AuthorTopic: Hills Group Oil Depletion Economic and Thermodynamic Report  (Read 72191 times)

Offline Eddie

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #285 on: September 10, 2020, 05:51:49 AM »

And if reading comprehension is worth anything in today's world, I didn't say, write or imply that all is well. Only that being terrified year after year of TEOTWAWKI might teach any of us that we terrify way too easily.

Anyone who is NOT terrified by what is coming down the pipe here is a few cans short of a 6-pack.

RE

How can anyone go through life, suffering terror spanning the time from Ehrlichs Great Dieoff of the 1980's to now, continue to be terrified? It is a defeatist type of mental energy, it would seem to impede progress through life, dull the senses to apparent lesser problems (like all the other things happening in life), and create someone (to date anyway) near permanently disappointed by events unfolding around them.

I do agree with this.....at some point, you just have to get on with life. AFAIK, we only get one.....counting on collapse is just as delusional as counting
 on an inheritance from a dead relative  to provide for your financial needs.
What makes the desert beautiful is that somewhere it hides a well.

Offline John of Wallan

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #286 on: September 10, 2020, 02:38:34 PM »

And if reading comprehension is worth anything in today's world, I didn't say, write or imply that all is well. Only that being terrified year after year of TEOTWAWKI might teach any of us that we terrify way too easily.

Anyone who is NOT terrified by what is coming down the pipe here is a few cans short of a 6-pack.

RE

How can anyone go through life, suffering terror spanning the time from Ehrlichs Great Dieoff of the 1980's to now, continue to be terrified? It is a defeatist type of mental energy, it would seem to impede progress through life, dull the senses to apparent lesser problems (like all the other things happening in life), and create someone (to date anyway) near permanently disappointed by events unfolding around them.

I do agree with this.....at some point, you just have to get on with life. AFAIK, we only get one.....counting on collapse is just as delusional as counting
 on an inheritance from a dead relative  to provide for your financial needs.

Rational fear is a good thing. It lets you prepare and be aware of what is coming. Unfortunately the concept of fear and rationality are often mutually exclusive. 

I dont consider myself a "doomer", but others raise a few eyebrows when I talk of backup gen sets, gardens and water tanks etc... What I see coming makes me sad more than frightened. I dont fear death, but I am not in danger of dying any time soon. At the time this may change.

Preparedness is just as much between the ears as what toys you have. I live a normal life, work a normal job, and am a regular citizen. I also see a bad moon rising and am getting prepared for the future to be different to the current. A lot of people can not handle any change from the status queo let alone a change for the worse. Delusional thinking that things will always be rosy may make you happy in the short term, like the 2nd bottle of Merlot. But like the 2nd bottle, the hangover when things go South will be pretty unbearable to many.

Plan for the worst, hope for the best.

JOW

Offline BuddyJ

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #287 on: September 10, 2020, 05:04:09 PM »
How can anyone go through life, suffering terror spanning the time from Ehrlichs Great Dieoff of the 1980's to now, continue to be terrified? It is a defeatist type of mental energy, it would seem to impede progress through life, dull the senses to apparent lesser problems (like all the other things happening in life), and create someone (to date anyway) near permanently disappointed by events unfolding around them.

I do agree with this.....at some point, you just have to get on with life. AFAIK, we only get one.....counting on collapse is just as delusional as counting
 on an inheritance from a dead relative  to provide for your financial needs.

It seems logical that a resilient lifestyle (as unique as what each of us thinks "collapse" might be, and what "resilient" might be in that context) is the best answer to the twists and turns of current events.  Terror is certainly not a feeling that everyone feels the same way, let alone which combination of current events might generate it at all. A fight/flight reaction to the slow decline of America just doesn't seem to fit the problem.

I was perusing the early posts and thread topics of this website, which would seem to cover a decent time slice of current events, and for all the eager interest in what might happen, the reality is that the US or world didn't even a recession until now. And as it turns out, that didn't happen because of economic mismanagement or resource scarcity or the Fed borrowing money or the price of gold. Makes a bit curious now, to find some decent pandemic threads and see how those were foretold, prior to arrival.

Offline BuddyJ

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #288 on: September 10, 2020, 05:05:41 PM »
Plan for the worst, hope for the best.
JOW

Make a plan, and work it.

Offline Phil Rumpole

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #289 on: September 11, 2020, 11:50:01 PM »


Since you asked, I think the right-wing shooter kid is a product of his environment, which probably included a lot of indoctrination from somebody. I see him not as an isolated individual, but rather as a symptom of our disease.....not that unlike a school shooter...it's just that his delusion is shared by a lot more  people,. which ultimately makes the  phenomenon more dangerous.

