So as the world began to recover and reopen from the pandemic, everyone is learning the hard way that narrative one – oil is a sunset industry – has helped increase commodity prices and created supply issues for narrative two – continued fossil fuel consumption because of a lack of practical alternatives. Apparently, a lot of people don’t know that. You cannot make plastic or jet fuel from solar power. That’s because they are essential, cheap, dependable and readily available. Whatever the people of the world are supposed to do, they refuse to quit buying fossil fuels. The other narrative is consumer demand and economic reality. So if we say this a lot, will you please leave us alone and let us do our business?
We don’t know how, we don’t know when, but we sure know why. Combined with the collapse of cash flow from low oil and gas prices since 2014 and its complete disappearance because of 2020’s pandemic lockdown, many industry executives gave up and began repeating what the opponents of fossil fuels want to hear. If you’re in the oil business, this onslaught eventually wears you down. As are accusations that oil executives are “climate criminals.” Terms like “stranded assets” and “sunset industry” are commonplace. Every tool imaginable (and previously unimaginable) has been employed. The first narrative is that petroleum can and must go as soon as possible. In fact, energy shortages are making things much worse than proponents of decarbonization had predicted or even imagined.įor years there have been two conflicting narratives about the future of oil. This translated into political support and policies in Canada, the US and most European and OECD countries.īut this is changing fast, giving fossil fuel providers another opportunity to state the obvious.īecause no matter what we’ve been repeatedly told, there are no large-scale replacements for petroleum, natural gas and coal at the present time. These conditions enabled those making aspirational claims about the bright future of low carbon energy alternatives to have a significant influence on public opinion. Low energy costs and ample supplies since oil prices collapsed in late 2014 have lulled the world and its political leaders into a false sense of security.
UK utilities are going broke because the government has capped prices lower than their natural gas supply costs. A fertilizer shortage next year could make things much worse.
Gas supplies from Russia are threatened by a new level of geopolitical uncertainly including the possible Russian military invasion of Ukraine.īecause of high gas prices, European fertilizer plants are shutting down as uneconomic. The region is going into winter with below-normal levels of natural gas storage. The big ice storm in Texas early this year demonstrated the fragility and consequences of insecure and unreliable energy supplies when they are needed the most.Įurope has been plagued by months of lower than required levels of renewable electricity, leading to massive price spikes. Because events of the past year have materially changed the channel on the pace of the so-called energy transition. Selecting words from the slogans invented to obfuscate the impact of rapid decarbonization, let’s call it a Just Reset. For the first time in a long time, the tall foreheads of the world’s oil and gas industry screwed up their courage and started telling the truth about the future of petroleum in the years and decades ahead. The World Petroleum Congress in Houston wrapped up on December 10.
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