Power Struggle
Improving the energy dialogue in Canada (and beyond) through honest, non-partisan, and fact- based conversations.
The energy conversation is personal: it’s in our homes, in our hands, and now, it’s in our ears. Power Struggle invites you to listen in on honest, non-partisan, and fact-based conversations between host Stewart Muir and the leaders and thinkers designing modern energy.
Watch videos at https://www.youtube.com/@PowerStrugglePod
Power Struggle
Canada’s Missed Energy Moment? Dr. Anas Alhajji on Oil, EVs, and Global Reality
Is the electric vehicle revolution all hype? Is Canada underestimating its role in the global energy future?
In this episode of Power Struggle, Stewart Muir is joined by world-renowned energy economist Dr. Anas Alhajji, who breaks down why the "end of oil" is far from reality — and why Canada’s oil sands and natural gas are more vital than ever.
From flawed EV stats out of China to the $18 trillion investment gap in global oil and gas, Dr. Alhajji challenges the forecasts shaping public policy and investor decisions. He explains why hybrid vehicles are the real trend, how energy demand is skyrocketing due to urbanization, immigration, and AI — and why Canada is poised to lead, if it seizes the moment.
Why the Trans Mountain pipeline still matters
How media and international agencies distort the energy picture
What Canada needs to do now to support global data centres and energy security
This is a must-watch for anyone interested in real talk about the future of energy, and Canada’s place in it.
The energy conversation is polarizing. But the reality is multidimensional. Get the full story with host Stewart Muir.
Reach out to us with thoughts, questions, or ideas at info@powerstruggle.ca
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The trend right now is very clear. We are going hybrid. Hybrid. The electric story is over.
SPEAKER_00:I'm Stuart Muir. Today on Power Struggle, we're joined by one of the sharpest minds in global energy, Dr. Anas Al-Haji. Welcome, Dr. Al-Haji. Thank you. Thank you for having me. You're a leading voice in oil and gas economics, and we know you've spent decades decoding how markets move. I enjoy your newsletters. You look at policy shifts, how nations compete for energy security. You've advised governments around the world, you've trained industry leaders, you're on the stage at some of the biggest, most influential events on energy. You also served as chief economist at NGP Energy Capital Management. And your experience in guiding billion-dollar investment decisions, I'm sure, must have given you a lot of insights into how the world works. So that's why I'm so excited. And uh, you know, I must say, Anas, uh, I can't think of many people who are commentators like you who can connect the dots between energy, politics, and the economy, prosperity, the way, the way that you do, the the way I see you out there all the time. So just so happy to have you here today. You're in Dallas, Texas. Yes. You know, I'm here in Canada, so you won't be surprised to know that I'm a little bit obsessed with Canadian stuff, but I've noticed that you often are commenting on Canadian things, and I I've always wanted to ask why that is. Um but before we get there, I just want to talk about your reputation. Um, you have an outside perspective. You have brought an American, but really a true global perspective to explaining the role of American energy, but Canadian energy too. So what stands out to you about Canadian oil and gas?
SPEAKER_01:Yeah, so when I was at NGP, NGP has many portfolio companies. I remember at one time we had 11 portfolio companies in Alberta and neighboring uh states. Uh so the Canadian uh oil and oil and gas industry basically are part of the job and not something kind of strange to me. So I am not an outsider to it. So that's really the main connection. We had many companies, some of them made us uh uh a lot of money. Uh and uh in general, basically, still the oil and gas industry in Canada, uh a promising um uh cash cow uh for uh many funds in the coming years.
SPEAKER_00:So a cash cow that kind of implies that it is steady. It's out there grazing in the field all the time, always producing a return. What makes it that, rather than say, you know, up and down, like some regions?
SPEAKER_01:The Canadian oil industry is kind of a special industry in several fronts because most of it is oil sands. Uh it's mostly like a manufacturing process rather than a natural resource uh process uh relative to uh traditional uh uh or conventional oil or shale. Uh the decline rates are very low and uh the it's long life. So you look at the long life and decline rate and low decline rates, that's what you are looking for in an investment.
SPEAKER_00:Recently I wrote an article, I used a bit of a comparison, somewhat tongue-in-cheek, of Costco, that the oil sands of Canada are a bit like Costco, but you you actually uh show that some appreciation, which I thank you for. Uh but what what what is it about that that caught your imagination? Aaron Ross Powell, Jr.
SPEAKER_01:There are a couple of issues here, because we do have in Canada uh people on the left who are opposed completely to the oil industry. And I wish they were more logical in their approach to it. So the article that you wrote has all the facts, but they don't even acknowledge the facts. So this is what attracted me to the article that is stated all the facts. It it was an easy reading for even those who are not in the business, but those guys on the left basically will not even acknowledge that.
