Cap And Trade
Published on May 28th, 2015
by Tina Casey
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May 28th, 2015 by Tina Casey
Calling all Debbie Downers! Last week, while we were getting the inside scoop on Germany’s plethora of cutting-edge cleantech innovations, over at the global Business and Climate Summit in Paris it was business as usual. US Secretary of State John Kerry delivered a video message that was met with howls of protest from major fuel and petrochemical companies, which dug in their heels against his proposed carbon strategy. However, there was one bright spot, as Kerry offered up yet another hint that the controversial Keystone XL tar sands pipeline just ain’t gonna happen.
John Kerry’s Modest Proposal
It took us a while to track this down from news reports, but apparently the negative reaction was to Kerry’s announcement of the State Department’s 2015 Global Impact Economy Forum on clean energy investment, to be held this fall.
It’s a followup to the agency’s 2012 Global Impact Economy Forum, which was the launch of an ambitious program to leverage and coordinate “cutting-edge” financial instruments to accelerate clean energy investment as well as financial and social initiatives aimed at supporting US foreign policy. Here are a couple of snippets from the 2012 website:
Promoting the development of the Impact Economy is at the center of U.S. foreign policy objectives.
[snip]
Further, the Secretary’s 21st Century Statecraft calls for us to reach beyond traditional state-to-state interactions and harness the assets and tools of business to strengthen our diplomatic efforts.
The 2015 Impact Economy Forum promises an even closer focus on clean energy and climate change, which does not bode well for legacy projects like the Keystone XL pipeline.
Announced during the closing session of the Business and Climate Summit, the 2015 event will serve as a showcase for clean energy investment success stories from US government agencies, presumably including the incredible Energy Department Loan Programs Office, among others.
The aim is to demonstrate the powerful resources that government has on hand to accelerate private sector investment, all with an eye to boosting the chances for a successful global climate accord in Paris this coming December.
Combine that ambitious goal with Kerry’s long-running history of environmental activism, and the future looks pretty gloomy for the Keystone pipeline (for those of you new to the topic, the pipeline would bring tar sands oil from Canada down through the midsection of the US, to the Gulf Coast).
Howls Of Protest!
If the reaction to Kerry’s video announcement is any indication, executives at TransCanada, the Keystone pipeline’s developer, must be getting the willies.
Bloomberg reports that during last week’s conference, “Europe’s biggest energy companies clashed with US Secretary of State John Kerry,” particularly Royal Dutch Shell and Statoil, along with the chemical company Novozymes and the utility RWE.
Then there’s The Financial Times, which described how the world’s largest exporter of power station coal insisted that only coal can meet global energy needs (no, really?), only to be countered by SkyPower CEO Kerry Adler, who pointed out that new storage technology is a game changer for supplying electricity to India and other emerging economies (SkyPower is a solar company, no surprise there).
The Guardian also offered up some juicy dish, with executives from Statoil confirming the fossil-energy-forever sentiments of other industry leaders. Meanwhile, Novozymes pushed the case for carbon pricing from another angle. Here’s CEO Peder Holk Nielsen cited in The Guardian:
…The oil companies will not help the world to switch to renewable energy – that will never happen. They are part of a system that protects the business they have. The only way the world gets more renewables is if bold politicians step up to it and mandate.
The point of contention is that Kerry’s fall forum basically skips over the whole carbon pricing strategy for cutting global emissions. It aims to bring a whole new crop of players to the energy investment table that are unencumbered by fossil assets, primarily by focusing on emissions targets rather than carbon pricing. That puts legacy fossil companies — and their investors — at a huge disadvantage.
Considering the years of failure to pursue renewable alternatives, stalling, pushback, and misinformation (we’re talking about you, ExxonMobil) churned up by the fossil industry, you could say the fossil companies have no-one to blame but themselves. The green business investment group Ceres, among others, has been warning about this sort of thing for a long time while offering investors clean energy alternatives.
