Post by Blitz on Apr 30, 2024 6:47:02 GMT -5
Much to the chagrin of ESG fairy tales regarding the demise of oil. The facts expose the truth regarding rising global oil and gasoline demand. And demand is rising despite renewable energy and EV growth defying ESG fantasy predictions of oil's dominance as an energy source.
With shrinking world reserves new discoveries are becoming more meaningful. Last year 41% of new discoveries came from deepwater. That number will continue to grow as most of the land based discoveries dwindle as deepwater areas grow. These areas include Brazil, Guyana-Suriname, and, Namibia. More drillships will needed to meet growing future demand for reliable energy and turn these region's potential into profits.
And now this...
OPEC Chief Challenges Reports Predicting Demise of Oil Demand
By Irina Slav - Apr 29, 2024, 7:00 PM CDT
oilprice.com/Energy/Crude-Oil/OPEC-Chief-Challenges-Reports-Predicting-Demise-of-Oil-Demand.html
- In an op-ed for the Middle East Economic Survey last week, OPEC Secretary General Haitham Al Ghais called on those predicting the end of oil to take it a bit easier because these predictions could be dangerous.
- OPEC has repeatedly argued that forecasts that predict a rapid end to the era of oil are not grounded in reality and that amplifying them could sap new investment in oil and gas supply that the world needs.
- The rate of investment in new oil projects is slowing down while crude oil demand has remained robust.
Reports on what authors like to call the end of the oil era were a frequent reading some 20 years ago. At the time, the focus was peak supply and the consequent need to find alternatives to the fuel that powers the world.
Now, 20 years later, there is once again a surge in reports and analyses predicting the end of the oil era. This time, however, they focus on the death of demand driven by alternative sources of energy. And the world’s biggest oil-producing group has had enough.
In an op-ed for the Middle East Economic Survey last week, OPEC Secretary General Haitham Al Ghais called on those predicting the end of oil to take it a bit easier because these predictions could be dangerous—especially since oil demand is very much not declining as the predictions say.
“Such assertions, despite all evidence to the contrary, are all the more dangerous given their potential to foster energy policies that stoke energy chaos,” Al Ghais said, citing a report by the Economist on, as he put it, “the end of oil.”
Interestingly enough, the Economist has published several articles recently on the topic of peak oil in evidence of the importance of the topic and, perhaps more importantly, the importance that some appear to see in trying to convince the public that human civilization can and should survive without oil. But, asks OPEC’s head, “What if investments in supply fall as a result, but demand for oil keeps increasing, as we are seeing today?”
This is not a new argument. In fact, it is OPEC’s main argument in the war of words with organizations such as the International Energy Agency, which last year called “the beginning of the end” of the oil and gas era, forecasting demand for all three hydrocarbon fuels would peak by 2030.
Related: Russia's LNG Expansion Plans Hit the Wall
The International Energy Agency is also the outlet that just recently forecast sales of EVs—a major factor for oil demand destruction according to all predictions—will boom this year, even though sales data from the first three months of the year shows a marked slowdown. Also, it was just revealed by UBS that Norway, which has the highest per-capita penetration rate in EVs, has not moved the needle on oil demand at all since it started on its electrification journey.
OPEC has repeatedly argued that such forecasts are not grounded in reality and that amplifying them could sap new investment in oil and gas supply that the world needs. This, in turn, would eventually lead to a deficit and higher prices, which no consuming country would want to experience.
In the MEES op-ed, however, Al Ghais went a step further, calling transition advocates out on their change of priorities. “Although the main goal of the Paris Agreement on climate change is to reduce emissions – not to choose energy sources – it feels like this has been forgotten,” the OPEC chief wrote. It has been “replaced by rigid narratives to reduce demand for hydrocarbons without thinking through the effects on energy security, socio-economic development, or reducing energy poverty,” he said.
Once again, it is quite difficult to argue with this assertion in light of strong transition NGO opposition to carbon capture, for example. The technology, while not tested at scale and still quite expensive, exists to slash emissions from oil and gas production, and power generation. Yet those NGOs seem to be more concerned with the fact of the oil industry’s existence than the generation of emissions.
