With Mass Vehicle Electrification on the Horizon, New Oil Development hits a 70 Year Low

“One thing is certain: Whenever the oil crash comes, it will be only the beginning. Every year that follows will bring more electric cars to the road, and less demand for oil. Someone will be left holding the barrel.”Bloomberg

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As the global climate situation worsens, the rickety and destructive old energy sources that caused the problem in the first place continue to look less and less secure. Meanwhile, the new energy sources that will help to address what is now a very serious crisis continue to gain strength.

Plummeting Oil Discoveries, Investments

A report out from the International Energy Agency this week showed that new oil discoveries had fallen to 2.4 billion barrels — less than 1/3 of the 15 year average. Meanwhile, the volume of conventional resources sanctioned for development fell to 4.7 billion barrels or the lowest level seen since the 1940s.

(Global oil discoveries and sanctioned developments hit historic lows during 2016. A structural trend due to new energy market factors that is likely to continue through at least the end of 2017. Image source: International Energy Agency.)

Sanctioned development is a direct measure of investment in new oil extraction infrastructure while new discoveries are a key factor in maintaining or expanding present oil supply rates of around 85 million barrels per day globally (total liquid fuels including biofuels are now 92 million barrels per day). If investments are falling along with new discoveries, at some point daily production rates will start to lag.

A combination of low oil prices, strong opposition to new oil projects, divestment of fossil fuel market capital, concern over climate change, loss of good faith in the oil industry, and rapidly falling renewable energy prices have all weighed heavily on oil exploration and new project investment. Intense efforts to extract unconventional oil (shale oil and tar sands) in the U.S. and Canada also depressed the broader global markets. IEA sees this trend continuing through at least 2017. A potential for price increases may emerge post-2017 due to supply tightening despite a feeble expected demand growth of 1.2 million barrels per day over the next five years. Given such weak expected increases in demand, most of any supply tightening would tend to come as flagging new project investments fail to make up the gap in falling well production rates.

Oil Major Predicts Electric Future

But over the same 5-year timeframe another factor pushing down global oil demand is expected to begin to emerge. Electric vehicle purchases, which now make up about 1 percent of the global market, are expected to dramatically expand in the coming years. A fact that even oil major Total acknowledges.

(Bloomberg New Energy Finance projects rapid adoption trend for electric vehicles. However, once this kind of market momentum starts, it can tend to snowball very rapidly. Potentially even more rapidly than this trend graph suggests.)

According to a recent report from Gas2:

At the Bloomberg New Energy Finance conference in New York on April 25, Joel Couse, chief economist for Total, predicted that sales of electric cars will surge from about 1% globally in today’s new car market to up to 30% of the market by 2030. If that happens, he says, demand for petroleum based fuels “will flatten out, maybe even decline.”

Coming from an oil major, this is a big admission. And one that jibes with past reports made by Bloomberg showing electric vehicles dramatically eating into global oil demand by the 2020s. Since Bloomberg’s 2016 report, new revelations have continued to emerge showing EV market strength. Battery prices are falling by 20 percent per year — which just keeps making both EVs and related battery storage more accessible. Meanwhile, EVs continue to develop in ways that surpass their conventional counterparts. Michael Liebreich, who founded Bloomberg New Energy Finance, expects that by “2020 there will be over 120 different models of EV across the spectrum. These are great cars. They will make the internal combustion equivalent look old fashioned.”

Potential to Decimate Oil Demand in Just One Decade

More than 50 percent of global oil demand comes from gasoline use. Another 15 percent of that demand comes from distillate use which includes diesel — which is also a motor vehicle based fuel. Start replacing significant portions of the global vehicle fleet with EVs and that demand is going to fall.

(Total oil demand is significantly vulnerable to fluctuations in gasoline and distillate products demand — both of which are heavily impacted by electric vehicle and solar energy adoption rates. Image source: Quora.)

This is arguably already a marginal feature of the oil market with EVs making up 1 percent of global vehicle sales and with solar now acting to directly replace diesel based electric generation. But the ground swell we are beginning to see in the energy markets appears to be the start of transformational trend.