And he doesn't look like the sharpest crayon in the box, frankly.

On the original police shooting, I stand my previous statements. In a country with 55 million arrests a year, and many more police-citizen encounters, I don't see any chance of getting down to zero on shootings of black guys.....I believe racism exists in policing, but mental illness, drug-induced impairment, running from cops, resisting arrest, and demographic factors (more cops get called in black neighborhoods)all that figures in.....racism is only one part of it......and a thousand deaths in 55 million incidents is a vanishingly small number. Even if the real number is 10X the reported number, it's still vanishingly small.

But it only takes one viral video to put people in the street. I doubt that will change.

A left-leaning politico I once voted for said that there is nothing left in the middle of the road except for white lines and dead armadillos.....and that isn't too far from the truth.

Well I still disagree resisting on its own is a justification. I also think that if people are that authoritatian in trusting police on the scene to be ethical, they can easily become the low hanging fruit for unscrupulous police and prosecutors themselves. Not to be shot, but charged and/or convicted of things by incriminating themselves through misplaced willingness to co-operate.  'I'll just go down to the station and clear this all up...I'll seem guilty if I don't answer questions.... I plead guilty, but...'' are all ways to have everything incriminating magnified and everything mitigating excluded, opposite to the suspect's expectation.

with the shooting of Jacob Blake I thought it was a case where for a change, policee had no choice, so should not have resulted in the following turmoil. I thought Rayshard Brooks shooting was wrong as the man was clearly mentally retarded for anyone who watched the full video, so did not understand the instructions. He was not suspected of doing anything other than being drunk, so should not have been shot in the back running away.

In this Blake case, at least some news media was misleading in blacking out the seconds where he reaches for the floor of the car and shots are fired. The Guardian, which has zero journalistic integrity did that anyway.

I then asked a lawyer why the news and obviously much of the public was treating it as a simple shot in the back situation. He said it was because there were 4 police on scene and they never tried to use less lethal force like tackling, pepper spray or tazer beforehand. Fair enough.

Then I started getting a lot of memes sent my way, treating the
Rittenhouse kid who shot 3, killing two as a huge war hero deserving of a gold or bronze Star. You would have thought he had stormed a machine gun nest, not shot unarmed people, himself armed with an armalite.

I personally don't think he is either a cold blooded murderer or a hero as the polarised opposing opinions hold. I certainly don't accept that charges against him are totally unfounded and simply acted in self defence while doing a public service of killing commies. I don't buy for a second that going somewhere armed and underage is the same as picking up a weapon in self defence underage. I also see a case for self defence hugely negated by unnecessarily placing yourself in danger.

 A huge swathe of public opinion does seriously maintain he has altogether no culpability at all and his arrest is simply political. I think those same people are responsible for him throwing his life away, by imparting this idea that a teen with a semi auto in a crowd is as much a rite of passage as one with an air rifle in the uninhabited woods. Also the approval for dropping out of school to play call of duty all day, leading to LARPing. Certainly the profile of a school shooter as you said, and his former classmates said the same. That said, he didn't set out to kill anyone, but should never have been in the situation that might forseeably result in it happening: which is why he was armed and resulted in three shot with two dead and charges that would effectively mean life in prison. Yet millions refuse to take any responsibility for this happening, through the same beliefs they have in the attitude of first his mother who sent him and then the men in the milita who allowed him to accompany them.



« Last Edit: September 12, 2020, 12:45:53 AM by Phil Rumpole »
Women are like hurricanes: Wet and wild when they come, take your house when they leave

Offline BuddyJ

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #290 on: September 12, 2020, 06:06:11 PM »
A huge swathe of public opinion does seriously maintain he has altogether no culpability at all and his arrest is simply political. I think those same people are responsible for him throwing his life away, by imparting this idea that a teen with a semi auto in a crowd is as much a rite of passage as one with an air rifle in the uninhabited woods.

Do you have any information as to how or why Americans would equate those two? As someone who grew up around firearms (admittedly awhile ago), this never happened in the rural area I am familiar with. It seems a bit of a stretch even in flyover country today, imagining all these folks who would confuse using an air rifle in the woods with a semi-auto in a crowd.

