Category Archives: Oil & Gas

Canada plans to invade the US (again)

Guest Blog by S. A. Shelley: Pipeline politics have come to dominate energy discussions domestically and internationally. Probably the most well-known of these are the Nordstream 2 Pipeline in the Baltic to bring Russian Gas to Germany and of course the Keystone XL Pipeline which would have brought more Canadian Heavy Oil to American Refineries. Believe it or not, pipelines can bring benefits. For Nordstream 2 it will bring Russia a new vassal state. Keystone XL, had billions in money set aside to utilize renewable power and hire unionized workers; It would have been the world’s first “net-zero” pipeline and probably the world’s first equity built pipeline. Unfortunately, for both pipelines the tactical thinking won out over the strategic benefit.

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The Simple Answer: Oil Demand is Declining and Natural Gas Demand is Increasing

Guest Blog by S. A. Shelley: Since 2016, OWOE staff have been watching energy markets change as new technologies and phenomenon entered society, or as old problems and business practices ossified. While 2020 was a wild year that laid bare the ineffectiveness of most major governments to handle crisis, it also exposed some of the fallacies upon which western societies are built: Namely the need for business executives to fly around the world for meetings, the need for hordes of people to commute to digital jobs, and of course the lack of economic robustness in most realms. For certain, the pandemic surge and economic drop of 2020 that cut travel, commuting and similar highly energy intense activities resulted in a major drop in oil demand (Reuters, US BLS), and a noticeable drop in CO2 emissions along with a corresponding improvement in overall air quality in many urban settings. But, and here’s the real issue, as the pandemic ends, energy demand is increasing again.

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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.

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Oil Supply – If Everyone Produces, Everyone Goes Bust Part 2

Guest blog by S. A. Shelley: In Part 1 of this blog on Oil Supply, l examined the supply-demand history of oil over the past decade, which has set the stage for the dramatic changes in the industry that are just beginning. In this blog I’ll explore some of the likely consequences and will venture to predict some of the dramatic events to come and some of the likely irreversible impacts recent events will have on the world oil industry.

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Oil Supply – If Everyone Produces, Everyone Goes Bust – Part 1

Guest blog by S. A. Shelley: A few years back, I wrote that at some point in the future (now-ish) oil produces may need to resort to providing incentives for ICE buyers, or undertake more extreme measures to ensure sufficient oil demand. Well, oil producers have not yet undertaken either of those steps and, as noted in a recent blog, we’ve now hit peak oil demand. So producers were resorting to the next best means of balancing the supply-demand equation by curtailing supply in order to support oil prices. At best this was a short term solution to a growing long term problem. Now with the beginning of the oil supply war, we see that curtailing supply has failed completely, and, as predicted in my February 2, 2019 blog, somebody has decided to produce the hell out of its reserves while there still is a market for oil. This will not be a short war; it will be long and drawn out, and the eventual winners will not be who everyone now thinks they will be. In Part 1 of my blog on this topic, I’ll examine the supply-demand history of oil over the past decade, which has set the stage for the dramatic changes in the industry that are just beginning. In the upcoming Part 2 I’ll explore the likely consequences.

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The World is at Peak Demand

Guest blog by SA Shelley: (Note from your OWOE editor: This demand blog was written a few weeks before the oil supply war started. The oil supply war and corresponding drop in oil prices will be discussed in an oil supply blog in a few weeks. However, the author firmly believes that COVID-19 and a likely economic recession are short term demand shocks. Long term demand decline resulting from shifts in technology and consumer behavior, key issues addressed in this blog, is inevitable.)

The world has hit peak oil demand. I wrote it, I’m standing by it, and no apologies to anyone for this.

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Who is hiding all the oil?

Guest blog by SA Shelley: I try to avoid writing about oil too often for three reasons: 1) the oil markets are well observed by more than enough highly paid analysts, 2) the changes in energy technology and distribution are more interesting (and still largely misunderstood by highly paid analysts) and 3) I try to build anticipation for my oil industry supply and demand blog in January of each year. But because of some recent peculiarities that have arisen in the oil markets, a short blog about oil now seems warranted.

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Canada and Energy: Part 2 – The Bad

Guest blog by S. A. Shelley In the previous blog about energy in Canada, I presented evidence that Canada has abundance of energy, ranging from hydrocarbon to existing renewable energy supplies. In essence, Canada has similar potential to Norway and even at a larger scale. Norway, like Canada, has been a prolific producer of oil and gas and continues to be so, but Norway is already in a position to be able to transition fully to renewable energy and has undertaken steps in that direction and to curtail fossil fuel consumption (see Independent.co.uk, and Fortune.com).

But where Norway has long term vision and broad social and political consensus, Canada has acrimony, mismanagement and corruption.

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Canada and Energy: Part 1 – The Good

Guest blog by S. A. Shelley If there is a poster child in the world for energy wealth, it’s Canada. Folks are dumbfounded by what the Europeans are achieving with renewable energy and decarbonizing, folks quake at the vast untapped oil and gas reserves of Russia, and folks are stunned at how technology and finance combined to bring about the prolific U.S. tight oil and gas production which is upheaving world energy markets. Wow, eh?

Instead, folks should be looking at Canada, that half frozen land of log drivers, curlers and exporter of Hollywood A-listers, and be awestruck by the energy resources that have somehow fallen under the Dominion of Canada.

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The Great Oil Slump of the 2020s – Part 2b, Demand and Technology

Guest blog by S. A. Shelley In my previous two blogs I have offered views on oil supply and the (macro) social changes that are resulting in a slowdown of growth in oil demand. In this blog, I’ll look at some of the technological (micro) factors that that will contribute further to a drop in demand. This combination of oversupply and drop in demand will have significant and far-reaching impacts on oil companies, petro-nations, and all the companies and people who are a part of the industry.

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