What's American billionaire Warren Buffett doing with a $US10 billion ($14.5bn) bet on the future of oil and gas, helping old-school Occidental Petroleum buy Anadarko, a US shale leader? For pundits promoting the all-green future, this looks like betting on horse farms circa 1919.
The Conservative Party supports whatever energy source will deliver energy to Australians reliably and cheaply - and renewables are not the answer.
The Wall Street Journal reports, meanwhile, broad market sentiment is decidedly bearish on hydrocarbons. The oil and gas share of the S&P 500 is at a 40-year low, and the first quarter of 2019 saw the Nasdaq Clean Edge Green Energy Index and "clean tech" exchange-traded funds outperform the S&P.
A week doesn't pass without a mayor, governor or policymaker joining the headlong rush to pledge or demand a green energy future. Some 100 US cities have made such promises. Hydrocarbons may be the source of 80 per cent of America's and the world's energy, but to say they are currently out of favour is a dramatic understatement.
Yet it's both reasonable and, for contrarian investors, potentially lucrative to ask: what happens if renewables fail to deliver?
If the favoured alternatives fall short of delivering what growing economies need, will markets tolerate energy starvation? Not likely. Nations everywhere will turn to hydrocarbons. And just how big could the call on oil and natural gas - and coal, for that matter - become if, say, only half as much green-tech energy gets produced as is now forecast? Keep in mind that a 50 per cent "haircut" would still mean unprecedented growth in green tech.
If the three hydrocarbons were each to supply one-third of such a posited green shortfall, global petroleum output would have to increase by an amount equal to doubling the production of the Permian shale field (Anadarko's home). And the world supply of liquid natural gas would need to increase by an amount equal to twice Qatar's current exports, plus coal would have to almost double what the top global exporter, Australia, now ships.
Green forecasters are likely out over their skis. All the predictions assume that emerging economies - the least wealthy nations - will account for nearly three-fourths of total new spending on renewables. That won't happen unless the promised radical cost reductions occur.
For a bellwether reality check, note that none of the wealthy nations that are parties to the Paris Accord - or any of the poor ones, for that matter - have come close to meeting the green pledges called for. The International Energy Agency says: "Energy demand worldwide (in 2018) grew by … its fastest pace this decade … driven by a robust global economy … with fossil fuels meeting nearly 70 per cent of the growth for the second year running."
The reason? Using wind, solar and batteries as the primary sources of a nation's energy supply remains far too expensive. You don't need science or economics to know that. Simply propose taking away subsidies or mandates, and you'll unleash the full fury of the green lobby.
Green advocates can hope to persuade governments - and thus taxpayers - to deploy a huge tax on hydrocarbons to ensure more green construction.
But there's no chance that wealthy nations will agree to subsidise expensive green tech for the rest of the world. And we know where the Oracle of Omaha has placed a bet.
