Guest smack-down by David Middleton
Hat tip to Clyde Spencer…
The Oil Age Is Coming to a Close
Noah Smith
Bloomberg October 29, 2019(Bloomberg Opinion) — The oil industry faces an uncertain future. The world is rapidly waking up to the severity and immediacy of the threat from climate change. At the same time, electric vehicles are getting cheap enough to compete with internal-combustion engines. BloombergNEF expects electrics to begin taking over in about a decade:
[…]
Yahoo! Finance
Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
Bloomberg
Which is it?
Does “the oil industry face an uncertain future”? Or is “the Oil Age coming to an end”? “The Oil Age is coming to an end” doesn’t sound very uncertain to me. Or maybe Former Professor Smith listened to too many Doors albums in college (I know I did)…
The future’s uncertain and the end is always near…
Jim Morrison, The Doors, Roadhouse Blues, 1970
Before “electrics begin to take over,” they first need to top Ford F-Series pickup trucks.
EV’s may be taking over in the parking lots of the ivory halls of academia and LaLa Land of BNEF blogging, but the developing world likes SUV’s.
Oct 23, 2019
SUVs: A Reality Check On Oil Use And CO2 EmissionsJude Clemente Contributor
Energy
I cover oil, gas, power, LNG markets, linking to human development.The never-ending spirit of wanting a more enjoyable and easier life is a constant reality that far too many of us involved in our energy-environment discussion unwisely choose to ignore.
A perfect example of this is SUVs: gas-guzzling Sport Utility Vehicles that are increasing both oil demand and CO2 emissions.
Much bigger, much safer, and much more fun to drive, the harsh fact for some is that people love SUVs.
The Paris-based International Energy Agency gives us a much-needed reality check on SUVs, oil demand, and the corresponding CO2 emissions.
SUVs are becoming more popular in the emerging economies of the world, where urbanization and expanding middle classes are giving more people more access to buy.Many see SUVs as a symbol of wealth and status.
And why not?
Even environmentalists Alexandria Ocasio-Cortez and Mayor De Blasio love oil-swilling SUVs.
[…]
Forbes
Jude Clemente actually understands the energy industries… as opposed to the to the former professor of finance, who seems to be clueless about… everything…
Meanwhile, concerns over groundwater pollution are leading to growing calls for a ban on hydraulic fracturing, the main source of increased U.S. production during the past decade.
Former professor of finance
The former professor of finance is almost half right. Frac’ing is the leading “source of increased U.S. production during the past decade.” The second-leading source is the deepwater of the Gulf of Mexico, where “shale” scale frac’ing isn’t a factor (1)(2)(3).
However “concerns over groundwater pollution” are only “leading to growing calls for a ban on hydraulic fracturing” from left-wing (Marxist) politicians. There is no evidence whatsoever that frac’ing is any threat to groundwater.
Can anyone guess how many times I’ve heard this sort of thing the past 38 years?
Reduced demand for crude will send prices plunging, cutting into profits at oil extractors and refiners. Share prices of oil majors have drifted lower in recent years:
[…]
Workers in the energy industry need to be prepared for this shift. For knowledge workers, such as geologists, chemists and software engineers, this means cultivating technical skills that can be useful in other fields such as information technology, pharmaceuticals, health care or finance.
Former professor of finance
Clearly, this former professor of finance doesn’t know Jack Schist about the oil industry. The oil & gas business follows a “boom & bust” cycle. High oil prices reduce demand relative to supply. Low oil prices reduce supply relative to demand, ad nauseum. Shares of most oil companies have been beaten down since 2014-2015 because the price crash destroyed a lot of equity. If “reduced demand for crude” sends “prices plunging,” it will spur an increase in demand. That’s how business works. Maybe they don’t teach this in former professor of finance school.
