy Information Administration and other sources rank Canada 14^th – 16^th.) And Alberta’s oil fields are so prolific Canada ranks 4^th globally in proven oil reserves.

Trudeau had spent years simultaneously flogging and sucking money from Alberta’s oil and gas fields. As Chancellor, in the midst of an energy crisis, Scholz rebuffed efforts to stop or defer closure of the last German nuclear power plants his fellow German “leaders” had imposed a decade earlier. So, expecting that a former teacher and an attorney, leading governments that denominated virtually all policies in CO2 emissions and “climate change, might come away with any plan didn’t defy the laws of physics and economics was probably overly optimistic.

Trudeau was no help on the LNG front. But together, the two G7 members came up with a “better” idea, one that fit their mutual, CO2-centered raison d’être.

Their brainchild was announced in Stephenville, Newfoundland on August 23, 2022, by (then-) Canada’s Natural Resources Minister Jonathan Wilkinson and Germany’s Vice-Chancellor/Minister for Economic Affairs and Climate Action Robert Habeck:

The plan for the Canada Germany Hydrogen Alliance (The Alliance) envisions a series of multibillion dollar facilities using hundreds (possibly thousands) of wind turbines to power electrolyzers used to split hydrogen from water. Air separation units isolate nitrogen from the air. Nitrogen and the non-fossil fuel derived hydrogen are combined, compressed, and fed to the same type of catalytic Haber–Bosch plants that have made ammonia for over 100 years. This “green” form of ammonia (NH3) would be shipped to Germany via tankers. There, it would either be “recracked” into hydrogen or used in its existing form.

The Alliance announcement was four years ago this month. It projected “commercial scale green hydrogen production beginning in late 2025.”

So, we were curious to check the status of the initiative. Where do the two highly touted, first-mover projects that emerged from the announcement stand? And what about other similar hydrogen Dutch tulip bulbs planted in the Canadian Maritime Provinces nearby since? Let’s head to the island of Newfoundland and to Nova Scotia to see how The Great Canada Germany Hydrogen Hopefest has fared.

We begin with the global love affair with the concept. All of the requisite technologies exist and are commercially produced. It sounds simple, elegant and compelling. A diagram depicting the process makes it look like a piece of cake:

Touted as a compelling, “green solution” across a variety of sectors, ammonia can be burned in some combustion-based electricity generating plants or used in certain high heat industrial applications, and as an industrial feedstock. We’ll call it “an aspirational fuel” for vehicles and global marine shipping.

But in most Alliance schemes, it simply acts as a carbon-free carrier for the desired hydrogen molecules. Hydrogen is notoriously difficult and expensive to store and transport long distances. But ammonia is a global commodity, readily stored and transported by ships, with the basic infrastructure to support the “green” ammonia trade, until the “recracking” infrastructure that processes the ammonia back to hydrogen becomes widespread.

The EU, naturally, has an entire regulatory classification for “green hydrogen” and “e-ammonia” produced by this “renewable” powered electrolysis process: Renewable Fuels of Non-Biologic Origin (RFNBO, another desperately needed, catchy, five-letter climate acronym). And, surely, hundreds of pages of implementing regulations.

Fuels of biological origin produce CO2 when combusted. (Bad!) RFNBOs don’t (Good!). World’s most pressing problem solved!

If only life were that simple.

Globally, the wind/solar to electrolysis to hydrogen to ammonia project hype started to emerge in the years just before Covid-19(84). Early projects were announced in Australia (2019), Saudi Arabia (2020), Chile and Egypt (2021).

But as most of these project developers have discovered, even with government support, “if you build it, they will come!” is not a “sustainable” model for “green hydrogen” or “e-ammonia” (irony intended). Most have struggled to reach Final Investment Decision (FID) or obtain necessary financing.

Many are being delayed and, with the exception of the Saudi’s NEOM project and a scattering of others, few have actually started construction of the key infrastructure, other than some of the planned wind turbines and/or solar arrays. Environmental assessments, permitting and “social license” problems (the last ranging from NIMBYs to environmental to indigenous groups) continue to plague many.

But the biggest problem is that long-term offtake contracts for the hydrogen or ammonia being produced are not materializing. For most project developers, those firm contracts are the gating function for private sector financiers.

Governments, always excellent at picking losers, are trying to solve that problem. The EU’s auction mechanism, described near the end of this post, is intended to close the “green premium” gap between producers and industrial consumers Bill Gates noted in his notorious climate memo last fall. For the EU, subsidizing that gap is just another climate-related taxpayer-funded bonfire “necessary investment,” of course.

In our view, the projects with much more than a snowball’s chance in hell combine a credible offtake buyer under contract with existing ammonia production and port terminal facilities owned/controlled by the project developer. According to our research, you could lose a finger or two in a meat slicer and still be able to count the number of projects worldwide currently meeting those standards on that hand.

Meaningful physical progress on most projects is hard to find. Project cancellations, wildly out-of-scale capacity ambitions getting pared back dramatically (wind/solar and electrolyzer capacity, volumes of hydrogen and ammonia) and bankruptcies are more common.

In the middle of the head-on crash between aspiration and reality sits the Canada – Germany Hydrogen Hopefest. Four years after the announcement, things look very different than what was promised.

The first two significant project announcements tied to The Alliance were World Energy GH2’s (WEGH2) Stephenville project on the southwestern coast of the island of Newfoundland, and the EverWind Fuels Company (EverWind) Point Tupper project on the Strait of Canso northeast of Halifax, Nova Scotia.

World Energy GH2 – Stephenville/ Port au Port, Newfoundland

Just over two months before The Alliance was announced at the Port of Stephenville, WEGH2 registered the required Environmental Assessment (EA) under Canadian regulations for “Project Nujio’qonik.” The translation for the Mi’kmaq name for St. George’s Bay is “where the sand blows.

The initial EA for the first phase envisioned 1 Gigawatt (Gw) of wind turbines (~164, reaching ~200 meters in height), powering a 0.5 Gw “green hydrogen” plant (the electrolyzers, air separation units and Haber-Bosch system) at the Port of Stephenville. Three 50 Megawatt (Mw) gas-fired turbine generators WEGH2 claimed would be “primarily fueled by hydrogen” (highly doubtful), and a 230 kV interconnection to the electric grid were also specified.

The wind turbines were to be scattered over 108,000 hectares (>250,000 acres) of Newfoundland and Labrador (NL) Crown Land. This required WEGH2 to submit and win Crown Land bids, after which it would first control the properties through provincial a land reservation/exclusive development rights agreement, eventually converting to long-term leases upon payment of all fees and meeting designated project milestones.

But that was just the start of WEGH2’s big ambitions. Planned later phases would bring the total wind power capacity to 3 Gw by expanding wind turbines to two additional sites and adding another Gw of “green hydrogen” production (twice the capacity of phase 1), bringing that capacity total to 1.5 Gw.

Later ambitions expanded wind generation further to 4 Gw. For the completed project, WEGH2 advertised goals of 280,000 metric tons (MT) per year of hydrogen (1.6 million MT of ammonia).

With offices in St. Johns on the island of Newfoundland, WEGH2 was created to be the ~$12 billion project’s local proponent. WEGH2’s ownership is split among three different entities, CFFI Ventures, Horizon Maritime, and World Energy, LLC. Wealthy Canadian maritime business owner John Risley owns controlling interests in CFFI Ventures and Horizon Maritime and a minority stake in World Energy, LLC.

Born in Halifax, Nova Scotia, Risley is former co-founder of Clearwater Seafoods and a successful Canadian maritime business owner. In the EA for the project, his CFFI Ventures is described as “an Atlantic Canadian based private investment firm with global investments... spanning a range of industries from renewable energy to extensive involvement in the ocean economy, banking, and a leading role in Canadian space exploration.”

Recognizing the sensitivity around indigenous land rights Canada has been struggling with for several years, as part of its “social license” WEGH2 has partnered with several indigenous groups in area communities, as well as a wind energy training and workforce development entity to create new jobs and economic opportunities. Despite the effort some residents formed a group called Environmental Transparency Committee to try and fight the project.

Money talks and WEGH2 used it in order to quell opposition in the rural communities, promising a $3 million+ “vibrancy fund” for the project area during the 3-year period of construction. Left unclear was the question of how that money would be distributed among unincorporated rural communities.

Questions of political homecooking emerged as the opposition organized in the fall of 2022. John Risley was at the center of it:

“..the project has made headlines not only because of its size, but also due to the close relationship between two of the project’s directors, John Risley and Brendan Paddick, and Newfoundland and Labrador Premier Andrew Furey.

Furey has previously called Paddick, a telecom exec, his “best friend.” The Liberal premier also holidayed at Risley’s fishing lodge less than a year before announcing an end to a long-standing moratorium on onshore wind development. (Furey has repeatedly rejected any suggestion of a conflict of interest, saying he has maintained an “ethical wall” and that all political decisions on Nujio’qonik — the name of the World Energy project — are the purview of other ministers.)

Three members of the Stephenville town council, including Tom Rose, and a civil servant, also flew home aboard John Risley’s private jet following a trade show in Germany in August.

But that opposition was not able to stop the project. By early 2023, WEGH2 seemed to be making significant progress.

In March 2023, WEGH2 submitted its Crown land bids for the 108,000 hectares needed for the project’s wind farms. In May, South Korean engineering and construction firm SK Ecoplant invested ~$50 million for a 20% stake in the project.

In June, WEGH2 acquired the Port of Stephenville. Critically, this gave the firm control of the brownfield land – a former Abitibi pulp and paper mill – for the planned hydrogen/ammonia plant and export terminal.

A major milestone occurred in August 2023 when the government of Newfoundland and Labrador approved WEGH2’s Crown Lands application for the 108,000 hectares of wind farms for Project Nujio’qonik. The same month the firm selected Topsoe to provide the Haber-Bosch ammonia loop for the project.

In February 2024, WEGH2 and the Government of Canada executed agreements for a $128 million (~US$95 million) credit facility from Export Development Canada to support the project. By mid-2024, WEGH2’s Project Nujio’qonik appeared to have the wind in its sails.

But around that time, the company began shifting the project’s framing. No longer limited to pure export hydrogen/ammonia, now Project Nujio’qonik was described as a broader “green energy campus,” capable of decarbonizing industry, supporting green fuels and green steel, and power data centers and other domestic loads from its planned 4 GW of wind turbines.

The “Newsroom” tab on WEGH2’s website contains an article dated May 9, 2024, briefly recounting the company sharing artists renderings of the hydrogen and ammonia plant with a Member of Parliament for St. John’s East and the Minister of Labour. Nothing has been posted under the tab since.

Despite its early hype materials implying the project would achieve first deliveries of hydrogen and ammonia in late 2025, by the end of 2024 the company was still not committing to specific construction much less production dates. All of this should have been a signal that WEGH2 was having trouble securing the necessary offtake agreements, something it surely would have been crowing about had they been executed.

An early 2025 CBC article confirmed the pivot. It also gave two critical clues that the project might be in trouble. First, the critical offtake agreements were not forthcoming:

“..in November, the company told The Canadian Press it couldn’t find a buyer and said it was shifting its focus to using wind energy to power a “renewable energy campus” in the short term.”

The second came when CBC asked provincial Energy Minister Andrew Parsons about WEGH2’s recent change of plans. The response came in the form of a letter, which stated:

“The department has not been formally advised of plans by World Energy GH2 to utilize the energy generated by its proposed wind turbines to power a data centre ..

.. “Any material changes in the project from what was proposed in the call for bids process would require review by the provincial government.”

Things did not improve for WEGH2 or Project Nujio’qonik throughout 2025. And they were about to get worse.

In early January this year, industry publications reported that the company had shelved its original project “after failing to secure buyers” for its hydrogen/ammonia and was “pivoting” to a “new wind-focused venture — Clean Grid Atlantic — to export power domestically.” John Risley explained the situation (emphasis in original):

“In comments to CBC, Risley acknowledged that with no viable export market and a lack of domestic industrial demand, clean hydrogen in Canada remains economically unfeasible in current market conditions. The company will instead focus on power transmission infrastructure to deliver clean electricity from its Stephenville wind development to other parts of eastern Canada.

The new website for World Energy GH2 reflects this pivot — rebranding itself primarily as a renewable energy developer, with hydrogen now positioned as a potential long-term application rather than a lead business model.

But the real shovel to the head occurred one month later. On February 19^th, the provincial government gave WEGH2 nine days’ notice that its Crown land reservation would not be renewed and would expire at the end of the month.

And that was pretty much the end of WEGH2 and its vision of “green hydrogen” production at Project Nujio’qonik. One week after receiving the notice, WEGH2 filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA, the federal insolvency restructuring law for bankrupt large corporations).

The filing shows that WEGH2 owed the Newfoundland and Labrador provincial government over $10.5 million in unpaid Crown Land reservation fees. The fees to reserve the land were ~$390,000 per month, billed quarterly. It owes Export Development Canada another $50 million (all figures Canadian dollars).

John Risley must have been warned just before the province notified WEGH2 that its Crown Lands reservation was terminated. Two days before receiving that notice, CFFI Ventures sought bankruptcy protection under the Nova Scotia Companies Act.

As a result of ongoing disputes with, and pressure from, large creditors over the initial reorganization plan, the CFFI Ventures proceeding was transferred to federal jurisdiction, where it appears to be proceeding as a liquidation. Whether WEGH2’s Crown Lands reservation of 108,000 hectares associated with Project Nujio’qonik is an asset on WEGH2’s books remains a key legal battleground in both the bankruptcy cases.

Suffice to say, despite the hopes and best laid plans of “The Alliance,” Germany won’t be getting any “green” anything from WEGH2 and Project Nujio’qonik any time soon.

EverWind Fuels – Point Tupper, Nova Scotia

EverWind acquired the Point Tupper terminal from NuStar Energy for $60 million in April 2022, around four months before the big Alliance announcement (at WEGH2’s now failed Newfoundland project). Construction was slated for late 2023.

EverWind announced plans to produce a small amount of green hydrogen in 2025 (sound familiar?). Full phase one operations were scheduled for 2028, with production of approximately 200,000 tons of “green ammonia” each year, using newly built wind farms powering electrolyzers and a Haber-Bosch plant, just as WEGH2 had planned.

A second phase would add approximately 800,000 tons more annual capacity. Total capital investment was projected at more than $6 billion.

The project has achieved numerous milestones similar to WEGG2’s failed project in Newfoundland. EverWind acquired the former NuStar terminal, which was crucial. The project has completed the requisite Environmental Assessment process. Its Crown Lands reservation appears to be intact, suggesting EverWind is paying the required fees. Front-End Engineering Design is said to be complete.

EverWind has indigenous partnerships in place, with Cape Breton’s Membertou First Nation leading a consortium that owns 51% of the project’s wind portfolio. And in March, it secured $240 million in “structured financing” from New York-based investment manager Nuveen Infrastructure Credit.

But technical, permitting and financing difficulties have pushed the schedule back about three years. EverWind’s website now states construction is targeted to begin in 2027. If relevant history is any guide, the same problem WEGH2 faced with offtake agreements in Newfoundland suggests EverWind’s new schedule may even be optimistic.

On the same fateful day in August of 2022 when the Canada Germany Hydrogen Hopefest was proclaimed, Everwind announced Memoranda of Understanding (MOU) with two German multinational utilities, each contemplating 500,000 tons of “green ammonia” purchases annually. One was E.ON and the other with Uniper.

In an irony we could not make up, Uniper was spun out of E.ON in 2017 and sold to Finnish utility Fortum in 2018, only to be bailed out by the German government in July 2022 in a €15 billion rescue deal that nationalized part of the company. Why, you might ask? Because it ran out of cash trying to buy natural gas on the spot market in the very situation that sent Olaf Scholz to Canada in the first place.

But those MOUs were non-binding, nothing more than contemplating future negotiations for purchase contracts. And last week, E.ON announced that it was abandoning the project. EverWind has provided no update on the status of any offtake contract negotiations with Uniper.

EverWind had another similar, but even bigger project on the Burin Peninsula of Newfoundland, less than 200 miles as the crow flies from WEGH2’s failed project at Stephenville. There EverWind had ambitions of as much as 10 Gw wind generation and 1.75 Gw of solar generation. The company claimed the $16 billion investment would be one of the largest in Newfoundland history.

But in August 2025, the province reduced the broader wind-energy reserve area and extended it only until February 28, 2026. And in the same February 19, 2026 announcement that swept away WEGH2’s Crown Land reservation for unpaid fees (3.5% of land value, paid quarterly), EverWind lost its own reservation for its Burin Peninsula project.

Such is the state of The Alliance as of this writing. One of the marquis projects that captured the “green hydrogen” world’s imagination went bust before putting the first piece of steel in the ground. The other is supposedly alive but without the offtake agreements that are clearly the gating function.

Of course, German and European leaders who have their taxpayer’s wallets hearts in “green hydrogen” won’t give up the dream easily. And it looks like Canada won’t either.

The answer is the “H2Global joint Canada-Germany H2Global auction” concept, first announced in March 2024 in the form of (what else?!) a Memorandum of Understanding. In January of this year, the European Commission (who else?!) gave the H2Global auction a (citizen-funded) boost (emphasis added):

“On January 15, 2026 the European Commission (“Commission”) approved the €400 million H2Global joint Canada-Germany H2Global auction concept under State aid rules. The Commission’s decision authorizes Germany to contribute €200 million towards the scheme, which will be matched by Canada, to support Canadian production of renewable hydrogen and its derivatives, known as renewable fuels of non‑biological origin (“RFNBOs”).”

The Bilateral Window will follow H2Global’s double-sided auction approach, with Hint.Co (the government-backed intermediary) acting as market-maker, bridging the cost difference between buy-price and sell-price for the imported RFNBO. However, unlike the other H2Global tenders previously launched, the Bilateral Window will run simultaneous auctions on the producer-side and the customer-side.

Hint.Co will auction ten-year Hydrogen Purchase Agreements (HPAs) and Hydrogen Sales Agreements (HSAs) under separate auctions but on parallel timelines. Winning bids on each side will then be matched, so that producer and customer have a contractual relationship.

We’re certain Hint.Co is acting as intermediary and market maker pro bono, out of the goodness of their hearts. And color us skeptical that the volumes of “green” hydrogen or ammonia that the H2Global Auction scheme could possibly unlock with only €400 million to bridge the gap between buyers and sellers will have any material impact on Europe’s or Canada’s lofty decarbonization goals.

We generously assumed a US$500/ton “green premium” for ammonia produced by wind/solar/electrolysis (the International Renewable Energy Agency’s 2022 estimate mid-point was ~$810/ton), not including tank storage, port handling, or transatlantic shipping costs. The “landed” green premium would surely be higher than our $500/ton.

Using today’s exchange rates, the €400 million Canada and Germany recently committed to the European H2Global auction equates to ~$462 million in U.S. dollars. At a “green premium” difference of $500/ton, that $462 million would subsidize the purchase of less than 1 million tons of “green ammonia,” a figure equal to ~0.5% of the nearly 200 million tons of ammonia used globally last year. Add in transatlantic shipping costs and call us skeptical that the Canada Germany auction subsidy can even purchase that much.

All of this hydrogen bombing was avoidable, because it was predictable. In only our third post on Substack, we panned the facts that Trudeau “could not make the business case” for Canadian LNG, that none of the hundreds of wind turbines, electrolyzers, or the Haber-Bosch plants that render ammonia existed, and that Germany didn’t even have sufficient infrastructure to receive and process the “green” ammonia to be produced and shipped. But others whose work we admire provided specific details as to why the entire charade was a road to nowhere before, and after, The Alliance was announced.

Doomberg’s June 2022 post Immaculate Combustion took apart the idea of turning hydrogen into ammonia and then cracking it in a reactor to reconvert to hydrogen to use in a fuel cell to produce electricity to power a tractor, additionally noting that in order for the process (emphasis added):

“..to enable a reduction in carbon emissions, there would need to be a virtually limitless supply of economically viable hydrogen produced from renewable sources (or nuclear power). If we had such so-called “green hydrogen” available to make ammonia, the last thing we would do is convert it back to hydrogen and run tractors using fuel cells. Instead, we would focus on systematically replacing the ammonia we currently make from fossil fuels and use to grow food, which is an enormous task that would take decades.”

And Doomberg’s post Chicken’s Razor in October of that year about the recently announced Alliance succinctly pointed out the absurdity of the scheme in no uncertain terms (emphasis in original):

With no realistic ability to ship hydrogen directly anytime soon, aspiring grifters green hydrogen proponents intend to transform hydrogen to ammonia and ship that, a concept we’ve had fun ridiculing in a prior piece. While the notion of using carbon-free energy to produce hydrogen to produce ammonia is indeed seductive – and one we wholeheartedly endorse in the right setting – making ammonia using hydrogen derived from wind energy in Newfoundland, where no Haber-Bosch plants exist, for ultimate use in Germany, is insane.

Doomberg’s better alternative for Germany was elegantly simple:

“If the goal is to land “carbon-free” ammonia in Germany, simply turn back on the retired nuclear power plants and dedicate them to the production of ammonia!”

And Doom would not be alone in making the suggestion.

In June 2024, around the time WEGH2’s fortunes were changing, Chris Keefer and Canadians for Nuclear Energy (C4NE) produced a 38-page report titled “The Canada-Germany Hydrogen Alliance: Throwing Caution to the Wind.” C4NE’s report details the major problems with The Alliance concept. Regarding energy losses in the production of hydrogen and ammonia (emphasis added):

“With current technology, electrolysis + the Haber-Bosch process to make ammonia is at most about 66% efficient before loading the product onto a tanker ship. Then, re-converting it to hydrogen using ammonia decomposition, or “cracking,” requires extra fuel inputs and creates further inefficiencies that drive the energy losses throughout the process to over 50%. In all, more than half of the energy that would be used to bring Canadian hydrogen to German shores would be lost before it could be used.”

Regarding the wisdom of importing ammonia from Canada versus producing hydrogen domestically in Germany:

“Compared to domestically produced German hydrogen that avoids the conversion to ammonia and back, the low efficiency of exported Canadian hydrogen multiplies its carbon intensity, ecological impact, end-user price, and subsidy cost for each unit delivered. This constitutes a major competitive disadvantage.”

In terms of the economic absurdity of the proposition (emphasis in original):

“Close to 100% of current global hydrogen production occurs on-site where it is needed. And of this on-site production, the higher cost of electricity-powered electrolysis compared to Steam Methane Reformation of fossil fuels has held electrolysis at a mere 0.1% global market share. The combination of electrolysis and inefficient international hydrogen exports is therefore, on economic grounds alone, an extremely dubious proposition.”

The report provides details how the lifecycle CO2 emissions are far higher than the front-end onshore Canadian carbon emissions counted, how the projects have significant ecological impacts, that much of Canada’s subsidies will leak to foreign companies (electrolyzer and wind turbine manufacturers, etc.), and many other consequences that Canadian and German politicians were all too happy to ignore.

The C4NE report takes direct aim at Germany’s ignorant decision to close its last nuclear power plants. Like Doomberg had suggested nearly two years earlier, C4NE suggested that if “green hydrogen” is their aim, those plants need to be the source, not the Canadian wind-electrolysis-hydrogen-ammonia scam (emphasis ours):

“The fully-completed Nujio’qonik project (with around 1.8 GW of electrolysers) will cost an estimated CAD 16 billion and occupy over 1,000 square kilometres. At the expected 50% overall utilization of its electrolysers and roughly half of its inputted energy irretrievable from the delivered hydrogen, the project will deliver around 4 TWh of hydrogen per year. This is about 1/15th of what Germany could produce from its half-dozen nuclear plants while requiring little more than the capital cost of new electrolysers. At a capital cost of USD 1,100–1,800 per kilowatt for PEM electrolysis, the cost for electrolysers to make use of the full output of the otherwise unused, recently shuttered German nuclear fleet would range between 9 and 15 billion USD.”

It is fair to argue that Keefer and C4NE are unapologetic advocates for nuclear power as the preferred electricity generation technology for decarbonization and would rather see Canada invest in domestic nuclear power. That said, their report puts numbers to the scale of the stupidity of The Alliance in terms of Canada’s interests:

“Using the figures from Nujio’qonik, for Canada to match the hypothetical H2 production capacity of electrolysers powered by already-built German nuclear plants would require astronomical expenditure”, including:

• $240 billion (Canadian) in capital investment for wind turbines, electrolysers, and ammonia conversion facilities

• 60,000 Mw of new wind capacity (equal to Germany’s entire installed wind fleet)

• 3,000 Mw of new gas-fired generators

• 2,000 Mw of additional balancing power from the grid, the equivalent of three large CANDU nuclear units

• 15,000 square kilometers of land (2X the area of Greater Toronto)

• · 30,000 MW of electrolysers (3X what would be needed if using restarted German nuclear plants coupled w/sufficient ammonia conversion capacity)

• Over 200 annual round trips across the Atlantic by large gas carrier ships (powered by refined oil, not “RFNBO”)

Space does not allow us to give proper justice to the CFNE report, but we applaud Chris Keefer and the organization for an outstanding, sober, detailed analysis that Canada’s leaders chose to ignore. We highly encourage readers interested in more details to read the full report (linked here).

We close by noting that some quantity of “green” hydrogen derived from wind and/or solar powered electrolysis is surely going to reach the market long before, say, electricity from fusion reactors. But most of it will be used domestically where it is produced, it will be costly, there won’t be very much of it relative to global hydrogen consumption by industry (as C4NE’s report notes, ~94 million tons) and, as such, it won’t be the holy grail for decarbonizing heavy industry any time soon.

If Germany wants hydrogen from electrolysis, let it restart its nuclear plants and use them to power a domestic hydrogen industry. And as C4NE makes the case, if Canada wants a domestic “green hydrogen” industry, the case for the nation’s own CANDU reactors gets even stronger.

Germany, on the other hand, like the rest of Europe will try everything that won’t work first, and as long as it promises a reduction in CO2 emissions, the cost, environmental consequences, land use, and whether it will actually work or not are mere afterthoughts.

For now, Hydrogen is Bombing in the Canada – Germany Hydrogen Alliance.

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On podcast appearances since Russia’s invasion of Ukraine, Doomberg has routinely made the comment that “one of the reasons you don’t go to war is because you might lose.” The statement itself is blind to whichever side you happen to support in any conflict. The consequences of losing are never good.

Technically speaking, a nation need not even lose a war to suffer society-straining political or economic consequences - or both. Think America, at home and in southeast Asia, in early the 1970s.

The theocratic regime running the Islamic Republic of Iran cannot defeat the overwhelming firepower, capacity, technology and sheer force of the U.S. military on any battlefield or at sea. But it may not need to do so.

The regime may merely need to extract enough of a toll on the U.S. economically, and Trump politically, to get the latter to soften his demands and survive with its skin. Prediction markets, with all their flaws, seem to reflect that reality.

Open-source data from the Russian war in Ukraine made it clear that cheap drones had changed modern warfare in a profound way well before Trump’s “excursion” in Iran. Meting out its ballistic missiles, and using ~$30,000 Shahed drones powered by two-stroke air-cooled small aircraft gas engines (that Iran copied from a simple German design) generating a mere 50 horsepower and weighing less than a bag of play sand have kept tens of billions of dollars’ worth of the world’s most sophisticated and powerful naval battlefleet out of the Persian Gulf and even several hundred miles offshore in the Arabian Sea out of an abundance of caution to date.

The Iranian regime is a despotic, fundamentalist theocracy crushing its citizens’ freedoms, the Middle East’s undisputed lead terrorism sponsor, and a legitimate nuclear threat. But it has strategically leveraged its assets against an opponent with a military advantage it can never overcome in a surprising manner that has defied Trump’s objectives (whatever they actually are) for five months.

Diplomatic negotiations during the ceasefire failed in April. Nine days after the parties walked away from the negotiating table, Trump extended the fragile ceasefire “indefinitely.”

But in late June, Iran began attacking vessels in the Strait of Hormuz, and in early July, the Islamic Revolutionary Guard Corps (IRGC) struck three more. By July 8^th, Trump had seen enough and announced that the beatings would continue until Iranian diplomatic morale improved, then it was bombs away with the two sides reigniting an escalating series of tit for tat strikes.

The U.S military pounded Iranian missile sites, air defenses and coastal facilities. This week, with Saudi Air Forces, U.S. Central Command confirmed it bombed Iran-aligned terrorist logistics targets in eastern Iraq, stating the targets were associated with more than 30 attempted drone attacks on U.S. and Saudi forces and oil infrastructure in the last few days.

Iran does not seem fazed. It continues to launch missile and drone attacks, targeting U.S. military assets in Kuwait, Bahrain, Jordan, Qatar, and Oman.

On July 22^nd, Trump used his Truth Social outlet to threaten Iranian infrastructure.

Iran responded in kind. Iranian Parliament Speaker Mohammad Bagher Ghalibaf specifically threatened neighboring Gulf states’ oil and infrastructure on X:

Iran’s Foreign Minister Abbas Aragachi reiterated the threats on X. In response to Trump’s threat, he went all biblical and he, too included a not-so-indirect threat against Iran’s neighbors in the region:

Attacking civilian infrastructure that makes no effective contribution to an opponent’s military actions is a violation of international law. But in the second decade of the twenty-first century, Russia, Ukraine, Iran, President Trump and much of the rest of the world are blowing by that quaint concept in the left lane out in the Wild West, while whatever “international law” enforcement still exists is either at the nearest truck stop eating donuts or on the side of the road out of gas.

In the midst of all this, on July 20^th, the Yemen-based group Ansar Allah, known in the West as the Houthis, entered the conflict, announcing a blockade of maritime traffic to and from the Gulf of Aden to Saudi Arabia’s Red Sea coast via the Bab el-Mandeb Strait, something we warned about four weeks into the conflict. In the ensuing days, they claimed attacks on a Saudi oil tanker and Saudi oil facilities in Yanbu and Jizan.

Any disruption to oil cargos transiting the Bab el-Mandeb strait becomes a costly new problem for Saudi Arabia and those dependent on its oil. But as the Houthi’s actions and vessel tracking in the ensuing days quickly confirmed, their blockade - if they can even enforce it - doesn’t apply to everyone. One important buyer has “other arrangements.”

How does a disruption to the Bab el-Mandeb strait impact Saudi crude oil, and who gets hurt the most? Which country’s Very Large Crude Carriers (VLCCs) have been granted safe passage through the Bab el-Mandeb? What else did that geopolitical power signal this week, and how do all of these developments fit into our working mental model from April about what could have possibly driven Trump to pursue a war in Iran?

We begin with the Houthi disruption to the Bab al-Mandeb strait. The narrow waterway connects the southern Red Sea to the Gulf of Aden and the Arabian Sea beyond.

Within about a month after the munitions started flying back in February, the Saudis had rerouted millions of barrels per day (bpd) of oil flows to the East West pipeline they constructed decades ago as a contingency plan in the event of a Strait of Hormuz disruption. Running ~750 miles from the Eastern Province oilfields around Abqaiq to the Saudi Arabia’s Red Sea port of Yanbu, the pipeline’s capacity was quickly maxed out to move ~5 million additional bpd for export through the Bab el-Mandeb strait once it was clear the Strait of Hormuz closure would not be temporary.

Prior to the Iran war, the East West pipeline was moving ~2.5 million bpd. Some of that oil is routed to Yanbu area refineries for domestic consumption. But significant volumes were destined for European markets via the Mediterranean to the north by transiting through the Suez Canal.

If the Houthis can effectively close the Bab el-Mandeb, the Suez Canal is the only other realistic option for Saudi oil loaded at Yanbu to transit exit the Red Sea in order to reach international markets. That would seem simple enough but for one problem.

The Suez Canal comfortably accommodates “Suezmax” crude oil vessels designed to draw no more than 65 feet when fully loaded, each carrying ~800,000 – 1,000,000 barrels of oil. Suezmax vessels are thus used to carry the bulk of Saudi oil shipments headed north from its Red Sea port at Yanbu to European buyers.

Most of the current generation of VLCCs are much larger, with more draft than the Suez Canal’s ~66-foot depth limit. VLCCs can carry 1.75-2 million barrels of crude and aside from their greater navigational depth requirements, their larger beams (width) exacerbate the problem in the narrow canal.

The difference has real world implications once the Houthi’s started firing at ships and into Saudi Arabia. The consequences in terms of time and money are non-trivial to the nations importing that Saudi oil.

Fully loaded VLCC’s normally have to engage in a cumbersome, time-consuming and costly exercise to lighten their loads and pass through the Suez Canal into the Mediterranean in order to reach ports of call anywhere in the world, offloading as much as 30% of their cargos at Ain Sukhna on the Egyptian Red Sea coast, at the southern terminal of the SUMED (Suez to Mediterranean) pipeline and storage tank system. That oil then gets piped to the northern SUMED terminal west of Alexandria on the Egypt’s Mediterranean coast, where it is reloaded via offshore pipeline back on the VLCCs.

In addition, the question of whether the limited market of commercial insurers willing to issue coverage for VLCCs and their cargoes will shy away from Red Sea passages given the Houthi’s ability to strike vessels some distance from northwest Yemen is an open one. For now, risk premiums have skyrocketed:

“On Thursday, the sources said, indicative war risk premiums for voyages through the southern Red Sea rose to over 1% of the value of a ship from around ⁠0.75% on Tuesday and 0.3% last week before the Houthi announcement, according to the sources, who declined to be identified due to the sensitivity of the matter.

Rates for some shipping companies calling at Saudi ports and also Saudi-linked ships were quoted as high as 3% for voyages from southern Saudi ports in the Red Sea such as Jizan and Al Shuqaiq, which would take them closer to Yemeni territory and for transits through the Bab el-Mandeb gateway further south that leads into the Gulf of Aden..”

The distances from Houthi launch sites to the Saudi port at Yanbu, the SUMED southern terminal at Ain Sukhna, and even Suez canal’s northern terminus at Port Said, Egypt are all we understood by Lloyds of London and the commercial insurance market for crude oil carriers. All are within range of Houthi missiles or drones, some of which have easily traveled over 1,300 miles. In July 2024, a Houthi Samad-3 drone followed an indirect route and is believed to have traveled ~2,000 miles before striking Tel Aviv, killing one person and injuring about a dozen more.

Around 70% of Saudi oil exports are destined for Asia. A Saudi cargo leaving Yanbu passing through the Bab el-Mandeb normally reaches South Korea, for example, in about 24 days. After transiting through the Suez Canal into the Mediterranean, the route around Africa adds about 30 more days.

No matter where in Asia that cargo is headed, the reroute adds 3,000 – 6,000 nautical miles and weeks of additional travel, doubling or more the voyage for some Asian destinations. The additional cost of fuel to haul those cargos and the added daily vessel charter fees add to the cost of each barrel.

Higher frictional costs for the offload/reload scheme to get through the Suez Canal, higher war-risk insurance costs for VLCC owners, and add up to 30 days or more for delivery to Asian destinations plus all the additional costs of charters days and fuel burned. These are the practical realities once the Houthis joined the conflict and began threatening the Bab el-Mandeb strait.

Somebody has to pay for all that frictional cost. A reasonable estimate is ~$2 - $5/barrel.

The Saudis’ can discount their oil to offset the cost. But there’s not a damn thing they, or their Asian buyers, can do about the additional time if VLCC’s are forced to use the Suez Canal. That matters for nations with uncomfortably narrow crude oil inventories.

Houthi attacks in the Bab el-Mandeb strait have had substantial impacts on the flow of Saudi crude in recent years. As we wrote in Decades in Days (March):

Starting in the fall of 2023, Houthi attacks threatened and rerouted significant volumes of global shipping traffic through Bab El-Mandeb. Prior to October 2023, ~9mmbpd of crude oil and refined products (~9% of global seaborne) and nearly 10 million cubic meters of LNG (about 8% of global LNG trade) transited the Strait each day. Since the attacks, LNG volumes have been practically reduced to zero, and crude oil shipments down to around 4-5mmbpd.

In 2025, the Trump administration bombed the Houthis in northwest Yemen for seven weeks before negotiating a ceasefire agreement in May. Given their paymaster’s interests, the Houthi’s effectively declared force majeure on that agreement last week, changing the oil import calculus across Asia.

American allies South Korea and Japan will feel the impact. Saudi oil makes up ~35% - 40% of their crude oil imports.

What about China?

According to the Statistical Review of World Energy, in 2025 China produced 4.3 million bpd of crude oil but consumed around 17.3 million bpd. The ~13 million bpd difference was imported. (Other reports show that 2025 shortfall at ~11.4 million bpd.)

By our calculations, ~3.5 million bpd of those crude imports came from Saudi Arabia and Iran. This means a good working estimate is that Saudi and Iranian crude makes up ~25-30% of Chinese imports.

China was reported to have ~1.3 billion barrels of oil in storage when Trump commenced the Iran war. Engine switching, electrification, and other measures may limit consumption in the short term. And its giant strategic oil reserves buffer China even if it were to completely lose and be unable to replace ~3 million bpd of imports from Saudi Arabia and Iran for six months.

But just as all of these realities were emerging in the wake of the Houthi’s opening a new front in the Iran war, something rather telling happened.

Last Friday, reports began to emerge that the Houthis were allowing some ships to pass through the Bab el-Mandeb strait. And, while we suspect most of our readers will only need one, we’ll give you three guesses whose ships those were (emphasis added):

The Houthi militia in Yemen appears to be allowing some ships to pass through the Bab al-Mandab strait at the mouth of the Red Sea, despite its blockade of shipping to Saudi Arabia, experts said on Thursday.

A Chinese oil tanker, Cosco Shipping’s VLCC Xin Long Yang, has been granted permission to pass through the waterway, according to the trade publication Lloyd’s List.

It said Chinese tankers returning from the Saudi port of Yanbu in the Red Sea may be able to negotiate passage with the Iranian-backed Houthis on a case-by-case basis.

China isn’t likely to confront the U.S. Navy in the Persian Gulf or Arabian Sea to protect its Middle Eastern oil supply. But it demonstrated this week that it won’t quietly sit on the sidelines, either.

Tuesday, Reuters reported that its “sources” had determined (emphasis added):

“China has held direct talks with Yemen’s Houthi movement to enable its tankers to sail through the southern Red sea without being attacked after the Iran-aligned militia pledged to prevent access to Saudi ports, six sources with knowledge of the matter have said..

..Beijing asked the Houthis directly to promise safe passage for its tankers, according to the sources, who included a senior Iranian official.

China was among the first countries to contact the Houthis directly about transits through the Bab el-Mandeb, the strait at the southern end of the Red Sea with Yemen on its eastern bank, said the sources, who declined to be identified due to the sensitivity of the matter..

At the other end of the spectrum was the VLCC New Champion, operated by Hong Kong-based Associated Maritime. It had no such safe passage. Discretion being the better part of valor under the circumstances, according to Kpler and other industry sources it exited the Gulf of Aden and headed back into the open waters of the Arabian Gulf after having been scheduled to call at Yanbu to load Saudi oil.

That was not the only instance in which China’s President Xi appeared to take a new posture with regard to the war in Iran this week. The other development leaves us wondering whether China sees Trump and the U.S. as weakened by the conflict.

Trump has warned China and Russia not to supply (or resupply) Iran with arms. Last Friday, when asked directly about the matter by a Fox News reporter, Trump suggested he had spoken with Xi and Putin, and both said they would not “partake.” He further stated that he did not think they would want to “disappoint” him.

China and Russia have provided Iran with intelligence, satellite data, and precision target acquisition since the war began. Caspian Sea ports make it easy for Russia to do resupply Iran without any Russian or Chinese ships ever entering the Persian Gulf.

In early May the New York Times reported that Russia was resupplying Iran with drone components via the Caspian. This is likely the reason Israel hit Iranian naval facilities and a port facility at Bandar Anzali that supports Capsian Sea trade with Russia in March.

Despite his public assurances less than a week ago, on Wednesday this week, citing “sources familiar with the matter who spoke anonymously because of the sensitivity of the sale,” Reuters reported that China is preparing to send hundreds of shoulder-launched missile systems to Iran.

We close by returning to a question that framed our working model to try and explain why a President in Trump’s situation would risk a protracted military operation in Iran if America’s immediate interests were not directly threatened. In The Art of the Blockade (April), we wrote:

In Beijing, we expect that Trump will attempt to leverage (read: threaten) access to China’s energy supplies, whether or not the U.S. blockade of the Strait of Hormuz is still in place, or the tenuous ceasefire fails and the bombs and drones begin destroying more Gulf state oil and gas infrastructure. We will not be surprised if Trump threatens interdiction of shadow fleet tankers carrying sanctioned oil in, or even closure of, the Strait of Malacca.

What will he try to achieve in return? A sweetheart tariff deal for China (by comparison to Europe and other “allies”) in return for guarantees not to place license restrictions, export controls, or play other games to constrain the supply of any of the low-cost, critical inputs to the U.S. economy that China controls.

According to the official releases by both governments, Trump did not attempt to leverage China’s hydrocarbon energy supply in his May meeting with Xi in Beijing. But we have still yet to see any convincing evidence that the mental model is wrong.

If Trump’s real objective for the war in Iran is to leverage China’s oil and natural gas import dependency to secure an unimpeded supply of critical resources for U.S. industry, technology, the American economy and military defense, then the Houthi’s threatening Red Sea maritime oil trade but allowing Saudi oil destined for China through the Bab al-Mandeb strait does not bode well. Nor do suggestions about Chinese missile sales to Iran, if Reuters’ reporting is correct.

Iran will not defeat the mighty U.S. military. But in order to achieve an outcome that it - and many across the world - will perceive as a victory, it does not need to do so.

Using drones and ballistic missiles, Iran’s strategy seems to be Hold On for Dear Life to keep global energy prices high and the U.S. bogged down until the U.S. midterm elections. Houthis, their proxies in Yemen, are a useful tool in that game.

After directly negotiation with the Houthis for safe passage of Saudi oil on their VLCCs, we are led to wonder: just as China foresaw some event and filled its strategic oil reserves with ~1.3 billion barrels in 2025, what do the latest developments suggest Xi sees coming and may be positioning China to preempt or leverage for itself?

Iran is HODLing, betting Trump will TACO when the economic and political price gets high enough and, weakened as they are likely to be, their emboldened behavior is a test of Trump’s political resolve. Xi may sense Trump is in trouble in Iran and, if so, use it to China’s advantage.

Iran HODLing, the Houthis helping, and now the X(i) factor. With less than 100 days until the midterm elections and the U.S. average gasoline price presently $4.10/gallon, August is going to be interesting.

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The Arab oil embargo of the 1970’s caused the first panic over energy security in the U.S., long before CO2, greenhouse gas (GHG) emissions, and “climate change” were policy priorities. In 1979, President Jimmy Carter held a dedication ceremony celebrating the installation of 32 solar photovoltaic panels on the roof of the West Wing of the White House.