The Writing On The Wall For Keystone XL Pipeline
We said the Keystone pipeline was toast a couple of years ago, but the writing has actually been on the wall since 2000, when Sheikh Ahmed Zaki Yamani, former oil minister of Saudi Arabia, issued this prescient observation:
Thirty years from now there will be a huge amount of oil – and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.
Though there are a number of geopolitical reasons why the Saudi Kingdom has refused to cut production during the current oil price crash, industry observers are beginning to apply Occam’s Razor to the global oil glut, and some have hit on Yamani’s statement as the most simple reason: it’s better to sell low than not sell at all.
Meanwhile, as we pointed out earlier this year, Saudi Arabia has begun to crank up its renewable energy sector with considerable government support — precisely the kind of strategy that Kerry hopes to accelerate at the 2015 Global Impact Economy Forum.
Stay tuned.
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Photo Credit: TransCanada Keystone pumping station in Nebraska by Patrick Shannon via flickr, creative commons license.
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Tags: John Kerry, Keystone XL, SkyPower
About the Author
Tina Casey Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.
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The temperature in Alaska is 80, parts of India 120, over 1000 deaths, unusual weather in parts of the US, forest fires they can’t put out in Russian and Canada in May.
If this gets significantly worse in the next decade the oil companies will also feel the heat.
Hmm, it appears that the number of tornadoes in the US has been decreasing for the last 60 years. Whats up with that? I guess it could qualify as unusual weather, but why?
It is certainly not unusual to have serious forest fires in Canada. We do have a lot of forest.
It is very unusual to have large forest fires in western Canada in May.
The number of tornadoes has remained about the same for the last 50 years with 2011 being the worst year on record.
The fire season has extended to year-round in California.
I live in western Canada and large fires are not at all unusual. In fact they are commonplace every time there is a dry spring.
True that 2011 was about the worst, or maybe a result of better reporting, but then 2012 and 2014 were among the lowest. The number of tornadoes reported has remained about the same or slightly lower. Non of these scenarios support a contention of unusual weather.
And the northern spread of bark beetles and resulting massive tree die offs?
Yes bark beetles may be spreading because of less extremely cold winter days. Then again they might be mutating or adapting to more northern areas or higher elevations. They may even be contributing to more forest fires by making more dry fuel available. What exactly has this to do with keystone.
Western Canada forest fires this year, 2,365 long term average, 1738 up 136%. HA’s burned this year 157,381, long term average 87,409 up 180%, as of May 27th.
Just another normal year, nothing to worry about folks!
Nobody claims it is a average year. But being on one side or the other of average is normal. This year may be unusual but it is not abnormal.
I have a ranch in the Chilcotin. I am 72 and have never seen it this dry. That is abnormal!!
Well, you are are a year younger than me but I have seen many dryer years in the area I live in. The rains we usually get this time of year are late, however, and contributing to conditions favorable for fire. We have recently had a little rain locally but most of the province has not.
I have visited 100 Mile House, Williams Lake and Barkerville but am rather unfamiliar with your area. I do know it is beautiful country and must be a wonderful place to own a ranch. I am sorry it is so dry in your locality. It must limit the grazing potential considerably.
But Bob, Rocky lives there and can see the whole country from his house. Stats have nothing to do with it.
There are three kinds of lies, lies, damned lies, and statistics. I am not sure who I am paraphrasing there, but I am not the first to say it. Besides I can travel and am not blind. Funny that you would assume I just sit in my house and peruse the internet or is that your method of accumulating information.
It’s a misstatement.
There are three kinds of lies. Lies, damned lies, and lies told by liars who misuse statistics in their lies.
The last kind are the most damnable, because they can sound so believable.
I suppose you could travel to the library and get some temperature and fire incidence data.