While the oil industry certainly employs some chemists and software engineers (although, I’ve never worked for a company that did), the “knowledge workers” primarily consist of petroleum engineers, geologists, geophysicists, accountants, lawyers, petroleum land management professionals and compliance specialists. At least he mentioned geologists. Cyclical downturns have led to several episodes of layoffs since 1986 and the voluntary exodus of many “knowledge workers”. Most of the geoscientists (geologists and geophysicists) I started out with at Enserch Exploration in 1981 left the industry in the late 1980’s through 1990’s. Most went into hydrology/environmental/engineering geology, a few became schoolteachers, one became a NASA astronaut and is currently the Director of the USGS. I know of maybe 2 or 3 who went into finance… And none who went into pharmaceuticals or health care. Otherwise, no schist Sherlock… Back up plans are sort of de rigueur in this business.
This is where the former professor of finance went full Tropic Thunder.
Lower-skilled workers and fracking boom towns, however, will have a much harder time landing on their feet.
[…]
The problem will be compounded for those who live in the small towns and cities that grew up around oil-extraction sites. Americans have been less willing to move from place to place in search of work in recent decades, and big cities are no longer lands of opportunity for those without an advanced education. The decline of the oil industry may leave the country dotted with yet more decaying half-empty ghost towns, unable to pay for the upkeep on their infrastructure, afflicted with drugs and alcoholism and suicide.
Governments at the local, state and federal levels should work to prevent this unhappy future. People in decaying oil towns can be given vouchers to help them to move, perhaps to a nearby thriving college town.
Former professor of finance
Did I mention that this former professor of finance doesn’t know Jack Schist about the oil industry? What does he think Houston, Midland, Tyler and a whole lot of other oil towns looked like in the late 1980’s, early 1990’s and other bust cycles?
Did he seriously suggest giving hard-working blue collar workers “vouchers to help them move to… a nearby thriving college town”?
But… Then he sped right on past full Tropic Thunder.
The march of technology means oil’s days are numbered.
Former professor of finance
The oil industry is a helluva lot more high tech than wind and solar. Due to advances in seismic imaging technology over the past 40 years, we can literally “see” oil & gas accumulations more than 30,000′ below sea level in geological settings that couldn’t even be imagined, much less imaged, just 10 years ago. Due to advances in drilling technology, we can now drill highly precise directional wells in over 10,000′ water depths, through thick layers of salt, to hit pinpoint targets we didn’t even know were there just a few years ago.
The “march of technology” means that “oil’s days are numbered in decades, if not centuries.
I have read a lot of truly idiotic articles about the demise of the oil industry, often sponsored by Bloomberg New Energy Finance, but this one takes the cake. The former professor of finance earns a Distinguished Ron White Cross with a The Stupid it Burns Service Device and a Billy Madison Lifetime Achievement Award…
How about some Morrison Hotel?
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
The former professor of finance might have a point in Norway where a sense of oil-guilt is afflicting the precious young’uns in Oslo who want the oil business that pays for their welfare shut down by tea time, imagine their smart phones and e-bils (EVs) will work just fine hanging off windmills and haven’t learned yet the benefits of not biting the hand that feeds or not shitting in one’s own nest.
Elsewhere, in the real world, however I agree; the former professor of finance sounds like he is trying to convince himself that disruptive unicorn farts are about to become scalable and cheap.
And when the Noggie oil adventure is killed off by the green blob, I doubt very many of those vouchers to travel to a thriving college town will be taken up because a lot of the natives don’t like moving
Erny72
When I see pieces such as written by Smith, I don’t see an attempt to try to convince himself of anything. Instead, I see propaganda intended to stampede the lemmings. That is, he knows it is false; however, he is either writing it at someone’s bidding ($), or believes that the end justifies any means, and willfully lies to support his naive ideology.
Bloomberg himself is making 100’s of millions off of solar and wind. His news organizations will denigrate the oil industry at every chance they get.
He had ONE THING RIGHT. : “big cities are no longer lands of opportunity”.
” BloombergNEF expects electrics to begin taking over in about a decade:”
Bearing in mind that Bloomberg will have to wait until there is enough coal being mines mined in order to produce the electricity for his electric cars.
Cheers
Roger
The Norwegian economy runs on hydroelectricity, they didn’t need the oil mony to keep the lights on so they were able to bank a lot of it.
Norway depends on oil revenue to fund their “welfare state”…
https://www.norskpetroleum.no/en/economy/governments-revenues/
Norway expects to “earn” NOK 238 billion ($26 billion USD) this year from its oil production. Norway spends 25% of its $400 billion GDP on welfare programs.
