I wonder if we will look back on this period and think "How did anyone in the 2020s believe that oil, coal and natural gas would be phased out within a decade or two? How could anyone have taken that idea seriously?" But, we have seen this before with the end of coal predicted since the 1860s, albeit Jevons was talking domestically not globally:
"I must point out the painful fact that such a rate of growth will before long render our consumption of coal comparable with the total supply. In the increasing depth and difficulty of coal mining we shall meet that vague, but inevitable boundary that will stop our progress." - Jevons, 1865
Do you think this generation's 'peak demand' idea is delaying CAPEX in true long cycle projects and so creating more volatility? I know you've addressed this before but it seems like at this point in the cycle almost everyone is still shy about committing to the mega, long-term, projects (maybe Guyana is the exception)?
100% agree Investor with your opening sentiment about looking back on all the "peak demand" noise. But that is a recurring theme over the past 100 years...there is a great exhibit in the Midland, TX Petroleum Museum with magazine covers going back to the 1920s declaring the same.
IMO, the delayed long-cycle CAPEX is due both to last decade's poor profitability and concerns about long-term demand viability.
It's the strangest thing how we don't learn from history. Would it be possible to get photos of that display in a future post? We'd love to see that.
You also touched on natural gas infrastructure. Do you think there will ever be enough export infrastructure in the US to ship US natgas globally and so equalize the price of US natgas to European/global prices? Or will the US always be a kind of natgas 'island'? Perhaps something for a future post? (I'm always trying to propose potentially interesting future content).
I regret not taking a photo when I was last in Midland! My concern on US nat gas normalizing relative to EU/ROW is politicians (both parties) driven perhaps by domestic industry to at some point seek to limit LNG exports. Not my base case view, but a risk is how I'd put it. We have A LOT of nat gas domestically...I haven't been in the camp it will truly link up with ROW, even if exports are fully allowed, any time soon.
Arjun, I tend to agree. I think it’s reasonable to expect as the Net Zero scam implodes, the West will still seek to lower emissions and NG will be a big part of that. Now we COULD use the oversupply as a trade windfall, but I’m at least a little concerned politicians and even citizens will begin to see our NG fuel as “critical resources” and begin to hoard it. I’m not saying whether that is good or bad, only it’s a real possibility.
I wonder if we will look back on this period and think "How did anyone in the 2020s believe that oil, coal and natural gas would be phased out within a decade or two? How could anyone have taken that idea seriously?" But, we have seen this before with the end of coal predicted since the 1860s, albeit Jevons was talking domestically not globally:
"I must point out the painful fact that such a rate of growth will before long render our consumption of coal comparable with the total supply. In the increasing depth and difficulty of coal mining we shall meet that vague, but inevitable boundary that will stop our progress." - Jevons, 1865
Do you think this generation's 'peak demand' idea is delaying CAPEX in true long cycle projects and so creating more volatility? I know you've addressed this before but it seems like at this point in the cycle almost everyone is still shy about committing to the mega, long-term, projects (maybe Guyana is the exception)?
100% agree Investor with your opening sentiment about looking back on all the "peak demand" noise. But that is a recurring theme over the past 100 years...there is a great exhibit in the Midland, TX Petroleum Museum with magazine covers going back to the 1920s declaring the same.
IMO, the delayed long-cycle CAPEX is due both to last decade's poor profitability and concerns about long-term demand viability.
It's the strangest thing how we don't learn from history. Would it be possible to get photos of that display in a future post? We'd love to see that.
You also touched on natural gas infrastructure. Do you think there will ever be enough export infrastructure in the US to ship US natgas globally and so equalize the price of US natgas to European/global prices? Or will the US always be a kind of natgas 'island'? Perhaps something for a future post? (I'm always trying to propose potentially interesting future content).
I regret not taking a photo when I was last in Midland! My concern on US nat gas normalizing relative to EU/ROW is politicians (both parties) driven perhaps by domestic industry to at some point seek to limit LNG exports. Not my base case view, but a risk is how I'd put it. We have A LOT of nat gas domestically...I haven't been in the camp it will truly link up with ROW, even if exports are fully allowed, any time soon.
Arjun, I tend to agree. I think it’s reasonable to expect as the Net Zero scam implodes, the West will still seek to lower emissions and NG will be a big part of that. Now we COULD use the oversupply as a trade windfall, but I’m at least a little concerned politicians and even citizens will begin to see our NG fuel as “critical resources” and begin to hoard it. I’m not saying whether that is good or bad, only it’s a real possibility.