Originally published by Chris Mitchell of The Australian
13.04.2026
Environment writers who claim the Iran war oil shock will be a boost for renewable energy don’t understand how industrial production actually works.
The world spent $US2.5 trillion ($3.55 trillion) on green projects in 2025 alone.
Yet more than 91 per cent of total Australian energy use still relies on fossil fuels. The global figure is more than 82 per cent.
All the renewable energy installed in the past decade has not shielded the world from the effects of the partial blockage of 20 per cent of the world’s oil by Iran in the Straits of Hormuz for only six weeks.
It’s a lesson that should have been learned earlier. Many countries, especially in Europe, accelerated the closure of reliable fossil fuel power after the gas shock triggered by Russia’s 2022 invasion of Ukraine, thinking more renewables would protect them.
It’s like even governments don’t understand almost every industry globally depends on fossil fuels, from making fertiliser, plastics and cement to smelting metals, refining Avgas for planes, diesel for farm machinery, and trucks and heavy oil for shipping.
Yet environment editor Nick O’Malley in the Nine papers assured his readers on March 19 that the way forward from the present oil crisis was more subsidies for electrification.
O’Malley claimed China was showing the world the way forward without fossil fuels by building more renewables capacity since 2022 than the rest of the world combined. True but China is also the world’s biggest CO2 emitter, largest user of coal and second largest user of oil.
That won’t change any time soon because the green steel, green ammonia and green hydrogen the Nine papers have been spruiking for a decade do not exist.
Sure renewables are becoming the backbone of our electricity system but 80 per cent of our fossil fuel use is in industries other than electricity generation.
And while the world has been spending trillions of dollars a year since Covid building out renewables, it has wound back spending on oil and gas exploration and production.
Mike Shellenberger on the Public website estimates total global spending on oil and gas exploration and production peaked at $US780bn in 2014 and fell to $US350bn by 2020 – a fraction of what is spent on renewables that deliver only a small proportion of global total energy.
Discussing a new book, Abundance, that Labor ministers here have been spruiking, Shellenberger in “Democrats’ Fake ‘Abundance’ Agenda Will Continue Energy Scarcity” on April 5 said the Hormuz crisis showed the world needed to build more oil and gas pipelines.
“The only energy abundance solution that works at the scale of civilisation right now is piping natural gas and oil. A pipeline delivers energy continuously, at near zero marginal cost per unit delivered, with no exposure to shipping choke points, insurance markets or geopolitical disruption.”
Asking why the left continues to push the idea renewables are the solution to industrial processes renewables cannot power, Shellenberger answers, “The first reason is profit. Solar and wind development is an enormously lucrative business, not because the technology is superior but because the subsidies are guaranteed.”
Joe Biden’s Inflation Reduction Act allocated $US370bn to solar, wind and batteries. The EU Green Deal offered a trillion euros.
“The returns are attractive precisely because the government guarantees them.”
This is the model the Albanese government and Minister for Energy Chris Bowen are copying without wondering where the rest of our energy requirement will come from even if we do manage to build an electrical grid on renewables, storage, batteries and gas back-up.
Shellenberger says bankers are the big drivers of support for renewables because every wind farm, solar array and big battery project involves commissions for financial intermediaries brokering deals between manufacturers and power providers.
“Goldman does not profit from cheap, abundant energy delivered through pipelines at near-zero marginal cost. Goldman profits from complex, capital intensive projects that require financing, structuring and advisory fees.”
As this column has argued for a decade, it’s big bankers and financiers preaching the gospel of sustainability who reap the rewards of renewables. Think Malcolm Turnbull and Simon Holmes a Court here.
Shellenberger says China is the other big winner.
“China proliferated cheap solar panels to the West not out of environmental conviction but as an industrial strategy that made Western nations dependant on Chinese manufacturing while China itself relied on the energy source that actually works at scale: coal.
“China burns more than half the world’s coal. It built an electricity grid twice the size of America’s. It stockpiled critical minerals.
“It built coal-to-chemicals facilities to produce diesel and jet fuel domestically and for military needs,” Shellenberger says.
Meanwhile, Australia, the largest exporter of coal to China, plans to shut all its coal power generation plants and places stringent approvals processes in front of any potential new coal mine. Yet Labor claims it is accelerating its Future Made in Australia strategy in response to the present oil crisis.
What of the world’s biggest losers from the renewables transition? That would be the poorest people from the world’s least developed countries.
Shellenberger on April 1 interviewed Zion Lights, an activist who quit Extinction Rebellion in the UK in 2020 and was quoted in this column about XR’s extreme methods at the time.
Lights has written an important new book, Energy is Life, Why Environmentalism Went Nuclear.
She describes how for the past two decades “climate policy has been the dominant priority in wealthy nations’ engagement with the developing world”.
“Western NGOs have even blocked the construction of hydro-electric dams, which tends to be the first reliable source of power that poor nations develop as they rise the development ladder,” she tells Shellenberger’s podcast.
After the Paris Agreement in 2015, private institutions and national governments “began systematically restricting financing for oil, gas and coal projects in the developing world”.
“The practical effect was to deny poor countries the energy infrastructure that every wealthy nation used to climb out of poverty.
“Between 2017 and 2019, multilateral development banks provided an average $US9.7bn annually in direct fossil fuel finance.
“By 2020-22, that figure had collapsed to $US3.2bn.
“In March 2021, the UK’s export finance agency ended all financial support for overseas fossil fuel projects.”
At COP 26 in Glasgow in November 2021, 20 countries and five development banks pledged to stop financing unabated fossil fuels by the end of 2022
Lights goes on to outline how the Asian Development Bank and the African Development Bank then began forcing the closure of various fossil fuel projects.
Yet in Africa, 600 million people are living without electricity.
Lights says she has never been interviewed by the BBC. Our ABC, Guardian Australia and Nine papers are just as deaf to thoughtful voices on the realities of energy and environmentalism.