Cities and countries are banning (or planning to ban) petrol-based vehicles. Automakers like Volkswagon, GM, Nissan, BMW, Audi, Ford, and Toyota are dedicating increasing portions of their vehicle fleets to electrics even as all-electric manufacturers like Tesla are growing more dominant. And fast charging stations that are capable of 5-10 minute charge times are on the horizon. Given the emerging confluence of affordability, capability and desirability — it appears that a big, S-curve-like, EV adoption bump is coming on fast. If and when such an event occurs, a crash in oil production rates is likely to follow soon after.

Links:

International Energy Agency

Total Predicts Electric Cars Will Decrease Oil Demand

Bloomberg New Energy Finance

How Goliath Might Fall

The 5-10 Minute EV Charging Stations are Coming

Quora

Hat tip to Steve Piper

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Toxic Interests: In Lead-up to Paris Summit, Conservative Politicians Around the World are Fighting to Kill Renewable Energy

We have seen the enemy and he is us.

‘He,’ in this case, is those among us now fighting an all-out war against government programs aimed at reducing the damage caused by human-forced climate change. And in this present time of ramping climate catastrophe, there is no excuse at all for this morally reprehensible activity. Yet, excuse or no, the foul actions of these shameless ignoramuses continue. For all around the world conservatives (called [neo] liberals in Australia) with ties to fossil fuel based industry continue to scuttle programs that would result in the more rapid adoption of renewable energy systems even as they undermine related initiatives to increase energy efficiency.

At a time when the world faces down a growing climate crisis — one that will have dramatically worsening impacts as the decades progress — these failed and corruption-born policies represent the most abhorrent of political activities. And as the world convenes to consider how best to lessen the danger posed by an unfolding global tragedy, there are many in power who are now actively working to increase that danger.

More than anything else, this corrupt group is fighting to enforce ramping dangers, an ever-broadening harm, and untold future tragedy.

Shutting Down Coal to Build Natural Gas in The UK

This week, the conservative government of the United Kingdom made what seemed to be an optimistic announcement. It now plans to phase out all coal generation by 2025. Because coal power generation is the worst of the worst among carbon polluters, this news was rather good. Good, that is, when one doesn’t take a look at the broader context of current UK energy policy. And taking that look, we find what could best be described as an utterly abysmal state of affairs.

wind_power

(Wind power, produced by these and many other majestic towers turning over the UK countryside, is a critical solution to human-based fossil fuel emissions and a target of conservative energy policies. Image source: British Wind Energy Association.)

Ever since coming to power this summer, the conservative government has consistently cut subsidies for renewable energy while providing subsidies for some of the worst polluting facilities imaginable. Recently, UK Energy Secretary Rudd received stark criticism for this move along with pointed words over related backward policies like the provision of subsidies for expensive and polluting diesel-electric generators. Pointed words that came from both politicians and scientists alike. One such scientist was chief of the UN’s environmental programme Jacqueline McGlade who recently stated in the Financial Times:

“What’s disappointing is when we see countries such as the United Kingdom that have really been in the lead in terms of getting their renewable energy up and going — we see subsidies being withdrawn and the fossil fuel industry being enhanced.”

So even as conservatives in the UK are phasing out coal, they are replacing it with oil and natural gas. Fossil fuel replacements for fossil fuels at the expense of both zero-carbon renewables and a climate capable of supporting human civilization. For both oil and gas are still major carbon emitters. Especially when one considers the UK conservatives’ intention of fracking the countryside in search of these dangerous fuels. A method of extraction that has proven to increase emissions of volatile methane gas. And each new gas or oil plant built will continue to pump carbon into the atmosphere for decades even as it risks having its production lifespan cut short as the damages caused by carbon pollution become ever more obvious.

From the Financial Times:

Ms Rudd told the Today programme she wanted to rewrite the rules of the scheme to encourage gas instead. She said: “We have a capacity market auction coming up. We are going to review it carefully afterwards and ensure we do get the new gas we need.”

Conservatives, in this case, who have ideologically (and ludicrously) campaigned against all subsidies have instead decided to subsidize the bad climate outcomes all while cutting funding for solutions.

