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Energy Giant Shell Says Oil Demand Could Peak in Just Five Years
- monkmartinez 10y agoIf we know anything, it is that these guys (energy industry) are pretty terrible about predicting much of anything. Ironically, it was an engineer at Shell that started "Peak Oil" in the 50's... one, M. King Hubbert. Maybe monster trucks will take over as the prophecy of the film Idiocracy come true and oil stages a massive come back... you heard it here first!
- mrnzc 10y agoI think you have to distinguish between Peak Oil (point in time where there is the maximum rate of extraction) and "Peak Demand", which is what the article is about. Furthermore, Shell is actually well-known for its effective foresight activities (particularly in the 70s). Maybe because they switched from forecast to foresight...
- nicholas73 10y agoHubbert was dead on correct about peak oil for conventional sources.
- diafygi 10y agoThere's a great report from the UK that analyzes the losses of stranded fossil assets if we're to hit our climate change goals. It says that in order to cap at 2C warming we can only pull up 1/4 of our existing proven reserves, and only 1/3 to cap at 3C. That means stranding over 2/3rds of our fossil assets. Also, the situation heavily favors producers who have cheap assets, which are mostly sovereign producers in the middle east. The private producers like Shell end up having to strand way more than 2/3rds because the get pushed out due to low prices. http://www.carbontracker.org/report/carbon-bubble/ http://www.carbontracker.org/report/carbon-bubble/ https://en.m.wikipedia.org/wiki/Carbon_bubble https://en.m.wikipedia.org/wiki/Carbon_bubble
- m_mueller 10y agoAnd since this is not going to happen, and carbon sequestration takes more energy than we gain from the remaining oil, an articifial volcanic winter is probably going to be the only way out. Main problem: Kiss complex oceanic life goodbye - 2C warming will already be enough to pretty much kill all the coral reefs. Getting a cooling effect but with a continuously increasing ocean acidity will be devastating.
- zachrose 10y agoIs there a chance that evolution will mitigate the rising temperatures and ocean acidity? Or are there perhaps levels those things that are fundamentally negative to life in general? Or is evolution too slow or too unpredictable to come out as a anything other than a net negative for humans?
- m_mueller 10y agoWith very high certainty (with some slight chance that Earth becomes the next Venus and evolution here ends for good). Keep in mind though that a mass extinction is part of the process of accelerating evolution. You don't get a quick adaptation without a strong selection process. Edit: By 'slight chance' I mean very much near zero btw. However I'm skeptic enough of climate models to know that they aren't good enough to include all the domino effects we've never seen. The Permiam-Triassic boundary saw tremendous forest fires along with abrupt methane release, and that didn't include a species actively releasing enormous amounts of fossilised carbon. I'd imagine that if a few worst case scenarios came together - finding more fossil fuel sources, burning up all of it and causing unstoppable forest fires in all large remaining forests, it could happen. http://news.nationalgeographic.com/news/2013/13/130729-runaway-greenhouse-global-warming-venus-ocean-climate-science/ http://news.nationalgeographic.com/news/2013/13/130729-runaw...
- Scarblac 10y agoIt depends on whether there already exist creatures that can survive the rising temperatures and coming acidity _together with whatever they eat_.
- mrfusion 10y agoDon't the current low oil prices suggest we've already hit peak demand?
- handedness 10y agoPrices are a function of numerous inputs, with supply and demand being the most significant two.
- saryant 10y agoPrices are low primarily due to unrestricted output from OPEC, the addition of Iranian oil with the lifting of sanctions and the massive increase in supply by American frackers.
- ruilov 10y agoNormally people use the term "demand" to mean a curve, which is a function of price. In an efficient market (a good approximation for the oil market), the price solves for the equilibrium between supply and demand. The quote in the article, "demand will peak before supply", is meaningless. It's not wrong, it's just not saying anything. The fact that the price has come down in the past couple of years means that either demand has shifted down (that is, keeping the price constant, people demand less) or that supply has shifted up. On the demand side, it's unclear to me, I'd appreciate any pointers others would have. While advanced countries get more efficient with their use of energy, emerging economies are increasing their demand as more people escape poverty. What is clear is that the supply curve has shifted up. Both because of technological improvements in the U.S. in fracking, and due to political improvements in countries like Iran, Iraq and Nigeria.
- deleted 10y ago[deleted]
- wiz21c 10y agoOil demand in relation with oil price... http://energie-climat.obspm.fr/local/cache-vignettes/L500xH306/petrole_elastique_graph1-6aaf1.jpg http://energie-climat.obspm.fr/local/cache-vignettes/L500xH3...
- magoon 10y agoIn my lifetime I have learned that the only prediction I can believe regarding peak oil is that there will always be another prediction about peak oil. I'm not saying it's not gonna happen (or hasn't), just that it's been said so many times before.
- hpjules 10y agoHe was talking about demand and not about the supply.
