The Looming Oil Shock

Guest “You get what you pay for” by David Middleton

Hat tip to Jan from the Netherlands…

It’s Too Late To Avoid A Major Oil Supply Crisis
By David Messler – Jun 17, 2021

There are a number of observable trends in oil supplies and by extension prices, presently. I am going to discuss one of them in this article. A lack of capital investment in finding new supplies of oil and gas. A favorite analogy of mine comes to mind, the ship is nearing the dock. In nautical parlance that means the time for course corrections is at an end. So we shall see if that is the case for oil. The massive “ship” that is world oil demand is on an unalterable collision with supplies that will have profound implications for consumers. This key metric reveals what the future is likely to hold for our energy security as the world continues to recover from the virus to those who will listen. The level of drilling and by extension capital investment is insufficient and has been for a number of years to sustain oil production at current levels. It’s no secret that even with the lower break-even costs for new projects thanks to cost-cutting by the industry the last few years, oil extraction is a capital-intensive business. The chart below from WoodMac, an energy consultancy, shows just how severe the decline in capex has been.

The message to oil and gas companies has been pretty clear from the market, investment funds like Blackrock seeking green “purity” in the allocation of financing of new energy sources, and government edicts mandating carbon intensity reduction across the entire swath of society, and a transformation to renewable energy, that new supplies of oil and gas are not wanted.

[…]

Oil Price Dot Com
Annual oil extraction CapEx is ~$600 million short. WSJ

[…]

In fact, an article carried in the Wall Street Journal noted that “Planned investment in oil supply globally falls about $600 billion short of what will be needed to meet projected demand by 2030, according to JPMorgan Chase & Co. analyst Christyan Malek. Pressure to deliver cash to shareholders, partly driven by worries about the long-run outlook for oil demand, has limited the industry’s ability to plow money into new projects, he said.” This reasoning was seconded in the article by another analyst.

“It’s just hard to see where the capital is going to come from to grow at a rate that will be needed from 2022,” said David Meaney, founding principal of Assert Capital Management LP. The Dallas-based hedge fund is positioning for higher oil prices through futures and options.”

[…]

To summarize. In an amazingly short period of time, the world has made an irreversible bet on green energy sources – solar, wind, and biofuels – being able to shoulder much of its energy burden. This is a transition without a track record and a very spotty roadmap of implementation. Time will tell if this bet will pay off. If my judgment is correct, we won’t have long to find out.

Mr. Messler is an oilfield veteran, recently retired from a major service company. During his thirty-eight year career he worked on six-continents in field and office assignments. He currently maintains an independent training and consulting practice, and writes on energy related topics.

Oil Price Dot Com

While demand for motor fuels has nearly recovered to pre-Shamdemic levels…

This Week in Petroleum, June 16, 2021. EIA

Jet fuel has been a laggard. Some even asserted that air travel would not recover… Well, that appears to be changing:

Airfare bargains vanishing as airlines seize on surging summer demand
By JUSTIN BACHMAN AND MARY SCHLANGENSTEIN, BLOOMBERG NEWS
TRIBUNE NEWS SERVICE |
JUN 15, 2021

The days of bargain basement airfares are ending as the U.S. vaccine supply unleashes a wave of pent-up travel demand.

A rebound in trips to visit friends and family coupled with flight schedules that remain below 2019 levels means more flyers chasing fewer seats. That’s pushing up trip costs for the peak summer season as carriers reboot revenue management tools — which raise fares in line with stronger seat demand — after a year in which planes often flew with rows of empty seats.

[…]

Chicago Tribune

The Larry Finks of the world didn’t seem to factor supply and demand or the laws of physics into their “irreversible bet on green energy sources – solar, wind, and biofuels – being able to shoulder much of its energy burden.”

While it’s very annoying that these piss-ants think they can change the laws of physics by starving the oil & gas industry of capital, most of the industry is fine with lower CapEx and more free cash flow…

As Inflationary Pressures Mount, Impacts on Oil and Gas Production Could Intensify

BY KEVIN DOBBS
June 13, 2021
U.S. oil producers overall have been reluctant to ramp up output even as crude prices climb and demand rebounds. They have focused on generating cash flow and exercised patience as the economy recovers from the pandemic.

But shortages of supplies needed for drilling and resulting inflation amid coronavirus fallout could extend the trend and keep production in check into 2022. Citigroup Inc. analysts said in a June report that inflation could eclipse 12% in the North American oil and gas sector by the end of 2021, driven up by rising costs for everything from steel to cement.

[…]

All of this helps to explain why U.S. producers reiterated their caution when speaking with investors in recent weeks. Houston-based Marathon Oil Corp., for example, said in May it would hold firm to its $1 billion capital expenditures budget in 2021 even if oil prices keep rising. 

“We will simply generate more free cash flow and further solidify our standing as an industry leader when it comes to capital discipline,” CEO Lee Tillman said during a call to discuss first quarter earnings, echoing several of his peers.

Assuming a $60/bbl West Texas Intermediate oil price, the independent expects to generate $1.6 billion of free cash flow this year, he said. Marathon has a mandate to return at least 30% of cash flow from operations to investors and is on track to return more than 40% in 2021.

[…]

Natural Gas Intelligence

With some commodities traders betting on $100/bbl oil, this classic 1978 Saturday Night Live skit comes to mind:

Jimmy Carter on Inflation

A Special Message From the President of the United States

President Jimmy Carter…..Dan Aykroyd

[ open on Presidential seal ]

Announcer: And now, a special message from the President of the United States.[ dissolve to Oval Office ]

President Jimmy Carter: Good evening. On Tuesday, we Americans will have the opportunity to exercise our role as citizens in a free democracy. Yet, only a third of the eligible voters will actually cast ballots. The other two-thirds are, in a sense, very lucky. Because they do not know what’s going on.

Last week, I delivered a message on inflation. Since then, the dollar has dropped in value, the stock market has sustained record losses, and the whole sow price index increased 0.9%. In other words, our economic system is screwed, blued and tatooed! We just have to face the fact that there is simply no way to fight inflation in a capitolly-intensive, highly-technological, conflict-riddled, anything-for-a-thrill world of today. That’s why, tonight, I want you to try to look for in inflation, an entirely new word: Inflation is our friend.

For example, consider this: in the year 2000, if current trends continue, the average blue-collar annual wage in this country will be $568,000. Think what this inflated world of the future will mean – most Americans will be millionaires. Everyone will feel like a bigshot. Wouldn’t you like to own a $4,000 suit, and smoke a $75 cigar, drive a $600,000 car? I know I would! But what about people on fixed incomes? They have always been the true victims of inflation. That’s why I will present to Congress the “Inflation Maintenance Program”, whereby the U.S. Treasury will make up anyinflation-caused losses to direct tax rebates to the public in cash. Then you may say, “Won’t that cost a lot of money? Won’t that increase the deficit?” Sure it will! But so what? We’ll just print more money! We have the papers, we have the mints.. I can just call up the Bureau of Engraving and say, “Hi! This is Jimmy. Roll out some of them twenties! Print up a couple thousand sheets of those Century Notes!” Sure, all these dollars will cause even more inflation, but who cares? Everyone will be a millionaire!

In my speech last week, I said that America would have to undergo an austerity program, but since this revolutionary new approach welcomes inflation, our economy will be free to grow, and we can spend, spend, spend! I believe the watchwords for the 80’s should be “Let’s Party!” And in that spirit, I’d like to say, “Live, from New York, it’s Saturday Night!”

SNL Transcripts
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ggm
June 20, 2021 6:15 am

This is part of their plan. They know the only way to force unreliable green power on us, is to make oil so expensive that green power becomes commercially viable.

2hotel9
Reply to  ggm
June 20, 2021 6:21 am

One word, Black Market. Prohibition taught us a valuable lesson, you can not stop people from doing what they choose to do, just make it expensive. I see a wave of sabotage against wind and solar coming, people are getting pissed.

Barnes Moore
Reply to  ggm
June 20, 2021 6:31 am

Except that you can’t mine for the raw materials, transport them to a manufacturing facility, power the manufacturing process, do site preparation, perform ongoing maintenance, ultimately decommission and dispose of unreliables without using fossil fuels. So, a price increase in fossil fuels will result in escalating costs of unreliables. Of course, all that means is that our fearful leaders will simply increase subsidies to cover hide the increased costs.