A Wikipedia entry about the event notes that (emphasis added):

“The panels provided almost 75 percent of the energy to heat 1,000 gallons of water in the staff kitchen of the White House.”

Carter set an ambitious goal that year, striving for America to generate 20 percent of the nation’s energy needs by the year 2000 from “renewable” energy sources. That, obviously, did not happen.

U.S. crude oil production did drop to 6.8 million barrels per day (bpd) in 2008. But the American energy industry was on the verge of unlocking the nation’s vast shale reserves, and technical innovations in hydraulic fracturing, horizontal drilling, and 3D seismic imaging unleased a new oil boom. By the end of 2025, American oil producers were pulling over 21 million bpd out of the ground, more than 3 times U.S. production in 2008.

President Regan took down Carter’s panels in the 1980s. In 2003, George H. Bush reinstalled solar thermal heaters. The Obama administration put more solar panels back up on the White House roof in 2013. All of these were merely symbolic displays.

For nearly 50 years, we’ve been told that nuclear fusion was only a few years away, and once achieved, the power therefrom would be almost too cheap to meter. A few startups and Department of Energy projects have actually achieved a small net power gain in fusion reactors, but getting to commercial scale is not going to happen any time soon.

Gargantuan supplies of carbon-free energy sources at scale and cost parity with hydrocarbons are always right around the corner. But according to the latest update to the world’s most complete energy data set, it’s hard to find that the incremental gains taking place are any form of energy “transition,” or that any real “net zero” CO2 and GHG emissions scenario is anywhere on the horizon.

On June 30^th, the Energy Institute released the 2026 update to the Statistical Review of World Energy (2026 Review). The annual compendium captures the world’s energy production and consumption, and its release is eagerly anticipated by those who follow the flow of electrons and molecules closely. How much progress did the world make towards the much hyped “renewable energy transition” in 2025? How dependent is the world still on the form of energy so magical that if we hadn’t discovered it, we would have had to invent it? And how do the U.S. and China actually compare despite the latter being held out as the world’s leader in “renewable” energy?

It will take us some time to tease out additional insights, and to give them context and relevance to geopolitical disruptions as they occur, economic oscillations, proposed changes in domestic political policies, and other events. The 2026 Review is a big, multi-layered onion. But upon peeling back the first layer, we wanted to share our initial findings with readers.

We begin with the Energy Institute’s (EI) teleconference for the release. The event included a thirty-three-page PowerPoint deck summarizing the 2026 Review. The opening slides describe EI’s history (a charity granted by Royal Charter dating to 1914 in the UK) and function. The sixth slide summarizes EI’s triple role.

In the third of those roles, EI might reconsider the messaging, especially as respects the developing world. Everyone wants energy to be safer, more efficient and affordable. Most likely would prefer it to be lower carbon as well.

Lower carbon is a clearly articulated objective of EI’s third role. Affordability is not.

For the second year in a row, all forms of energy – oil, natural gas, coal (hydrocarbons), nuclear, hydroelectric and “renewables” – increased globally. For the world, total energy consumption increased from 592 exajoules (EJ) to 600 EJ.

As a refresher, 1 EJ contains the energy equivalent of ~174 million barrels of oil. So, the increase of 8 EJ represents the energy equivalent of just under 1.4 billion barrels of oil.

“Renewables” gained the most in 2025. The combination of wind, solar, biomass, biofuels and geothermal gained 10% (3.2 EJ).

Nuclear energy gained one-third of an EJ. Another 80 gigawatts (GWs), eventually good for about another 2.5 EJ, is currently under construction worldwide, about half of it in China.

Hydroelectric was essentially flat. Globally, something on the order of 130 – 260 GWs of hydroelectric, a large share of which includes pumped storage, is presently under construction.

Climate and “renewable” energy advocates are happy to point that “carbon-free” sources reached almost 14% of world primary energy consumption in 2025. That figure lumps nuclear and hydroelectric in with “renewables” (wind, solar, biomass, geothermal). Here we point out that because “environmentalists” have fought nuclear and hydroelectric at every turn for more than a quarter century, their attempting to count nuclear and hydroelectric in the “clean” energy bucket for optics is a ruse we will not permit.

“Renewables” on their own still only represent a paltry 6% of world primary energy consumption, up from 3% in 2016, the year Paris Agreement was signed. (For that reason, we use 2016 in most of the graphs that follow since it is the “baseline” year for the “landmark” global climate agreement. The U.S. is presently not a participant to the agreement, having now twice withdrawn during Trump’s two terms as President).

“Renewables” fare much better when it comes to percentage of electricity generation. In 2025, they accounted for their highest share of global electricity consumption ever, with their 6,270 terawatt hours (Twh) accounting for 19% of the world’s 32,202 Twh of electricity consumed.

But electricity only accounts for about 21% of the world’s primary energy consumption. It is clear from the first of the two graphs above what is still doing the world’s heavy lifting. But just to put a bow around it, the graph below shows the specific figures for 2025:

EI’s PowerPoint presentation did not say it, but we will. Since the Paris Agreement was signed in 2016, the portion of the world’s primary energy consumption provided by hydrocarbon energy (oil, natural gas, and coal) has declined by a whopping three percentage points, from 89% in 2016, to 86% by the end of 2025.

EI’s slide deck accompanying the press release for the 2026 Review put it this way:

“All forms of energy reached new highs for the second consecutive year. Renewables are the largest single source of growth, but fossil fuels still met 60% of the growth.”

As Roger Pielke, Jr. noted, of the ~8 EJ of new energy consumption added in 2025, “carbon-free” sources accounted for 44% (3.6 EJ, 3.2 EJ of which were “renewables”) but fossil fuel sources accounted for 4.6 EJ (56%).

EI’s launch presentation deck did its best to put a happy transition face on all of this. It also gladly pointed out the Bad Boy laggard by comparison.

One slide shows that total energy consumption in China rose by 2.4% in 2025, but 60% of that was met by “low carbon” supply. And it is true that China accounted for 1.8 of the 3.2 EJ in new “renewables” consumption globally.

The next slide shows that total energy consumption in the U.S. grew by 2.2%. It noted “US energy growth dominated by fossil, which met 88% of the 2025 change.” And the slide that followed noted that “US emissions grew 4x faster than China, representing nearly 40% of global increase.”

But China’s increase in oil consumption year-over-year in 2025 was more than double the U.S.’ in absolute terms. The increase in each country’s natural gas consumption was similar (.42 EJ for the U.S., .31 EJ in China). U.S. coal consumption increased by 0.8 EJ while China’s (reportedly) remained flat.

The net effect was that the pace of China’s emissions intensity reduction increased year-over-year. U.S. additional coal consumption caused American emissions intensity to increase slightly in 2025.

Another slide from the EI launch presentation appeared to present the happy transition story that growing electrification is increasingly being met by “low carbon.” It shows fossil fuels’ declining share in electricity generation in China, the U.S., India and the European Union (EU). But in doing so, it inadvertently visualized one of unavoidable consequences of said “energy transition.”

The slide shows fossil fuels still provide ~60% of the electricity in the U.S. and China and approaching 80% in India. For the EU, the figure is 30%.

The framing of the U.S., China, and India by comparison suggests that EU’s low share of electricity generation from hydrocarbon energy sources is a virtue. But is it?

Over the period shown (2015 – 2025), average economic growth was:

· ~6% in China and India

· ~2.5% in the U.S.

· Barely 1.4% in the EU

Germany is the economic and industrial powerhouse of the EU. In nominal terms it has the highest electricity prices on the European continent. Viewed through the lens of Robin Brooks X post from November 2024, the EU’s mid-30’s% share of electricity generation from fossil fuels starts to look more like a vice – in the literal, two-definition sense – than a virtue.

We believe a better comparison of the world’s largest CO2 and GHG emitters comes via direct comparison over the period since the Paris Agreement was signed by both the U.S. and China. And the 2026 Review provides the data to do so easily and directly.

The U.S. and China are the world’s largest consumers of liquid and solid (coal) hydrocarbon energy. Together the two consumed 220 of the 518 exajoules (42%) of oil, natural gas and coal burned by the world in 2025. The next four charts compare U.S. and China consumption of oil, natural gas, coal and renewables from 2016 - 2025 (we have not shown nuclear and hydroelectric because they have not materially changed in either country).

Oil:

The ten-year trajectory for U.S. oil consumption is nearly flat. China’s oil consumption is still rising.

Natural Gas:

Natural gas consumption is still increasing in the U.S. and China. U.S. consumption doubled since 2015, but it did so at the expense of U.S. coal consumption (driving down U.S. CO2 emissions intensity in the process.)

Coal:

Coal is where the differences between the U.S. and China really stand out in terms of hydrocarbon energy consumption. U.S. coal consumption is down by 39% since 2015. But after building a new coal-fired power plant on average every couple of weeks for well more than a decade, China today consumes >10 times more coal than the U.S.

“Renewables”:

The growth of Chinese renewable energy consumption (and capacity installation) speaks for itself. It now consumes about 70% more energy from “renewables” than the U.S. How much of that is a function of building too much wind and solar capacity and having to soak up some of it domestically for economic reasons vs. for national security priorities is anyone’s guess. But it certainly wasn’t to “save the planet.”

The following chart combines all of the U.S. and China hydrocarbon energy consumption figures above into a single visualization for simple comparison.

For 2025, China’s total of 142 EJ was 1.8 times more total hydrocarbon energy than combusted by the U.S. (78 EJ). The above comparisons were not included in EI’s slide presentation deck for the 2026 Review release, but we are happy to provide readers with that necessary context.

At the conclusion of the EI release teleconference, President Andy Brown commented on “lessons from prior crises and oil trade flows ahead of the ME conflict,” presenting two slides titled “Hormuz Crisis – Self Sufficiency.” The first slide compares U.S oil and gas production vs. consumption with that of the UK.

The obvious UK deficit is a problem we, Doomberg and others have been warning about for some time. The U.S. is a net exporter of both oil and natural gas. The UK, a net importer of both fuels, is what Doomberg often rightly calls an “energy vassal.”

The second slide curiously compares oil consumption with refining capacity in China, Australia, the Philippines and the UK, all of which are net importers. It is not obvious what anyone learned that was not known to most energy observers by EI including these two slides.

Like Doomberg, we have quantified the gap between EU hydrocarbon energy consumption and production. It is as if the lessons that caused Jimmy Carter to symbolically put solar panels to heat almost 70% of 1,000 gallons of water on the roof of the White House caused Europe to make its own energy security more tenuous. The 2026 Review shows that dire situation is unchanged.

Contrast that with U.S., an energy power unlike any other on earth. The U.S. produced 21% of the world’s liquid petroleum products and 26% of the world’s natural gas in 2025. America is a net exporter of both.

We updated earlier analysis regarding energy surpluses and deficits using the new SROWE figures. But for heavy sour crude cuts that the U.S. is importing from the Middle East (that it could arguably get from Venezuela and/or Canada), as we, Doomberg and others have shown in the last couple of years, the U.S. no longer needs Middle East oil, and it damn sure doesn’t need natural gas from that region. In fact, North, Central and South America combined produce an oil surplus that renders oil security and the Middle East largely meaningless to the Americas.

For 2025, the Middle East produced 30 million bpd and only consumed 9 million. Russia produced 10.7 mmbpd and only consumed 3.7 mmbpd.

The combined surplus of oil production over consumption in the Americas, Middle East and Russia was 35 million bpd in 2025. Europe, China and Southeast Asia’s economies are all dependent on that surplus, and the same is true with natural gas.

And while the margin between China’s oil refining capacity and its consumption on the graph Mr. Brown presented does not appear to be significant, it does not show Chinese domestic oil production, and the absolute barrels per day figures tell a different story.

Oil:

China’s 13 mmbpd deficit is greater than Russia’s entire crude oil production.

Natural Gas:

In natural gas the story is much the same. China consumed almost 16 exajoules of natural gas in 2025 but only produced 9.5 domestically, covering only ~60% of China’s natural gas consumption. For now, China has to import most of the balance from Australia, Qatar, Russia, Malaysia and others (including some cargoes from the U.S.) in the form of LNG, at least until a much discussed pipeline project from Russia comes to fruition.

As we noted from our very first post on Substack, the direct correlation between energy consumption and economic growth is so tight and well established as to be undeniable. Most people still consider energy a derivative of the economy. Those who do so have it completely backwards.

Economies are derivatives of energy. Energy is the economy. Look no further than Venezuela for the most recent example.

From 2016 to 2024 the cumulative decline in Venezuela’s real output was ~35%, even after posting modest positive growth after 2021 according to the IMF/World Bank. (2025 data is still available only as provisional estimates).

Total Energy Supply in Venezuela fell from 2.81 exajoules in 2016 to 2.03 by the end of 2025. The 28% decline closely mirrors the decline in Venezuela’s GDP.

Finally, at the opposite end of the spectrum from Venezuela are the planet’s new energy hogs: data centers. For the first time, the 2026 Review captures global data center energy use.

In 2020, the first year of data center energy consumption shown, Our Tech Overlords new hogs hoovered up ~1.5% of global electricity generation. By the end of last year, data centers consumed ~2.5% of the world’s electricity.

The U.S. and China dominate that growing demand. Together, the two nations who appear to be locked in an AI arms race of sorts sucked up 66% of the world’s data center electricity consumption in 2025.

The 2026 Review figures on data center electricity consumption are another glaring example of the importance of energy to economic development in the twenty-first century. Data center electricity demand is a proxy for high tech 21^st century economic development. The countries where it is lowest are not even in the same race being run between China and the U.S., while the EU and Canada hope to keep up.

We close by noting that despite the world consuming record amounts of hydrocarbon energy, the carbon intensity of the global economy continued its relentless decline in 2025. Some would like you to believe it is because of “climate policy”. It is not.

As we showed in The New Deniers, global carbon intensity has been declining steadily since ~1960. Even with the US burning more coal in 2025, it still decreased last year, in an amount very close to the long-term average decline.

As Roger Pielke, Jr. noted in a post this week, as a practical matter the world cannot “decarbonize” and get to “net zero” by 2050.

“Reaching zero by 2050 requires retiring ~21 exajoules of fossil energy every year, starting now. That annual reduction exceeds the total energy consumption of most countries on Earth. And every year the line fails to bend down, the required rate in the remaining years grows larger, just as a matter of math.

Replacing 21 EJ of fossil energy per year, and retiring an equal amount of fossil supply alongside it, means building the equivalent of about one 1.75-gigawatt nuclear plant every day from now until 2050 — roughly 420 plants a year. Measured in wind turbines instead, at 3 megawatts and a 0.30 capacity factor, that comes to about 2,000 turbines a day, every day, for 25 years.”

We’ll be blunter. The chances that anyone reading this post will live to see a an actual “net zero” world in their lifetime are Slim and None. And Slim left town on the 4:30 p.m. Greyhound to El Paso.

If you are reading this while holding a newborn baby, chances are very high that your child will not live long enough to see the world truly reach “net zero” CO2 and GHG emissions either. Purely as a practical matter given the required pace and extent of the reduction in fossil fuel use and replacement with zero carbon emission sources, eighty years would be a near miracle in our view.

Like it or not, hydrocarbons are still the Crown Joule of the world’s primary energy consumption. Whatever “transition” exists, it stands no chance of changing that reality any time soon.

(Editor’s Note: forgive us if we’re slower than normal responding to comments the next few days while we’re out west fly fishing.)

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With all due disrespect to Stanford civil engineer Mark Z. Jacobs and “renewable” energy fans like him, Big Tech was never going to rely on any combination of Spinning Green Crucifixes™ (wind), solar, and batteries to provide the 8,760 annual hours of always-on electricity on which its AI bets rely. While they may be faster to deploy, Big Tech isn’t betting trillions of dollars over the next few years on any source that can’t generate the juice for more than half the hours in a day, and battery systems can’t economically eliminate that problem, even if they don’t spontaneously combust.

So, in April 2024 when we posted Nat Gas & Nuclear’s New BFFs, predicting natural gas and nuclear would be the horses Big Tech would ride for their energy requirements, it was not exactly a trail-blazing prediction. Nuclear takes a long time to build. It was more like a James Carville, Captain Obvious moment: It’s the economy (natural gas), stupid.

Ever since we penned that post, our Big Tech Overlords have rushed around the country to secure dispatchable, reliable, affordable electricity in gargantuan amounts, prior big talk about “sustainabilchemy” and waterfalling cash at “Renewable Energy Certificates” (RECs) be damned. (We would be lying if we did not admit feeling a bit of schadenfreude.)

Without apologizing for the obvious flip flop and green hypocrisy, Big Tech could not have done a better job pissing off and alienating their former “environmentalist” allies. Those former allies have honed in on data center energy use, water use, and rural land conversion.

And worse: They view Big Tech lining up with natural gas and nuclear instead of “renewables” as a blatantly hypocritical religious apostasy, and the purchase of all those billions in RECs to burnish their corporate “sustainability” reports as disingenuous. The green crowd cheered for wind, solar and the spontaneously combusting mineral boxes with the docile sounding name of a pasture Hereford - “BESS” (“battery energy storage systems”) – but was instead left sitting in chairs against the wall at the big dance looking forlorn. And angry.

Most of those jilted, angry green forces are now lining up against their former technology heroes. The former defenders of eminent domain in landmark cases like Kelo vs. New London have suddenly become staunch defenders of property rights. Water use, CO2 emissions from gargantuan energy consumption, and rural land and environmental conservation – all very real data center proliferation concerns – already fit nicely in their wheelhouse.

Big Tech’s speaks through its actions. And if those actions were words, their response to the “renewables” crowd is essentially what Robert Bryce’s said in a recent post about the wind industry getting crushed, stalled, scattered, smothered, and covered by the Trump administration: “Cry me a fucking river.”

Elon Musk sent the message blatantly. While we were writing Nat Gas & Nuclear’s New BFFs, he was in negotiations to secure ~150 – 300 Megawatts (Mw) from Memphis Light, Gas and Water (which sources electricity from Tennessee Valley Authority) for his Colossus I and II xAI facilities outside Memphis. But MLGW’s and TVA’s processes do not move at sufficient speed for Rocket Man.

So, he simply slapped up 62 (that we can count) industrial gas turbines - similar in principle to aircraft jet engines but optimized for stationary power generation - across the two locations, air and other permits be damned. The Southern Environmental Law Center did not like that very much. It sued the company this April.

For xAI, all revenue is essentially a derivative of electricity consumption, and regulatory fines represent a minor expense. As such Elon will pay the defense costs and any penalties and fines, make sure the facility has the power it needs, and never rely on wind, solar and batteries to provide the bulk of the electricity for Colossus I and II. End of story.

Most of the generators at the two Memphis xAI facilities were provided by a company called Solar Turbines. While you might not have heard the name, you probably know their parent: Caterpillar, renowned makers of heavy equipment used in mining, construction, and other industries, as well as industrial-scale power generators.

That’s right. Caterpillar - whose diesel-powered industrial machines consume copious amounts of hydrocarbons worldwide in service of critical industries - is cashing in on the west’s infatuation with “renewables.” Caterpillar is not a climate-obsessed shareholder activist hedge fund trying to get Exxon and Chevron to drop oil and gas for wind and solar. Their motive is simple: shareholder returns.

In September 2024, five months after our post, Microsoft announced a 20-year power purchase agreement (PPA) with Constellation Energy. The reported $16 billion deal restarts the 835 megawatt (MW) Three Mile Island Unit 1 nuclear reactor in Pennsylvania, shutdown in September 2019. Microsoft will effectively consume the full output at the renamed Crane Clean Energy Center when the reactor comes back online in the next couple of years.

The very next month, Google announced a 10-year PPA with small modular reactor (SMR) developer Kairos. Amazon (through its Amazon Web Service unit and/or venture capital arm) inked $700 million in investments in SMR designer X-Energy and signed agreements for future SMR generation with utilities Northwest Energy in Washington State and Dominion Energy near its existing North Anna nuclear power station in Louisa County, Virginia.

Existing nuclear power plant restarts, license extensions, new plant expansions at existing nuclear projects, and new advanced SMR design, funding, and commitments were announced across America. By the end of 2025, it was clear that Big Tech is nuclear energy and natural gas’ new BFF (emphasis ours):

Big tech companies signed contracts for more than 10 gigawatts of possible new nuclear capacity in the United States over the last year. Microsoft committed to a 20-year, 835-megawatt power purchase agreement to restart Three Mile Island. Google ordered up to 500 megawatts of small modular reactors from Kairos Power. Amazon invested over $20 billion converting the Susquehanna site into a nuclear-powered AI data center campus. Meta issued a request for proposals targeting 1 to 4 gigawatts of new nuclear generation.

And the party kept going in 2026. In January, Meta announced a deal to buy ~2.2 Gigawatts (Gw) of electricity from Vistra’s Perry and Davis-Besse nuclear power plants in Ohio, and an additional 433 Mw of incremental upgrades across two plants in Ohio and one in Pennsylvania over the next eight years. The company also announced deals for nearly 4 Gw of power from SMR firms Oklo and Bill Gates-backed Terra Power.

By mid‑2026, industry reports listed at least 13 announced nuclear data center deals in the U.S., totaling ~10 Gw of nuclear capacity. The projects are all either contracted or targeted by the “big four” hyperscalers: Microsoft, Google, Amazon, and Meta.

But nuclear energy takes time to deploy. And as Elon demonstrated, Big Tech needs power faster than either the darling SMR developers or any traditional western nuclear firms can deliver Gw-scale existing designs like the AP-1000 units Georgia Power built at Plant Vogtle (where time and cost performance we less than inspiring).

So natural gas was always going to be Big Tech’s other energy BFF. And that’s why an American energy major’s announcement this week was nothing more than the logical culmination of events we foresaw. The timing likely got a boost from that little something that someone did in Iran the last four months.

What was notable about the announcement was not so much that it was another example of Big Tech abandoning any pretense that its own energy demands could be met with “renewables” and instead cutting a long-term deal relying on natural gas. More noteworthy was the fact an American evoil™ major’s new bespoke natural gas project for Microsoft has a partner you’d least expect: a former hero and darling of the climate shareholder activism industry, a hedge fund who only four years earlier had successfully targeted its biggest competitor and had its guns aimed at its newly announced partner next.

Which American energy major announced a first-of-a-kind data center project for its industry this week? Who is its new partner with the pedigree so counter to the project’s central strategy that on a list of ten likely firms, it would have been #99?

Get your boots out, we’re going to the Permian basin of west Texas. That’s where money, arbitrage, and the dynamics of the coproduction of methane with crude oil changed one “sustainability” minded hedge fund’s green religion to natural gas blue.

We begin the story with a brief explanation of the unique dynamics of hydrocarbon production in the Permian basin. Last April, an excellent Doomberg post summarized the situation nicely for our purposes (emphasis ours):

…there are now three categories of oil and gas producers in the world: those that produce only oil, those that produce only gas, and those that produce a mixture of the two. It is the rapid emergence of the third category - especially in the US, but increasingly in other countries as well - that has so disrupted the energy markets. Three-quarters of US crude oil and half of its natural gas are now produced concurrently, creating a classic co-product competition dilemma for single-product drillers.

Since the onset of this development, natural gas has been the nuisance byproduct in the U.S., routinely flared on-site or sold at steep discounts—a situation only worsened by OPEC’s efforts to prop up crude oil prices. When domestic gas prices sank to rock-bottom levels, producers in the gas-only fields of Appalachia and Haynesville were forced to curtail.

But not in the Permian basin of west Texas and southeastern New Mexico. There, the geology is more conducive to large scale coproduction than all other fields in the U.S. When crude oil market prices send the signal that oil is more valuable than natural gas, the gas becomes a “nuisance byproduct” in economic terms.

The Waha natural gas hub (the Waha hub) in west Texas’ Pecos County near the small, unincorporated community of Coyanosa is about 60 miles southwest of the Midland-Odessa metro area, the major business hub in the eastern Permian Basin. There, more than a dozen major interstate and intrastate pipelines intersect to transport gas to domestic markets and Mexico. Pipelines like the Gulf Coast Express, Permian Highway Pipeline, Whistler, and Matterhorn Express deliver Permian gas to Gulf Coast liquefaction facilities for export to international markets, and more are under construction and/or expanding.

Because of the coproduction dynamic, there have been several periods over the last few years during which natural gas at the Waha hub traded at negative prices for a number of days. More natural gas was being produced than could be piped out of the Permian basin, and the producers were either forced to pay someone to take it or flare it.

Just prior to Trump’s War in Iran, natural gas at the Waha hub set a new record for most consecutive days (13) trading at negative prices. Two weeks ago, natural gas spot prices at the Waha hub traded in positive figures for the first time in 90 days.

Left to their own devices, markets close arbitrages. The price of natural gas in west Texas eventually had to draw huge hyperscalers to the area. And with them speculative developers with big dreams … and other people’s money.

Enter Rick Perry, former Texas Governor and Energy Secretary during the first two years of Trump’s first term, a group of investors, and Fermi America (Fermi). The data-center real estate development and power company is attempting to build a private “HyperGrid” to serve hyperscalers, starting with 6 Gw natural gas, adding 4 Gw traditional large scale and advanced SMR nuclear, and ~1 Gw of the obligatory-for-optics solar panels and spontaneously combusting BESS pasture cows. Fermi describes its Project Matador as helping close the growing gap between AI’s voracious power demands and the public grid infrastructure’s ability to keep up with it.

Fermi controls the ~7,500-acre site in the Texas panhandle northeast of Amarillo owned by Texas Tech under a 99-year ground lease. It is adjacent to the U.S. Department of Energy Pantex industrial site, the nation’s primary facility for the assembly, disassembly, and maintenance of nuclear weapons.

As for progress, the website states that over 4 miles of natural gas piping are already in the ground, and more than 11 miles of site fencing have been placed around 300 cleared acres. The first shipments of combined cycle natural gas turbines and associated kit are reportedly on the way.

Fermi went public via Initial Public Offering on the NASDAQ in October 2025. The company sold ~ 32.5 million shares at about $21/each, valuing the company at over $15 billion. Market analysts framed Fermi’s Project Matador as something of a stress test for the “if you build it, they will come” model of hyperscale development, leveraging nearby Permian gas.

But the company and project have struggled ever since. After topping $30/share after the initial launch, the stock has been on a steady decline, trading below $4 in April and May this year after CEO Toby Neugebauer was ousted in a dispute that led to his suing the company. (It has recently bounced back to around $9.)

Recent coverage in legacy media does not paint a pretty picture. It describes a company that is still without customers, in pre-construction mode, with leadership turmoil and growing skepticism about whether Fermi can secure the financing, permits, and the anchor Big Tech tenants needed to turn Matador from an overhyped, overvalued “AI-nuclear campus” into a functioning energy and data-center complex.

On the surface, Fermi’s bet on cheap Permian natural gas would seem to be a solid bet, but its’ “if you build it, they will come” model is still very much in question given the project’s current status. And, as it turns out, Fermi wasn’t the only business eyeing the arbitrage between the U.S. Henry Hub benchmark price for natural gas and the recent negative pricing at the west Texas Waha hub.

This week, an American oil major with significant investments in the Permian basin announced a hyperscaler project. But unlike Fermi, they are not building on speculation.

Chevron is developing a power generation facility near Pecos, Texas, to provide electricity for a Microsoft data center under a 20-year PPA. “Project Kilby” is anticipated to deliver 2.67 gigawatts of capacity once build out is complete.

The announcement states that the agreement is a first milestone, with a final investment decision expected by year end. Chevron anticipates first power delivery in 2028.

With substantial production in the basin, Chevron is well positioned to leverage the recurrent bottlenecks at the Waha trading hub that result in negative pricing and flaring when production exceeds takeaway capacity. That situation is a direct function of the co-production of oil and gas in the Permian basin that Doomberg and others have noted, owing to its geology and the technological innovations in directional drilling and hydraulic fracturing (fracking).

Chevron’s project for Microsoft in the area may be the ideal Permian arbitrage play. By comparison, Fermi’s Project Matador looks more speculative than ever.

Project Kilby is a bespoke project developed by an American oil major who knows how to lay pipe and play energy arbitrage on scales for which Fermi’s executive team can only dream. Fermi’s Project Matador still does not have its first tenant.

It is worth considering what Microsoft’s choice might say about how the biggest hyperscalers like the ones mentioned above view Fermi’s “build it and they will come” model at Project Matador.

For a risk averse Big Tech giant like Microsoft, Chevron’s gas reserves and balance sheet virtually eliminate credit risk on a 20-year PPA. No mid-cap, speculative, private grid developer depending on third party pipeline capacity and long-term financing can match that.

Project Kilby is a co-located, dedicated, behind-the-meter campus, and effectively a power generation complex connected to a single, anchor tenant. It is precisely what Doomberg predicted more than a year ago due to the very arbitrage they kept noting between the benchmark U.S. Henry Hub and the Waha hub: gas goes in one end, data comes out the other, with none of it metered by or produced through the public grid.

Project Matador is a multi-tenant “hyper campus” (with no tenants) with one power generation complex serving multiple data center customers. Those customers will have to share power, infrastructure and to some extent governance with each other and Fermi. By comparison to Kilby, Matador is a giant hyperscaler co‑work complex with more expensive power and no single-tenant control.

Kilby is in Reeves County near the city of Pecos. The two are positioning the area as a Permian energy industrial corridor, with visions of becoming a substantial industrial hub on the opposite (west) side of the basin from Midland – Odessa. The Project Matador site has more political complications. It sits next to the only U.S. nuclear weapons assembly/disassembly complex. It will use water, and the greatest saturated thickness and highest water quality in the Texas portion of the Ogalla aquifer sit under the site.

Project Kilby intends to use non-potable, brackish, low-quality groundwater for power plant operations. Chevron’s announcement states that it is “working to advance solutions for reuse of produced water from oil and gas operations,” potentially turning what is otherwise a costly expense for oil and gas producers in the Permian into either a smaller liability or maybe even a potential source of revenue someday.

In terms of reputational and regulatory risk/hassle, these things matter. Kilby is free of many political complications that face Matador. Anti‑nuclear, climate/environmental, and local‑community advocates are more likely to fight it than a more remote Permian gas plant in an area like Pecos where hydrocarbon infrastructure and natural gas power plants are about as common as tumbleweed, mesquite, and rattlesnakes.

Fermi has 6 Gw of air permits in hand. But it has no tenants and lacks full gas turbines and associate infrastructure procurement, financing, and connections for a project with energy ambitions almost an order of magnitude greater (17 Gw vs. 2.67 Gw). ZeroHedge reported that Chevron has already secured orders for seven GE Vernova gas turbines and supporting kit, a big deal given that most hyperscale data center developers and utilities are facing well-reported constraints due to multi-year backlogs for large gas turbines and related hardware.

At Fermi’s project, Microsoft would likely be one of multiple hyperscaler tenants in a seller’s market, with less control or ability to customize the infrastructure to its requirements. It would be less able to dictate commercial terms, reliability standards and impose its environmental requirements. Kilby makes Microsoft the anchor tenant and co-architect of the project, not just a tenant stuck with someone else’s plug-and-play mega campus.

Finally, as if all of these advantages were not enough, when you get right down to it, Fermi’s Project Matador is essentially a giant real estate development targeting hyperscale data centers with large electricity capacity. But as they say in real estate, location is everything, and here is where Project Matador is at a significant disadvantage relative to the power generation element.

We pinned the location of Fermi’s project on a Google Earth map with an overlay of the Permian basin. Fermi’s Project Matador is about 200 miles away from its center of production and the Waha hub. Existing natural gas pipeline capacity is insufficient to feed the ambitious project’s gargantuan future fuel appetite, and running new natural gas pipelines to the north side of Amarillo with sufficient capacity will be expensive.

The general location of Project Kilby near Pecos, Texas, as well as the Waha hub are shown, smack dab in the middle of the Permian basin. One would have to be blind not to see the inherent advantage of Chevron’s newly announced project simply by virtue of necessary length of required pipeline runs.

That matters commercially. At Project Kilby, Chevron can monetize local gas that would otherwise be heavily discounted at the Waha hub. Fermi’s Project Matador will require a much longer pipeline, sending the fuel further over constrained intrastate routes, adding cost and transport risk in a bottlenecked basin. Even with the new takeaway capacity that’s coming (not coming quickly enough), much of that gas is spoken for, headed east to Gulf Coast LNG liquefaction and export terminals. Other portions are headed west or even south, with less headed north to the Texas panhandle.

We find none of these differences particularly surprising given the way Microsoft and Chevron go about large investment decisions and deploy their own capital, versus a speculative developer using other people’s money like Fermi. What did surprise us was one of the participants listed in Chevron’s Project Kilby announcement, a name we immediately recognized from a post we wrote about two years ago (emphasis added).

Our February 2024 post Big Evoil Punches Back detailed Exxon’s successfully turning SEC’s rules constraining muckraking activist investors - FollowThis and Arjuna Capital - against them. As part of the story’s background, we began with a brief history of a climate shareholder activist hedge fund whose efforts against Exxon’s Board actually succeeded (emphasis added):

In December 2020, a newly formed activist investment fund called Engine No. 1 purchased $40 million worth of Exxon Mobil stock. Shortly after taking the position, its Founder Christopher James penned an open letter to the Exxon Board of Directors criticizing Exxon’s Return on Capital Employed (ROCE).

Continuing, we wrote:

Christopher James and Engine No. 1 chose a different tact than their predecessors. They successfully convinced some of Exxon’s largest shareholders, including (ESG Maven and) Blackrock CEO Larry Fink, Vanguard, and State Street, to vote for their proposal.

When the smoke cleared after Exxon’s shareholder meeting in May of 2021, despite holding a mere 0.02% of Exxon shares, Engine No. 1 candidates had won three seats on Exxon’s Board of Directors. The usual legacy media Climate Corps hailed the win as a transformational, “David beats Goliath” victory.

In summer 2021, after Engine No. 1 successfully went after Exxon, James pointed his gun at Chevron. So, the company met with Engine No. 1 leaders.

Chevron has recently met with representatives of activist investor hedge fund Engine No. 1 to talk about plans for emissions reductions, as the U.S. supermajor is getting ready for a possible proxy battle similar to the one Exxon led —and lost—earlier this year, The Wall Street Journal reported on Friday.

The meetings were described as “cordial.” Engine No. 1 did not indicate it would engage in an Exxon-style proxy battle at Chevron.

Chevron did not seem bothered. Why? The corporation said it had “contingency plans” to respond to many different types of events, including an activist investor.”

Only Chevron and the climate activist hedge fund led by Chris James know what was said in that, and subsequent, meetings. But suddenly, after the meeting with Chevron in summer 2021, Engine No. 1 seemed to be having a quiet change of heart despite its success winning the three seats on Exxon’s board, when the wind was actually in its sails. As we noted in that February 2024 post, it started pushing back on other climate activist proposals via its three board representatives (emphasis added):

For glaring examples of the divergence between the interests of Arjuna/Follow This and those of Exxon’s shareholders, look no further than Engine No. 1’s recent votes on such matters. In 2022, Engine No. 1 voted against Follow This’ shareholder proposal calling for Exxon to reduce its Scope 3 emissions. In October 2023, all three of Engine No. 1’s successful 2021 Board picks voted in favor of Exxon’s $60 billion acquisition of Permian basin oil and gas giant Pioneer Natural Resources.

What exactly was discussed in that fall 2021 meeting between Chevron and Engine No. 1? Why did they suddenly back off? What were the specifics of Chevron’s “contingency plans” for dealing with Engine No. 1?

As it turns out, we had inadvertently stumbled on to a thread. In the wake of Chevron’s formal announcement this week, Project Kilby seems to have answered those questions (emphasis added):

Chevron Corporation (NYSE: CVX) today announced that Energy Forge One LLC, a wholly owned subsidiary, has signed an agreement with Microsoft Corp. (NASDAQ: MSFT) to develop a co-located power facility in West Texas that will provide dedicated electricity to a Microsoft-operated data center under a 20-year power purchase agreement. Chevron and Engine No. 1 have been collaborating on the development, known as Project Kilby (“Kilby”).

Kilby is expected to deliver approximately 2.67 gigawatts of capacity, built through a phased, modular approach that enables incremental expansion over time. A majority of the generation will come from large GE Vernova (NYSE: GEV) turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar Inc. (NYSE: CAT).

‘Ya don’t say!!

Now what could possibly have caused Engine No. 1 – a climate activist hedge fund that successfully forced its way on to Exxon’s Board of Directors and pointed its guns at Chevron next - to have such a change of heart?

Now that Chevron let the cat out of the bag, the answer seems clear. Clear enough that Engine No. 1 did not even try to pretend to hide it.

On the same day that Chevron released the announcement for Project Kilby noting its relationship with Engine No. 1, the latter released the following on its website (emphasis ours):

Joulent, LLC (“the Company” or “Joulent”) today announced its launch as a technology-driven energy company purpose-built to deliver reliable, multi-gigawatt power at the speed and scale demanded by the current pace of innovation. Founded and developed over three years by Engine No. 1 in strategic collaboration with GE Vernova, Joulent will provide reliable, continuous power engineered to meet the needs of American innovation.

“Leadership in the AI era will be determined by who can deliver energy and compute the fastest, most reliably, and at the lowest cost,” said Chris James, Founder and CEO of Engine No. 1 and Joulent. “By building new power generating facilities, Joulent enables customers across industries to power the next chapter of American innovation – while reducing pressure on existing grids and maintaining affordability for ratepayers.”

As Joulent’s first power project, Engine No. 1 and Chevron have been collaborating on a natural-gas power facility project in West Texas known as Project Kilby (“Kilby”).

Cynics might accuse Chris James and Engine No. 1 of selling out the hedge fund’s “sustainabilchemy” mission by collaborating with Chevron and Microsoft on a Gw-scale natural gas power plant complex. You can count us among them.

But don’t worry, the Joulent announcement gives reassurances that the green dream is still alive and well at Engine No. 1 (read: barely, on life support, and mostly for optics):

“The model also provides a foundation for future expansions through renewable energy sources, beginning with solar, creating additional pathways to add clean generation capacity over time.”

We close by noting that “climate change, greenhouse gases and sustainability” for years were the motivation for, and animated, Engine No. 1’s very existence. Today, all such terms are conspicuously absent from the born-again hedge fund website’s self-description. Funny that.

The Project Kilby announcement demonstrates just how deep the reckoning with physics and energy cuts where the rubber meets the road. The Big Tech darlings who purchased all those RECs to burnish their “sustainability” credentials abandoned the pretense that “renewables” could provide the power they need the instant the exercise changed from virtue signaling to earnings per share. It’s that simple.

What happened to Engine No. 1’s activist enlightenment? Is producing and combusting natural gas and its associated environmental and climate impacts now OK to the former climate shareholder activist? If so, is that only because some it would have otherwise been flared in the Permian? Or because it has nearly half the GHG emissions as oil?

Or is it really just because it is abundant, cheap, and the best arbitrage on the board for a hedge fund with money and understanding of how to play it the data center craze?

Or was Chevron’s “contingency plan” back in 2021 effectively telling Chris James and Engine No. 1, “We see what you did at Exxon. You won’t beat us, but you can join us”?

After such an amazing religious conversion, inquiring minds want to know. Meanwhile, from our perch, it sure looks like money can change a man’s religion from green to (natural gas) blue.

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“The Church of Carbon” is a term Doomberg coined several years ago to describe the cabal of scientists, legacy media, environmental non-governmental organizations (ENGOs, aka non-profits), activists, celebrities and others who denominate every issue through the lens of CO2 emissions and “climate change.” Members have a variety of terms to describe anyone who challenges the prevailing view that “climate change” is a catastrophic problem for earth and humanity, and “flat earther” is not even close to the most derogatory.

More than twenty years ago, the Church’s most ardent and vocal priests and apostles began to paint heretics with the term global warming “denier.” The not-so-subtle term is an effort to shut down those who would dare question their religion.

The choice of term is not accidental. It attempts to liken climate religion heretics and apostates to those who deny that the Holocaust – the WWII stain on the history of humanity that killed six million Jews in the 1940s - ever occurred.

The deranged “logic” goes something like this: paint those who question what “the science” says with a term so ugly that they are simply beneath inclusion in any rational, civil debate over matters of such importance. “The opinions of people who deny things like “climate change” or the Holocaust are not worthy of consideration in the public discourse over policy,” or so it goes.

The now two-decade pattern of using the term “denier” in this matter is worse than ugly. It shamefully denigrates the death and suffering of millions, and with the subtle wink of an eye attempts to conflate the act of asking legitimate scientific questions with human atrocities.

Educated scientists, politicians and legacy media who should have known better than to believe using the term “denier” would allow them to avoid directly answering hard questions. The strategy was never going to succeed in the long run, and the history of science is replete with examples of its laughable failure. See the Catholic Church, Copernicus and Galileo and the earth-centric view of the universe, for starters.

Our March 2024 post Cook-Ing Up Censorship highlighted a report by a UK-based think tank on a mission to define and suppress ideas with which it disagrees as “hate speech” run by a character with connections that raise no shortage of questions. Included in what Imran Ahmed and the Center for Countering Digital Hate (CCDH) define as “misinformation, disinformation and malinformation” is just about anything related to “climate change” that counters the mainstream narrative. The New Climate Denial was the 2024 CCDH report that outlined the media platforms and content creators who profit by spreading what it defines as “new forms” of climate “denial.”

Whereas the “old denial” focused on arguing that anthropogenic “global warming” was not occurring or that human emissions of greenhouse gases (GHGs) are not causing it, the report suggests the “new denial” spreads “hate speech” by suggesting that the impacts of warming are more beneficial than harmful, climate policies and green energy “solutions” won’t fix it, and that climate science and the climate movement are uncertain and “unreliable.”

The New Climate Denial authors include John Cook, creator of the website, SkepticalScience.com (SkS). Cook is not a scientist but an outspoken critic of any human who questions any aspect of the climate apocalypse, and SkS is his weapon of choice.

Cook and the research team used an artificial intelligence large language model they trained and named CARDS (“Computer-Assisted Recognition of climate change Denial and Skepticism”) to ferret out “the taxonomy of five climate denialist super-claims and 17 related sub-claims.” They used CARDS to identify “the changing tactics of climate deniers on YouTube by analyzing thousands of hours of transcripts of videos on the platform from 96 channels dating back to 2018.”

The New Climate Denial uses some form of the term denier over 275 times in a report of 34 pages. On average, some form of the pejorative term appears more than seven times per page.

Last month we published the news that the most apocalyptic scenarios of future GHG emissions used by the world’s climate scientists and research organizations have officially been tossed in the trash heap, deemed by the very cabal that created them as “implausible.” Near the close of Implausible Deniability we posed a few questions (emphasis added):

…will the scientific community admit their errors and change course? Tens of thousands of research papers have relied on the now discredited high emissions BAU scenarios, including RCP8.5 and SSP5-8.5, across all six emissions scenario frameworks. Will politically motivated climate scientists continue to push for their relevance as “reference” scenarios?

