BP and Total are forecasting Peak Demand within the this decade. Peak Supply was averted by technology (fracking) and it now seems that technology (EV) could bring Peak Demand. China and India want to get off foreign oil more than anyone.
Does management hold this view deep down? Or is it still about price? Would $65 WTI stop this?
Wasn’t it a 5% over supply of oil that caused the 2015 crash? EVs could easily cause an over supply greater than 5%.
Nat gas will be important long into the future but is gas enough to sustain the industry?
@2lfm- please share with us your hard data on future trends. Really curious to learn when the energy density of natural gas and wind+solar switch.
Speaking of switch, I highly recommend watching "Switch On." An educated citizenry is vital to our survival my friend.
With that thinking and reliance on last data to inform on future trends I reckon you are ELT material my friend.
I've never been influenced by emotionally-charged rhetoric. I'm a numbers guy. Let's look at some numbers. According to the EIA (U.S. Energy Information Administration), here's the changes in U.S. primary energy consumption since 2010:
1) Solar increased 1.3% to 1.3%.
2) Wind increased 2.2% to 3%.
3) Natural gas increased 8.4% to 34%.
4) Oil decreased 1.4% to 35%.
5) Coal decreased 11.5% to 10%.
6) Biomass flat at 5%.
7) Nuclear flat at 9%.
8) Hydroelectric flat at 3%.
I totally understand if you no longer want to play this stressful game of musical chairs, but be honest about the real reasons why. Fabricating a convenient story about the rapid demise of this industry to justify your decision is intellectually dishonest.
Companies in this industry will certainly need to evolve to remain competitive in the long run, but you are living a lie if you think your grandchildren won't be burning nat. gas to stay warm in the winter and charge their EVs fifty times a year. Thermodynamics and economics will dictate our energy future, not emotionally-charged rhetoric.
I ticked the box and want to leave the industry to something different. The writing is on the wall for the industry, EV adoption is accelerating. Onshore wind and solar are cheaper than new natural gas plants, China installed more renewable energy last year than the UK generates total!
In the early 1900’s nobody believed that cars would replace the horse drawn carriage. Within 20 years car market share went from 2.5% in 1905 to 94.54% in 1925. We’ll see just as much if not a more profound change with EV’s, batteries, solar, wind etc.
In the late 00’s Microsoft, Nokia and Blackberry thought smartphones would be a fad or a slow transition. Look how that turned out and look at the incredible advancements driven by the smartphone like Uber. Don’t allow yourself to get caught up in the trap that change will happen slowly or that the technology doesn’t exist for much of what our industry produces to be replaced in a short space of time.
85% of produced oil goes into making gasoline, diesel or jet fuel. The automobile industry is rapidly moving to the EV space through hybrids and than full electric at some point. Think of the pandemic as a look into the future of oil and gas where instead of nobody driving because of a pandemic , nobody drives a gas fueled vehicle because of technology. We all see how the last year worked out for the OG industry and oil price. I won’t even mention that the OG industry was in the sh–ter before COVId because of bad bets on shale and mountains of debt fueled by speculation. There is a reason banks won’t lend to this industry and its not all related to climate change, the OG industry is a leader in value destruction.
There will always be a space for oil and gas in production of jet fuel, plastics or other minor elements of need but the big money makers are on their way out. Just like there is a small space for coal now, but that is rapidly being squeezed out of existence by gas production and alternative energy, there will be a small space for OG in 20-30 years. The world progresses on to new and better things, it’s what we do as humans. Smoke signals to cellphones? It’s tough to accept your industry is in decline, but we all must admit to it at some point.
Interesting perspective @1nxs+19eF0dKy
I think this is a valid conversation to have. I'm on the fence about whether or not to continue working in oil and gas. It's going to become increasingly difficult to attract and retain young talent with few opportunities for growth.
China's population is expected to peak in just 4 years. Global population is now expected to peak in 2064. A lot of the growth in energy demand over the last couple decades has been driven by growth and industrialization in China. Their demand has grown by 7 MMbbl/d in 10 years.
China has come a long way in the last 20-30 years. With a declining population, and so much progress already made industrializing, it's hard to imagine much demand growth coming from there.
US oil consumption has barely increased compared to the late 70s. US consumption has only grown from about 18 to 20 MMboe/d in 30 years.
Demand growth is correlated with economic growth which is correlated with increasing labour force which of course comes with population growth (baby booms).
There's still expected growth from Africa in the coming decades, but it's not likely to offset the declines and stagnation in the rest of the industrialized world.
I think extraction technology and EVs are more a consequence of our situation than the cause.
Whether or not BP and Total are correct in their predictions, time will tell. I could see another spike in growth once economic activity picks up post-pandemic. I'm less optimistic about growth after the next 2 or 3 economic cycles.