For those passionate about climate change and seeking to comprehend the influence and consequences of fossil fuels, this publication, along with the preceding one, likely provides a comprehensive understanding. The analysis presented here is grounded in incontrovertible facts, distinguishing it from the myriad of theories circulating. These facts are compelling and difficult to dispute for anyone who approaches the subject with reason. Thank you for your exceptional contribution to this crucial discourse.
Good luck getting oil production up to 212 million barrels per day (more than double the present level) for 8 billion people and more given expected population growth. Obviously you haven't bothered checking stats on oil reserves, drilling etc. And obviously you have no concerns about global warming or checked the stats on that as well. Just keep driving the growth train into the limits wall. Wow is all I can say - hopefully your voice is an extreme minority.
That's true. Arjun's posts have been showing up in my email and I read this one as the title intrigued me. I am an earth scientist with five decades of experience looking at energy resources and in the last couple of decades I've studied climate change and the depletion of the biosphere (mass extinctions), mineral and energy resources. It may be fun to speculate on endless resources, limitless growth and a developed-nations-standard-of-living for all. Sorry to pop your bubble folks, but reality demands lowering consumption and throughputs, not raising them. The future does not have to be dystopian, but it will be with folks happily claiming that oil production can double and there are no limits on this finite planet.
But if this is simply a discussion of TAM in the next couple of decades, I agree that demand will be higher - much higher than available resources can supply and much higher than commonsense demands in the face of the impact of the human enterprise on the biosphere and climate.
Well, Arjun, you asked for disagreements. I'm no climate change denier and support vigorous climate research. But I did spend much of 40 years leading large teams of scientists and engineers to accomplish difficult things, some of which involved massive hardware. And the perspective on systems necessary to do that is missing from thinking and advocacy related to solar and wind.
The short statement of my views is that a movement toward energy sources with low energy density (rather than higher such as nuclear) is a really dumb thing to be doing. They are a lot more dangerous, far less practical than is often claimed, less advantageous for CO2 than is often claimed, and damaging to the environment in many ways. Roger Pielke, a pretty neutral and objective observer, has a nice piece out this week on why wind energy will always be niche (https://substack.com/inbox/post/144333943).
Solar and wind are great niche sources. I don't oppose them absolutely. But at best one can accuse their advocates of execrable systems engineering.
Lazard’s estimates of LCOE, used for decades to proclaim the superiority of these energy sources, were badly flawed because they did not include until very recently the firming costs required to compensate for their intermittency. Those costs, per the recent Lazard calculations, eliminate the alleged advantages of these sources.
Beyond that, the issues of providing the necessary materials and the necessary expansion and improvement of electric grids, seemingly never mentioned and certainly never yet here, are each individually impactful enough to derail the dreamed-of “energy transition”.
The failure to include them was a failure of systems engineering. Many of the advocates are people who should know better.
So I often find myself in disagreement with things you say about these energy sources.
"Execrable" 😁 I was trying to think of that word the other day. I may have used an oilfield approximation. 😉 We should collaborate sometime Dr. Paul. Cheers
Well it seems I misinterpreted what you meant. Sorry about that. On several occasions, you have seemed to me to think that innovation can solve every problem and I have interpreted some of those comments as aimed at those two classes of systems. But no amount of innovation can make the sun more intense and we would not want the wind to be either.
Paul, No worries and I am always looking for where my message isn't coming through clearly. I fully agree with you on LCOE and the disaster that it is. And on your comments about energy density and nuclear. Agree solar/wind can be good niche technologies but seems insane to want to run an entire grid off it. Agree fully on the lack of inclusion of systems costs and have made that argument in comparing LCOE to the old well IRRs for shale plays.
I think it may be in my use of innovation and the belief that places like China and India, etc., that are not long crude oil will try to "innovate" their way out of oil import dependence. But I do project a 250 million b/d total addresssable market for oil as the indication that innovation is highly uncertain on timing.
Yes, basically same issue as LCOE. Well IRRs excluded acreage acquisition, midstream infrastructure (even if others were spending on it), heterogeneity of well performance, timing from drilling to completing well, etc. 30%-100% promised well IRRs translated to 0%-5% corporate profitability for shale E&Ps last decade.
“What was the basis for the 2030 oil demand estimates under high-profile net zero oil demand scenarios?”
I didn’t understand your reply to this question. All net zero scenarios by the IEA or anyone else present an integrated prescriptive picture of what a pathway might look like working back from a net zero 2050 constraint. That’s exactly what they’re tasked to do.
If folks think they’re unrealistic or they have a better pathway in mind that’s great. That’s one of the major benefits of the exercise. And if one believes that there are no more decarbonization policy changes in the pipeline then you refer to the stated policies scenario as your base case (checking to see that the policies are adjusted for implementation risk).
It is true that NZ scenarios can be misused. I’ve been very critical of people that take one component of the whole scenario (no new FF development) and present it as a standalone rx. The IEA has tried to clarify its messaging around this and I’ve noticed that you don’t really hear mainstream climate folks spouting this rhetoric anymore.