SPEAKER_00:I'm going to uh uh take that back and and we'll we'll share that article as much as we can. I really appreciate that that uh analysis. Um in terms of just going deeper into what you see, I mean, it seems to an observer that there's quite a heavy dependency on Canadian oil delivered steadily to parts of the United States that then refine it into the products that people use every day in their cars, in their lives. Um dependent is America on Canada now? Aaron Ross Powell, Jr.
SPEAKER_01:It is very dependent. We are talking about 60 percent of U.S. oil imports come from Canada. So we are talking about significant dependence on Canadian oil. Aaron Powell That's quite a lot.
SPEAKER_00:Um the arrival of a new pipeline to the west coast of Canada was for Canadians, I think, quite a moment. There was a lot of struggle. I've called my podcast power struggle, because it seems like nothing comes easy when it's around energy. It was a decade of struggle to get that thing built, the Transmountain expansion. Um what do you think that has done in terms of the continental balance? Is it is it good for America? It doesn't make a difference at all.
SPEAKER_01:That that pipeline, as you know, is is 10 years late, but it is here. And we can see the benefits of it already. The pipeline operators and all the producers who are using it, uh, and the shippers and all of us analysts out there have learned a significant uh amount of information that we did not know before, after the operation. So one of the things that people should realize is that yes, that oil is not coming to the United States the old way, but it is coming to the United States the new way, to California, for example, uh, via oil tankers. So it's still going to the United States, just different locations. And the irony here is California, because of its liberal stand against oil, they need the Canadian oil more than ever. But now they are losing the refineries. So we will see how this is going to work out. One of the ironies is that today in the news we have an oil company and a pipeline company reversing pipelines to California to supply California with products, not with crude, because everyone is expecting that those refineries are going to leave. But I think there will be a time when uh politicians are going to come to their senses and uh keep some refineries, and those refineries need that Canadian oil.
SPEAKER_00:Do you think there will be more new refineries in future in the US?
SPEAKER_01:No, but but we see uh a kind of uh brownfield expansion, uh increase in efficiency. So we can see that capacity probably improving little, but we are not going to see new refineries.
SPEAKER_00:One of the most interesting things in your work over the years on us is that you've always been a predictor of trends. I guess that's the business you're in. People want to know uh what's around the corner, and you are a PhD economist, and you're there to give your advice on what that what that is. Um back in the 90s, you were talking about peak oil. You were not convinced that the um end of usage of oil was going to happen. Uh, what happened at that time?
SPEAKER_01:We had for several years, we had a group of people who were writing books. I think within like four years, we had 14 books written on peak oil production. And they had their own conferences, events, etc. And uh their attitude, and talking about the attitude, I'm not talking about the approach, their attitude toward the oil industry is no different from the people on the left in Canada or in the United States or even in Europe. They they really had an attitude. And um I will tell you a story that happened with me. Um, I met Colin Campbell, who was uh, in a sense their master. I mean, he was the biggest guy in this group who reinvented himself after retirement and wrote several books. And uh I was a young man and I asked him the following question. I said, uh, you worked for the old industry for 40 years. You never opened your mouth, you did not say anything, and now you are retired and you open your mouth. Why? He said, Well, you know, because people get fired, and I don't want to get fired. And you cannot say that to your bosses, etc. So my reply to him was, Well, look, uh, King Hubbard uh basically was not fired. For 40 years you lied. Why do I have to believe you now? Anyway, it was very clear that there will be no peak in oil, uh, in oil production. Uh now we are talking about peak demand. So we have people around the world talking about peak oil demand. And it this is the other side of the story. And that story does the this new story does not make any sense at all. Uh, the if you look at all the evidence that they are gathering to tell us about peak oil demand and attach that to all the bearishness in the market that we have today, including this idea of massive amount of oil uh on water, which by the way, we yesterday we uh uh sent out a note to uh clients basically debunking the whole story of oil and water. And after we published it, like almost 10 hours after we published it, one of the major tracking companies in the world that track shipments, they sent a note to their clients saying, so in a sense, the meaning of it, sorry, our numbers were wrong, we exaggerated oil on water. You're a just the facts guy. So if if you please allow me, I would like to share with the audience some of the issues related to that oil and water, why we die, how did we debunk the story? Yes, please do. When we talk about oil on water, we are talking about oil on ships going from a place to another. But that includes what we call floating storage. Floating storage when a ship goes to a certain place to uh uh deliver the oil and it cannot discharge the shipment and stays in the same place more than seven days, right? We call that floating storage.
SPEAKER_00:Okay.