Offline Phil Rumpole

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Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« Reply #291 on: September 13, 2020, 02:32:05 PM »
Perhaps a touch hyperbole, but what I see is every right wing protest or counterprotest such as the anti-lockdown ones around April, carry guns instead of signs. People are citing the Wisconsin law on open carry has some exemption clause for 16-17 yr olds. I haven't seen the actual wording of that, but it's common sense in my mind it would be meant for going hunting or a firing range. I doubt most of them have even thought about the relevant statutes at all, they just take what the youngster in Kenosha was doing as natural as a boyscout needing a pen-knife. Boggles my mind.
« Last Edit: September 13, 2020, 02:56:01 PM by Phil Rumpole »
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Offline RE

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🛢️ Oil Majors Stuck Between A Rock And A Hard Place
« Reply #292 on: October 19, 2020, 08:42:39 AM »
Good material about Winston Churchill and the transition of Naval power to oil from coal.

RE

https://oilprice.com/Energy/Energy-General/Oil-Majors-Stuck-Between-A-Rock-And-A-Hard-Place.html

Oil Majors Stuck Between A Rock And A Hard Place
By Andreas De Vries - Oct 18, 2020, 6:00 PM CDT


The past few years have been historic for as far as crude oil forecasts are concerned. Back in 2015 the view that crude oil demand could peak during the 2020s or 2030s was still met with disbelief (and some ridicule…). Economic growth had been pushing crude oil demand up ever year for decades already, so why would things become different, so the reasoning went. Today, however, essentially all major energy forecasters, including BP, Shell, Total, DNV-GL, the IEA and even OPEC, have come round and acknowledge Peak Oil Demand as a realistic possibility.

The strategic response of the Oil Majors to this possibility has differed. But so far, none seem to have won over the investment community. What could be the reason for this? And does this leave the Majors at risk of being cut-off from capital?

Crude Oil during the 20th century

As Admiral of the Royal British Navy, Winston Churchill took a decision that not only shocked his nation, but also defined the role crude oil would play in the global economy during the 20th century.

Great Britain had become the world’s leading nation thanks to its invention of the steam-engine, coupled with an abundance of coal in the country. This enabled the country to be the first to mechanize industry, which made it not only the world’s industrial heartland, but also its leading military power, as Britain’s mechanized industry was able to churn out warships that were much larger and more heavily armed than its rivals could produce. And by fitting them out with steam-engines, these British warships were also able to travel faster and further, independent from wind. In other words, thanks to the steam-engine and coal, Britain became “the empire on which the sun never sets”.

Nevertheless, in 1912 Winston Churchill decided that the British Navy’s future would be based on crude oil, when he ordered construction of the Queen Elizabeth class of super-dreadnoughts based on an internal combustion engine design. Many were outraged. Steam-engines needed coal, of which Britain had plenty. But Churchill’s internal combustion engines needed liquid fuels derived from crude oil, of which Britain had only a negligible amount. So what on earth was he thinking? But Churchill was convinced that warships which coupled the technology of the internal combustion engine with the physics of crude oil could be made larger, more heavily armed, faster, and with a greater range of operation, than any warship that utilized a coal fired steam-engine. The introduction of the internal combustion engine would therefore ensure that in the competition with France, Russia and Germany, the British Navy would remain superior.

Churchill turned out to be right. Judging by speed, range, ease of operation, reliability and economics, the internal combustion engine fueled by a crude oil derivative did indeed outperform all other transportation solutions. And, as it turned out, these advantages applied not only to (war)ships, but also planes, trains and automobiles. As a result of this superiority of the internal combustion engine, oil became the most important source of energy of the 20th century.

The implications for the strategy of oil companies was far-reaching. Since there was no technology that could compete with the internal combustion engine, growth of the global economy ensured growth in demand for crude oil. Oil companies could therefore simply focus on finding crude oil, producing, refining and marketing it. For as long as they could do this at a price point that was lower than that of their competitors, they would always find takers for their product. They would be able to sell all the oil they could lay their hands on, and at margins which guaranteed record profits and rates of return.

The Crude Oil Business during the 21st century

Over recent years, a number of trends have developed that call into question the future of the internal combustion engine and crude oil.

Primary among these trends is sustainability. The first generation that grew up in the internal combustion engine and crude oil era, the baby-boomer generation, did not know much about the impact on the environment of crude oil production, refining and burning in an internal combustion engine, as this body of knowledge developed only during the 1970s. The baby-boomer generation therefore became environmentally aware after they had firmly established a certain lifestyle. The descendants of the baby-boomers, the Millennial generation, was brought up with knowledge of the environmental implications of crude oil. Consequently, they became not only aware of the environmental issues associated with the internal combustion engine and crude oil, but also concerned about them. As this generation educated its descendants, the so-called Generation Z, in these concerns from the youngest of ages, this latter generation moved beyond environmental awareness and concern, to action. Generation Z consumers are considered the “green generation” because for them, environmental concern is a key factor in day-to-day consumption decisions. For the sake of the environment they are willing to make do with products that are sub-optimal from a convenience perspective but deemed sustainable, and they are willing to pay a premium for products that are deemed sustainable.  This trend would be irrelevant for the internal combustion engine and crude oil had it not been for a second trend, namely technological innovation. Over recent years a number of technologies that greatly appeal to the Generation Z, the consumers of the future, have developed to the point where it becomes possible to imagine that they bring forth solutions that can compete with the internal combustion engine and crude oil on power, range, ease of operation, reliability and economics. Chief among these technologies are the electric drivetrain, batteries and hydrogen, which have made electrification of transportation not only possible but likely.