A nation that funds $100 billion in welfare with $26 billion of oil revenue isn’t banking much of anything.
I said ‘were able’ past tense. Their oil and gas fields aren’t what they were, and they have some adjustments to make in their social programs to make when they’re back to fishing and forestry.
Compare them to a Denmark that imports oil, gas, and hydro, and they look pretty solid.
I find anyone from a hydro-power rich area living off a million square miles if ocean being smug about their personal carbon footprint fairly annoying.
It’s silly to be proud of something that’s largely an outcome of geography and local climate. Sillier still to make it into a political fight between BC, QC, and AB in Canada. BC is a lot like Norway, Alberta is a lot like Denmark. Except for the oil, so BC can suck it.
Their oil revenue is five times what it was in the 1980’s.
https://www.norskpetroleum.no/en/economy/governments-revenues/
The only reason it was higher from 2008-2014 was the price of oil.
Yes, Norway is about halfway through their recoverable known reserves now, which is what I meant by ‘not what they were’, and of course there’s the price collapse.
Yet somehow they put some money in the bank, while Canada seems to have spent it all. I wouldn’t say ‘Alberta’, because of equalization payments cleaning the cupboard bare.
‘The world is rapidly waking up to the severity and immediacy of the threat from climate change.’
This is absolutely false; the exact opposite of the truth.
They just forgot “Activists” as the end, there…
How then can that sentence be rewritten to reflect reality, Gamecock?
The world is rapidly waking up to the absurdities and agendas driving climate change propaganda.
Regardless, it’s not happening fast enough.
Regards,
Bob
I keep hearing stuff like this repeated throughout the media. Never any evidence in support, just the bald claim.
They really must think that if they keep saying it it will be true.
According to the Communists, oil is simply withering away, is naturally & quickly being replaced by supposedly better, more low cost alternatives.
So then why the constant attacks on an energy source that is supposedly on it’s way out?
No, it is correct.
“Severity” = “Somewhere between ‘Not severe at all’ and ‘Negligible'”.
“Immediacy” = Either “Never” or “In a few centuries (or possibly millennia, see ‘The NEXT glacial maximum’)”.
“….EV’s may be taking over in the parking lots of the ivory halls of academia and LaLa Land of BNEF blogging, but the developing world likes SUV’s….”
Doesn’t matter if they love them. If they’re banned….
In the developing world?
The amazing Bangladesh story is how the economy and quality of life in the most hopeless country on earth gripped with tragic poverty and reduced to exporting cheap labor to the middle east were suddenly elevated by the discovery of significant natural gas reserves.
My friends with electric cars in Northern California just got a huge wake up call. Their cars are useless when the power is out. The power company says the next 10 years will be more of the same.
I guess we’ll have a break from some of them California world experts posting about how insane it is to buy plugin hybrids, because who needs to cart around a stupid gasoline engine when there’s always electricity everywhere?
Alcohol was banned in the US between 1920 and 1933 by the 18th Amendment. Look at how well that worked out.
Using the Constitution for social engineering goes against the spirit of the document, which is to tell the government, not the people, what it can and cannot do.
That’s not at all reliable. There’s Moore’s law about the development of computers. Opposite to that, there’s Eroom’s law about drug development.
Blind faith, that technology will rescue us from everything, is just stupid. In particular, diving into a course of action, while depending on the development of unavailable technology, is suicidal.
Then there’s the all-too-prescient Augustine’s Law Number XVI: “In the year 2054, the entire defense budget will purchase just one aircraft. This aircraft will have to be shared by the Air Force and Navy 3-1/2 days each per week except for leap year, when it will be made available to the Marines for the extra day.”
I think we’re right on track for that one.
B-52s will still be available.
I LIKE it when people invent new things and utilize technology to make things better for all. However, the tendency of people to prophesy some particular desired outcome based on their own emotions or desires drives me absolutely nuts. The reason markets work, the reason the invisible hand works, is because these new things compete against the old thing, and the better thing wins. The US was founded on the idea that a free society with limited government is primary, which leads to the economic system of Capitalism, in which people, if free to make a their own choices and to voluntarily associate with others to invest and form corporate interests, who have property rights and the force of law to protect them and their interests, will generally choose the better thing. They still want clean water and air. Long term pollution choices are eventually costed by free people. But generally, for things to win in free competitive contests, they must not be arbitrarily more expensive. They must be more economical and the more efficient. This is how oil and gas won out over wind power in the first place.
