The world faces both a shortage of hydrocarbons and the displacement of fossil fuels. Next, what is an oil patch? – Is it good?

Reposted from BOE REPORT

Terry Etam

Good morning, echo chamber!

It’s stereotypical, anyway – since this is a site about the oil and gas industry, readers must therefore be in the skin club. It’s not necessarily true; I can happily report that readers come from all over, and more than a few are not hydrocarbon users. No horns or anything.

While I am happy to have such people on board, today is a question that only the hydrocarbon crowd can answer:

What’s your game plan from here on out?

It’s clearly a stupid question in a sense, because the answer clearly depends entirely on one’s frame of reference. Precisely the game plan for a small producer will be different for a mid-range/upstream producer will be different from an oil sands producer and the views of this group/company will differ in individual level. There are thousands of jobs and situations, each with its own decision tree.

Despite the potential variance, it’s still a valid question, because globally we’re at the crossroads of several important implications. The happiness of much of the world’s population depends on how the hydrocarbon industry operates over the next few years. At the same time, pressure is being exerted on the shrinking and withering hydrocarbon industry (as in the wildly successful divestment campaign of fossil fuels, or banks). cut oil and gas loans to get favor with those who have that problem).

This is a powerful contemplation, a philosophical decision that each of us will have to face. Younger people will have to decide if they want to continue working in the industry, even if the red dot has already trained on their forehead. Mid-careers have to decide if it’s time to retrain and leave because they’re being encouraged, even though they’re probably more used to the red dot. The traders then have to decide if they will scramble to get out as soon as the new stock options are worth it.

This question is not an easy one given the dramatic change in the hydrocarbon industry over the past few years. We used to be the good people, the fuel suppliers in the world, a collection of dynamic, entrepreneurial and agile people.

Then the story changed, and the industry went from being relatively obscure to Public Enemy number one. By 2019, public hatred of it had peaked, with mass protests staged across the globe. The year 2020 brought a close-up as Russia and OPEC decided to cut prices in their battle for control of the market, and all the anti-hydrocarbon protesters turned from protest to cheer, famously declaring that ” oil is dead”, that oil prices will never recover. because electric vehicles are causing rapid demand destruction, and the humane thing to do now is to simply shift all hydrocarbon workers to other industries.

Even typing that now sounds like an alien experience, like walking around in a crowd without a mask on. The reason those conversations have become obsolete is because today, it is clear that oil is as dead as the Internet. Of course, some will say that high oil prices will accelerate the transition to renewables, and it is true that it will make renewables more cost-competitive (although not yet). reliable in terms of reliability).

But consider that a rapid transition to renewable energy is not possible from a mining perspective alone (the IEA has speak that the global transition to Net Zero 2050 will require four times as many important mineral deposits by 2040 (an impossibility as governments are ramping up mining everywhere) and Finnish Geological Survey calculate that a full transition adoption of renewables/EVs would require more important metals and minerals than are known global reserves).

If you are still wondering whether the days of hydrocarbons are numbered, consider that Germany, the most advanced energy transition country in the world, just a few days ago ponder that Drilling for new oil/gas fields in the Arctic sounds like a pretty good idea.

Also consider that this is the new Green Party led government saying this. Also keep in mind that any development in the Arctic takes a minimum of many years, so these developments have nothing to do with this immediate crisis. If Germany is planning a decades-long oil/gas development, that tells you all you need to know about the hydrocarbon collapse. There isn’t a single one.

But that doesn’t answer the question at hand. What will industry insiders do? Will they start and retrain in something else? Of course, there are many different situations, but one is far more ominous than the others. Here’s a little dissection.

The handler will most likely continue processing; any profession in constant flux probably won’t stop because of staff shortages. If you’re a gas marketer or pipeline scheduler or refinery manager, there’s no breaking point in business continuity.

But manufacturers are different. Much difference. Next year’s production bin will not necessarily and automatically appear as part of a continuous flow. Need to enact a lot of very competent brain capacity, hired and managed team, etc. Finding and developing new oil/gas lines is an option.