SPEAKER_01:I'm not going to talk about floating storage today, I'm gonna talk about the ships on water moving from one place to another. In September, we have a group of eight in OPEC plus being increasing production, so we have increasing production. At the same time, it's the end of the summer, uh the end of summer in those countries. And the end of summer means that their domestic demand declines substantially. So they have more oil coming from production and more oil coming from consumption to be exported. So that's play that's one side of the story. But all of a sudden we've seen a major increase in exports from Iran, Venezuela, and Russia. And what is common among all of those? Sanctions. Okay? So the we already have a bearish sentiment coming from the International Energy Agency. And the banks, the major banks, are supporting it, and the media, especially Bloomberg and Waiters. Before I move into the oil and water, the IEA expect the largest surplus in history next year. And they expect a major surplus in the fourth quarter. Here is the problem. The IEA expecting the largest surplus in history without COVID-19, without lockdowns, without a recession, without any of those issues, just kind of like tells you something. I mean, the oil industry is 160 years old. The irony here is we don't have enough storage for that. And if there is no storage, then it cannot be produced. And if it cannot be produced, then there is no surplus. But the issue here is this let's look at the record of the IEA.
SPEAKER_00:The International Energy Agency, the IEA.
SPEAKER_01:Yes. Yes. So uh for 15 years, between 2007 and 2021, the IEA underestimated global oil demand. So they came in toward the end of 2022 and they told us that they underestimated oil demand between 2007 and 2021. So for 15 years, they've been underestimating all demand. And of course, they published all the data. I will go back to this point in a minute. Then in May 2025, just a few months ago, they said they are revising up global oil demand in 2022, 2023, and 2024. Up. So they've been wrong for 18 straight years. And how much? By how much? Two or three years. The total is about 350 million barrels. Then in August, in their monthly report, they said they are revising up Mexico's oil demand by a hundred thousand barrels a day since when? Since twenty twenty. I mean, with all of this, who is going to believe the IEA on this largest surplus in history?
SPEAKER_00:Okay, well, I'm puzzled by this. They have access to information just as you do. They are uh plugged into the networks uh that uh share this information, they have the experts, the models. How come they come up with such a different analysis than you do? And because they have an agenda. Okay.
SPEAKER_01:That's what it is. They have an agenda. So let me give you one more piece of information and then we move to the oil and water. In 2015, the IEA made forecasts for global oil demand in 2025. And now we are in 2025. So the IEA itself is telling us that their current estimate of oil demand in 2025 is higher than their estimates in 2015 by 3.2 million barrels a day.
SPEAKER_00:That's where we're talking about a base of 100 million barrels a day. So it's a significant gap.
SPEAKER_01:So the idea here is OPIC plus exports increased, we have more oil and water, that's absolutely correct. But those the oil bears basically took the information and ran away with it. And we debunked this on several fronts. So I'm going to go over them. First of all, they ignored the impact of sanctions. So when recently Trump imposed sanctions on Chinese ports, for example, that forced ships to be rerouted. So they were not able to discharge. So we have more oil on water. So that's number one. Of course, the the story of sanctions, we have more on that as we go. If you look at the data, you will find that Iran exports increased substantially in September and October. And you think if that happened, that means their production increased. But their production is flat. So where did that oil come from? We said probably it's from storage. They did not have storage. So where did that oil come from? Well, all of a sudden, a few weeks ago, for some reason, all the ships, all the tankers that are carrying the Iranian oil started turning on their transponders. So the transponders basically, those are the transmit the signal, the location of the ship. All of them. Which means that everything now is completely visible. So what happened is the media and others be reporting the lower number because they did not see all the ships. Now we see it. So what that means is that oil was already on water anyway. It's not an increase. So that's a second second one. Third one. Brazil's exports decrease significantly in September. So we have a reduction in supply. Yet their exports to China increased significantly. So if their exports in total declined and their exports to China increased, that means it came at the expense of others. And therefore, if you look at the data, you will find that Brazilian exports to the United States, to Europe, and to the regional countries around Brazil declined substantially. If you look at the distance between Brazil and China, it is double that to Europe, triple that to the United States, and quadruple that to their neighboring countries. You have more oil and water, yet supply is down. But this is not the whole story. Let's go back to OPEC plus. Most of the increase in OPEC plus came from Saudi Arabia. Saudi Arabia increased exports almost a million barrels a day. Again, because of increased production one side, and end of summer that let them divert shipments from domestic uh use to outside. Most of