Or just look it up online. ;o)
You can look up almost anything online, but it is hard to judge what is true, what is opinion, and what is just damned lies. I have found that much is just plain misleading and in almost every instance I find contradictory information. It seems necessary to do a lot of research before accepting anything. It is a valuable resource, though, if used with care.
Over time one learns which are the most trustworthy sources. And what sources should be avoided.
I’m pretty comfortable with US/Canadian/European government sources. Don’t trust North Korea at all.
That said, I’m not comfortable with all US government sources. I’m fine with NASA, NOAA, EIA data. No trust in stuff coming out of Republican Congressional hearings.
Generally, I agree with you, but I think some of NASA and NOAA data may be colored by bias . Generally good though.
I’d try to find some solid data that supports your bias opinion before you continue to hang on to it.
Science treats data with huge respect. One does not screw with data. Screwing with data is a career-ending activity.
Just last week someone was found to have faked some data in a social science journal paper. They will now be looking forward to a career in fast food.
There are built-in safeguards when it comes to scientific data. Almost certainly someone is going to gather similar data and if theirs does not match yours then thousands of eyes are going to be focused on what went wrong.
Scientists are humans and mistakes are made. New data is always looked at with some skepticism. I use to tell my students that if a paper comes out that is “ground-breaking” to look at it with the attitude of “This is interesting and it might turn out to be true”. When the first supporting study is published the assume the finding has a decent chance of being correct. But wait for a third or fourth paper in agreement before accepting the finding as likely correct.
If you publish something that is “too good to be true” then someone is likely to replicate your study. I published two papers in which I showed published results were due to design flaws. Both papers had findings that were out of line with the general trend so I spent a few hours per day for a few months and ran the studies on my own. I also re-ran one study with unusual results and confirmed the findings. This sort of stuff happens all the time.
When it comes to data such as global temperatures from NOAA, there are other organization around the world gathering the same data but with a different set of sensors placed in different spots. That leads to some small, but insignificant, differences. But when all those data sets basically agree with each other then that’s data that’s trustworthy.
In my own experience NOAA data suggested that my area had higher than average temperatures last May. My own research using environment Canada Weather station data over a large area showed our temperature highs to be about 3 degrees C below average and lows to be about average. Personal observation agreed that we had a colder than normal May. Admittedly, their data was for a larger area and probably fewer measurements but it did not give me much confidence in their data. I did not say the scientists were biased but that their data could be, by measurement methods and by choice of data. That said, you can’t honestly believe that scientists do not have bias? The only question is how they are biased
So because a small section of an area had a different temperature average than the larger area the larger area must be wrong? That’s like saying that because your rent went down the average rents for your state couldn’t have gone up.
There’s going to be some noise in just about any data set. There are statistical methods for removing then noise and finding the signal. Temperature trends, for example, are so noisy that climate scientists look at 18 year periods, not single years.
In climate science there’s no assumption that 10C/whatever on one device is the same as 10C on another. What is looked at is the amount of change in temperature for each individual device.
As far a bias, the question is not the direction of any personal bias, but how well the bias is controlled. When one designs a study a lot of effort goes in to how to keep bias and other confounding variable at a minimum. In drug research, for example, we often use double blind studies where neither the patient or the administering/evaluating doctor knows whether an individual patient received the drug being tested or a different drug/placebo.
My test area was not small, but not as big as the NOAA section. 3 degrees differential is not small, it is very large and could hardly help but lower the average considerably for the block. They would have needed some very high readings to bring the average above normal. I think someone wanted a headline declaring the hottest May on record. I know of no other organization that either confirmed or disputed that conclusion or at least none that got a headline.
Energy is a free market choice. If I want to drill for oil and make gasoline for cars that’s my right. If I want to build cars and engines, that’s my right. America was built, by free people producing and manufacturing products.. All I have to do is produce my oil and my cars safely and responsibly. Just like Apple INC has the right to make cell phones in a safe and responsible manner. Oh, wait they make everything in China. Nevertheless, We have the right to chose products and create products.