The topic of energy poverty that Haitham al Ghais notes in his op-ed is another important one—and a topic that climate activists only discuss in the context of the cheap wind and solar narrative. The question of why, if they are so cheap, the poorest countries in the world have not embraced these two, remains outside the spotlight, however.
Energy poverty is a huge concern in most of the world, population-wise speaking. There are hundreds of millions of people with no access to any electricity, let alone one generated by wind and solar. A lot of these people want to be able to produce their own electricity from their own national resources, yet lenders such as the International Monetary Fund and the World Bank are limiting access to funding for projects unless they are “aligned” with transition targets—essentially dooming these people to energy poverty.
At least that would have been the case had the oil industry not decided to go with its gut and its knowledge and continue investing in new supply. The problem with this is that the rate of investment is slowing down while oil demand isn’t, which is why OPEC has been warning about underinvestment so insistently.
Of course, a counter-argument could be made that the producers’ cartel is grasping for straws in a world where oil is on its way out—only it would not reflect reality. Just look at Norway and its EVs.
By Irina Slav for Oilprice.com
///////////////
TotalEnergies CEO calls on policymakers to “face reality” as world oil demand rises
Francois de Beaupuy, Bloomberg - April 29, 2024
www.worldoil.com/news/2024/4/29/totalenergies-ceo-calls-on-policymakers-to-face-reality-as-world-oil-demand-rises/
(Bloomberg) – The world could still be using more than 100 MMbpd of oil by 2040, making it vital to start preparing and adapting for a warmer climate, said TotalEnergies SE Chief Executive Officer Patrick Pouyanne.
Patrick Pouyanne at the Abu Dhabi International Petroleum Exhibition and Conference. (Photographer: Christopher Pike/Bloomberg)
The warning from the outspoken 60-year-old Frenchman carries some weight, as under his leadership, TotalEnergies is investing $5 billion a year into low-carbon fuels and renewables, while remaining a major supplier of oil and gas. The fact is that “it will take time” to build a clean global energy system that can satisfy the demands of a growing population, Pouyanne said.
“The responsibility for political leaders is to work seriously now on adaptation” to higher temperatures, the CEO said in an interview at TotalEnergies’ headquarters near Paris on Wednesday. “It doesn’t mean that you should give up” on the Paris climate targets, but policymakers must face reality, he said.
World oil consumption rose above 100 MMbpd in 2023 and is expected to keep rising this year and next, according to the International Energy Agency.
Achieving net zero emissions by 2050 requires tripling renewable energy capacity by the end of the decade and more than doubling green investments to $4.5 trillion a year globally by the early 2030s, the IEA said last year.
“Maybe it’s achievable,” Pouyanne said, but it requires global coordination. Europe’s current policies aren’t supportive of the efforts of companies such as TotalEnergies, which has been criticized by governments, investors and climate groups even as it’s directing a third of its annual capital expenditure into clean power and low-carbon fuels such as biogas, Pouyanne said.
While the French company’s $5 billion annual investment in clean energy dwarfs that of its U.S. peers, European investors still “see the glass half empty” and have been selling some of their holdings in oil companies, Pouyanne said.
Europe’s regulators are putting pressure on financial institutions “to go quicker than society” in the shift to net zero, making the region’s banks reluctant to finance fossil fuel projects for fear of getting caught on the wrong side of sustainability rules and climate litigation, Pouyanne said. However, U.S. lenders are happy to pick up the baton, he said.
TotalEnergies, which is marking the 100th anniversary of its founding this year, needs to keep producing both oil and gas and clean energy for many years to come, Pouyanne said.
The company must continue to grow its oil and gas production with new projects in places such as the U.S., Qatar, Iraq, Brazil and Uganda. Strong earnings and dividend payments from fossil fuels are needed to keep investors happy and fund the growth of clean power until that business can become cash-flow positive in 2028, Pouyanne said.
TotalEnergies sees power, renewables and synthetic fuels accounting for 20% of total energy sales by 2030, up from 8% last year. This can be achieved without large and expensive acquisitions, Pouyanne said. Even so, the company’s strong balance sheet puts it in a perfect position to buy parts of projects from wind and solar farm developers that are currently grappling with big increases in financing costs, he said.