the Saudi exports went to two places. One to Egypt, most of it basically, about 850,000 barrels a day went to Egypt, and the rest basically, or or most of the rest went to India. Now listen to the details here because these are fascinating. Egypt cannot handle that amount. So where did that oil go? The long time ago, from the 70s, the Swiss Canal couldn't handle the very large tankers. So they created a system. If you are going in the Red Sea north, before you reach the Swiss Canal, there is a port there called An Sokna. They created a port there with uh storage facilities and they built a pipeline that goes west around Cairo and then goes north to Alexandria to a port called Sidi Cr. So those ships will come in, will unload some of their shipments so they can float past the Swiss Canal, then go left and take that oil again from Sidi Cr. That was a long time ago. Later on, with efficient management, other things, etc. The the there this out is realized. I can send my ships to Anistochna and load there. I don't have to pay fees for the Swiss Canal, just empty everything there and come back. It's a very short trip. And then take that Olivia summit pipeline to Sea Decreer, and then smaller ships will come from the United States and Europe and take it. In August, the storage at Sea Decreer was near record low. So the Saudis needed to replenish that storage. It's that simple. So that oil and water, basically, that everyone is counting, just moving it from one storage here to another storage. But eventually that oil will go to Europe. And if you look at the EU oil inventories, they were extremely low. Again, even if it goes to Europe, you replenish the storage. There is no surplus. You are barely going to the average, to the five-year average. So there is no surplus, and there is that oil on water, basically, is completely exaggerated. You're like an oil detective. But everyone is about the loss of the same facts, but you saw what was really going on. Some of that oil went to India. India's inventories were very low. And if you look at India's numbers, India's inventories go up every October. So what is the surplus? That oil is going to storage just to bring it back to the average. So that's the story of all of but there is more to it. I'll tell you more. Um, probably you heard about uh the agreement that's been done with Kurdistan and the Iraqi government and Turkey to export the oil from northern Iraq through the jihad port on the Mediterranean. All of a sudden now we have more oil on wire because everyone is reporting what's coming out of jihad from Iraq. But that oil basically was going to domestic markets through pipelines, etc., and being reported if Iraq or Iran export it, but never being reported out to Turkey or the Mediterranean.
SPEAKER_00:It looks like more consumption, but it's really just different reporting.
SPEAKER_01:Absolutely. So the issue here is this push by the media and some analysts, it's just part of that bearish narrative that they are supporting, but it does not have the legs. We are not denying that exports are increased. We are not denying that there is more oil and water. But some of that oil is exaggerated in terms of quantity, like when we took when I talked about Brazil or I talked about Iran, or the Saudi oil that would be locked up in storage, or the impact. They exaggerated the impact uh significantly, and that's where the problem is. So it's the the the market is not as bearish as being reported.
SPEAKER_00:Well, your job is to get the best information, the most accurate, so that people making investment decisions are doing so from a solid fact base. Would you agree?
SPEAKER_01:I hope so. That's the case. But one of the issues that we we are facing right now is almost everything is agenda-driven. And and that's really the problem. Okay. For me, I don't work for anyone. I work for myself, so I have only my reputation to care about uh whether I might end up destroying my reputation, I don't know. But I lost, I lost over time many friends, I lost money, I lost contacts, uh, etc. Uh so there is a price for that. The extreme uh cases where I've seen it in the media basically, where certain news are published, they were fake news. I know who paid, I know who got paid.
SPEAKER_00:This trend in forecasting to go from what people actually do to what policy aspirations would dictate they should do in the future. And I look at this, the IEA, I think at one time you could go to their website, their information, they would say, Well, we measured this, this is what's occurring based on all of that data capture. But then they shifted a few years ago to say, based on the climate commitments made by these countries, uh, what should be happening is this. And if they uh if countries overall uh have a more stringent approach to emissions reduction, it will look like that or like that, and they would have scenarios. So if you said, well, that it's very nice to see the scenarios and what could happen if those policies are pursued, but I would also like to know what's actually happening today. And it became harder to find that information in Canada. It was the same thing. Our federal government used to maintain records. You could pretty easily find information on what they were measuring in the economy. They have all these different ways of doing that, they have economists, and you could find out what Canadian industry and consumers were doing. But then a couple of years ago they went the same direction as the IEA. It became, you went to the website, and then you could find out what the climate aspirations and all those predicted that there'll be less oil used. Here's the problem.