People who think their own personal opinions combined with political power can successfully supplant the free and voluntary decisions of everyone else, are crazy, stupid Socialists and totalitarians. Our (road-to-hell-is paved-with) Good intentions cannot run a successful command economy, no matter how badly a person may want it. This is why Socialism fails, every time it has been tried at national scales. And yet, we keep churning out young people who, without the proper training in history of such things, believe it will work the next time, when THEY are in charge. These are people who vote like Californians, and at the same time insist that what happened in Venezuela cannot possibly happen in the US. I warn them, that IF what happened to Venezuela also happens in the US, it would make that look like a picnic. It would be one of the ugliest and most deadly chapters in human history. I truly believe most people will not want that result. Yet many will vote for these asinine socialists like Bernie Sanders and AOC and Elizabeth Warren, who now openly express their hostility to Capitalism and free choices and free markets, and who think they can run a command economy.
EV’s are like mopeds they are fun to drive until one of your friend see you 🙂
I wonder just what people think electric cars are built of? Fairy dust and unicorn farts?
“Think” – you think they think?
Peak Media is upon us with declining readership, declining trust, blurred lines of news, fake news, agenda news, paid news, and opinion news. Agenda science didn’t help either.
“Peak Media”–I love it! But unlike “peak oil,” which keeps receding into the future, peak media is already in the rear-view mirror.
Our local newspaper keeps getting smaller. They regularly run half-page ads about themselves claiming they are an antidote for fake news. That fills in some of the unsold space in the advertising section.
It’s gotten so bad for them that they are actually running some pretty conservative editorials in an effort to cut circulation losses. However they’re still pushing the climate change narrative.
Just to make it a bit more clear to the former Professor of Finance –
Might want to add in the sales figures for the rest of the pickups into that chart that has the best-selling Ford against all the EVs
You are going to have to raise the height of that chart.
2019 quarterly sales of full size pickup trucks:
https://www.goodcarbadcar.net/2019-us-pickup-truck-sales-figures-by-model/
The Prof is wrong on electric cars replacing ICE cars, trucks and SUVs.
EVs in making and operating them, without subsidy, is too expensive and the fad may fade.
But a remarkably regular financial pattern is completing and that is a great financial bubble.
This is the sixth since the first–the South Sea Bubble of 1720.
Crude oil has been a commercial product since the late 1860s. The 1873 Bubble was number 4, with 1929 being number 5.
The typical post-bubble contraction ran for some 20 years.
On the last two post-bubble contractions, crude’s real price fell to around 1/3rd of the high.
That would be on the annual average price.
Real prices for base metals also suffer.
So the resource industry will likely contract over the next decade or so.
The usual 3 to 4 year business cycle will likely continue, with weak recoveries and noticeable recessions.
The epitome of grand driving in 1929 were the V-16 and V-12 cars, and even those who could still afford them would not buy them. Too ostentatious.
Like electric cars.
Tulips – they were a “bubble”, too and then – not so much.
This is probably more true:
‘The world is rapidly waking up to the severity and immediacy of the threat from climate
changeactivism.’This defense of the oil industry is spot on, but only scratches the surface.
To emphasize the “you can’t fix stupid,” I had a discussion with an EV fanatic (owns a Tesla) about this. His position was ICE vehicles would be obsolete in just five years. I pointed out to him that the best selling vehicle is the Ford F-150, the second is the Dodge Ram, the third is The Chevrolet Tahoe, and half if the remaining top ten are SUVs. He claimed the problem was solved, they have already started making EV pickup trucks.
True, but I had read about them. Capable of carrying a decent size payload, towing, going more than a hundred miles between charges, or less than a hundred thousand dollars – pick ONE.
I simply asked, if EVs could be made with power sufficient for a heavy-duty pickup, i.e., steel construction, big payload-capacities, and towing ability, why are EVs like Tesla made with as much lightweight plastic as possible, have limited driving distance, and are expensive? He was still convinced E-pickups would be on the market any day.
