Energy notes from the edge | BOE Report

Today, some bite sized energy-related pieces because some days that’s all I can handle. It’s like the difference between walking past a road-killed deer and spending the afternoon with one. You’ll see what I mean.

Is growing AI power demand a problem or… did he really say that? 

Once, not long ago, there were a few of us braying in the pasture about what AI was going to do to energy/power demand. Now the chorus is much louder, less theoretical and much more precise. An AP/Reuters article notes that a year ago, two of the top 10 US electrical utilities mentioned data centres as a main centre of growth; in recent conference calls, 9 out of 10 did. NextEra Energy, an energy powerhouse, said it had 3 Gigawatts of data centre power demand in its queue, the equivalent consumption of all the homes in Minnesota. Global power consumption for data centres is expected to grow form 15 Terawatt-hours (TWh) in 2023 to 46 TWh in 2024. The CEO of microchip company ARM, a huge global tech company worth more than $120 billion, recently said in an interview that “AI models are just insatiable in terms of their thirst for electricity…the more information they gather, the smarter they are, but the more information they gather to get smarter, the more power it takes.” He speculated that “by the end of the decade, AI data centres could consume as much as 20% to 25% of U.S. power requirements. Today that’s probably 4% or less.” One large energy company, Dominion Energy, whose assets include 27,000 megawatts of power generation, 6,000 miles of electric transmission lines, and 54,000 miles of power distribution lines, said that it has agreements signed for data centre growth  that will use the equivalent of 35% of the electricity used during last winter’s cold snap. In other words, a bolt-on of 35% more demand. Elon Musk recently said, in Elon’s way, that GPUs are “currently harder to get than drugs” and that while 2023 was marked by a shortage of chips, two to three years out will be marked by a shortage of electricity. 

Those are some pretty sobering statistics, from a wide spectrum of people in the know, but, of course, look what happens when the net-zero 2050 bandwagon hears this. Uh-uh, they say, can’t happen, it ruins our storyline. Renewable energy super-advocate Jesse Jenkins, professor at Princeton University and highly influential in current US energy policy, scratching his jaw inattentively with the femur of a peasant someone in the anthropology department traded him, probably, mused on Twitter: “Will the rise of AI break the grid? … Are we facing a supply crisis—or is it a sales pitch meant to build more gas plants?” This Vaudevillian query is attached to a podcast entitled “Skeptic’s take on AI and Energy Growth.” Sigh. It’s like everyone is standing around the poor dope saying “Hey your house is on fire,” and he’s saying “Yeah whatever, you just want me to run out so you can go steal my socks.”

I do read what these people have to say, and how they think. They simultaneously hold a toxic combination in their heads: a belief that we are all doomed imminently from climate change, that every storm/drought/flood/whatever is a consequence of climate change (they stand silently by while the media amplifies this nonsense, or spurs them on), and that policy can accomplish the environmental goals they deem necessary. They then work back from their preordained conclusion to rubber stamp anything on the ‘right’ path, and plow under anything that objects. They dismiss insurmountable challenges with the wave of a hand, for example brushing aside the question of inadequate minerals with a platitude out of the economist’s bucket: “high prices ensure new supply will arrive.” When the CEO of one of Rio Tinto, a global mining giant says that the gap between required and actual mining investment is “humungous” and that the world isn’t just facing a shortage of minerals but the capital to build new mines, such concerns are brushed off  and downplayed. Because in the ruling class, the musings of a PhD trump an industrialist’s spreadsheet every single time.

As noted, Jenkins and his brothers in arms are highly influential in US federal energy policy. Canada is worse, with a self-proclaimed Greenpeace activist running even faster towards the wall. Buy that wood stove.

Gold hits record prices and even energy investors should care

No one really knows why gold is going up; some headlines speculate that it is due to Middle East tensions or Chinese economic challenges, others that it is central banks buying up gold for one reason or another… my personal favourite is that it is because Costco now is selling gold and, in the Costco way, the bricks are wayyyy more than you need but it’s just so easy and tempting. But fundamentally, gold goes up because people or institutions are looking for something tangible and timeless as a store of value and they don’t trust Bitcoin yet. A major reason people are looking for such tangible value is because they are watching in horror what the world’s leading governments are doing to not just their currencies but governance in general. In North America, the US and Canada are run by absolute clowns, and might well be indefinitely, that are racking up debt at an astonishing pace to pacify social/enviro justice warriors who can never be pacified, and invest in things that have little or no economic return. Think of using a credit card to pay for not just groceries but lawn ornaments as well, with no intention of ever paying down the debt. The EU’s governance is the only thing that makes North America’s leaders look halfway sane; almost anyone on earth can look at what Germany is doing to it’s economy and energy system and see that common sense has packed its bags and fled the country. So: debt is out of control, CO2 emissions are dominating western governments’ visions at any cost, and productivity is falling except in the weird areas where AI is going to do something positive. Interest rates are high, to fight inflation, which governments are pretending they have under control because they have to – debt and the attempts to control the economy going far faster than what their ship was designed for and don’t want to admit it. They are driving up the price of the very component required for successful western civilization: energy. And AI is, as noted above, going to suck up a lot more power. 

Gold might not make a lot of sense as a productive asset, but apparently people and governments are saying, well, it sure as hell beats having exposure to the imbeciles running the show. Anyone that produces energy should take heart; the world is understanding your value at a rate that is increasing just as fast as government debt.

Budget day

Speaking of imbeciles, and debt, today in Canada is national Budget Day, and we are all cowering in our respective corners. In a bid to rise out of the muck of the depth of popularity polls, Canada’s federal government has been handing out daily allotments of billions in a frantic bid to win votes. On Budget Day, we learn how the clowns explain how they will try to pay for it all. They do not understand at all the concept of not killing the golden goose, but they have the reins until late 2025. The US – in the midst of its own too-bizarre-for-words election – may soon have to deal with thousands of Canadians fleeing over their borders as well. Will it be ok if we bring firewood instead of fentanyl?

Middle East

I had a pretty comprehensive solution written out on a scrap of paper somewhere but can’t find it at the moment.


Like a fine wine, getting better with age… Energy meets humour in “The End of Fossil Fuel Insanity”, a timeless classic that should be on every book shelf alongside classics such as War and Peace, The Adventures of Huckleberry Finn, and The Idiot, none of which was selected lightly. Available at, or Thanks!

Read more insightful analysis from Terry Etam here, or email Terry here.

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