Robert W Turner
Reply to  ggm
June 20, 2021 6:54 am

Lithium is another commodity that has seen underinvestment into new exploration and development over the past two years. There is a “looming deficit” in current stockpiles and the price has not yet adequately reflected this.

https://www.mining.com/lithium-price-hydroxide-back-on-top/

EV batteries will only continue to become more expensive as EV adoption is forced upon consumers and their price competitiveness compared to ICEs will be like chasing a carrot on a stick.

Stevek
Reply to  Robert W Turner
June 20, 2021 7:50 am

I would like to invest in lithium but have not as of yet. Not sure which stocks to buy. Copper also is good investment as the amount of copper needed for EV and charging stations is large. However there is lots of copper in the world, just some grades are low.

Scissor
Reply to  Stevek
June 20, 2021 7:58 am

I think it’s coming to the point where I need to ingest some lithium.

TonyG
Reply to  Stevek
June 20, 2021 11:09 am

Whatever you do, don’t buy d’Anconia copper…

Daddio62
Reply to  TonyG
June 21, 2021 12:10 am

Awesomely pithy!

BARRY HOFFMAN
Reply to  Robert W Turner
June 21, 2021 4:02 am
Carlo, Monte
Reply to  BARRY HOFFMAN
June 21, 2021 6:47 am

The Search for the Magic Battery is at the end?

ATheoK
Reply to  Robert W Turner
June 21, 2021 4:27 am

Failures to build anything but a dilettante urban putt around town vehicles puts lithium in the reckless category of investments. Unless the investor is an expert in straddles and covers all funds in support of lithium.

Shorts on various lithium investments are likely to increase. Right now, significant investors are watching for any industry success or failure.

What will rise in the short term is the demand for lithium ores, mining and refining.
In at least one instance, a recently discovered species preferred habitat is destined to be mined for lithium ore.

Tesla, GM, Ford, and many of the worlds largest automakers are testing the waters for lithium batteries. Their interests will force increased search, mining, refining and construction of lithium products.

That is, even if vehicle batteries remain a niche market, the tools and appliances lithium battery market is consistently expanding.

At least until lithium batteries are determined to be significant causes of household fires.

John Savage
Reply to  ggm
June 20, 2021 7:04 am

The green movement is largely financed through vague untraceable off shore sources. But you will note that its advocacy is never directed at Russia or OPEC. This is the long term game, to cause dingbat Westerners to hate the thing they need the most. Create a scarcity and extort vast sums for a product that the West could produce itself but is too stupid to do it.

Gregory Woods
Reply to  ggm
June 20, 2021 7:41 am

‘Green Power’ will never be commerially viable…take into account the lifetime costs….

beng135
Reply to  ggm
June 20, 2021 8:18 am

Obama the Abomination stated it plainly — “I’m going to bankrupt the coal companies”. Now the next step is beginning — bankrupt/destroy ALL the fossil-fuel companies.

Dennis G Sandberg
Reply to  beng135
June 20, 2021 3:38 pm

Obama made it tough for USA coal, but it’s doing great in China and is scheduled to get better every year for the next five (5) years ensuring a good market until 2050-60.

Reply to  ggm
June 20, 2021 8:47 am

OT but IMPORTANT – COVID WAS MILITARY BIOWEAPON

Hi Jo and thank you for your email and this post.
RUMOR: TOP CHINESE SECRET SERVICE MAN DEFECTED — SAYS COVID WAS MILITARY BIOWEAPON
https://joannenova.com.au/2021/06/rumor-top-chinese-secret-service-man-defected-says-covid-was-military-bioweapon/#comment-2435957
 
REPEATING FROM MY FIRST EMAIL TO YOU – I CONCLUDED THAT COVID-19 DID NOT JUMP – IT WAS PUSHED.
 
Nailed it again.
 
Regards, Allan

More at https://wattsupwiththat.com/2021/06/18/what-it-is-like-to-be-a-climate-realist/#comment-3273452

Reply to  ALLAN MACRAE
June 20, 2021 10:30 am

UNITED STATES SENATE TODAY ANNOUNCED: ‘CORONA IS A LIE’! THE MEDIA IS COVERING UP THE TRUTH.
https://www.bitchute.com/video/UIi6h8B9PYyB/

It is official. The United States Senate today announced: ‘Corona is a lie’! The media is covering up the truth. Big Pharma, Big Tech, Big Media, the WHO and other traitors will be all held accountable. 

Told you so 15 months ago.– on 21&22March2020.

There was no justification for the Covid-19 lockdowns – all we needed to do was over-protect the very elderly and infirm.

Early treatment with HCQ (and even better with Ivermectin) would have saved lives – why were these cheap, effective, approved treatments vilified and effectively banned?

I also predict that the Covid-19 “vaccines” within ~2 year clearly will have caused more harm than good – hope to be wrong, rarely am. Do NOT inject your kids.

Reply to  ALLAN MACRAE
June 20, 2021 12:15 pm

Here is my suggestion for an appropriate immediate action by western governments to retaliate for the release by the Chinese Communist Party (CCP) of the Covid-19 bio-weapon against our countries, at great cost:

By act of Congress, Parliament, etc. immediately cancel ALL debts owed by all western governments and private entities (companies and individuals) to ALL Chinese entities. Then immediately cancel all western currency held by Chinese governments and private entities, if that is possible.

Dennis G Sandberg
Reply to  ALLAN MACRAE
June 20, 2021 3:41 pm

Good idea, but you better hurry, my guess is after seven (7) years of Biden/Harris the US dollar will no longer be the world currency. That could complicate matters.

Tom Abbott
Reply to  ALLAN MACRAE
June 21, 2021 7:02 am

What would hurt the Chicoms as much or more, would be if the world boycotted the upcoming Chicom Olympic Games.

If they did this, it would signal to the Chinese people that their leadership has done something partcularly horrible and the whole world is condemning them for it.

This might facilitate the departure of Dictator Xi.

Boycott the Chicom Olympics.

Attending the Chicom Olympics would be the equivalent of the world attending the Nazi Olympic Games in 1936, after knowing the Nazis had deliberately murdered millions of innocent people.

If the world had known about the Nazi Holocaust, they would not have attended the 1936 games.

Will they attend the Chicom Olympic Games now that they know about the Chicom Holocausts of sending a deadly disease out into the entire world deliberately, and the Holocaust being perpetrated on the Muslim minority in China.

Btw, where are the holier-than-thou Muslims? Where’s AOC and her Squad? No condemnation of the Chicoms for the way they are treating fellow Muslims?

You’re all a bunch of cowards! Religion is negotiable to the Muslim leadership apparently, when it comes to confronting the Chicoms. Even Muslims can look the other way. What would Allah say?

Last edited 1 month ago by Tom Abbott
Tom Abbott
Reply to  Tom Abbott
June 22, 2021 8:22 am

I heard a report yesterday where the Pakistani president refused to criticize the Chicoms for the atrocities they are committing against Chinese Muslims.

That’s how corrupt Muslim leadership is today.

Reply to  ALLAN MACRAE
June 23, 2021 11:09 am

Here is another source of the same 15-minute video with accompanying commentary:
https://www.blackburn.senate.gov/2021/6/blackburn-leads-press-conference-demanding-answers-from-big-tech

WASHINGTON, D.C. – U.S. Senator Marsha Blackburn (R-Tenn.) led her colleagues at a press conference to discuss how Big Tech censored the origins of COVID-19. Senator Blackburn was joined by Senators Roger Marshall (R-Kan.), Mike Braun (R-Ind.), Ron Johnson (R-Wisc.), and Roger Wicker (R-Miss.).
Click here to watch.


BIG TECH CANNOT GO UNCHECKED
 
“We know that Facebook recently reversed their decision on taking down any kind of information that said it came from the lab in Wuhan… YouTube had previously announced it would ban any content that contradicted the Beijing-run and China-funded World Health Organization… YouTube even took down a video from some medical doctors who were questioning the value of these lockdowns.”
 
“Big tech has really stepped over the line on this one. We all have suggestions of how we as a Senate should move forward and things that we should do to make certain that this never happens to the American people.”
 
DR. FAUCI NEEDS TO STEP ASIDE
 
“I think it is appropriate that Dr. Fauci step aside from his responsibilities at the NIAID and that he make himself available to Congress to find out exactly how was he in cahoots with Mark Zuckerberg and big tech. What transpired there? Did American people hear some truth but not the whole truth?”
 
