Environmentalists had a bad day yesterday after the EU Parliament revealed it will now label natural gas and nuclear as “green” energy investments.
You see, the EU has a plan to become climate-neutral by 2050, which means the economy would boast net-zero greenhouse gas emissions. It’s actually the keystone of the EU’s climate commitment to the Paris Agreement, which was the first universal, legally binding, global climate change deal.
But with the geopolitical shit show being orchestrated by Vladimir Putin, the EU suddenly finds itself in a precarious position.
It wants to end its highly vulnerable reliance on Russian oil and gas, but that reliance is so vital to the EU’s energy economy that it’s now struggling with the reality of a very serious energy crisis.
The EU is committed to transitioning away from highly pollutive energy sources, primarily fossil fuels. It even developed something called sustainable finance taxonomy, which is a protocol designed to dictate what can actually be marketed as a “sustainable investment.”
Per Reuters, this includes economic activities as well as detailed environmental criteria that each economic activity must meet to earn a green label.
The EU had already identified which sectors would be covered, including investments in steel plants, building renovations, and electric cars. But rules for natural gas and nuclear have been delayed because the nuclear and oil and gas industries have very deep pockets and have been successful in delaying any rules related to their respective industries. Most of this has come in the form of lobbying governments to convince them that nuclear and natural gas can help fight climate change — a questionable argument to be sure.
Despite some of the other negative environmental impacts that come with conventional nuclear (e.g., the creation of radioactive waste that can pose a threat for thousands of years beyond the life of a power plant), nuclear power does not produce greenhouse gas emissions during operation.
So if the environmental burden the EU seeks to lift is solely greenhouse gas emissions and not radioactive waste, the nuclear industry has a very compelling case.
Natural gas, on the other hand, is a bit trickier.
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While considered a “low-emission” fuel compared with coal, it’s hardly environmentally benign.
You see, during the process of extraction and transportation, large amounts of methane are leaked into the environment. And methane, to clarify, is a greenhouse gas that’s over 80 times more potent than carbon dioxide. So all this leaked methane actually cancels out any reduction in CO2 emissions that you would get by replacing coal with natural gas.
Now the EU has created a sort of caveat regarding its recent decision regarding natural gas as “green.”
Under this latest proposal, operators of these gas-fired power plants must commit to switching to low-carbon gases such as biogas or hydrogen by 2035.
But by 2035, solar, wind, and energy storage will be so cheap and ubiquitous that it’s likely those gas-fired power plants will be so much less vital to the EU’s energy economy that it won’t matter.
Now, the interesting part about all of this is that the EU’s taxonomy doesn’t actually ban investments in things that it does not label “green.” It just doesn’t allow what it considers to be “non-green” companies to make the claim that they are climate-friendly.
Of course, the truth is transitioning to a more environmentally and economically sustainable energy economy is happening, regardless of whether or not the EU gives the oil and gas industry what is essentially a marketing-gimmick lifeline.
And investors know this.
The fact is, by 2050, fossil fuels will command less than 25% of the world’s energy mix. And it’s not because world leaders want to save the planet. It’s because transitioning to technologically superior energy production and distribution is an economic imperative.
This is why I continue to invest in — and, of course, profit from — the new energy technologies that, over the next 10 years or so, will take the lion’s share of the new global energy economy.
Like this new solar window technology, for example, that can power entire buildings with nanoscale solar cells that are integrated into windows and can even be “sprayed” like paint onto the walls and roofs of any structure.
I don’t care if you’re the biggest tree hugger in the world or you want to power your Hummer with liquid coal — this solar window technology has nothing to do with being “green” and everything to do with making a boatload of cash. So you might as well take advantage of it.
To a new way of life and a new generation of wealth… Jeff Siegel
@JeffSiegel on Twitter
Check us out on YouTube!Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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