For Shell, Oil Is Past Its Peak

[Velasco]

Very few people speak about it, but we are at the gates of an energetic crisis that will have an impact in all aspects of life

https://www.nytimes.com/2021/02/11/business/shell-oil-production.html

 Royal Dutch Shell on Thursday made the boldest statement among its peers about the waning of the oil age, saying its production reached a high in 2019 and is now likely to gradually decline.

Shell’s “total oil production peaked in 2019” and will now drop 1 or 2 percent annually, the company said in a statement.

The announcement, part of the small print of a presentation about future clean-energy goals, is a turning point for one of the world’s leading oil firms, one dating back to the 19th century. And it underscores a talking point that the company’s chief executive, Ben van Beurden, has expressed for years: To stay in business, Shell must be seen as part of the solution, and not the cause, of climate change (...)

Demand for oil has revived somewhat since last spring’s collapse, and oil futures returned to their pre-pandemic levels on Monday, but Shell and other companies clearly realize that oil is no longer the mainstay they can count on, so they are investing more in renewable sources like wind, solar and hydrogen.

European oil companies are all heading in roughly the same direction regarding fossil fuel production, with some differences in approach. BP said last year that it would probably cut oil and gas production by 40 percent by 2030-  

According to some sources, global peak oil was reached by the end of 2018. The fact is that big oil companies have been divesting in the exploration of new deposits, due to the decreasing profitability. The problem is that our economy is highly dependent on oil production, not only for energy production but specially in transport. Currently 90% of the global energy production depends on oil, coal, natural gas and uranium and all these non-renewable sources are reaching their peaks.  These production peaks don't imply that the world going to stop using such sources, but their availability will diminish gradually over time with a huge impact in energy production and transport. Renewable sources like solar and wind have serious limitations and cannot supply the same amount of energy produced by non-renewable global-heating sources. Let alone the limitations of electric cars (there are no raw materials available to produce 1 billion of these, in replacement of the private cars with internal combustion engines existing worldwide) and the 'green' hydrogen (the new energy swindle after the biodiesel fiasco).

I heard to an energy expert that oil production could decrease by 50% in 2025, if no action is undertaken. Possibly it won't happen, because such a decrease would imply a total collapse of the global economy. Forget about shale oil or synthetic substitutes, they are not viable solutions and the former is poisoning water resources that will be increasingly vital. The implications of a sharp oil decline in transport of goods and energy production would be terrifying (let alone tourism, an industry with gloomy prospects). Governments should be planning adaptative and global responses to the upcoming crisis, as well as telling people the truth about the situation. The problem is that it's politically unacceptable, because admitting there exists a problem implies admitting there's something wrong in our economic model.

Don't expect technological miracles and forget about a 'Green New Deal' because renewables are not enough to sustain our energy consumption levels (and transport depends on oil). Of course solar and wind are better than fossil fuels, but they won't sustain the current model. Either we adopt strategies towards degrowth and energy saving, or we will forcibly degrow in the form of a societal collapse. Given the vast amount of energy waste in the developed countries (US, Australia and Canada are on top, followed by Europe), there is a lot of work to do in this respect

[Velasco]

Degrowth advocates persistently make the error of their granddaddy Malthus: failing to even remotely consider the effects of technology, and believing again and again that given problems are a completely unfeasible conundrum, despite the evidence of, um, the entire history of humanity since the Neolithic Revolution.

I used to think in a similar fashion, but I don't think that putting all one's hopes on technological miracles is the best course of action. Technological progress has been a constant in the history of humanity, that is true. However, decades of inaction with regard the climate and the energy crises are leading us to a point of no return (the most pessimistic folks think we have already passed it). There are several scientific studies (and even physical laws) pointing that perpetual economic growth based on increasing energy supply is not possible, or that it's incompatible with thepreservation of biodiversty. On the other hand, degrowth does not necessarily imply impoverishment. If we were able to make a correct use of energy and the limited resources available (via technology or whatever), it'd be possible to reduce consumption without reducing considerably living standards. But that would require a change in consumption patterns and a radical change of model. The era of rapid economic growth and prosperity that began after WW II is gone forever. Given that we are reaching the limits very fast and the resources available are not going to increase (rather, they will decrease), the current capitalist model will have to evolve in order to adapt to a new era of economic stagnation. The problem is that evolution might take a dystopian direction. Hopefully we'll find technological solutions in the future, but there are no foreseeable technological developments that will save the situation in the short term and there is a sense of urgency because the situation is critical now.

On a side note, electricity amounts only 20% of the energy production. Solar, wind and hydro produce electricity. There are plenty of things, particularly in transport and heavy machinery, which are extremely difficult to electrify. I'm all for renewable energy and electric trains  but we are far from developing electric trucks, ships or planes

[Velasco]

Technological advances were happening to solves crises well before the second war. Plato's Republic has a phrase that loosely translates to our modern "Necessity is the mother of invention." In 1972 there was a popular piece of futurism called "The Limits to Growth" which was a big deal when I was in high school. It used computer modeling to forecast major sector assuming linear growth in tech with exponential growth in population. Global industrial production was supposed to be in decline earlier this century and food production was supposed to peak about now. It turns out that tech can also move exponentially, it just happens in spurts.

Before 2020 no vaccine had ever moved to market in less than 4 years. Covid drove innovation to use existing tools at a pace never seen before. I have no reason to think that Plato was wrong, and innovation will surge when societal pressure requires it.

Advances happen, as you say, but they are by no means exponential in the field of energy production. "The Limits of Growth" was a first call of attention. The fact that computer modelling in 1972 was not as developed as it is nowadays (and still modelling has limitations, for the simple reason that complex systems like climate are infinitely variable) does not invalidate the main premises of that work, in my opinion. So far scientific advances and technological progress have not found a magic remedy to replace fossil fuels, while sustaining a continued economic growth. The problem appears nearly impossible to resolve. On the one hand,  econonic growth relies on non-renewable energy sources which have reached their peak in production ; on the other hand, economic growth based on fossil fuels is deteriorating the climate and the environment to a point of no return. Waiting for a miracle to come without undertaking actions or revising the model sounds foolish.

In reply to The Birth of Babalon, Elon Musk is indeed a fraud and so far "green energies" need non-renewable components. Eco-fascism,  authoritarianism,  technocracy and exponentially increasing inequality are real menaces. We are heading towards a societal collapse or a dystopian model of society if we follow the same course as of now

As for the "peak oil",  you can find a lot of information in the ASPO webiste

http://www.aspo.be/en/peak-oil/

[Velasco]

I'm not saying that technological progress won't find solutions on the mid term, but certainly there are no signs of a technological miracle the short term. As I replied Crabcake  earlier, hopefully we'll find something. The problem is that we are lacking sources to replace fossil fuels right now and there is no time to wait for miracles anymore. If we wait 25 years for technological remedies that might come or not, while we continue with the same patterns of consumption, all the tipping points will be reached and left miles behind by the time we find something new

As for batteries and energy storage. As I said earlier electricity supplies only a part of energy production (20% approx). In the current state of technologicsl progress, there are no alternatives to fossil fuels in civil and military transport (trucks, ships, planes) and heavy machinery, among others

It may not be popular to say these things, but we are not in a situation to paint a glossy picture of the future. On the other hand, the energetic crisis is totally absent in public discussion as of now. Given the magnitude of the problem, I find that's incredible