How Climate Activists Caused The Global Energy Crisis – OpEd


Over the last decade, climate activists have successfully pressured governments, banks, and corporations to divest from oil and natural gas companies. At first such efforts appeared to be strictly symbolic. But in recent years years climate activists succeeded in driving public and private investment away from oil and gas exploration and toward renewables. The result is the worst energy crisis in 50 years.

Under-investment in oil and gas exploration is not the only cause of today’s energy crisis. The economic comeback from the covid pandemic has pushed up demand. Lack of wind in Europe meant higher demand for both natural gas and coal. And a drought in Brazil meant it had to import natural gas.

But the main cause of energy shortages is the half-decade-long under-investment in oil and gas driven by climate concerns.

“ESG [environmental, social, and governance] considerations account for much of the decline in capital expenditure by international oil companies in recent years,” notes The Financial Times today, “and the investor exodus out of oil and gas markets.” Bloomberg agrees, noting that “the market is now fixated on climate change and the dwindling appetite to invest in fossil fuels.”

China, India, the U.S., East Asia, and Europe are all mining and burning more coal to make up for the lack of natural gas. China’s government recently waived environmental safeguards on coal mining. China imposed rolling blackouts due to energy shortages while India narrowly avoided them.

Normally, the anticipation of higher oil and gas demand causes firms to increase investment in exploration. That hasn’t happened. The main reason, according to Goldman Sachs, is climate activist pressure on governments, firms, and banks to divest from oil and gas exploration.

Oil and gas exploration investments declined by half between 2011 and 2021, notes The Financial Times. New oilfield discoveries fell to historic lows between 2016 and 2020, not due to lack of oil, but lack of investment in exploration. Today firms are spending 25 percent less than they need to hold oil production steady.

The result of successful climate activism is, paradoxically, rising coal use and carbon emissions. That’s because because electricity produced from natural gas produces about half of the emissions of coal.

Some of us warned that climate activist efforts against natural gas would backfire. Eight years ago I defended fracking for making natural gas cheaper than coal. Reducing natural gas exploration would make gas more expensive, I argued, and delay the transition away from coal.

Some worry that cheap oil increases its use, but petroleum use is highly inelastic, since our cars and trucks rely on it. Little oil is burned for electricity production, and natural gas is required to balance at the intermittency of solar and wind.

The proof is in the data. Fossil fuels’s share of global energy production remain unchanged at 84 percent since 1980. To the extent emissions in Europe and the US declined, it was largely due to the transition from coal to natural gas.

As a result of successful activist pressure, governments and investors have punished oil and gas companies. When an oil and gas exploration firm, EOG Resources, announced in February that it intended to expand output, its share price dropped more than any other company on the S&P 500. Naturally, American oil and gas firms have since refused to expand production, even as prices have risen. 

Social responsible investing is decades old, but ESG was embraced over the last decade by large university endowments, investment banks like Blackrock, governments, the International Energy Agency, the United Nations and eventually by oil and gas companies themselves, including Shell, Total, and many others. In May, a court in The Netherlands ordered Shell to reduce its emissions, a ruling that made firms reluctant to invest in new oil and gas exploration.

It’s not like oil and gas executives didn’t know that underinvestment would lead to today’s price shocks. It’s that they were ignored. When the former CEO of Exxon, Lee Raymond, was asked what kept him up at night he said, simply, “Reserve replacement.” Shareholders had demanded he stop investing. In 2020, under pressure from climate activists, JPMorgan Chase, America’s largest investment bank, removed Raymond from his role as the board’s lead independent director.

Part of the problem is that neither corporations nor governments are taking the right actions. Some are going in the wrong direction. The U.S. Congress appears close to approving a deal to pour $500 billion into renewables and its enabling infrastructure over the next decade. Those taxpayer subsidies could further reduce the incentive for private firms to invest in oil and gas. Even if they don’t, the Biden administration has moved to restrict oil and gas drilling on public lands.

Meanwhile, even in the middle of the global energy crisis, the United Nations and the International Energy Agency (IEA), funded by developed nations, are putting pressure on nations to reduce oil and gas investments even more than they already have.

But high oil and gas prices will create political problems for governments as they worsen inflation. And prices are likely to remain high for years not months.