But as I said, all this merely scratches the surface if the oil industry. The civilized world is oil-based, from the clothes we wear to the food we eat, huge changes would be required if the oil business ceased to exist. You couldn’t make an EV without plastic. Well, I guess you could if you used the first type of plastic that was created (bakalite), but it’s made from coal, so…..
Even aspirin is synthesized from oil. There aren’t enough willow trees in the world to supply us with the aspirin we consume, and most all other pharmaceuticals are synthesized from oil as well. Get rid of the oil industry, and we really will be living in caves, fighting over scraps of squirrel meat, with a life expectancy of 42.
I thought that was the whole purpose of the green movement, to negate all the technological and societal advances of the last 300 years?
You betcha, Andrew.
To the Elites, whose Watermelon Minions serve as their useful idiots, getting rid of oil and therefore killing off a major portion of the global population, is a feature not a bug.
The survivors will be skilled in 18th and 19th Century technology. Their minions? Not so much.
The Amish might take passing notice that almost everyone else is gone.
Even if a new battery appeared tomorrow that had twice the power density, charged in half the time, had twice the lifetime, and cost half as much as the best batteries today, EVs still would not replace ICE vehicles for many decades. Why? Because we simply don’t have the electric infrastructure (power lines and substations) to support charging all those batteries, not to mention power generation. People who spout this nonsense have no idea what they are talking about.
Paul, good point. Not sure if you intended to include it but on only has to look at the network of gas stations all over the country that would take a lot of resources, money and worse yet time to just duplicate the fuel supply for ICE vehicles not to mention the additional facilities to “fuel up” given the relative time to charge a battery. Beyond that think of all the fossil fuels used by industry, heating homes, ships an Rail roads moving stuff around the world, pipelines, military vehicles, airplanes, chemicals and plastics, and who knows what else.
Clearly they have not thought this through very far.
Leftist love to project their fantasies and beliefs as facts and future happenings.
Bingo!!
😐 Since declaring her candidacy in May 2017, Ocasio-Cortez’s campaign heavily relied on those combustion-engine cars — even though a subway station was just 138 feet from her Elmhurst campaign office.
She listed 1,049 transactions for Uber, Lyft, Juno and other car services, federal filings show. The campaign had 505 Uber expenses alone.
In all, Ocasio-Cortez spent $29,365.70 on those emissions-spewing vehicles, along with car and van rentals — even though her Queens HQ was a one-minute walk to the 7 train.
The campaign shelled out only $8,335.41 on 52 MetroCard transactions
Bloomberg is strange (ht/ Doors):
https://youtu.be/GJY8jJkDoMY
Articles like this are not descriptions of reality, but are attempts to manufacture the reality they want to see.
icisil
+1
Former Assistant Professor Smith to be pedantically correct – let’s not give him unearned status.
I was in Albuquerque recently at a hotel when I noticed a Chevy Bolt drive in to the lot. It had a Topanga Cyn (Calif)license plate surround. I had a house in Topanga some years back and I knew that the distance to Albuq from Topanga is approx 750 miles. I asked the driver how long it took him to get to Albuq. 4 DAYS. He had to charge with 110 for ~8-10 hours for a full charge.
I told him I would buy an EV when everything on the car was manufactured with wind and solar.
Mad Mac
Four days 😂😂 the cost of charging would probably be more then the cosr of petrol/diesel.. Also, I wonder what source produced the 10 hours of electricity need to charge his car
I made very similar drive in 1987 with a couple buddies in under 12 hours. UNM to Santa Monica Pier. We were in a new Honda Prelude SI. We got around 30 MPG and gas was about 1.00 a gallon . we spent $80 on gas for the entire trip. It was spring break, so if we had the same crappy 4 day journey as the EV guy, we would have only driven there and back. paying for hotels all along the way and that would have really sucked. Another simple illustration about how really stupid it is to believe that EV will replace ICE anytime in the near future.
750 miles would tale:
175 hours at 110v charging
19 hours on 240v 48a charging
2 hours at Tesla 130 kw charging
1 hour or so total at Tesla 250 kw charge rate. About $30 to charge, maybe $20 if starting out on a full charge.