Well, let’s all stand up and salute you.
(But here’s a hint. Don’t try drilling for oil or building cars in your suburban neighborhood. Your rights extend only up to the point at which they bump into someone else’s.)
In fact, drilling can be done anywhere. In down town LA they drill for oil and people don’t realize it.
How do we preserve the chemical industry from sinking along with the fossil fuel giants? Still going to need plastics and other materials synthesized outta petroleum feedstock. If fast transition occurs like 30 years for most vehicle to switch from IC to electric it will severely impact the chemical industries the rely on petroleum for feedstock material.
Refineries are massive facilities that take enormousness sums of money to operate and maintain and decades to build. They are critical part of a web of interconnecting industries. The goliath among those industries has been fossil full but that giant is going to go down and it probable smart to start considering how to ensure that the related industries can survive and transition into the post fossil fuel era.
The oil industry is very unlikely to disappear. Just shrink.
There are still a few rolls of film produced each year. It’s just the giant “Kodak” scale that has gone away.
Yes, the demise of oil is unlikely for a very long time. Global demand is still increasing rapidly, and likely to continue to, for some time. The only recent change has been a rapid increase in production in North America. It remains to be seen if this can be sustained. Somewhat questionable in the face of lower prices and the problem of fast decline rates of tight oil wells.
American use of oil seems to be leveling off, but what will the effect of lower prices be?
America still imports a large amount of oil, mostly from Canada, with the only exports of crude oil going to Canada.
Keystone was a sensible option 5 or 10 years ago but the delay has caused other methods of transportation to become entrenched. Sadly, methods such as rail or truck are less environmentally friendly and more costly.
US population isn’t going to grow much. Young people are diving a lot less than young people previously drove. Car efficiency is going up, significantly, between now and 2025. We’re developing more public transportation. I doubt there will be any increase in US oil use. Over time a drop.
The next five years is going to be telling. If Tesla and GM bring mid-$30k EVs to the market in a year or so we should see EV sales take off and other companies jump into the business at a serious level. If we’ve got a number of longer distance EV choices for just over $30k five years from now then we’ll likely see them selling for $25k or less five years after that.
When decent quality, 200 mile range EVs can be purchased for under $25k then oil is toast. I firmly believe that oil is a goner, it’s a question of how long.
I think you are right that we will eventually be weaned off most oil burning. I do think however that it will be more a result of oil becoming too costly rather than the price of electric vehicles. Besides it will take many years just to replace most of the cars, worldwide. You are also not factoring the oil used for transportation of goods, for agriculture, and for industrial equipment. The replacement of personal cars has barely started and I have yet to hear of any mobile heavy equipment or farm tractors that does not run on liquid fuel. Granted, some of that could be replaced by biofuel, but again a major consideration will be cost. I think we will still be using significant amounts of oil in 50 years.
I do, however, think the U.S. will be among the first to see declining oil demand. That is significant as it is still the worlds largest market.
I’m guessing that about 20 years after we get $25k long range EVs there will be few to no ICEVs left on roads anywhere. High mileage ICEVs will have little to no market value once someone can pick up a EV with at least a 150 mile range for $5k or less.
Look for China to flood the global market with less expensive EVs. They will sell tons into markets that have less stringent standards than do the US and Europe.
Oil prices are likely to stay low because the low cost providers are going to want to maintain market share.
We’re already seeing battery powered garbage trucks and buses. Some companies such as FedEx are using battery vans for some of their delivery. We use electric and battery large machinery in underground mines. We could run 18 wheelers with batteries by going to battery swapping every 200 miles or so.
Battery capacity is almost certain to improve over time. As capacities rise the number of applications grow.
We can do what the Russians did. Electrify our rail. The Trans Siberian is now all electric, runs twice the distance as SF to NYC, and carries a massive amount of freight. As we ship less coal and oil we will free up track space and will be able to ship more containers from trucks to rail for the longer hauls.