“Today, investment in fossil fuel is vilified and financing has become sparse as big western banks withdraw,” notes The Financial Times. “Due to long lead times between investment and supplies, we are yet to see the full impact of this slowdown in spending on conventional oil and gas production. In other words, supplies will continue to lag behind demand for the next few years.”

As a result, even as the Biden administration prepares to promote its heavy investments in renewables in preparation for United Nations climate change talks in Scotland, it is also pressuring OPEC to increase oil production.

“President Biden has effectively accepted the idea that the United States will rely more on foreign oil,” noted The New York Times. “His administration has been calling on OPEC and its allies to boost production to help bring down rising oil and gasoline prices, even as it seeks to limit the growth of oil and gas production on federal lands and waters.”

As a result, foreign nations will benefit from rising rising oil and gas prices at America’s expense. Saudi Aramco recently increased its investment in exploration and production by $8 billion. “Of course we are trying to benefit from the lack of investments by major players in the market,” its CEO said.

Increasing America’s dependence on foreign oil producers makes even The New York Times, which has long championed oil and gas divestment, nervous. A reporter there recently warned that “the United States and Europe could become more vulnerable to the political turmoil in those countries and to the whims of their rulers.”

Pundits are increasingly comparing President Biden to former President Jimmy Carter, and the 2020s to the 1970s. And, indeed, today’s energy crisis is eerily similar to what happened back then. Carter throttled oil and gas production, promoted renewables, and provoked a backlash that helped elect Ronald Reagan.

Michael Shellenberger

Michael Shellenberger is a Time Magazine “Hero of the Environment,” and president of Environmental Progress. Follow him on Twitter @ShellenbergerMD and at

7 thoughts on “How Climate Activists Caused The Global Energy Crisis – OpEd

  • November 1, 2021 at 4:52 pm

    This guy does not get it: WE CANNOT CONTINUE TO BURN FOSSIL FUELS.
    Having earned a Master of Science in THIS field, I have to tell you fools like this guy are killing us with their lies and misinformation.
    Look up Ocean Acidification and see how close we are to the conditions of The Great Dying.

    • November 1, 2021 at 8:42 pm

      Gkam is perhaps the single biggest internet spammer on record. He is a failed energy sector “Engineer” (probably took water samples) and took advantage of subsidies paid for by his neighbors so that he can irritatingly “virtue signal.”

      Alarmists are like little children – move the toy behind your back, they think it is “gone.” Unable to extrapolate a “trend,” they believe all innovation is about to mysteriously stop just a few years before solar plus grid storage actually becomes cheaper than any other reliable source. In unabashed fanatical fervor (utter hubris), they truly believe they are the only humans capable of seeing “the answer” (play holy choir sounds here) – which in their minds is to use government around the world like a giant cudgel, forcing everyone into poverty by making them buy immature over-priced alternatives RIGHT NOW!!!!!

      The world will be fossil fuel free by 2050 no matter what governments do, for the same reason people stopped buying horses, typewriters, steam engines, etc. – better products at lower prices. Just say no to your childish totalitarian wanna-be neighbors, and put the adults back in charge.

    • November 2, 2021 at 2:24 am

      Dude, Shellenberger actually does not want us to panic and shut down all of our 24/7 firm capacity like nukes, nat gas, etc. until we have an adequate green replacement to ensure the bulk electric system remains 99.7% reliable.

  • November 1, 2021 at 5:37 pm

    Being a former engineer for a large power company and having earned a Master of Science in Energy and the Environment, I had PV panels installed six years ago, with my estimated payback of 15 years, . . the right thing for an eco-freak to do. Before they could be installed, we acquired a VW e-Golf electric car. The savings in gasoline alone took the solar system payback down to 3 1/2 years. So, we added a used Tesla Model S, P85, and that took the payback down to less than three years, which means we now get free power for household and transportation.

    But that is not all: We do not need to go to gas stations, we fuel up at home at night with cheap baseload power. During the daytime, the PV system turns our meter backwards powering the neighborhood with clean local power, which we trade for the stuff to be used that night. If we paid for transportation fuel, the VW would cost us 4 cents/mile to drive, and the Tesla would cost 5 cents/mile at California off-peak power prices.

    No oil changes are a real treat along with no leaks. And since it has an electric motor, it needs NO ENGINE MAINTENANCE at all. We do not go “gas up”, or get tune-ups or emissions checks, have no transmission about which to worry, no complicated machined parts needing care.