SPEAKER_01:Okay, the uh IEA or the government of Canada can go on their own and do whatever they want. Our problem basically is twofold. First of all, uh if you want to criticize them or you want to comment on them, the media will block you. I uh since 2018 basically, uh I've been literally uh listed even in the advertisement of conferences on panels, and I was canceled. And I'm not talking about twice or three times, talking about a large number of times being canceled, simply because if you criticize any of those, you are out of it. You'll not be invited to speaking at those events, etc. So, okay, we have no issues with those, but why the media and conference organizers basically are dictating uh uh what to be said and not what to be said. So we do have a serious problem with that. Uh the issue here is this IEA and others, all of them are assuming that the government plans will be implemented in full, and the percentage of success is 100%. This is a big problem because we grew up, we went to school, we went to university, and we learned that there are tens of thousands of books, articles, speeches, uh uh interviews, etc., from around the world, all of them talking about government policy failure. Tens of thousands. And yet they want to convince me that when the government wants to implement climate change policies that are dependent on weather, that they will succeed a hundred percent and the implementation will be successful a hundred percent. That's really a serious problem there. You have all the literature, you know, there are more books on the government policy failure than any other things in economics, and they ignored all of that. The other issue is they ignored the fact that politicians at the end they want to be reelected. This is kind of like common sense, and they ignored that completely. We've seen a retreat from every single politician, from every single country, from every single company of uh from climate change goals. We've seen that all over. And yet we still see the IA and others basically still going forward uh with what they are saying, etc. While we've seen uh let's go back to uh BP forecast. BP told us that all demand peaked in 2019. And by the way, I challenge them, and I have a tweet on Twitter with a picture of eggs, saying I'm going to save those for the future. And guess what? BP right now is expecting all demand to peak by 2030. All those issues about peak, etc. Basically, the way they are calculated. If a student of mine at the university, uh like a second-year student, will do those calculations, he will get an F. For example, let me tell you something about electric vehicles. Because this is kind of really uh becoming annoying right now. Notice that all the media, especially on the left, they report EV sales all the time. EV sales, EV sales, EV sales. But if you, in fact, Bloomberg today was talking about uh the number of ship sales that does not use oil, and they are talking about 50% of them basically are made are are designed for LNG and everything else. That's the whole article. But what they did not tell us was there are only 800 of them. Well, I have 105,000 ships out there. The same thing with EVs. They tell us, well, look, at Norway, it's 100% EV sales, and this country is 40%, and this country is 60%. Well, what matters really is the number of EVs on the road. It's not the sales. That's what really matters, because if you want to talk about all demand, you need to look at the number of EVs on the road. So let me give your audience some numbers here. Right now we have about 55 million EVs, assuming that the Chinese numbers are correct. Because I'm going to talk about that in a few minutes. Those 55 million vehicles, about 35 of them, 35 million are in China. The replacement in terms of oil is only 1.3 million barrels a day. That's it. If you listen to the media and listen to the promoters of EVs, you think all demand is collapsing. As we speak, all demand today is 107 million barrels a day. That's eight million above what what it was in 2019, despite all the EV sales. Okay. So only 1.3 million barrels a day. That's it, that's the equivalent. But this is the gross number because EVs use more oil and oil products to make them than an ice vehicle. So we need to subtract that. We've done a study. Um we concluded that between 2016 and 2022 the number of EVs was small at that time relative to today. Yet the additional demand for oil from the extra tires used was about 60,000 barrels. No one even mentioned this. Here is the problem. So in five years I'm going to jump all of this. But this is not the problem. What's missing from the argument here is by 2040, all those 55 million vehicles today will not exist then. I need a replacement for the 55 million and whatever I'm going to buy in the next few years. And to keep all demand at 100 million barrels a day, by 2050, I need at least 700 million vehicles by that time, that's EVs, on the road. An improvement in I, whatever ice available at that time, improvement in their efficiency.
SPEAKER_00:So to by 2050, in order to reduce global use of oil to only 100 million barrels a day, lower than it is today, there have to be 600 million EVs produced and on the road. 700 on the road. 700 million on the road. And we have only 55 right now. Right. Assuming China's numbers are correct. Okay, but what if there aren't 700 million EVs on the road by the time?
SPEAKER_01:Well that's that's where it that's where Canada plays. That's what that's why we are bullish on Canada. Okay. Let's go with the 700 million or more. 2050, 700 million. If I don't invest at all in oil today, I will have only 15 million barrels available at that time. OPEC estimates that I need, listen to this number, 18 trillion dollars to invest in oil and gas to meet demand by that time.
SPEAKER_00:Between 2025 and 2050, 18 trillion US dollars needs to be invested in production of oil and gas.
SPEAKER_01:Even if you go and say, okay, oil demand is going to decline to 75 million by 2050, most of it will not exist. I still need to invest because of decline rates. I still need that. But let me go back to China because I want to shock your audience to that. China basically has many people on trial today because of the large number of scams in the EV business in China. And there are three major scams being running. The first scam is that when the government decided to give subsidies to EVs, they have to create a system. I mean, you don't just show up with a car and tell them, look, give me the money. So part of that system is that it has to be an EV, and somehow they wrote the law in a way where the mileage has to be zero. So I can bring a 2017 car with a mileage of 200,000 miles, take it somewhere and zero it, and show up and say, Here is electric, here is zero, give me the subsidy.
SPEAKER_00:But isn't that car gonna look worn out by the even the first time you try that? Because everyone is on it.