Very little industrial equipment runs on oil. It runs on electricity.
Remember, we’re in the infancy of EVs and wind/solar. Only wind has reached competitive price levels, it will take a few more years for EVs and solar to become cost winners. We’re just seeing the first battery buses and large vehicles appear. There’s going to be a lot of innovation which will lead to lower prices and drive the transition faster.
Think about how slowly large screen TVs sold when they first came to the market at several thousand dollars each. And how rapidly small TVs disappeared from people’s livingrooms once the price dropped well under $1k.
EVs, wind and solar are going to be immense markets. That means a lot of money is going to be spent by companies looking for a market edge. Improvements and cost cuts will follow. What we see today is going to see as quaint at $700 cell phones.
I agree that everything you say is possible and even likely on the long term. I just think you are being overly optimistic or hopeful for the short term. You and I have both seen major changes in our lifetimes but we have also seen many things, that seemed almost certain, fizzle out over time. Prediction is a dangerous game and most of us would end up looking like fools if anyone remembered our words. By the time the results are in, though, I doubt that either you or I will care.
Change seems to come a lot quicker these days than back when we were kids. Back then information, deeper than a headline and a few lines of text, traveled in monthly magazines. Or books that took a year to reach the library. Now a development can be communicated around the world in seconds.
And something we tend to leave out of these discussions is the driving force of climate change. As people become more and more concerned their desire to do something will put a thumb on the scale in favor of low carbon solutions.
As the newer, cleaner technologies grow look for less investment in fossil fuels and fossil fuel technology. Prices will stall out, even increase. We saw that happen during the transition from film to digital. At one point companies quit designing new film cameras and new film products. No one wanted to spend money into a clearly dying industry.
We’re seeing some of that happen now with coal. Coal stocks have dropped about 50% over a very short amount of time. As the old industry collapses it drives more activity to the replacement.
i expect to live long enough to see the world installing renewables at a rate that grabs at least a 3% market share away from fossil fuels each year. I certainly don’t expect to make it to 2050, but I think I’ll see a massive difference before I hit 80.
Coal is failing fast because there are several easily utilized alternatives including natural gas. The same was true for film cameras. There were a multitude of electronics companies looking for new products and this was an easy entry market for them. There are just as many transitions that didn’t happen such as a switch to supersonic passenger airlines. High speed electric rail is having a hard time getting established on this continent even though it makes a lot of sense on multiple levels. You are certainly right about information spreading quickly today, but capital does not move nearly as quickly, and a switch away from oil is going to need a lot of capital. Interesting reading is past issues Mechanics illustrated or Science illustrated.
There’s no shortage of capital to finance the move from ICEVs to EVs. Every year we replace about 1/15th of our existing car fleets. Financing a new fuel motor design probably costs less than increasing electric motor manufacturing. Tesla and BYD are having no trouble financing massive (today’s) scale battery plants.
Switching from coal to renewables will largely be done with the money that would have been spent on replacing aging coal plants. People often overlook the fact that replacement costs are baked in to our economy. It’s a question of what we purchase rather than how we find the money to purchase.
If we look back only a very few years we see wind and solar not being competitive with coal. Now they are clear winners. The same is likely to happen with EVs. Somewhere around $25k for a 200 mile range EV will mean the ICEV market will collapse. I think that could be as little as five years away.
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High speed rail. I’m a big fan. But I’m holding back to see if the hyperloop works. If so, then we need to forget HSR and go straight to shooting ourselves down tubes. ;o)
Imagine a straight run from the East Coast to the West Coast and a couple Canada to the Gulf/Mexican boarder N/S runs. You could get in a tube in Seattle and be in Sacramento in an hour. Switch to the east tube and be at the East Coast N/S in about three hours. Switch to the south tube and be in Miami in less than two hours. Then we could build spurs off those main routes where the cars would run very fast, just not have the space to build up 800 MPH speeds.