“As the IEA has since taken pains to clarify, achieving net-zero means investment in new fields is not needed, not the other way around. “Simply cutting spending on oil and gas will not get the world on track for the NZE scenario; the key to an orderly transition is to scale up investment in all aspects of a clean energy system,” the IEA wrote.”
Jason, If they start with 2100 (+/-), they have a chance to have a realistic scenario though there would still be numerous uncertainties on technologies utilitized. They just as well should have started with net zero by 2025 if they were going to go with 2050. The point on NZO being misused seems to be the base-case intention, which one can see in that willfully included tagline "no new oil and gas fields are required". This has never been an exercise in reasonable scenario analysis. I would respectfully disagree that the IEA has "taken pains to clarify". Just the opposite in fact, in particular from Fatih Birol. They are like the risk disclaimers an overly bullish analyst dot-com reports, etc.
I think what they could do to help alleviate some of this criticism is to restore the current policies scenario and add other decarbonization scenarios like a +2C and a +2.5C scenario.
That likely would be a good place to start. They will say that STEPS and some of the other scenarios in fact reflect those alternative paths. But that is not how any of this stuff has been promoted. and has led to some really bad policy.
I think your premise that everyone in the world is driving toward energy sufficiency, however defined, is 100% correct, and that it remains an incomprehensible fantasy that net zero will ever arrive. Personally, I have always subscribed to the idea of acting in the most efficient manner as possible when it comes to issues like this, as efficiency will, as a natural consequence, utilize more of the inputs more effectively, thus reducing the outputs.
Thanks Arjun. (BTW-OilPrice article is over 20K views.) Always appreciate your sharing your creative thinking and new ways of looking at problems/challenges. It is refreshing to a see a positive spin on oil demand. In my blog on Seeking Alpha I am researching a number of African centered oil companies. One theme that rings true from country to county is the welcoming of development capital for hydrocarbon resources. As you say, they are tired of being poor. Keep em coming. Cheers
For those passionate about climate change and seeking to comprehend the influence and consequences of fossil fuels, this publication, along with the preceding one, likely provides a comprehensive understanding. The analysis presented here is grounded in incontrovertible facts, distinguishing it from the myriad of theories circulating. These facts are compelling and difficult to dispute for anyone who approaches the subject with reason. Thank you for your exceptional contribution to this crucial discourse.
Thank you Peter!
Good luck getting oil production up to 212 million barrels per day (more than double the present level) for 8 billion people and more given expected population growth. Obviously you haven't bothered checking stats on oil reserves, drilling etc. And obviously you have no concerns about global warming or checked the stats on that as well. Just keep driving the growth train into the limits wall. Wow is all I can say - hopefully your voice is an extreme minority.
Clearly you have no background on Arjun.
That's true. Arjun's posts have been showing up in my email and I read this one as the title intrigued me. I am an earth scientist with five decades of experience looking at energy resources and in the last couple of decades I've studied climate change and the depletion of the biosphere (mass extinctions), mineral and energy resources. It may be fun to speculate on endless resources, limitless growth and a developed-nations-standard-of-living for all. Sorry to pop your bubble folks, but reality demands lowering consumption and throughputs, not raising them. The future does not have to be dystopian, but it will be with folks happily claiming that oil production can double and there are no limits on this finite planet.
But if this is simply a discussion of TAM in the next couple of decades, I agree that demand will be higher - much higher than available resources can supply and much higher than commonsense demands in the face of the impact of the human enterprise on the biosphere and climate.
thanks for engaging Joe. Feedback/pushback always welcomed. But still looking for the counter arguments to the points I am actually making.
Well, Arjun, you asked for disagreements. I'm no climate change denier and support vigorous climate research. But I did spend much of 40 years leading large teams of scientists and engineers to accomplish difficult things, some of which involved massive hardware. And the perspective on systems necessary to do that is missing from thinking and advocacy related to solar and wind.
The short statement of my views is that a movement toward energy sources with low energy density (rather than higher such as nuclear) is a really dumb thing to be doing. They are a lot more dangerous, far less practical than is often claimed, less advantageous for CO2 than is often claimed, and damaging to the environment in many ways. Roger Pielke, a pretty neutral and objective observer, has a nice piece out this week on why wind energy will always be niche (https://substack.com/inbox/post/144333943).
Solar and wind are great niche sources. I don't oppose them absolutely. But at best one can accuse their advocates of execrable systems engineering.
Lazard’s estimates of LCOE, used for decades to proclaim the superiority of these energy sources, were badly flawed because they did not include until very recently the firming costs required to compensate for their intermittency. Those costs, per the recent Lazard calculations, eliminate the alleged advantages of these sources.
Beyond that, the issues of providing the necessary materials and the necessary expansion and improvement of electric grids, seemingly never mentioned and certainly never yet here, are each individually impactful enough to derail the dreamed-of “energy transition”.