 

Reply to  ALLAN MACRAE
June 23, 2021 4:09 pm

Meanwhile, back at the ranch…
 
I would like to see the big media fraudsters shut down completely for their crimes – they were fully complicit in the lies and cover-up about the origins of the Covid-19 virus. It did NOT come out of the Wuhan wet market. It was a CCP bio-weapon, deliberately released. Then western fraudsters including big media vilified effective treatments like HCQ and Ivermectin and blasted panic propaganda that caused incompetent western governments to make matters much worse with mass lockdowns, dangerous “vaccines”, etc. I suspect within ~2 years we will see huge injuries and deaths from the toxic “vaccines”- hope to be wrong.
 
The media fraudsters were also fully complicit in the blatant lies about very-scary global warming allegedly caused by fossil fuels – a 50-year-old fraud.. The world is naturally cooling now due to low solar activity, just as we correctly predicted in 2002. CO2 does NOT dangerously drive climate – that is the core Big Lie of the decades-old Global Warming / Climate Change fraud.
 
Climate and Covid over-reaction are the two huge frauds of our age, promoted by leftist scoundrels and believed in by imbeciles.

The cost to humanity is many trillions of dollars and many millions of lives.

Reply to  ALLAN MACRAE
June 20, 2021 11:54 pm

I would so much like to be wrong about this one.

INVENTOR OF mRNA INTERVIEWED ABOUT INJECTION DANGERS
https://articles.mercola.com/sites/articles/archive/2021/06/21/mrna-inventor-interviewed-about-injection-dangers.aspx?
by Dr. Joseph Mercola June 21, 2021

STORY AT-A-GLANCE

·        Dr. Robert Malone invented the mRNA and DNA vaccine core platform technology. He has grave concerns about the lack of transparency of side effects, censoring of discussion and the lack of informed consent that these bring

·        Free SARS-CoV-2 spike protein is biologically active — contrary to initial assumptions — and causes severe problems. It is responsible for the most severe effects seen in COVID-19, such as bleeding disorders, blood clots throughout the body and heart problems. These are the same problems we now see in a staggering number of people who have received the COVID-19 “vaccine”

·        The spike protein also has reproductive toxicity, and Pfizer’s biodistribution data show it accumulates in women’s ovaries. Data suggests the miscarriage rate among women who get the COVID “vaccine” within the first 20 weeks of pregnancy is 82%

·        Israeli data show boys and men between the ages of 16 and 24 who have been vaccinated have 25 times the rate of myocarditis (heart inflammation) than normal

·        The COVID-19 injections have emergency use authorization only, which can only be granted if there are no safe and effective remedies available. Such remedies do exist, but have been actively censored and suppressed

Reply to  ALLAN MACRAE
June 22, 2021 10:03 pm

19 WORLD DOCTORS WARN: DO NOT TAKE COVID-19 SHOTS
Published March 18, 2021
Video: https://rumble.com/veseil-world-doctors-warn-do-not-take-mrna-shot.html
For more details on the Scamdemic go to nojabforme.info and cosmicfact.com

IN SUMMARY, THESE DOCTORS STATE:
The Covid-19 was a fake pandemic – there was no dangerous Covid-19 emergency.
Total deaths in many countries are not different from previous years.
The PCR tests have been misused. As result, Covid-19 cases have been greatly exaggerated.
The Covid-19 lockdown and related distancing etc were NOT necessary.
The harm done by the lockdowns etc have caused much more harm than the Covid-19 illness.
There are effective conventional treatments for Covid-19.
The Covid-19 “vaccines” are experimental and are not proven safe or effective and might be very dangerous – NOT justified.
The principle of “informed consent” was not applied – people who were injected were not properly informed of risks.
These Covid-19 injections can cause a range of severe reactions, including the inability to bear healthy children – potentially disastrous.
These doctors will NOT take the Covid-19 injections and will NOT recommend them to their patents.

I published most of these conclusions long ago, some as early as 21March2020.

In my recent paper, I noted that there is no “death bump” to mid-2020 in either Alberta or Canada (or the USA) – that is, no significant increase in total deaths from all causes over the trend of the previous seven years.

That means there was no significant deadly Covid-19 “epidemic” in Alberta or Canada or the USA to mid-2020, and no justification for the panic, the lockdowns of the workforce and students, and the destruction of our economy – just as I correctly published more than one year ago, on 21&22 March 2020:

21March2020 – Allan MacRae
LET’S CONSIDER AN ALTERNATIVE APPROACH: Isolate people over sixty-five and those with poor immune systems and return to business-as-usual for people under sixty-five. This will allow “herd immunity” to develop much sooner and older people will thus be more protected AND THE ECONOMY WON’T CRASH.
22March2020 – Allan MacRae
This full-lockdown scenario is especially hurting service sector businesses and their minimum-wage employees – young people are telling me they are “financially under the bus”. The young are being destroyed to protect us over-65’s. A far better solution is to get them back to work and let us oldies keep our distance, and get “herd immunity” established ASAP – in months not years. Then we will all be safe again.

All we really needed to do was over-protect the very elderly and infirm – the high-risk population – which we failed to adequately do. What a debacle!
The evidence of serious criminal activity is overwhelming.

This was not a difficult judgment call, once the quality data was located.
MOST IMPORTANT: Do NOT inject your children or grandchildren.

Regards, Allan MacRae
____________________

CHINESE VIROLOGIST SAYS FAUCI’S EMAILS ‘VERIFY’ HER WUHAN LAB LEAK CLAIMS
By Lee Brown June 4, 2021
https://nypost.com/2021/06/04/chinese-virologist-says-fauci-emails-verify-her-lab-leak-claims/

A Chinese virologist who was among the first to suggest COVID-19 leaked from a Wuhan lab has said that Dr. Anthony Fauci’s emails prove she was right all along.

Dr. Li-Meng Yan was one of the first to research the emerging coronavirus and previously revealed she was forced into hiding after accusing Beijing of a cover-up.

Now, as international leaders finally focus on her Wuhan lab-leak theory, the scientist told Newsmax that Fauci’s emails contain “a lot of useful information” suggesting he always knew more than he revealed.

Tom Abbott
Reply to  ALLAN MACRAE
June 21, 2021 6:48 am

Yes, the Chinese counter-intelligence Chief who defected to the U.S. recently may be the reason the Leftwing Media has suddenly switched their tune from calling the Wuhan virus a naturally-occurring virus, to allowing the possibilty that it was manufactured in the Wuhan lab.

DMacKenzie,
Reply to  ggm
June 20, 2021 9:08 am

….their plan…Yes, it is part of some elite Bilderberger types to have a new world enhanced economy based on ecological maintenance.
Similar to the soul-saving Church economy of medieval times, or the more recent secret police report-your-neighbour-for-a-pay-check-boost economy of the East Block. Its a bit like the broken window fallacy that modern economic theory says is actually good for the economy if an unemployed person is put to work, and even better if they are put to work based on false rumours of more broken windows than normal….
These Bilderberger types love CC for its ability to keep their status as elites in the world order, while charging sin taxes useful to governments and generating green industries for profiteers, psychologically making people feel good about their eco-efforts, spinning up a new facet of money circulation, and on and on….

griff
Reply to  DMacKenzie,
June 20, 2021 9:22 am

Nonsense: conspiracy theory.

DMacKenzie,
Reply to  griff
June 20, 2021 10:53 am

”nonsense..”, lets look at a simple one…the Ontario NDP party’s published plan promises to spend $15 Billion, create 300,000 green jobs, reduce CO2 emissions by 450 megatons, based on Carbon tax and forced consumer and industry fuel cutbacks. That IS a political conspiracy…
And that’s peanuts compared to the GND.

John Endicott
Reply to  DMacKenzie,
June 21, 2021 5:06 am

“even better if they are put to work based on false rumors of more broken windows than normal…”

What false rumor, Antifa and BLM will make sure there’s plenty of broken windows (and burned buildings, and loots stores) in need of replacing, rebuilding and restocking.

Bob Hunter
Reply to  ggm
June 20, 2021 9:23 am

Residents of Vancouver BC, the govt taxes (federal, provincial, municipal, carbon & sales) total approx $1.50 US per US gallon

An EV pays sales tax on the electricity.

nickc
Reply to  Bob Hunter
June 20, 2021 10:29 am

More EV’s, less tax paid. How is road infrastructure going to be paid? Just waiting for the ev tax.

Martin
Reply to  nickc
June 20, 2021 10:51 am

The UK government only recently woke up to the finance dilemma it has created – ie fuel tax is about 80p /litre vs no tax on electricity for EVs = big hole in government revenues. As yet they have made no formal proposals, but I’m guessing that by around 2128 road pricing will be brought in. To replace the lost revenue at current petrol prices, a charge of around 10p/ mile would be needed. Road pricing would have the additional benefit( from government perspective) of hammering continued ICE use – as fuel tax would continue to be levied in addition to any road pricing charges, making ICE use financially painful

John Endicott
Reply to  Martin
June 21, 2021 5:08 am

I doubt it’ll take over 100 years for them to come up with a scheme to get tax money from EVs 🙂 I’m gussing you meant 2028 not 2128!