- taneq 10y agoYou say that like the two aren't interdependent.
- crpatino 10y agoPeakOil-the-movement shares the same strenghts and weaknesses of many other engineering spawns: The stuff they predicted got all the technical details correct to a remarkable degree, yet they failed to grasp the economic and political implications, and made a communication fiasco out of it. I find it very sad and ironic. I'd urge you to not throw the baby out with the bathwater. I can share that I have taken life decisions under the assumption that resource depletion will be a real socioeconomic force during the second half of my life; yet you will notice that ditching my programming career and moving to an organic farm in the middle of nowhere were not among those decisions (yet).
- ux-app 10y agomind sharing the decisions you have made and followed through with?
- tbihl 10y agoNot who you asked, but the two biggest questions that I ponder along this line: (1) How can I preserve some of my savings in real assets so that they won't evaporate when the bond market finally crashes and takes the dollar with it (probably a few crashes from now)? (2) Given the nature of just-in-time logistics and our complete dependence on trucks, will I be somewhere that I can limp along once oil hits a price that makes that all infeasible? Or will I be a sitting duck, waiting to die of hunger, thirst, or heat exhaustion? And (3) am I preparing myself with skills outside of work that will help me sustain myself when I have to work a little bit lower down Maslow's pyramid (first and foremost, maintaining fitness?) I don't work in programming at the moment, but my job ceases to exist if we lose our ability to have high-precision manufacturing and logistics chains spanning an entire continent.
- cheeseprocedure 10y agoI really miss The Oil Drum. Can anyone recommend sources for news/analysis from the energy industry?
- namenotrequired 10y agoI like Jeremy Leggett's monthly "State of The Transition". Note, the author is firmly in the renewable sector, so not exactly unbiased. The latest: http://www.jeremyleggett.net/2016/11/state-of-the-transition-october-2016-as-the-paris-agreement-enters-into-force-momentum-in-the-great-energy-system-change-continues-to-outpace-setbacks/ http://www.jeremyleggett.net/2016/11/state-of-the-transition...
- vpribish 10y agoyour tax dollars at work (doing some excellent work) : https://www.eia.gov/petroleum/weekly/ https://www.eia.gov/petroleum/weekly/ this is new and a little lightweight (don't sign up for their email, it's got some really insulting promotional stuff): http://oilprice.com/Energy/Oil-Prices/ http://oilprice.com/Energy/Oil-Prices/
- kinj28 10y agoCheck DronaHQ insights and if it makes sense then feel free to email me.
- ruilov 10y agoRBN energy has really detailed analysis: https://rbnenergy.com/ https://rbnenergy.com/. It assumes some level of familiarity, so it's not for everyone.
- glbrew 10y agoAKA "Oh don't worry about regulating us and protecting the environment, it will naturally happen in five years when your need for us will surely peak!"
- themodelplumber 10y agoOr AKA "Oh hey look at us, we're the weak guys now! We need all the assistance we can get!"
- woodandsteel 10y agoDid you read the article? Shell said "we are going to be fine, because we are switching our business to things natural gas and biofuels" What most petroleum companies say, as the article indicates, is that oil demand is going up for a good while longer. That's because if the idea gets around that demand is going to peak, they won't be able to borrow the gigantic amounts of capital they need to keep drilling new wells.
- sinxoveretothex 10y ago> That's because if the idea gets around that demand is going to peak, they won't be able to borrow the gigantic amounts of capital they need to keep drilling new wells. Alternative hypothesis: it's simple denial, much like Nokia and more recently RIM.
- mikeash 10y agoAlternative alternative hypothesis: they're correct, because the move towards renewable energy and electrified transportation is more than offset by increased oil consumption caused by economic growth in poor countries.
- woodandsteel 10y agoI don't understand that idea. From what I understand, most oil is used for transportation, so if EV's get cheaper than ICE, which it seems is going to happen in less than a decade, won't all the newly-prosperous developing world people buy EV's instead?
- deleted 10y ago[deleted]
- legohead 10y agoIs this our yearly "oil is running out" journalism run?
- mcv 10y agoIt's not "oil is running out", it's "demand for oil will drop", which is the other side of the equation, and definitely a good thing (except for oil companies that don't prepare for it).
- caseysoftware 10y ago"Peak Oil" generally refers to peak oil production. This article is about peak oil demand. Overall, this should be considered a good thing. As people convert to alternatives which are cheaper - due to renewables improving - the demand for oil in some industries decreases. Which then drives further innovation into those areas and further alternatives. In fact, this is exactly what critics of peak oil have been saying for years. (This isn't saying demand for oil will go to zero, just that it is likely to start decreasing.)
- ThomPete 10y agoIt is a good thing on the long run but 3-4 trillion debt is tied up in fossile fuel economy. If that transition happens too fast thsts not a good thing.