SPEAKER_01:I mean it's a corruption case. So even the officials who are running this, they are on it. Everyone is splitting the subsidies. So that's one factor. So the second one is more interesting. Because they are telling us there are more sales in China, and it's funny when you have someone on the left in a capitalistic society like the United States and Canada, and they brag about China. So what they do is they don't get subsidies when they export the cars. But I'm going to export today 5,000 vehicles, and the ship is there in the port. So I can make money by calling a friend or a relative, okay, and telling him, look, I'm going to sell you all those 5,000 cars. All you got to do is just go to this place and issue licenses, I mean the uh license plates, issue insurance for one day, we get the subsidies, and the second day they will be on the ship going somewhere. So they've been counted twice. And the third scam is even kind of more interesting. EV sales are declining. I mean, the growth is declining. There are many tens of thousands of them in parking lots that are not being sold. So as a manufacturer or a dealer, I'm getting nothing. So what I will do is I will call a friend or official or whoever and tell them, look, the cars are in the parking lot. I have, let's say, 2,000 cars. I will sell them to you. So we'll show the paper. You issue the license plates, you issue the insurance, you get all the subsidies, we split it. But the cars are still in the parking lot anyway. And they are considered sales.
SPEAKER_00:That's uh quite quite a list of scams. Um right now in Canada, there's a furious public debate on whether we should take down the 100% tariff barrier to made-in-China electric vehicles and let them flood in, because if that happens, then everyone will be able to afford one of those inexpensive made-in-China cars, and that will then reduce the dependency on oil. Um, there are some people where we manufacture cars, of course, in Ontario and other places that feed into that through parts, um, who don't think it's a good idea to do this. Uh obviously they they think it could disrupt domestic production, but that's only one issue. In in terms of the climate argument, those who say, well, you should do it because it will get us that big gain, are you saying perhaps that the occurrence of uh kind of scam-ridden manufacturing and uh taxation system in China might be skewing the numbers of what China is producing?
SPEAKER_01:Oh, 100%. I mean, this that's why I said that the 35 million vehicles and all the sales numbers that we reported on a monthly basis, that part of it are scams, and the cases are in court. So even the Chinese media is talking about it. So this is not secret. What are you confident is true of EV production from China? This is very hard to uh deal with, but the idea here is that if you look at all the reports of the media since 2019 and till now, the objective is very clear. To make you feel that you are the only one who is not driving an electric vehicle. It doesn't matter, whatever it is. That's really the objective. I'll give you some headlines I collected over the years. We have a major newspaper with the headline that Africa is going electric. And they are talking about one car in one country in the presidential palace. One car in the Africa. I mean, but the headline was Africa going electric.
SPEAKER_00:It it raises a lot of questions, uh, such as the reliable distribution of electricity through uh uh a system that doesn't maybe have uh that that uh history of reliability. But but you know, Anas, I'm wondering here, um one thing you said is that even if you had uh pervasive electrification of the vehicular, you know, the personal vehicle fleet, um it might not make that big of a difference, anyways. Um let's dig into that a little bit. Um you you say we're at 107 million barrels a day. I I remember when it was a big deal, it was a big story, when it broke 100, that was a threshold. That was that was back in what, 2018 or 19? Um, 2019. And suppose you took significant uh vehicular transportation out of that, what would you be left with? And also what would happen in future? Are we using oil in new ways, in uh whether it's manufacturing the tires for electric vehicles, but all kinds of other things too? Like if Africa is building roads and it's sealing them with blacktop, that's gonna take some oil. But also if it's manufacturing more aspirin somewhere, that's gonna take oil. I mean, where is this demand coming from? And what's what do you think the real factors of change are if EVs are going to be that driver?
SPEAKER_01:The trend right now is very clear. We are going hybrid. Hybrid. The electric story is over. Hybrid cars. Hybrid cars. Yeah. Uh hybrid sales basically been going through the roof. And this is going to continue. And governments are tired of giving all those subsidies and getting almost nothing. Let me give you some examples on that. And and and a funny story, too. Uh it was very clear years ago that if we go for electrification of the transportation sector, governments are going to have serious problems collecting money to replace the gasoline tax, the diesel tax, and the fuel tax. These are massive taxes, by the way. In Europe, it's over$500 billion a year. If they lose all of that, how are they going to compensate for it? In the US, it's about$80 billion. How are they going to compensate for it? So where do you have seen local governments and state governments basically imposing additional fees on EVs to compensate for the gasoline tax and the diesel tax? And there we have people on the left who are angry because of that, but they are so dumb to realize look, I need this tax to make roads for your EV. If there is no roads for EVs, then you cannot even drive your EV. So we need to do that. So they are collecting this money as additional fees, basically, to uh maintain the roads and bridges and everything else. But the other issue related to this, which is kind of fascinating, is that the same idea now is spreading to renewable energy. Without to mention names, we have cities in the United States who said we are we are not able to maintain the grid because people are using rooftop solar and they don't pay taxes. Because we used to sell when they used to buy electricity from the grid, they used to pay taxes, and that taxes are used to maintain the grid or expand it or update it. But now in some cities, because solar is so widespread, they are not collecting those taxes, and companies are not collecting the money to maintain the grid. So now they want to tax people for the solar on the roof. The same idea of gasoline tax and the tax on EVs. That's a sea change from the subsidies that's being given to them.