Rhs
Reply to  nickc
June 20, 2021 2:49 pm

They’ll have to tax tires. That is the only way a-round the funding problem for roads.

Kevin
Reply to  Rhs
June 20, 2021 4:10 pm

Aren’t tires made with petroleum?

Tom Abbott
Reply to  Rhs
June 21, 2021 7:15 am

They should not apply taxes for road use the way they do. Doing so harms the poorest people in society and society in general.

If a govenment needs money to fix roads or any other infrastructure, they should get that money out of the general tax fund, not a specific tax on fuel or anything connected with transportation, since that raises the costs of everything and the poor end up paying a larger percentage of their income when these costs increase.

Transportation taxes harm everyone in an economy. Increasing transportation taxes increases the harm done.

Transportation taxes are counterproductive. Politicians need to be weened off of them. Get the money somewhere else and take the burden off the poor people and the economy.

I note that Joe Biden is vehemently against raising the current gasoline tax in the United States. Why? I don’t know. Perhaps his pollsters have him leery about a gasoline tax increase.

Last edited 1 month ago by Tom Abbott
Reply to  ggm
June 20, 2021 11:19 am

We do not generate power from oil, except for emergeny diesels.

Intelligent Dasein
Reply to  ggm
June 20, 2021 7:31 pm

Green power does not become “commercially viable” when oil gets more expensive. Commercial viability isn’t a matter of relative prices but rather the energy returned on energy invested. In this respect (the only one that actually matters in physical reality), green power will never be commercially viable and the growing expense of oil only makes it less so.

GregB
Reply to  ggm
June 21, 2021 8:24 am

Nonsense. Green power depends on fossil fuels.

Diogenese
Reply to  ggm
June 22, 2021 10:40 am

It may become commercial viable but that will not stop the lights going out after the sun goes down .

rbabcock
June 20, 2021 6:15 am

Having lived through more than one global “oil shock” and two smaller ones recently thanks to the Colonial Pipeline, I concur with the article and thanks David for bringing this to the attention of WUWT readers. It’s coming. If you want to participate in a positive way, look into buying stock in oil and gas producers. That way you can afford to fill up your car.

Klem
Reply to  rbabcock
June 20, 2021 7:32 am

Best advice I’ve heard in months.

Ron
Reply to  Klem
June 20, 2021 4:04 pm

I went long oil futures the day Biden was inaugurated! Thanks Joe!

commieBob
Reply to  rbabcock
June 20, 2021 7:34 am

Amen!

Thanks for the warning David.

Occasionally it blows my mind when I realize how much I have learned on WUWT. Thanks Anthony.

Ron Long
Reply to  rbabcock
June 20, 2021 8:04 am

rbabcock, I also lived through the Jimmy Carter inflation/gas crisis, and it was a challenge to drive from here to there. I remember stopping at every gas station open, getting in line, and then only being sold 10 gallons of gas. Try to drive across Nevada on this schedule! The reality was that a tremendous amount of gas was wasted by cars waiting in line. I second the buy oil and gas stocks. Everyone that voted for Obama/Biden can freeze in the dark as far as I am concerned.

Joe Crawford
Reply to  Ron Long
June 20, 2021 9:40 am

Better yet, in the early 70’s when the Clean Air Act started to take effect and OPEC was just starting to feel it’s oats you were lucky the find an Avis or Hertz that would make if across the sidewalk and out of the lot. I found it hard to imagine how doubling the fuel usage per mile reduced emissions.

John Endicott
Reply to  Ron Long
June 21, 2021 5:11 am

And don’t forget the Odd//Even days for being allowed to buy that 10 gallons of gas!

Tom Abbott
Reply to  John Endicott
June 21, 2021 7:28 am

And a speed limit of 55mph to lower fuel consumption.

I got a speeding ticket the morning that new speed limit was enacted back in the 1970’s. I was going 65mph (the old speed limit)at the time.

Last edited 1 month ago by Tom Abbott
Jan de Jong
Reply to  rbabcock
June 20, 2021 9:39 am

I was gainfully employed with Schlumberger in Africa 40 years ago and remain keenly aware of the essential role of hydrocarbons.

Jan de Jong
Reply to  Jan de Jong
June 20, 2021 9:44 am

Oil service companies may be less vulnerable than producers to ‘green’ infection.

John Garrett
Reply to  Jan de Jong
June 20, 2021 9:53 am

Schlumberger is a wonderful company. I am a shareholder.

Jan de Jong
Reply to  David Middleton
June 20, 2021 3:06 pm

One must hope the crane driver knows his business indeed.

Richard Brimage
Reply to  David Middleton
June 22, 2021 5:07 am

Remember one winter night, cold misty wind blowing, hanging onto the basket over the water waiting for the boat to get back to the rig.

ozspeaksup
Reply to  rbabcock
June 21, 2021 3:42 am

or get the gasifier plans off the net and consider how to fit em to our vehicles

D. J. Hawkins
Reply to  rbabcock
June 21, 2021 11:53 am

If you want to participate in a positive way, look into buying stock in oil and gas producers.

Ehhhh, maybe not. Buying a company’s stock doesn’t give them funds to pursue their business. That only happens if you buy into a stock offering where a company is issuing new shares.

Editor
Reply to  rbabcock
June 21, 2021 1:42 pm

rbabcock, Already started buying. Perhaps more buying in the future. I’ve learned over the decades to always buy Exxon in the 30s, except after a split. Sure worked this time!

2hotel9
June 20, 2021 6:23 am

Without oil and gas the greentard world collapses so it is not going anywhere.

Komerade cube
Reply to  2hotel9
June 20, 2021 7:18 am

“…the greentard world collapses…” unfortunately this is what they are trying to do: collapse western civilization. Right Griffy?

2hotel9
Reply to  Komerade cube
June 21, 2021 10:11 am

Their world will collapse, ours will be just fine.

Richard Page
Reply to  2hotel9
June 20, 2021 8:01 am

Not sure it’ll get that bad. The article is discussing oil production in the West – Russia’s going to be laughing it’s way to the bank as it ramps up production. The Green Blob is going to hand all hope of energy security to countries that the West has been pi$$ing off for years. It’ll get ugly, and expensive, but chances are that’s where the petrol and avgas of the future’s coming from. Russia will have the West over a barrel, thanks to the Green cultists.

Last edited 1 month ago by Richard Page
2hotel9
Reply to  Richard Page
June 21, 2021 10:09 am

My point is they are all lying. Without oil and gas their world collapses. Not mine, I live in a region with plenty of oil, gas and coal. Right in the valley I live in we have 3 petro/chem plants, one of which is producing gasoline as a byproduct of their other production. OUR world will be fine. Add plentiful sources of firewood and I ain’t worried, we will survive and thrive. All this bloviation from leftards is simply noise, American gas, oil, coal, hydro and nuclear ain’t going anywhere.

June 20, 2021 6:33 am

There may be trouble ahead
But while there’s moonlight and music and love and romance
Let’s face the music and dance!

beng135
Reply to  Hatter Eggburn
June 20, 2021 9:37 am

Party like it’s 1999?

John Endicott
Reply to  beng135
June 21, 2021 5:12 am

If the green cultist have their way it’ll be party like it’s 1099.

June 20, 2021 6:36 am

The “green” new deal is turning out to be the “mean” new deal … https://www.youtube.com/watch?v=Fw-XbO9Cdu4

Scissor
Reply to  John Shewchuk
June 20, 2021 6:45 am

Good video, a rare display of honesty from Obama but unfortunately Biden’s stupidity has become all too well persistent.

June 20, 2021 6:51 am

”Blame oil for the world populating to 8 billion” – Oil was the cause of transportation, medical, and communication infrastructures.
https://www.cfact.org/2021/06/20/blame-oil-for-the-world-populating-to-8-billion/
 

Summary After the discovery of oil a few hundred years ago, we created various modes of transportation, a medical industry, and electronics and communications systems. The oil that reduced infant mortality, extended longevity to more than 80+ and allowed the world to populate to 8 billion, is now required to provide the food, medical, and communications to maintain and grow that population.

