While millions of people are inclined to blame fossil fuel producers, auto manufacturers and drivers of oversized vehicles for growth in global CO2 emissions, two Calgary energy analysts say the real drivers are tech-enabled easy travel and custom product deliveries, and the billions of people in developing countries escaping poverty.
A Dec. 3 article in C2C Journal by Steve Larke, former managing director of Peters & Co., and Adam Le Dain, an associate at Azimuth Capital Management, calls out the support for Amazon, Uber, Airbnb and “thousands of air-conditioned data centres” around the world as part of the potentially unprecedented “mass hypocrisy” that exists around energy use.
The analysts point out the connection between the huge success of Airbnb and growing access to cheaper air travel, which recently hit a record of approximately 202,000 planes airborne on a single day, enough to carry the entire population of Canada.
“If the ‘airline industry’ were a country, its annual increase in oil demand would rank it second globally, bested only by China,” the authors state.
“With a few taps on a smart phone, a trip can be arranged and purchased faster, easier and cheaper than at any time in history. Oh, and incidentally there is no electric-plane solution pending – the power to weight ratio doesn’t fly.”
With ride-sharing services like Uber and Lyft, “our phone can summon a driver 24 hours a day, generating new CO2 emissions alongside all the benefits,” write Larke and Le Dain.
“And Uber isn’t merely replacing taxi emissions. In New York City for example, Uber and Lyft have grown by approximately 480,000 trips per day while taxi trips have fallen by only about 150,000 trips per day. This has driven an astounding 62 percent increase in total taxi and ride-sharing trips (and associated air emissions) in that city in just three years.”
Of Amazon, they write: “Picture a university student bouncing out of bed on a Sunday morning and clicking the ‘Buy now with 1-Click’ button before strolling off to a pipeline protest. This click likely prompts a coal-fired factory in China to manufacture the item (67 percent of China’s electricity was generated from coal in 2017), which is then transported via diesel-powered truck or train to an air- or seaport, followed by an oil-fuelled ship or plane ride to North America, yet another leg by diesel-powered truck or train to a distribution centre and, ultimately, a gasoline-fuelled delivery truck doing the ‘last mile’ run.
“The next day, while that student is in class, that truck drops off items to various students at the university – all one-off, instant-gratification purchases. There is, unsurprisingly, a direct and strong decade-long correlation between Amazon’s revenue and total U.S. trucking miles, both of which continue to break annual records. Then tie that with a recent Amazon press release about the company ordering 20,000 Mercedes-Benz Sprinter vans for last mile delivery.”
Ridding the world of fossil fuels may be a noble idea, the authors write, “but it rests on a lack of understanding that credible alternatives have enormous challenges of scale and their own environmental costs, while the supercomputer in your pocket is adding to energy demand by the second.”
“Hydrocarbons are indispensable not only to our standard of living but to the entire global economy and the aspirations of billions to no longer live in poverty. They are needed to support many of the things thought of as ‘green,’ such as manufacturing and often times generating the power that runs electric vehicles.
“They’re required to produce high-grade steel, cement and ammonia (a fertilizer constituent that helps feeds an estimated 50 percent of the planet). There are no rapidly scalable replacements pending for planes, trucks, ships or trains – nor recognition that, if there were, the transition will be slow, for existing fleets would be used until obsolete.”
Decreasing oil and gas investment amid global energy demand driven by population growth presents an “astounding global opportunity” for energy-rich Canada, write Larke and Le Dain.
“Sadly for Canada, our collective response…appears to be self-flagellation, continuous delay and an ever-increasing regulatory burden, rather than building great, well-thought-out projects, of which Canada could have many. It is no wonder the world’s energy investors are uniformly looking elsewhere – and will continue to.”