We Will Still Need Fossil Fuels In 2050–AEP’s U-Turn
By Paul Homewood
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h/t Ian Magness
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AEP sees the light!
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The climate Left has picked the wrong target in vilifying BP. It is a futile mistake to tar every oil and gas company with the same brush.
Bernard Looney’s BP is doing its part to decarbonise the world in a way that does not trigger energy mayhem in the process, and does not provoke a paralysing political backlash. So are all of the European “majors” to varying degrees.
Contrary to media headlines and feverish censure from Greenpeace, Friends of the Earth, and the Liberal Democrats – who ought to know better – BP is not retreating from renewables or clean energy. The company is tapping its booming oil and gas profits to make green hydrogen a commercial reality in this country instead of a pious dream.
In parallel, it is investing an extra £1bn annually in oil and gas, concentrated on “short-cycle fast-payback” wells to exploit soaring prices and meet the looming supply crunch in the mid-2020s.
Yes, it is also paying down debt and providing a dividend to pension funds and retirees struggling to cope with fuel bills. It is taking necessary steps to remain a viable commercial company, able to fend off takeovers by powerful rivals with a very different climate ideology.
Green realists should recognise the tactical wisdom of BP’s plan to slow its exit from fossils this decade. Its upstream spending will focus on spur pipelines from existing drilling platforms able to produce within one to three years. They include “tie-back” mini-projects such as Seagull and Merlach in North Sea for crude; or Cypre and Mento in Trinidad for gas.
This is nothing like BP’s retreat from renewables after Lord Browne’s tenure, when the company went green slightly too early and lost money becoming (briefly) the world leader in solar power.
BP’s Energy Outlook this month is in many ways an extraordinary document. It concluded that global demand for oil and fossil fuels peaked in 2019, with even China close to rolling over. It has rung the bell that tolls for Big Oil.
The $190 trillion (£155 trillion) global economy runs on a legacy infrastructure of fossil fuels. Three quarters of British homes are heated exclusively by gas. The fleet of 1.5 billion vehicles on the roads today will depend on petrol and diesel for a long time. Ditto for aviation and maritime fleets. Steel, cement, chemical, and fertiliser plants can be decarbonised but for now they run on fossils.
That does not mean it is impossible to switch this vast and complex system to net zero emissions by 2050. The International Monetary Fund and the International Energy Agency say alternative technology is already so cheap that decarbonisation can be done at a negative net cost – ie, an economic gain.
But it cannot be done by shutting down supply or by Puritan incantations of “degrowth”. People will not willingly submit to economic depression and food rationing.
Vladimir Putin’s energy war has shown us how quickly societies will turn against climate targets if the transition becomes disorderly and threatening. We have lost just 120 billion cubic metres (BCM) of Russian gas supply out of a global market of 4,100 BCM. That has been enough for our democracies to wobble.
There was always going to be an energy crisis this decade – regardless of Ukraine – because the world faces a structural supply deficit. Rystad Energy says upstream investment in oil and gas was running at over $800bn a year at the top of the commodity supercycle in 2014. It has been running at closer to $400bn over recent years.
Daniel Yergin, S&P Global’s energy guru, calls it “pre-emptive underinvestment”. The cycle has played its part, but so has net zero signalling, with fears of stranded assets and long-tail risk from climate litigation.
Old fields are depleting. Few new projects coming on stream. Shale drillers have tapped the best seams in the Permian. The “expected ultimate recovery” of wells has dropped this year for the first time since the fracking boom began.
Investment in nuclear, renewables, and electrification has not compensated. It needs to rise by a factor 2.4 this decade to plug the gap.
“The world is underinvesting in all forms of energy,” said Columbia University’s Jason Bordoff.
The danger of a botched transition should by now be obvious, and so should the danger of a premature and misplaced campaign to disinvest from well-run western oil majors, which have much lower methane emissions than the bad actors, and which bolster the energy security of our democracies.
Of course it was not long ago that AEP was demonising the fossil fuel industry, insisting that its days were over and warning of stranded assets:
And it this naive assumption that renewables would simply replace fossil fuels overnight that has led to the massive underinvestment in fossil fuel projects.
As the IEA projections above make clear, we may still be needing almost as much oil as we do now in 2050.
It’s a pity AEP did not wake up to the real world a few years ago.
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
The first green shoots? [Pardon my adjective]
There’s plenty of other rubbish in that article. He’s still completely deluded.
Indeed. And he’ll change his mind again next week when it suits him. Anyone who takes his contradictory ramblings seriously anymore needs help.
As he is a ‘last person I spoke to’ commentator, its really BP that has found a narrative that pays lip service to net zero whilst investing again in the real stuff.
Indeed!
I wouldn’t believe a thing that man says as it’s likely to change with the weather – and he couldn’t get that right on the same day.
Good to see AEP regaining some of his old common sense ? But the whole fossil fuel charade is based on the false and stupid idea of unnecessary and wasteful decarbonization. Why are we trying to decarbonize anything ? There are no benefits.
This journalist is an AI: an articulate idiot
‘This is nothing like BP’s retreat from renewables after Lord Browne’s tenure, when the company went green slightly too early and lost money becoming (briefly) the world leader in solar power’.
That’ll be ‘first adopter advantage’ I keep reading about, then.
Just like the second mouse gets the cheese.
This is a guy who writes ‘opinion forming’ nonsense purely for money. So it can only be BP who paid him for this article.