What about the legacy media? Having published tens of thousands and to possibly over a hundred thousand articles depicting these cremated scenarios as the “business as usual” trajectory the world was on, with every adverse weather event held as evidence of the forthcoming climate Armageddon, and fear their cheapest and easiest sell, will they admit that the truth was not what they chose to present?

It only took a bit more than a month after the new first broke before the answer became clear. What is the Church of Carbon and its priests, apostles and book publishers saying? How are the “implausible” scenarios being portrayed and even defended? Grab your giant soup spoon. It’s time to give some very deserving folks a dose of their own medicine.

Our story begins with a reality that the new deniers just can’t seem to choke down: the high GHG emissions scenarios that scared the world into a panicked spend of ~$5 trillion did not die because we suddenly got serious about spinning green crucifixes (wind turbines), sun catchers (solar arrays), and “green hydrogen” (via electrolysis from either that will never happen in any material quantity). The sky-is-falling scenarios were implausible from their conception because they were grounded in unrealistic assumptions about energy, economics, or demography (population/birth rates). And the people who built them and are now defending them despite these clear errors know it.

But based on the reactions from most of the scientific establishment, explainer media, and climate‑policy world, you’d think the only reason the apocalyptic emissions scenarios known as RCP8.5 and SSP5‑8.5 are now “implausible” is because heroic climate policies and “cheap renewables” saved earth and humanity in the nick of time. Nothing could be further from the truth.

The graph below shows global CO2 emissions intensity from fossil fuels and industry since 1900 measured in kilograms of CO₂ emitted per dollar of GDP, using 2011 international dollars (adjusted for inflation within countries over time, and differences in the cost of living). As you can clearly see, the impact of the Kyoto Protocol (signed 1997, entered force 2005), the Paris Agreement (adopted 2015, entered force 2016), the European Clean Development Mechanism (the EU’s carbon taxation mechanism, part of Kyoto), the U.S. Inflation Reduction Act (2022), and any other United Nations climate agreement or domestic policy of any western nation had absolutely no impact on the slope of the trend shown below.

Global carbon intensity peaked in 1960 and has been steadily falling ever since, with no discernible change in the rate since any of these measures. If “climate policies and cheap renewables” have made a material impact, it cannot be seen in the graph above.

In the nearly 30 years since the world’s first international climate agreement, the Kyoto Protocol, was signed, the portion of world primary energy consumption from oil, coal and natural gas has fallen a whopping five percentage points from 85.7% of total to 80.6%. That is why no changes in the trend of carbon intensity can be seen in the first graph above.

As we noted in Implausible Deniability, the emissions scenario designers for United Nations Intergovernmental Panel on Climate Change (UN IPCC) upcoming Seventh Assessment Report (AR7) – the ScenarioMIP group – published the updates scenarios in a paper by van Vuuren et al in early April.

Buried in the paper was a sentence that leveled twenty years of apocalyptic climate narratives, while at the same time misattributing the cause of their demise:

“For the 21st century, this range will be smaller than assessed before: on the high‑end of the range, the CMIP6 high emission levels (quantified by SSP5‑8.5) have become implausible, based on trends in the costs of renewables, the emergence of climate policy and recent emission trends.”

As we documented, the new “high” emissions scenario projects global annual GHG emissions of only ~78 gigatons (Gt) vs. RCP8.5’s >128 Gt by the year 2100. The current trajectory runs in the range of ~43 – 50 Gt annually by 2100. The latter amount is less than half the annual GHG emissions projections from which the forcing potential for nearly 10 degrees warming Fahrenheit by the end of the century was calculated.

That is to say, the high‑end SSP5‑8.5 pathway—RCP8.5’s successor—no longer passes the straight face test. Not by a country mile.

Climate researchers Zeke Hausfather, Glen Peters, and Piers Forster fairly summarized that reality in “On the death of RCP8.5.” The authors concede that the worst‑case family of emissions scenarios “has become implausible,” and that tripling global GHG emissions or multiplying coal consumption fivefold by 2100 were wildly divergent from humanity’s actual track.

But they frame the cause as a good-news story about the rapid decline in the cost of “renewable” energy, the emergence of climate policies, and flattening emissions trends. The first two occurred but had nothing to do with the third, as our graph above shows quite clearly.

The message that “we saved ourselves from the worst case” is politically convenient even as it is scientifically laughable. It’s a two-step dance the very climate research community that portrayed the very same scenarios as “business as usual” might have gotten away with but for the tireless work of researchers like Justin Ritchie, Hadi Dowlatabadi, and Substack publisher Roger Pielke, Jr.

Their detailed takedowns of RCP8.5 and its successor SSP5-8.5 now leave no quarter for those in the scientific, legacy media, and environmental non-government organization (ENGOs like Greenpeace, Natural Resources Defense Council, Sierra Club) communities and the Charlaticians™ who portrayed these scenarios as the world’s “climate” track, with apocalyptic results nearly certain and always imminent. We noted many of the same reasons in Implausible Deniability, emphasizing the wildly erroneous population projections baked into the scenarios.

For some within that scientific community, remaining silent on the misuse of the implausible scenarios was not the worst offense. Those who routinely crossed the line between disinterested scientific analysis and political advocacy have even greater responsibility.

These scientists have the most egg on their faces today. Watching some of them justify their actions and even attempt to hold on to emissions scenarios whose “sell by” date expired more than a decade ago is highly informative, and great entertainment value for us.

Put simply: Climate policy and “renewable” energy didn’t retroactively make the high emissions scenarios RCP8.5 and SSP5-8.5 unrealistic. They were never realistic from their conception.

This is the history the new “implausible thanks to renewables and policy” narrative is trying to omit. But it is the storyline put forth in most explainers that were rushed out to cover the high GHG emissions scenarios’ implosion.

One of the Church of Carbon’s high priests, climate scientist Michael Mann, wasted no time trying to sell the narrative. Hour after we posted Implausible Deniability, in his uniquely bombastic manner Trump took a victory lap and, as usual, actually got part of the story right. Naturally, Mann could not help himself from both taking a swing at Orangemanbad and implausibly confusing cause and effect, claiming we’re not tracking below the high emissions scenarios “because of climate policy in spite of Trump.”

If science were baseball, the clip below would be Dr. Mann trying to barrel up the “policy did it!” narrative. (Oooh. That’s gonna leave a mark!)

Other scientists like NASA climate scientist Gavin Schmidt falsely accused those properly celebrating the demise of the high emissions scenarios in the IPCC’s forthcoming update for exactly the reasons they had been pointing out for years as “bad faith BS.”

Schmidt, likely embarrassed by the highly detailed points made by the likes of Roger Pielke, Jr., Justin Ritchie and Hadi Dowlatabadi, resorted to personal attacks (emphasis ours):

People (hi Roger!) acting as if the publication of new CMIP7 scenarios is some huge policy shift or an admission that previous scenarios are no longer ‘official’ are just bull-shitting. This is something that was planned for and expected for literally years. Previous scenario sets were used in previous rounds, a new set will be used for the new round – that is all there is to it.

Oh, good cut Gavin! Thanks for the cool breeze! 😊

As for legacy media, Forbes’ Marshall Shepherd tried a softer approach, opting to try and “clarify” the torching of the high emissions scenarios. Using an analogy about beers at a bar, he left readers with the impression that we still face major risks from climate change and must redouble policy efforts, despite the “business as usual,” worst case scenarios being off the table now.

The same is true for the New York Times and Washington Post, both of whom framed the story so that scientists responsibly updating their models are merely progress, and wealthy nations’ climate agreements and domestic policies get the credit for bending the emissions curve. RCP8.5 is described as a “dire” or “do nothing” path that is only now off the table thanks to our glorious climate policy and “renewable energy” subsidy slush funds efforts.

The American version of French news agency Agence France-Presse (AFP) tried to cover four bases with its attempt. It pulled the scientific “consensus” card, portrayed dropping the high emissions scenarios as an “adjustment,” claimed their removal was being “misrepresented” across social media, and tried to sell the narrative that the changes resulted from “renewable energy implementation.”

None of the legacy media who stepped into the scientific batter’s box got hit in the face trying to knock the high emissions scenarios back into relevance like Michael Mann. But none of them looked any better in their plate appearances than Michael Mann or Gavin Schmidt.

Absent from all of their pieces was a candid reckoning with the fact that the “business as usual” path required energy, economic and demographic contortions that were never remotely likely, even without climate treaties or “renewable energy” subsidies.

The ENGO’s fared no better. The Center for Progressive Reform - apparently tipped off to the upcoming van Vuuren et al paper announcing the new ScenarioMIP group’s dropping of the high emissions scenarios - said RCP8.5 (and by extension is successor, SSP5-8.5) “remains not only legitimate, but crucial..”

CPR argued that scientists using the high emissions scenarios “are not out to shock or deceive; they are simply following the best science.” Even if the pathway is implausible, the authors insist, using it “is not misleading.”

This is precisely the type of misdirection that enabled an implausible scenario to colonize impact assessments, financial‑risk models, and national climate reports for a decade. It wasn’t just an objective “stress test.” It was the basis for “business as usual” rhetoric that scared the public into believing 4–6 °C of warming by 2100 was what happens if we don’t pass the next climate bill. And the one after that.

CarbonBrief spoke with one of the authors of the van Vuuren et al paper’s authors. The ENGO leaned into old tropes and stayed a country mile away from the core of the controversy – the real reasons why the high emissions scenarios were always implausible:

“...projections suggest that the world is still on course for between 2.5C and 3C of warming, another author says.

...This level of warming was previously described as “catastrophic” by the UN.”

CarbonBrief’s choice to put Orangemanbad’s face bearing a skeptical grimace was a nice touch. But it did not help CarbonBrief or CPR in the batter’s box any more than their cohorts above. Instead, they all made themselves scientific laughing stocks.

And finally, what about our friend John Cook over at Skepticalscience.com, author of the Center for Countering Digital Hate report The New Denial? On May 25, Cook republished RCP8.5 Update, a post from Ken Rice that originally appeared on And Then There’s Physics. Rice repeats climate scientist Gavin Schmidt’s subheading:

“The fantasy version of the normal updating of scenarios for a new round of CMIP simulations doing the rounds is bad faith BS.”

SkS’ entire justification consisted of linking to Schmidt’s article, CPR’s article, and others. Conveniently absent was any admission that the assumptions embedded in RCP8.5 or SSP5-8.5 years earlier about future coal use or population growth were erroneous or acknowledging that the steady decline in carbon intensity per unit of GDP preceded all climate policies and the growth of “renewable” energy.

Speaking of “bad faith,” a scientific culture and community that was capable of self-correction and genuinely committed to the integrity of the scientific method would not behave in such a manner. The same can be said for legacy media and ENGO complexes that were genuinely interested in reducing environmental impacts while advancing human prosperity.

If these actors were actually interested in doing so, one would at least expect that they would explicitly acknowledge that RCP8.5/SSP5‑8.5 were erroneous by specification - not just rendered implausible by virtuous policy. They would stop treating legitimate critics who specified very precise plausibility concerns a decade ago (that turned out to be correct) as bad‑faith actors. And they would revise impact assessments, “Social Cost of Carbon” estimates, and financial sector stress‑test designs that were built on what the scenario designers themselves now call implausible futures.

And if RCP8.5 and its successor SSP5-8.5 were always energy‑economically-demographically incoherent, some uncomfortable questions need to be asked and answered:

• How did these scenarios survive peer review and become defined as “business as usual”?

• Why did so few within the climate‑science establishment amplify critiques like those of Roger Pielke, Jr., Justin Ritchie, and others when they first came out? Was it the source they did not like or the nature of their findings?

• Setting aside the $5 trillion spent, how much of the public’s trust was squandered fearmongering a tail‑risk by presenting it as a central expectation?

It is far cleaner, reputationally, to tell a story in which the models were fine, the scenarios were fine, and they only became “implausible” because we rose to the challenge with climate policy and “renewable energy.” That’s not science, it’s narrative maintenance, religion, or maybe a scientific tooth fairy story.

We close by pointing out the delicious and unavoidable irony. For nearly two decades, all of these scientists, legacy media “journalists” and editors, and ENGOs have been screaming “denier” at anyone who challenges the prevailing narrative. Yet here we stand, with the UN’s own scenario development function deeming “implausible” the exceedingly high GHG emissions scenarios on which these people and institutions based their endless use of the pejorative term denier.

Consider the second and third order consequences of scaring the world with the always- farfetched, high GHG emissions scenario projections: Young people are declining to have children based on misplaced fears their kids will have no future. $5 trillion (and counting) has been spent on “solutions” that could not possibly fix an apocalyptic crisis that does not exist. Soaring electricity costs and two lost decades refusing the one electricity generation technology in the advanced world (nuclear) that is GHG emissions free while subsidizing “renewable energy” technologies instead.

Perhaps the worst consequence of all are policies that have kept the developing world from being able to finance projects capable of delivering dispatchable, reliable, affordable electricity to the world’s poor, where it is desperately needed to raise living standards.

The New Deniers™ are the actors that enabled all of these outcomes, are still pretending that RCP8.5 and SSP5-8.5 are important, valuable, or relevant, and portraying these scenarios as implausible because climate policies worked and the cost of “renewables” dropped dramatically. In actuality, they were never anything more than climate porn and fear mongering, and that is as much anathema to the scientific method as the idea of scientific “consensus.”

Who could have seen that coming?

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The most visible face of the opposition to Project Sail and Georgia Power’s Ashley Park - Wansley High kV Transmission line project is a young local named Ansley Brown. Her childhood home is one of the 20-30 houses slated for demolition to make way for the transmission line being built to serve QTS and Project Sail under the generalized veil of growth in electricity demand. Her TikTok videos have garnered more than 6 million views and gained Project Sail opponents national attention.

Opposition from local environmental groups like the Chattahoochee Riverkeeper focuses on impacts to the watershed that serves as the freshwater resource for millions of Georgians. The Chattahoochee River watershed is vital enough to Georgia, Alabama, and Florida that the three states have been engaged in “Water Wars” over the resource for decades. This pits local Team Blue “environmentalists” against Big Tech. But the Riverkeeper is made up almost entirely of citizens in the region.

Opposition from rural landowners who wish to preserve the character of a county on which metro Atlanta has been encroaching for more than three decades similarly pits Team Red rural Republicans (who, in Georgia are not particularly fond of government to begin with) against the Silicon Valley Carpetbaggers.

A few other environmental groups have their guns pointed at either Project Sail or the Georgia Power Ashley Park – Wansley High kV Transmission line project (or both) as well. These are not part of the local community. Their funding and interests go far beyond Coweta and Fayette County or citizens in the state of Georgia. Clues that outside “environmental” interests are involved in the fight against the projects became clear in the research for this post.

The first clue was found in a legal filing. On January 9th of this year, the Southern Environmental Law Center (SELC) filed a Joint Petition for Reconsideration with the Georgia PSC on behalf of Georgia Interfaith Power & Light and Southface Institute, the Sierra Club, and the Southern Alliance for Clean Energy (SACE).

The Sierra Club needs no introduction in these pages. SACE is a “progressive” non-profit “climate change” advocacy group for “renewable” energy in the southeast U.S. The SELC is a “progressive environmental” legal advocacy non-profit doing Sierra Club’s and SACE’s local bidding. The Petition asks the PSC to undo or narrow its approval of Georgia Power’s 2025 IRP plan provisions that add large amounts of new fossil gas capacity, particularly the nearly ~2,700 MW of new gas-fired generation referenced above. (Shocker, we know.)

One day after filing the Petition for Reconsideration, SELC filed a second petition with the Georgia PSC requesting oversight of new large-load customer contracts (a request with plenty of merit targeting data centers). That filing specifically identifies the QTS data center in Fayette County and Georgia Power’s Ashley Park – Wansley High kV Transmission line as a cause for Georgia Power’s new generation infrastructure. It also accuses Georgia Power of back-room negotiations with data center developers out of the public eye, something that caused the smell of rotten eggs involving Project Sail in Coweta County (emphasis added):

“Georgia Power made QTS an offer before the 35-mile line was identified in public transmission planning documents.”

Whether you’re fans of environmental non-profits like Sierra Club, SACE, and the SELC or not, the lack of transparency they have alleged is a real political problem for data center developers and their power-hungry customers like Meta, Microsoft, and others.

Our second clue as to outside “environmentalist” interest around Project Sail and the Ashley Park – Wansley High kV Transmission line project showed up on the Stop Project Sail website. Readers might recognize the name we circled in the lower left corner in the graphic below from an article linked there.

Desmog bills itself as a global climate investigations journalism outlet. But in reality Desmog is a well-known leftist environmental propaganda machine, much like John Cook’s Skeptical Science website. Desmog maintains a Climate Disinformation Database that lists many highly credentialed scientists who challenge the prevailing climate apocalypse paradigm like Judy Curry, Roger Pielke, Jr., and NASA Exceptional Scientific Achievement Medal winners (for contributions to climate science) Roy Spencer and John Christy. The fact that the database also includes Czech Canadian polymath Vaclav Smil is quite telling. Every one of these experts believes that - all things equal - humans contribute to warming earth’s atmosphere by burning fossil fuels. The fact that they believing that “climate change” is not a “crisis,” and present forms of “renewable energy” are a non-solution, is enough to earn the privilege of listing in Desmog’s database.

Desmog, the Sierra Club, and the Southern Environmental Law Center, unlike the Chattahoochee Riverkeeper, are not local environmental organizations, made up of local residents, concerns about their own backyards. In the case of Project Sail and the Ashley Park - Wansley transmission project, they’re merely environmental activist carpetbaggers riding on the backs of pissed off locals to advance their own broader interests.

What are those interests? Stopping any new hydrocarbon or nuclear-based electricity generation projects. The kinds that Big Tech has clearly decided to bet their future on, acknowledging that “renewables” were a quaint thing that bought them green street cred, and that the Renewable Energy Certificates they purchased just enabled lots of wind and solar projects that would have otherwise never been built. The kinds we told you Big Tech was going to rely on at the expense of “renewable energy” interests in Natural Gas & Nuclear’s New BFFs more than two years ago.

Renewable energy interests are butt hurt somewhere on the spectrum between sad and angry that, instead of relying on wind and solar and batteries, when it came to betting on their own futures, Big Tech ditched them faster than urban gangs ditch out-of-gas stolen cars. Big Tech’s commitments to natural gas and nuclear energy the last two years for the on-demand electricity their data centers require 8,760 hours per year with 99.999% reliability makes that crystal clear.

Hiding behind “we’re just tenants!” in facilities like QTS in Fayette County or Project Sail in Coweta County, or Georgia Power including a few hundred MW of “BESS” (battery energy storage systems) projects when repowering former coal plants with thousands of new MWs of natural gas, only makes those renewable energy interests’ angrier. They would rather starve the data centers - including, if needed, the local community - of electricity than see the projects fueled by hydrocarbons or nuclear power. In our view, the Petitions for Reconsideration and Regulatory Oversight described above make the Sierra Club’s and SELC’s real objectives very clear.

Knowing the area quite well, we can say with a high degree of confidence that the objectives of Desmog, the Sierra Club, the SACE and the SELC do not align with either the interests or the values of the more than two thirds of Coweta County residents who voted Republican in the last three presidential elections. The “climate journalists” and the non-profits clearly object to natural gas plant expansion in Georgia. While portraying themselves as aligned with those two thirds of rural landowners over eminent domain or other concerns as relates to Georgia Power’s Ashley Park – Wansley Transmission Line project or Project Sail, they are simply using the local citizen’s anger. Those voters would be the first to approve using natural gas to meet Georgia’s growing electricity demand, generally, were it not for the data center sprawl.

Why is this playing out in Georgia? The state has a Republican led State Assembly and pro-business regulatory environment, and competitive residential and industrial electricity rates. Georgia also has growing baseload generation capacity, adding 2,200 MW (2.2 Gigawatts) of new nuclear capacity at Plant Vogtle over the last few years, and plans to add thousands of additional MWs of natural gas generation.

But perhaps most importantly, Georgia Power is a vertically integrated, state‑regulated monopoly that controls generation, transmission, and distribution end-to-end. It trades off being subject to PSC rate regulation and punishment for failure to meet service obligations for being economically rewarded for building new generation capacity when the PSC approves its IRPs. And electricity devouring Big Tech data centers are the perfect “justification” (read: economic incentives) for load growth.

What’s a poor utility supposed to do? It’s our mandate to serve all customers! (Wink, wink…)

Red Team voters in Coweta and Fayette counties certainly have good reason to be pissed off at the Republican leaders they elected. But ironically, Georgia Power’s position as a vertically integrated, PSC-regulated, investor-owned utility with a monopoly that owns virtually all of the generation and transmission assets in the greater metro Atlanta area dates back to the days “Dixiecrats” (Democrats) controlled everything in the state.

But if it makes them feel any better, the Virginia legislature has been controlled by Democrats since 2024 and, like Georgia Republicans, the state’s Democrats have failed to reign in data center sprawl. When one looks closely, one finds that all of the meaningful attempts to stop the sprawl there, even in Loudon County’s “data center alley,” have occurred at the local level, with county and municipal ordinances doing the job the state legislature and Governor won’t.

It is also important to distinguish the differences between Virginia’s electricity market and Georgia’s. Virginia’s system resides within the Federal Energy Regulatory Commission (FERC)-regulated PJM Interconnection (a regional transmission organization or RTO) electricity market. PJM does not own any generating plants or transmission wires. It operates the grid and competitive generation markets. Utilities and merchant operators own the generation plants, and utilities own the transmission infrastructure (e.g., Dominion, American Electric Power, etc.), but PJM controls competitive market bidding for generation as well as the transmission dispatch and planning.

So, unlike Georgia, the decision to build a big large amounts of new generation and 500 kV transmission lines in Virginia is less a single utility’s internal planning and more a regional decision involving FERC and PJM, with multiple utilities and merchant power plant developers at the table. Perhaps it is fair to say that as imperfect as that system is, in the case of data center sprawl, it probably provides a bit more transparency to the public than the system that affords Georgia Power a monopoly. As utility expert Meredith Angwin has made clear, neither arrangement is perfect or ideally suited for the challenges the U.S. electricity market faces more broadly.

In Georgia, data‑center deals are negotiated largely between Georgia Power, the PSC, and local governments. Transmission grid expansion projects that follow are decided based on Georgia Power’s IRP and rate cases.

In Virginia/PJM, big new loads and lines are more visible in PJM stakeholder processes, with other utilities, independent generators, and regulators watching. This doesn’t stop the sprawl, but it probably reduces the “home cooking” and creates more venues for challenge.

The Georgia Power monopoly incentive to chase data‑center load is almost pure—every gigawatt of new demand is new steel in the ground recovered through the rate base. In PJM, the spoils are at least divided among multiple market utilities with regional and FERC oversight (for what that’s worth).

In Georgia, Georgia Power can argue in PSC filings that 500 kV lines and new gas units are needed for systemwide load growth, but because it controls both generation and transmission assets, it appears to local ratepayers and landowners as a single corporate actor using state‑backed monopoly privileges and eminent domain for private clients. And, politically, that dog don’t hunt in rural areas in the South.

Multiple bills have been introduced in Georgia’s and Virginia’s state’s legislatures to try and constrain data central sprawl over the last two years as Big Data increasingly clawed their way into rural areas. None have been signed into law, and few ever made it to their Governor’s desks.

Local voters in both parties in many areas of the country feel let down by their representatives on this issue, across the municipal, state and federal levels. Are data centers the issue that finally causes America to have its Uniparty “aha!” moment?

This is how Big Tech aligned two political adversaries that could not have been more unlikely to join forces. Green haired environmentalist Democrats and pickup truck driving conservative Republicans with Trump bumper stickers standing, not across the street yelling at each other, but joined at the hip ready to burn Big Tech at the stake.

We close by noting that the alignment of Team Red rural landowners with Team Blue “environmentalists” is a phenomenon that Charlaticians™ in both parties and Big Tech and its local developer bagmen created. Billionaire investor turned data center developer (of Shark Tank fame) Kevin O’Leary’s appeared on Fox News “Big Weekend Show” a few days ago as the industry standard bearer to make it clear that they have not figured out how to deal with the problem.

That’s when host Joey Jones questioned O’Leary about the matter of the growing opposition to Big Tech and its data centers. O’Leary’s Box Elder County, Utah data center project has become a lightning rod gaining national attention just like Project Sail.

Jones is a native of Georgia who lost his legs serving as a Marine Corps Explosive Ordnance Disposal technician in Afghanistan. Though he was born in Dalton (the northwest Georgia textile hub known as “Carpet-town”), biographies and background material list his current residence as (wait for it..) Newnan Georgia, a rifle shot from Project Sail and the Georgia Power Ashley Park – Wansley project in Coweta County.

What was O’Leary’s strategy? Claim that the loudest protesters are astroturf: outsiders, brought in to protest, funded by foreign interests.

Now the question of whether foreign interests have been funding anti-fossil fuel environmental groups in the U.S. (and Canada for that matter) is a fair one, and something we have long been concerned about. But we know Coweta and Fayette counties well and can assure you that the environmental group Chattahoochee Riverkeeper, Joey Jones’ pickup truck driving Red Team neighbors, and all the landowners Ansley Brown are interviewing are not funded by China, Russia, or any other foreign interests.

Give O’Leary credit for correctly identifying the motivations of the out-of-towners, the carpetbagger environmental non-profit Hatfield’s, when he states:

“This is happening all over America. People want to stop the development of power.”

On the other hand, we’ll let you judge how effective O’Leary’s argument and demeanor were. And how well the billionaire genius acquitted himself and Big Tech attempting to pull the “foreign interest” card on Joey Jones and the folks in Georgia.

The issue is a bipartisan hot potato of politicians’ own making. Democrats in Virginia can’t run away from the problem any more than the Republicans in Georgia. Even within the Republican race for governor, data centers and eminent domain are being used as an “us vs them” wedge. Witness the campaign flyer being run by an opponent of Trump’s endorsed Georgia gubernatorial candidate, Burt Jones:

It took Big Tech to make strange bedfellows out of Prius and pickup truck drivers, Blue Team “environmentalists” and Red Team rural Trump voters. But electric power and land are the gating functions for the grand data center plans of our Silicon Valley Overlords over the next several years, and now Big Tech has pissed off both groups, aligning the Hatfield’s with the McCoy’s to fight Big Tech Data villains they like even less than each other. Imagine that!

As for us, we’re mixing a jug of peach sweet tea and putting a bowl full of Orville Redenbacher’s in the microwave. We’re going to enjoy the show.

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Deep in the heart of Appalachia, a violent conflict began during the Civil War era between two families on either side of the Tug Fork River, the border between Kentucky and West Virginia. The feud became a metonym in American culture for bitter disputes between rival parties more than a century ago.

It wasn’t until a formal truce was signed in Pikeville, Kentucky in 2003 by dozens of descendants of the two families that an official end to “all hostilities” promoting unity and forgiveness was declared. The governors of Kentucky and West Virginia proclaimed the day “Hatfield-McCoy Reconciliation Day,” and the event made national news. The History Channel’s dramatic mini-series starring Kevin Costner and Bill Paxton recounts the bloody, decades-long conflict.

For more than fifteen years, “progressive environmentalists,” represented by Team Blue, and “conservative capitalists” represented by Team Red, have been bitterly divided over energy, environmental, and economic policy in America, with “climate change” at the feud’s center and fossil fuels as the Tug Fork River separating the warring sides.

While the official truce between descendants of the Hatfield and McCoy families took 143 years, we always believed physics and economics would reconcile the partisan divide over energy and environmental policy in America far sooner. But the villain now unintentionally forging an alliance between Blue Team “environmentalists” and Red Team rural pickup truck drivers on the outskirts of metropolitan Atlanta, Georgia was not on our Bingo card. Or, apparently, the villain’s either.

What is the force that is causing bitterly feuding “environmentalists” and rural conservative landowners to join forces and point their weapons at something other than each other? What outside parties are using the local’s anger to advance their own interests? And what does it mean for the industry that some are convinced will revolutionize the world for the betterment of humanity and others are sure will destroy it?

We’re going down South, where Democrats and Republicans, Prius and pickup truck drivers, progressive “environmentalists” and their philosophical counterparts both have their hair on fire just down the road from where Sherman burned Atlanta around the time the Hatfield’s and McCoy’s started shooting at each other. Rather than looking away from the nemesis down in Dixieland, the locals are digging in, and it’s worth considering what the situation portends for America’s newest villains. (America’s energy companies are ;surely happy to have the Hatfield’s after another industry, even if temporarily.)

We begin our story with a simple axiom: In America, people who own property do not like having it taken away from them by governments, and there’s one thing they hate even worse than having income from their productive labor and investments confiscated by the government in the form of taxes.

Americans really don’t like government taking away their land.

When the taking is for a legitimate public purpose with “just” compensation - as required by the Takings Clause of the Constitution’s 5^th Amendment – citizens have no choice but to accept it as part of the tradeoff of living in a free society. But let them suspect that the power of eminent domain is being used to separate them from their land to benefit private parties rather than for justifiable public works and Katie, bar the door!

The use of eminent domain – the taking of people’s land by government (or quasi-government) with compensation – is perhaps the most penal use of force against the property rights of citizens afforded protection by the Constitution. As such, its use should be reserved for projects that clear extremely high and transparent hurdles for serving the public interest.

Georgia law dating to 1897 extends the State’s eminent domain authority to electric utilities. The operative language states:

“Any person operating or constructing or preparing to construct a plant for generating electricity shall have the right to purchase, lease, or condemn rights of way or other easements over the lands of others in order to run power lines, maintain dams, flow backwater, or carry on other activities necessary for constructing and operating such a plant.”

But state legislatures crafting statutes decades ago could not have anticipated present technology innovations. Or how eminent domain might be abused when the stars eventually aligned between the interests of a multi-trillion-dollar private industry that did not exist and quasi-governmental authorities afforded such powers.

The terms “Artificial Intelligence,” “data centers,” and “hyperscalers” would not become part of the American lexicon for another 15 years when the Supreme Court rendered its 2005 decision in Kelo vs. New London. In the ruling, the nation’s highest court found that the City of New London, Connecticut’s taking of private homes for economic redevelopment of a blighted waterfront neighborhood qualified as a “public use” under the 5^th Amendment, even though the property was to be transferred to a private developer(s).

Annual growth in U.S. electricity demand had been averaging low single digits for decades. And in 2005, the partisan divide between red team/blue team on energy, environment, and economic policy was a fraction of what it is today.

Robert Bryce’s Renewable Rejections Database documents the annual and cumulative number of rejections of wind and solar projects across the U.S. Beginning this year, he added a tab tracking “Data Center Rejections” to the database which tracks rejections of Big Tech and hyperscaler data center projects.

Bryce’s databases show that only 28 solar projects have been rejected globally in 2026. Wind, solar and battery storage project rejections combined total 64 globally this year.

But in the U.S. alone 163 Big Tech data center projects have been rejected since the beginning of this year. Three states (Georgia, Michigan, and Ohio) together account for nearly 1/3 of that total.

In our view, a vertically integrated public utility, regulated by a public service commission, and granted a near monopoly by state law should only be able to wield the power of eminent domain for projects that meet the highest threshold for “public use.” But how one defines that term is being tested in real time in the public square just northwest of largely rural community of Newnan, the seat of Coweta County, Georgia. And Big Tech is the driving force behind the test.

On the surface, two projects a few miles southwest of metro Atlanta in Coweta County, one of which also impacts neighboring Fayette County, typify the local pushback against Big Tech and AI. Upon closer inspection, however, one finds an emergent and growing phenomenon that our Silicon Valley Overlords apparently did not have on their Bingo cards.

Almost overnight, Big Tech has succeeded turning bitter enemies where energy and environmental policy are concerned into allies – even if uncomfortable ones. Two sides that would normally be at each other’s throats other over “climate change” and fossil fuels vs. “renewables,” the Hatfield’s (“progressive”, climate-denominated “environmentalist” Blue Team Democrats) and McCoy’s (pickup truck driving Red Team conservative Republicans) are, at least temporarily, setting aside old feuds in order to point their guns at a villain each considers even worse - Big Tech carpetbaggers and their data center land sprawl.

In the last three presidential elections, Hillary Clinton, Joe Biden, and Kamala Harris defeated Donald Trump by margins of ~45% in Fulton County and ~65% in Dekalb county, the two counties that make up metro Atlanta. About 90% of the city limits of Atlanta fall within the former.

Trump won the state by ~2%. But metro Atlanta is politically purple.

But heading southwest out of Atlanta, Coweta County is where the bustle of Atlanta transitions into rural west-central Georgia. In Coweta County, Donald Trump beat Hillary Clinton by a margin of ~42%, Joe Biden by a 36% margin, and Kamala Harris by 34%. Coweta County is red, not purple.

The two projects that have aligned EV-driving environmentalists and diesel pickup driving conservatives include a sprawling new data center development in Coweta County northwest of Newnan, and a 35-mile-long high voltage transmission line. The new high kilovolt (kV) transmission line will connect to former coal-fired power plants that Georgia Power is repowering with natural gas, both of which will feed electricity to the new data center near Newnan and one already under construction ~30 miles northeast near Fayetteville (in Fayette County). The data center project in Fayette County operates under the (Trojan Horse) moniker “QTS Technical” (QTS) to divert attention from its actual Big Tech customers.

Georgia Power’s website shows the Ashley Park – Wansley 500 kilovolt (kV) Transmission Line Project running west from the new Ashley Park substation built to serve the QTS data center in Fayette County to two Georgia Power electricity generation plants - first to Plant Yates in Coweta County, then on to Plant Wansley in Heard County. Georgia Power describes the project as (emphasis added):

“..a key component of our Integrated Resource Plan (IRP) and supports the continued growth of the state’s energy needs.”

Project Sail is the recently approved data center project northwest of Newnan. As is commonly the case with large scale, high-profile projects, a local developer assembled the land and used his connections to work through the zoning and county approval process. Atlas Development, LLC is working in conjunction with pedigreed, publicly traded industrial developer and REIT, Prologis, who will build the project Atlas itself couldn’t.

Neither Atlas nor Prologis will name their future tenant(s). Using a local developer to run cover for those who’d like their names to be kept out of the public eye is a common tactic when Big Tech wants to go into a rural community.

At Project Sail, Prologis plans to build a data center campus with 9 buildings on ~830 acres, with a total of ~4.3 million square feet under roof. Seven of the data center buildings would be designed to pull 72 megawatts (MW) each, with the remaining two each pulling 48 MW, for total electricity demand of ~600 MW. Atlas’ Development of Regional Impact (DRI) application lists a 10-year build out with a total value of $17 billion, generating $163 million per year in estimated annual local tax revenues. Its independent financial analysis suggests $434.1 million in net revenue to Coweta County, and net revenue to the school system $876.3 million, over twenty-one years.

Opponents of the project call bullshit on those figures. But we can see how such eyewatering figures could cause locals who love high school football and see some of the insane high school stadium projects the oil industry built in Texas to start dreaming big. And Georgians sure love their high school football.

Our overlay below shows the Project Sail layout northwest of Newnan near the small community of Sargent. The facility just out of view immediately to the north is Georgia Power’s Plant Yates.

Historically, Plant Yates had 7 coal-fired steam units generating ~1,250 MW. In 2014, five of those were closed and the remaining two converted to natural gas, each with 403 MW nameplate capacity. In April 2024, Georgia Power received approval to add three natural gas turbines at the site, with nameplate capacity totaling ~1,300 MW. Once fully completed, Plant Yates’ generation capacity will be a bit over 2,100 MW.

At the western end of the Ashley Park – Wansley High kV Transmission line, Georgia Power is also in the process of repowering decommissioned coal-fired power units at Plant Wansley with two 750 MW combined cycle natural gas units and 500 MW of battery energy storage systems (BESS) at Plant Wansley. The satellite image below shows Project Sail, the Ashley Park – Wansley transmission line (red), and the two Georgia Power plants in relation to Newnan, Fayetteville, and south metro Atlanta.

In a rural area where 800 acres of land is assembled for a large project owner (or tenant) who would rather go unnamed, there is usually some home cooking going on having to do with land sales and the assemblage, good old boy networks involving the members of the zoning board, and lobbyists. The local developer is the bagman and usually runs those gauntlets for the big out of town monied players, using his local connections and getting a healthy vig in the process. All these allegations surround Project Sail, and locals noticed the smell early in the process.

Georgia Power’s claims that the Ashley Park – Wansley Transmission line project supports load growth generally, rather than the two data center projects specifically, has a similar rotten odor. Opponents of Project Sail have alleged that the utility began negotiating behind the scenes with Atlas and Prologis while preparing its most recent Integrated Resource Plan (IRP) the Georgia Public Service Commission (PSC) approved in July 2025. That IRP began as follows (emphasis added):

“Georgia continues to be the number one state in the country in which to do business and we are in the midst of an extraordinary period of economic growth. We continue to see positive short and long-term economic development trends, with many of the businesses coming to the state bringing large electrical demands. Over the next six years, we project approximately 8,500 megawatts (MW) of electrical load growth — an increase of approximately 2,600 MW in peak demand by the end of 2030 when compared to projections in the 2023 IRP Update.”

QTS’ Fayetteville “giga campus” with 13 buildings and roughly 6.2 million square feet is being marketed as a multi‑phase campus with ultimate capacity ~1.4 gigawatts (1,400 MW), with an initial power draw ~250MW. Project Sail plans power demand of 600MW in the initial ten-year buildout, but an August 2025 letter from Georgia Power to Prologis notes (emphasis ours):

“You have indicated that the electrical load at the Premises will, over time, reach approximately 910 MW (the “Projected Load”).”

And the Financial Impact Analysis Atlas and Prologis provided to the County for Project Sail describes “a nine-building, 972MW facility.”

At full buildout, the two projects combined have the potential to draw more power (~2.3GW) than the total output of the first two new commercial nuclear reactors built in America in 40 years, which happen to be Georgia Power’s Plant Vogtle Units 3 & 4 (~2.2 GW or 2,200 MW). It is not pure coincidence and ordinary industrial or economic growth that caused Georgia Power to suddenly find 2,600 MW of new load demand over the next six years between its 2023 and 2025 IRP updates.

Local opposition to Project Sail includes well-founded concerns over destroying the rural character of Coweta County, water use (the DRI states 9.1 million gallons/day) and impacts to Wahoo Creek and wetlands in part of a watershed designated as a “Most Significant Groundwater Recharge Area” in the Middle Chattahoochee River basin by the Georgia Department of Natural Resources. Those issues cut across both sides of the political spectrum.

Atlas Development initially undertook to rezone the project site from rural conservation to light industrial use in December 2024. Shortly thereafter Citizens for Rural Coweta evolved as the main community/advocacy group organizing opposition, petitions, public comments, legal actions (including appeals and lawsuits), scientific analyses of impacts, and public meetings. It added a Political Action Committee last summer.

Around the same time as Citizens for Rural Coweta County was formed, the Facebook group “Stop Project Sail Newnan Data Center” emerged. That group is now simply Stop Project Sail and has an entire website dedicated to the effort.

Coweta County adopted a new Data Center Ordinance in December 2025, and in January of this year Atlas Development amended its rezoning application from “light industrial” to “industrial.” The latter classification allows the most intensive industrial use and the broadest range of industrial operations under the county’s code. That’s when opposition to the project went into high gear.

Opposition to Project Sail really hit hyperdrive on April 7 when the Coweta County Board of Commissioners voted 3-2 to approve Atlas’ revised zoning application. On May 5th, seventeen residents filed an appeal in Coweta County Superior Court challenging the County’s approval of Project Sail, naming both Coweta County and Atlas Development, LLC as defendants.

Among other allegations, the residents allege the property falls within an area designated in Coweta County’s Comprehensive Plan for “Rural Places and Complete Communities,” not industrial development, and that the County improperly rezoned the land. They filed the action as a Petition for Review/Appeal and Request for Declaratory Judgment under Georgia’s zoning procedures law. The appeal asks the Superior Court to declare the rezoning invalid and prohibit construction and operation of the proposed hyperscale data center campus on the property.

Opponents also quickly coalesced around the threat of eminent domain for the Ashley Park – Wansley High kV Transmission line that impacts Coweta County residents where the two projects intersect. The line is anticipated to impact more than 330 properties in Coweta and Fayette counties. 20–30 homeowners are faced with complete demolition to clear the right‑of‑way that Georgia Power will use to feed the QTS facility in Fayetteville and Project Sail. Georgia Power frames this as nothing more than its 10‑year transmission plan to meet rising electricity demand from data centers, industry, and growth in south metro Atlanta.

In Part 2 we look at the makeup of the opposition and the bigger problem emerging for Big Tech and data centers.

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In environmental science and economic forecasting, the term “business as usual” is generally understood to mean that current trends and their underlying conditions are expected to continue absent any major interventions or policy changes. In the field of climate science specifically, it turns out “interventions” take many forms, and sometimes the forms that have the least to do with “policy” are the ones the make the most mockery of forecasts.

The United Nations Intergovernmental Panel on Climate Change (IPCC) adopted the term “business as usual” (BAU) in their First Assessment Report (AR1) issued in 1990 to its projected trajectory of human emissions of greenhouse gases (GHGs) and in particular CO2. In conjunction, it articulated the downstream effects: radiative forcings that would change the earth’s energy balance leading to atmospheric warming, sea level rise, and a whole host of horrors.

In AR1, the IPCC’s “best estimate” on the BAU trajectory at the time indicated a worrying level of “global warming” of ~4.3 degrees Celsius (~7.65 degrees Fahrenheit), with its “high estimate” a scary > 6 degrees Celsius, or more than 10 degrees Fahrenheit, by the year 2100.

At the time, earth’s population stood at about 5.4 billion people, and global oil consumption was just under 67 million barrels per day (mmbpd).

Today, nearly 8.3 billion earth inhabitants operate around 1.5 billion cars and trucks, almost 100,000 commercial ships, and some 30,000 in-service commercial aircraft, all of which rely on the uninterrupted flow of the refined products from ~104 mmbpd of oil. Most of heavy industry across western civilization still relies on coal and natural gas for process heat.

The CO2 emissions from essential products like steel and cement and the use of natural gas in the production of ammonia-based fertilizers remain extremely difficult to abate. All this combined with global economic growth has added up to even more oil, coal and natural gas being combusted for various human uses today than when AR1 was released ~35 years ago.

CO2 emissions from transportation and industry have climbed steadily since the time AR1 was published in 1990. Combined with the absence of any global treaties that would commit nations to reduce CO2 and GHG emissions at scale, IPCC’s choice of the term “business as usual” (BAU) may not have seemed unreasonable at the time of AR1’s publication.

