As the Government continues to work with the oil companies to extract the oil that lies under our Atlantic waters, concerns have been raised that the transition to “cleaner” energy by the major energy-consuming economies that have promised to head off the effects of global warming might leave us with excess production capacity before our oil runs out. However, presently, the demand for energy is rising so rapidly, that even though energy from renewables is increasing rapidly, usage of coal – which is far more polluting than oil in general and more so our light Brent variant – is also increasing.
The US, for instance, claims to be a leader in energy transition efforts, but its utilities companies still used fossil fuels to generate an average of 62.4 per cent of total electricity production over the past four months. While this is higher than China’s 60.5 per cent electricity generated from fossil fuels over the same period, the latter’s far larger power-producing capacity dwarfs the US’s absolute usage – and pollution contribution. China’s mammoth manufacturing-led economy has faced a far steeper climb in total power demand in recent years, with electricity consumption rising by nearly 37 per cent from 2019 to 2024. To keep pace with that demand growth, China’s utilities have been forced to lift both fossil fuel and clean energy generation by more than any other major economy. As such, fossil fuel-fired electricity output has jumped by around 23 per cent from 2019 to 2024, with over 95 per cent of that power coming from coal plants.
In the US, the fastest growing sector for electricity usage is the hot, new AI field where developers are determined to throw as many high-performance servers packed with energy-guzzling GPUs as possible towards training their generative AI models. Financial services giant Morgan Stanley last month published a report, warning that global greenhouse emissions between now and the end of the decade are likely to be three times higher than if generative AI had not been developed. This growth has caught out many utility companies, which have until now faced flat or shrinking demand in the US market and planned their infrastructure investments accordingly, flatfooted.
To fill this need, more evidence has emerged that AI-driven demand for energy to power data centres is prolonging the life of coal-fired plants in the US. For instance, in Omaha, one mega power company has had to abandon plans to stop burning coal to produce electricity because of the need to serve demand from nearby datacenters, Google and Meta in particular. Rising energy demands from those facilities mean that two coal-burning generators at the North Omaha power plant cannot be decommissioned without risking a power shortage for that district. This is despite previous undertakings from the operator that it would cease burning coal in order to improve air quality in the surrounding area, endangering public health as well as continuing to spew out greenhouse gas emissions.
Another source of the resistance to transitioning to cleaner energy and continuing with fossil fuels – including coal – is the role of private equity firms in the US. These groups have long been accused of the most predatory profitmaking. They often buy assets in deals that quickly recoup their investments, then frequently sell off the most valuable parts of an enterprise, and then walk away either by selling or declaring bankruptcy. Such firms are heavily invested in fossil fuel-powered electricity generation.
One of the largest private equity firms, Blackstone, is selling a profusely-polluting coal-fired 2600-megawatt plant to two other private equity firms, Energy Capital Partners (ECP) and Javelin. ECP is invested in 14 energy companies with 64 per cent of them having fossil fuel generation and has a grade of C when it comes to such things as transparency in disclosing emissions and political spending and having a clear plan to transition to clean energy by the end of the century.
In Guyana, we have very little to worry going forward about selling our sweet, light Brent Crude, when our major trading partner will remain with fossil fuels in the foreseeable future.