John Tillman
Reply to  Ronald Stein
June 20, 2021 7:40 am

First US oil well was drilled in PA in 1859. First modern well in the world was sunk NE of Baku in 1846. So only 175 years.

Last edited 1 month ago by John Tillman
Richard Page
Reply to  Ronald Stein
June 20, 2021 8:08 am

The use of crude oil and refined petrol goes back over 2000 years. Oil was ‘discovered’ thousands of years ago and the first bored oil well dates to around 9th century China. It’s been part of our lifestyle for a lot longer than you imagine.

MarkW
Reply to  Ronald Stein
June 20, 2021 11:08 am

Since that 8 billion is living better than people did when the population was 7 billion, 6 billion, 5 billion and so on down to 2 people, what’s the problem. Unless you just hate people.

Tony Sullivan
June 20, 2021 6:54 am

A classic ‘chop off your nose to spite your face’ scenario unfolding.

John Garrett
June 20, 2021 7:48 am

Thank you, David Middleton— and thank you Jan from the Netherlands and David Messler.

I can hear that freight train rumbling down the tracks. What will piss me off is that, when that freight train arrives, the f*cking morons who were responsible will not be held to account for what they did.

This includes not only the climate crackpots™, the media, the economic and scientific illiterates and the innumerates, it also includes the Pelosis, the Schumers, the Cuomos, the AOCs, the Michael “Piltdown” Manns, the Seth Borensteins, the Engine No. 1s, the Larry Finks, the Gavin Newsomes, and (especially) the craven managers of Royal Dutch Shell, BP and Total— who should know better.

Total Rig Count 1973-.png
Last edited 1 month ago by John Garrett
Clyde Spencer
Reply to  John Garrett
June 20, 2021 8:44 am

Let’s not be too hard on these ‘climate crackpots.’ After all, they are peddling as fast as they can, considering their mental handicaps.

Anthony
Reply to  John Garrett
June 21, 2021 1:01 am

Good graph John
If only I knew what a rotary rig was,I’m sure the graph tells a tale lol

Last edited 1 month ago by Anthony
John Garrett
Reply to  Anthony
June 23, 2021 9:44 am

Anthony-
“Rotary rig” = drill rig

Abolition Man
June 20, 2021 7:50 am

David,
Thanks for, once again, trying to enlighten the ignorant alarmists about what their policies actually do! I think when the gas prices and inflation really start to bite into the American pocket book, we could see a reaction the makes the French gilets jaunes look tame by comparison!
Maybe that’s why the Biden insurgency is so intent on domestic terrorism; they know they are pushing the US economy and populace off a cliff with their insane America Last programs! I don’t think it will end well as the election audits spread to other states and the very legitimacy of former Vice President Biden’s coronation by the media, DemoKKKrats and CCP comes into question!

John Hultquist
Reply to  Abolition Man
June 20, 2021 8:23 am

“…  as the election audits spread to other states and the very legitimacy of former Vice President Biden’s coronation “

Most folks are not paying attention to these activities. They are noticing that gasoline prices have gone up – and generally will continue. Likewise, all prices will be increasing faster than Biden+ expect while taxes are increasing. Not a lot to like.
The Biden/Harris administration is not progressing well. It is “what’s going on” that people will notice, not the past election. Don’t expect audits to produce exciting results.

Burgher King
Reply to  John Hultquist
June 20, 2021 9:21 am

Biden-Harris and their legal shock troops in the DOJ/FBI and in the leftist lawfare community are moving heaven and earth in an attempt to prevent these audits from revealing the truth about what happened in the 2020 election.

The audit results will in fact be exciting, assuming the audits are allowed to continue and assuming the facts about what happened in November 2020 make it into the voting public’s consciousness.

As the misery index gets worse over the next twelve to fourteen months, voters will have a greater incentive to listen to the facts. Only time will tell if it’s too late by then to fix the election system and the Democrats get away with stealing the 2022 election cycle.

MarkW
Reply to  Burgher King
June 20, 2021 11:11 am

Even CNN has taken to ridiculing Harris and her pathetic excuses.

philincalifornia
Reply to  MarkW
June 20, 2021 2:18 pm

How long do you have to be quarantined after watching CNN?

Abolition Man
Reply to  philincalifornia
June 21, 2021 12:34 am

It depends on if you get the antiserum quickly enough! With rapid treatment two weeks is usually adequate; delayed response is often fatal! CNN kills; literally!

Tom Abbott
Reply to  Abolition Man
June 21, 2021 7:44 am

Yeah, CNN was pushing the false narrative that therapeutics like Hydroxychloriquine and Invermectin did not work on the Wuhan virus.

How many people did this misinformation cause to not take these medications seriously?

How many doctors failed to medicate their Wuhan virus patients adequately based on this misinformation?

The Biggest Medical Scandal Evah! No telling how many people died as a result of this therapeutics disinformation campaign.

And CNN isn’t the only one involved in this lie. Everyone on the Left is involved and our Medical associations and government officials all played their part. They all need to pay the price for this lie. There’s blood on their hands.

Tom Abbott
Reply to  John Hultquist
June 21, 2021 7:36 am

Biden’s approval rating is already down to 48 percent. I suspect it will go lower as prices go higher. By 2022, there will be a *lot* of people who are fed up with the Biden Administration.

Stevek
June 20, 2021 7:53 am

Seems in this situation a good buy would be higher cost producer, as when price gets high enough they become profitable. I’m sure many stocks are beaten down of the higher cost producers so are cheap.

Pat from kerbob
June 20, 2021 7:53 am

Good times coming here in Oilberta, as predicted

Marc
June 20, 2021 7:56 am

It should not escape any of us that Biden never brought up the topic of oil at all in hours of discussions with Putin. With Brent pushing $75 a barrel it would have been one of the first topics Trump would have brought up with him since Russia is holding oil off the market. Trump constantly pushed OPEC+ to keep production up. Biden shows no such interest. Why ? Because Biden’s handlers want prices as high as possible to make the “green transition” more sellable to the masses. Triple digit oil prices coming by 2022.

John Garrett
Reply to  Marc
June 20, 2021 8:40 am

You are correct that the grifters and promoters of unreliables want the highest possible hydrocarbon prices. In their minds, high prices have two desirable effects: (1) they discourage consumption and (2) they encourage the development of alternative sources of energy such as (surprise) unreliables!

Perversely, it is the hydrocarbon rich producers who want affordable hydrocarbon pricing to discourage the development of alternative energy sources. Those hydrocarbon rich producers possess long-lived reserves.

Duane
June 20, 2021 8:01 am

Meh … capital will always flow to wherever a profit can be made. Over the last 16 months the entire world experienced a dramatic cycle in the demand signal and the markets are all responding just as they always do … a sudden drop in demand begets a sudden spike in over supply causing prices to plummet during 2020 … and now with the arrival of the vaccines in large volumes the world economies are now responding to the suddenly restored demand signal, goosed by pent up demand from 2020.

The rest of this year will see the over demand signal reduced, with perhaps a couple more perturbations back and forth until the COVID effect is fully dampened out.

Anybody alive for the past 50 years since the first Mid East oil embargo ought to be fully aware of the cyclic nature – indeed, boom and bust nature – of the oil and gas business. Nothing is ever a long term effect because whatever part of the oil and gas cycle we happen to be in, it will soon be the opposite within years if not months.

Long term we all know that renewables cannot replace hydrocarbons. The only truly long term disruption of oil and gas markets can only be due to a large scale and relatively slow conversion to nuclear energy, abetted to a long term degree to a shift to EVs and FCVs.

David A
Reply to  Duane
June 20, 2021 8:33 pm

Oil and gas always cycle because of peak oil, peek and you will find it.

Mark D
June 20, 2021 8:05 am

What is causing the mass insanity that is destroying us world wide?
Can the ultra wealthy think they will not be taken down with the rest of us?
Do Bezos et al. think they are safe against the diseases that will ravage humanity w/o refrigeration, water, and sewerage systems? SARS‑CoV‑2 was a grain of sand on the highway to death that will come with world wide societal collapse!
Do they prefer to be the king of the mountain on a mountain of death and destruction?
Modern society isn’t possible w/o oil.
Modern society is not possible w/o refrigeration.
Modern refrigeration isn’t possible w/o oil.
Even if you could somehow have reliable non-oil electricity where will refrigerants be sourced?
Think also about that fact. So many wheels within wheels within wheels…

Clyde Spencer
Reply to  Mark D
June 20, 2021 8:50 am

When the ‘renewable’ power goes off, people will just have to adapt by learning not to open the refrigerator until the power comes back on — the next morning.