SPEAKER_00:Would you agree that taxes are uh very commonly used to uh encourage people to not consume something to be a signal to, you know, uh don't smoke cigarettes, we're gonna put a lot of tax on that. Uh don't use so much gasoline, we're gonna put a lot of tax on that. Uh is that an effective lever to nudge the public? I mean, you can have a subsidy. We're gonna do it the reverse of a tax. We're gonna give you money if you buy this kind of car, it's an EV. So where do you see these kind of levers? Body of literature on both.
SPEAKER_01:And taxes are ineffective when income is increasing, in a sense that they are effective when you literally destroy the uh lives of people by having low economic growth or recession, and then you tax them. Otherwise, when you have economic growth and higher incomes, those taxes are ineffective. And in terms of subsidies, look around the world. Most of the subsidies, especially for EVs, went to rich people, not to the poor. So any way you look at it, it does not work.
SPEAKER_00:We've covered so much today, and we we don't have uh a lot of time left. You know, I recently heard a influential uh uh minister in a Canadian sub-national government say that, you know, we don't really need another pipeline because by 2050 we won't be using oil. So, you know, what's the point of this? Um Do you think that's a uh credible prediction that is being made by uh, you know, anyone saying that?
SPEAKER_01:I can't tell you without any reservation, we do need another pipeline. Another Canadian pipeline to typewater. Let me put it let me put it this way energy demand globally is increasing at a very high rate in a way that we never seen before. And there are several reasons for that increase. One of them, of course, is urbanization. And with urban urbanization, there is no way back. So if you bring someone from a forest and put him in an apartment with light and running water, he's not going to leave after he loses his job and go back, no water, no electricity. There is no way. The second one is immigration, and we talk about immigration, this is really a missing point, and especially when it comes to Canada in particular. Let me give you a true example. When President Biden withdrew from Afghanistan, they brought with them tens of thousands of Afghan families, and they put them in houses and apartments. The moment they put them in housing, their energy consumption increased by 70-fold. That's 7-0 fold, not percentage, not okay, 70-fold. Several times, yeah. Those immigrants at the border, southern border of the United States, the moment they go in and they live in an apartment, their energy consumption increases by about 40-fold. And we are talking about millions of people when you look at Europe, you look at Canada, you look at the United States, millions. So energy demand is going through the roof because of those. In addition, when we talk about increasing income, especially in emerging economies, when you talk about BRICS, we talk about India, we talk about China, we talk about Brazil, we talk about Turkey, Saudi Arabia, etc. When people basically move up the income ladder, if my income doubles today, I'm not going to eat lunch twice. I'm not going to wear two jackets just because my income doubled today. But what people will do is they will spend the additional income on comfort. And what comfort means here, exactly, of course, it has several steps in that comfort. But the first one and the biggest one is air conditioning. And when you look at three billion people in Asia going for ACs, just think about it. And I have not even talked about AI and data centers. Once you add AI and data centers and autonomous vehicles, because autonomous vehicles are AI plus when it comes to energy consumption. So you add all of those, energy consumption is already massive and is going to continue to increase. So the question is, and this is really the conclusion of all of that, what is the impact? People on the left, when they came up with the idea of climate change and climate change policies, they literally wanted to build solar and wind to replace coal and natural gas. Well, now with this massive increase in energy demand, that replacement is not going to happen. But you mentioned the scenarios earlier. Those scenarios already counted that we don't need the oil, we don't need the gas, we don't need the coal. But now we need it all. So the possibility of energy crisis if investment does not keep up with the failure of those forecasts is real. And talking about the demand for AI and uh data centers, I would like to end with this. And this is a message to Canadian officials. What we see now is we have massive demand for natural gas. Canada is very rich in natural gas, and you know natural gas prices are very low despite the LNG uh exports. The problem we end up with is that we don't have enough manufacturers of gas turbines to build those power plants. We do have the gas, we can produce it on demand, but we don't have the turbines. And now, if you are if you want to buy turbines today, you have to wait about three years. But I have an AI company right now, and I want to build those data centers, and I cannot wait. And the competition is so severe, I cannot wait. So, from where I'm going to get the power? Nuclear will take several years. Gas is not an option right now if I am late. So, what I'm going to do? What we are going to see is two developments. The first one is we will see higher utilization of coal power plants. So those who are claiming that the demand for coal is going to peak, it's not going to happen. But not all the areas have uh the coal-fired plants. Some areas, like the Northeast and the United States, or some countries like Sweden and Europe, they have old oil-fired plants. They are idle, they keep them for emergency. We might see politicians and companies basically trying to revive them and have them work 24-7. That's additional demand for oil. That's a message for the Canadian officials. There is one more related to that. Even that is not enough. And I have an AI company, I want to build the data center, I have no other choices. And I have the patents, everything ready. The only choice left for me, whether I'm in China or the United States, is to go for private generation. I can buy those 10, 15 generators, each one of them the size of a big room or bigger. But guess what? They run on diesel or LPG. And that's oil. And that's another message to Canadian officials.