(Yes, tunnel under those mountains. The Sierra tunnel would be about twice the distance of the Chunnel.)
I’ve seen no one state a reason why the hyperloop wouldn’t work. The only criticism I’ve seen is turning at high speed and the g-forces put on passengers. The solution – go straight.
Isn’t 800 MPH supersonic. It would be nice if I could reach Arizona or Mexico quickly without resorting to inefficient and polluting air travel. I am not going to hold my breath though
Yes. Faster than greased lightening.
As I said earlier, I’ve seen no one point out why it can’t work. But until there’s a full scale section up and going we won’t know for sure.
It looks like a short loop track will be built starting this year. The cars/capsules won’t be able to go much faster than 200 MPG due to the short length (about 2 miles on the straight away and then a 180 degree curve. I expect this will be mostly testing tube/track, car/capsule, and terminal design. Get that stuff working well and then we might see track built over a much longer distance.
I’m giving the hyperloop a 50% chance of working. That’s based on how the plans came into being. Elon Musk has two very successful “engineering/construction” companies – Tesla and SpaceX. I would think he called in the best and brightest of each company along with knowledgeable friends and had them look at the plans with a critical eye. All of them would have been motivated to spot any problems in order to keep from embarrassing their joint activities.
Sorry, when i said industrial equipment I meant mining, construction, etc..
You and others keep saying that oil prices are low, yet almost all the oil in the world can be produced, at a profit, at today’s prices. it is only marginal production such as shale oil and new oil sands developments that may not be profitable..
Since you called all Debbie Downers, her I am. Hi, Tina.
Keystone XL isn’t needed. For the US at least. Canada can send the goo to the moon and over to Asia if they want. It’s no longer in US interest. US refineries are awash in already transported diluted tar sands. Midwest, Gulf and soon Seattle refineries are all upgraded and refining the heck out of what’s being sent down. US refineries that don’t have heavy crude processing capabilities (coker unit) are being sent light sweet oil from shale fields in North Dakota, Texas and lesser shale fields.
We’re already importing about 3.2 million barrels per day of crude from Canada. That’s about 65 percent tar sands and 35 percent conventional crude. We’ve got about another 1.5 million barrels per day cross border pipelines already permitted. Keystone XL is only 890,000 barrels per day. So almost a rounding error now.
We’re also producing domestically about 9.2 million barrels per day. Sometime this year we’ll be producing more oil than ever before. Some of Canada and US crude is going out to the world. Much of it is getting refined and products are being exported. Like never before. Sadly, a mineralized hydrocarbon contributes to CO2 levels in the atmosphere regardless of where it’s burned.
What’s freaking out major oil companies about Canada are two things: production problems and politics. Alberta just got a little more progressive politically wise as demonstrated in the recent elections. Tar sands surface mining is declining due to the depth of the formation. The method for extracting deeper deposits is called in situ extraction or “steam assisted gravity drainage (SAGD).” And that’s showing to be problematic both economically and environmentally. On the other hand, there’s limited surface damage compared to stip mining. Oil majors are kind of spooked about legacy costs, i.e. “who’s going to cleanup up (pay for) this mess when we’re done?”
An impressive look at things. Pretty depressing, really. You get your Debby Downer award. It looks like oil will stay cheap for a lot longer and cause a lot more damage. With Iran pumping out even more to keep the fracking cos. from competing, alternative fuel cars will have a tougher time getting a foothold. The mid-east oil countries can keep pumping at this rate for at least another 20 years – some for much longer.
It is looking like a ‘grab it while you can’. Lower cost producers are likely to attempt to sell as much oil as possible over the next couple of decades while we transition most of our transportation off oil.
It will put a crimp in EV sales. With cars becoming more efficient and fuel prices staying low there will be less financial incentive to move to electricity.