The third trend of importance to the internal combustion engine and crude oil is ESG investment. On the one hand not fall foul with Generation Z, and on the other hand to leverage this generation’s sustainability preference for financial gain, investors around the world are making sustainability a key tenet of their investing strategy. The bottom line of this trend is that less money will be available for investment in crude oil projects, while that which remains available will most likely come at a premium.

All this means that there is a real possibility the crude oil business will experience a structural change during the 21st century, as the internal combustion engine could lose its role as the “engine of the global economy” to the electric drivetrain.

Crude Oil Strategy during the 21st century

If the above scenario – the Energy Transition scenario - were indeed to play out, the Oil Majors would be forced to change their strategies in a fundamental manner. If, namely, crude oil loses the pivotal role it plays in the global economy, growth in demand for it would no longer be guaranteed. In such a market environment, the traditional “find it, produce it, refine and market it” strategy would no longer guarantee the growth in profits that the Oil Majors’ shareholders have come to expect.

This potentiality appears to have triggered strategic reviews at a number of the Oil Majors.

Shell was the first to adopt the Energy Transition scenario as the core for its future strategy, as evidenced by the fact that over the past years  it has announced a number of decisions that are natural responses to this scenario. For example, in 2016 it launched a New Energy division to leverage the opportunities that would result from the Energy Transition, such as in electricity generation, batteries, grid management and hydrogen. in 2018 it adopted methane emissions intensity targets for its assets, which has led it to divest from crude oil resources with high carbon intensity such as the Canadian tar sands. In 2019 the company adopted a new ambition to become the largest power company in the world during the 2030s. And most recently the company announced that it would accelerate it transformation in response to the Energy Transition. It adopted “net zero” emissions targets in April of 2020, and in September 2020 launched a major restructuring to free up funds for investment in the New Energy area.

BP too has changed it strategy its strategy in accordance with the Energy Transition scenario, but more recently than Shell. After the failure of the company’s “Beyond Petroleum” strategy launched in 2002, it spent most of the 2010s managing the implications of the Deepwater Horizon disaster. But since the appointment of a its new chief executive officer Bernard Looney in October 2019, things have changed. In February of 2020, in pretty much his first major announcement, Looney announced the new strategic direction of the company using the slogan “Reimagining energy, reinventing BP”, accompanied by a very specific “Net Zero” ambition. Shortly thereafter the company restructured in accordance with this strategy, implementing a new organization structure and leadership team during May and June of 2020. In August it then set out the details of its new strategy, explaining it to the international investment community during September. Further that month it also communicated its new “core beliefs” about the future of global energy demand, saying it assumes this will continue to grow (“at least for a period”), but in a manner different from before, with a “declining role of fossil fuels offset ‎by an increasing share of renewable energy and a growing role for electricity”. On this basis BP then signed its first major M&A deal to add to its New Energy portfolio, also during September.

Although Total has not made the major announcements around the Energy Transition of Shell and BP, it has not stood idly by. It has been speaking about “integrating climate change” in its strategy since 2017 already, and has made a number of significant investment accordingly. Today, of all the Oil Majors, the Total portfolio of New Energy businesses is probably the most advanced, covering renewable power generation, storage, electric vehicle charging, and, through its Carbon Neutrality Ventures arm, even a hydrogen fuel cell powered commercial vehicles developer.

Over in the United States, however, ExxonMobil and Chevron are taking the contrarian position, with both maintaining a market outlook that is best described as “steady she goes”. Based on this outlook, ExxonMobil believes that heavily investing in addition crude oil, natural gas and petrochemicals capacity now sets the company up for success it the future, especially as its European competitors are speaking about decreasing the share of fossil fuels in their future portfolios. Consequently, the company’s strategic plan targets well over US$ 30 Billion of investment annually over coming years – all in fossil fuels.

