Category Archives: Fossil Fuels

Don’t Blame the Suppliers, Unless They Are Big Oil

Bill Luyties, OWOE Founder and Technical Editor: Last year OWOE published a blog titled “Don’t Blame the Suppliers. It was intended to help focus the narrative related to climate change from attacks on the supply side of the contributors to climate change, i.e., the big oil companies, to the demand side, i.e., consumers who want big cars and to buy lots of everything. However, since that time I have come across several articles published by the BBC: one published in 2020 titled “How the oil industry made us doubt climate change” and another published earlier this year titled “The audacious PR plot that seeded doubt about climate change“. These articles document the efforts of the fossil fuel companies to engage in a public-relations campaign to sow doubt in the science of climate change by following the playbook of the tobacco industry from several decades earlier. Thus, I would like to update the title of that blog to “Don’t Blame the Suppliers, Unless They Are Big Oil”.

Figure 1 – Public disinformation campaigns – left: Big Oil 1990s; right: Big Tobacco 1980s (ETS = Environmental Tobacco Smoke, i.e., second-hand smoke)

The first of these articles takes us back 40 years when a scientist at Exxon created a computer model that showed the earth was warming from the burning of fossil fuels. Exxon chose to disregard their own science because of the risk it posed to their business and instead start a campaign to spread doubt about the dangers of climate change. It then goes into the link back to the tobacco industry campaign starting in the mid-1950s to confuse the public about the danger of smoking cigarettes. The second article addresses the efforts of an organization called the Global Climate Coalition (GCC), started in 1989 by energy companies and fossil fuel dependent industries, to aggressively lobby US politicians and media to persuade the public that climate change was not a problem. This included finding and funding climate sceptics to give speeches or write op-eds and arranging media tours so they could appear on local TV and radio stations. It was all about deception and sowing doubt in an American public that would quickly become confused when supposed experts disagreed on the science (see Figure 1).

Much of this was happening while I worked for a Big Oil company. I spent 30 years as an engineer, engineering manager, and project manager working on the development of offshore platforms used to develop oil and gas fields around the world. I was never privy to high level corporate communication strategy, but I should have been knowledgeable and intelligent enough to sift through the disinformation. I remember discussing climate change issues with my wife and using arguments such as “we’re only talking small possible changes in earth’s temperature compared with the planet’s history”, “carbon dioxide levels were much higher in the atmosphere in the past”, “volcanoes and forest fires spew out much more greenhouse gasses in a year than automobiles”, and, of course, “oil and gas are critical to the world economies and any alternative forms of energy are less effective and much too expensive”.

Looking back now, although much these beliefs might have been correct, they truly missed the point – burning fossil fuels is increasing the earth’s temperature, and it doesn’t take very much of an increase to have a major impact on human life as we know it. So now I am looking back and recognizing that I had been deceived along with hundreds of millions of others. I remember stories about oil companies purchasing early electric vehicle technology and burying it. I guess I can accept that – it is a time-honored practice to protect one’s business by all means necessary. But to know something that will have a fundamental negative impact on the entire world, lead to sickness and death and likely wars over diminishing resources, and then to obfuscate the facts seems criminal. Just as the tobacco industry’s effort to promote smoking against all science has been determined to be criminal.

Will Big Oil ever be held truly accountable? Very unlikely. And the reality today is that we still need fossil fuels in the interim until renewable power can replace it across the globe. The OWOE recommendations from that previous blog to make a major push on the demand side of the equation still apply and summarized here in three broad strategies.

Strategy 1 – implement programs that truly reward low carbon energy: establish a carbon tax that truly captures the cost of greenhouse gas emissions; develop markets to trade these emissions with the aim of reducing and eventually eliminating them; clarify what big companies can claim as being green; curtail the current scam in carbon offsets; and, of course, continue to invest in renewable energy technology.

Strategy 2 – capture low-hanging fruit: focus on energy efficiency; and regulate industry to eliminate fugitive methane emissions as quickly as possible.

Strategy 3 – change behavior: stop the political bickering that is driven by individuals and organizations that choose to ignore the science of climate change for greed; rein in the utilities so that their financial objectives align with world needs; and create a public service campaign that helps all Americans understand the benefits of such plans.

But now I will add one more, surely to be very controversial, recommendation – implement a windfall profit tax on the oil companies. Global oil fields currently under production break even on average with oil prices between $18 and $28/barrel (as reported by Reuters) while projects currently under development will break-even with oil prices between $25 and $35/barrel. At today’s cost of over $90/barrel for Brent crude, such projects will be enormously profitable. Who knows what the future price of oil will be, but allow the oil companies a reasonable profit on their investments and then collect the remainder to pay for the tremendous costs to mitigate against global warming, a phenomenon that they helped create in search of past profits.

Time for a New Energy Policy

OWOE Staff: It’s a new year, we have a new president and administration, and we have new hope that the plan to vaccinate Americans is going to finally end the pandemic. What we don’t have is new thinking on what this country should be doing for a long term, rational and strategic energy policy. OWOE believes it is the right time to propose a comprehensive energy policy that balances America’s needs with the planet’s needs and is based on sound economics, realistic technology and good common sense. The OWOE energy policy combines several key elements, including: firm commitment to dramatically reduce dependence on fossil fuels in a planned and rational manner, sustainable investment in renewable technologies, and establishment of a North American Energy Alliance (NAEA) between the US and Canada to aggressively develop and globally sell our existing energy resources.