The failure to include them was a failure of systems engineering. Many of the advocates are people who should know better.
So I often find myself in disagreement with things you say about these energy sources.
"Execrable" 😁 I was trying to think of that word the other day. I may have used an oilfield approximation. 😉 We should collaborate sometime Dr. Paul. Cheers
For sure, Dave/Doc. I've almost entirely stopped publishing on SA, as of 10 weeks ago. My Substack location is FocusedInvesting.com.
Cheers Paul. Subbed to your site. I've paused Substack-just too much with SA and OilPrice!
Paul, thanks for your comment. I fully agree with your comment. Not sure where I have disagreed with you?
Well it seems I misinterpreted what you meant. Sorry about that. On several occasions, you have seemed to me to think that innovation can solve every problem and I have interpreted some of those comments as aimed at those two classes of systems. But no amount of innovation can make the sun more intense and we would not want the wind to be either.
Paul, No worries and I am always looking for where my message isn't coming through clearly. I fully agree with you on LCOE and the disaster that it is. And on your comments about energy density and nuclear. Agree solar/wind can be good niche technologies but seems insane to want to run an entire grid off it. Agree fully on the lack of inclusion of systems costs and have made that argument in comparing LCOE to the old well IRRs for shale plays.
I think it may be in my use of innovation and the belief that places like China and India, etc., that are not long crude oil will try to "innovate" their way out of oil import dependence. But I do project a 250 million b/d total addresssable market for oil as the indication that innovation is highly uncertain on timing.
That is a great comparison to well IRRs. Seems to me that IRRs are rather treacherous in numerous investment contexts.
Yes, basically same issue as LCOE. Well IRRs excluded acreage acquisition, midstream infrastructure (even if others were spending on it), heterogeneity of well performance, timing from drilling to completing well, etc. 30%-100% promised well IRRs translated to 0%-5% corporate profitability for shale E&Ps last decade.
Thanks Arjun. It’s always a pleasure.
Thank you Martin!
“What was the basis for the 2030 oil demand estimates under high-profile net zero oil demand scenarios?”
I didn’t understand your reply to this question. All net zero scenarios by the IEA or anyone else present an integrated prescriptive picture of what a pathway might look like working back from a net zero 2050 constraint. That’s exactly what they’re tasked to do.
If folks think they’re unrealistic or they have a better pathway in mind that’s great. That’s one of the major benefits of the exercise. And if one believes that there are no more decarbonization policy changes in the pipeline then you refer to the stated policies scenario as your base case (checking to see that the policies are adjusted for implementation risk).
It is true that NZ scenarios can be misused. I’ve been very critical of people that take one component of the whole scenario (no new FF development) and present it as a standalone rx. The IEA has tried to clarify its messaging around this and I’ve noticed that you don’t really hear mainstream climate folks spouting this rhetoric anymore.
“As the IEA has since taken pains to clarify, achieving net-zero means investment in new fields is not needed, not the other way around. “Simply cutting spending on oil and gas will not get the world on track for the NZE scenario; the key to an orderly transition is to scale up investment in all aspects of a clean energy system,” the IEA wrote.”
https://www.linkedin.com/pulse/climate-change-critical-energy-securitythe-iea-has-evolved-bordoff-q8h7e
(I’m a different Jason to avoid any confusion)
Jason, If they start with 2100 (+/-), they have a chance to have a realistic scenario though there would still be numerous uncertainties on technologies utilitized. They just as well should have started with net zero by 2025 if they were going to go with 2050. The point on NZO being misused seems to be the base-case intention, which one can see in that willfully included tagline "no new oil and gas fields are required". This has never been an exercise in reasonable scenario analysis. I would respectfully disagree that the IEA has "taken pains to clarify". Just the opposite in fact, in particular from Fatih Birol. They are like the risk disclaimers an overly bullish analyst dot-com reports, etc.
I think what they could do to help alleviate some of this criticism is to restore the current policies scenario and add other decarbonization scenarios like a +2C and a +2.5C scenario.
That likely would be a good place to start. They will say that STEPS and some of the other scenarios in fact reflect those alternative paths. But that is not how any of this stuff has been promoted. and has led to some really bad policy.
I think your premise that everyone in the world is driving toward energy sufficiency, however defined, is 100% correct, and that it remains an incomprehensible fantasy that net zero will ever arrive. Personally, I have always subscribed to the idea of acting in the most efficient manner as possible when it comes to issues like this, as efficiency will, as a natural consequence, utilize more of the inputs more effectively, thus reducing the outputs.
100% Andy.
the extraneous outputs, I should say
Thanks Arjun. (BTW-OilPrice article is over 20K views.) Always appreciate your sharing your creative thinking and new ways of looking at problems/challenges. It is refreshing to a see a positive spin on oil demand. In my blog on Seeking Alpha I am researching a number of African centered oil companies. One theme that rings true from country to county is the welcoming of development capital for hydrocarbon resources. As you say, they are tired of being poor. Keep em coming. Cheers
Great to hear Dave and thanks so much.