Mark D
Reply to  Clyde Spencer
June 20, 2021 9:11 am

LOL!

Abolition Man
Reply to  Mark D
June 20, 2021 12:29 pm

Mark D,
Many of these highly educated idiots think they will be snug and secure; living like demigods in their Olympian retreats! Maybe for a while, but life and karma have a way of balancing things out!
I believe I once read an SF book where the uber-wealthy were hunted like big game, with a percent of their assets going to the successful predators. Or maybe that’s just a recurring dream I’ve been having since figuring out how many of my fellow citizens were murdered by our leaders and the High Tech Nazis when they suppressed therapeutics like ivermectin and forced thousands of businesses into bankruptcy with their fascistic lockdowns!

Clyde Spencer
Reply to  Abolition Man
June 20, 2021 3:12 pm

The problem is that our so-called leaders should be in advisory positions, where they share their understanding of the problem and their best solutions. If they are trusted, then people will follow their advice. Instead, they think that they have the right to force people to do what they think is best.

Because one’s right’s only extend so far as they impact the rights of others, a very strong case has to be made that medical restrictions are necessary because other’s rights have been infringed. That hasn’t been done! What’s worse, the experts have waffled on what the best strategies are, indicating that they really don’t know and therefore shouldn’t be forcing people to follow their changing opinions.

Abolition Man
Reply to  Clyde Spencer
June 20, 2021 5:19 pm

Clyde,
In retrospect it seems pretty clear that HCQ and ivermectin had to be suppressed to get the EUAs for the “vaccines!” Fauxi and the media played on Trump’s germophobia to get him to go along; the major mistake of his presidency!
The DemoKKKrats used the virus to discredit him and help them steal the election, and they only had to kill a few hundred thousand Americans and destroy about half of US small businesses! That’s a win-win for them and their big, corporate cronies!

LdB
June 20, 2021 8:10 am

Saudi’s and Russia must be laughing all the way to the bank.

Tom Abbott
Reply to  LdB
June 21, 2021 7:53 am

All the enemies of the Western Democracies are very happy that Joe Biden is president. And you can already see why.

I used to call Barack Obama the “worst president evah!”, but Biden has already outdone him for stupid, counter productive policies, and he’s only been in office a little less than six months.

It’s going to be a rolling disaster as long as the Democrats hold the White House, although control of either House of Congress after the next election will dramatically slow the damage.

We have radical Democrats in charge trying to do the most radical things they can manage. And they are in a hurry.

Doug Huffman
June 20, 2021 8:18 am

Attend to Q: Nothing Can Stop What Is Coming. Nothing. Now Comes The Pain. We Know What Happens In The End, God Wins.

Jimmy Joe Meeker
June 20, 2021 8:46 am

The goal of any crony business sector or government service is to deliver the least at the highest possible price. Oil is for the most part a crony business sector. The idea of the climate change alarmism for big oil is to have very high prices. The goal of the ruling class is to make energy scarce and expensive.

This is where people get the wars and political problems in oil regions all wrong. It isn’t done to make oil cheaper, it’s done to take oil off the market and make it more expensive. Then in the aftermath have that oil under the control of the people who will throttle its production or never restart it at all.

MarkW
Reply to  Jimmy Joe Meeker
June 20, 2021 11:17 am

That only works when there is one producer that controls all production.
Since there are dozens of competing oil companies, the first company that ramps up production will make a killing.

John Endicott
Reply to  MarkW
June 21, 2021 5:23 am

Indeed. When prices are artificially high, competitors will see an opportunity.

That said, where “crony businesses” look to control prices isn’t through the mechanism Jimmy Joe imagines, it’s through putting up barriers to entry (IE government regulations designed to keep the competition out).. Which, again, only works as long as there’s only one government overseeing operations, Oil is a world wide business with dozens of governments providing differeing regulations and controls. As we saw last year, not all governments act in lock step when it comes to controlling the production of oil (see Saudi vs Russian Oil fight during the pandemic which caused oil prices to plummet).

bigoilbob
June 20, 2021 8:53 am

The dividends and buy backs from the domestic producers show us that OPEC+ is still in control w.r.t. domestic activity. The domestic producers are willing to lose PUD’s and probables to mollify those stockholders in it for now. I.e., most of them, due to the natural deselection of smarter, longer term investors.**

There are enough PUD’s and choke openings available from OPEC+, at CAPEX and OPEX/boe rates unachievable in the west, to supply the world for at least the next 5 years, and probably the next 10 years, without significant North American development. Even given post pandemic demand increases.

AGAIN, North American CAPEX and OPEX/boe is artificially low, due to the fact that it was gained by sucking the life out of the domestic oilfield service industry. Any significant development will raise those rates.

“The global market still looks adequately supplied through much of the medium term. But in the absence of fresh upstream investments, the spare capacity cushion will slowly erode. By 2026, global effective spare production capacity (excluding Iran) could fall to 2.4 mb/d, its lowest level since 2016.” 

https://www.iea.org/reports/oil-2021

Yes, domestic oil and gas will be produced and sold again profitably in the ’30’s. Just not much before.

  •  Cheaters. They will not only be able to sell their oil, but sneak in resources to sustain their relatively easy to produce oil, for quite awhile.

** Please, no Warren Buffett talk. He worked the deal of the century.

bigoilbob
Reply to  bigoilbob
June 20, 2021 9:18 am

Yes, technically off topic. But this is where most of my friends work, so this is where my thoughts first went. Supposedly relevant for the poster as well….

Jeff Alberts
Reply to  bigoilbob
June 20, 2021 10:41 am

You have friends?? Who knew?

Derg
Reply to  Jeff Alberts
June 20, 2021 1:46 pm

Most likely because nobody understands BigOil’s writing other than BigOil…where is BigPharma when we need to make sense of things?

John Endicott
Reply to  Jeff Alberts
June 21, 2021 5:24 am

Yes he does, though most people don’t count friends of the imaginary kind.

SAMURAI
June 20, 2021 9:00 am

Since Senile Joe’s election, crude oil prices have skyrocketed 95% (not a typo…95%), due to his: moratorium on federal land/ocean oil leases (just ruled unconstitutional by a lower court), war on oil, cancelling the Keystone Pipeline (14,000 oil jobs gone with one stupid decision), ANWAR oil exploration cancelled, some new refinery permits put on hold, etc.

Under Trump, for the first time in 75 years, the US became energy independent. That’s all fine now…

in addition, FED’s money printing has run amok which is causing inflation to rapidly rise, so prices on Everything are about to skyrocket…. This is not a “temporary” phenomenon…

Biden’s Misery Index is now 10.3 and climbing rapidly..

Miss Trump yet?

John Endicott
Reply to  SAMURAI
June 21, 2021 5:34 am

I agree with the general thrust of your post, however I’d take the 95% number with a grain of salt. What is that 95% comparing with? last year when oil futures were selling at negative 37 a barrel – prices cratered due to drop in demand (thanks to pandemic lockdowns) coupled with a glut in supply (due to Russia and Saudi having a tiff). neither of which can be laid at Dementia Joe’s feet (he was too busy hiding in his basement at the time). The “skyrocketing” of crude oil prices is a positive sign that the economy is returning to normal quickly (prices are now roughly in the same range they were in before the pandemic that’s actually a good thing, even if, as consumers, you’d prefer the prices to be lower.)

Last edited 1 month ago by John Endicott
Burgher King
June 20, 2021 9:00 am

From the David Messler article cited above:  ” ….. The message to oil and gas companies has been pretty clear from the market, investment funds like BlackRock seeking green “purity” in the allocation of financing of new energy sources, and government edicts mandating carbon intensity reduction across the entire swath of society, and a transformation to renewable energy, that new supplies of oil and gas are not wanted. ….. “

Several former BlackRock senior executives are now among Biden’s key policy advisors: BlackRock in the White House

Biden and Harris are merely ventriloquist dummies for a committee operating behind the scenes which makes all the important policy decisions announced by the White House.

However, the membership of that committee has been a subject of much speculation since Biden was installed as president in January. 

It would appear that working through its former senior executives who are now among Biden’s closest advisors, BlackRock exerts a powerful influence on the Biden administration’s decisions in the areas of energy policy, economic policy, and foreign policy. 

But to what ultimate purpose, dare we ask?

Mark D
Reply to  Burgher King
June 20, 2021 4:00 pm

Blackrock and Vanguard own everything. Literally. Search “blackrock vanguard own everything” and and examine the results. The answer to your query is likely somewhere in there.

griff
June 20, 2021 9:21 am

So, Peak Oil is a real thing, huh?