SPEAKER_00:And that message is be in the market with products from Canada, I think. We need that oil. Well, look, this has been a fire hose of information and ideas. You're challenging conventional wisdom. I think it's what you've always done. Um, I would like to end on one last question of mine, if I may. It is this um Anas Al-Haji, are you an optimist for the future of humanity?
SPEAKER_01:I am always, in fact, the story of my life, basically, if you look at it from uh the first moment until now, uh, it's really a story of being optimistic and things will work out in essence. So I am optimistic. Uh I think we will have enough investment for the oil and gas sector. The problem will happen when the outlooks remain pessimistic and investors act on the outlooks. But we've seen it before. Once you give them the signal, the money will be there. The problem is in shale we can solve the problem quickly. But you look around the world to go offshore, for example, that investment will yield results two or three years later. So the possibility of energy crisis during this time is very high. And that's where the disconnect is going to be. In these short-term trends. In the short term, basically, right now, we do have enough oil, and we can go back to shale and increase production within two, three months without any problems, if if we have the right mix. Okay, so we don't have any problems in the short run. We do have enough gas, we don't have enough oil. The issue that every politician has to realize is that for conservatives around the world, natural gas is the fuel of choice. But for liberals, natural gas is the fuel by default, and that's why we are bullish on LNG. And that's where Canada basically should go at full speed. Uh, and all those ideas about we are going to have a surplus in LNG, and probably this is a whole uh another show we can talk about is nonsense. Uh there are several reasons why it uh the same way I debunked Oil on Water, I can't debunk the LNG surplus story.
SPEAKER_00:Well, let's leave that story for another time because it would give us a great reason to come back. I mean, this this information and and analysis you have and share is is so timely and and important. Um I I feel you have got uh an optimistic vision of the future, but I I must ask you one question because I know there'll be some people watching saying, well, you Stuart, you asked uh Nas if he's an uh an optimist uh for the future, but did you ask him if he's an optimist about the the climate and emissions of the future? Will that be positively affected by how humans use the energy in our lives?
SPEAKER_01:I usually avoid the discussion of the climate change completely. Because most of my research is on policies and the unintended consequences of policies. And if you look at policies, basically, they are a bigger problem, even if you believe in climate change completely, the policies themselves is a bigger problem than climate change. And that's really a big problem. And the reason why, because policies are designed to serve a certain purpose without looking at the big picture. Why do we have all this retreat from climate goals in the last three years? Because companies and governments and individuals made commitment to be carbon neutral by a certain date without doing the due diligence. At the same time, they ignore the human behavior. Because uh, and I say this uh uh all the time that carbon accounting is the matter of all in runs. And you just look around the world and see all the games that being played, and it's just amazing. If you believe that people will cheat on their taxes, they will cheat and they're a carbon accountant.
SPEAKER_00:That's a great line to close with. Carbon accounting is the mother of all end runs. You know, it's football season, we're into it. My goodness, this is this is so interesting, and I I really wish we could do this show all day long because uh it's not just interesting, it's consequential for how people live in the future. It's consequential about what gets built, what doesn't get built, and how for a country like Canada, I mean, yeah, it's big on the map, but it's really a little country, isn't it? I mean, 45 million people, we're really a small country. Do you think we can look after ourselves in a country like Canada with all the all the stuff going on in the world?
SPEAKER_01:I I have a lot of things to say about Canada. I think the there there were many, many missed opportunities in the last 15 years. And things would have been way, way better than the way they are right now. Okay? Because what people did not understand is whatever the United States is being Number one at right now. You talk about LNG or oil, Canada would have been there too. You talk about hydrogen, Canada would have been there too. So they'd be missing those opportunities. On the other issue is regarding the expertise. Why don't you have thousands and thousands of Canadian men and women working in Brazil and other places in their energy sector today? You have the oil, you have the gas, you have the LNG, you have all that experience, you have all the universities, you have one some of the best universities in the world. Why are you not sending those experts worldwide? Why are you scaring them from being in the industry? That was a big missed opportunity. And if you think you can do it cleaner than anyone else, well, send your people to make it cleaner for the world.
SPEAKER_00:That is a powerful message. I hope people think about that. These are these are questions that deserve to be answered. I must say to you and us, uh, thank you for your time and insights today. It's just been uh a pleasure to learn from you and see the world as you see it. So th thank you for joining Power Struggle.
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