If no one chooses to find and produce more oil, the flow will slow, then stop. If geological talent is exhausted/retired/continued, new production doesn’t just happen. Same goes for drilling crews or finishing specialists or – dare I say – truckers.

Anti-hydrocarbon sentiment runs deep within academia, but it is those organizations that new hires will have to navigate if they have to land in a puddle of oil. It is no longer “just another option”. There is a stigma attached to oil and gas programs.

There is venom that comes from complete strangers. It should come as no surprise then that students are acting on it; they are going elsewhere. In a US study, from 2016-19 the number of US petroleum engineering students fall by 60%, and has no doubt dropped further since. Even in the heart of the Canadian oilfield, the University of Calgary has ban oil and gas engineering program after student numbers dropped to an all-time low of 10 – and that’s a span of more than two years.

What if no one chooses to find oil anymore? Yes, ten thousand Western elites will cheer wildly, but billions of truck-level people around the world who need that fuel for survival will say WTF, or some local equivalent.

Those ten thousand Western elites will tell all global beggars Hey, don’t worry! Solar panels are under development. And billions of people will say Yeah… but can I buy a refrigerator that has electricity for more than six hours a day? And Western elites will say No! But don’t worry about the battery being used. And those billions of beggars will say Great! When? And Western elites will say that Battery Storage is cheaper than ever! And supplications will say Great! When? And Western elites will say Fossil fuel death! And advocates will ponder in awe of the mystique and supposed superiority of the unscrupulous, small chatter re-instructing that great masses have not been washed. simply not worth understanding, and then they will starve to death.

And hydrocarbon producers will sit there wondering what to do next. They’ll answer the phone and their second cousin Moonbeam from Toronto or San Francisco will scream how you’re killing the planet, and then you’ll turn on the news and hear that producing more oil is the thing. moral imperative. You all are pouring money in, that will be true but then the politicians will say ‘We will take that proceeds btw and then whatever is left is better to go into the green project but you better increase production now and we mean now but only this year and then everyone should divest fossil fuels and we will take you to court because all the emissions that you have unilaterally generated over the last century and maybe fines will be deducted from the wind tax and maybe not and we’ll let you know when we’re good and ready. ‘

And yes, I love trail running sentences.

If this sounds pompous, it isn’t. In fact, the situation is much more dire than one, in terms of global impact: there is a massive trillion-dollar fuel system that sustains humanity. It is 80% hydrocarbon. There is currently no replacement. Most parts of that system operate on condition – they require a constant flow of hydrocarbons.

The various components of this massive system have “something to do” because, and only because, a relatively small group of people and entities at the origin of that system, upstream, choose keep it full. This small team looks at seismology, looks at well records, drills wells, plans production, builds small-scale infrastructure to bring this vital energy into the stream. Without those few people, the system would wither like a plant uprooted from the ground.

A lack of expertise and/or no interest in bringing new hydrocarbons to market will mean that the world supply will dry up. Well, ten thousand activists will say. Well, you might say, let’s see who needs who. But these other seven billion won’t be too suspenseful at all. No fuel, no fertilizer, no food. All because of the choices we’ve made here in the west.

So? Will you continue to power the world or not? Lots of hungry mouths longing to hear a yes. The people in power in the West, who control your economic destiny, have a frenzied and unsettled look in their eyes as they try to figure it all out, but openly cannot support you because they kicked you in the ribs for a long time and it’s hard to stop and call all the other kickers bullies.

Don’t look at me, I don’t know what will happen next. All I can say is that by the time it becomes optional, I will choose not to put my head in the sights anymore. I suspect I’m not alone.

Slava Ukraine! Find out how the world fell into such a disastrous energy state, and how to get out – catch the “Fossil Fuel Madness” at Amazon.ca, Indigo.caor Amazon.com. Thanks for the support.

Read more insightful analysis from Terry Etam this, or email Terry this. PS: Dear email reporters, the email flow is great and welcome, but I’m having a hard time keeping up. Apologies if comments/questions go unanswered; they are not ignored.