“The climate Left has picked the wrong target in vilifying BP. It is a futile mistake to tar every oil and gas company with the same brush.”
Indeed it is. Their fuels for conventional transportation will be required to continue the lengthy transition to renewables and EV transportation. We cannot simply stop using them to lower CO2 emissions to zero by 2050. The Left doesn’t seem to understand that reality. Certainly not the politicians at the UN.
Yes there appears to be a fairy tale, fervently beloved by the eco zeolots, that if you choke off all fossil fuel supply, this will somehow magic up enough “sustainable” energy sources to power our economy and make everyone want to adopt them. Hence the “Just Stop Oil” lunacy
Many Green zealots simply want to do away with oil because they hate oil & gas companies. Its an irrational hatred, as is their hatred of nuclear. There’s no “plan” as such, just a fervent religious belief that the world be better once what they detest is gone. It is Hitlerian really.
Nobody’s stopping them not using oil.
Hypocrite greentards.
“Their fuels for conventional transportation will be required to continue the lengthy transition to renewables and EV transportation.”
Renewables and EV transportation aren’t viable. A lengthy transition indeed.
Next thing you know he’ll be claiming that we don’t need a ‘clean energy transition’ because the burning of fossil fuels is not the global temperature control knob which climate ‘scientists’ have said it is. Next thing you know he’ll have re-discovered his brain which has been out on loan all these years.
Like many other Telegraph writers, he confidently predicts what doesn’t happen, ignores this and swings the other way. How many times has Con Coughlin predicted Putin’s downfall? One of several.
AEP is a comedy act, an idiot, a stooge. There is no point at all in giving credence whatsoever to any word he utters or commits to text.
It is a futile mistake to tar every oil and gas company with the same brush.
There wouldn’t be any tar if climate obsessives got their way.
And why do any need tarring? They produce what we want and need. How evil.
I can think of many GangGreens who need tarring.
And feathering.
But plenty of feathers to be found near wind turbines.
Peak oil 2019? Really? Somehow I think that was a temporary blip due to pandemic. Lets see how that prediction pans out by 2029.
I once tried to trace “the oil will run out soon” idea back to the start, but could only get to 1862 (and that referred to an earlier claim) which followed the Pennsylvania oil boom start in 1858. I don’t believe any claims like this.
And if oil were to be “just stopped” then there is a lot of coal still around. Little known but until 1951 coal was the major source of chemicals (and diesel). Then plentiful (and cheap) oil followed by natural gas became the preferred source.
Haven’t even started on methane hydrates. 100s of years of fossil fuels left if required.
Better late than never, I suppose. He’s probably been leaned on by his bosses who can se which way the wind is blowing – if you’ll pardon the pun.
AEP drifts more than a Chinese spy balloon ( I know, they have a propulsion system).
Joy in heaven?
The first graph are all predictions. We need to have real data (eg what led up to the starting point) so we can judge exactly how realistic (or otherwise) those projections are. As far as I can see, none of them are achievable, just wishful thinking.
“The climate Left has picked the wrong target in vilifying BP. It is a futile mistake to tar every oil and gas company with the same brush.”
But, as we can see, there’s no sense on the Left or the Right:
Kwasi Kwarteng: Net zero is ‘absolutely the right agenda’
Former chancellor defends green targets amid cost of living crisis and says Liz Truss was wrong to sack him after mini-Budget chaos
https://www.telegraph.co.uk/politics/2023/02/16/kwasi-kwarteng-net-zero-absolutely-right-agenda
Reblogged this on Calculus of Decay .
” The International Monetary Fund and the International Energy Agency say alternative technology is already so cheap that decarbonisation can be done at a negative net cost – ie, an economic gain.” What’s that referring to?
Bullshit most likely – a form of renewable energy that is readily available.
Cost isn’t the only barrier. Renewables are not scalable to meet the West’s needs. Africa isn’t willing to be Europe’s wind/solar farm.
BBC Radio4 are tweeting promoting a Greta interview page they made
The page is not connected to any radio broadcast
So why was it made ?
Well it just happened to be released in the same week Greta is promoting her new book ?
I maintain that the BBC has a close relationship with Green PR
I detected there was a problem cos the BBC page is dated 03 February 2023
And starts
“The unlikely voice of a generation, teen activist Greta Thunberg talks to Amol Rajan ”
There you go in black and white the page talks about Greta as a teen activist, when in fact she is 20
So what’s going on ?
The audio page is not new material It’s BBC regurgitating old material as if it’s new
.. the audio actually comes from an Oct 18th TV programme
Back on topic to Ambrose
It’s a fundamental part of human life , that we state a new enlightenment
and then realise we actually knew it , all along
Who is the bad man ?
The folks that put out the most CO2 ?
The folks who on balance most spoil the environment ?
The Chinese and North Korean governments
Nope, British Capitalism
cos Green activists are mostly British anti-capitalist & Marxists
Green is often a front for them
Hence the Watermelon label
The green energy myth where the economy can be powered by renewables while ignoring the use of oil to create the wind farms, solar panels and batteries. The idea that you can replace petrol/diesel vehicles with electric, when the National Grid has come close to backouts due to insufficient power generation seems to be wishful thinking at the moment.
Russian geologists have proposed that oil is abiotic and not a fossil fuel, which would if true, upend the theory that it is finite.
Petroleum compounds display optical activity, a sign of uneven concentrations of chiral molecules. Unassailable proof of biologic origin.
Sophomore organic chemistry.