- kbart 10y agoNot good only for a small subset of people on global scale, good for the rest of humankind and future generations.
- ThomPete 10y ago$3-4 trillion debt effect the entire humankind. Where are you going to get the money to fix the climate issues if the entire economy collapses?
- pjc50 10y agoDebt balances with assets across humanity - that number doesn't mean we owe $3trn to aliens. Some of the $3trn shows up as assets in pension funds and SWFs, but much of it is hiding in the balance sheets of oligarchs and middle eastern monarchs.
- SomewhatLikely 10y agoNot if the value of those assets declines, as when technology advances obsolete those assets.
- siculars 10y agoWhether it is 5, 15 or 50 years hence, peak oil demand will surely come. Technological innovations will see to that. The question I have is what will that mean for all our friends in OPEC nations? Venezuela is in most estimates already a failed state and thats simply due to mismanagement. What happens when structured demand erosion starts to take hold and no amount of state level management can stop it? For those who say poverty breeds desperation breeds terrorism (which I don't ascribe to) we'll no doublet be in for a few volatile decades indeed until it all gets sorted.
- MarkMc 10y agoIf we take Nigeria as an example: Their oil industry is worth about 10% of GDP [1] so if it were to halve in, say, 20 years you are looking at a drag of 0.25% GDP per year. And since oil profits mostly benefit only an elite group of kleptocrats, the average Nigerian will hardly notice the effect. In fact, it may be beneficial for Nigeria because it would greatly reduce the 'resource curse' and force government to be more accountable to the people [2] [1] http://data.worldbank.org/indicator/NY.GDP.PETR.RT.ZS http://data.worldbank.org/indicator/NY.GDP.PETR.RT.ZS [2] https://en.m.wikipedia.org/wiki/Resource_curse https://en.m.wikipedia.org/wiki/Resource_curse
- sqeaky 10y agoRich people hate losing their money. I do not know how, but I am sure the average Nigerian would feel the effect somehow. It could take any form but one I thought of is some kind of contrived import tax could be created to 'encourage' to locals to buy local oil instead of foreign solar panels.
- cmrdporcupine 10y agoOil price collapse in Alberta led to the election of its first not-super-right-wing gov't since the 1930s. It's since become fairly unpopular (something about not being able to wave a magic miracle wand and make oil prices go back up, so everything is their fault) but it's an interesting rupture.
- martin_bech 10y agoCurious note, Shell has at least in Denmark sold or closed all of its gas filling stations. source http://www.business.dk/transport/shell-saelger-danske-tankstationer-til-statoil-ejer http://www.business.dk/transport/shell-saelger-danske-tankst...
- enibundo 10y agoBecause countries like Denmark, Holland, Finland, etc. are very conscious environmentally speaking. I love these places.
- Scarblac 10y agoHolland absolutely isn't, we hardly do anything about our CO2 production. Possibly the worst in the EU. We opened a new coal electricity plant in 2016!
- Fr0ntBack 10y agoIf we implemented a carbon tax which makes oil producers pay for the environmental cost of oil, oil demand would probably peak even sooner.
- Neil44 10y agoPetrol in the UK is about 70% tax, although that's a tax on the consumer rather than the producerm but it would end up being the same thing.
- ZeroGravitas 10y agoThe oil producers are actually calling for a carbon tax, and have been for a while. It's the american coal industry, and their influence on the rest of the fossil fuel industry that's holding it back. http://www.bp.com/en/global/corporate/press/press-releases/oil-and-gas-majors-call-for-carbon-pricing.html http://www.bp.com/en/global/corporate/press/press-releases/o...
- nickjarboe 10y agoLooks like the market cap for US traded coal companies is only $4 billion[1]. Maybe a US multi-billionare could buy them out as a philanthropic act and reduce mining to only that needed for chemical stock. [1]http://markets.on.nytimes.com/research/markets/usmarkets/industry.asp?industry=50111 http://markets.on.nytimes.com/research/markets/usmarkets/ind...
- mrfusion 10y agoThe Stone Age didn't end for lack of stones.
- mhurron 10y agoMy back yard can back this up. Man I felt bad for the dudes putting that fence in, even with the post digger.
- mikeash 10y agoThe Bronze Age may well have ended for lack of bronze (or more specifically lack of fuel for making bronze) though.
- pilom 10y agoI'd love to read more about this if you have a source?
- mikeash 10y agoFrom the Wikipedia article: "The Aegean Collapse has been attributed to the exhaustion of the Cyprus forests causing the end of the bronze trade. These forests are known to have existed into later times, and experiments have shown that charcoal production on the scale necessary for the bronze production of the late Bronze Age would have exhausted them in less than fifty years." https://en.wikipedia.org/wiki/Bronze_Age#European_timeline https://en.wikipedia.org/wiki/Bronze_Age#European_timeline I don't know enough about the subject beyond what's there to say how accurate it is, but it's a place to start.