This will make combatting climate change harder. We’d better hope for a period in which Democrats control both Congress and the White House so that we get a price on carbon. Or at least enough of the more progressive states to institute a carbon price to drive EV sales.
Fracked oil is probably cooked. Tar sands oil is not likely to expand, perhaps fail to some extent.
Come on Tesla! Let’s get a highly desirable Mod3 on the road and use those earnings to get us to a $20k ModT.
Although oil is lower in price than recent levels I would hardly consider WTI at 60 dollars as cheap. The price is not the problem, but rather the high cost of U.S non conventional production. Also the spread between WCS, WTI, and Brent crude has been narrowing quite dramatically. Along with the currency difference, this keeps Canadian production quite profitable. New oil sands development may be questionable in some cases, though, and shale oil drilling is certainly doubtful.
You are partly right about tar sand mining declining because of depth. The most economical deposits are developed first. Prices and costs determine if less accessible deposits are mined. SAGD varies in its success but there is no question that this method, and others, work and can be profitable.
In Alberta, oil companies are required to do their cleanup.There is no question there other than inflationary factors on future costs.
Currently, oil companies are cooling their jets until prices level off and they are more certain of the direction that will be taken by the new Alberta government. It remains to be seen if change is smarter than stability.
The pace of oil sand development in Alberta has been frenetic. This has led to a shortage of labor and supplies, and a steadily increasing cost of development. I, for one, welcome the slowing to a more sustainable pace. The lower price of fuel is certainly welcome.
Alberta has always been interesting to oil companies and others because of political stability providing a relatively predictable operating environment. Something that is rare in most oil producing regions. So far there is little indication that this will change. Delaying decisions while waiting for clarity is hardly “freakin out.”
In comments, I’m always “only partly right” about everything. I’m entertaining myself and using blogs/comments to get up-to-speed on environmental issues outside my wheelhouse. There’s a lot of environmental issues out there. We all need to be getting up-to-speed on. And fast.
Oil companies freak out about political instability, since they put so much effort and money into making the political landscape the world over stable to their liking. This could be something as simple as deals made between Dick Cheney et al from the US and Ralph Klein from Alberta back in 2003-ish to optimize the producer/consumer relationship for tar sands diluted bitumen delivery. Or using some of the US $600 billion or so department of defense budget to keep oil flowing throughout the world. Freaking out is the least worst thing.
Oil and gas may not be freaking out, like say “Aaahh Freak out! Le Freak, c’est Chic. Freak out!” type of freaking out. But they are truly befuddled and a bit worried about the economics and environmental impact of fossil fuel in general and tar sands in particular. So is the province of Alberta. They don’t see the dollars necessary being put into a trust for stuff like site abandonment, mined land reclamation, well plugging, soil and groundwater remediation, wetlands restoration and surface water cleanup. Alberta tar sands is a mess and will be an expensive mess. Somewhere around a good chunk of Canada’s gross national product, give or take a bunch or two.
Yes they do put effort into the political landscape which is the same as every other industry and interest group including radical environmentalists. That is actually how our systems are supposed to work, with input from everybody effected. Don,t fault the petroleum industry for following the norm.
You seem to think Alberta is a disaster area. Well, I have lived here for over 70 years and it is a beautiful province. Almost all played out wells and obsolete oil facilities have been reclaimed to the point where you would be hard pressed to know where they were. There is no reason to believe that this level of stewardship will not continue into the future.
The biggest impact on wetlands has never been the petroleum industry. It has always been agriculture and urban expansion. I think you have said before that you have never visited the oilsands. Well I have, several times, and except for it being a larger operation than most other mines, it is no more of a mess. Start googling mine sites around your own country and see if you find any reclamation. Reclamation of oil sands mines started a number of years ago and progresses continually.
I am uncertain of where you see major need for either surface or groundwater remediation. Here again the major culprits would be agriculture and urban development. But then we need housing and food as much as we need fuel.
