oil and gas

Oil at $10-$20 a barrel?

A Paris based banking group with C$3.5 trillion in assets has a startling message for potential oil industry investors.

With our analysis showing that wind and solar in tandem with EVs will yield significantly more useful energy for mobility than will oil for gasoline- and diesel-powered light duty vehicles (LDVs) at $60/bbl, the real question is this: at what price would oil need to trade over the long term in order to remain competitive in the market for mobility?

For gasoline LDVs, we calculate the oil price required to yield as much net energy as would new renewables projects in tandem with EVs at $9-$10/bbl, and for diesel at $17-$19/bbl...

Indeed, the clear conclusion of our analysis is that if the world were building out the global energy system from scratch today, then the economics alone would dictate that at a minimum the road transportation infrastructure would be built up around EVs powered by wind- and solar-generated electricity rather than around oil, refineries, and gasoline and diesel vehicles.

This analysis is in line with statements by Gary Shilling, a renowned economist who forecast that crude oil will drop to $10. When he said that in times of economic disruption, smart operators win and investors lose, he should have included taxpayers among the losers.

Of course, BNP Paribas admits oil has a massive incumbency advantage. The industry has invested heavily in politicians and corporate media, the fools and tools it needs to keep billions of dollar in subsidies flowing from the public to the private sector.

We are left to wonder if Trudeau Liberals received unbiased advice before they committed more than $15 billion to a pipeline that will allow expanded production of the world’s most expensive oil.

Too bad that $15 billion will not go into energy efficiency or clean renewables. European nations are solidly on the road to change. A single off-shoe project is planned to supply renewable energy to 80 million people.

In June 2016, nine countries, including the Netherlands, Germany, Belgium, Luxemburg, France, Denmark, Ireland, Norway, and Sweden signed an agreement to build offshore wind parks with the primary purpose of reducing costs and making renewable energy more economically viable.

The North Sea Wind Power Hub Consortium

A windpower executive spoke five years ago about constant winds off BC’s north coast giving potential for the province to be a top place for wind energy.

In partnership with First Nations, BC could turn the lightly populated northwest coast of Vancouver Island into the future powerhouse of western North America.

But, doing so requires visionary leaders and those are rare commodities.

Categories: oil and gas

4 replies »

  1. It is unfortunate that government is in the pockets of their corporate donors….both provincially and federally. That marriage has clouded their vision.
    Thanks again Norm for another insightful article.

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  2. I’ve been amazed to see two brand new gas stations being built in Chilliwack this summer. Both are in odd locations, with inconvenient access to the freeway and dubious local traffic flow. Not prime locations at all.

    The oil companies must know what they’re doing, to invest so much money and endure so much red-tape dancing, to put in these new stations. Apparently, there’s no fear (in the oil offices) of being made redundant by electric cars in the next decade or two.

    I wouldn’t be so sure. I just bought an e-bike and my car has sat idle for five days — and as I look around, the conversion to e-transport is steadily gaining momentum.

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  3. It is time of great change as the oil and gas industry are slowly ebbing into history.

    The problem is that ebbing into history is jobs for the less than fully educated and government desperately need these jobs to keep the rabble employed. Too much unemployment means regime change.

    The Liberals, Conservatives and the NDP are guilty pandering to the old order and have wilfully ignored the new order of things.

    In Europe, most houses now have a wind turbine and solar panels and solar heating.

    Alternative fuels, including hydrogen powered trains are now in revenue service. Even the roads are being planned as massive solar generators.

    In Canada, we are sitting on our asses, squandering billions on yesterday’s ventures and ignoring the future.

    Trudeau should know better, but I am afraid the the Liberals have become “Lotus Eater”, when it comes to alternative energy; the Conservatives deniers and the hapless NDP only care if there are union jobs to be had.

    For whom the gods wish to destroy, the make mad first!

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  4. Ironically, a perpetually windy region is the Peace River region in BC, in the site C dam areas. So much more could have been done with this magnificent microclimate and fertile land. Yes, it might well be a reservoir for clean water for other than BC residents (read US), but it could have generated other than hydroelectric electricity.

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