With shrinking world reserves new discoveries are becoming more meaningful. Last year 41% of new discoveries came from deepwater. That number will continue to grow as most of the land based discoveries dwindle as deepwater areas grow. These areas include Brazil, Guyana-Suriname, and, Namibia. More drillships will needed to meet growing future demand for reliable energy and turn these region's potential into profits.
And now this...
OPEC Chief Challenges Reports Predicting Demise of Oil Demand
By Irina Slav - Apr 29, 2024, 7:00 PM CDT
oilprice.com/Energy/Crude-Oil/OPEC-Chief-Challenges-Reports-Predicting-Demise-of-Oil-Demand.html
- In an op-ed for the Middle East Economic Survey last week, OPEC Secretary General Haitham Al Ghais called on those predicting the end of oil to take it a bit easier because these predictions could be dangerous.
- OPEC has repeatedly argued that forecasts that predict a rapid end to the era of oil are not grounded in reality and that amplifying them could sap new investment in oil and gas supply that the world needs.
- The rate of investment in new oil projects is slowing down while crude oil demand has remained robust.
Reports on what authors like to call the end of the oil era were a frequent reading some 20 years ago. At the time, the focus was peak supply and the consequent need to find alternatives to the fuel that powers the world.
Now, 20 years later, there is once again a surge in reports and analyses predicting the end of the oil era. This time, however, they focus on the death of demand driven by alternative sources of energy. And the world’s biggest oil-producing group has had enough.
In an op-ed for the Middle East Economic Survey last week, OPEC Secretary General Haitham Al Ghais called on those predicting the end of oil to take it a bit easier because these predictions could be dangerous—especially since oil demand is very much not declining as the predictions say.
“Such assertions, despite all evidence to the contrary, are all the more dangerous given their potential to foster energy policies that stoke energy chaos,” Al Ghais said, citing a report by the Economist on, as he put it, “the end of oil.”
Interestingly enough, the Economist has published several articles recently on the topic of peak oil in evidence of the importance of the topic and, perhaps more importantly, the importance that some appear to see in trying to convince the public that human civilization can and should survive without oil. But, asks OPEC’s head, “What if investments in supply fall as a result, but demand for oil keeps increasing, as we are seeing today?”
This is not a new argument. In fact, it is OPEC’s main argument in the war of words with organizations such as the International Energy Agency, which last year called “the beginning of the end” of the oil and gas era, forecasting demand for all three hydrocarbon fuels would peak by 2030.
Related: Russia's LNG Expansion Plans Hit the Wall
The International Energy Agency is also the outlet that just recently forecast sales of EVs—a major factor for oil demand destruction according to all predictions—will boom this year, even though sales data from the first three months of the year shows a marked slowdown. Also, it was just revealed by UBS that Norway, which has the highest per-capita penetration rate in EVs, has not moved the needle on oil demand at all since it started on its electrification journey.
OPEC has repeatedly argued that such forecasts are not grounded in reality and that amplifying them could sap new investment in oil and gas supply that the world needs. This, in turn, would eventually lead to a deficit and higher prices, which no consuming country would want to experience.
In the MEES op-ed, however, Al Ghais went a step further, calling transition advocates out on their change of priorities. “Although the main goal of the Paris Agreement on climate change is to reduce emissions – not to choose energy sources – it feels like this has been forgotten,” the OPEC chief wrote. It has been “replaced by rigid narratives to reduce demand for hydrocarbons without thinking through the effects on energy security, socio-economic development, or reducing energy poverty,” he said.
Once again, it is quite difficult to argue with this assertion in light of strong transition NGO opposition to carbon capture, for example. The technology, while not tested at scale and still quite expensive, exists to slash emissions from oil and gas production, and power generation. Yet those NGOs seem to be more concerned with the fact of the oil industry’s existence than the generation of emissions.