“The oil companies will not help the world to switch to renewable energy ” yes they had the option of owning the RE market. If starting 10 years ago, they had diverted 25%-50% of their exploration budget to RE they would be the dominate players now.
Yep — can’t confirm your figures but the basic point is that the industry (with a couple of exceptions) failed to diversify and get in on the game early.
Just to be fair to the oil companies, they have supported RE in the past (mainly solar) as you can read in the book ‘Sun above the Horizon” .
But then they got out of that sector (mostly) for whatever reason.
But is it not better to have a market share of something, even a small one, than having not market share at all??
Thanks for getting this subject covered Ms Casey. Last week on BBC it was possible to listen in on some of the conferences going on in Paris. While the primary subject was addressing CO2 abatement and the resultant climate change it was great to hear the business leaders saying that this was going to turn out to be an economic positive for them with the right cooperation from government policy.
And yes the coal majors were still trying to claim that they were a economic necessity for the developing countries, but they were refuted by everyone from the leaders of the renewable energy businesses on through the government representatives of these countries they were referring to.
Rather a pleasant listen all in all to finally hear the business and political leaders saying the same things that have been said on this site for years.
Any businessman will look first at ROI (return on investment). They will look at how fast they can get that, and what other risks and options are. If I were an oil co. exec. I would look at RE as a long term play but to meet my quarterly and annual revenue goals I would go with the short term tried and true.
Ultimately, do you think they won’t be able to simply buy a successful RE co. after all the dust has cleared and they can see which techs are successful and more importantly which cos. in those techs are successful?
Like any new industry there are going to be mostly losers while everyone figures out what strategies work.
I expect you’ve pretty much identified the oil industry’s strategy.
Make as much money as possible from oil right now. When it gets close to the time that the market starts a strong downturn then use accumulated capital to move to a new business.
Until we have good quality, longer range EVs selling around $20k (or a miraculous price breakthrough on hydrogen *) there will be plenty profits for companies that buy, refine and distribute oil.
* Throwing you a bone, Michael. ;o)
Yeah, oil folk are a bit like crack addicts: brown rice may be healthier, but the ‘rush’ just can’t compare. Plus, they have the moral fig leaf of their fiduciary duty to maximize ROI for current stockholders.
There’s a difference between oil “companies” and “producers”. Some producers (Argentina, US frackers) are likely to be badly hurt starting now. Oil companies that purchase from the least expensive producers and refine/distribute can probably look forward to good profit streams for the next 20 years.
It could be 10 years before we see $20k, long range EVs. And another 10 years before those EVs largely replace ICEVs.
If you’re in a position of power in a large corporation you’re likely over the age of 50. That means that you’ve got an excellent chance of finishing out your career in the oil industry and enjoying the sort of pay you now get. Why worry about the value of the stock 25 years from now? (Just be sure to move as much of your own money to non-oil stock.)
The oil industry does not have to diversify, nor do they possess any desire. The oil industry is the centrifuge that drives all other industries be it, transportation, agriculture, or manufacturing. The oil industry is the heart of them all, including the solar and wind industry. That depend on petrol chemicals for their manufactured products… It would be extremely foolish for the oil industry to diversify to industries that need their industry.
The oil companies will not become allies, but eventually the electrical power production and distribution people will join the greenies. Right now these guys mostly live in the fossil fuel food chain. But once the switch to RE becomes large and unavoidable, they will want to take transportation from the oil guys with electric vehicles.
Electric people do lose a lot of generation in the future, but they have substantial opportunity in an electric world.
No hope for oil and coal people. Some day coal will probably be economically viable again, but not for burning. Of course we will use oil for many decades and probably centuries.
Even the tar sands will be useful some day, but not for burning. We don’t think about saving petrochemicals for future generations, but we should. This is one argument I use with conservatives.
Creative Commons (CC) article source: http://cleantechnica.com/2015/05/28/yet-another-reason-keystone-xl-pipeline-toast/