Continue reading Time for a New Energy Policy

A Look-back at 2020

By OWOE Staff: Happy 2021 dear readers and supporters of OWOE. As everyone is aware, 2020 was a most unfortunate series of events, beginning with the release of a virulent pathogen from China which resulted in a wide range of foreseeable acute and long range economic, social and energy consequences. Thus, OWOE staff are working hard to analyze these consequences to provide meaningful insight about energy matters going forward. We plan a variety of interesting updates to our core energy information, tools and blogs this year and perhaps even a contest involving energy self-sufficiency at the local level. Many of the changes happening in the world of energy are the cumulative results of individual changes in consumption resulting from economic turmoil compounded by inept government policies and continuing industry business practices.

Continue reading A Look-back at 2020

Canada and Energy: Part 3 – It’s Very Ugly

Guest blog by S. A. Shelley In the first blog of this series, I summarized the huge energy resources of Canada. In the second blog, I showed how most of those resources have been or are being squandered and how governments with good intentions, at times more often than naught, deliver bad outcomes. While statistically bad outcomes can be unintentional, in Canada a lot of bad outcomes are actually the deterministic result of government strategy. Coupled with the breakdown of the rule of law at the highest levels, Canada is in bad shape. That unfortunately is the very big ugly in Canada. Other factors resulting in Canada’s bad energy situation are the focused actions by small groups of well-funded opponents and the apathy by the populace who have been habituated to the sweet lucre of government largesse. Canadians are generally kind and polite people, but at the governing level, the plotting and duplicities surpass a Shakespearean tragedy. The Russians probably learn by watching what happens in Ottawa.

The biggest warning that I have is that the path that Canada is on will more likely lead to Canada becoming the next Venezuela – corrupt, ineffective and when in trouble, doubling down on failed collectivist ideas, instead of returning to integrity, order and prosperity.

Continue reading Canada and Energy: Part 3 – It’s Very Ugly

The latest push for fossil fuels – rhetoric or reality? Part 1 – Coal

By W. H. Luyties, editor OWOE. With the election of Donald Trump as president of the US and control of all 3 branches of the government in the hands of Republicans, who have historically been strong supporters of fossil fuel interests, one lightning rod topic has been the push to increase coal and oil production in the US. This has energized both proponents of fossil fuels, who see an opportunity to possibly save their industries (coal) or increase production (petroleum), and opponents, who fear the environmental consequences of such a change. But is this a real threat to the global move away from fossil fuels, or is it simply rhetoric to energize a political base? Continue reading The latest push for fossil fuels – rhetoric or reality? Part 1 – Coal

OPEC Supply Cuts Will Accelerate Decline in Oil Demand

Guest blog by S. A. Shelley Imagine a future where your choices for purchasing a new car include numerous options for electric vehicles (EV’s) and internal combustion vehicles (ICV’s). But competing with the typical federal or state subsidies for the EV’s are hefty rebate checks from OPEC or Russia for purchasing a fossil fuel burning ICV. That may sound crazy, but in today’s age of large supplies of easily produced shale oil, inexpensive renewable energy options, and changing societal demographics, it’s only a matter of time before the current oil glut results (see EIA figure below) in stranded oil resources that are too expensive to produce for many of the suppliers, drastically reduced supply-side control from oil producers, and a critical need for oil suppliers such as OPEC to find creative ways to stimulate demand.

Source: EAI Dec 2016

Continue reading OPEC Supply Cuts Will Accelerate Decline in Oil Demand

Peak Oil vs Peak Coal

Last month’s OWOE blog “Did the World Hit Peak Oil in 2015 and Nobody Noticed?” generated some interesting discussion. One follower raised a very good question regarding whether we have compared the fate of the oil industry with the fate of the coal industry in terms of the effect of oil and gas as disruptive technologies. Since it’s been some time since we touched on coal, now is an ideal time to use this question as a lead-in to the broader subject. The simple answer is “yes”, as the relatively recent rapid decline in coal production and usage has been a demand driven phenomenon caused by many of the same issues as we are seeing with coal. If we look only at the US, peak coal occurred in 2008, as illustrated in this figure from the Energy Information Administration (EIA).

US Quarterly Coal Production
US Quarterly Coal Production

Continue reading Peak Oil vs Peak Coal

Cancellation of Keystone Pipeline – A win for climate change or misplaced symbolism?

On Friday President Obama announced that he had rejected the request from TransCanada to build the Keystone XL oil pipeline which ultimately would have transported 800,000 barrels a day of heavy oil from the Canadian oil sands to the US Gulf Coast refineries. This ended a seven-year review that had become a contentious political issue and symbol of the debate over his climate policies.  Continue reading Cancellation of Keystone Pipeline – A win for climate change or misplaced symbolism?

MIT Plan for Action on Climate Change

On October 21st the Massachusetts Institute of Technology (MIT) issued its Plan for Action on Climate Change. This document was the culmination of a year of discussions within the MIT community on the risks of climate change and the role that MIT should play as a leader on climate sciences and energy innovation. MIT’s position is that overwhelming evidence shows that the world is warmer than it was in the pre-industrial age, and that present-day climate change is due to human activity, in particular the emission of greenhouse gasses. MIT supports the 2C Challenge which aims to limit warming to 2 degrees Celsius above pre-industrial levels and sees the need for a world-wide, aggressive but pragmatic transition plan to achieve a zero-carbon energy system. Continue reading MIT Plan for Action on Climate Change