Fighting Renewable Energy Subsidies, Clean Power Plan in the US

In the US, the situation is only slightly better. Slightly better in that conservatives do not currently hold the Presidency. That said, conservatives are still doing their damnedest to kill off practically every renewable energy program the United States has to offer.

In May, House Republicans presented a bill (HR 1901) that would completely kill off the Production Tax Credit (PTC) for wind energy in the US. This in contrast to a permanent wind Production Tax Credit proposed by Obama. Meanwhile, the same Republican clowns who bring snowballs into the halls of Congress as supposed proof that global warming isn’t happening repeatedly try to de-fund the PTC for both wind and solar at each and every new budget session.

And it’s primarily due these efforts on behalf of fossil fuel backers by Republicans that the PTC is set to expire again by 2017. A move that will inject volatility into the renewable energy markets and bite into what has been an amazing period of growth by both Wind and Solar energy across the US. Growth that has happened despite Republicans’ apparent best efforts to halt it (see Paul Krugman’s Enemies of the Sun).

US Solar Energy Adoption rate

(US Solar energy adoption rates continued to soar in 2015, jumping to 40 percent of all new installed energy capacity for the first half of the year. These great gains have occurred despite broad based assaults on public policies supporting the rapid adoption of this critical renewable energy source. Image source: US Solar Market Summary.)

Though the PTC represents the Federal Government’s big support program for wind and solar energy development, any program that would reduce carbon emissions falls under attack. Republicans, who have hypocritically spoken in favor of US energy independence, mount repeated attacks on increases in Corporate Average Fuel Efficiency Standards. Republicans incessantly assault the EPA and its underlying Clean Air and Clean Water Acts. But more recently, Republican attacks against EPA have focused on the underpinnings of Obama’s Clean Power Plan. The plan, which sets modest goals to reduce US carbon emissions by 32 percent below 2005 levels through 2030, would also greatly increase the rate of US renewable energy adoption, force the early retirement of the worst polluting power plants, and push for further increases in energy efficiency. Exactly the kind of progress against human forced climate change and toward US energy independence that Republicans apparently abhor.

By contrast, there hasn’t been a bit of legislation supporting fossil fuels that Republicans haven’t loved. Republicans constantly call for ending the oil export ban — a move that would greatly benefit US-based oil corporations. They wholeheartedly support the polluting and groundwater destroying process that is fracking. They’ve repeatedly called for increased drilling of all kinds everywhere including offshore drilling, Alaska National Wildlife Refuge Drilling, and Arctic Ocean Drilling. And they continuously support the dirtiest, highest carbon emitting fuel sources imaginable such as Canada’s Tar Sands and Coal. In fact, Republicans support for coal extends to the point that they frequently pass bills like this one which would allow toxic fly ash the enter groundwater supplies.

At the State level conservative republicans have repeatedly attempted to ram through ALEC and Koch funded bills to roll back net metering laws and renewable energy targets (see Koch Brothers, Big Utilities Attack Solar Energy). All while attempting to open public lands and waters to every variety of drilling and coal mining.

But despite these broad based attacks, renewable energy in the United States continues to make major gains even as energy efficiency measures advance. Sadly, the pace of carbon emission reduction and related renewable energy adoption has been greatly slowed by these continuous attacks by conservative Republicans.

Australia — From Terrible to Not Much Better

In the Southern Hemisphere, recent years have seen a wholesale gutting of renewable energy based policies by the Tony Abbott government in Australia. Time and time again, Abbott (which like northern conservatives foists laizzez faire markets and supports destructive industries like fossil fuels) pushed for a roll back in Australia’s previously aggressive renewable energy adoption rate all while trying to breathe new life into a zombie coal mining, export and power industry.

By Summer of 2015 the situation had gotten so dire that solar energy industry leaders were calling Abbott’s actions a ‘vindictive crusade’ against the renewable energy industry. John Grimes, head of the Australian Solar Council, this July launched an attack on the Abbott government after Australia’s Clean Energy Finance Corporation decided to stop funding new wind projects.

In a statement to the Saturday Paper, Grimes asserted:

“If Abbott continues this way, we’re [the solar industry] finished. We know that solar and other renewables are competing with coal, and Abbott is intent upon protecting that industry. So, this is our WorkChoices moment. We will be mobilising, and we’ll be campaigning in marginal seats. We’re starting to plan this now.”

