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Cancelling Keystone XL is driven by “keep it in the ground” logic, a rational that is wrong-headed, a blunt instrument that forces costs on the market, disproportionate to the benefits gained.
Jobs are lost, prices go up, money gets diverted and for what?
#keepitintheground
Jobs are lost, prices go up, money gets diverted and for what?
#keepitintheground
High oil and gas prices help decarbonisation, as alternatives become relatively cheaper.
They also spur further investments, and prolonged periods of high prices lead to innovations, the shale / tight oil revolution a recent example, offshore was an example from an earlier era.
They also spur further investments, and prolonged periods of high prices lead to innovations, the shale / tight oil revolution a recent example, offshore was an example from an earlier era.
Innovations once triggered cannot be undone, they cannot be un-invented. Learning to get oil and gas from impermeable rocks or from under the sea, miles deep, were the result of steep learning curves, possible because of high prices. Once learned, the costs came down as well.
Don’t believe for a second that there are not other resources out there waiting to be exploited. Guyana only started producing oil in 2019, and has billions of barrels of reserves.
Many of the biggest producers of conventional oil are sitting on massive shale resources.
Many of the biggest producers of conventional oil are sitting on massive shale resources.
A misunderstanding of the shale revolution is perhaps part of the problem. Investors have lost money, but this is not because of a fundamental flaw with the technology, but rather because oil companies went all out for growth and failed to share the proceeds.
In many cases management was rewarded for volumes, not profits. Capital discipline might shrink the sector, but it will not kill it.
Maybe its easy to keep fossil fuels in the ground in Western countries, where climate change is a big issue.
In petrostates, where corruption and bribing the citizenry is often rife, any leader opting to keep it in the ground might end up buried in the ground themselves.
In petrostates, where corruption and bribing the citizenry is often rife, any leader opting to keep it in the ground might end up buried in the ground themselves.
So we punish Canada, and reward Russia and Iran? Does this really make sense?
On one hand we want low prices, because this inevitably leads to much lower levels of investment by the industry, which reduces the long term production of oil and gas.
On the other hand we don’t want low prices, because consumers will consume more.
On the other hand we don’t want low prices, because consumers will consume more.
If only there were a way for producers to see low prices and consumers high ones……
Of course there is, is called taxes. For consumers in Europe this is already the reality.
Today in London, a litre of petrol costs GBP 1.2 or USD 1.63, which is USD 160 per barrel.
Today in London, a litre of petrol costs GBP 1.2 or USD 1.63, which is USD 160 per barrel.
Keep it in the ground reminds me of the war on drugs. Billions have been spent and many have died on trying to reduce supply. It results in impoverished farmers, gangsterocracy and does absolutely nothing to stem the flow of drugs.
The problem of fossil fuels, like the problem of drugs is a problem of DEMAND, not SUPPLY.
If nobody wanted oil and gas, no-one would produce it.
If nobody wanted oil and gas, no-one would produce it.