    The future is not only cleaner, it is cheaper, and it is here now.

    • November 1, 2021 at 6:44 pm

      Sir: I too have a solar collector from Tesla. Great for household electricity. But not everyone can afford or buy a solar system or an electric vehicle and there are not enough electric cars being produced to make but a small dent into gasoline consumption. For factories, trucks, airplanes and the guts of our industrial economy, intermittent solar and wind can only be stored in limited quantities and thus power from other sources must be provided. Geothermal or hydro are limited by their geographic location. Stored power cannot be sent across country or very far because we haven’t rebuilt the grid to allow that. Furthermore, even if the US adopts the $100 trillion/70 years program pushed by the climate change folks, it doesn’t even give us a net reduction in GHG’s given the current plans of just China and India. Furthermore the ICPP baseline for 2005-6 which is what their models are based, includes a projected 800% per capita increase in coal production which is the huge increase in GHG that we then must curtail. It is not going to happen. But the IPCC folks still have to panic the clingers and deplorables. However, China and India and other large scale emitters particularly in the non G20 world are producing the GHS numbers that nothing the G20 do will change. So we panic folks to take action that won’t solve any problem. If folks want to drive an electric vehicle and then stop for 8-20 hours mid trip to recharge, go for it. Truckers would go broke. Ocean going freight run by solar panels and wind? Sure, can’t wait for that. And trains to Hawaii from California which Sandy Cortez AKA occasional cortex promotes are of course just around the corner. PRH President, GeoStrategic Analysis. Formerly with the UNEP in NY and TEF in DC and US Department of Interior, Office of Energy and Minerals.

  • November 1, 2021 at 7:32 pm

    From an individual that has worked in the industry for the last 30 years at an executive level, I can say this guy does get it. I have been responsible for the forecast planning and purchasing of natural gas and electricity in two states N.Y. and Pa. The unreasonable head flank mentality that N.Y. has taken will harm the State economy, cause more citizens to flee and decrease system reliability while having zero impact on the net reduction of GHG emission world wide. The path forward does include more renewable energy project in the portfolio but we will not be able to shift away from fossil fuels within the time frames identified its just a fact! Humans have been successful throughout our history because we have adapted to the environment. To try and hold a world wide climate crisis in check by stopping a process that is partially man made over the past 150 years by forcing fossil fuels out of the mix immediately will not reverse the effects of the last 150 years in 30 years it’s impossible. Even if the U.S.A. stops cold turkey (unlikely) the other major players will not.

  • November 8, 2021 at 1:51 am

    As incomprehensible as it seems, the entire Canadian leadership … most of the federal MP’s, the entire legal community, every Premier (save one) and … every last journalist … missed the fact that Justin Trudeau has set Canada on a path to biofuels announced to the nation the day after the Oct, 2021 election. Not one response by anyone to to the fact the Liberals govern,ent have Canada on a path of replacement of gasoline and diesel with, BIOFUELS.
    Put in their proper perspective, biofuels are every bit of the, “crime against humanity”, characterized as such by the then (2007) Raconteur of UN Food, referring to the, “burning of food crops for fuel”, at a time rich nation exported their debt onto poor nations, replacing their food crops with biofuel crops.
    Biofuels are at the bottom of the energy density barrel, creating an unfathomable threat to millions of miles of farm land needed to grow mega tons of measly, meagre biofuel crops to provide enough product to refine into liquid fuels to replace gasoline. As demonstrated by the USA corn belt, biofuel farming will also consume, sterilize, then poison our crop lands and, worse, the unfathomable billions of gallons of water required to turn Canada’s farm land into a single crop, monoculture, ag. society, will also be poisoned. Biofuels threaten our ability to feed ourselves.
    I doubt there is a physicist in the world who hasn’t decried biofuels. The best of environmental NGO’s have spoken out against biofuels. Our famous environmentalist, David Suzuki, has clearly stated biofuels should not be pursued. Yet, biofuels are at the top of Justin Trudeau’s climate change agenda. Canadians require a take back of control of the future because we are on the wrong energy pathway. Trudeau dictated the future for Canadians without our permission and, with the absolute worst possible alternative to CO2; one far more deadly for planet earth.


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