Related: The Secret Behind America’s Most Valuable Energy Play

Chevron is positioning itself in between the European Oil Majors and ExxonMobil, adopting a wait-and-see strategic approach. Its current strategy prioritizes dividends payments and share buy-backs over investment, as long as it is not fully clear what the future of energy will look like. The company’s top goal is to distribute US$ 75 billion - US$ 80 billion in cash to shareholders over the next five years.

The Stock Market Response Interestingly, at the end of September, the share price of all the mentioned Oil Majors was down significantly on the year. Shell was down 58%, BP 53%, Total 45%, ExxonMobil 52% and Chevron 40%. Part of this is due to the crude oil price decline during the year, and the lingering impact of the COVID19 pandemic on global crude oil demand. But since this should affect all Oil Majors more or less equally, it is fair to assume that the divergence in their share prices movement is related to the differences in their strategies. Based on this assumption, it appears that none of the mentioned strategies has so far fully convinced the international investor community.

As to the reasons why this could be the case, different considerations are likely at play.

As to where global energy markets are heading, the ambition of consumers, governments and international organizations is clear: sustainability remains the trend, to which investment community is responding by prioritizing ESG investment. The “steady she goes” strategy of ExxonMobil does not address this, as a result of which the company finds itself under significant investor pressure at the moment.

On the other hand, what is not helping the case of the transitioning Oil Majors Shell, BP and Total is the fact that the speed at which they envisage to transition does not align with the 1.5°C global warming limit as outlined by the Paris Agreement. Additionally, smart investors are asking questions about the ability of these companies, which for over a century have focused on fossil fuels, to actually deliver on their transformation ambitions. And, even if one assumes they will be able to, there is no doubt that transforming an Oil Major is harder than starting up a new venture based on the Energy Transition scenario. So why would a smart investor bet her Energy Transition money on a “fossil trying to change”, that will have to deal with a company culture and practices that were developed for the fossil fuel era of the 20th century, when she could also put this money in a New Energy focused startup unhindered by such deadweight?

This probably explains why Chevron, with its focus on returning cash from existing operations to shareholders, has relatively outperformed its competitors so far this year.

The Way Forward

This author firmly believes that the Oil Majors cannot succeed without the Energy Transition, and that the Energy Transition cannot succeed without the Crude Oil Majors.

As to the first point, the need for the Oil Majors to adopt the Energy Transition strategy, in the world before Covid-19, sustainability was what futurologists and trendwatchers call a macro trend. That is, a general movement in society toward a comprehensively different way of life. Sustainability fell into this category because it was in the process of changing consumer preferences; social taboos as with flight shaming; societal priorities, as evidenced by national commitments made under the UN Framework Convention on Climate Change; government rules and regulations such as bans on single-use plastics and internal combustion engines; and national development policies as exemplified by China's Industrial Green Development Plan and Europe's Green Deal. Historically, only cataclysmic events, such as a pandemic or global war, disrupt macro trends. So far, however, the Covid-19 pandemic has not disrupted sustainability. To the contrary, as evidenced by the calls to use the current crisis to accelerate the transition to a carbon neutral economy, it is likely to only accelerate the sustainability trend. Consequently, the pressure on the Crude Oil Majors to transition is likely to increase as well. Those that are transitioning are likely to eventually find themselves under pressure to transition faster. But those that are not transitioning might find themselves cut off from investment, financing and funding.

Related: Democrats Want Permanent Ban On Offshore Oil Leasing

As to the second point, the dependency of the Energy Transition on the Oil Majors, firstly, this has to do with the nature of a transition. Despite the global ambition for a carbon-neutral economy, the dependency of the global economy on the various derivatives of crude oil will not disappear overnight. Since nothing could be more disruptive for the Energy Transition than a shortage of transportation fuels and plastics during the process, even in their current form the Crude Oil Majors will remain an essential component of the global economy.

Secondly, this has to do with the competencies and capabilities the Oil Majors have built up over the decades. According to the OECD, to meet the needs of the global economy, around $6.3 billion of investment in the global energy infrastructure is needed annually until 2030. This number rises to $6.9 billion if all investments are made compatible with global climate ambitions. Clearly, the scale of this necessary effort is huge, and it is hard to imagine how it could be achieved without leveraging the Oil Majors’ experience in delivering massive, technologically complex projects in the most inhospitable areas of the world, and seamlessly connecting the energy produced with consumers globally.

For the sake of Energy Transition, therefore, the Oil Majors should transition, in a balanced manner, but with a sense of urgency. If they do this while communicating well with their stakeholders, there is no reason to believe the global investment community will not overcome its current hesitancy and come to support their transition strategies.

In a separate, future article I will expand on my ideas about what a balanced transition strategy should look like for the Oil Majors.

By Andreas de Vries for Oilprice.com
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