Editor
Reply to  griff
June 20, 2021 9:54 am

Who said it wasn’t possible?

MarkW
Reply to  griff
June 20, 2021 11:19 am

Government outlawing oil production causes peak oil?
Is that what you are being paid to think?

Lrp
Reply to  MarkW
June 20, 2021 5:22 pm

No, he makes stupid comments for free

Abolition Man
Reply to  MarkW
June 20, 2021 5:22 pm

Wait, the griffter thinks!? C’mon, man!

John Endicott
Reply to  MarkW
June 21, 2021 5:37 am

Anyone paying griff to think clearly aren’t getting their moneys worth!

David A
Reply to  griff
June 20, 2021 8:37 pm

Oh yes, peek and you will find it!

SAMURAI
Reply to  griff
June 21, 2021 12:15 am

Griff-san:

There isn’t a shortage of oil, but rather Fascists’ severe shortage or complete lack of: intelligence, economic understanding, common sense, logic, rational thought, business acumen, business experience, science proficiency, math skills, understanding of monetary dynamic, morals, ethics, etc….

observa
Reply to  griff
June 21, 2021 6:16 am

Supply and demand griff but you might be headed for peak battery too-
Tesla leads on EV battery costs, despite soaring lithium prices (thedriven.io)
But that’s only the half of it without nukes for generating electricity-
West Australia puts community batteries at top of new energy roadmap | RenewEconomy
You’re living in la la land if you think you’re going to batterify the world griff.

Doug
June 20, 2021 9:39 am

Most people would love to see a transition to some nice cleaner energy source. Wanting it, and claiming it is coming, won’t make it appear. The buzz from media to the new Exxon board members is about some magical transformation, but they must not be in touch with reality. They need a drive through the refinery district of Baytown, a trip to a big offshore platform, a ride on a super tanker and a visit to Saudi. Maybe check out some massive Wyoming coal seams. They are oblivious to the enormity of our current energy supply. It won’t be replaced any time soon.

Reality has this nasty habit of not going away. The pipeline hacking should have been a wake-up, but bigger doses of reality are needed, and will come.

Derg
Reply to  Doug
June 20, 2021 1:48 pm

Pipeline hacking is possible but not election hacking 🤓

Joel O'Bryan
June 20, 2021 10:32 am

Russia’s Putin, Iran’s Ayatollah, and OPEC couldn’t be happier at these turn of events.

Last edited 1 month ago by joelobryan
MarkW
Reply to  Joel O'Bryan
June 20, 2021 11:21 am

The idea that Putin was pulling strings to get pro-oil Trump elected only made sense to people who never had any contact with reality in the first place.

Derg
Reply to  MarkW
June 20, 2021 1:49 pm

Exactly Mark…Trump Russia colluuuusion anyone 😉

John Endicott
Reply to  MarkW
June 21, 2021 5:41 am

Indeed. Who would rational people think Putin is happier with?
Trump: attempts to block Russia’s Nordstream2 with sanctions and get America’s Keystone pipeline project going
or
Biden: removes sanctions blocking Nordstream 2 and puts the kibosh on America’s Keystone pipeline project

James F. Evans
June 20, 2021 10:43 am

At $75 a barrel… those who pump oil can make a profit… perhaps make payment on bank loans & make return to investors.

As consumer I like cheap gas.

For an industry… the above seems reasonable & healthy.

Abolition Man
Reply to  David Middleton
June 20, 2021 12:36 pm

David,
An old boss of mine had a custom BBQ trailer built that could cook six pigs at a time.
As oil prices keep being driven up by the inept and malicious policies of the Bai Den Regime, I can’t help thinking; “We’re gonna need a bigger BBQ!”

Last edited 1 month ago by Abolition Man
SAMURAI
Reply to  James F. Evans
June 21, 2021 12:29 am

James-san:

Oil companies have very low profit margins of around 10%, so they aren’t price gouging..

if idiotic Leftist hacks would stop hamstringing the oil industry with: excessive regulations, excessive taxes, excessive EPA standards, excessive OSHA laws, cancelling- oil leases, pipelines and new refineries, etc., the cost of petroleum would be greatly reduced….

Just sayin’…

old engineer
June 20, 2021 1:46 pm

David-

I’m not sure what the message you are trying to get across with this post. While I’m old and most of my impressions were formed sixty years ago, I’ve always been under the impression that oil exploration was cyclical. So if it’s down for a few a years, while companies reward their shareholders, so what?

It seems to me this idea that investors will stop investing in oil and gas because some green guru says to, is just a green dream. It’s been my experience that investors go where the money is. From what you have written here, it seems that is oil and gas.

old engineer
Reply to  David Middleton
June 20, 2021 5:56 pm

David-

Thanks. Got it. Bad for consumers, but not so bad for the oil industry, except for being screwed around by sources of capital.

Reply to  David Middleton
June 21, 2021 4:36 pm

Thank you Dave.

Imagine this – the USA Democratic Party and the Biden White House are acting like agents of the Chinese Communist Party and Biden is “The Manchurian Candidate”. It’s not a big stretch – every one of their bizarre actions for the past several years has served the interests of China.

The same is true of Justin Trudeau and the Canadian leftist parties – the Liberals, NDP, Greens etc.

The same true of Boris Johnson and his Climate-and-Covid clowns in the UK.

Also Australia and New Zealand.

None of their Climate or Covid policies made any sense, and all of their actions did many times more harm than good.

Do you really believe all these government people could all be so utterly dysfunctional, so incredibly stupid?

That corrupt imbecile Biden cancelled the Keystone XL pipeline, which was to supply Canadian oil to USA refineries.

Who benefits? Russia and China both benefit! The USA becomes strategically dependent on Russia for energy and its balance-of-payments heads south too.

Only an imbecile and/or a crook would pull such an incredibly stupid move.

Here is the story:

AS BIDEN GOES GREEN, US RELIANCE ON RUSSIAN OIL SURGES TO RECORD HIGH
The Epoch Times, 17 June 2021
https://www.theepochtimes.com/us-reliance-on-russian-oil-surges-to-record-highs-amid-tensions_3863635.html

WASHINGTON—Russian oil imports have set a new record in the United States despite the strained relationship between Washington and Moscow. Industry experts believe the Biden administration’s climate policies will make the country more dependent on foreign oil producers.

The United States imported record levels of crude oil from Russia in March and is expected to continue importing at high levels in coming months, according to the Western Energy Alliance, a trade association that represents 200 independent natural gas and oil producers in the United States.

Imports of crude oil and petroleum products from Russia reached 22.9 million barrels in March, the highest level since August of 2010, according to International Energy Agency (IEA). Of the total amount, crude oil imports from Russia stood at 6.1 million barrels. Russia has become the third-largest oil exporter to the United States.

High levels of oil shipment from Russia have continued since March, according to ClipperData, a commodity intelligence company that monitors cargo shipments worldwide.

“Last month we saw a record 5.75 million barrels of Russian crude discharged in the US, and we’re projecting a further record this month of 7.5mn bbls,” ClipperData analysts wrote on Twitter on June 7.

Critics argue that Biden’s climate agenda is hard on the U.S. oil industry but soft on foreign producers.

“It’s disturbing to our industry that the Biden administration goes out of its way to disadvantage the American producer while buttressing the Iranian and Russian industries,” Kathleen Sgamma, president of the Western Energy Alliance, told The Epoch Times.

The recent spike in Russian oil imports has followed the “misguided climate policies” of the administration, including ending the Keystone XL pipeline and pausing new oil and natural gas permitting on public lands and waters, according to Sgamma.

President Joe Biden has “tipped us into oil dependence on Russia just a year after complete independence,” Sgamma said, calling it “a geopolitical gift” to the Kremlin.

U.S. West Texas Intermediate crude surpassed the $70 mark last week, reaching the highest level in over two years. Top commodity traders now believe oil prices could see $100 per barrel due to supply constraints. Oil hasn’t traded above $100 per barrel since 2014.

“There’s been kind of a dearth of investment in fossil fuels, which is going to leave us undersupplied as we go forward,” Phil Flynn, senior energy analyst at the Price Future Group, told The Epoch Times in a recent interview.

He noted that the Biden administration’s climate policies, which will reduce the supply of oil and gas, have been a major factor in driving the prices.

“U.S. oil production has fallen by 1.715 million barrels [per day] from a year ago, so a large part of that void is being filled by Russia,” Flynn wrote in a recent op-ed on Fox Business.

