An energy shortage and resulting dramatic spikes in oil and natural gas prices are stimulating a worldwide crisis, exacerbated in Canada by banks and major pension funds, like Quebec’s Caisse de dépôt, that are divesting fossil fuel assets.
Investment decisions normally reflect market principles. Yet, in their rush to embrace trendy political judgments and earn public favour, financial lenders are ignoring the most fundamental laws of supply and demand. Natural gas stocks are alarmingly low globally and prices have never been higher.
As governments wean their economies from coal to gas in order to reduce carbon emissions, many are simultaneously discouraging investment in gas production and LNG infrastructure. But they have miscalculated the pace and scale of the shift to renewables and are now paying the price.
As Walter Russell Mead observed in the Wall Street Journal , by depressing fossil fuel production in the democratic world faster than renewables can fill the gap, the U.S. “promotes a multi-year, multitrillion-dollar windfall for countries like Russia, Iran and Saudi Arabia.”
For the rest of this article: https://nationalpost.com/opinion/derek-h-burney-the-fallout-from-the-global-energy-crisis-demands-a-reality-check-in-canada