The topic of energy poverty that Haitham al Ghais notes in his op-ed is another important one—and a topic that climate activists only discuss in the context of the cheap wind and solar narrative. The question of why, if they are so cheap, the poorest countries in the world have not embraced these two, remains outside the spotlight, however.
Energy poverty is a huge concern in most of the world, population-wise speaking. There are hundreds of millions of people with no access to any electricity, let alone one generated by wind and solar. A lot of these people want to be able to produce their own electricity from their own national resources, yet lenders such as the International Monetary Fund and the World Bank are limiting access to funding for projects unless they are “aligned” with transition targets—essentially dooming these people to energy poverty.
At least that would have been the case had the oil industry not decided to go with its gut and its knowledge and continue investing in new supply. The problem with this is that the rate of investment is slowing down while oil demand isn’t, which is why OPEC has been warning about underinvestment so insistently.
Of course, a counter-argument could be made that the producers’ cartel is grasping for straws in a world where oil is on its way out—only it would not reflect reality. Just look at Norway and its EVs.
By Irina Slav for Oilprice.com
///////////////
TotalEnergies CEO calls on policymakers to “face reality” as world oil demand rises
Francois de Beaupuy, Bloomberg - April 29, 2024
www.worldoil.com/news/2024/4/29/totalenergies-ceo-calls-on-policymakers-to-face-reality-as-world-oil-demand-rises/
(Bloomberg) – The world could still be using more than 100 MMbpd of oil by 2040, making it vital to start preparing and adapting for a warmer climate, said TotalEnergies SE Chief Executive Officer Patrick Pouyanne.
Patrick Pouyanne at the Abu Dhabi International Petroleum Exhibition and Conference. (Photographer: Christopher Pike/Bloomberg)
The warning from the outspoken 60-year-old Frenchman carries some weight, as under his leadership, TotalEnergies is investing $5 billion a year into low-carbon fuels and renewables, while remaining a major supplier of oil and gas. The fact is that “it will take time” to build a clean global energy system that can satisfy the demands of a growing population, Pouyanne said.
“The responsibility for political leaders is to work seriously now on adaptation” to higher temperatures, the CEO said in an interview at TotalEnergies’ headquarters near Paris on Wednesday. “It doesn’t mean that you should give up” on the Paris climate targets, but policymakers must face reality, he said.
World oil consumption rose above 100 MMbpd in 2023 and is expected to keep rising this year and next, according to the International Energy Agency.
Achieving net zero emissions by 2050 requires tripling renewable energy capacity by the end of the decade and more than doubling green investments to $4.5 trillion a year globally by the early 2030s, the IEA said last year.
“Maybe it’s achievable,” Pouyanne said, but it requires global coordination. Europe’s current policies aren’t supportive of the efforts of companies such as TotalEnergies, which has been criticized by governments, investors and climate groups even as it’s directing a third of its annual capital expenditure into clean power and low-carbon fuels such as biogas, Pouyanne said.
While the French company’s $5 billion annual investment in clean energy dwarfs that of its U.S. peers, European investors still “see the glass half empty” and have been selling some of their holdings in oil companies, Pouyanne said.
Europe’s regulators are putting pressure on financial institutions “to go quicker than society” in the shift to net zero, making the region’s banks reluctant to finance fossil fuel projects for fear of getting caught on the wrong side of sustainability rules and climate litigation, Pouyanne said. However, U.S. lenders are happy to pick up the baton, he said.
TotalEnergies, which is marking the 100th anniversary of its founding this year, needs to keep producing both oil and gas and clean energy for many years to come, Pouyanne said.
The company must continue to grow its oil and gas production with new projects in places such as the U.S., Qatar, Iraq, Brazil and Uganda. Strong earnings and dividend payments from fossil fuels are needed to keep investors happy and fund the growth of clean power until that business can become cash-flow positive in 2028, Pouyanne said.
TotalEnergies sees power, renewables and synthetic fuels accounting for 20% of total energy sales by 2030, up from 8% last year. This can be achieved without large and expensive acquisitions, Pouyanne said. Even so, the company’s strong balance sheet puts it in a perfect position to buy parts of projects from wind and solar farm developers that are currently grappling with big increases in financing costs, he said.