“During Trump’s term, America was competing with Russia and Saudi Arabia to be the world’s dominant oil and gas producer, yet under Biden, we are retreating from that race in the name of climate change,” he wrote.
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Smart Rock
June 20, 2021 2:20 pm

Meanwhile, Russia is nearly finished building Nord Stream 2, and China, not to be outdone, is doing oil and gas exploration, apparently with some success:

https://www.rt.com/business/527091-china-major-oil-deposit-discovery/

You can’t always trust the veracity of RT (it is after all “state-sponsored”), but it’s still a better source of news than MSNBC, CNN, BBC, Guardian, nearly as good as Sky News Australia.

The tone of RT’s articles about China is becoming very cordial, and suggests new levels of cooperation and collaboration between them, e.g. this:

https://spacenews.com/china-russia-reveal-roadmap-for-international-moon-base/

“Ras” Putin is many things, but naive, ignorant and stupid are not among them. He can tell which way the wind is blowing.

Robin
June 20, 2021 2:27 pm

“The world has made an irreversible decision on green energy”. The western democracies have made this decision. It will be out epitaph.

Loren C. Wilson
June 20, 2021 3:20 pm

As we saw when the Saudis got mad at the Russians for not cooperating on the price-fixing scheme, there is plenty of spare capacity still. The Middle East prefers that they have it, and not the USA. if the price holds, companies will invest in tight gas and more difficult to extract oil. What worries the Saudis the most is viable nuclear (the greens will take care of that issue for most of the world) and Iran coming off sanctions.

lynn
June 20, 2021 5:16 pm

Oil will be $100 / barrel by Labor day. Maybe.

Gonna be panic in the streets when the price does not stop there.

Paul Johnson
June 20, 2021 9:38 pm

Regarding the project shortfall of oil extraction investment, the analysis seems to assume that the cost of oil extraction is unchanged from 2014. The rapid decline in investment from 2014 to 2016 reflects the impact of fracking, which significantly reduced the cost of petroleum production and pushed higher cost production out of the market. Future efficiency gains in exploration and production should be expected to further reduce capital demand. It might be instructive to compare global spending with global production to assess the decline in unit production cost.
A short-term price spike may materialize if demand ramps up faster than forecast, but the shorter cycle time for fracked onshore wells will shorten production response time.

John Garrett
Reply to  Paul Johnson
June 21, 2021 6:22 am

You are dead wrong. The rapid decline in industry capital spending from 2014 to 2016 was a direct result of the collapse of petroleum prices from over $100/barrel in 2014 to ~$30/barrel in 2016.

See: https://fred.stlouisfed.org/graph/?g=ETpj

Last edited 1 month ago by John Garrett
Kevin E Todd
June 21, 2021 12:47 am

In a fairly short period of time, we have made a considerable bet on the world’s green energy, such as solar energy, wind energy and biofuels. Some car manufacturers, such as Mazda, focus on the efficient use of green energy to reduce the use of oil. In addition, the timing of the car will tell us whether the bet will pay off.

Last edited 1 month ago by Kevin E Todd
ozspeaksup
June 21, 2021 3:33 am

aussie fuel prices are as high as if oil was 120+ a barrel right now
and with ZERO car manufacturing left were screwed when they stop making ICE cars in eu or usa
if they actually do
or we’ll be in great wall or indian knock off mercs vws etc;-/

Jeff Corbin
June 21, 2021 6:30 am

Yeah we are back to the races with gasoline consumption, and frankly we are all very pleased. Life is getting back to normal. The big bump in demand will rise gas prices… yeah I get it. It’s the Memorial day to July 4th peak and everyone is on the road again. Love it. But I don’t buy the long term investment as a predictive window into a slackening of the oil supply. There is plenty of capital out there to turn the cash flow/oil valve on and off. Maybe there will be a air lock in the supply tube with post pandemic spike in demand and prices soar a little. And maybe the reduced spending is due to the pandemic. The reduced spending could also be a sign of long term oil over-supply projections as Natural Gas takes a bigger chunk of the pie, (NG turbines, pumping out electricity for electric cars. I don’t like electric cars. I see them as inefficient consumers of fossil fuel (grid generation is 17%, burning gas in my care is 47%), but the fact that electric cars are here and coming maybe having a long range impact on investment. It was only 13-14 months ago when oil prices hit negative numbers. The pandemic sent shock ways through the layers of cartels and collusion. So how much is the price of oil based on supply and demand in the short or long run and how much of it is politics of the day. Much of it is up to a Saudi Prince/King/OPEC and how secure America makes him feel.1974, insecure: Israel/Egypt war… Saudi worries as US is silent concerning their security issues and are angered, gasoline goes from 33 cents to $1.00 1991, massive US military presence in Saudi Arabia (and they are our best new friends) very secure, down from $2.45 to 77 cents by 1996, Obama comes into office soft pedaling Iran and it shoots from $2.65 to $4.24 Trump is silent on Kasogi and gas drops to $2.10. Obama’s form VP, Biden comes to office and it goes from $2.25 to $3.35. Tell me this is supply and demand! Never forget the Sunni/Shiite conflict and the politics of the day when talking about oil prices. Why not promote electric cars, which promotes the grid, and our massive indigenous natural gas supply right here in my home state of Pennsylvania. Natural gas the fossil fuel that is good for greenie gooses and grid ganders. LOL

John Endicott
Reply to  Jeff Corbin
June 22, 2021 3:18 am

Jeff, you are cherry picking to fit your narrative. When Biden took office (price @2.25 per your post) gas prices were still *down* from their pre-pandemic level as COVID-restrictions were still in place (IE demand was still below normal levels). As restrictions are lifted and more and more people get back to normal behaviors (IE as demand rises) it’s not surprising that prices would rise (not to mention gas prices are seasonal, In the US they normally rise between Jan and Jun as warmer weather leads to more driving). This same thing would have happened regardless of whether Biden’s residence is in DC or if it remained in Delaware. Gas prices right now are currently not too much more than they were this time in 2019 (the year before the pandemic screwed up everything) and even closer to what they were this time in 2018 (and still below their peak of several years before that).

John Endicott
Reply to  John Endicott
June 22, 2021 3:35 am

(ETA this was in reply to Jeff, Must have hit the wrong reply button)

Also you say “it was only 13-14 months ago when oil prices hit negative numbers” without examining *why* that is so. First it was oil “futures” (the price of oil delivered in the future) that were negative. Think about why that was so. The country was in lock down (IE driving was curtailed, with mainly only essential workers on the roads, most everyone else was huddling in their homes not going anywhere) demand was *way* down. On top of that Russia and the Saudi’s were cranking up supply. There was literally more oil already on the market then needed and no one willing to pay for it as they didn’t need it.

If I’m a company that bought oil/gas expecting normal demand for this month, which doesn’t materialize (due to all of the above) and I’m not expecting the demand situation to improve all that much next month, how much oil/gas do you think I’m gonna order for next month when I already have most of my current months supply left over (and only have a limited storage capacity) and it will likely last me for that month and maybe the next as well? The answer is likely very little to none. You’d have to pay me to take more oil/gas next month because I don’t actually need it and don’t have much room to store it as the left over from this month will more than cover my needs for next month.

It was very much a classic supply/demand issue (huge supply, little to no demand) that drove those futures prices to the negatives.

Last edited 1 month ago by John Endicott
Caligula Jones
June 21, 2021 8:24 am

“I never thought leopards would eat MY face,” sobs woman who voted for the Leopards Eating People’s Faces Party.

Steven Soerens
June 21, 2021 11:08 am

Has anyone done studies / surveys on the extent that capital investment is being held back because of the uncertainty in the construction permitting process? It used to be that when you had your permit, you had your permit and therefore every expectation that you’d be able to complete the project. In 2016 Obama proved everyone wrong about that, when he had the Army Corps of Engineers pull the Dakota Gas construction permits. Notice in your chart of capital investment how closely that coincides to the drop-off.

The willy-nilly cancellation of construction permits for political expediency was not mentioned in the article, but it froze a lot projects on the drafting table. Who dares to invest billions of dollars in a multi-year project when you no longer have any assurance that you’ll be allowed to complete it, and have to eat it all as ‘sunk costs’?

angech
Reply to  Steven Soerens
June 21, 2021 4:56 pm

“the level of drilling and by extension capital investment is insufficient and has been for a number of years to sustain oil production at current levels.”
Just normal supply and demand, the market at work.
People only respond to pressure that is why we have to have crises to initiate change.
Will consider buying some oil shares, David
. Might be a good short or medium term strategy.

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