Q&A: This analyst believes minerals for the green economy could spark an N.L. boom larger than oil

There has been a major worldwide push to decarbonize economies as much as possible, with many industrial countries committing to strategies to develop alternative sources of energy. 

Yet a major forecast points to a growing, not shrinking, demand for oil. The International Energy Agency released its 2023 forecast for oil supply and demand, with indications pointing to an increased demand for oil. 

At the same time, the conversion to renewable energy sources has not been happening as quickly as some may like, and that's in part because of a shortage of what are called critical minerals — nickel, zinc, lithium and copper, to name a few — that can power electric cars, batteries, turbines and other products. 

Larry Short, portfolio manager and senior investment advisor at Short Financial, went through the issues with Krissy Holmes during a recent interview on CBC Radio's St. John's Morning Show. 

His thinking may surprise some people. He believes the mining sector may be in for a boom that could exceed what the province has seen with offshore oil development. 

This interview has been edited for length and clarity. 

Q: So what is going on? Why is demand for oil expected to grow next year? 

A: Largely because China has still been in lockdown during the last eight months.  As much as the rest of the world has come out of the COVID crisis, China has not. So, they've been battling it by doing major lockdowns. There's still hundreds of ships off the coast of Shanghai waiting to load and unload. 

The reason why we're still seeing shortages throughout the world is because the manufacturing that China has been trying to do, the products cannot get into the ships. 

Electrification — we've certainly been talking about that transition in the last number of years. Is there a relation? Is that happening as fast as it should be? 

Oh, heavens no, nowhere near it. Based on numbers that we're still building, 33 per cent of the world's energy is still coming from coal, for heaven's sake. In fact, China recently announced a new project using coal, which will actually use more coal than all of Europe is currently using. 

We're not moving forward to reduce carbon emissions largely because we aren't able to make changes quickly enough due to bottlenecks.

A key one of those bottlenecks is critical minerals. Basically, we're not mining all of the things that we need to mine in order to make the conversion at a fast enough rate.

Looking at countries like Indonesia, Pakistan, and Bangladesh, with large populations. They all want air conditioning, running water, televisions and automobiles. The world is still trying to keep up with demand for those products and services, meaning that the total energy demand around the world is increasing, while the ability for the world to generate alternate energy is simply not there.