Debates over the robustness of the IPCC emissions scenarios and the assumptions contained therein remained mostly the domain of scientists until the early 2000s. We view the 2005 Atlantic Basin hurricane season as the catalyst that changed everything.

In 2005 the U.S. suffered its worst Atlantic basin hurricane season in history, setting records for most named storms (27), most hurricanes (15), most Category 5 storms (4), and highest Accumulated Cyclone Energy. Louisiana took a beating. Few can forget the tragic loss of life, chaos, and destruction in greater New Orleans when Katrina made landfall in late August. But fewer will remember that Rita hammered Cameron Parish in western Louisiana only three weeks after Katrina, destroying every building in Holly Beach. The season was so active it exhausted the entire pre-assigned list of 21 named storms, forcing the National Hurricane Center dig into the Greek alphabet (Hurricane Epsilon was active into early December.)

On the heels of the 2005 hurricane season, former Vice President Al Gore’s “An Inconvenient Truth” was published in book form in May of 2006, with the film’s release following a month later. Gore intimated that the 2005 hurricane season was evidence of an ongoing, intensifying trend in hurricanes (it was not), something of a “new normal” that could be expected in the era of anthropogenic global warming (the term “climate change” would not become mainstream for several more years).

Mother Nature laughed in Gore’s face. The U.S. did not get hit by another major hurricane for ten consecutive years plus ten months, breaking the previous record for consecutive years without a major hurricane landfall (6 years) that had stood for about a century.

But the book and the movie both keyed in on the scary, high emissions “BAU” scenario to paint a very dark picture. In our view, this was the era when the “BAU” terminology combined with legacy media propaganda coverage to spin fear of “climate change” up into a relentless, everything-is-caused-by-climate-change political circus.

The combination of now six UN IPCC Assessment Reports and the tidal wave of legacy media propaganda portraying end times from the BAU emissions scenarios led to global climate agreements from the 1997 Kyoto Protocol (approved 1997, entered force 2005) to the Paris Agreement (adopted in Paris 2015, entered force 2016). European Union-wide regulations (CO2 “Emissions Trading Scheme” 2005) and a wave of domestic climate legislation, from Germany’s Energiewende to America’s Inflation Reduction Act were also unleashed as a direct result.

On the basis of the apocalyptic future projected by BAU scenario, advanced western nations from America to Europe to Japan embarked on a policy mission in which virtually everything became denominated in GHG and CO2 emissions and climate change. In the process, they spent $5 trillion they didn’t have in an attempt to rebuild their energy systems with an exclusive focus on CO2 emissions using “renewable energy” technologies that never had a chance to replace the services provided by their hydrocarbon and nuclear-based competitors.

The IPCC’s high GHG emissions scenarios would continue to be referred to as the “BAU” scenario across five additional technical frameworks included in five more Assessment Reports (i.e., AR2-6) over a period of more than 30 years.

Projections of future GHG and CO2 emissions are derived from assumptions about changes in population, economic growth, energy/technology, land use (forestry, agriculture), and policies/governance. Future population, energy technology, and economic growth drive the outcomes and predicted downstream climate impacts.

When we first went down the rabbit hole to understand the IPCC scenarios around 2010, we were not qualified to challenge the underlying assumptions relating to future energy use, though the future projections for coal consumption in the high emissions scenarios were a red flag. Global population predictions versus how global fertility rates have trended since were for us an early clue to significant model errors.

National scientific organizations, financial institutions, engineers, policymakers, and others have relied on IPCC Assessment Reports to guide their decision making for more than a quarter of a century. The question of how realistic the high emissions scenarios the IPCC has used to produce its assessment reports has been examined for around half of that time by a small group of dedicated researchers.

Their findings have largely been ignored. All the while, the media continued to magnify the high emissions scenarios as “business as usual,” finding signs of apocalypse in every adverse weather event. And the “overwhelming consensus” of climate scientists did nothing to stop them, some like Michael Mann even gladly acting on advice Al Gore gave in a speech to the 2009 annual meeting of the American Association for the Advancement of Science (AAAS):

“Scientists can no longer in good conscience accept this division between the work you do and the civilization in which you live. Start getting involved in politics. Keep your day jobs but get involved in the debate. We need you.”

Climate scientists’ and the IPCC’s high emissions future scenarios just went up in flames for precisely the reasons the small group of researchers exposing their implausibility previously warned. And those scenarios were ultimately cremated by the very scientific institutions that created them and kept them alive long past their spoil by date.

What just happened that rendered the scary, high emissions future climate projections “implausible?” What does it mean? And how is the news being treated by the same legacy media who used the now demised scenarios to scare the western world into panic? By definition, that which is “unsustainable” cannot go on forever, so let’s put on our lab coats and dig into the biggest news in climate science since Al Gore did not become President.

We begin the story with the announcement that climate science’s high emissions scenarios are going in the garbage bin of scientific history gone astray. Earlier this month, the international committee that produces the GHG emissions scenarios that function as the foundation for most climate research and assessment projections used by climate modelers and the IPCC published the next – 7^th – generation of emissions scenarios.

One of the researchers who has been central to the detailed critiques of the high emissions scenarios is Roger Pielke, Jr. Well before Substack was created, Roger and colleagues had deep dived the basis of the scary BAU high emissions scenarios, detailing their increasing departure from objective reality.

At The Honest Broker, he recently described the climate-panic-shattering news:

“The new scenarios come from the Coupled Model Intercomparison Project (CMIP) — a project of the World Climate Research Programme (WCRP), co-sponsored by the World Meteorological Organization, the International Science Council, and UNESCO’s Intergovernmental Oceanographic Commission.

Under CMIP, now in its seventh iteration, sits another little-known committee with responsibility for developing the scenarios necessary for earth system models to project future climate. That committee — called ScenarioMIP — just published the new scenario framework that will underpin the IPCC’s Seventh Assessment Report (AR7) and much of the research that it will draw upon.”

In an admission we had to read twice to make sure we didn’t misread it, the lead author of the paper that introduces the new scenarios makes a stunning admission (emphasis added):

For the 21st century, this range will be smaller than assessed before: on the high-end of the range, the CMIP6 high emission levels (quantified by SSP5-8.5) have become implausible, based on trends in the costs of renewables, the emergence of climate policy and recent emission trends.

A highly abbreviated history of the evolution of the “BAU” scenario and its progeny that sent the advanced world into a panic is necessary. Readers interested in the details will find additional links to resources below.

In summer 2021, Roger Pielke, Jr. and researcher Justin Ritchie penned an article in Issues in Science and Technology highlighting the results of a paper they had recently published arguing how the high emissions climate scenarios had been misused. There they provided a useful but brief explanation about how emissions scenarios are developed and how they feed into the climate models the project future outcomes:

To develop emissions scenarios, scientists begin with assumptions about the future of socioeconomic variables such as economic growth, population growth, and energy consumption, as well as a range of other variables, such as changes in land use (farming, grazing, forestry, and so on) and particulate pollution. They plug these variables into models of society and the economy called integrated assessment models (IAMs) to generate plausible pathways of future emissions—these are the emissions scenarios. These scenarios project the future not only of carbon dioxide emissions, but also of other chemicals that affect the climate, such as methane and nitrous oxide. Emissions scenarios, in turn, are necessary to determine another variable, called radiative forcing, a measure of changes in the net transfer of energy (i.e., heat) in the atmosphere. Radiative forcing pathways (changes in forcing over time) are a key input for the climate models that project the future behavior of climate.

The IPCC has used five different scenario frameworks across its six Assessment Reports (AR1-6). For two - AR3 (2001) and AR4 (2007) - the same “Special Report on Emissions Scenarios” (SRES) scenarios were employed. All five frameworks have included a high emissions scenario widely referred to by legacy media as “business as usual.”

In 2007, the IPCC reacted to calls for improvements to the SRES scenarios by leading the process that delivered the next generation, called the Representative Concentration Pathways. The RCPs were developed using a “parallel approach” to meet the tight timeline for AR5 (2013-2014).

Climate modelers needed scenarios to feed into their models by 2010, so researchers created the RCPs as an interim solution while more thorough “socioeconomic pathways” (SSPs) were being developed. Four RCP scenarios were developed by different research teams and published between 2007-2011.

Here again we return to the Pielke, Jr. and Ritchie 2021 article (emphasis ours):

“In parallel, scenario developers would simultaneously start with this same set of radiative forcing pathways and work backward to develop socioeconomically plausible emissions scenarios that would produce the four RCPs.”

Translation: scenario developers assumed how much GHGs the world would emit, calculated the radiative forcing that would result, and the correlated increase in temperature over the next 90+ years, then force fed the necessary assumptions about population change, economic growth and, most importantly, the energy technologies the world would use 10, 25, 50 and 75 years hence into the emissions trajectories after the fact.

Continuing with the Pielke, Jr. and Ritchie article:

Although the IPCC selected the four radiative forcing pathways to provide a range of projected futures to 2100, it did not consider the plausibility of the socioeconomic assumptions used to generate them…

The IPCC had cut the link between the socioeconomic characteristics underlying the scenarios (population change, economic growth, and so on), the emissions scenarios they provided for climate models, and the climate futures those models would predict. The effect of the separation was to save time while abandoning any commitment to evaluating the scenarios and pathways for plausibility or probability.

The high emissions scenario – still widely misused as “business as usual” – for the new RCPs was labeled RCP8.5. The numerical value denotes the model output’s expectation of an 8.5 watts/square meter (W/m2) change in radiative forcing compared to earth’s 1750 era pre-industrial baseline.

The graph below displays the anticipated global annual GHG emissions measured in Gigatons CO2 equivalent per year (Gt Co2e/yr.) to the year 2100 for each of the four RCP scenarios. We have highlighted the range of Gts equating to that high level of radiative forcing in RCP8.5 for you (note the values at year 2100: low end ~85 Gt, high end ~135 Gt, central estimate ~105 Gt).

The problem of decoupling the socioeconomic characteristics underlying the scenarios, the emissions scenarios they fed into climate models, and the climate futures those models projected being a rather obvious – and severe - problem, the two finally appeared to catch up when the next emissions framework, the Shared Socioeconomic Pathways (SSP), were developed between 2010 and 2017. In the IPCC’s AR6, published 2021-2023, five SSP’s replaced the four RCP framework.

The graph below compares the annual Gt CO2e emissions trajectories to the year 2100 for the five SSPs. Compare the trajectory and anticipated emissions at the year 2100 for scenario SSP5-8.5 to its progenitor, RCP8.5 (highlighted):

RCP8.5 and its ideological mess of a successor SSP5-8.5 both project annual GHG emissions well in excess of 100 Gt CO2e per year at the year 2100. As others have noted, RCP8.5 required enormous growth in coal consumption, including a six-fold increase in per capita global coal consumption.

Go back and look at the green line documenting global coal consumption since 1990 in our earlier graph of global primary energy consumption. Does an increase of more than five times appear likely based on the trends since RCP8.5 was born in 2007?

Projections of future population were another error that caused the historic high emissions “BAU” scenarios and their successors like RCP8.5 and SSP5-8.5 across six framework series to project unrealistic global GHG emissions and planet-melting correlated temperatures in the year 2100. The table below lists the population projections for the two BAU scenarios prior to the SRES framework, along with RCP8.5 and SSP5-8.5 from the RCP and SSP frameworks, respectively. It turns out all of the population projections were far too high until one (and that one has other “issues”):

If it strikes you as odd that the world’s leading climate modeling scientists and the IPCC calculated nearly the same global annual GHG emissions at the year 2100 in RCP8.5 and its new and “improved” successor SSP5-8.5 with nearly 40% fewer humans on earth, congratulations, you are catching on! That is the effect of the aforementioned six-fold increase in per capita coal consumption in a wealthier 2100 world with far fewer people, a prospect we and others find absurd.

For reference, in 2020 a team at the University of Washington’s Institute for Health Metrics and Evaluation (IHME) projected that the global population would peak around 2064 at just over 9 billion and decline to about 8.8 billion by 2100. The present global fertility rate of ~2.1 birth per fertile woman held constant for 74 years yield an estimated population decline to approximately 7.29 billion by 2100, a net decrease of roughly 960 million from today.

Here we have only highlighted three of the major problems with the high emissions scenarios that scared the world into panic over climate change. But all of these and more were well documented almost ten years ago. For readers wishing to deep dive the extensive problems with RCP8.5 and its successor SSP5-8.5, we highly recommend the following (links embedded in each):

• In 2017, researchers Justin Ritchie and Hadi Dowlatabadi found serious errors in estimates of future coal consumption.

• In 2021, Ritchie and Roger Pielke, Jr. produced an extensive and detailed critique on the “misuse and abuse of climate pathways and scenarios,” introducing the term “plausibility vacuum” to describe the impact of decoupling the RCPs from relevant socioeconomic assumptions.

• Two weeks ago, Roger Pielke, Jr. posted RCP8.5 is Officially Dead with an outstanding summary and timeline at The Honest Broker.

In RCP8.5 is Officially Dead, Pielke, Jr. lays out the details of the new CMIP7 scenarios (that replace the SSPs, which replaced the RCPs) to be used in the upcoming IPCC AR7. Roger was kind enough to allow us to publish the following graph from that post which nicely consolidates and visualizes the implausibility (some would say hilarity) of the previous high emissions scenarios in retrospect:

The new CMIP7 “High” scenario replaces the scary RCP8.5 and its successor SSP5-8.5 (The new CMIP7 series also drops SSP3-7.0 as “implausible.”)

You will note that CMIP7 High estimates global annual CO2 emissions at only 78 Gt/year in 2100. That value is a country mile below the 128 to 135 Gt’s projected by its predecessors that triggered a quarter century of worldwide climate panic.

The graph also includes the International Energy Agency’s “Current Policies Scenario” (IEA CPS) and “Stated Policies Scenario” (IEA STEPS) for reference. Think of the CPS as where the planet is headed given the existing combination of the world’s in-force energy/climate policies, existing energy technologies, consumption trends, and demographics. The STEPS alternative represents the emissions trajectory based on the stated intended policies of the world’s sovereign nations.

The astute reader will notice that the IEA CPS line – the IEA’s assessment of where the world is headed – trends along the line of CMIP7 Medium. CMIP7 Medium projects global annual CO2 emissions ~43 Gt/year at 2100. This has two important practical applications:

1. For the next IPCC Assessment Report (AR7, due 2028-2029), the new scenarios include exactly zero projections exceeding 78 Gt CO2e by 2100. Estimates above that value are officially “implausible.”

2. Best estimates of warming vs ~1850 baseline pre-industrial temperatures now fall in the range of 2.5 degrees Celsius. Former “BAU” and high emissions scenario projections of 4.5 C – 6C and greater are also officially deemed “implausible.”

In our view, estimates of future population have been wrong for more than a decade. We noted this in The Population Bombing in our first few months on Substack (March 2023).

There is no way of sugar coating it. The new CMIP7 scenarios destroy twenty years of climate apocalypse narrative.

How is that being reported by legacy media? Other than a few outlets in Europe, basically crickets.

There is much more to be said about the impact of the climate fear porn generated by the now deceased early BAU-denoted high emissions scenarios, RCP8.5, and its successor SSP5-8.5. They influenced the national climate impact assessments of 5 of the G7 nations (and scores of others). Almost 150 global banks used The Network for Greening the Financial System framework that factored RCP8.5 physical risks into bank financial stress tests applied by the U.S. Federal Reserve, the Bank of England, the European Central Bank, and others. These examples, and much more, are covered in greater depth in Roger Pielke, Jr.’s RCP8.5 is Officially Dead and several successive posts at The Honest Broker (and in even deeper detail in his 2021 paper with Justin Ritchie, for paying subscribers).

The “scientific basis” for the climate fear porn that drove the advanced world to expend $5 trillion of money it did not have is “implausible,” relegated to the dust bin of scientific history. Good riddance.

But will the scientific community admit their errors and change course? Tens of thousands of research papers have relied on the now discredited high emissions BAU scenarios, including RCP8.5 and SSP5-8.5, across all six emissions scenario frameworks. Will politically motivated climate scientists continue to push for their relevance as “reference” scenarios?

What about the legacy media? Having published tens of thousands and to possibly over a hundred thousand articles depicting these cremated scenarios as the “business as usual” trajectory the world was on, with every adverse weather event held as evidence of the forthcoming climate Armageddon, and fear their cheapest and easiest sell, will they admit that the truth was not what they chose to present?

Finally, consider the impacts across cornerstones of the argument for aggressive decarbonization like the cost/benefit calculations contained in the Social Cost of Carbon. Or how this should impact catastrophe models used by global commercial insurers.

How might this knowledge impact the capital investment decisions of major utilities in America, Europe, and other advanced nations? How will the world’s major energy companies view the high emissions scenarios melting like the Wicked Witch of the West getting doused with water? And what about future policies that subsidize “renewable energy” and electric vehicles at the expense of the electric grid and the energy security that has become fashionable in the wake of two global energy crises since 2022?

We close by noting that we do not view the errors made by climate modelers and the IPCC through any conspiratorial lens or question their motivations. The lesson that should be learned here is that human socioeconomic decisions and choices about how many children to have, the evolution of energy technologies, and many other factors in the real world are extremely difficult to model, and small divergences between prediction and observed reality compound dramatically over time. And when fed into climate models predicting radiative forcing, correlated warming, and downstream impacts decades into the future, those errors compound into even greater divergences from projections over decades.

The RCP8.5 and SSP5-8.5 scenarios were not implausible “based on trends in the costs of renewables, the emergence of climate policy and recent emission trends.” They were implausible because of errors in assumptions about future energy use, population, and other factors.

Some will argue that China’s “dramatic” growth in “renewable energy” deployment changed the outcome. Here we remind readers that, despite the widely publicized growth in that capacity, in terms of actual consumption coal constitutes over 52% of China’s primary energy consumption and renewables only 11% according to the latest Energy Institute Statistical Review of World Energy. And China’s coal consumption has grown steadily every year since the IPCC issued AR1 in 1990. At that time, coal and natural gas constituted 27% and 20% of world primary energy consumption respectively, a future few saw coming. In the latest Statistical Review, coal accounts for less than 26% and natural gas over 23%. Advanced hydraulic fracturing and the tsunami of natural gas it unleashed in America are a perfect example of the kinds of energy technology changes that frustrate modelers’ attempts to project. No one saw it coming in 1990 when the IPCC issued its first climate change report.

None of this is to say that human emissions of greenhouse gases including CO2 have no impact on earth’s atmosphere. Or that those emissions could not lead to serious problems some day in the future.

But as for the “business as usual,” high emissions scenarios that legacy media, Charlaticians™ like Al Gore, and climate scientists like Michael Mann used to scare the world, their likelihood of occurring was always Slim and None, and Slim took the 4:30 Greyhounds to Abilene years ago. Any attempt to now contend otherwise would be a form of implausible deniability instead of the necessary opportunities for science to self-correct. We advise lower expectations for legacy media and Charlaticians.

“Like” this post or we’ll tattoo RCP8.5 on your head.

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Fullerton, California is a mid-sized city about 25 miles southeast of downtown Los Angeles in northern Orange County. With median home values of around $900,000 and average household income of about $105,000, Fullerton is a diverse, middle-to-upper-middle-class suburban neighborhood.

On the northwest side of town, straddling the border with the city of Buena Park, the ~100-acre Ralph B. Clark public park sits at the foot of the West Coyote hills. With athletic fields, tennis courts, sand volleyball courts, an amphitheater overlooking a lake stocked for fishing, multiple children’s playgrounds, and hiking trails among other amenities, it is a popular local attraction. Interestingly, within the park historic evidence of saber-tooth cats and mammoths has been unearthed.

Located on the south side of Rosencrans Avenue about half a mile east of Beach Boulevard (State Road 39), Clark Park sits adjacent to the Los Coyotes Country Club golf course’s three 9-hole tracks. Neighborhoods of residential homes effectively bound the park and country club completely to the east, west and south. A quick Zillow search suggests home values surrounding the park and country club in a range from about $1.3 million to over $3 million.

Houses along one side North Fairgreen Drive and Tiffany Place are adjacent to three Los Coyotes golf holes in the northeast most corner of the club property, like this four-bedroom, two bath, 2,653 square foot home with a pool on Tiffany Place. For a bit over $1.5 million, with annual real estate taxes of “only” $10,500, and for the pleasure of $6.50/gallon local gas prices and the highest electricity costs in the continental U.S., this could be your little piece of heaven near the foot of the West Coyote Hills.

What you wouldn’t know from the Zillow description is that the house is adjacent to one of the State’s first and most notorious National Priorities List (NPL) sites under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as “Superfund.”

CERCLA is the federal law enacted in 1980 that imposes liability for cleanup costs on arrangers and transporters of hazardous substances, and on current and former owners of facilities where hazardous substances were disposed. NPL sites by definition are “national priorities” due to the higher risks they pose to human health and the environment. They are the “worst of the worst” of the bunch.

The matter of who ultimately paid for most of the cleanup at the McColl Superfund NPL site in Fullerton, and by what legal means, and a unanimous decision in an unrelated case rendered by the U.S. Supreme Court April 17^th are connected in ways few have considered. But for major U.S. energy firms facing increasing civil litigation alleging past and future “climate damages” in state courts, the recent Supreme Court ruling working in conjunction with legal precedents established in the McColl NPL case has significant implications.

State attorney generals, environmental non-governmental organization (ENGO) zealots representing “climate-injured” youth, and any other climate litigants who might have legal standing to bring climate-related lawsuits in state courts may have just been outfoxed. If so, it will turn out to be one of the cleverest legal maneuvers ever by western energy majors in U.S. courts.

What did the U.S. Supreme Court say in Chevron v. Plaquemines Parish, etal? How is the McColl Superfund site case relevant? And how might the legal strategies from both cases combine to thwart the growing wave of state litigation against major energy firms, or possibly even make your tax dollars pay for it? Let’s make a cross-country trip - from Fullerton to coastal Louisiana to the halls of the nation’s highest court in D.C. - to connect these two cases and show you how the legal theories involving both may soon work in tandem to produce outcomes few seem coming.

We begin in Fullerton, which developed as a citrus center after the arrival of the Sante Fe Railway in 1888. A few years prior, the Brea-Olinda oilfield had been discovered about four miles north of town.

By the year 1900 oil field production in Kern, Los Angeles and Fresno Counties to the north was booming. In 1903 California became the nation’s leading oil-producing state, later trading the top spot with Oklahoma for many years. But production from the Brea-Olinda field did not really take off until the 1920’s and 1930’s. And then the Japanese invasion of Pearl Harbor in December 1941 changed everything.

At the time of the Pearl Harbor attack that brought America fully into WWII, the U.S. was only producing about 40,000 barrels per day (bpd) of the 100-octane aviation gasoline (avgas) critical to the war effort, but the U.S. military determined it would rapidly need over 190,000 bpd of the fuel, and ultimately much more. With the “win at any cost” ethos at the time, the federal war apparatus had to secure critical supplies of a wide variety of materials, but sufficient, on-demand avgas supply was deemed critical to victory. The capacity to refine that much avgas, however, simply wasn’t there, and American refiners could not justify the enormous capital investment (over $15 billion in today’s dollars) required to meet the military’s needs.

The solution was money and contracts. The U.S. government agreed to pay all the refiners’ costs to produce the avgas in return for their accepting a reduced profit margin and agreeing to government restrictions on private market production and sales. But as part of that bargain, the refiners demanded something else from the government, and they got it.

In what became known as “the grand bargain,” the oil companies got the government to agree to not only pay all the costs of producing the avgas, but also to assume contingent future regulatory costs they might face as a result of their production of avgas for the WWII effort. The “Avgas Program” was implemented via supply contracts between the oil companies and the Defense Supply Corporation (DSC), which gave the government broad control over the industry through the Petroleum Administration for War. (We sincerely hope we have not just given President Trump any big ideas.)

At the time, there were essentially no environmental regulations of any meaningful force in America (or Europe or the UK, for that matter). It would be decades before the National Environmental Policy Act, Clean Air Act, Clean Water Act, CERCLA, the Resource Conservation and Recovery Act (RCRA) and other major environmental regulations would come into force. As such, the second and third order consequences of agreeing to virtually anything to get those fuels to win WWII could not have been foreseen, and the government was so desperate for avgas to win the war that it effectively threw all caution to the wind with the breadth of the indemnity obligations it assumed in the supply contracts.

Because America’s entered WWII in the Pacific theater after Pearl Harbor, and California had become an oil producing powerhouse, it was natural that many of the DSC contracts went to west coast refiners. In addition to California’s geologic endowment, the Port of Long Beach’s location so close to California oilfields was an enormous natural strategic military advantage.

The major refiners delivered. By the time WWII ended, the Avgas Program was producing an amazing 500,000 barrels per day, more than ten times U.S. output prior to its start.

How critical was 100-octane avgas to winning the war? In 1943, Great Britain’s Petroleum Secretary, Geoffrey Lloyd, commented that “we wouldn’t have won the Battle of Britain without 100-octane…”. In that context, “the grand bargain” certainly looked like a bargain at the time.

This is where the northeast corner of Los Coyotes Country Club’s property and the lovely homes around it like the one above enter the story. At the time, that acreage was owned by a fellow by the name of Eli McColl, and old Eli was nothing if not a businessman.

Refining avgas (or any other product) from crude oil back then was not exactly a pristine business. It generated a lot of nasty waste, and in the early 1940’s, no western nation yet had any meaningful environmental laws or regulations. All that avgas refining waste had to go somewhere.

Enter Eli McColl, who owned a section of the old Emery Ranch northwest of Fullerton. In an arrangement that was neither illegal nor uncommon at the time, McColl contracted with Shell Oil Company and other WWII-era refiners such as Atlantic Richfield (ARCO), Texaco, and Union Oil (Unocal) to haul acidic sludges and other hazardous byproducts of high-octane avgas refining by truck for disposal on twenty-two acres of his land. McColl then had 12 pits constructed specifically to receive the waste.

Between 1942 and 1946, 72,600 cubic yards of this waste were deposited in the 12 unlined pits, or sumps, on McColl’s land, with total contaminated waste material estimated at around 100,000 cubic yards. (For context, the typical tandem-axle dump truck holds about 12-14 cubic yards of material like dirt or gravel).

Most of the waste originated from nearby Shell, ARCO, Texaco, and Unocal refineries. The satellite image below shows the approximate boundaries of the McColl Superfund NPL site today, with the arrow pointing at the Zillow property pictured above.

Surely thinking himself an astute businessman, old Eli likely figured he’d get ‘em going and coming. After neighbors complained about odor, he covered some of the pits with oilfield drilling muds and fill dirt. Later, as Fullerton grew, he tried to cover all of them in order to capitalize on selling or redeveloping the land, adding soil during construction of part of Los Coyotes golf course as it expanded.

Homes were built nearby in the 1970’s, and by the late 1970’s, residents began complaining of odors and health issues to local and state authorities. To make a long story short, by the time the environmental investigations were done, CERCLA had become law, and in the fall of 1983, when the U.S. Environmental Protection Agency (EPA) created the nation’s first list of Superfund’s notorious NPL sites, the McColl Dump Site was on it.

In 1991, EPA and the State of California filed suit against Shell, Texaco, Unocal, and ARCO to recover their costs of investigation and remediation under Superfund’s section 107(a) cost recovery provisions. In 1993, a California District Court held the four oil companies and good old Eli McColl jointly and severally liable for past and future response costs, including the ~$25 million EPA and the State of California had already spent, and future costs that would surely be much higher. Because of CERCLA’s joint and several liability, Eli McColl’s business(es) likely paid little if anything, and as far as EPA and California were concerned, he might as well have been a turnip. Once EPA has deep pocket large corporations on the hook as “responsible parties” (RPs), the smaller, less solvent, and/or insolvent parties are, in an economic sense, little more than part of the legal file (their former Commercial General Liability insurers, however, may not enjoy such privileges).

The remediation cost nearly $100 million between what the four major oil RPs, EPA, and the State of California spent. Readers interested in the details of the soil and groundwater remedies can find an overview on EPA’s website. The picture below is from McColl site remediation efforts during the 1990s:

Extensive, complex litigation and settlements ensued. In 2010, Texaco and Unocal were severed from EPA’s cost recovery suit due to corporate restructuring and liability shifts, but Shell, Chevron (as successor to Texaco and Unocal) and BP (successor to ARCO) all settled with the State of California at the end of 2021, paying $8.1 million for the state’s response costs from 1990 through March of that year.

But Shell had good records, long memories, seasoned in-house attorneys and plenty of four-figure-per-hour expert outside ones happy to help them. They remembered those DSC contracts from WWII, and in particular their broad indemnity provisions. And that’s when things got interesting (emphasis added):

In February 2006, the refiners brought an action in the U.S. Court of Federal Claims seeking to recover the McColl site cleanup costs, claiming that the WWII DSC avgas supply contracts required reimbursement under a provision entitled “Taxes.” They claimed that the provision was not limited to tax reimbursements because the contracts obligated the government to pay “any new or additional taxes, fees or charges…which Seller may be required by any municipal, state or federal law…to collect or pay by reason of the production, manufacture, sale or delivery” of avgas. The refiners argued that the McColl cleanup costs were new “charges” imposed by Congress under CERCLA that they incurred because of the production and manufacture of avgas under the DSC avgas contracts. Thus, they argued that the government was obligated to reimburse the McColl cleanup costs.

The federal government disagreed. It argued that the “taxes” language applied to tax-like charges, that any other interpretation would impose enormous costs on the government through essentially unlimited indemnities that weren’t part of the “grand bargain,” and any recovery was barred by the Anti-Deficiency Act because Congress had not appropriated funds for the claimed costs.

The Court of Federal Claims ruled for the government on all issues, but the oil companies appealed to the U.S. Court of Appeals for the Federal Circuit. In April 2014, a panel of that court ruled 2-1 in favor of the oil companies that the CERCLA costs at McColl did indeed constitute taxes or charges under the DSC contracts. The ruling forced the federal government to live up to the promises in the contract more than 70 years earlier.

The government petitioned the Federal Circuit Court for an en banc hearing, but the petition was denied in August 2014. When the smoke cleared, the government had extracted between $50 and $80 million from the oil companies through CERCLA cost recovery but was ultimately ordered to reimburse the oil companies for nearly $100 million under the WWII contracts for their remediation expenditures at Eli McColl’s waste dump.

In January of this year, our friend and outstanding writer Trevor Casper’s post Delta Dawn described many of the activities that have contributed to the loss of coastal Louisiana land and wetland complexes over many decades, some man made, some natural. To be sure, the canals that were cut into the coastal marsh to facilitate oil and gas exploration and production allowed saltwater to intrude deeper into the fresh and brackish water marshes, and some abandoned wells and equipment remain, so some damage is certainly attributable to oil and gas company activities. But as Trevor notes in Delta Dawn, enormous freshwater flows were being diverted for flood control and navigation in many places throughout the lower Mississippi River basin decades earlier. Determining which damages were caused by projects undertaken by the federal government via the U.S. Army Corps of Engineers for navigation and flood control purposes vs. those caused by digging canals and using them for oil and gas exploration and production vs. natural geomorphological evolution is hardly more than educated guesswork with computers, if not impossible.

Make no mistake, coastal wetland and upland land loss is a significant issue all across Southern Louisiana. The questions are the causes and the best remedies. These are sensitive systems that range from fresh, to brackish, to salt across as transition toward the coast. Previous attempts to restore marsh using funds allocated for that purpose from the 2010 BP Macondo well blowout in the Gulf of Mexico have had at best limited results. All of these, and other relevant considerations are noted in Delta Dawn.

In 2013, one year before the Federal Circuit Court ruled to force the federal government to live up to its WWII Avgas Program contract commitments at the McColl Superfund site, Plaquemines Parish and others filed 42 lawsuits in Louisiana state court alleging ecological damage to coastal lands and wetlands against Chevron and 200+ other oil and gas companies under the Louisiana State and Local Coastal Resources Management Act (SLCRMA). The 1978 state law prohibits certain uses of Louisiana’s coastal zone without a permit, including oil production, but contains an exemption for legal uses commenced prior to 1980.

The Parish alleged that the companies lacked permits and that some uses, even if initiated before 1980, were illegally commenced and therefore not covered by the exemption. Critically, at one point during the litigation, the Parish filed an expert report which made it clear that it intended to challenge certain defendants’ crude-oil production during the Second World War (hint: McColl Superfund site above.)

In December 2013, one month after Plaquemines Parish sued them, Chevron attempted to remove the matter from the Louisiana state court system to the federal courts, filing a Notice of Removal in the federal District Court for the Eastern District of Louisiana (EDLA) under the “federal officer removal” statute. The law allows persons (in this case corporations) acting under direction of federal officers and agencies to remove civil or criminal cases from state court to federal court when the claims arise from acts performed “under color of” federal office. The effort failed and the case was remanded back to state court.

But Chevron did not give up easily. Critically, its initial attempts to have the case removed to federal court were not based on its World War II-era contracts to refine crude into avgas for the military but grounded instead in other federal Acts and legal theories that fell short.

But in May 2018, Chevron changed tactics. This time, it filed for removal again under the federal officer removal statute in the same federal court which rebuffed its earlier attempts, but this time using the same WWII era Avgas contract indemnities at issue in the McColl Superfund case.

Meanwhile, one of the initial Louisiana state lawsuits against Chevron and other oil companies proceeded to jury trial, and in April 2025, (to the surprise of few) a jury in Plaquemines Parish state court rendered a $745 million verdict in favor of Plaquemines Parish. The bulk of the verdict related to coastal land loss, with smaller portions allocated to environmental contamination and abandoned wells and equipment.

Chevron succeeded removing the Plaquemines Parish suit to federal court in the EDLA and argued that the litigation was “related to” its duties to refine crude under its contracts with the government. The District Court rejected the argument and remanded the case back to state court.

A 2-1 panel of the U.S. Court of Appeals for the Fifth Circuit affirmed the District Court’s decision in spring 2024, finding that Chevron had “acted under” a federal officer in its military contract, but that the suit was not “for or relating to” those acts since Chevron’s contract did not specify how to obtain the crude needed for refining. The full Fifth Circuit denied Chevron’s request for rehearing en banc on the last day of October 2024.

But Chevron still was not done with the matter. It petitioned the U.S. Supreme Court for certiorari in January 2025. Last June the Court granted Chevron’s petition, and the case was heard on January 12^th this year.

Just under two weeks ago, on April 17^th, the Supreme Court overturned the Fifth Circuit decision and rendered a unanimous decision (8-0, with Justice Alito recusing himself) in favor of Chevron, finding that the company had (emphasis added):

“...plausibly alleged a close relationship between its challenged crude-oil production and the performance of its federal avgas refining duties—not a tenuous, remote, or peripheral one—and has therefore satisfied the “relating to” requirement of the federal officer removal statute.”

The Supreme Court remanded the case to the Fifth Circuit, where its effective role will be to eat crow and formally order removal of the litigation to federal court. It will most likely land again in the federal EDLA. The federal District Court will have to decide the matter on the underlying merits — Are Chevron and the other energy company defendants liable under federal common law or other applicable law for the claimed coastal Louisiana damages?

Before that can even occur, now that the matter is in federal court the SLCRMA state law claims and their $744 million verdict will face federal preemption challenges. The tests are critical gating issues, and energy companies will argue that the Outer Continental Shelf Lands Act (OCSLA), the Clean Air Act, and other federal laws displace Louisiana’s ability to impose liability for the challenged conduct. OCSLA’s is a primary preemption tool for coastal damage claims, something particularly relevant in the Plaquemines parish case. Because removal and final-judgment issues are legally distinct, the plaintiffs will try to argue that the final judgment survives removal to the federal courts. But if federal law preempts the state law claims, then Plaquemines Parish and the other plaintiffs may have no viable cause of action. Net result: the $744 million verdict would not simply be retried; it would be extinguished.

The strategy is a high-leverage play. The 42 state cases are most likely to be consolidated into a multi-district litigation case in the federal EDLA, with bellwether trials and a single judge ruling once on preemption. That means in one preemption ruling the legal question at issue across all 42 cases could be disposed of simultaneously.

You can see why Chevron was so persistent.

Assuming that the District Court finds that federal law does not preempt the state law claims, then it is left to decide – under new and separate proceedings - whether Chevron, etal are liable for the alleged coastal damages and, if so, the extent of the damages. The federal rules of procedure and damages framework are both more deferential to Chevron – and worse for the plaintiffs - than those in Louisiana’s state court system. The federal Daubert standard excludes weaker expert causation reports. Federal common law on causation/damages versus Louisiana tort law makes the plaintiffs’ burden higher. A federal jury drawn from the EDLA is not as likely to be quite as deferential as one drawn from state court in Plaquemines parish. And the damages methodology changes from SLCRMA’s restoration-cost basis to something more akin to diminution-in-value or CERCLA or OCSLA natural resource damage assessments.

And this is where Shell vs. U.S. and the McColl Superfund site converge in ways that could shape the legal landscape for climate-related damage suits in state courts for years.

If the cases were to succeed on the merits in Federal Court, and the court rules that climate-related tort damages qualify as “new-or-additional charges” under the DSC avgas contract indemnity language, then absent any ruling overturning that finding at the federal appellate court level or ultimately the Supreme Court, some - and potentially a lot - of the damages awarded against energy companies in state climate litigation could end up being reimbursable under the contracts. For energy companies, here’s how that might work.

The first step would require an energy company to succeed in having the state case removed to the federal court system under the federal officer removal statute. Under the standard set by the Supreme Court on April 17^th, the company would argue that its oil production during all periods in which it had a federal contracting relationship relative to the allegations bears a “close, non-tenuous relationship” to its refining activities. The new standard set by the Supreme Court does not require that the activities directly caused the harm, only that the challenged conduct “relates to” the acts performed under federal direction. It would still have to meet the other required elements of the federal officer removal test:

• It acted under a federal officer (something like the DSC, or the Defense Logistics Agency today).

• The charged conduct is related to that federal direction.

• It has asserted a colorable federal defense.

The last of those elements is where other Federal Courts (the Fourth and Ninth Circuits in climate cases involving Baltimore and Honolulu, for example) have held that state-law climate tort claims do not sufficiently implicate a federal defense to support removal to federal courts. The Supreme Court’s decision in Chevron vs. Plaquemines Parish does not resolve the court split, but its broadening of the “relating to” language now puts energy companies in a stronger position to assert federal officer removal in state climate cases.

The second step would involve a crossclaim or third-party claim by the energy companies against the United States — brought parallel to the underlying tort case and drawing the Department of Justice into the damages phase. Energy companies will claim that climate-related tort damages — coastal wetland loss, costs of mitigating sea level rise and bolstering flood infrastructure, property devaluation, etc. — qualify as “new-or-additional charges” under the same DSC avgas contract indemnity language that prevailed in Shell Oil Co. v. United States which caused the federal government to reimburse the responsible party oil companies at the McColl Superfund site in Fullerton. Following this logic, the energy company would argue that:

1. It produced fuel under a federal contract such that the federal government exercised control over production.

2. That activity generated CO2 emissions that are a direct basis of the plaintiff’s damage claims.

3. Such damages constitute a “charge” imposed on the company as a result of conduct required by the federal contract; therefore,

4. The federal government must indemnify the company for the portion of damages attributable to the conduct over the duration of the federal contracting period.

Space does not permit a full examination of the practical legal hurdles the approach would face in areas such as factual apportionment (isolating the proportionate share of greenhouse gas emissions (GHGs) associated with the covered federal activity and the damages resulting from), the question of whether “charges” in the DSC and similar contracts include climate civil tort awards, and whether each energy company’s contract includes sovereign immunity waivers like the ones at issue in Shell’s McColl Superfund case.

But from our research we can conclude that the path exists for more than just Shell and Chevron. While not a get-out-of-jail-free card, it is a powerful tool for energy companies who can document a “fact-specific, non-tenuous nexus to a specific federal contracting relationship” involving fuel production and refining.

In fact, the evidentiary foundation of a perfect analogue already exists in the federal record. ExxonMobil’s predecessor entities operated under wartime contracts with the U.S. government at their Baton Rouge, Louisiana and Baytown, Texas refineries for the production of avgas and synthetic rubber during WWII and the Korean War. Those two refineries were among only three in the country to produce over one billion gallons of 100-octane avgas during WWII, accounting for ~20% of all avgas consumed by Allied Forces.

In ExxonMobil Corp. v. United States, a federal court found that the government “exerted substantial control over the refineries’ actions.” It awarded the company $20.3 million for environmental remediation costs at the two sites.

The situation will vary by energy company. For example, Texaco’s record of WWII military fuel contracts is complicated and less robustly litigated.

Ironically, while the question of apportionment of damages is vexingly complex (read: realistically impossible on an equitable basis), this is where energy companies could turn the same “attribution science” (a computerized form of voodoo) developed by their opponents against them. Methodologies like The Carbon Majors could be, theoretically, used to isolate their barrels produced during the period of federal contracting vs. their commercial market production, the GHG emissions from those barrels connected to the federal conduct, that volume’s proportionate contribution to cumulative GHG emissions, and by extension the damages attributable to it.

By doing so, the energy companies would be rubbing their opponent’s strategy and tools in their faces by adopting their opponent’s own causation methodology and applying it to carve out the indemnifiable federally contracted share. Pretty nifty (and bound to leave a mark).

The approach also has the advantage of conceding commercial activity-related liability, grounding their indemnity claims in a bounded, quantifiable factual predicate, and mirrors the proportionate share liability framework federal courts already apply in multi-party Superfund liability cases. That makes it a far easier lift for the federal courts.

Of course, any successful application of this approach leads to absurd results in which U.S. taxpayers end up paying for a portion of state civil court climate damages awarded against major U.S. oil companies. Perhaps it is coincidental that very week the Supreme Court rendered the Chevron vs. Plaquemines Parish decision, Wyoming Republican House Member Harriet Hageman introduced H.R. 8330:

The bill would have the effect of affirmatively barring “retroactive climate liability lawsuits” and nullify existing state climate superfund laws. Hageman’s bill also could be insurance in the event that EPA’s present effort to rescind its (Obama-era) 2009 Endangerment Finding on GHGs succeeds. If that occurs, the Clean Air Act’s federal preemption of state climate tort lawsuits that has been the energy companies’ strongest defense once cases are removed to federal court would be eliminated.

We close with an analogy from a repeated Doomberg refrain since the Russian invasion of Ukraine and NATO’s proxy war in the defense of the latter: “one of the reasons to avoid going to war is because you might lose, and losing wars is hard.” By going to war in state courts, climate litigants have given energy companies some new legal tools and avenues they certainly did not intend.

