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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe End of Oil is Near--The pandemic may send the petroleum industry to the grave
THIS PAST SPRING, coastlines around the globe took on the feel of an enemy invasion as hundreds of massive oil tankers overwhelmed seaports from South Africa to Singapore. Locals and industry analysts alike used the word armadatypically applied to fleets of warshipsto describe scenes such as when a group of tankers left Saudi Arabia en masse and another descended on China. One distressed news article proclaimed that a floating hoard of oil sat in tankers anchored across the North Sea, everywhere from the UK to France and the Netherlands. In April, the US Coast Guard shared an alarming video that showed dozens of tankers spread out for miles along Californias coast.
On May 12, Greenpeace activists sailed into San Francisco Bay to issue a challenge to the public. In front of the giant Amazon Falcon oil tankerwhich had been docked in the bay for weeks, loaded up with Chevron oilthey unfurled a banner reading, Oil Is Over! The Future Is Up to You.
The oil industry has turned the oceans into aquatic parking lotsfloating storage facilities holding, at their highest levels in early May, some 390 million barrels of crude oil and refined products like gasoline. Between March and May, the amount of oil stored at sea nearly tripled, and it has yet to abate in many parts of the world.
This tanker invasion is only one piece of a dangerous buildup in oil supply that is the result of an unprecedented global glut. The coronavirus pandemic has gutted demand, resulting in the current surplus, but it merely exacerbated a problem thats been plaguing the oil industry for years: the incessant overproduction of a product that the world is desperately trying to wean itself from, with growing success.
Today, the global oil industry is in a tailspin. Demand has cratered, prices have collapsed, and profits are shrinking. The oil majors (giant global corporations including BP, Chevron, and Shell) are taking billions of dollars in losses while cutting tens of thousands of jobs. Smaller companies are declaring bankruptcy, and investors are looking elsewhere for returns. Significant changes to when, where, and how much oil will be produced, and by whom, are already underway. It is clear that the oil industry will not recover from COVID-19 and return to its former self. What form it ultimately takes, or whether it will even survive, is now very much an open question.
Under President Donald Trump, the United States has joined other petroleum superpowers in efforts to maintain oils dominance. While government bailout programs and subsidies could provide the lifeline the industry needs to stay afloat, such policies will likely throw good money after bad. As Sarah Bloom Raskin, a former Federal Reserve governor and former deputy secretary of the Treasury, has written, Even in the short term, fossil fuels are a terrible investment. . . . It also forestalls the inevitable decline of an industry that can no longer sustain itself.
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Clearly, leaving Donald Trump, Vladimir Putin, and Mohammed bin Salman in charge of a global solution is a sure way to lock in a world order tied to oil. The extent to which governments are already stepping in to provide the capital that is otherwise draining from the industry is a testament to Big Oils remaining political prowess. Led by President Trump and Republicans in Congress, oil and gas companies in the United States had, by June, received billions of dollars in both direct federal COVID-19 benefits and indirect payouts through new Federal Reserve pandemic-relief spending, according to my own calculations for Sierra.
https://www.sierraclub.org/sierra/2020-5-september-october/feature/end-oil-near?utm_source=insider&utm_medium=email&utm_campaign=newsletter
marble falls
(57,157 posts)Calculating
(2,957 posts)I don't want to lose all the money I invested in xom for safe reliable dividend returns. Plenty of people are invested in these companies, and it would be devastating for them all to fail. People literally depend on the them for their retirement.
pwb
(11,287 posts)Fuck you Vlad.
CaliforniaPeggy
(149,681 posts)zipplewrath
(16,646 posts)I remember at the beginning of the Obama administration the price of photovoltaics dropped such that solar energy costs were on par with oil. It's one of the many reasons the administration was trying to support various American solar companies. We've seen a huge growth in solar energy production, along with a huge expansion in wind power. Oil will hang in there for a while, but a bit like coal, it's getting too much competition from cheaper, cleaner solutions. Heck, if there is a single indication that there's a real future, and real profits, in new energy production and distribution, it is the fact that several years ago, Lockheed Martin got into the business, much of it commercial in nature.
https://www.lockheedmartin.com/en-us/capabilities/energy.html
Wounded Bear
(58,693 posts)It's been living on government subsidies since the 80's, at least. Funny how we subsidize the shit out of production, and then tax the shit out of consumption. Somewhere in there I sense a bit of a paradox.
NNadir
(33,541 posts)Last edited Wed Aug 26, 2020, 05:58 PM - Edit history (1)
...deep level, this post consists almost entirely of delusional wiahful thinking.
For the entire 21st century, the use of dangerous fossil fuels has been surging.
The modern Sierra Club, which has been spitting on John Muir's legacy by advocating turning wilderness into industrial parks for so called "renewable energy" has a very poor understanding of energy reality.
The result is written in the planetary atmosphere. The rate of accumulation of the dangerous fossil fuel waste carbon dioxide in the atmosphere is accelerating and has reached 2.4 ppm per year, an unprecedented rate far beyond what it was just two decades ago.
EX500rider
(10,849 posts)NNadir
(33,541 posts)...the electricity produced in this country is produced using dangerous fossil fuels.
The idea that an electric car is "green" is also delusional, and whether they are ethical or sustainable is also questionable. There is not enough cobalt (or slaves to dig it) to make the electric car sustainable on any kind of meaningful scale.
The reality is that the car CULTure itself is not sustainable; it never was; it never will be. The invention of the car - the first real example of "distributed energy" in the industrial sense, has been an environmental tragedy of a magnitude that is seldom appreciated.