Most people keep them plugged in to do a full overnight charge at home, so the first 250 miles would take zero additional time.
and the time and effort it takes is to plug and unplug, easy as a cordless drill.
Usually meal breaks are 30 minute charge stops, and at motels that offer overnight charge plugs. Going off the beaten track is a bit more challenging than on major routes.
I wouldn’t take an EV up into the Yukon in winter, and they’ll never be as cheap to buy new as a gas or diesel vehicle. But the cost of energy for driving the car is like coffee money, and the motor has one moving part.
If I had enough money to justify a Tesla, I would probably fly to avoid the hassle of charging. Would rather spend the money wisely on a twin engine ICE powered boat.
We don’t often do 750 mile trips by car, but when we do they don’t take four days. A Volt or Bolt sells for not much less than the base model Tesla, but there’s really no comparison in how they drive.
The Mythbusters did a comparison fly vs drive over 400 miles, I think the flight saved 15 minutes, and it’s a whole lot safer than any car.
All the children are insane, the end
https://youtu.be/VScSEXRwUqQ
Robbie Krieger’s haunting psychedelic guitar riffs make we want to find a straight-haired hippie chick and start sway-dancing to the psychadelica.
Kreiger is horribly overlooked as a guitar genius of the Rock era. His Doors work is spectacular
Krieger wrote “Light My Fire”. His guitar riffs in that song are unequaled.
If you expect to do ‘WORK’; that activity that puts food on the table, you’d better have in internal combustion engine.
I just wonder what color the sky is in Noah Smith’s world? They used to lock folks like him away in “funny farms”. Now, they get to write crap like this, and be taken seriously. Progress!
David …
“I started out (with at)? Enserch Exploration in 1981 left the industry in the late 1980’s through 1990’s. ”
Another great post…
“Most of the geoscientists (geologists and geophysicists) I started out with at Enserch Exploration in 1981 left the industry in the late 1980’s through 1990’s. Most went into hydrology/environmental/engineering geology, a few became schoolteachers, one became a NASA astronaut and is currently the Director of the USGS. I know of maybe 2 or 3 who went into finance… And none who went into pharmaceuticals or health care.”
Oops, my bad…..D’OH !
How many went to “thriving college towns”? And what did they do there, pour star bucks for the AOCs of the world getting economics degrees?
I’m still struggling with the phrase “thriving college towns”… My recollection is that, apart from a small area around Yale University, New Haven CT was basically Bridgeport… AKA a schist hole.
In fact – the age of petroleum has really jsut begun: https://insuspectterrane.com/2016/05/25/the-petroleum-age-has-just-begun/
Infomercial = SPAM
David, are you replying to the Thomas D post?
It appeared rather informative AFAICT.
I read this article on Bloomberg when it ran and considered sending the former professor a note. I decided against it. Multiple articles like this appear on Bloomberg every week. Michael Bloomberg is working overtime to try and discredit and destroy the oil and gas industry. So the only way the dear uninformed former professor can get something printed is to toe the Bloomberg company line. Sad for him. But dangerous for his readers.
I particularly took offense at the surface water contamination issue from fracking. In a prior life back in 1981 I actually fracked wells for Halliburton. Pretty much every study on fracking has reached the same conclusion- fracking is safe if conducted as designed. If surface ground water becomes contaminated it’s because somebody is breaking the law concerning the disposal of produced water or other fracking by products. Its like banning cars because some people choose to drive drunk.
Every pro EV article ignores the incremental electric power generation required for what is now 250 million vehicles. Also there is the electric grid. From what I’ve read it can’t take the additional load.
I’ve heard that ‘grid can’t take the load’ thing before. My house has a 6000 watt stove, a 6000 watt clothes dryer, and a 4500 watt air conditioner.
And a 1400 watt charger for the Prius Prime that runs for a couple hours a day that the utility hasn’t complained about once.
There’s a 42,000,000 watt bitcoin mining operation north of town that hasn’t killed the grid, either. That 42 MW could charge the Prime in 3/4 of a second, but probably that would spectacularly void the battery warranty.