State climate litigation in blue state courts that results in US taxpayers reimbursing energy companies for climate “damages” from legal activity in support of WWII and similar government directed contracts, you say? That would certainly be an ironic outcome of all this legal maneuvering.

Whether energy companies attempt to deploy this strategy, and how it pans out will take years to determine. Right now, your tax dollars being used to reimburse energy companies for state climate litigation is not something anyone has on their bingo cards. But thanks to the precedents set by Shell at the McColl Superfund site and this month’s Supreme Court decision in Chevron vs. Plaquemines Parish, that possibility is now in play.

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For six weeks we have watched the events unfolding in Iran, Israel, Lebanon and throughout the Persian Gulf wondering why U.S. President Donald Trump would pursue a war in Iran at this moment in time. Considering the risks to his agenda (and worse, Republican control of the House of Representatives and the Senate this November) if things go badly, the rewards he seeks surely must have larger domestic implications than the defense of Israel and throttling Iran’s nuclear aspirations and sponsorship of regional terrorism.

In Venezuela, Trump authorized “lethal force against narcoterrorists to stop the flow of deadly drugs into this country” followed by “an extraordinary military operation in support of law enforcement to bring outlaw dictator Maduro to justice.” But, as a practical matter, the operation carried little domestic political risk.

You can choose to accept the administration’s justifications at face value or not. But we believe energy – primarily, but not exclusively, U.S. energy security - drove the military action to remove Maduro.

Thanks to American hydraulic fracturing (aka “fracking”) innovations, the U.S. produces enormous amounts of light (high API) oils that render large fractions of gasoline, with lesser but still respectable yields of jet fuel and kerosene. And they produce substantial fractions of naphtha, a key petrochemical feedstock, and light olefins and aromatics critical to a variety of plastics, synthetic rubbers, nylons, and solvents, as well as propane and butane.

But they produce lower volumes of diesel and even lower fractions of fuel oil and heavy residuals like asphalt and petcoke. Yet all of these are critically important to the U.S. economy.

Heavier crudes contain more long chain hydrocarbons, and they render higher fractions of “middle distillates” like diesel, jet fuel, and kerosene in American refineries. But the U.S. has largely depleted its reserves of heavier crudes after ~100 years of domestic production, and today about 70% of U.S. refineries are optimized for heavier crudes than the U.S. now produces, especially most Gulf coast refineries.

The Gulf Coast Petroleum Administration for Defense District (PADD), one of five across the U.S., happens to account for around half of U.S. refining capacity and produces more than half of the nation’s diesel and jet fuel. And to optimize their middle distillate production, PADD 3 refiners on the Gulf coast (and others) need heavier crudes to blend with U.S. light shale oil from fracking.

As a result, around 60% of U.S. crude imports are heavier forms, mostly from Canada and Mexico. Venezuela happens to have a lot (~300 billion barrels worth, proven) of heavy crude.

Venezuela’s production had declined from around 3.5-4 million barrels per day (bpd) at its peak in the late 1990s to ~850,000 bpd by the end of 2025. But about 125,000 bpd was still going to U.S. Gulf coast refiners prior to the U.S. military operation that removed Maduro from power in January this year, most via Chevron, the only U.S. oil major remaining in Venezuela after Chavez nationalized foreign energy company assets in 2007.

Diesel and jet fuel are what runs big industrial mining machines and airplanes. No mining, no metal. No jet fuel, no commercial aviation. With the exception of nuclear-powered aircraft carriers and submarines, they also provide the energy that defends the nation. No diesel, or jet fuel, no troop or materiel movements, no jet fighters, no bombing runs, and no Navy.

These are the life blood of the U.S. economy and the nation’s defense.

Like Canada and Mexico, Venezuela has the heavy crude cuts U.S. gulf coast refineries need, only far more. Keeping those refineries fed with a steady flow of that specific type of crude is a matter of critical economic and national security. It is through this lens that we viewed Trump’s actions in Venezuela.

The war in Iran began in a similar fashion. The objectives were said to be regime change, capturing and removing ~1,000 pounds of enriched uranium, stopping Iran from “ever” achieving a nuclear weapon, and degrading its ability to strike Israel and its neighbors with ballistic missiles and fund terrorist proxies like Hezbollah in Lebanon and the Houthis in Yemen through the sale of crude oil and refined products. After 6 weeks, the last of those has been achieved to some extent.

But the moment the Trump ordered the U.S. Navy to blockade the Strait of Hormuz, that was our signal that Trump’s decision to engage in military action in the Persian Gulf, like Venezuela, also had to do with energy. But not U.S. energy security, or even the global flow of energy that has been portrayed by nearly all media reporting.

What else do we believe is driving Trump’s military actions in 2026? If we are correct, how will this soon be evident? If one views Trump’s choice of conflicts through the lens of energy, environment, and economics - not just dictators (theocratic or socialist), terrorists, or nuclear bombs – a picture of resource wars and great powers emerges for which Venezuela and Iran are merely pawns in a larger game.

We begin in 2012, where a complaint filed by the Obama administration with the European Union and Japan at the World Trade Organization (WTO, of which China had only become a member about ten years earlier) was, in retrospect, a foreshadowing (emphasis added):

“The administration’s tactic — lodging a complaint with the WTO with Japan and the European Union to curb “unfair export restraints” on so-called rare earth minerals — could take years to resolve unless China surprises everyone and throws in the towel to head off a showdown in the next two months.”

In 2014, the WTO ruled in favor of the U.S. and other petitioners. In May 2015, China officially dropped the export quotas and inconsistent export duties on rare earths, tungsten, and molybdenum.

For the key commodities modern industrial societies require to function, the Chinese Communist Party has quietly built-up strategic control of vital supply chains over decades through policy and State-funded overinvestment. For commodities its geology provides domestically, it cornered markets as the low-cost supplier of base materials. For those with which it is not geologically blessed, Chinese leaders employed the same strategy to dominate the earliest possible key chokepoints in refining, conversion, and other key processes.

The result is that today China dominates the world’s supply chain for rare earths, crude steel (despite being a net importer of iron ore), pig iron, cement, polysilicon ingots, antimony, tungsten, molybdenum, graphite, magnesium, smelted aluminum, titanium, and many other key commodities.

Before and since ascending to WTO membership, China has not been burdened by the environmental regulatory and domestic political constraints that have gutted the industrial bases of European, UK and, to a lesser extent the U.S. In October 2023, Doomberg succinctly captured the essence of the matter in Geopollutical Warfare:

“Producers who set up shop in jurisdictions with lax pollution enforcement enjoy substantial advantages, while those in regions with strong controls grow necessarily less competitive over time. Of course, pollution limits—and how strictly they are enforced—are nothing more than policy choices. Taken to the extreme, allowing domestic producers to recklessly pollute amounts to a hidden but decisive subsidy that can allow a nation to monopolize strategic industries. No country has perfected this art more than China…”

Paraphrasing Doomberg’s many podcasts explaining the situation, when your regulations properly capture the cost of environmental protection, but your competitor’s idea of a wastewater treatment plant is a pipe to the nearest river, they have a cost disadvantage you will never overcome. This is where the West finds itself today with an uncomfortable number and volume of commodities critical to its standards of living and economies.

Following the Obama administration’s effort at the WTO, the Trump administration took similar action during his first term. Two Executive Orders (EOs, one in 2017, the other in 2020) explicitly noted that the U.S. was importing as much as 80% of its rare earth elements (REEs) from China, directing federal agencies to develop strategies for domestic critical minerals supply chains.

The administration also considered tariffs on Chinese REEs and began forging supply partnerships with Australia, Canada, and Mexico. The Department of Defense (DoD) allocated $30 million to support Australian rare earth firm Lynas’ establishing a refining facility in Texas.

During the Biden administration, the Infrastructure Investment and Jobs Act and the Inflation Reduction Act (IRA) included efforts to bolster domestic REE separation and processing. Through these, America’s only remaining REE miner, Mountain Pass (MP Materials), received help through Department of Defense contracts and IRA tax credits.

In April 2025, the situation reached a critical threshold. In response to threatened Trump tariffs, China imposed export restrictions on seven rare earth elements, and by September last year, it effectively prohibited Chinese companies affiliated with foreign militaries from receiving export licenses for REEs.

The Trump administration responded by buying equity stakes in MP Materials, Intel, and Trilogy Metals. Ultimately, the parties reached a temporary truce under which China agreed not to restrict rare earth exports for at least one year in exchange for U.S. tariff relief. But in the process, U.S. Treasury Secretary Scott Bessent gave an important signal (emphasis ours):

“This is China versus the world. They have pointed a bazooka at the supply chains and the industrial base of the entire free world, and we’re not going to have it.“

For some perspective on the extent to which China dominates key commodities, and the products and sectors that can be constrained by its’ controls with the simple stroke of Xi’s pen, consider just the minerals in the table below:

Gallium, germanium, tungsten, and antimony are critical to U.S. advanced weapons systems. Steel, aluminum, and magnesium are critical to the U.S. automobile and other heavy industries, and while China is a net importer of iron ore, it produces half the world’s crude steel today. As respects key agricultural inputs, China produces ~40% of the world’s phosphate fertilizers. And about 40% of all Advanced Pharmaceutical Ingredients (API’s) globally originate in China.

China has used cheaper electricity mostly derived from coal-fired power plants, cheaper labor (including forced labor for solar hardware production in the Xinjiang Uyghur Autonomous Region), and environmental standards far below the West’s to corner supply chains for critical commodities and other inputs the advanced nations of Europe and North America need to maintain their economies and living standards and provide for their national defense.

The U.S. can take all the equity stakes it wants in domestic producers and innovative startups that proclaim ways to change this reality. But the economic implications of building the industrial infrastructure to meet western environmental standards make overcoming China’s advantage effectively impossible at cost parity. The years it would take to accomplish that build out even if the economics were favorable “onshoring” or “friendshoring” are not going to be quick solutions.

Mining, separation, and refining of REEs, like other forms of mining, is a very dirty business. There is no avoiding the fact that producing the commodities in the table above would be subject to these time, cost, and environmental regulatory pressures. The substantial differences in labor cost between the West and China only exacerbate the former’s ability to regain control of its supply chains.

Three axioms provide the foundation for our working mental model of the present situation. First, that China, consuming over 16 million bpd of oil but only producing ~4 million bpd, and consuming 42 billion cubic feet (bcf) per day of natural gas but only producing about 24 bcf/day, cannot afford to have its hydrocarbon energy supplies constrained. China’s 1.3 billion oil reserve build prior to the Iran war is only about 100 days’ worth of consumption, and while its’ natural gas storage situation is less clear, it is thought to be around 50 days.

Second, that the U.S., constrained by its mostly (but not completely) necessary permitting and environmental regulatory policies, will never produce much less refine REE’s and other key commodities at anywhere near cost parity with China. But American defense, automotive, energy, electronics and many other industries are severely handicapped without reliable supplies of these inputs at stable costs lower than the West – all hampered by similar regulations – could possibly produce them.

Third, that Chinese and U.S. leaders do not wish to confront each other militarily over their resource dependencies. No member of the much-propagandized Chinese military has ever fought a single day in a modern war. And for all of the U.S. military strength demonstrated in the current confrontation with Iran, America has not fought a war against a world power in eighty years, and China is a long way from home.

We surmise that early in Trump’s second term, his cabinet officials quietly made it clear that America’s reliance on China for such a large share and volume of critical economic, industrial and defense inputs had reached a level that poses a significant threat to national security, in both economic and military terms. Trump’s threats to annex Greenland well before military actions in Venezuela and Iran can mostly be viewed through the same lens.

On China’s side of the resource dependency ledger, the Statistical Review of World Energy paints half the story. Since joining the WTO, the growing gap between Chinese production and consumption of both oil and natural gas has – ironically - created a strategic and economic vulnerability for China that is somewhat analogous to the resource dependency the western nations created for their key commodity resource inputs by outsourcing them to China for economic and environmental purposes.

Oil:

Natural Gas:

Perhaps the biggest irony is the recognition, in hindsight, that the U.S. military built up a presence to defend the nation’s energy supply in the Middle East while, thanks to fracking, America’s dependence on the Persian Gulf states ultimately declined from the 1970’s Arab oil crisis to today. Concurrently, the U.S. military was securing China’s growing dependence on oil from the very same Middle Eastern countries.

Just prior to the Arab oil embargo of 1973, crude oil from Persian Gulf countries (Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, United Arab Emirates, and the Neutral Zone between Kuwait and Saudi Arabia) accounted for around 12% of U.S. imports. Today, that figure is down to around 8% (~490,000 out of 6.2 million barrels per day, or 8.5% if one includes crude products). But since ascending to WTO membership in 2002, China has imported between 45-55% of its crude oil from Persian Gulf countries.

For the U.S., Middle Eastern oil is becoming increasingly irrelevant. The chart below from our December post Lose the Battle, Win the War compares oil production from Western hemisphere producers to that of the Middle East:

For China, the picture is quite different. In 2025, ~31% of Chinese liquified natural gas (LNG) imports came from the Middle East, with Qatar supplying all but 1-2% of that total. According to Kpler data, combining crude oil, refined fuels, LNG, and liquified petroleum gas (LPG), China imported roughly 642 million metric tons of all hydrocarbon products in 2025, with 317 million tons (49.4%) sourced from Middle Eastern suppliers.

We take the Trump administrations stated objectives and justifications for the military actions in Venezuela and Iran at face value. But in our model, the unstated objectives are the bigger game, and other actions by the administration in the months leading up to, and since, would seem to support this analysis.

In 2017, Panama joined the Chinese Belt and Road Initiative (BRI). Chinese state-owned enterprises pursued major infrastructure projects including a proposed fourth bridge over the Panama Canal. But on the very day U.S. Secretary of State Marco Rubio visited Panama in early February 2025, Panama President Mulino announced that Panama would formally withdraw from the BRI.

In 2025, Panamanian officials (surely at the behest of American interests) launched an audit of Panama Ports Company (PPC), a subsidiary of CK Hutchison, the Hong Kong-based conglomerate that operates port and terminal franchises across the world. PPC was operating both the Balboa (Pacific entrance) and the Cristobal (Atlantic entrance) terminals at the Panama Canal.

The audit found that PPC owed Panama millions of dollars in unpaid revenues since its concession was extended in 2021. It led to a Supreme Court case that PPP ultimately lost in January this year. The Panamanian government seized control of the Balboa and the Cristobal terminals in February, just prior to the start of the Iran war.

None of these actions were coincidental. On April 13th, after a meeting between U.S. Secretary of Defense Pete Hegseth and Indonesian Defense Minister Sjafrie Sjamsoeddin, the U.S. Department of Defense announced a Major Defense Cooperation Partnership (MDCP) with Indonesia at the Pentagon. Why Indonesia? Virtually all seaborne energy imports heading to China have to flow through the Strait of Malacca, a maritime chokepoint between Malaysia and the Indonesian island of Sumatra. And just last week, Malaysia’s Maritime Enforcement Agency (MMEA) detained two tankers for allegedly conducting an illegal ship-to-ship (STS) transfer of diesel off the island of Penang. In the broader context of the recently announced increase in U.S. – Indonesian defense cooperation, we read this as the U.S. exerting greater influence over the last key chokepoint standing between China and the imports of critical crude oil and LNG on which it depends – the Strait of Malacca.

And now the U.S. has allegedly blockaded and taken control of the Strait of Hormuz, the choke point China depends on for the safe passage of an uncomfortably large share of its oil and natural gas (in the form of LNG) imports. The objective is to shut off Iranian oil exports. It is not difficult to figure out who that hurts the most after Iran.

Importantly, Trump had arranged a meeting for the end of March with Chinese President Xi in Beijing the week prior to starting the Iran war. The meeting has been postponed until May, but no matter when it occurs, some very difficult trade and tariff conversations are going to take place.

When he arranged the meeting back in February, we believe Trump anticipated that he would march into Beijing with a strong negotiating hand in the wake of two very dominant, overwhelming, and successful military actions in Venezuela and Iran. With respect to the latter, the jury is still out as to whether the war in Iran has strengthened or weakened Trump’s hand in trade negotiations with China. The critical question is how China perceives the strength of its hand compared to America’s.

China has the ability to take a sledgehammer to the U.S. economy through selective import export controls constraining key commodity inputs across a wide variety of critical American industrial and defense sectors. The U.S. asserts control of the Strait of Hormuz, is clearly eyeing the Strait of Malacca, and has run a subsidiary of a company from China’s “Special Administrative Region” out of its operational position at both ends of the Panama Canal.

We close by noting where we believe all of this is headed. Right, wrong, or indifferent, we view Trump’s military actions in Venezuela and Iran, and the recent announcement to increase military cooperation with Indonesia in the Strait of Malacca are signals to China in advance of his meeting with President Xi beyond their stated objectives.

In Beijing, we expect that Trump will attempt to leverage (read: threaten) access to China’s energy supplies, whether or not the U.S. blockade of the Strait of Hormuz is still in place, or the tenuous ceasefire fails and the bombs and drones begin destroying more Gulf state oil and gas infrastructure. We will not be surprised if Trump threatens interdiction of shadow fleet tankers carrying sanctioned oil in, or even closure of, the Strait of Malacca.

What will he try to achieve in return? A sweetheart tariff deal for China (by comparison to Europe and other “allies”) in return for guarantees not to place license restrictions, export controls, or play other games to constrain the supply of any of the low-cost, critical inputs to the U.S. economy that China controls. This means all of the items in our table above and others we did not list that are just as important, not the least of which are the unrestricted flow of computer chips from Taiwan Semiconductor Manufacturing Corporation (TSMC) no matter what China does in Taiwan.

In our view, this is the bigger game playing out behind the scenes. The shiny objects most media sources and pundits are endlessly scrolling across your TV and mobile device about the war in Iran are the just warm up band (one with good pyrotechnics).

Will Trump’s gambit succeed? That is the $64,000 question. It is not obvious to us he has the leverage he thinks he does.

China has lots of cards to play in an economic war with the U.S, and America cutting off its access to energy won’t produce more of the phosphate fertilizer, gallium, tungsten, REEs, and other commodities the U.S. needs. Blockading the Straits of Hormuz and Malacca concurrently would almost certainly invite a kinetic confrontation with China, something we do not believe Trump actually wants (nor does China).

Our analysis could, of course, be entirely wrong, but we will know whether our model holds up or gets cast aside in a matter of weeks. When Trump and Xi meet in China, and the terms of the trade begin to emerge, our signal will be whether Trump tries to use the carrot of U.S. energy exports or other forms of cooperation, or the stick of squeezing China’s energy access.

Beyond whatever objectives he may have in Iran, this is a key part of President Trump’s “art of the blockade” at the present time in our view, and the amount of leverage Trump does or does not have in coming trade negotiations with China partly hangs in the balance on the outcome of the war in Iran.

Look beyond the kinetic battle in Iran. The war to watch is the economic one between the U.S. and China.

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A few events that have occurred since the turn of the century seem in retrospect to have been weeks when decades happened by virtue of how profoundly the consequences of each changed the world.

September 11, 2001.

The Great Financial Crisis in September of 2008.

Covid-19(84) in the spring of 2020.

Terrorism. Fraud. A virus created in a lab. All of these events caused significant economic damage.

In each case, the global economy recovered, even if growth came at a slower pace and the consequences of piling printed money on growing government debts and deficits have yet to be fully realized. But the global supply of energy was not the cause of any of these historic, world-changing events.

A month into the war in Iran, Israel and the U.S. have killed scores of Iran’s theocratic political leaders and those of its Islamic Revolutionary Guard Corps (IRGC), exacted a heavy toll on the country’s military assets, and damaged or destroyed a significant portion of its missile and drone stockpiles, production and launching capabilities. But despite these facts, Iran continues to strike Israel and its U.S. allied Gulf neighbors with nightly attacks of both.

In addition, by virtue of the fear of those missiles and drones, and despite reportedly having most of its naval assets damaged or destroyed, Iran continues to exert de facto control over the vital Strait of Hormuz, through which 20 million barrels of crude oil and refined products - 25% of the world’s seaborne crude - and 20% of the world’s liquefied natural gas (LNG) ordinarily pass daily. That they have done so without a navy, from land, is a testimony to how much warfare has changed since the U.S. last engaged in a major conflict in the Middle East.

Iran has declared that U.S. energy companies’ fractional ownership interests in its neighbors’ energy production assets makes them legitimate targets in retaliation for attacks on Iranian energy infrastructure. And in the overnight hours of March 18/19, its retaliation against the Qatari LNG facility we noted in our last post was, in our view, the first inflection point in this war, and a clear signal about how Iran intends to prosecute it.

After we wrote Not Laffan Now, we watched the war evolve fearing escalations that would target oil and gas production facilities more widely across the Persian Gulf, and spread to civilian electricity and water production and distribution plants. When QatarEnergy’s Ras Laffan LNG plant was struck by Iranian ballistic missiles, we viewed the event as a significant step up the escalatory ladder.

Why was the attack at Ras Laffan such an important first inflection point in the war in Iran? What is the next inflection point that would cause the global energy crisis, and the human toll, to go from bad to much worse? And regardless of the final outcome, how might global hydrocarbon energy flows, and the energy, environmental and economic policies of the West’s advanced industrial nations, all change in the wake of the war in Iran? Let’s review the big picture since the attack that damaged Ras Laffan, consider the risks in play, and speculate whether an energy crisis far worse than 2022 might shake advanced nations like Europe and Great Britain out of their climate-induced stupor.

Before we begin in Qatar, our story requires a brief detour to recount an event which occurred in Israel on October 1, 2024. That day, Iran launched a missile barrage into Israel in retaliation for the latter’s assassination of Hamas leader Ismail Haniyeh in Iran, and strikes that had killed a senior IRGC leader and Hezbollah Secretary General Hassan Nasrallah in the prior sixty days. This event would turn out to be highly relevant to the current war in Iran.

As reported by Israeli media, of the approximately 200 ballistic missiles Iran launched in Operation True Promise II (emphasis added):

“Approximately 20 of them were intercepted or thwarted before entering Israel’s airspace by the United States, British and Jordanian air forces, leaving around 180 missiles that were either intercepted or impacted within Israeli territory.”

Around 30 ballistic missiles struck on and around the Nevatim Airbase in southern Israel, with one causing significant damage (that was clearly visible in satellite images) to an aircraft hangar. Two missiles were reported to have struck near Mossad headquarters outside Tel Aviv, with three others potentially hitting structures on the Tel Nof Airbase near the city of Rehovot.

Why did this event matter? To our knowledge, it was the first time that Iran demonstrated that it could launch a series of ballistic missiles that could overwhelm Israel’s highly sophisticated missile defense system and hit targets with some degree of precision.

As we noted in Not Laffan Now, Iran hit QatarEnergy’s Ras Laffan LNG liquefaction plant with a minor drone strike within 48 hours of the start of the war in Iran. The social preview for that piece warned:

“One serious attack on a single Middle East LNG export facility and the EU’s self-inflicted energy crisis gets even worse.”

We conclude that March 2^nd drone strike was Iran’s way of showing that it could hit the facility.

When Israel attacked (with or without U.S. help) the South Pars natural gas field that Iran shares with Qatar in the Persian Gulf on March 18^th, Iran’s retaliation was swift. Within hours of declaring Ras Laffan as a target in retaliation, Iran hit two of the site’s 14 LNG trains with ballistic missiles, damaging $20 billion worth of energy infrastructure and putting ~17% of its production offline for 3-5 years. Almost 4% of marketable global LNG production was taken down in a matter of moments.

In our view, the precision with which the attack was conducted constituted the war’s first major inflection point. Why?

QatarEnergy holds the majority interest in all 14 LNG trains at Ras Laffan. Train 4 is a joint venture between QatarEnergy (66%) and ExxonMobil (34%), and Train 6 is a joint venture with QatarEnergy owning 70% and ExxonMobil 30%. According to QatarEnergy CEO Saad al-Kaabi, the damage to these trains impacts supplies to Italy, Belgium, Korean and China.

According to our research, American energy firms hold significant stakes in ten of Ras Laffan’s 14 LNG trains, meaning eight other trains co-owned with QatarEnergy have not be hit. In addition to ExxonMobil (which has ownership interest in 9 of the Ras Laffan LNG trains), ConocoPhillips has interest in one of those trains.

Ras Laffan was not the only QatarEnergy facility hit at the giant complex that week. The Pearl GTL (gas-to-liquids) plant - a multibillion-dollar facility that converts natural gas into fuels, and oils used to make premium lubricants, paraffins, and waxes - was also attacked the day prior, sustaining damage to one of the plant’s two trains. The joint venture between QatarEnergy and Shell is the world’s largest GTL plant and, as Shell proudly notes, “one of the world’s largest, most complex and challenging energy projects ever commissioned.” The fifteen-year-old plant had a price tag of about $20 billion.

As a representative for Saad al-Kaabi, noted the day after the strikes:

“The damage caused to one of the two trains at Pearl GTL is being assessed and is expected to be offline for a minimum of one year .. and … would also lead to the loss of the following products and amounts:

· Condensates: 18.6 million barrels which is around 24% of Qatar’s exports

· Liquefied Petroleum Gas: 1.281 MT which is around 13% of Qatar’s exports

· Naphtha: 0.594 MT which is around 6% of Qatar’s exports

· Sulfur: 0.18 MT which is around 6% of Qatar’s exports

· Helium: 309.54 MCFA which is around 14% of Qatar’s exports

The very next day, speaking of the damage to the two LNG trains he said the damage to ⁠the facilities that had cost $26 billion to build would impact LNG deliveries to Europe and Asia for up to five years.

“The cold boxes are gone. This is the main unit, that is the cooling box of the LNG, it is completely destroyed.”

At that point, any pronouncements from legacy media about the portion of Iran’s drone and missile launching capabilities that have been destroyed no longer mattered. The fact that Iran was able to use precision targeted ballistic missiles to hit $50+ billion worth of energy facilities (Ras Laffan’s two LNG trains plus Pearl GTL) partly owned by Western energy majors while avoiding the rest was the war’s first major inflection point in our view. If Iran could hit these facilities, it would be unwise to assume they could not hit refineries, production facilities, and other high value targets, including ships in the Strait of Hormuz closer than all of the above.

Two days later President Trump reacted to the strikes on Ras Laffan, several of Iran’s Gulf neighbor’s energy assets, and continuing strikes on Israel by giving Iran an ultimatum. At the time, it was not obvious to us that he had fully grasped the implications of what Iran demonstrated with the hits at Ras Laffan.

Making things even more complicated and dangerous, after Iran’s earlier noted October 1, 2024 missile barrage on Israel, Doomberg presciently foresaw the present danger in more humanitarian terms. More than ten million residents’ ability to live in the Middle East’s only democracy depends on the continued operation of no more than ten power generation and water desalination plants that provide 75-80% of electricity and fresh water. All of these facilities are concentrated in an area about the size of New Jersey and are easily identifiable (emphasis ours):

“Consider Israel’s electricity grid. Five large thermal power plants account for approximately three-quarters of the country’s power output, with the balance coming primarily from intermittent solar, wind, and a few smaller natural gas plants. The country has been systematically shifting away from coal and toward natural gas, in large part because it is now a net exporter of the latter. Israel produces much of its gas from offshore reserves in the Mediterranean Sea, particularly from two large fields, Leviathan and Tamar.

Layered upon this concentrated risk is the fact that nearly 80% of Israel’s drinking water is sourced predominantly from just five large desalination facilities. These operations require copious amounts of electricity to run and are essential to everyday life in the country. Were they to be taken offline, a significant humanitarian crisis would swiftly follow.

The precise geolocations of these dozen targets—above ground and difficult to harden against external attack—are widely known to all involved. If Israel’s air defense systems are no longer capable of stopping a large barrage of missiles, a significant and directed attack against the country’s energy and water treatment facilities would be catastrophic. The potential for this knockout blow radically changes the game theory involved in the decision to escalate.”

After Trump’s 48-hour ultimatum on Saturday evening March 21, a man whose face has regularly appeared over the last few weeks issued Iran’s response via Tasnim News Agency, the Iranian propaganda outlet of the IRGC. The specific targets he listed cemented our view of the war’s second major fulcrum.

By Monday morning, Trump appeared to consider the implications of Iran’s ability to hit Gulf energy assets more broadly. With just over twelve hours remaining, he extended his first ultimatum deadline by five days.

All 32 member countries have released (or agreed to release) crude from their strategic petroleum reserves in accordance with the International Energy Agency (IEA) plea (and earlier U.S. “recommendation”), with the U.S. authorizing the release of 172 million barrels. Saudi Arabia has maxed out their East/West pipeline to get some crude locked in the Strait of Hormuz out via the Red Sea, and the UAE is using the Habshan–Fujairah (aka Abu Dhabi) oil pipeline to get crude beyond the Strait directly to the Gulf of Oman, but Iranian drones have attacked caused fires at its terminal at Fujairah at least twice in March.

Incredibly, the U.S. eased sanctions Iranian oil trapped at sea to increase flow and calm markets while it was shelling Iran. It also eased sanctions on Russian oil for the same purpose. Meanwhile, Iran has let some crude cargoes pass through the Strait of Hormuz, either for a ransom “fee” or for countries it did not deem aggressors or those collaborating with them.

But because of the threats that Iran demonstrated with the attacks on Ras Laffan and Pearl GTL, and more than two dozen additional strikes to other Gulf energy assets since, Iran remains in de facto control of the Strait of Hormuz at this writing. There is no way of putting a positive shine on this reality.

By the third week of the war, the IEA said that forty energy assets in the Middle East had been severely damaged. IEA Director Fatih Birol declared that the fallout from the conflict “is equivalent to the two major oil crises of the 1970s and the 2022 gas crisis put together”.

We asked Perplexity AI to prepare a map of the oil production, refining and terminal facilities, as well as the LNG liquefaction and export facilities, which have been struck by Iranian drones or missiles since the war began. It identified 30 strike events at 18 facilities in six different Persian Gulf neighbors:

By our rough calculations, even with the Saudi, UAE and other workarounds, the global oil market is still short about 10 million barrels per day (mmbpd) of crude oil versus pre-war trade, and there is no workaround for the 20% of global LNG production presently trapped on the wrong side of the Strait of Hormuz. 17% of that LNG production would not be available to the world at least 3 years if the war ended today. And QatarEnergy has postponed additional work on its enormous North Field expansions that would have brought billions more cubic feet of capacity per day online at Ras Laffan in the next two years.

Before Trump’s first deadline extension could expire on March 28^th (a weekend, no doubt in relation to global oil and stock markets), he extended it again, attributing the move to a request by Iranian government authorities.

Regional and some western media sources reported that Iran did not request the extension. Israel and the U.S. continued to pound Iranian targets. Iran continued to mete out its ballistic missiles and drones to demonstrate that it still has the capability to hit strategic targets.

The two sides have allegedly exchanged their terms for ending the conflict. Iran has rejected the U.S. 15-point plan. The U.S. has rejected Iran’s 5 key conditions. This morning, China and Pakistan advanced a “Five Point Initiative for Restoring Peace and Stability” calling on the parties to “immediately stop attacks on civilian and non-military targets .. and stop attacking important infrastructure including energy, desalination and power facilities, and peaceful nuclear infrastructure, such as nuclear power plants.”

Control over the Strait of Hormuz is the key issue both parties’ demands. At the end of this conflict, one will not get it.

All of this has led to where we stand today. The Strait of Hormuz is effectively closed to around 10 million barrels per day of the world economy’s life blood. Nothing is passing through without Iran’s explicit permission. And thousands of U.S. Marines and hundreds (or more) of Special Forces are on their way to the Middle East or have already arrived in theater.

Widespread attacks on oil production, refining, and export facilities, more at Ras Laffan, and attacks on civilian electricity generation and water desalination plants are the next inflection point in the war. While we make no prediction as to the likelihood of that outcome, we have been considering the consequences of such an escalation. A new development that occurred over the weekend caused us to look more closely at the outcome we have feared since the war began.

On Saturday, Iran’s Houthi proxies fired missiles into Israel. By Monday it appeared they had joined the war. But several days previously, Iran began threatening to cut off shipping through the next major Middle East chokepoint. All maritime traffic back and forth between the Mediterranean Sea and the Arabian Sea has to pass through the Bab El-Mandeb Strait, a choke point narrower even than the Strait of Hormuz, between Yemen and the African coast at Djibouti.

Starting in the fall of 2023, Houthi attacks threatened and rerouted significant volumes of global shipping traffic through Bab El-Mandeb. Prior to October 2023, ~9mmbpd of crude oil and refined products (~9% of global seaborne) and nearly 10 million cubic meters of LNG (about 8% of global LNG trade) transited the Strait each day. Since the attacks, LNG volumes have been practically reduced to zero, and crude oil shipments down to around 4-5mmbpd.

With the Houthi’s joining the conflict, the prospect of the world’s supply of vital oil and natural gas being threatened by the closing of two major Straits in the Middle East through which around 25% of seaborne trade of crude oil and refined products and over 20% of global LNG transited daily prior to the war in Iran is very much on the table.

And this is where things could quickly go from bad to much worse. Escalations from here likely mean increasing:

• Attacks on oil production, refining, terminal, and export facilities across the region,

• Attacks on Qatar’s Ras Laffan LNG megafacility,

• Attacks on civilian electricity generating stations and water desalination plants.

• Iran and the Houthis attempting to close the Bab El-Mandeb Strait.

A closure of the Bab El-Mandeb Strait would likely take another 2-3 mmbpd of global oil production out of the market, bringing the total global shortfall to ~15mmbpd. On top of 20% of world LNG supply being temporarily trapped behind the Strait of Hormuz (and 17% of that not coming back for two or more years even if the war ended tomorrow), the world’s markets and producers of oil and natural gas could not fully adjust in 2026 or 2027 under any circumstances.

Now imagine a situation in which widespread destruction of Middle East oil and natural gas production facilities takes place in a war that continues for two or three months, or more. Under those circumstances the potential for a loss of more than 15mmbpd of global crude oil production for a period of several years is a very real, even if remote, possibility.

And energy products are not the only key global commodities at stake in this scenario. We asked Perplexity AI to prepare tables showing pre-conflict volumes of key commodities passing through the Straits of Hormuz and the Bab El-Mandeb.

Assume half of all the crude oil and refined products, all of the LNG, and half of the other commodities above are displaced or rerouted at significant cost for another two months. Consider the possibility that 15mmbpd of crude oil are lost for 3-5 years. What would the global price of crude oil look like, and how would that impact western economies?

Imagine the cost of rerouting grain from European and Black Sea ports destined for the Middle East and Africa. How much less acreage might be planted in grains globally this spring due to the price of fertilizer or supplies being insufficient to meet global demand? What happens to food prices, and who suffers the quickest and the most?

And consider the lives of millions in the Middle East hanging in the balance if civilian electricity generation and desalination plants are attacked and disabled or destroyed in Israel, Iran, and Iran’s neighbors in the Persian Gulf. Those facilities cannot be rebuilt in a matter of weeks and days. What happens if tens of millions in the desert don’t have access to electricity, clean water, and sanitation for weeks or months?

As uncomfortable as these questions might be, we are forced to confront them as possibilities. The answers are beyond our expertise, and likely difficult even for those whose careers depend on them for the simple reason that the world has never been here before.

Finally, we believe that the future flows of hydrocarbon energy will look quite different when this conflict ends. Some significant, strategic reshuffling of global oil flows is highly likely.

We had Perplexity prepare a map showing global oil production and consumption by continent, separating the production and consumption into “East versus West” of the Suez Canal. The continents where the consumption bubbles in pink exceed the production bubbles in blue by a large margin are clearly in a bad position.

The West is better balanced between supply and demand than the East. The regional comparison shows how stark the problem is for Europe and Asia.. And just how different the picture is for the U.S. and Canada.

We ran the same exercise for the global LNG export/import trade. The results were similar. (Here, we told Perplexity to denote Turkey as a “continent” to separate its unique position as a country with feet in two continents, at the crossroads of Russian natural gas pipelines, and importing 100% of its gas consumption).

Here again, the regional comparison shows very clearly who is long and who is short LNG imports versus exports. The gap for “East of Suez” is even greater for natural gas than with crude oil.

With the added emphasis on energy security and maritime disruption risk, it seems intuitive that more oil and natural gas production in the Middle East and Russia will likely be directed to, and consumed by, Asia than Europe and the west prior to this conflict. And more of North America’s energy abundance will be consumed by Europe (though with what passes for European “leadership” at present, anything is possible) with continued LNG support to Japan likely.

We conclude with three important observations. First, the shortages of oil and natural gas in the global supply chain created by this conflict will not be made up by production anywhere on earth in 2026. The world’s largest crude oil producers (the U.S., Saudi Arabia, and Russia) cannot deploy enough extra capacity, and the significant supply of LNG supply coming online later this year on either side of our East/West Suez divide will not arrive fast enough to alleviate the now baked-in shortalls.

Second, Iran cannot win this war militarily against the U.S. and Israel. But it does not have to. All it has to do is keep the Strait of Hormuz (and disrupt or close the Bab El-Mandeb Strait) long enough to impose more economic pain on the U.S. than Trump is willing to withstand. Iran has been locked out of the global economic system for long enough that its remaining leaders seem willing to suffer as much pain as necessary to inflict the necessary damage, assuming their ballistic missile and drone supplies hold up. And we are convinced that Iran is receiving precision target coordination and other help from Russia and China, who are all too happy to open a second front to the proxy war against the U.S. that has been playing out in Ukraine for over four years now.

Finally, we believe that the energy, environmental and economic policies of the advanced, western nations are being rewritten in real-time as a result of this conflict, regardless of the duration and outcome. This can already be seen in the actions of a number of Asian and even some European nations. Japan is going to burn more coal to make electricity and South Korea is extending the life of coal plants slated for closure. Even Germany has been forced to consider the climate taboo of restarting idled coal plants for power generation.

For Europe and Great Britain, a second energy crisis in four years should be the force that causes serious energy and environmental policy course correction. As Chris Keefer noted in a brilliant Decouple episode with Doomberg and written post recently, the French instituted the Messmer Plan and built 54 nuclear reactors in 20 years, and Britain and Norway opened up the North Sea after the Arab oil crisis in the 1970s. The usual suspects are suggesting this event will speed up adoption of “renewables.” We expect the opposite will occur, though we concede that Europe is going to try utility scale solar and batteries first before eventually conceding that these are not long-term solutions for energy security much less economic growth.

Events are moving quickly. This morning, Trump posted the below on Truth Social:

We stand at a dangerous crossroads. Decades in the future of energy geopolitics are likely to be decided in the days ahead.

The war in Iran is an historic world event that should finally dispel any notion that energy is a derivative of economies rather than the converse. We hope the escalations we fear do not come to fruition.

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At a breakfast meeting during a NATO Summit in Brussels in July 2018, President Trump expressed his displeasure to America’s European allies the riot act for Europe’s and in particular Germany’s dependence on Russia natural gas. At the time, Russia already supplied over 50% of Germany’s gas demand.

In an address two months later at the United Nations General Assembly in New York, Trump echoed the warning he had delivered in Brussels.

“Germany will become totally dependent on Russian energy if it does not immediately change course.”

The members of the German delegation visibly laughed and smirked. Forty months later when Russia invaded Ukraine, Germany and Europe came begging to Trump’s successor, Joe Biden (and Canadian Prime Minister Justin Trudeau), for liquified natural gas (LNG).

At the time, Germany consumed fifteen times more natural gas than it produced domestically, nearly double from 2010 around the time its Energiewende began to take its present, destructive form. Today, Germany consumes 22 times more natural gas than it produces.

While Germans were laughing at Trump in 2018, the EU 27 bloc as a whole was consuming more than six times the amount of natural gas it was producing. (By the end of 2024, that multiple had increased to over 11!)

When Russia invaded Ukraine in February 2022, global oil and natural gas prices spiked. That summer Europe scrambled to secure LNG imports from wherever it could to make up for lost Russian supply even before western interests destroyed the Nordstream 2 pipeline that September. The premium paid by the EU to secure whatever natural gas it could obtain priced out developing countries like Pakistan and Bangladesh, leading to electricity blackouts for millions in those two countries.

When natural gas prices at the benchmark Dutch TTF trading hub hit €340/megawatt hour that August, the Germans and Europeans were not laughing any more. Converted to U.S. dollars per million BTUs (mmBTU), the figure was about 10 times higher than the price of natural gas at the U.S. Henry Hub benchmark.

The damage from higher energy prices to Germany, Europe’s largest economy, has been substantial. The German economy contracted in six of eight quarters between Q4 2022 and Q4 2024 with the other two quarters registering 0% growth. Deindustrialization across the chemical, fertilizer, automotive and other industrial sectors has cost hundreds of thousands of jobs and large numbers of plant closures.

The war in Iran commenced by Israel and the U.S. in the early hours of March 1 created a similar set-up to summer 2022 for oil and natural gas price spikes, when global supply was constrained by war and Russian sanctions. Only this time, the situation is even more dangerous for energy markets and Europe in particular. Iran’s counterattacks almost immediately in response targeted not only Israel and American military targets, but also its Gulf neighbor’s interests, including energy infrastructure.

When markets opened this Monday, month forward natural gas prices at the TTF briefly traded for nearly double the €32/megawatt hour (€/Mwh) February 27 market closing price, and front month Brent Crude traded briefly at nearly $120/barrel, a spike of over 60% from its pre-war market price. Finance officials from G7 nations calmed markets by expressing willingness to dig into the strategic reserves (equal to ~90 days of net imports) held by the International Energy Agency’s (IEA) 32 member nations. The U.S. appeared to enthusiastically support the idea, recommending a release of 300 – 400 million barrels or about a third of the roughly 1.2 billion barrels held by IEA member nations.

Oil is a fungible global commodity that can be loaded right onto tankers in the form from which it is pumped out of the ground. As such, U.S. benchmark West Texas Intermediate (WTI) crude caught the Brent crude bid and spiked to near $120/bbl before the G7 and IEA’s signals calmed international oil markets. But unlike European markets, the spike in the U.S. Henry Hub benchmark natural gas price from the start of the Iran war to when U.S. markets closed this Monday afternoon was limited to ~22%.

Unlike oil, natural gas cannot be pumped out of the ground and put on cargo ships. It must be liquefied first. As such, no “strategic natural gas” reserve exists anywhere in the world.

Iran is shooting missiles at its Arab neighbors and attacking them with drones, hitting the world’s largest LNG liquefaction facility in Qatar and source of ~15% of Europe’s imported natural gas with a drone only two days into the war. Having learned nothing from its last self-inflicted energy crisis in 2022, the European Union (EU) now finds itself on the brink of another, possibly worse, situation four years later.

