Financial Insanity – Betting on Oil, Rejecting Green Alternative Energy

 

Financial Insanity – Betting on Oil, Rejecting Green Alternative Energy

While Donald Trump is a master at manipulating, particularly those gullible enough to believe in simple answers to complex economic and political problems that can be summarized in a very short, catchy label, he almost always has to lie, promise what he cannot deliver and blame others for his litany of shortfalls. The weird part of all this is despite his litany of failures is that he has amassed an unbreakable of diehard aggregation MAGA followers (roughly 30% of the electorate) who believe almost everything he says (maybe generating some doubt over the extent of his knowledge of the Epstein nasties). What’s worse, he's made that following an essential constituency for any Republican seeking primary victory in any congressional race and has somehow convinced his 6-3 reconfigured Supreme Court to de facto amend the Constitution repeatedly to raise the executive branch as the most powerful branch of the federal government, with limited (if any) checks and balances from either the legislative or judicial branches.

Notwithstanding the Supreme Court skepticism over his inflation-accelerating tariff policy and the startling voter rejection over the economy evidenced by the November 4th clean Democratic sweep in just about every election conducted on that date, a clearly aging President Trump remains tone deaf to the rising anti-Trump voices all around him. His polling is falling faster than a stone tossed off the Rock of Gibraltar. And that’s just in the United States. Overseas, most of the rest of the world is figuring out workarounds against his use of the military to wage war without congressional approval and to bully nations into adopting his warped vision of the world. The complete failure of the Trump administration to send anyone to the COP30 climate conference in Brazil is such a blessing to China; it’s hard to overstate the damage he is foisting on American competitiveness, particularly the rising global opprobrium over his inane climate change “hoax” stance.

As China sails her third and newest nuclear powered aircraft carrier – this one mirrors the our Navy’s use of magnetic catapults to launch aircraft – China has also both spread AI into daily use consumer items (creating the standards for AI consumer use) and completely dominated the mega-growth alternative energy marketplace, one which Donald Trump has announced is the pathway to economic destruction for any nation that believes this fossil fuel avoidance strategy could ever work. Except it is growing like wildfire and delivering!

As Trump told the UN that China builds big ugly wind turbines but never uses them herself, China leader Xi Jinping must have cracked a bid wide grin. China is indeed the largest user of wind turbines and solar in the world. As AI places extraordinarily increased demands for more electrical power, Xi knows the only answer is alternative energy. In the United States, massive file server farms that are needed to support AI sit unused for lack of electrical power. Today, China accounts for 74% of the global investment in alternative energy systems and now sells three times the number of cars (virtually all electric) globally as does the United States.

Writing for the November 12th The Morning (NY Times newsfeed), Somini Sengupta and Brad Plumer, tell us: “‘Emerging economies are a very important part of the story,’ an environmental advocacy researcher told The Times. ‘The reason we should be paying attention is that they have the most people in the world, they have the largest number of poor people in the world, and their energy demands are growing. If these economies don’t change, there’s no chance for the world to get to a safer place.’

“[For example,] Ethiopia has banned the importing of new gasoline-powered cars, they write. Nepal has lowered import taxes for electric vehicles so they’re cheaper than gas ones. Brazil raised tariffs on imported cars to help persuade Chinese automakers to build plants there.

“And China is investing heavily — nearly a quarter trillion dollars since 2011, they report, with most of that money going to what’s known as the global south. Adjusted for inflation, that is more money than the U.S. put into the Marshall Plan after World War II.

“A decade ago, the U.S. and Europe were pressuring developing nations to take faster action on climate change. Now the economics have changed, and developing nations are delivering what appears to be good news for the planet.

“India, for example, recently announced that half of its demand for electricity can now be satisfied by renewable energy from wind, sun and water, five years earlier than the 2030 target it had set in the Paris Agreement… Countries like Brazil, India and Vietnam are rapidly expanding solar and wind power. Poorer countries like Ethiopia and Nepal are leapfrogging over gasoline-burning cars to battery-powered ones. Nigeria, a petrostate, plans to build its first solar-panel manufacturing plant. Morocco is creating a battery hub to supply European automakers. Santiago, the capital of Chile, has electrified more than half of its bus fleet in recent years.”

It seems that poorer nations find that the cost of importing or even extracting fossil fuels (for the few that have such resources) is no longer competitive with sustainably cheaper green tech. By decentralizing electrical power generation, likewise, they can save on the massive wiring infrastructure required to transfer power from huge power plants hundreds of miles away. The idea of being released from the fossil fuel bullies that dictate oil prices is particularly appealing to less affluent nations that have better use for their limited capital resources.

But ever-so-wise Donald Trump is determined to lead the United States away from this lucrative and exploding market, saddling us with an obsolete power-generating model for the future, just when the demand for electricity has never been so high. China is deeply grateful for Trump’s blind retro push for a non-growth industry facing decreasing demand. Even US-based oil companies are not exactly heeding Trump’s call for “drill baby, drill.” They are shying away from investing the billions Trump wants to see in oil. Just look at how many US refineries are shutting down!

I’m Peter Dekom, and the notion of going long on fossil fuel extraction and short on green energy power generation is just one more step to reduce the power of the American economic marvel and allow China to zoom past us to the top spot.