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Upstream Energy Transition: A Thread. If you're like me, you've been in the upstream bizz for most of your career (f' it's closer to two decades now). When the energy transition comes up, I get a bit annoyed. It's natural. It impinges on my ability to make money. 1/
It was never even a consideration early in the career. However, working in non-US based businesses over the last decade or so, you see how passionate other cultures are (particulary Euro) about the transition. It's not made up. People care and it's coming our way. 2/
Now, do I care? Some. We are impacting the earth. However, my general feeling is that it is short-lived. The concern with our carbon output is largely tied to some expectation that hydrocarbons continue unfettered forever. Sadly, this is a poor assumption. 3/
Before shale came along, the world was facing real prospects of dwindling supply. But then, Hallelujah! shale has solved our problems. Limitless supply. Ten years later, we are beginning to see how limited this supply wedge actually is. 4/
The core is much smaller than we realized. The wells aren't as economic. You can't grow production without experiencing significant stress. The US is running on fumes, so the rest of the world needs to pick up the slack. Where is that coming from? 5/
You have to drill deeper. You got to go to more dangerous jurisdictions. Does shale exist elsewhere? Hell yeah it does, and other countries will start extracting it, but US is the easiest by far to do business so add 10-20 per bbl to each resource to extract. 6/
What does this mean? With growing populations comes growing energy use, and sadly renewables aren't enough to meet all of the demand. And probably won't be for a very long time. Oil prices will rise so that Tier 2 and 3 acreage makes sense to drill, though barely. 7/
Unrest could occur as energy costs rise. You need to very much consider nuclear as an alternative source to keep prices down. Our decisions to burn off all this natural gas to produce more oil will look idiotic as we are scrambling for any and every resource we can. 8/
Stop flaring you idiots! These are resources we will need and will never get back! I often joke that I'll move to Pittsburgh when the energy wars start, as there is a ton of good Marcellus rock sitting under it yet to be drilled. 9/
What do we need to do? Embrace the transition. Use our darned engineering degrees to try and find more energy. If you bristle at the environmental aspects, think of it more as a supply issue. We need to make progress to ensure adequate supply of energy to our offspring 10/
I guess we can always go back to the dark ages.
We dealt with it before. We will innovate our way through somehow. Though the dark ages would help get rid of social media. So i guess I'm torn. Anyway, thanks for listening to the late night ramblings of an angry sloth.
We dealt with it before. We will innovate our way through somehow. Though the dark ages would help get rid of social media. So i guess I'm torn. Anyway, thanks for listening to the late night ramblings of an angry sloth.