Why is the U.S. in a better structural position to weather the storm it created in energy markets when it joined Israel and attacked Iran? How might the combination of EU’s domestic paucity of hydrocarbon energy production relative to its consumption and current global LNG supply make this situation different than 2022? And which single LNG liquefaction and export facility on the shores of the Persian Gulf is one missile or drone attack away from sending European natural gas levels back into the hundreds of Euros per megawatt hour range just like August of 2022? Let’s do some situational recon from a safe distance as the projectiles continue to fill the skies and drones swarm over the Middle East.

We begin with a reminder just how dependent the EU has chosen to become on foreign energy imports by virtue of its integrated environmental, energy and economic policies. As we noted in Help Me Help You back in November and the Doomberg team well before us, the EU consumed almost 39 exajoules of hydrocarbon energy in 2024 but produced less than 5 exajoules from within its own borders. (For reference, an exajoule contains the energy equivalent of about 160 million barrels of oil.)

In 1977, the 27 members of the current European Union produced about 75% of the natural gas their economies consumed. But ever since that era – long before “climate change” drove western energy policy – their production began to wane. The gap between domestic natural gas production and consumption shown in the graph below has been growing steadily ever since.

When the EU took a victory lap for the Paris Agreement on “climate change” in 2015, the bloc was still producing almost 25% of the natural gas it consumed. By the end of 2024, the figure had dropped to less than 10%.

The EU chose to become increasingly dependent on foreign hydrocarbon energy imports. The Paris Agreement, Germany’s Energiewende and similar policies other western European countries held out as virtuous and “leading the world on climate change” were deliberate, and their leaders and citizens quite proud to enact them.

While Europe might not be blessed with America’s geologic inheritance, it does not lack for natural gas fields. As German Substack writer Brawl Street Journal commented in a March 3^rd Note (emphasis ours):

“The potential for European gas production looks enormous on paper. According to a 2013 energy study by Germany’s Federal Institute for Geosciences and Natural Resources (BGR), Europe’s technically recoverable gas resources amount to 21 trillion cubic meters (tcm). This volume would cover the EU’s entire gas demand for 65 years.”

According to Brawlster’s analysis, the roughly €100 billion spent by the EU each year between 2021 and 2023 on “renewable energy” subsidies could have underwritten 270 billion cubic meters (bcm) of domestic natural gas production – about 85% of EU’s current gas consumption levels - annually.

Instead, while engineering a hydrocarbon energy deficit that (unsurprisingly) undermined their economies, political stability, and their citizen’s living standards, EU political “leaders” harangued U.S. politicians and Presidents for their lack of similar “leadership.”

The U.S. is blessed with more advantageous geology, and the U.S. chose a different policy path. The technological innovation its entrepreneurs (like U.S. Energy Secretary Chris Wright) developed that unlocked vast stores of oil and natural gas was not subsequently prohibited by law, as it was in most of Europe.

Thanks to that geology and the relentless incremental improvements in fracking technology, the U.S. is the world’s largest producer of liquid petroleum products and natural gas. Today, America produces over 20% of global petroleum liquids and ~25% of global natural gas.

After bottoming out in 2005 at 82% of domestic consumption, in 2017 American natural gas production equaled domestic consumption for the first time since 1986 thanks to the U.S. fracking boom. Despite domestic consumption growing by nearly 75% since 1977, today U.S. natural gas production equals ~115% of consumption. If the German clowns laughing at Trump’s UN speech in 2018 had any self-awareness they would, in retrospect, acknowledge that without that growing surplus since 2017, the self-inflicted mess in which Europe has found itself since 2022 would be much worse today.

Compare American domestic production, consumption, and self-reliance in the graph below to that above for Europe.

The result? Europe is, as Doomberg is fond is stating, an “energy vassal.” The U.S. is an energy superpower and, unlike Europe (or the UK), its energy security is not in question.

For perspective, consider that the day before Israel and the U.S. began bombing Iran, natural gas at the U.S. Henry Hub closed at $2.86/mmBTU. Converted from €/Mwh to $/mmBTU, the closing price that day at the Dutch TTF hub was nearly four times U.S. prices at just under $11/mmBTU. But only four days before the war began, natural gas prices at the Waha trading hub in the U.S. Permian basin set a new record (emphasis added):

“In the cash market, average prices at the Waha Hub fell to minus $4.56 per million British thermal units (mmBtu) for Monday, down from a negative $2.16 for Friday.

That was a record 12th day in a row that Waha prices closed below zero. The prior record was 10 days in June 2025.”

While the EU allowed a steadily growing, five-decade deficit to occur between domestic natural gas production and consumption, America steadily closed its small deficit and turned it into a surplus. This reality puts both in vastly different circumstances given the developing crisis in the Middle East.

Several other important differences versus the 2022 global energy crisis make the war in Iran more challenging for an already struggling Europe. While significant new LNG export capacity is coming online this year and next throughout the world, most of the 2026 completions will not occur fast enough to alleviate shortfalls sure to develop over the next few weeks unless the war ends quickly. The U.S. exports the most LNG globally but most of its capacity is committed under long-term contracts.

Russia, which has been providing increasing LNG cargoes to the EU even as the bloc has reduced imports of Russian pipeline gas, has the capacity to provide some relief. But instead, President Putin is giving the EU an ominous signal.

As Doomberg noted in No Laffan Matter, last week:

“In comments made on Wednesday, the Russian president hinted that instead of helping his adversaries, he might take the opportunity to put the screws to them.” (emphasis added):

“Russian President Vladimir Putin said his country will consider ending most sales of natural gas to Europe in favor of more promising alternative markets.

The European Union plans a gradual ban on imports of both Russian pipeline gas and liquefied natural gas by late 2027. In this light, the Russian leader said he would instruct his government to assess redirecting supplies away from the bloc so that officials could work on the issue with companies.

Other markets are opening now,’ Putin said on state television on Wednesday. ‘Maybe it’s better for us to end supplies to the European market right now? To go to those markets that are opening now and get a foothold there.”

As if these risks and complications were not enough, consider that the theater for the Russia – Ukraine war did not constrain the flow of crude oil or natural gas through natural chokepoints in dangerous neighborhoods. In fact, sanctioned Russian oil has made its way via a fleet of shadow tankers to refineries in India and China, (at a discount) - without risk of attack in a narrow straight in the middle of the conflict - since it invaded Ukraine and continues to do so.

But about 20% of global oil consumption and a quarter of seaborne crude trade flows through the Strait of Hormuz, which is effectively shut down and now sits squarely in the middle of a war zone. About $50 billion of hydrocarbon energy products flow through the Strait each month, with Iran’s share accounting for around 10%.. The EU must hope that somehow the Strait of Hormuz opens quickly.

But perhaps the biggest risk of a serious energy problem for Europe relates to the bloc’s natural gas supplies, where storage is already dangerously low at or below 30% of capacity (about a third below normal) coming out of winter. The world’s single largest LNG liquefaction and export facility sits a chip shot away from Iranian missile and drone launching sites across the Persian Gulf. That reality creates a concentration of natural gas supply risk for Europe, and the facility has already been targeted in this conflict.

Within forty-eight hours of the start of the war, Iranian drones struck QatarEnergy’s Ras Laffan facility. Operating 14 LNG liquefaction trains with a combined nameplate capacity of nearly 110 bcm/year, Ras Laffan is responsible for 20% of global LNG production, and 100% of it has to pass through the Strait of Hormuz.

Ras Laffan sits on the northeast coast of Qatar, a ~100-mile-long peninsula sticking out from the southwest Persian Gulf coast. It sits precariously close to the Strait (~300 miles west) and sits within 120 miles of Iran’s border.

After the attack, Saad al-Kaabi, Qatar’s energy minister and CEO of state-owned QatarEnergy shut down the facility and said, “We don’t yet know the extent of the damage, as it is currently still being assessed. It is not clear yet how long it will take to repair.” Two days after the attack, the company declared force majeure on its LNG contracts, a legal maneuver to head off contract default claims. The same day, Reuters cited “sources saying it may take at least a month to return to normal production ‌volumes.”

LNG liquefaction trains are complex systems, not the type of thing for which one flips the switch and starts producing the supercooled gas and loading it on cargoes ships that afternoon. The process is complicated and 30-50 days for a full assessment, inspection, and pressure vessel testing and cycling would not be unusual.

Within five days of Reuters report, QatarEnergy began offering eleven LNG cargo tankers located outside the Strait of Hormuz for lease. Whether that was a signal about the damage and expected duration of the closure at Ras Laffan or worry about trying to transit their cargo tankers through the Strait is unclear.

The current spot market for global LNG is likely tighter than in the summer of 2022, when Europe scrambled around the world paying exorbitant prices to get it. There may be no more than 2-3 bcf/d of spot market capacity (most of it from the U.S.) to make up for the current loss of Ras Laffan’s 10 bcf/d production.

We close by wondering how much longer the EU can sacrifice the bloc’s energy security, economic competitiveness, and its citizen’s standards of living on the altar of its centrally planned “energy transition” and “net zero” policies and aspirations. Four months ago the U.S. and Qatar sent the EU a clear signal: failure to eliminate penalties of “not less than 5% of global net revenue” and the prospect of civil liability for failing to comply with its Corporate Sustainability Due Diligence Directive (CSDDD) would seriously threaten energy imports from producers with alternative markets. Yet so far, nothing but crickets from the EU about the CSDDD.

At a Nuclear Energy Summit in Paris yesterday, European Commission President Ursula von der Leyen not only (belatedly) acknowledged the self-induced problem but did an about face on nuclear energy (emphasis added):

“Industrial competitiveness is increasingly determined by who can best produce, transport, store and use abundant and affordable electricity.

Now, Europe is neither an oil nor a gas producer. For fossil fuels we are completely dependent on expensive and volatile imports. They are putting us at a structural disadvantage to other regions, and the current Middle East crisis gives us a stark reminder of the vulnerability it creates.

But we have homegrown energy sources. Nuclear and renewables. And together they can become the joint guarantors of independence, security of supply, and competitiveness if we get it right now…

…While in 1990 one-third of Europe’s electricity came from nuclear, today it’s only close to 15%. This reduction in the share of nuclear was a choice, and in hindsight it was a strategic mistake for Europe to turn its back on a reliable, affordable source of low-emissions power. This should change.

Europe chose the structural disadvantages Von der Leyen acknowledged. Her comments - less than three years after Germany shut down the last of its nuclear power plants in the midst of the last energy crisis – might suggest Europe’s Charlaticians™ are finally beginning to see the error of their ways. But those comments alone will not change the political calculus in the EU any time soon, and any European nuclear renaissance won’t come soon enough to fix the mess they have created.

Will EU “leaders” go through with the CSDDD as planned after being admonished by the U.S. and Qatar - suppliers of 45% of global natural gas - in October and in the wake of what they have now learned twice in four years? Or could this be a convenient and timely opportunity for the EU to begin to climb down from the altar of “renewable energy,” “net zero,” and “climate change?”

Only time will tell. Meanwhile, with Ras Laffan one bad drone or missile attack away from a lengthy closure, European “leaders” may have been laughing at Trump about natural gas security in 2018, but they probably aren’t laffan now.

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Sometimes, a second, faster flying bird crosses behind and a bit above or below your target just as you pull the trigger. The setup is rare enough that you can almost never plan it. Watch closely, it happens fast!

About a month ago, we received a tip that the U.S. Environmental Protection Agency (EPA) had submitted the necessary paperwork to issue the final rule to rescind the 2009 Endangerment Finding on greenhouse gases (GHG’s, including CO2) from new U.S. motor vehicles (the “EF”) to the U.S. Office of Management and Budget, a final step required prior to public release. On January 25, we posted the following on Substack Notes:

Eighteen days later EPA Administrator Lee Zeldin announced the agency was issuing the final rule. In the press release and live media event, Zeldin said the action would save American taxpayers $1.3 trillion and $2,400 per new car, and boasted it removes the off-cycle credit vehicle manufacturers use to reach the agency’s mileage standards, which created “the almost universally despised start-stop feature on vehicles.” He called the EF rescission “the single largest deregulatory action in U.S. history.” And had a few other choice words, on social media and in his presser with the President.

The complete 111 page EPA final rule was posted in the Federal Register last Wednesday, February 18 and can be found here. EPA’s webpage containing the additional resources and documents EPA included to support rescission of the EF can be found here.

Federal statutes allow 60 days to file petitions challenging EPA’s final rule to rescind the EF in the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit), the designed jurisdiction for such legal challenges. But health, environmental and other non-governmental organizations (NGOs) raced to file their petitions on the very day EPA published it. Given their strategy, Zeldin and the administration were surely pleased.

Pomp, circumstance, platitudes and promised savings aside, the published final rule details how Zeldin and the Trump administration intend to shoot down the EF. Included within are hints at their bigger objective: to knock down the more prized bird flying adjacent to it.

On what bases are Lee Zeldin, the EPA and the Trump administration rescinding EPA’s 2009 Endangerment Finding on GHGs? What basis did they intentionally choose to avoid, and why? And what Scotch Double is the Trump administration actually trying to pull off with this effort? Let’s roast some marshmallows over the fire emanating from “environmentalists’” hair together while giving you a pre-game program for the battle that has officially begun.

We begin with the final rule itself. Rescission of the Greenhouse Gas Endangerment Finding and Motor Vehicle Greenhouse Gas Emission Standards Under the Clean Air Act (the “Rescission”) is as notable for what is not in it as what is.

There’s an old adage in the South. Never wrestle in the mud with a pig. You’ll just get dirty and the pig will enjoy it. Zeldin clearly applied that rationale.

EPA’s August 1, 2025, Notice of Proposed Rulemaking (NPR or the “proposal”) officially kicked off the process. The proposal laid out two rationales for rescinding the EF, a “primary” rationale grounded in statutory and legal findings, and an “alternative” rationale grounded in “climate science.”

In two posts last year after the proposal was announced, Pillar in Peril and Game On, we provided readers with an overview of the 2007 Mass. v. EPA Supreme Court ruling that enabled the 2009 EF, the key subsequent Supreme Court rulings EPA is relying on to support its rescission, and the two rationales supporting the action. We also detailed how the several of the Court’s current Justices voted in Mass v. EPA, and changes in the Court since.

Game On provided an overview of a scientific report cited throughout EPA’s proposal. A Critical Review of Impacts of Greenhouse Gas Emissions on the U.S. Climate was prepared for the U.S. Department of Energy’s (DOE) by a Climate Working Group (CWG) consisting of several highly credentialed scientists.

After EPA’s proposal last August, a number of scientists outraged at the CWG report’s findings and EPA’s attempt to use them scrambled to prepare a rebuttal. Their refutation, led by Andrew Dessler and Robert Kopp - Climate Experts’ Review of the DOE Climate Working Group Report - required 85 scientists and 437 pages to “rebut” the 139-page report CWG produced with a total of four climate scientists and a Professor of Economics.

The cruel joke on Mr. Dessler, Mr. Kopp and the other eighty-three authors, who dropped everything to produce something three times as long requiring 17 times the number of authors as what they were rebutting, all in thirty days. According to the final rule published in the Federal Register February 18^th, EPA rescinded the EF based solely on the primary – statutory/legal – rationale, not the alternative, scientific one.

Like poachers shooting at a Styrofoam decoy game wardens set out to attract fire, the shots fired by Climate Experts Review were for naught. As we noted in Pillar in Peril and Game On, “the science!” is not where this battle was ever going to be fought.

Zeldin’s strategy avoids the scientific mud wrestling match. As EPA explained in the final rule issued last week:

“Although the Administrator continues to harbor concerns regarding the scientific determinations underlying the Endangerment Finding, the EPA has decided not to finalize this scientific alternative rationale at this time.

EPA is rescinding the Endangerment Finding based on the best reading of CAA section 202(a)(1), under which the EPA concludes that Congress did not authorize the Agency to regulate GHG emissions from new motor vehicles and engines in response to global climate change, and, separately, is repealing the GHG emission standards for the additional reason that futility renders it unreasonable to retain the standards. These legal conclusions are sufficient to support rescission of the Endangerment Finding and repeal of the related GHG emission standards without the additional scientific basis set out at proposal.”

The final rule details the three rationales EPA relied on to rescind the EF.

First, the agency finds section 202(a) of Clean Air Act is best read to a) authorize EPA to “identify and regulate ‘air pollution’ that threatens to endanger health and welfare through local and regional exposure,” and b) require EPA to issue emissions standards in conjunction with findings of endangerment, rather than sever the two steps. Here, EPA applies traditional tools of statutory interpretation “as informed by the Supreme Court’s decisions in Loper Bright v. Raimondo and Utility Air Regulatory Group v. EPA.”

Loper Bright destroyed the Chevron doctrine, essentially reigning in agency’s authority to regulate where statutes are ambiguous and Congress’ intent unclear. UARG clipped EPA’s wings for trying to rewrite numerical emissions thresholds set by Congress in the CAA, “tailoring” them in order to only regulate large CO2 emitters. Both decisions, rendered by the current 6-3 conservative Supreme Court, are foundational to the EF rescission.

Second, EPA finds that the language in CAA Section 202(a) “lacks the clear congressional authorization required for the EPA to assert authority to regulate GHG emissions in response to global climate change concerns.” Here, the final rule holds out the Supreme Court’s specific application of the “major questions” doctrine in the UARG and West Virginia v. EPA decisions as support.

Third, EPA finds that “the Agency should not and need not make an endangerment finding under CAA section 202(a)(1) when exercising the regulatory authority conferred by that provision would have no meaningful impact on the identified dangers.” Here, Zeldin asserts the statute only authorizes regulation of GHG emissions from new U.S. motor vehicles if they represent more than a de minimis contribution to global concentrations. Further, “even a complete elimination of all GHG emissions from new motor vehicles and engines would not address the risks attributed to elevated global concentrations of GHGs,” and as such regulation is futile.

Importantly, EPA notes that each of these findings “is severable, and each basis alone provides sufficient justification to rescind the Endangerment Finding,” an attempt to ensure its legal durability even if one or two of the rationales fail to survive legal challenge. The rule will become effective on April 20, 2026, unless stayed by legal action. (Readers interested in the details of EPA’s rationale can find them in pages 25 – 49 of the final rule.)

Legal petitions challenging the action must be filed in the DC Circuit within 60 days of publication in the Federal Register. On the same day that EPA published the final rule, the American Public Health Association along with 16 other environmental and health-related NGOs (including The Center for Biological Diversity, Conservation Law Foundation, EDF, Friends of the Earth, Natural Resources Defense Council, Sierra Club, and the Union of Concerned Scientists) filed their petition.

Eighteen children from Alaska, California, Colorado, Hawaii, Montana, New York, Pennsylvania, Tennessee, Washington, and Wisconsin represented by Our Children’s Trust filed a separate petition, citing specifically violations of their First, Fifth and Tenth Amendment rights, as well as the “Religious Freedom Restoration Act.” According to lead petitioner Elena Venner:

“The EPA’s repeal of the endangerment finding violates my first amendment right to practice my faith and my fifth amendment rights to life and liberty.”

You will pardon us for wondering how the practice of one’s faith relies on any EPA determination or regulation.

The two cases are likely to be consolidated in the DC Circuit Court. Procedural orders, stay motions/briefing (e.g., Petitioners seeking to stop effectiveness pending final legal resolution), EPA certifying the administrative record, merits briefings and proceedings and the like mean that a decision from the DC Circuit in 2026 is unlikely. Even an expedited case might not conclude until the latter half of 2027.

Whoever loses the case in the DC District is almost certain to petition the Supreme Court for certiorari (to accept for review from the lower Court). An environmental legal expert we trust says he believes the Supreme Court would be highly likely to grant certiorari to decide a case with such significant economic ramifications.

We are not qualified to predict the outcome. But Zeldin and the administration are eager for the chance to put their case before a Supreme Court they view as favorable after its UARG, Loper and West Virginia decisions, upon which EPA’s final rule to rescind the EF relies heavily. Their plan is designed to bring down not only the EF, but the real prize flying alongside it.

We close by noting that Zeldin’s final rule frames the EF as inconsistent with the Supreme Court’s rulings in West Virginia and UARG (major questions doctrine) and Loper Bright (removing Chevron deference for agencies), all of which were decided after the 2009 EF. By doing so, EPA is effectively asking the Supreme Court to reexamine its Mass v. EPA conclusion that greenhouse gases meet the definition of “air pollutants” under the Clean Air Act.

Zeldin and the administration are trying to kill two birds with one shot: the 2009 Endangerment Finding and the 2007 Mass. v. EPA decision that unleashed it. More than a few legal scholars see the latter as a real, if unlikely, possibility:

Elizabeth Albright, Dan and Bunny Gabel associate professor of the practice of environmental ethics and sustainable environmental management, thinks last week’s repeal will draw lawsuits from states and environmental groups around the country that may set the stage for Massachusetts v. EPA to eventually be overturned. .. in the event Massachusetts v. EPA is overturned, Congress would have to pass a new law for the federal government to be able to regulate greenhouse gases again.

Forcing Congress to pass legislation to regulate CO2 and GHGs while removing future administrations’ ability to do so absent clear instruction from Congress is the real prize. It is the deeper purpose of the Trump administration’s effort to rescind the EF.

Of the five Justices who rendered the (narrow) 5-4 Mass. v. EPA decision (2007), exactly none remain on the Court. Three dissenting Justices – including Chief Justice John Roberts - are still serving, and all joined Justices Kavanaugh, Coney Barret, and Gorsuch in the 6-3 West Virginia v. EPA (2022) and Loper Bright (2024) decisions. In UARG (2014), Roberts, Thomas and Alito found with the majority, with Kagan and Sotomayor dissenting.

For nearly twenty years, the 2009 Endangerment Finding on greenhouse gases has winged its way through challenges intact, with the Supreme Court’s 2007 Massachusetts v. EPA decision flying alongside and seemingly safe immediately down range. Changes in the makeup of the Supreme Court and its subsequent rulings cause the Trump administration and Lee Zeldin to see this as a moment in time when the two are flying close enough to be brought down together with one shot. The gun is coming to shoulder, and you can see the gleam in their eyes.

Will it be a Scotch Double for Zeldin and the Trump? Or the agony of defeat and a long drive home in the President’s limo with a wet dog’s tail beating their faces in humiliation because they whiffed?

You’ll have to be patient to find out. Sorry, we don’t control the timeline.

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“If you like your doctor, you can keep him. This bill will cut healthcare costs.”

“These vaccines are safe and effective.”

“This new rule does not ban internal combustion engine cars.”

“Misinformation, disinformation, and malinformation” (or “MDM”) are not new phenomena. All political parties are, to one extent or another, guilty of disseminating it, as are all governments, non-governmental organizations (non-profits) and, of course, legacy media.

As pervasive as “MDM” is across social media, the fact that platforms like X and Substack are also perhaps the single best tool to see through it average citizens have at their disposal is an irony worth contemplating. While doing so usually requires some discernment, at times the purveyors make it too easy (even if by accident).

Around 2018, the MDM triad emerged within the U.S. Department of Homeland Security’s (DHS’) newly created Cybersecurity and Infrastructure Security Agency (CISA). “Misinformation, disinformation, and malinformation” quickly morphed from an external concern about U.S. cybersecurity, critical infrastructure, and foreign election interference to one focused on domestic information control. In Europe, that effort has subsequently devolved into something far darker.

In an infographic prepared for the U.S. Department of War’s Defense Counterintelligence Security Agency, CISA defines each term (emphasis added).

Misinformation misleads. It is false but not created or shared with the intention of causing harm.

Disinformation deceives. It is deliberately created to mislead, harm, or manipulate a person, social group, organization, or country.

Malinformation sabotages. It is based on fact, but used out of context to mislead, harm, or manipulate.

In the Spring of 2022, DHS under the Biden administration attempted to create a new office to function as an Advisory Board to coordinate the fight against MDM threats. On April 27^th, the department announced the appointment of Nina Jankowicz – an “expert” on disinformation (with experience advising the Ukraine government!) to lead the newly created Disinformation Governance Board.

Days later, a TikTok video surfaced that ensured the effort would be short lived. Jankowicz singing a cleverly worded, MDM-themed version of “Supercalifragilisticexpialidocious” turned out to be one of the Biden administration’s classic (and thankfully harmless) gaffes.

“Scary Poppins” set off a firestorm among Conservatives and libertarian defenders of free speech. It took no more than three weeks before that melted the resolve of DHS officials who hatched the hairbrained idea. Jankowicz resigned, and the DGB was fully disbanded by August 2022.

Whether or to what extent the tsunami of false but not ill-intended, and intentionally out of context claims with bad intentions on social media, foreign or domestic, influenced U.S. elections since 2016 is a matter for others. What is clear in retrospect is that the same governments who became consumed with “(MDM” around the time of Covid-19(84) had, in fact, been feeding it to their electorates with regard to energy and climate policy for more than a decade.

How did “progressive” western government regimes, with the help of legacy media, in Europe, the U.S., Great Britain, Australia and elsewhere, use “MDM” to advance the “renewable” energy “transition” agenda and mislead the public? What “misinvestment, disinvestment and malinvestment” occurred as a result, and what consequences are now evident? Let’s cut through the fog of the energy and climate information war and survey the battlefield to see what lessons can be learned – and future consequences avoided.

We begin our story with a simple axiom: if you’re a non-profit whose mission is to protect “civil liberties online” and you’re using junk social science powered by AI to call out opposing views, you’re probably trying to protect narratives infected with misinformation, disinformation and malinformation. The same axiom applies to government regime efforts to harass or attempt to prosecute actual free speech platforms. (We’re looking at you, Europe, and Great Britain.)

In Cook-ing Up Censorship we detailed the collaboration between Australian climate activist John Cook and British MDM activist Imran Ahmed. Cook is a PhD social scientist with undergraduate training in solar physics. Ahmed is UK Labour party political strategist.

Cook is the founder of the skepticalscience.com website. Since 2007, “SKS” has been attempting to debunk climate change “misinformation.” On one hand, SKS does dispatch plenty of fringe/conspiracy climate-related MDM. On the other, its defense largely consists of “settled science” studies against which no shortage of legitimate countervailing scientific evidence exists. It so happens that Cook is also an author of one of the “97% consensus” studies repeated ad nauseum by complicit, MDM-spewing legacy media for two decades.

Ahmed is Founder and CEO of the Center for Countering Digital Hate (CCDH). Founded in 2016 ostensibly to fight online misinformation, extremism, conspiracy theories, and fake news, eventually Ahmed turned his interest to “climate change misinformation.”

In late 2025, the Trump administration barred Ahmed and four other individuals from entering the U.S. on the basis that they were attempting to suppress opposing viewpoints by pressuring social media companies. Whether one agrees with the administration’s action, attempting to suppress opposing scientific viewpoints on climate change and energy by labeling it “MDM” is precisely what Ahmed – with Cook’s help – did in their 2024, report, The New Climate Denial.

Where “old denial” was straightforward rejection of human-induced climate change, the report defines “new denial” as “the departure from rejection of anthropogenic climate change, to attacks on climate science and scientists, and rhetoric seeking to undermine confidence in solutions to climate change.”

Produced by Cook and three other “scientists,” the report used an artificial intelligence (AI’s) large language model to “demonstrate” that social media platforms were disseminating “climate change” MDM in these “new forms of climate denial.” Combined, the four “scientists” who produced The New Climate Denial had the same number of advanced degrees in atmospheric geophysics and chemistry and other climate-related fields as the janitorial staff at your nearest public middle school. (That would be zero.)

We concluded Cook-ing Up Censorship by noting that:

Allowing CCDH and Cook to be the world’s arbiters of climate truth is as absurd and dangerous as allowing Nina Jankowicz (aka Scary Poppins) to be the arbiter of disinformation/misinformation/malinformation for the U.S. Department of Homeland Security’s proposed “Disinformation Governance Board” (albeit not as creepy).

Those confident in the strength of their positions do not attempt to silence their opponents. Instead, they welcome all critics. In science, any attempt to silence skepticism is an attempt to remove a central tenet of the scientific method. Keep that in mind the next time you hear screams of “hate speech,” or “misinformation, disinformation, malinformation” involving any complex scientific issue.

By the time CCDH published The New Denial, governments, legacy media, and environmental non-profits had been spreading energy and climate-related MDM across the globe for more than a decade. The examples would fill many pages in a book but, using the CISA definitions above, a few help demonstrate the point:

Misinformation

In the U.S. Department of Energy’s 2015 report, Wind Vision: A New Era for Wind Power in the United States, President Obama’s Energy Secretary Ernie Moniz declared that wind power could provide 35% of U.S. electricity generation by 2050 by virtue of technology advances. That snowball had never had a chance in hell.

In 2020–2021 while promoting what would become the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, President Biden claimed the U.S. could achieve “100% carbon-free electricity by 2035” affordably, replacing hydrocarbon and nuclear energy via wind and solar “scaling”. That assertion had two chances: Slim and None. And Slim left town on a Greyhound for Ft. Worth long before Biden ever made the ridiculous suggestion.

Misleading information that “renewables overtake coal” (in generation capacity). Solar and wind are “cheaper” than coal or natural gas (“levelized cost of electricity”). Billions in future energy “savings” under the IRA.

None of these claims were correct. Forcing ourselves to be generous and diplomatic, we will assume none were intended to cause harm.

Disinformation

Disinformation, according to CISA’s definition, deceives, and does so with ill intent. Unlike “misinformation,” it is “deliberately created to mislead, harm, or manipulate” people, groups, and countries.

Judging intent is difficult. No one is a mind reader. Disinformation and malinformation are therefore harder to define with clarity.

But judging by the way certain environmental non-governmental organizations (ENGO’s) like Greenpeace and the Rocky Mountain Institute (RMI) have portrayed the risks related to the operation of nuclear power plants and the handling and storage of partially depleted nuclear fuel (mislabeled as “waste”), it is reasonable to infer their intent to harm the proliferation of nuclear energy.

Regarding partially spent nuclear fuel, Greenpeace UK’s website states (emphasis added):

Some of this waste will remain dangerously radioactive for hundreds of thousands of years, yet nobody knows of a way to safely store it so problems aren’t created for future generations.

In a 2021 Yale Environment 360 article he co-authored, RMI founder Amory Lovins claimed solar and wind “tend to work independently at different times and seasons,” making shortfalls “less likely” and eliminating the need for nuclear as part of baseload electricity generation. The first part of the statement is misinformation (that independence in and of itself doesn’t make shortfalls “less likely”). The second half is malinformation – that independence does not eliminate the need for nuclear energy in baseload electricity generation. Lovins also portrayed nuclear energy as “unreliable” due to outages and fuel supply chain issues, but the track record of the 94 operating U.S. reactors clearly says otherwise.

Given their decades-running fight against nuclear energy, it is hard to view statements like these as anything but deliberate fabrications intended to discourage the proliferation of nuclear power generation in the world’s advanced economies.

Malinformation

Malinformation may be based on fact but is used out of context to sabotage. Here again, intent is hard to discern.

When President Obama stated in 2011 following the Fukushima accident that the U.S. must ensure nuclear plants can withstand extreme events, he used the fear associated with a factual event out of context. Only about 26 of the 94 operating American nuclear power plants are even exposed to tsunami risk.

Greenpeace USA’s webpage states (emphasis added):

“Nuclear reactors are inherently unsafe… If the industry’s current track record is any indication, we can expect a major meltdown about once per decade. As a result, millions of people who live near reactors are at risk.”

There is no shortage of narratives that:

• suggest natural gas is no better than coal.

• frame nuclear as uniquely catastrophic.

• overstate reliability, firmness, and cost of wind and solar,

• downplay wind and solar intermittency and the need for hydrocarbon, nuclear and/or hydroelectric power backup.

• downplay land use, siting and social effects of wind and solar energy.

These and dozens of other examples ultimately led to an enormous misallocation of taxpayer funds and private capital in the U.S., western Europe, the UK and elsewhere. These energy and climate MDM narratives depressed investment in firm/baseload, dispatchable, inertia-based natural gas and nuclear electricity generation resources, while leading to overinvestment in intermittent, weather-dependent, inverter-based wind and solar energy. In the U.S. alone, the combination of taxpayer funds (in the form of printed government dollars) and private investment in wind and solar energy exceeded $1 trillion dollars between 1999 and 2025.

The number of those installations whose lives will exceed 30 years is virtually zero. Few will last twenty-five years.

The result? A colossal misinvestment, disinvestment, and malinvestment that can be clearly seen in retrospect.

Depending on configuration, location and other factors, the overnight capital cost of a combined cycle gas turbine (CCGT) natural gas power plant in the U.S. is about $1,000-2,000/kilowatt (kw). The U.S. Energy Information Administration (EIA) assigns a capacity factor of 87% to CCGTs. A CCGT power plant built today can easily run for 30 years, and with good maintenance and some component replacements and upgrades may produce power for 40-50 years or more.

While it is true that the two new AP-1000 reactors (with ~1.1 Gigawatts of generation capacity each) at Plant Vogtle in Georgia cost over $15,000/kw to construct (>$35 billion for two units delivering 2.2 Gigawatts generation), it is also true that South Korea routinely builds similar designs with overnight construction costs of $4,000/kw or less.

A 2022 MIT study by Koroush Shirvan estimated that the 10^th of a kind AP-1000 built in the U.S. at approximately $2,900/kw in 2018 US$. Shirvan’s 2024 update puts the figure at $4,625/kw. EIA assigns a capacity factor of 90% to U.S. nuclear power plants based on the AP-1000 design, and the best run U.S. nuclear power plants consistently perform at capacity factors exceeding 90%.

According to EIA’s Electric Power Monthly, for the twelve months ending November 2025, the U.S. generated a total of 841 Terawatt hours (Twh) of electricity from wind and solar (457 Twh wind, 384 Twh solar). That generation came from nearly 300 Gigawatts worth of and solar installations.

For perspective, had we begun building CCGT and nuclear power plants instead of wind and solar 15+ years ago, that 841 Twh could have been generated with approximately 80 Gigawatts of modern CCGT and 30 AP-1000 scale advanced nuclear power plants. Using the estimates above, the cost of those CCGT and nuclear plants would have totaled under $300 billion, about 70% less than what has been spent on their “renewable” energy alternatives. What’s more, the estimated life of the CCGT’s would have all exceeded 30 years, and the operational life of most of the nuclear plants would have ranged from 50 to nearly 100 years.

Terawatt hours are certainly the best metric for comparing actual electricity generation sources. But to demonstrate the impact that nearly twenty years of “climate change”/CO2 denominated energy policy have had on the advanced western nations, detailing what has happened to electricity capacity over time teases out this misinvestment, disinvestment, and malinvestment.

The graphs below show electricity generation capacity in four U.S. states and the national average over the period 2010 – 2024. While the green lines (representing wind + solar) will clearly jump out at you, pay close attention to the blue lines (representing hydrocarbons + nuclear), in particular the differences in their slopes as well.

New York

Massachusetts

California

Texas

We included Texas because “renewable” energy advocates like to point out that the state has about two times more installed wind and solar capacity than California and yet has low electricity rates. This is true but almost rises to the level of “malinformation” when one fails to point out two major differences. First, Texas has not shut down any nuclear power capacity (or generation) since 2010 and lost only around 1.5-2 Gigawatts of firm, baseload coal, natural gas, and nuclear generation capacity on a net basis. Over the same period, California has shut down half of its nuclear capacity and lost 7.5 Gigawatts of coal, natural gas, and nuclear generation capacity combined.

Second, Texas is an energy superpower, with oil and natural gas enjoying extensive pipelines throughout the state, nothing blocking more, and Tier 1 wind and solar locations. Wind and solar capacity factors are substantially higher in Texas than in places like New York and Massachusetts.

Now have a look at the same charts for two countries that are just a bit farther down this dead-end road than California. By the end of 2024, installed wind + solar capacity in the UK effectively equaled installed baseload capacity from hydrocarbons + nuclear.

Great Britain

We saved the best for last. Much has been written about Germany’s Energiewende. But sometimes a picture is worth 1,000 words (in this case, far more). When you are an advanced industrial economy and your green line is above your blue line, the result is what German citizens are now experiencing in terms of the cost of electricity, with the impact falling heavily on industry as well.

Germany

What does all of this misinvestment, disinvestment and malinvestment mean to the citizens of these states and countries? Judge for yourself. The chart below graphs residential electricity prices in all of these locations in US$ cents/kilowatt hour from 2010 – 2024.

It is no accident that the blue shaded lines – Texas and the U.S. average – run far below all the others, with Texas nearly two-thirds lower than Germany. These are the consequences of overbuilding wind and solar capacity and reducing firm, baseload, and dispatchable capacity sources like coal, natural gas, and nuclear power.

We close by noting a refrain we have preached from our earliest days on this platform: the laws of physics and economics do not yield to green ideology.

Platitudes will not change these immutable forces. And no amount of MDM, however oft repeated, will protect any narrative that attempts to violate them. Meanwhile, substantial costs have been incurred, and enormous sums have been wasted in the service of efforts to do so.

Energy and climate misinformation, disinformation, and malinformation have real consequences. Misinvestment, disinvestment and malinvestment in electricity generation resources logically follow.

The lessons being learned the hard way by Germany, the UK, California, and certain other U.S. states are ones best avoided for the U.S. as a whole. Remember this when summer 2028 rolls around.

(Editor’s note: the graph of UK nuclear + hydrocarbons vs. wind + solar electricity generation capacity has been corrected due to a miscalculation that undercounted the aggregate wind + solar data. The situation is worse than originally showed. We apologize for the error.)

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In March of 2023, during our freshman campaign on Substack, we penned Crying Fowl, a post dealing with the impact of U.S. biofuel policy (read: corn ethanol) on wildlife habitat in the nation’s heartland. We documented the massive change in land use, including farmers canceling Conservation Reserve Program (CPR) lease contracts to plow up land for corn monoculture, seriously degrading habitat for waterfowl, pheasants, quail, turkeys, whitetail deer and other game and non-game wildlife, while increasing nutrient loading in waterways, and degrading and eroding soil. We noted that both political parties own the environmentally-destructive biofuels debacle:

“Corn ethanol. Brought to you by Charlaticians™ in both parties, with little to no understanding of critically important science or economics, making decisions on passions, polls and ideologies.

We can hardly see a better foundation for setting aside partisan differences and starting to solve the very real and steep physics, economic and environmental challenges facing humanity’s energy future: wildlife.”

Lesser Prairie chickens, a prairie grouse species of the southern Great Plains once prized as a game bird, are one of the protected species that have suffered the consequences of the bipartisan U.S. “biofuel” bellyflop. The picture below accompanied that post.

In our August 2024 post, Pyrrhic Victories, we described the legal outcome of Exxon’s battle with shareholder activist group Arjuna Capital. In that post, we used a story about a New York lawyer on a goose hunt in Texas “winning” a battle over a downed snow goose with an adjacent landowner as a metaphor for Arjuna’s legal “victory.” The picture below was the thumbnail image for that story.

Last June, in Actions Speak Louder Than Words, we wrote critically of the U.S. Federal government’s plan to sell millions of acres in 11 western states currently owned by U.S. citizens under the auspices of “affordable housing.” Much of that land is open space valued by outdoor enthusiasts for a variety of recreational uses. The picture below was featured in that story.

A few weeks ago we posted Don’t Just Do Something, Stand There!, about the U.S. Fish and Wildlife Service’s plan to kill 450,000 barred owls with shotguns to attempt to save the Northern Spotted Owl in Pacific coast states, and a U.S. Forest Service plan in conjunction with Montana’s Department of Fish, Wildlife and Parks to poison all of the fish in a high altitude lake and stream in the Absaroka-Beartooth Wilderness. The latter plan’s objective was to remove all living fish from the watershed with a poison that kills anything with gills. Having suitably sterilized the watershed, Montana FWP would reintroduce Yellowstone cutthroat trout above a cascade barrier. The picture below was featured in that story.

Some of these photos were my own. With these and other nuanced signals, even before we published a two minute video with pictures and clips from our just concluded annual fly-fishing “business meeting” out West last August in Sublime, some readers of this publication had probably figured that our careers might not be the only thing in our lives revolving around the environment.

In that post, I wrote (emphasis added):

If you really want to understand “the environment,” you have to spend lots of time studying it. But that alone is not enough.

You must truly immerse yourself in it. Go out, carefully observe, figure out how to fit into it, and get it under your fingernails. Over and over again.

Suffer heat, or a bitter wet cold, maybe even a fear of apex predators once in a while. Feel it squirm in your hands before you release it back into a stream. Stare in awe as a dog becomes a statue, nose full of the scent of a wild game bird, in one of nature’s most amazing choreographed dances.

As founder/head writer of environMENTAL, that is what I will attempt to evoke in a new Substack coming later this year. Stay tuned for more.

“Late this year” slipped by a month or so. But on Wednesday this week, Little Green Guy finally got his baby sister.

The name for this new Substack is taken from a passage in a 2010 book by outstanding Canadian writer David Carpenter. In A Hunter’s Confession, Carpenter recounts a story conveyed to him by Walter Linklater, an Ojibway First Nations elder, counselor and spiritual leader in Saskatoon, Saskatchewan:

Before a hunt, for example, the men would light a smudge from sweetgrass or some other plants, and they would take the smoke to their firearms to purify them before the kill. The animals were as much a part of their families as their own people so to hunt them without reverence would be unthinkable.

Totemtik. This is a Cree word that Walter gave me so that I might understand this reverence for the animals. “Totemtik means all my relations, human and other.” He does not have dominion over the animals, he is connected to them.

Totemtik is a series of stories about all my relations, human and other, lived through nearly six decades in the outdoors.

The beautiful, wild places that birds and gamefish inhabit are the canvas. Family and friends, birds and bird dogs, and fish are the oil paints.

Totemtik is the Substack where the two converge, across all four seasons, spanning 80 degrees latitude, across two continents, over half a century.

Hunting, fishing and life in the outdoors are merely the backdrop. The stories in Totemtik will hopefully strike a chord as much or more for what they convey about human nature and values, relationships with parents, children and friends, and our connection with nature and ecosystems than for the hunting and fishing itself.

I hope that framing might make the stories compelling, even to readers who might not have interest in hunting, fishing or outdoor sports. Some of you probably have fond memories of other outdoor experiences with parents, family members, and friends.

If you like hunting and fishing, particularly fly-fishing, bird hunting and bird dogs, Totemtik is for you. Please share it with family and friends who share these passions.

Welcome to Totemtik, Little Green Guy’s new baby sister. Give the launch post a read this weekend when you have a few minutes. Leave us a comment on the site. And if you find this new publication interesting, I hope you will subscribe.