RET cut

(During June of 2015, the Tony Abbott government cut Australia’s Renewable Energy Target [RET] from 41 gigawatts by 2020 to 33 gigawatts. Unfortunately, the new Prime Minister — Malcolm Turnbull — hasn’t moved to support previous, more aggressive targets. As such, Tony Abbott’s legacy of cutting renewable energy in favor of coal lives on. Image source: Renew Economy.)

By Fall, the Abbott government had fractured. This development likely in no small part due to campaigning by renewable energy supporters and those concerned about human caused climate change. The new head of the Australian Liberal Party (don’t let the name fool you, they’re just like conservatives everywhere else) Malcolm Turnbull, when considering past performance, might want to support cutting edge solar technology for Australia. However, in his first months as Prime Minister he appears to have done little but cowtow to his numerous coal industry supporting party colleagues.

As an example, Turnbull’s appointed Chief Scientist Dr Alan Finkel recently stated:

“My vision is for a country, a society, or world, where we don’t use any coal, oil, or natural gas, because we have zero-emissions electricity in huge abundance”.

But Turnbull, who is now being pushed by his political colleagues to make it illegal for environmentalists to sue coal companies if they open up new land to mining, felt the need to defend coal on the same stage by making the following and highly fallacious statement:

“If Australia were to stop all of its coal exports … it would not reduce global emissions one iota.”

Due to renewable energy’s popularity in Australia, due to Turnbull’s own likely affinity for the development of cutting edge wind and solar ventures, but also due to the terrible and intransigent institutional legacy of coal support in his party, the Turnbull government has come across as schizophrenic on the issues of renewable energy and climate change. On the one hand, some within Turnbull’s administration make statements like that of Dr. Finkel above. But when it comes to actual policy, Turnbull has continued to support many of the disastrous initiatives set forward by Tony Abbott. Which makes the Turnbull government look like it’s attempting to greenwash a facade over a rather ugly coal-ash face.

If Leaders Can’t Support Renewable Energy and Work to Halt Fossil Fuel Burning, Then They Need To Go

Though the UK, the US and Australia do not make up the entirety of the western world, the conservative anti-renewable energy and pro-fossil fuel sentiment represented in these three countries is wide-ranging. Such sentiment is common to conservative governing groups around the world — from Canada to Europe to New Zealand and beyond. In the western democracies of the world this crippling ideology is preventing a necessarily rapid push to adopt non-carbon energy and prevent the worst impacts of global climate change.

As we approach the Paris Climate Summit, we should be very clear on this one political issue of key importance. If these people continue to hold political power, we will not act rapidly or decisively enough. We will find ourselves overwhelmed by consequences as their delaying actions stymie any effective response. It is therefore crucial that the supporters of the fossil fuel industries of the world are removed from office. They have shown themselves for their true colors — they’ll continue to support these harmful and wretched fuels regardless of consequences, regardless of any, even the most extreme, risks to their own nations and to the nations of the world.

Links:

Top UN Scientist Criticizes UK Cuts To Renewable Subsidy

UK Coal Fired Plants to be Phased Out

Ministers Accused of Trying to Sneak Through New Fracking Rules

Methane Leaks Wipe Out any Benefit of Fracking

Republicans Fight to Repeal PTC for Wind

House Panel Passes Extenders Package Without PTC

Enemies of the Sun

The GOP Assault on Environmental Laws

The Clean Power Plan

GOP Attacks on Clean Power Plan Going Nowhere

163 Republicans Push for More Offshore Drilling

Republicans Push for Renewed Drilling in Alaskan National Wildlife Refuge

Republican House Passes Bill Forcing Keystone XL Approval for the 9th Time

Republican House Passes Bill That Would Allow Toxic Coal Ash to Enter Groundwater

Koch Brothers, Big Utilities Attack Solar Energy

US Solar Market Summary

Abbott’s Campaign to Kill the Renewable Energy Sector

Renew Economy

Australia Slashes its Renewable Energy Target by 20 Percent

 

 

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