Totemtik

Genesis

Whoever even once in his life has caught a perch or seen thrushes migrate in the autumn, when on clear, cool days they sweep in flocks over the village, will never really be a townsman and to the day of his death will have a longing for the open. – Anton Chekhov, “Gooseberries…

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7 months ago · 13 likes · 5 comments · AJ Babcock

Enjoy Totemtik’s launch post. Thanks for your interest and as always, your support!

environMENTAL founder and writer -

‘Mental (aka AJ Babcock)

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In 1901, the famous Lucas Gusher erupted on Spindletop Hill near Beaumont, Texas. Eight years later David Day, a geologist with the U.S. Geological Survey (USGS), in a chapter penned for a 1909 report for the National Conservation Commission The Petroleum Resources of the United States, estimated that if consumption trends continued upward the U.S. had as little as 25 years of oil remaining.

In 1919, during a period of post WWI oil scarcity and high demand, David White, Chief Geologist of the U.S. Geological Survey, said:

“... the peak of production will soon be passed, possibly within 3 years. ... There are many well-informed geologists and engineers who believe that the peak in the production of natural petroleum in this country will be reached by 1921 and who present impressive evidence that it may come even before 1920.”

In a famous presentation to the American Petroleum Institute in 1956, Shell Oil geophysicist M. King Hubbert predicted the U.S. peak in oil production would occur between 1965 and 1970 for the contiguous U.S. U.S. Energy Information Administration (EIA) data confirms that Hubbert was partly correct. U.S. field production of conventional crude oil from the lower 48 states peaked in October 1970 at just over 10 million barrels per day (mmbpd) and declined slowly and steadily until bottoming out at the onset of the Great Financial Crisis in September of 2008 at just under 4mmbpd.

Hubbert was right, until he wasn’t, but ultimately for the same reasons all those brilliant geologists who had made similar predictions before him: they all failed to anticipate the power of oil field engineering, technology, and innovation. For more than a century, no shortage of highly qualified experts in the field have predicted that the U.S. would reach peak oil production only to see those forecasts smashed like wooden barns in an F5 tornado.

Some energy forecasters take their failed predictions dispassionately, as a matter of scientific course. Others, not so much.

As two recent reports – one from the EIA, the other from the International Energy Agency - demonstrate, even with access to the broadest, deepest data sets, predicting “peak oil” and what is going to happen with oil production, demand and prices beyond a few months is fraught with complications. What can be learned from recent EIA and IEA reports? What are the common elements that seem to consistently bust these predictions, and what additional one did IEA bring into the mix in the last decade? And what do we conclude about the short to medium-term prospects for “peak oil”?

We begin with the EIA’s most recent Short-Term Energy Outlook (STEO), a monthly report covering a variety of recent domestic and international energy metrics, including short-term predictions. To Art Berman’s likely displeasure, the U.S. set another record for production of crude oil, and the slight decreases it anticipates for 2026 have nothing to do with “peak oil”, but instead the best evidence of its opposite (emphasis added):

“After reaching an annual record of 13.6 million b/d in 2025, we forecast U.S. crude oil production will decrease in the forecast, declining by less than 1% in 2026 and by 2% in 2027. With sustained lower crude oil prices, we expect crude oil production will decrease as the slowdown in drilling activity will outpace increases in drilling productivity.”

In 2026, we expect productivity improvements will continue but be offset by declining rig activity, particularly later in the year as the impact of low crude oil prices on drilling activity becomes more apparent as WTI prices fall below $50/b in 4Q26.

Comparing this month’s STEO to the EIA’s same report from one year earlier demonstrates how quickly things change, and how difficult it is to predict even a year ahead when it comes to oil production, consumption, and market prices. The graph below shows the EIA’s January 2025 STEO price projections for the world’s benchmark crude’s – North Sea Brent (blue) and West Texas Intermediate (WTI, in green), the actual 2025 prices, and EIA’s predictions for this year and next in the recently released January 2026 STEO. Basic economics would suggest that a “peak” would imply scarcity, and any scarcity would appear in prices. See if you can find the price signal that implies “peak oil” is imminent:

We charted the same data for natural gas. Here, EIA missed the projection in the opposite direction, but the price action in the graph below is a function of conditions that have nothing to do U.S. natural gas scarcity. Pipeline constraints in the Permian, conversion to LNG for export, and growing electricity demand from data centers better explain the predicted increase.

In the January 2025 STEO, EIA predicted global oil production would be 103.95mmbpd in 2025, with a thin margin above the predicted consumption figure of 103.67mmbpd. While their consumption prediction was remarkably close to the actual 2025 figure (103.69), EIA badly underestimated the production figure, which the January 2026 STEO shows came in a whopping 106.28 mmbpd, or nearly 2.5 mmbpd higher than predicted. And that explains crude prices (for now).

So, actual 2025 prices were well below what EIA predicted twelve months earlier, and EIA’s January 2026 update predicts crude oil prices will fall further this year and next. Hard to find a signal for scarcity or “peak oil” in the global oil market in that forecast.

Historically, even the best and least biased forecasters of peak oil have been derailed by two factors. The first is underestimating the near magical prowess of oilfield technology advancements and the second is applying rearward-looking metrics to forecasts in spite of those relentless innovations.

The number of rigs deployed in oil production is one of the most common retrospective metrics used by forecasters. But industry innovation and technology advancements make “rig counts” a still valuable but different metric than it used to be.

The U.S. is the world’s largest producer of oil and natural gas. Converting both sources to a common measure of energy - British Thermal Units (BTU’s) – and graphing their aggregate U.S. production against rig counts since 1973 shows the incredible result of those innovations and technology advancements in the form of fracking since ~2010:

Where the blue line (rig counts) is near and/or above the green line (late 1970s - mid 1980s, again early 2000s - ~2010), two things occur. First, prices spike, and “peak oil” fears make headlines. Second, those price spikes are signals to the oil and gas industry to deploy capital and innovate to take advantage of those high prices.

New capital investment in exploration and discovery results, and technology innovations in production ensue (e.g., hydraulic fracturing, 3D seismic imaging, directional drilling, increased pumping pressure, varying proppant sizes and frac fluid mixtures, etc.). These unleash new supplies, and prices drop. The wide gap between rig counts and enormous U.S. oil and gas production – double the BTU’s from less than half the rigs – in the graph above is nothing if not a testimony to that near-miraculous technology and innovation, and anything but a sign of “peak oil.”

In particular, fracking industry technology, performance and efficiency gains have been profound, overcoming well depletion rates in developments almost no one saw coming in 2005. One exception was Chris Wright and the company that he headed prior to becoming Secretary of Energy in the second Trump administration, Liberty Energy.

Leen Weijers is VP of Engineering at Liberty. In late 2024, he began writing about these performance-enhancing innovations and efficiency and production gains on Substack. As an experienced industry engineer, the detail and insights he provides are another profound example of that which you will not find in legacy media. Within weeks, Weijers was posting gems like Increasing the Juice per Squeeze:

“… vintage production per fleet has grown from about 5,000 barrels of oil per day (BOPD/fleet) to about 24,000 BOPD/fleet today.

That is the combined effort of all efficiency gains and production improvements we have collectively achieved in this industry. Of course, frac fleets have grown to include more nameplate horsepower, but they work a lot harder with fewer people.

If we assume the current ~155 frac fleets keep working in liquid-rich basins for the foreseeable future, then about ~148 of these fleets are needed to keep US tight oil production flat. The extra fleets beyond that target are expected to raise US tight oil production by about 175,000 BOPD by the end of 2025.

Frac crew efficiency gains keep outpacing well depletion effects to make US tight oil barrels more competitive. Squeezing harder keeps producing more juice.”

For the last decade, in its annual World Energy Outlook (WEO) and other oil and gas market reports, the International Energy Agency (IEA) has shown an increasing bias that has approached cheerleading for the demise of hydrocarbon energy. But the group of energy ministers and senior representatives from 29 countries whose forecasts became badly tainted by energy transitionism more than a decade ago was begrudgingly forced to accept reality in its November WEO 2025 report.

The IEA began employing its “Stated Policy” Scenarios (STEPS) approach in 2019. STEPS was, from its inception, biased toward the clean energy and climate aspirations “stated” by government leaders and codified in their Paris Agreement obligations. As such, it seems to drift further and further behind what the actual data was telling the world about future oil demand and production.

IEA has increasingly received criticism for aligning forecasts with aspirations rather than reality and this year, in its WEO 2025 report reinstated scenarios dependent not on “stated” or “aspirational” energy policies but based on existing policies. The Current Policies Scenario (CPS) is independent of nation’s “stated” or “aspirational” goals to reduce fossil fuel use and provides a more empirically grounded view than the STEP forecasts, which have increasingly diverged from observed reality. When the WEO 2024 STEPS projections are compared to the new WEO 2025 STEPS updates and the new CPS figures, two dramatic changes are evident.

First, IEA’s 2035 oil demand projection increased only slightly from last year. But their estimate of 2050 projected demand increased by ~4 mmbpd.

Second, even with this year’s IEA’s increases, WEO 2024 and WEO 2025 STEP projections both undershoot the new CPS projections for 2035 and 2050 by a country mile. By 2035, the CPS shows demand 5-6 mmbpd higher than the STEP predictions, and its 112.5 mmbpd oil demand projection for 2050 is a whopping 16 mmbpd higher than WEO 2025 STEPS and nearly 20 mmbd higher than WEO2024’s STEP predictions.

The IEA forecasters who focused for years on the aspirational energy policy commitments made by Paris Agreement signatories pushing “renewables” obviously made the same mistake with natural gas. As you can see from the graph below, the gap between the “Stated Policies” (STEPS) projections – aspiring for less hydrocarbons – and the reinstated and updated Current Policies (CPS, aka Realityville) with respect to natural gas is also substantial.

A report released Tuesday by the National Center for Energy Analytics (NCEA) implies that IEA’s forecasts over the last decade have led to a chronic and growing underinvestment in oil and gas exploration and development. This is due to an inherent bias we call Wishcasting™, where the impacts of stated, aspirational national climate policies on oil demand outweigh empirical reality. The report notes IEA failed to account for rising incomes and living standards, demographics, economic growth, constraints associated with electrification and mineral resources and, with respect to natural gas, even the growth of data centers.

NCEA Executive Director Mark Mills is a seasoned energy analyst. His choice of highly credentialed experts with specific knowledge of IEA’s forecast methods to evaluate WEO 2025 report was no accident.

Neil Atkinson is former head of the IEA Oil Industry and Markets Division. Adam Sieminski was a Wall Street financial analyst and former administrator of the U.S. Energy Information Administration under the Obama administration.

In The Return of Realism in Global Oil Forecasts: A Critique of the International Energy Agency World Energy Outlook 2025, the authors summarize the problem as follows (emphasis added):

“World Energy Outlook 2025 (WEO 2025) represents a consequential recalibration by the International Energy Agency (IEA). For the past several years, WEO scenarios that have underpinned IEA forecasts of the global energy system were based on aspirations or promises that became increasingly disconnected from observed outcomes. Now, in WEO 2025, the IEA has reinstated a Current Policies Scenario (CPS) that constitutes a more realistic baseline against which ambitions of policymakers and investors can be assessed. WEO 2025 conveys a clear message: Global energy demand is expected to grow steadily through 2050, accompanied by an increase in hydrocarbon use. A significant reduction in fossil fuel consumption, particularly oil, remains unlikely.”

Atkinson and Sieminski explain why reinstating the CPS is important. In the process, the authors imply years of IEA Wishcasting have throttled upstream oil and gas investment, calling attention to previous IEA admonitions to halt it, while noting IEA’s grudging newfound recognition of the consequences of its advocacy (emphasis ours):

“The restoration of a more realistic baseline scenario should prompt a reassessment of investment risks and supply adequacy in global oil markets. Continued long-term demand growth, combined with the natural production decline rates in operating oil fields—particularly in U.S. shale domains—implies the need for substantially higher upstream oil and gas investments than are now evident. This, too, contradicts the IEA’s previous calls to halt all such new investments. Indeed, WEO 2025 now acknowledges that sustained underinvestment could lead to oil supply shortfalls, price volatility, and geopolitical dependencies.”

Currently, global liquid petroleum production exceeds demand by more than 2 mmbpd, explaining present and near-term oil prices. When current low prices and the underinvestment Atkinson, Sieminski, and Mills warn of causes that situation to reverse and the excess production margin to evaporate, do not be surprised when climate activists, “environmentalists”, and many energy analysts claim the ensuing price spike (and the one after that) is surely the evidence of “peak oil” (… again … but this time for real!)

But do not look for that to happen soon. More than a year ago the IEA’s own Oil Report 2024 calculated the staggering amount of new oil production coming online, not from OPEC or Russia, but mostly from the western hemisphere. America’s Permian Basin, the Western Canada Sedimentary basin, offshore basins in Guayana and Brazil, and the incredible shale resources in Argentina’s Vaca Muerta lead the way:

“Non-OPEC+ countries are predicted to add 6 million BPD of supply by 2030” and global production will then be “a staggering 8 million barrels per day above projected global demand.”

The depletion curves in the U.S. Permian basin showing rapid declines in well productivity only a few years after commencing production are very real. But as our graphs show, the Permian is a reservoir whose co-produced oil and gas defies simple, backward looking forecast metrics. Combining new non-OPEC production coming online over the next few years with the most readily measurable and objective metrics possible - actual production in mmbpd and market price/bbl – once again, it is hard to find a signal that peak oil imminent.

We close by noting the happy circumstance for the billions not yet living at western standards that peak oil is postponed once again. Global demand will continue to rise for the foreseeable future, but large new supplies coming online will satisfy it in the short term.

The same old backward looking forecasting techniques no longer work in the world of relentless oilfield technology innovation and the dynamics they render, with co-producing oil and gas fields like the Permian basin standing as an example. And as current global oil supply, demand, and market price signals confirm, climate activists, “environmentalists” and Wishcasters cannot bend oil consumption to their will with predictions of peak oil or falling demand due to “renewable” energy.

As the NCEA noted its report (emphasis ours):

“The implication is unavoidable: The global energy system is evolving through additions, rather than transitioning away from any of the conventional fuels—including oil.”

Like a stopped clock, eventually forecasts of “peak oil” may one day be proven correct. But for at least the next couple of decades, the gating functions and constraints may be prices and policies, but the geology itself is not in question.

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The Ministerio del Poder Popular para el Ecosocialismo (Ministry of Popular Power for Ecosocialism, or “Ministry of EcoSocialism” as it is known) is the Venezuelan federal government’s counterpart to the United States Environmental Protection Agency (EPA). The first tab found on its website is titled “EcoSocialism, ” and the page begins as follows (emphasis ours):

The planetary ecological crisis continues its accelerating deepening while further endangering the balance of life and the survival of the human species. The climate crisis, the systemic crisis, is the total crisis of the capitalist model, since it is based on a logic that is inherently expansive and predatory towards nature, resources, and people. This manifests itself in a way of life that makes the means of subsistence for some the means of death for others.

Given the circumstances in Venezuela, only a government with “huevos grandes,” cognitive dissonance, and a projection problem of the highest order could post such an inversion of reality. The page ends with the obvious answer to these crises:

Ecosocialism is poetry, it is song, it is future, it is hope, it is the tender gaze of a child knowing that they will have a planet where they can develop as a species, Ecosocialism above all things, is life, it is spirituality, it is peace.

Back in the real world, what has actually been predatory towards nature, resources and people in Venezuela is not “the capitalist model.” EcoSocialism has been a tragedy for its subjects, and like every Statist regime before it since the era of industrialization, a disaster for the country’s environment.

Last summer, Venezuelan President Nicolas Maduro posted this video on Facebook to “reaffirm our commitment to its protection and preservation” the month before introducing his Gran Misión Madre Tierra, or “Great Mother Earth Mission,” to address Venezuela’s “most pressing” crisis: it’s climate emergency(!). The “most relevant” comment made us laugh, but the sad irony of the reality made us want to cry:

The human and environmental wreckage left by a quarter century of Hugo Chavez’ and Nicolas Maduro’s Socialista regimes ended on January 3rd. That morning, President Trump used the U.S. Army’s elite Delta Force to remove Maduro and his wife Cilia Flores from Venezuela under cover of darkness, hauling him to New York to face charges of narco-terrorism, drug trafficking conspiracy, and weapons offenses.

The Trump administration appointed Venezuelan Vice President Delcy Rodriguez as interim President. It took control of Venezuela’s oil production.

Six days later, Trump hauled about a dozen executives from major U.S. and European energy companies to the White House to attempt to “encourage” them to invest more than $100 billion to expand Venezuelan oil and natural gas production. The reactions he received from U.S. energy firms Exxon, Chevron, ConocoPhillips, Halliburton, Valero, Marathon and others, and European giants Shell, Repsol and Eni varied.

Chevron is the only American oil major still operating in Venezuela, under license granted by previous U.S. administrations. Chevron CEO Mike Wirth indicated the company could feasibly increase production through existing joint ventures but was hesitant to commit to major new investments.

Exxon CEO Darren Woods called Venezuela “uninvestable.” Trump responded in his usual direct manner:

“I didn’t like Exxon’s response. You know we have so many that want it. I’d probably be inclined to keep Exxon out.”

When ConocoPhillips CEO Ryan Lance the President that his company was Venezuela’s largest non-government creditor, Trump responded by saying that ConocoPhillips would be able to recover a lot of its money but “we’re going to start with an even plate … we’re not going to look at what people lost in the past because that was their fault.” When asked how much money the company had left behind in Venezuela, and Lance informed him the figure was $12 billion, Trump laughed it off with a smile and responded, “good writeoff.”

For all that has been written in the legacy media about the very real political, legal, financial, and other risks that Woods and other industry executives expressed at that January 9th White House meeting with Trump, little has been said about another exposure to risk that awaits western energy majors who venture into (or back into) Venezuela. But the risk of entanglement in costly environmental liability litigation is very real given conditions on the ground there, and precedents already set in a nearby South American country increase it.

How bad is the environmental mess left behind by Maduro and the Socialistas in Venezuela? How did the situation get so dire? And how might a costly, hard-learned lesson suffered by the only U.S. oil major still operating there factor into other western energy majors’ decisions about investing in Venezuela?

We begin with the extent of the environmental damage rendered by a quarter century of Socialist rule relying almost entirely on oil revenues. The question is difficult to answer.

Nearly 100 years of oil production, most of it without any meaningful environmental regulation, has surely had negative impacts, but no one knows the full extent of the toll on Venezuela’s soil, surface waters, groundwater, sediments, or ecosystems. What we do know is that the situation was made dramatically worse by the steadily deteriorating operational conditions of its oil infrastructure, lack of capital investment to repair it, and how Venezuela’s state-owned petroleum company Petróleos de Venezuela, S.A, (PDVSA) was run in the years after Hugo Chavez took office in February 1999.

Oil and gas industry experts have offered many broad estimates that put the cost of restoring Venezuelan oil production to its historical peak of ~3.5 million barrels per day (mmbpd) at well over $100 billion. But no published, robust estimates exist for the aggregate cost to remediate the soil, surface water, groundwater, sediments, or sensitive ecosystems impacted by current and historical oil and gas production, conveyance and storage facilities to standards protective of human health and the environment.

No projects humans could perform for any price could fully restore certain ecosystem losses, such as those to the extensive mangroves, brackish marsh, and benthic communities damaged. Time and nature will have to heal the damage once the sources of the contamination are abated.

We know the situation took a dramatic turn for the worse after about 2010, and that it did not have to be this way. In the period before Chavez, PDVSA was regarded as the leader in environmental health and safety of Latin American oil production, with practices closer to American and European norms than others in South America. How did the condition of Venezuela’s environment become so dire?

When Hugo Chavez took office in February of 1999, PDVSA’s oil production was 3 – 3.5 mmbpd. By 2002, deep polarization over his socialist reforms, not the least of which included attempts to gain greater control over PDVSA, ostensibly for the purpose of redistributing more of Venezuela’s oil wealth to the marginalized, resulted in a coup that temporarily ousted Chavez.

Following the coup, thousands of workers went on strike and demanded new general elections. Many PDVSA workers were among them, and the strike reduced the company’s oil production to ~50,000 bpd. Chavez responded by firing around 18,000 PDVSA workers, nearly half the workforce, replacing them mostly with regime loyalists and retirees who were not the experienced labor and management that knew the oil infrastructure and how to operate it, maintain it, and repair it.

The consequences were grave. After 2003, PDVSA would never return to its 3.5mmbpd peak production. Things got even worse four years later.

Production and operations took another hit in 2007 when Chavez expropriated foreign energy company assets. Many of the companies, including ExxonMobil and ConocoPhillips, had been brought in to increase production of hard-to-process heavy crude in Venezuela’s Orinoco Belt.

The expropriation led oil industry talent and foreign capital to flee Venezuela, leaving PDVSA unable to fully capitalize on the resource or to manage it most efficiently, not the least of which included reducing spills and environmental risk. Without foreign investment, PDVSA was left in a nearly impossible position: unable to invest to update its dilapidated and corroded pipelines, leaking storage tanks, and hazardous equipment, Venezuela was literally spilling its financial lifeblood as a contaminant into the very ecosystems on which its citizens rely to survive. The combination of PDVSA’s workforce, stripped of its best technical and managerial expertise, and lack of foreign investment, corruption and kleptocracy left the Venezuelan oil industry in a constant battle against decaying infrastructure and the country’s environment a wreck.

Despite all of that, PDVSA was still producing about 2.5 mmbpd when Chavez died in 2013. While down nearly 1 mmbpd from Venezuela’s historical peak, oil prices remaining above $80/barrel since 2010 kept the Socialist regime Maduro inherited afloat despite deteriorating conditions for citizens.

That changed when global oil prices collapsed in late 2014 and throughout 2015. Government revenues plunged, the conditions of the country’s oil infrastructure deteriorated even further, and the number of spills and damage to the environment increased.

Three years after taking office, the Maduro regime simply tried to make the oil spills, pipeline and storage tank leaks, and other environmental impacts that are readily visible to citizens – and even to the world’s satellites – go away. In 2016, PDVSA simply stopped publishing operational data that included this information.

After 2016, with government income dramatically reduced from persistent oil prices below $65/barrel, the human and environmental crises in Venezuela deepened rapidly. In scenes sadly symbolic of the logical ends of the depraved philosophy of EcoSocialism, conservation website Mongabay and others reported that starving animals in zoos attacked each other, and citizens began hunting wild animals in national parks and breaking into the nation’s zoos at night to feed themselves:

In August 2017, a keeper at Zulia Zoo near Maracaibo reported that animals had attacked each other for lack of food. Other animals were apparently slaughtered by the keepers to feed the facility’s carnivores. Thefts have been rife at the same zoo. Forty animals have been reported stolen, likely to be killed and eaten. Vietnamese pigs, monkeys, macaws, and redfish were taken at night. Some robberies involved endangered species including tapirs. Two peccaries, a type of wild pig, were stolen, while buffalo were butchered on site.

Similar stories have been reported from other Venezuelan zoos: Peacocks and other captive birds were the victims of hungry thieves who raided Bararida Zoo in Barquisimeto, 250 kilometers (155 miles) southwest of Caracas. Several men dismembered a horse inside the Caricuao Zoo in Caracas, the capital; tapirs, sheep and rabbits have also been stolen from there.

Widespread damage from Venezuela’s oil industry is perhaps most evident in Zulia and Falcon states, the historical center of the country’s production, separated by South America’s largest lake. Lake Maracaibo, a freshwater lake when filled thousands of years ago, is now an estuarine brackish lake connected to the Gulf of Venezuela and the Caribbean Sea beyond by a narrow straight. A historical estuary that served as a breeding ground for fish, shrimp, and other marine life, teeming with manatees and a wide variety of birds and other wildlife, today its waters and shores are fouled with oil.

Commercial oil deposits were discovered in the lake in the 1920s and soon thereafter rudimentary offshore drilling on pilings began, with major commercial offshore expansions increasing rapidly from the 1940s – 1960s. Modern descriptions of the field estimate that there are ~25,000 kilometers (~15,000 miles) of pipe under the lake.

Many of the pipes were placed 50-70 years ago, but some are likely nearly a century old. The lake displays the evidence of the age and condition of the infrastructure. A 2021 article from NASA’s Earth Observatory showed satellite images of Lake Maracaibo swirling with oil slicks, noting:

“According to reports from news agencies, environmental groups, and human rights advocates, as many as 40,000 to 50,000 oil leaks and spills occurred between 2010 and 2016 across Venezuela, including Lake Maracaibo.”

Spills and releases at refineries along the Venezuelan coast east of Lake Maracaibo have increased dramatically since 2016. Around 2007, further south bordering country’s northern Amazon, production began increasing in the Orinoco Belt, home to 300 billion barrels in proven oil reserves in the Orinoco river basin. The Belt’s four blocks on the north shore of the river are shown on the overlay map below.

Exploitation of another natural resource in the Orinoco river basin with significant environmental impacts has also increased rapidly since 2016. As with the oil, the impacts are dramatically worse because they are not extracted and processed in a manner consistent with western environmental regulatory standards. The areas are remote, lacking environmental oversight and enforcement. And, like the Orinoco basin’s oil, Maduro has also used these resources to keep his “Ecosocialist” regime afloat, at the expense of both the Venezuelan populace and its environment.

In 2016, with oil prices effectively half of what they had been three years earlier, and Venezuela’s human tragedy, government finances, and corroding oil field infrastructure all deteriorating with increasing velocity, Maduro needed additional sources of revenue. That year, he established the Orinoco Mining Arc, a giant swath of land comprising ~12% of Venezuela’s south – an area roughly the size of Portugal.

The Arc contains significant deposits of diamonds, coltan, uranium, nickel, titanium, and some rare earth metals. And gold. The Mining Arc’s four major blocks are directly across from the Belt’s oil production areas on the south side of the Orinoco River, shown in the overlay map below.

Increasingly starved of oil revenue, after fouling Lake Maracaibo and Venezuela’s western coast for 15 years with dilapidated and corroding oil infrastructure the Socialist regime could not properly maintain, upgrade or replace after sucking off Venezuela’s oil revenues for personal and party gain, Maduro turned to oil extraction and mining in the country’s remote Orinoco River basin to try to remain in power. This spread the environmental destruction EcoSocialism wrought in Venezuela’s north to the country’s south and east, adding one of humanity’s most environmentally-destructive industries (mining) for good measure.

Last August, Washington, DC-based Financial Accountability and Corporate Transparency (FACT) Coalition estimated 86-91% of the gold mined in the Arc is produced illegally, generating ~$2.2 billion annually for the Maduro regime, noting (emphasis added):

While ostensibly designed to attract foreign investment, the Arc instead enabled rampant illegal extraction, controlled by military elites, Colombian guerrillas, and mega gangs like the Tren de Aragua…

The environmental devastation from these activities is catastrophic: over 1,000 square miles of the Amazon have been deforested, and 90 percent of freshwater sources are contaminated by mercury. Unlike Colombia and Peru, where non-state armed actors dominate, Venezuela’s gold economy is orchestrated by a symbiotic network of political elites, military officials, and transnational criminals, rendering it both a humanitarian crisis and a geopolitical tool for evading sanctions.

In 2019 the U.S. banned exports of the diluents needed to blend with the heavy crude from growing production in the Orinoco Belt in order to make it flow through pipelines and load on ships. America has a surfeit of these light oils, condensates, and natural gas liquids (NGLs) from the fracking boom, with NGLs alone making up ~1/3 of America’s 20+ mmbpd, world-leading production of total petroleum liquids.

Desperate for funds and diluent to stay in power, Maduro did what failing Collectivists always do – turn to other Collectivist, authoritarian, and even despotic Islamic theocratic regimes for help. Iran became a key supplier of diluent. Russia provided more oilfield equipment, expertise, investments, finance and oil trading, collateralizing billions in loans to PDVSA with stakes in future oil deliveries and upstream joint ventures. China rolled and extended oil-collateralized loans to Venezuela (distressed debt in resource-rich foreign countries being its preferred means of non-kinetic resource imperialism), while also “investing” in oil production joint ventures with PDVSA. China became Venezuela’s largest oil export customer, much of it through “shadow fleets” and ship-to-ship transfers.

Since Venezuelan law prohibits foreign firms from owning Venezuelan oil reserves directly, they invest in joint ventures with PDVSA. Through these means, Chinese and Russian firms hold claims worth billions on Venezuelan oil.

By the time Maduro was forcefully extracted earlier this month, Venezuela’s foreign debt had ballooned to nearly $200 billion. China was the Maduro regime’s largest oil buyer in 2025 with an estimated 450,000 bpd, but an untold amount of Venezuelan oil has been sent to China as “in-kind” debt repayment over the last decade.

It should be obvious that Chinese, Russian and Iranian foreign interests operating in Venezuela do not conduct oil production and hard rock mining with the same level of environmental scrutiny and regulation to which western energy and mining firms are held. The fact that oil production and mining activity in the Orinoco Belt and Arc are in remote areas where state and federal environmental regulators (such as they exist) are few and far between, people are starving, and corruption is rampant only adds to the likelihood that, left to their own devices, PDVSA and its Chinese, Russian, and Iranian joint venture partners would have looted Venezuela’s resources at the expense of the environment and its impoverished citizens.

The PDVSA/Sinovensa production/flow station and crude treatment facility below, ~30 miles northwest of Guayana City in the Orinoco Belt, was still under construction at the time of this Google Earth satellite image in 2023. It handles well production, gas systems, and dehydration/desalting of extra‑heavy crude before it is sent onward.

Trump’s actions in Venezuela are about western hemisphere resources, specifically oil, natural gas, rare earths, gold, and other metals. And which sphere of influence controls them, the Chinese/Russian axis or America.

China, Russia, and Iran have been quiet so far about their Venezuelan oil claims and outstanding debt. How do these square with a President who told the CEO of an American major energy company he invited to the White House to ask for help “good writeoff!” after having $12 billion nationalized in Venezuela? We are about to find out.

Our final question is a refresher of the hard lesson learned in South America years ago by the only U.S. energy major still operating in Venezuela, whose CEO was present in the room when Trump met western energy executives at the White House days after Maduro was removed from office. Mike Wirth became Chevron CEO in 2018, two years after the dust settled from Chevron’s Texaco adventure in Ecuador. As such, no one in that meeting was better positioned to explain to Trump how the lessons Chevron learned about the risk of environmental litigation in Ecuador might make western majors reluctant to rush to Venezuela.

From 1964 to 1990, Chevron predecessor Texaco produced about 1.5 billion barrels of oil from its Oriente Basin concession in the remote Amazon headwaters of northeastern Ecuador. The year after terminating operations, Texaco was sued in an Ecuadoran court by indigenous woman María Aguinda Salazar on behalf of thousands of affected residents (“afectados”) from communities in the region. The widely publicized, class action lawsuit alleged health and environmental harms from extensive contamination blamed on Texaco’s operations (not those of the state oil company Petroecuador) and sought billions in environmental remediation damages and compensation.

After ten years winding through the Ecuadoran court system the case was refiled in Superior Court of Lago Agrio adding Chevron, who had acquired Texaco in late 2001. In 2011, eighteen years after the initial litigation, the Lago Agrio court found in favor of the plaintiffs and ordered Chevron to pay more than $18 billion in compensation. The judgment was later reduced to ~$9.5 billion but upheld by Ecuador’s highest court.

Shortly thereafter, Chevron filed a civil Racketeer Influenced and Corrupt Organizations (RICO) action in Southern District of New York in 2011 against the lead attorney in the Ecuadoran case and several of his Lago Agrio plaintiffs. In that case, Chevron alleged fabrication of expert evidence, coercion of Ecuadoran judges, bribery, and other malfeasance, including the shocking allegation that lead counsel and his legal team actually ghost wrote the Ecuadoran judgment and paid the judge to sign it.

Chevron dropped its damages claims just prior to trial, seeking only equitable relief. That enabled a bench trial in front of Judge Lewis Kalplan instead of a jury trial.

In his 2014 ruling, Judge Kaplan found plaintiff’s lead attorney and the Lago Agrio team had engaged in a “pattern of racketeering activity” under RICO, including extortion, wire fraud, money laundering, obstruction of justice, witness tampering, and bribery of the presiding Ecuadorian judge. Kaplan granted Chevron equitable relief, holding that the Ecuadoran judgment was procured by fraud and unenforceable in the U.S.

In 2016, The Second Circuit Court of Appeals affirmed Kaplan’s decision, including the factual findings and the granting of equitable relief. The plaintiffs then sought review before the U.S. Supreme Court, but the Court declined.

Only Chevron knows its true costs for the fiasco it became embroiled in after terminating operations at its Oriente concession in Ecuador. But defending these types of class action cases is not cheap, and a $10 billion+ judgment could have easily eaten up to half of all the profits from Texaco’s 26 years of production in the Oriente.

With the ghost of Ecuador in the background, Western energy companies are being asked to go into largely decaying, dilapidated oil fields with corroding infrastructure, where many spills have occurred and are ongoing, and rebuild them. Even if they do so, they will be working in areas where decades of spills and releases have occurred, with little effort to remediate the problems by the actors who came before them.

The center of the production growth will be in the Orinoco Belt, a remote area with numerous indigenous tribes where oil spills, and for the last ten years illegal mining impacts, have caused heavy metals contamination in addition to oil spills.

If it does not go well, and a future Venezuelan regime nationalizes their assets, it seems likely (if not certain) that indigenous groups would be quickly seized upon by western NGOs with environmental lawyers in tow offering their “help.” So, while all the talk is about regime change, political certainty, constitutional and legal system changes, and government stability, we think environmental risk is an exposure flying under most people’s radars that could tip the scales for some western energy majors considering investing in Venezuela.

This would be a loss for Venezuela and its environment as well as its citizens, nearly 80% of whom are living in poverty in the beleaguered nation. Not just for the economic lift western energy companies could provide to an ideally more benevolent Venezuelan government through increased production and fixing deteriorating oil infrastructure. But specifically in the area of environmental remediation.

Western energy firms have the capital, technical experience, and latest remediation technologies to clean up the worst sites using technologies developed over the past several decades that are not widely used in South America. We would wager that more advanced remediation technologies like In-Situ Chemical Oxidation (ISCO), soil vapor extraction, air sparging, slurry walls, thermal destruction, and many more are not widely known about and employed across South America. American energy companies and their environmental engineers know how to use these technologies to gets sites cleaned up to conditions safe for human health and the environment efficiently (read: $), quickly, and properly.

Another good example is the enormous number of wells flaring gas from oilfield production in the Maracaibo and Orinoco basins. Luisa Palacios, the former Chair of CITGO in the U.S., recently noted that ~40% of Venezuela’s nearly 3 billion cubic feet (bcf)/day of produced natural gas is flared for lack of distribution and offtake capacity, squandering around $1 billion annually that could otherwise be captured to benefit Venezuela. More is certainly being lost to leaky infrastructure like valves, joints, fitting, and other surface equipment. Neither are helping the environment.

We close by noting that the money to remediate the urgent and long-term environmental risks from Venezuela’s oil and gas infrastructure and illegal mining will have to come from somewhere, and that will most likely be revenue from the sale of oil. Venezuelan oil already sells at a discount to other light, sweet, global benchmarks. Additional expenses – even for particularly good reasons like environmental remediation and restoration – function as costs on each barrel, and those costs cuts into the dollars left over to help Venezuela’s struggling populace and wrecked economy (people before planet in emergencies like this). And dollars left over in the form of profits to incentivize western energy companies to invest in Venezuela.

Environmental risks are on the table and the ghost of Chevron in Ecuador looms large. As such, President Trump will need more than bullying and threats to get western energy companies investing in Venezuela.

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For our money, there’s no better place to be on earth in October than the prairies of Saskatchewan, Canada. The fall sun throwing shafts of early morning or evening light on harvested wheat and barley fields creates memorable colors in the crisp, clear air. The crunch of grain stubble underfoot, the sights and sounds and earthy smells of the prairie, and skies full of migrating waterfowl draw us back year after year.

But as much as we love that land and the people who live on that prairie, we do not want to be anywhere near there in January. Bitter cold and prairie winds commonly drive temperatures below zero. With January daytime highs averaging about 15°F (about -9°C), and nights around -2°F (about -19°C) – before factoring the wind chill temperature - if you’re going to farm or ranch there, you live with wicked cold.

With the exception of its mountainous regions, most Americans probably don’t think of continental Europe as home to the kind of wicked cold we associate with Canada. But Berlin and Saskatoon, Saskatchewan are both at 52 degrees north latitude, and Berlin is actually a few minutes north (in latitude/longitude terms) of the capital of Canada’s resource-rich province.

Whether you’re on the prairies of rural Saskatchewan or in the metropolis of Berlin, losing electricity in January is suboptimal. People on the Canadian prairies are resourceful, hardy, and prepared for just about anything. But when parts of a suburban neighborhood in a large metropolitan city like Berlin lose power for 3-4 days in frigid temperatures, the situation becomes dangerous in a hurry.

Since 2011, the Berlin, Germany metro area has suffered nearly a dozen attacks by an elusive group of ecoterrorists using the name Vulkangruppe (“Volcano Group”) targeting transportation, telecommunications and, since 2018, power and utility infrastructure. In 2018, an arson attack on power lines in Charlottenburg caused a power outage for ~6,500 homes and 400 businesses. A 2021 attack on power lines cut electricity supply to the Tesla Gigafactory Berlin‑Brandenburg, construction site. German law enforcement authorities have never apprehended or prosecuted a single person for any of these crimes.

In May of 2023, we highlighted an independent film release timed for Earth Day in America the month prior. The movie “How to Blow Up a Pipeline” is based on a book by Swedish Professor of Human Ecology and devout Eco-Marxist, Andreas Malm. The book’s title (emphasis ours) was How to Blow Up a Pipeline: Learning How to Fight in a World on Fire.

As we noted in Moral Hazards, Malm explicitly recommends destroying fossil fuel infrastructure by violent means. While the overwhelming majority of “environmentalists” globally do not engage in violence, Malm advocates for its use in no uncertain terms (emphasis added):

“So here is what this movement of millions should do, for a start: announce and enforce the prohibition (on new fossil fuel development). Damage and destroy new CO2-emitting devices. Put them out of commission, pick them apart, demolish them, burn them, blow them up. Let the capitalists who keep on investing in the fire know that their properties will be trashed.”

The Volcano Group began attacking infrastructure before Malm published the book in 2021, but in 2024 the group turned their ecoterrorism toward public utilities. In March, their arson attack on a transmission tower conveying high voltage electric lines to the Tesla Gigafactory in Grünheide knocked out power to the plant. The four-day shutdown was costly for Tesla and put several thousand area residents in the dark in the process. Musk called Volcano Group “the dumbest ecoterrorists on earth.”

We published the full manifesto Volcano Group released after the 2024 attack in Moral Hazards. The environment and climate change are their principle motivations and justifications for resorting to violence.

In May 2025, they launched another arson attack on a radio mast and transformer station in Berlin-Grunewald, targeting a wealthy area. Afterward, the group commented that “we can no longer afford the rich.”

In the early morning hours on Saturday January 3^rd, Volcano Group struck again. Here’s how CNN described the attack:

Amid heavy snow in the German capital and temperatures plummeting to below freezing, nearly 100,000 people were left without power for several days after an alleged left-wing arson attack on Berlin’s power supply on Saturday caused a major blackout.

The activist group Vulkangruppe – or Volcano Group – claimed responsibility for the attack, citing the role that fossil fuels and AI play in accelerating the climate crisis.

Roughly 45,000 homes and more than 2,000 businesses in Berlin’s wealthy southwestern districts were affected by the outage, which lasted more than four days.

The outage is believed to be the longest in Berlin’s postwar history.

In public statements issued to German media on the day of the attack, and publicly on the internet the next, Volcano Group described their attack on the Lichterfelde natural gas power plant as follows:

“Our target was the high-voltage power lines, with the aim of causing significant damage to the company. We set fire to the cable bridge, which is not publicly documented and runs from the Lichterfelde power plant across the Teltow Canal, on the side facing the green space. We then short-circuited the charred cable strands with steel bars lying around.”

The ensuing power outage affected Berlin’s Steglitz-Zehlendorf district. It left nearly 100,000 residents without electricity or heat in freezing winter temperatures. Why that plant? It is a natural gas-fired power plant in an affluent part of Berlin.

Volcano Group’s ecoterrorists added to their malevolence by timing the attack to coincide with the weather. Data from the German Weather Service shows the temperature barely rose above freezing for a few hours the Saturday afternoon of the attack, while the next four mornings ranged from -7 to -10 degrees Celsius (19F to 14F), and afternoon highs remained below freezing.

Extreme cold kills nearly ten times as many people as extreme heat each year across the globe. An 83-year-old woman died after she was reportedly found near death in her flat by a relative and transported by ambulance to a local hospital. Berlin police did not provide details about her cause of death. Video from German media outlet Die Welt showed a 97-year-old woman on a cot in a shelter, chased from her home by the cold.

Train services and mobile phone connectivity in the area were disrupted. Five area hospitals were required to switch to emergency generators. It took Berlin’s electric grid operator, Stromnetz Berlin, four days to fully restore power to residents after the attack.

Berlin’s Mayor called the action “a terrorist attack by a left-wing extremist organization.” Berlin police began investigating the event as a terrorist attack, but German Federal investigators quickly took over what they are now describing as a “far-left militant act under federal terrorism investigation.” (Better late than never.)

Volcano Group’s nearly 5,000-word manifesto, wandering and at times tangential, provides clarity about how the violent left-wing ecoterrorists view the world, and who they blame. The choice of the target and who would be most affected were deliberate, with specific political motivations. Legacy media has conveniently and unsurprisingly provided limited details.

Hanlon’s Razor is the adage which states “never attribute to malice that which is adequately explained by stupidity,” and defaulting to that reasoning when either ignorance or malevolence could explain an action or event is always wise. But when a political terror group’s violence shows you over and over again who they are, and they leave behind manifestos to make sure you get it – Hanlon’s Razor no longer applies. It is malevolence.

This was not a prank pulled out of the innocence of youth or ignorance. Nor was it vandalism.

This was politically motivated terrorism, with a specific green, anti-capitalist, anarchist flavor. It was ecoterrorism, and the perpetrators are ecoterrorists. It was malevolent, not ignorant.

Who is the Volcano Group? What did their latest manifesto say about why they committed this act of ecoterrorism? Who and what are these attacks attempting to harm?

Dennis Prager has argued that people often deny the existence of evil not because it is too dark to see, but when it is so bright, open, and obvious that acknowledging evil creates a moral obligation to fight it. While mainstream media will not publish the full manifesto, we will. We believe the world needs to see and understand the raw, unfiltered philosophy of those who would commit such acts, understand it, and fight it.

We begin with a brief overview of what is known about the Volcano Group (VG). Politically, VG is a far-left anarchist faction with radical environmental and anti-capitalist roots. Based in Germany and seemingly centered around Berlin-Brandenburg, its signatures are anonymity and violence-oriented direct action, and arson is its weapon of choice. Its targets to date have included rail facilities, data infrastructure and high-profile corporations like Tesla and digital communications technology organizations like the Heinrich Hertz Institute.

The Lichterfelde natural gas plant was the group’s first attempt to target a fossil fuel powered electricity generating station. It would be wise to assume Lichterfelde will not be the last.

Early attacks invoked the names of Icelandic volcanoes before the group officially adopted Vulkangruppe in the early twenty-teens. As noted earlier, no member has ever been identified, arrested, or charged with any crime in connection with about a dozen attacks to German infrastructure and commercial buildings since 2011.

“Climate change” and “resistance” to fossil fuels, capitalist “greed for energy,” oligarchs, the ruling class and “elites” are central themes in the manifestos left by VG activists after each attack. All are recurring subjects in the group’s online communications posted on independent media websites.

How would we describe the Volcano Group? The European and western Left are not “left” enough, its feeble actions milquetoast against the environmental crises facing the planet, and violence is both necessary and justified. Burn down capitalism, especially Big Business and Big Technology with their gargantuan appetite for energy and resources. Take from “the rich.” Torch the present iteration of The State, and replace it with a “sustainably” powered, low environmental impact, egalitarian utopia.

It is not obvious to us that Volcano Group has adequately considered how their sustainably powered egalitarian society stays warm and fully functions in their 52-degree north latitude Berlin utopia in January. But the impacts they caused last week on the southwest side of town are highly instructive and should be thoroughly contemplated by Germans and other Europeans residents tempted to sign up to the group’s views.

A blackout in Spain in April is one thing. In Berlin in January or February it is an entirely different kettle of fish. Frozen fish.

The afternoon after the attack, Volcano Group published a five-paragraph statement to the public on the German website de.indymedia.org. It included a similar statement released to several German legacy media outlets (which it named) the day of the attack, along with a “detailed explanation” we’ll refer to as their manifesto, noting:

“Due to political calculations, our statement has not been made public to this day, except for a brief broadcast on Radio Eins at 5:30 a.m. After that, all quotes disappeared following our intervention… The media outlets contacted are acting accordingly, in order to prevent any substantive discussion.”

If German media are reluctant to publish the manifesto, it is not “in order to prevent substantive discussion,” but rather to avoid shining sunlight on the dark, festering, violent corners of an ideology it embraced and carried enthusiastically on its platforms for two decades or more. Better to simply report a few verses of the manifesto as “extreme left-wing ideology” than to admit its source is the same religious hymnal from which you’ve been singing.

The public statement apologizes for the “inconvenience” caused “to the less affluent and vulnerable members of the population” who were affected (as it damn well should). The opposite is expressed for the “the owners of the many villas, the real estate companies, the embassies, and other elite wealthy individuals” in the area (all emphasis in below added):

“The rich and their self-centered, antisocial lifestyle are currently destroying the planet.”

And what justifies eco-terrorism that leaves nearly 100,000 area residents with no heat in the middle of winter? The idea that German authorities dare use natural gas to keep the power on:

“The sabotage of the gas-fired power plant is, among other things, a necessary measure against the expansion of fossil gas power plants in Germany.”

In that public statement, VG claims credit, providing details only the perpetrators would theoretically know:

For further authentication: Under the cable bridge, there were about 64 pipes, most of which were occupied with high-voltage cables. We connected these with four construction site spikes to ensure a short circuit.

Take a bow, Andreas Malm. Your 2021 book is clearly having the intended effect in Europe.

What follows are portions of the statement released to German media the day of the attack, along with excerpts from the lengthy manifesto.

INTRODUCTION

Volcanic group: Cut off the power of those in power

NEW YEAR GREETINGS 2026. HAVE COURAGE!

We can no longer afford the rich.

We can initiate the end of the imperial lifestyle.

We can stop the plundering of the Earth.

In the greed for energy, the earth is being drained, sucked dry, burned, ravaged, razed, raped, and destroyed. Entire regions are rendered uninhabitable by the heat. They simply burn up. Or habitats disappear beneath the waves during floods or due to rising sea levels.

VG takes responsibility for the attack and makes the target clear:

Last night, we successfully sabotaged the gas-fired power plant in Berlin-Lichterfelde. This caused power outages in the wealthier districts of Wannsee, Zehlendorf, and Nikolassee. Power outages were not the goal of the action; the fossil fuel industry was.

Volcano Group admonishes us that destroying the means of human survival in winter in the name of saving the planet is not ecoterrorism. Rather, it is a courageous, virtuous act that benefits society.

“Our public-benefit action is socially beneficial… The attack on the gas-fired power plant is an act of self-defense and international solidarity with all those who protect the Earth and life.”

The manifesto begins with a regurgitation of well-worn climate change tropes. Floods and rising sea levels, climate refugees, record-breaking atmospheric CO2 levels, the collapse of the Atlantic Meridional Overturning Circulation, etc.

It calls out Big Tech’s “gigantic, energy-devouring computing and server centers. Which also drink our drinking water..” And notes other very real social consequences of the addiction to technology that plagues most in the advanced world, the fact that our gadgets:

“…bombard us on our screens with a lot of useless, supposedly important spam until we have unlearned to look our neighbor in the eyes. … We sit together with our friends while the feeds eat us up and sink into the devices instead of talking live.”

Volcano Group admits that they have no answers, other than to stop the planet’s destruction… by means of destruction. Of the existing systems, institutions, and the planet-killing infrastructure:

“We do not say we know the way out. But we know we must interrupt this destruction.”

Existing political parties and structures are not up to the tasks required according to the group. And the free market is the poison that only compounds the problems. The manifesto positions the group’s radical environmental ideology to the left of Europe’s existing parties (think about that):

“Please don’t come to us with the parties. Please don’t come to us with the brown alternatives in pinstripe suits and costumes. And not with the Greens or the Left either. Don’t come to us with the economy, whose free market will regulate the problem.”

All of the advanced nations of the global north, and all their political and economic systems, are part of the problem. Interestingly China, whose communist system would seemingly closely align with the central planning required to achieve VG’s objectives, is one of the culprits, leveraging the critical minerals required by “green” energy and technology:

“The countries of the global North, and soon also China among others, decide over the lives of all. China, as a communist, racist, and patriarchal dictatorship, can blackmail countries that are not in line with “rare earths” and thus gradually weave countries, cultures, political systems into the cocoon of the new dictatorial world power.”

The manifesto identifies rich elites as the core of the problem. Two tech titans get called out by name:

“And it is the rich who are the problem. It is the super-rich who are setting the world on fire… about 300 super-rich emit more CO² than the 110 poorest countries in the world. These criminals know about it. They don’t care… Zuckerberg wants more “masculine energy.” Musk “produces” children on an assembly line so that his clan survives.”

The manifesto decries the global North’s “imperial lifestyle” and its consequences on the planet, how German Social Democrat Party (SPD) economic liberals are part of the problem, and provides other attempts to justify for its violent actions. It provides details about the power plant and the attack the group conducted.

Importantly, Volcano Group’s manifesto serves as a call to action we would strongly advise western “leaders” to take seriously. Imploring violent direct-action from similar radical environmentalists in many other countries, their ecoterrorism anarchist message is clear:

“Sabotage the fossil infrastructure, the power grids, the plunder of the earth, the server centers, the chip industry and their suppliers, destroy the prerequisites for the automotive industry and the arms industry, for air traffic, the villas, the yachts, the spaceships, and the golf courses. Destroy the police centers, which are the guarantor for patriarchal property relations, because the earth belongs to itself and all beings and not to humans, or to men alone, and not to the richest among them.”

Traffic on social media appeared to suggest the possibility of a split between the original Volcano Group’s founders and the faction conducting this latest attack. Whether that turns out to have merit or not, it is clear that one some VG activists are prepared to carry out attacks on rail transportation and power and utility infrastructure, even at the risk of residents freezing in the dark in winter without heat in the midst of life-threatening cold weather.

In Moral Hazards, we wrote:

But in the post-modern world, where the internet and social media exist simultaneously as a powerful tool for human interaction and as a political weapon, the spread of ideological rot is a force multiplier for violence, fear, and terrorism. Add in a twisted moral justification for nihilism and direct it at foundations of modern living – energy – and the radicals at both ends of the political spectrum are playing a new game that has no precedent in modern Western history.

It would be unwise to underestimate the potential consequences that violence by disaffected, angry, nihilistic radicals on both sides of the political debate could have on western civilization if they turn their “moral” outrage on energy infrastructure.

Driven by an anarchist, violent form of ecoterrorism, this latest attack on a natural gas fired power plant in Berlin, Volcano Group, combined with its calls for more of the same by other activists, make it clear that the green shoots of the seeds Andrea Malm planted in his 2021 book are sprouting. We fear they are likely to become more widespread and dangerous.

As EcoLeftist groups in Europe and America become increasingly frustrated by the climate policy backsliding that began in the U.S. and will likely spread out of necessity (cost, keeping industry, and the lights on), attacks targeting energy infrastructure increase in likelihood. Given the content of the manifesto, we could envision an attack on a natural gas pipeline at a project where Big Tech brings natural gas to power plants behind the meter next to data centers. Ecoterrorists destroying a pipeline that feeds a gas-fired power plant sending electricity to hyperscaler’s data centers would be a logical call combining Andreas Malm’s demented green ideology and Volcano Group’s ecoterrorism actions.

We close by noting that Volcano Group’s actions and its latest manifesto allow us to confidently dispense with the benefit of the doubt Hanlon’s Razor cautions. Ecoterrorism is not ignorance – though it is likely partly born from it. It is unequivocal malevolence.

When malevolent people have repeatedly demonstrated their violence with fire and destruction, this leaving tens of thousands in the dark without electricity or heat in the dead of winter, we’d best not miss the chance to follow Maya Angelou’s advice this time.

Believe them now.

(At the time of publication, German authorities have provided no new information about the suspects. We will update readers via Notes as new information becomes available.)

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If you would like to read the full public statements issued by Volcano Group since the attack, translated to English by Grok, they can be found below.

(All bold emphasis is added.) A link to the original statements in German can be found here.

Volcano Group Manifesto, January 4, 2026.

Title: Shutting down fossil power plants is manual work. Have courage. Militant New Year’s greetings 2026. Statement and supplement. 4.1.2026

Date: 4.1.2026

Body of the Text:

From: Volcano Group: Cutting off the juice to the rulers on: 04.01.2026 - 14:01

Topics:

Worldwide (/worldwide)

The statement below was sent by us yesterday, 3.1.2026, to Spiegel, taz, RBB24, RBB Television, and Radio Eins. Our statement has not been made public until today due to political calculation, or only briefly at 5:30 on Radio Eins. After that, all quotes disappeared due to intervention. This is not in the interest of the political officials at Stromnetz Berlin, the city of Berlin, the economy, the police, and other political forces. The addressed media act in this sense to prevent a substantive debate. Stromnetz Berlin initially downplayed the damage from the fire on the cable bridge. Although Stromnetz Berlin managed to compensate for the sabotage of the power plant in about 50,000 households, presumably by purchasing expensive electricity. Why this did not succeed in about 40,000 households in Nikolassee, Wannsee, Zehlendorf, and parts of Lichterfelde is the question that Stromnetz owes to the public. The ball is in Stromnetz Berlin’s court. We would like to expressly apologize once again for the inconveniences to the non-wealthy part of the population that relies on help. They were not the target of the action. We ask the population for mutual solidarity help. In particular, we ask for support for people in need of care and their relatives, the penniless people in these districts, and the withdrawn people overwhelmed by the situation.

For the owners of the many villas, for the real estate companies, the embassies, and other elite rich in the area, our sympathy is limited as already mentioned. The rich and their egocentric, unsocial way of life are currently destroying the planet. The sabotage of the gas power plant is, among other things, a necessary measure against the expansion of fossil gas power plants in Germany. In our statement, we explain the connections between wealth, imperial lifestyle, and the destruction of our basis of life, which we all must oppose. We ask the residents of Bremer Street for discretion. For further authentication: Under the cable bridge, there were about 64 pipes, most of which were occupied with high-voltage cables. We connected these with four construction site spikes to ensure a short circuit.

INTRODUCTION

Volcano Group: Cutting off the juice to the rulers

NEW YEAR’S GREETINGS 2026. HAVE COURAGE!

We can no longer afford the rich.

We can initiate the end of the imperial lifestyle.

We can stop the plunder of the earth. In the greed for energy, the earth is drained, sucked out, burned, tormented, burned down, raped, destroyed. Entire regions are made uninhabitable by the heat. They simply burn. Or habitats disappear under floods due to flooding or rising sea levels. Shutting down fossil power plants is manual work. Have courage.

We know we must interrupt this destruction. We know we are not alone. Do not give up hope for a world where life has a place and not the greed for money, power, and destruction.

Tonight, we successfully sabotaged the gas power plant in Berlin-Lichterfelde. There were power outages in the more affluent districts of Wannsee, Zehlendorf, and Nikolassee. Power outages were not the goal of the action, but the fossil energy industry. We apologize to the less affluent people in southwest Berlin. For the many villa owners in these districts, our sympathy is limited. We explain why in our contribution below.

Our community-oriented action is socially meaningful. We have also commented on this in more detail in our letter about the action. The attack on the gas power plant is an act of self-defense and international solidarity with all who protect the earth and life. The infrastructures that serve the “technological attack” and promote the destruction of the earth can be sabotaged. Fossil energy production can be stopped. Smart city metropolises, like Berlin is supposed to become, can be prevented. With Stromnetz Berlin, a building block of this catastrophic vision of a smart city has been hit.

For us, it is self-evident that we have excluded the endangerment of human lives at all times. Our detailed statement is attached to this information.

NEW YEAR’S GREETINGS 2026. HAVE COURAGE!

Greed for Power, Greed for Energy, Greed for Destruction

In the greed for energy, the earth is drained, sucked out, burned, tormented, burned down, raped, destroyed. Entire regions are made uninhabitable by the heat. They simply burn. Or habitats disappear under floods due to flooding or rising sea levels. Thus, several thousand inhabitants of Tuvalu in the Pacific are already seeking refuge in Australia.

In the past year, the CO² concentration in the atmosphere rose to 423.9 parts carbon dioxide per million. A value that trumps all previous ones again. At the same time, climate scientists agree that the huge transatlantic ocean currents will break off sooner or later due to global warming. This collapse of the ocean currents, which has so far provided the North with a mild climate, is only part of the catastrophe that awaits us. The extent of this devastation is simply blanked out, abstracted, and discussed in global climate conferences until the extent of the destruction has disappeared in tables and declarations of intent. But the hunger for energy is insatiable and eats through the earth’s crust and our lives, among other things, to feed artificial intelligence, which then spits out stereotypes, brain farts, and confuses, disorients, and/or manipulates us. While language, expression, and vitality are further reduced, mutilated, and limited with each new “learning” of the AI with the previous data.

We feed our data to the “cloudy” called “clouds,” which are nothing more than gigantic, energy-devouring computing and server centers. Which also drink our drinking water and excrete numbers that bombard us on our screens with a lot of useless, supposedly important spam until we have unlearned to look our neighbor in the eyes. Having become dependent on the small devices, we are always ready to send an emoji and feed the “big brother,” whose algorithm registers our norm deviations and answers our search queries before we have finished thinking the thought. We sit together with our friends while the feeds eat us up and sink into the devices instead of talking live. We operate our own surveillance, and it is total. The tech corporations are in the hands of men of power, whom we give to them. We devour the colorful images that the machines filter and set before us and starve at the screens from loneliness and alienation. We become swiping zombies who run each other over in traffic. We are prisoners in a digital system that increasingly denies us the right to exist if we do not submit to the rules of the game and do not move our lives to social media, chat, artificial realities. We get no money, can book or buy nothing in cash. Without access to the digital world, we are increasingly excluded, lose connection to what seems normal. We are afraid of what happens to us and bury ourselves even deeper in the screens instead of turning off the devices and taking away the power over us from those who track, follow, observe, and manipulate us. We make ourselves blind to the knowledge for whose dissemination Edward Snowden risked his life. We make ourselves deaf to the silent screams of the indigenous people, the farmers, who see the planet’s basis of life burn before their eyes. On the contrary, we feed the fire that encircles us with every post and lets the temperatures rise to a new record every year. One day, we will simply thirst and starve sitting in front of the glowing screens or the dead devices. It is no longer hard to imagine this. We do not say we know the way out. But we know we must interrupt this destruction. Hedonism can no longer capture us once we have smelled the fear sweat that spreads when there is no way out anymore. No forward and no back. Only the horror of where we as humanity have landed. When the question falls back on us, what did you actually do to prevent what is coming upon us? You saw it coming, the survivors ask us, the next generations. Please don’t come to us with the parties. Please don’t come to us with the brown alternatives in pinstripe suits and costumes. And not with the Greens or the Left either. Don’t come to us with the economy, whose free market will regulate the problem. Economy and politics deal daily with death. With dictatorships and butchers. Concerns go to zero when it comes to satisfying the hunger for energy, for example. Russia still delivers gas to Europe via Nord Stream 1. And the U.S.A. wants Venezuela’s oil. That’s why military attacks are happening now. And fracking gas comes by ship from all over the world. Currently 79% from the U.S.A.! Fracking in its production is extremely environmentally harmful. Already in extraction, 6 to 10 percent methane loss is assumed, which additionally heats the atmosphere.

95% of the burned gas in Germany is imported. At climate summits, only tactical lip service comes out because the oil-producing countries have no interest in climate protection but in money. Because the metropolitan countries align their politics with money and growth, the lobbyists in Europe are just being given the out from the combustion engine ban.

The German Economics Minister Katharina Reiche, for example, was State Secretary in the Federal Government’s Ministry of Transport, lobbyist at the Association of Municipal Companies (VKM), and manager at the E.ON subsidiary Westenergie. E.ON Minister Reiche poses as a supporter of hydrogen but mainly relies on natural gas. So she wants tenders for additional gas power plants with a capacity of 10 gigawatts, which are to go online by 2031, which corresponds to about 25 new power plants. 20 billion euros are earmarked for these new gas power plants.

Reiche would prefer to postpone Germany’s climate neutrality from 2045 to 2050 anyway. The main human causes of climate destruction are not those who suffer the most from it, who pay for it with their health and lives. The people of the global South are already paying the highest price. The countries of the global North, and soon also China among others, decide over the lives of all. China, as a communist, racist, and patriarchal dictatorship, can blackmail countries that are not in line with “rare earths” and thus gradually weave countries, cultures, political systems into the cocoon of the new dictatorial world power. Over 85% of the world’s refined “rare earths” come from China. And it is the rich who are the problem. It is the super-rich who are setting the world on fire. In the East, in the West, in the South, and in the North. 60 percent of the super-rich’s investments worldwide go into investments in gas and oil. And about 300 super-rich emit more CO² than the 110 poorest countries in the world. These criminals know about it. They don’t care. Their greed for even more wealth and power sets the standard that everyone follows. They are preparing their own “salvation” on secluded islands or in space when they have burned this earth. A few years ago, we would have laughed at these misogynistic weirdos, but they mean it deadly serious. Zuckerberg wants more “masculine energy.” Musk “produces” children on an assembly line so that his clan survives.

No one solves the “problem” from the perpetrators. And certainly not is the basic problem solved regionally. On the contrary – the whole world is arming up for the last great battle over raw materials, water, food, and access to strategically important regions to prevent or at least delay the exit of their own spheres of power as much as possible. So that the population can be offered participation for as long as possible. So that we in the global North, spun into a world of consumption and an imperial lifestyle, participate and confirm the power with its increasingly authoritarian concepts. Because it’s no longer about freedom for all, it’s only about security for some. The security promise is an exclusive right of those who can enforce it for themselves. We let the losers pay for our imperial lifestyle, those who are too weak to defend themselves against “us.” We reject the offers of participation in a burned world with our militant action. That’s why we carried out the action on the gas power plant in Lichterfelde.

We do not prevent our own entanglement in an imperial lifestyle at the expense of other lives, but we set a signal. Once again, as many people and groups do in different places in the world. As some groups here, such as volcano groups, have been doing steadily since 2011.

We know these words do not reach many people – they are so far removed from the idea of a world and a coexistence that is not based on destruction that these words reach them as little as the misery of the world, which is transported in high resolution over the screens daily. We can list facts for kilometers and find no hearing.

We are not the first and we will not be the last to try to reach people with words anyway. We are not the first and last to resort to sabotage, because we are playing for time. At the same time, we and others use the gained time to reverse the destruction of all forms of life. They call us eco-terrorists, yet we respect life. They call us irresponsible, yet we take responsibility to end this imperial, destructive lifestyle.

Our community-oriented action is socially meaningful. We try to interrupt the exploitation of the earth, prevent the CO² deaths, and stop the diseases associated with the climate catastrophe. We also try to put an end to species extinction and make the world more livable for all again. Those who call us “eco-terrorists” are themselves the true eco-terrorists, formulating this in the sense of selfish interests and power calculation.

We see the unconscious who think they are smart and consider climate change fake news. Who consider empathy wokeness and only have their own advantage in mind, without recognizing how the things around them are interconnected. Behind this spreading denial of facts, we see a system of those who invest in the destruction of the earth. It is the same ones who hold power over the tech corporations, allowing them to breed a species of human that applauds when people drown, thirst, starve, or otherwise perish in attempting to reach Europe or the USA. These manipulated welfare chauvinists and party supporters second Trump, Modi, Miley, Netanyahu, Merz, Weidel, Putin, Höcke, Orban, Vans, Xi, and whatever they are all called, in the “defense” of freedom. The freedom to decide who must die and who not. Who gets access to wealth and who not. Every refugee who died fleeing has its counterpart here in a deep depression. Every starved person makes us fatter and sicker here.

We people of the global North, of the rich metropolises, have no benefit from the misery of other people. Material wealth is no wealth in the sense of an idea that can delight in the life of all.

If only in every country a small part of the population says: “Enough now. Not with us anymore, not in my name. No one may die at our expense anymore.” If we refuse to function and play along, if we become sand in the gears of a machine that we have been co-feeding so far, then something moves, then we can develop the power to stop the causes once and for all.

But we need an International of refusal of a progress that is based only on destruction, murder, and robbery. We call desperately, angrily, and determinedly at the same time and join the calls of others: Sabotage the fossil infrastructure, the power grids, the plunder of the earth, the server centers, the chip industry and their suppliers, destroy the prerequisites for the automotive industry and the arms industry, for air traffic, the villas, the yachts, the spaceships, and the golf courses. Destroy the police centers, which are the guarantor for patriarchal property relations, because the earth belongs to itself and all beings and not to humans, or to men alone, and not to the richest among them. This cry of despair is also a wake-up call, a cry of hope, and it has no local enclosure, it is global. We are talking about an International that does not invoke a patriarch, not the gallery of heads that the communists revere, but that starts from different premises. That is understood in China, in Europe, the USA, in India and Pakistan, in every corner of the earth where Starlink has its reception, in every country where the deadly drone seeks its target and needs electricity for it. In every country where without energy the warring forces are blind and people can leave the battlefields without anyone being able to give orders to kill them. In which the stock exchanges no longer function and the Bitcoins can no longer be called up.

We say it again, we have ideas but no final answers about the path. But about the goal. Every contribution counts. But trying everything within our reach to end this imperial lifestyle cannot be wrong. The progress of destruction is man-made, it can also be stopped by us. In the steps of resistance, in the echoes of diverse languages and cultures, in what others send to us, we will find and recognize each other. It’s about the earth. It’s about life. It’s against immature stupid men at the levers of power who act as if they were operating a toy excavator. There is no time for frustration regarding the resistance to man-made climate change and the growing number of deniers of this change. We must learn from defeats, not by going into parties or privatizing or settling into collapse, but by setting facts. Shutting down a gas power plant is one of these facts, but it can also be land, square, and forest occupations, destruction of golf courses and airports of the rich. Imagination is required and our determination. Switch off for the greed for energy, switch off for the digital management of life, switch off for the progress of destruction. Today we attacked the gas and steam turbine combined heat and power plant in Lichterfelde. The power plant produces a total electrical output of 300 MW on a natural gas basis. The target was the high-voltage lines to cause high damage to the company. We set fire to the cable bridge, which is not publicly registered and leads from the Lichterfelde power plant over the Teltow Canal, towards the green areas. We additionally short-circuited the charred cable strands with steel rods lying around.

The energy company will have to buy electricity on the free market in real time to fulfill the contractual obligations they have entered into with the delivery of electricity as soon as the failure of the delivery is noticed. We do not assume that we have disconnected 100,000 households from the grid, but that we have only disconnected them from the grid of the gas power plant. The multiply secured energy network will reconnect the households via other energy lines in the shortest time through the widely branched power grid. The short-term purchase of energy at market prices may be more expensive than at the time when the energy company bought the electricity on the Leipzig Electricity Exchange (EEX). To avoid high contractual penalties to the individual energy consumers, they have no other choice. We short-circuited over twenty 110 KV lines and did not include the district heating pipes in the attack. But we cannot rule out effects on district heating.

Our action differs in practice from the action in Adlershof on 9.9.2025 against the technology center. There it was a feeder line that neglected redundant security. In the case of the “Volcano Group Switch off Tesla,” which took Tesla off the grid by destroying a feeder line and affected about 5000 private households, the situation was similar. In our case, electricity is not cut off in front of an object like the technology park or the gigafactory so that this object goes into blackout, but the power plant with its wide branching of cables is disconnected from the grid. It still produces electricity but can no longer feed it into the grid and thus no longer deliver. However, the supply capability of private households via other power plants remains and is also intended by the authorities and energy giants. Nevertheless, it is not excluded that our action draws individual transformer stations into greater suffering.

The supply with district heating (thermal output around 690 MW) has not been interrupted by us. The individual households are not the target of the action. The goal of the action is to inflict high damage on the gas industry and the greed for energy.

If there are longer outages in private households, we want to make it clear here that they are not the target of the attack. And this effect was neither intended nor calculated by us. We have excluded the endangerment of human lives at all times.

Since we do not have one hundred percent certainty about what chain reactions, which are not in our area of responsibility, our shutdown of the gas plant could have, we have the following request to possibly affected households: Ring at your neighbors’ doors. Consider supplying older or needy people in case of a power outage. Supply yourself and other people by giving solidarity support. Inform each other. The combined heat and power plant in Lichterfelde was a one hundred percent subsidiary of the state-owned Swedish energy group Vattenfall AB with an annual turnover of 7.6 billion euros and the fourth largest electricity group after E.ON, RWE, EnBW.

From 2021, the power plant was “re-municipalized” and belongs to the city of Berlin. Thus, the power plant is also partially dismantled and converted to further capacities. This only sounds good at first glance. Stromnetz Berlin GmbH is currently making extensive investments in the expansion of Berlin’s grid infrastructure to meet the growing demands of the so-called energy transition. For this, the subsidiary of Stromnetz Berlin BEN (Berliner Energie und Netzholding GmbH) receives 380 million from the European Investment Bank - “to prepare for the advancing energy transition.” The “energy transition” is a smokescreen that conceals that it is about energy without transition and without ifs and buts. The main thing is energy, sustainable or not. So Stromnetz Berlin wants to double the capacities by early 2030. The goal is a “modern” digitized power grid. This means concretely hundreds of thousands of meters of new power cables and grid components as well as more digital services. We can imagine that this is not done out of neighborly love. Ostensibly, it is about the city’s supply security, but upon closer inspection, it is about a growth delusion in a government-forced competition. The battlefield is the city and our living conditions. The city is a commodity. The competitiveness with other major cities is to force the new settlement of more start-ups, more arms-researching and -producing companies, more digital service providers and tech companies that devour even more electricity than the millions of Berliners consume privately. It is also about e-mobility, which of course has no goal of promoting public transport, but more sheet metal rolling through the streets with lithium batteries, more AI-dominated systems that spit out self-driving private vehicles. This then runs under “expansion of infrastructure,” which will cost the state another 3 billion euros by 2029, after the A100 eats deeper into the city. Investments of up to 770 million euros are being made for the renewal of the power grid.

This all sounds more than boring, but it is of great importance for us as people in Berlin and Brandenburg, because it is our life, our land, our water, our future that is being negotiated here. For Giffey, the economic liberal of the SPD, the expansion of grid capacities and new power lines is a central prerequisite for Berlin as an investment location. These economic-liberal destroyers of a livable future think the city in numbers, sums of money, growth rates, and competitions with other cities. People do not count, or only as low-income or high-income quantities. The first part must be managed and contained somehow – also by means of police and repressive measures and thus walling in a park in Kreuzberg. And the other part is flattered, because its money boosts consumption. For this part, the city is made smart and pretty. Berlin is a brand and is traded as such.

For Giffey, the expansion of the grid corresponds to the rapid digitization of everyday life, as if it were a force of nature breaking over us. As if the TECH corporations and the tech fascists do not decide on the enforcement of AI, which will double global electricity consumption by 2030 according to the Federal Ministry of Economics. As if politics and economic liberals do not decide themselves when no cash payment is possible in BVG buses and people are forced to digital payments, whose tracking is also ensured, in a recalcitrant city where there is a tradition of militant movements that need to be controlled. As if politics does not decide when it gives the police and secret services the surveillance software Palantir, whose driving force is a fascist from the USA and whose software provides for a digital net to monitor people. Giffey advertises the expansion of the grid with “our” companies and the increasing electrification of mobility: “Out of love for Berlin, the most modern power grid for the climate-neutral capital.” And skilled in taking the edge off criticism, Stromnetz Berlin has involved “citizens’ councils” as fig leaves, which can exercise ridiculous participations in trivialities but have nothing to say about the direction of energy policy decisions and the design of the city. After Vattenfall and the city were forced by a broad citizens’ initiative to initiate a “re-municipalization,” a nationalization of the power grid and install BEN as owner, they continue business as usual and the madness continues unabated. The vision is clear: Smart City - Stromnetz Berlin says it: “Berlin is on the way to becoming one of the leading smart city metropolises. In all areas of urban life, this transformation process has already begun.” And: “intelligent infrastructures and especially the ‘smart grid’ (intelligent power grid) will form the foundation - as a networked operating system, it will become the backbone and catalyst of the energy transition.” Apart from the fact that we consider the term “energy transition” eyewash and would replace it with “technological attack on fellow-human relations,” we agree.

The concrete attacks on the Adlershof technology park, on Tesla’s gigafactory, on the infrastructure of the Vattenfall Reuter coal power plant, and on the Vodafone node in Adlershof are reference points of our action, as well as the many militant actions that set accents against the destruction of our earth. Even if these sabotage acts cause high financial losses, they cannot force a political change of direction as single (!) actions. But they point a way and a direction that we suggest to all metropolises. Paralyze the infrastructures that serve the “technological attack” and promote the destruction of the earth. The consensus on participation in the project of an imperial lifestyle is terminable. A social mass movement against the global destruction of the bases of life and against all wars and resource plundering goes hand in hand with the ability to sabotage the power grids and energy arteries.

The attack on the gas power plant is an act of international solidarity with all who protect the earth and life. Our resistance is diverse and often we still need too much time in the fog of disinformation, the different cultural accesses, the linguistic differences to recognize the commonalities. But we are confident that in the dark, the light is not far. If we place this action in the context of a worldwide resistance, whether in the USA, Latin America, Asia, China or Russia, in Europe or Australia, directed against all manifestations of dominance, rule, and destruction of the earth, we are confident that we will be heard, that these contributions will be translated, that translated contributions reach us, that on the winding paths of resistance a subversive communication takes place that recognizes each other. And intervenes. And this possibly without shedding blood, but determined to cut off the juice to the rulers.

Volcano Group: Cutting off the juice to the rulers

We can no longer afford the rich

Initiate the end of the imperial lifestyle

Shutting down fossil power plants is manual work

Stop the plunder of the earth.

Freedom for all antifas, climate activists, and all the other recalcitrant.

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The story of how environMENTAL came to exist is something about which we have never written. On the eve of a New Year, having just quietly celebrated our third birthday, we thought the story might be a good way to end the year.

For nearly 15 years starting around 2005, the western world shifted its priorities from the very real, immediate, and pressing environmental problems (soil, air, surface water, groundwater) on which great progress had been made over the preceding two decades. Under the growing pretense that “climate change” is an existential crisis and “sustainability” will solve it as well as all the world’s other environmental problems, they became the new focus. The majority of environmental professionals went along with it.

A few had done the requisite homework to understand the risks, tradeoffs, costs, and benefits of the proposed “solution” set, and held deep convictions that this redirection was necessary if not critical. Many accepted the “consensus” science without bothering to read any of it, and simply saw a new, politically popular revenue opportunity across the multi-disciplinary environmental industry, without the least bit of understanding of the costs and consequences.

Seven of us, all experienced professionals across a variety of environmental disciplines, quietly watched these developments push unresolved, serious domestic environmental problems with much lower costs and higher returns on investment down the list of priorities. “Climate” and “sustainability” were the new paradigm, hydrocarbon energy was its target, “environmentalism” was its political tool, and computer modeled bastardizations of economics and physics were its scientific justification.

Even worse than shifting the focus from clean air, soil, and water was the stark realization that the priority change was – and is – a threat to ~7 billion people’s ability to reach our living standards, and to the backbone of humanity’s incredible and continuous progress over the last two centuries: affordable, reliable, abundant, on-demand energy.

But what to do about it was a question that we all struggled with for the next decade. The fear mongering, legislated non-solutions, and greenwashing that increased rapidly in the twenty-teens exacerbated our consternation. For me, it became a part-time obsession.

When Covid-19(84) hit in the spring of 2020, I was five years away from retirement. But I was still thinking about how to put my experience, time, energy, and passion into something that might contribute to changing modern “environmentalism’s” wayward drift once that day came in 2025.

I quickly dismissed the idea of starting a non-profit to produce research to help policymakers push back against the prevailing climate, energy and environmental narratives and policies with data, facts, reason, logic. But donors would a grantee to carry their political water, making editorial independence nearly impossible, and attacks claiming research work was biased by its funding sources by those wishing to defend the new “climate/sustainability” paradigm, ironic as it may be, was inevitable.

On a warm evening in late May of 2022, still ruminating on all of this, a neighbor (and former Wall Street trader) with whom I had occasionally discussed these frustrations emailed me an article shortly after walking our dogs together. That’s the day everything changed.

The clip art chicken logo belied the content. The tagline “Chicken Little gets a Bloomberg Terminal” was catchy and better hinted at what was to come.

The article was a cogent, concise, insightful, bring-the-data-receipts takedown of biofuel (soy-based diesel, in this case) written with such detailed understanding of the key issues that it could not have been written by a “journalist.” The data gathering, analysis, deep understanding of physics, and insights were clearly the domain of someone(s) with substantial industry experience and unusual writing ability. I subscribed instantly, and continued to regularly read Doomberg, then leader in the Finance category of Substack.

That was the spark. No non-profit, no fundraising needed. The Substack platform, publicly available data from government, industry, and other sources. Independent research and analysis. Complete editorial discretion, the unfiltered chance to scream from a worldwide mountaintop that which I had been preaching from a soapbox for more than a decade.

I explored the Substack publishers’ platform to familiarize myself with the system’s architecture and functionality. They made it so easy even a Boomer could do it.

Within a few weeks I called those six close environmental industry friends who’d shared my frustrations for years and with whom I’d kicked around the non-profit idea many times. “I found a way to do what I’ve been talking about in retirement. Only I’m not going to wait, I’m going to give a go, this fall.

“I’d like your help, no big time commitment. I’ll pick the topics; I’ll do research and the writing. You’ll mostly be an information scout, technical expert on matters where I’m weak, and review drafts.” To a man, all six liked the idea and enthusiastically agreed to help.

Imitation is the best form of flattery, and imitating the habits of the extraordinarily successful seemed like an obvious place to start. With no professional writing experience or any better ideas on the matter, I decided to try to imitate the anonymous pen name intrigue, catchy logo, tag line, witty picture captions, and other styles Doomberg popularized on Substack.

I told myself and the rest of the team the worst that could happen is my choice of topics, research, analysis, writing and grammar could suck so embarrassingly that we would get few if any subscribers, and none of us would be worse for the wear. Some people might find the data, critical analysis, knowledge, and insights (if not the writing style) interesting or even useful. At best, we might someday contribute to a much-needed wakeup call and policy conversation that could defend western civilization and 7 billion not yet at our living standards against the excesses of modern “environmentalism.”

And with some trepidation, just over three years ago on December 10, 2022, we launched our first post as environMENTAL, noting:

Western nations have spent well over $5 TRILLION on “climate change” policy since the Kyoto Protocol was signed by Europe + 37 nations in 1997. The recently passed U.S. “Inflation Reduction Act” itself adds another $369 BILLION to that tab over the next ten years. A Congressional Budget Office report from 2009 documents that the U.S. (alone) spent $99 BILLION on “climate policy” from 1999 – 2009.

For almost two decades, we have asked ourselves, “what good could have been done for the lot of humanity worldwide with this amount of money”?

We have been quietly stewing thinking about this for a long time. Until now.

People read and subscribed, slowly at first. We benefitted from the well-documented “Doomberg Effect” phenomenon in Spring 2023 when the spark responsible for this project restacked some of work and added us to their list of recommended Substacks.

Reader engagement in the form of “likes” and comments grew. Aside from typographical errors and my own horrible grammar, egregious data errors and other mistakes did not plague us and comments were enthusiastic and supportive. We took the fact that engineers, a wide variety of industry executives (energy, environmental, financial; many at senior levels, some from companies we greatly admire), academics, energy analysts, environmental professionals, and energy authors started to appear in our subscriber list as a positive sign.

We were more surprised when we started to receive subscription pledges from readers. The crazy idea appeared to have some potential. Meanwhile, something more important happened.

I immediately fell in love with the job: choosing topics, researching, analyzing, thinking critically, and writing. Digging for and then slicing and dicing data. Fumbling with Excel spreadsheets and graphs. It was instantly clear this work would heartily satisfy two burning desires in retirement: a) trying to contribute to a necessary policy conversation and b) digging deeper to understand more about the intersection of energy, the environment, and economy.

Three years and 92 posts later, environMENTAL is read in 98 countries by nearly 3,000 subscribers, with over 8,000 followers on Substack.

In March of this year, I was fortunate enough to retire, early and ahead of a date planned – for today - since 2021. Since our beginning in December 2022, three other members of the environMENTAL team also retired early. They are traveling, enjoying the well-earned fruits of decades of work, spending time with kids and grandkids, and simply don’t have the time to help much anymore. I am forever grateful for their contributions, support, and encouragement.

As I am to the other three members of the team, who remain engaged as they count the days until their own retirements. Without the help of all these long-time friends and experts in their fields, it is doubtful I would have had the testicular fortitude to even attempt to create environMENTAL.

As we put a wrap on 2025 and begin a new year, what can you expect? First, we will never take sponsors, never sell your email address, and never take advertisements. Editorial freedom is a core principle more valuable to us than money. Period.

I will continue to publish 2-3 articles per month. A proper retired man needs time for fly rods, shotguns and dogs and birds and an occasional round of golf. And to spend time with a patient, understanding and supportive wife (before she “accidentally” spills a gallon of water on this laptop.)

We may tinker with new subjects, article length, some video projects, or other aspects around the margins, but the core work and objective will remain the same. And for the record, we find AI an incredible tool for research, but AI has never written – and never will write – a single sentence of any article we ever post. You are stuck with our own genuine thoughts, complete with all my clumsy, improper grammar, syntax, and informal writing style.

Climbing Substack rankings or turning environMENTAL into a large source of income is not an objective. Philosophically we feel it is important that our work be accessible to all.

In that spirit, we have chosen not to go behind a paywall for another year. Instead, we are simply going to ask for your voluntary support in 2026.

Our plan was to offer monthly subscriptions at $3.50 per month, about the price of a tall Starbucks coffee. Annual subscriptions would be priced at $36/year, and a Founders-level subscription for those who wish to support our work at a higher level would be $80.

You might ask how we arrived at those figures. There were two factors.

Since our earliest days in 2023 dozens of readers have graciously pledged annual subscriptions. 92% of those were for $80 (the other 8% were for $150).

Some readers similarly pledged monthly subscriptions. 100% of the monthly pledges were for $8/month.

Next, I considered the fact that I am not a professional writer. Doomberg and Robert Bryce, two Substack authors we admire, are professionals and to varying degrees their income relies on their publications. Doomberg publishes 6-8 articles per month, with basic subscriptions priced at $300 annually. Bryce, author of several books, publishes 5-7 articles each month and charges $10/month or $100 annually.

I am not a professional writer. My income does not depend on this work. I will never publish 5-8 times per month. All of these considerations factored into the modest price we are requesting for voluntary subscriptions to support this work.

A minor glitch in our plan is that Substack does not (currently) allow monthly subscriptions for less than $5 so, with our apologies, that is the default minimum we had to set. (If you’d like to support but cost is an issue, consider a monthly subscription for however many months you’re comfortable and then simply cancel. You won’t lose access to the content).

Tomorrow, we will begin accepting – not requiring - paid subscriptions. And with much gratitude, we will monetize subscriber pledges.

To the dozens of loyal subscribers who made those pledges, please accept our most sincere gratitude for your expression of confidence and support. You can take pride in the fact you are environMENTAL’s founding supporters. After waiting three years, all of your pledges will be monetized this week.

For the dozens who pledged annual subscriptions, congratulations, your support conveys upon you the Founder-level title of ‘Mentalist. For renewal on January 1, 2027, your subscription will automatically be mapped by the Substack system to the ‘Mentalist level ($80, unless you change it). For those who pledged subscriptions of $8 per month, that figure will be automatically reduced to $5 per month by Substack’s system.

2026 promises to be an exciting year in the world of energy, environmental, economic policy and geopolitics. The Trump administration will have to show its cards and push efforts to rescind the 2009 EPA Endangerment Finding on CO2. The war in Ukraine looks to be coming to a dramatic close, and Europe’s related and mostly self-inflicted energy debacle look to face a dramatic political reckoning.

Energy and environmental policy are facing a reset in the western world and, ironically, after years of greenwashing, the tech industry’s necessary backtracking and grid-busting electricity demand is helping drive that reset. Environmental non-profits are under financial duress and face political pressures unseen in this century.

Meanwhile legacy media continues to largely sleepwalk (or worse, propagandize) through all of these evolutions. The information void they created is one we and other Substack energy and environmental writers are happy to fill. All of this adds up to a smorgasbord of endless, interesting, impactful, and exciting things to write about next year.

We close with a genuine and heart-felt note of appreciation. To the dozens of subscribers who pledged your financial support, thank you for your gracious and generous act and vote of confidence. To our thousands of subscribers across the world, thank you for becoming part of the environMENTAL community. To our approaching 10,000 followers, thank you for your interest and we hope you consider becoming a subscriber in 2026 and joining our community.

On behalf of the entire team at environMENTAL, we wish you and yours a healthy, safe, and prosperous New Year. See you soon.

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