Category: Nieuws

U.S. energy company Sempra Energy (SRE.N) said on Friday it will continue developing liquefied natural gas (LNG) export plants in Louisiana and Mexico while building the first phase of the Costa Azul LNG export plant in Mexico.

Justin Bird, CEO of Sempra Infrastructure, told analysts on the company’s earnings call that Costa Azul was “on time and on budget” to produce first LNG by the end of 2024. Costa Azul will produce about 3.3 million tonnes per annum (MTPA) of LNG.

In addition, Bird said Sempra remains focused on working with partners at Cameron LNG to develop a roughly 6-MTPA fourth liquefaction train and optimize operations at the existing 15-MTPA, three-train facility in Louisiana.

Bird also said Sempra was developing the roughly 4.0-MTPA Vista Pacifico LNG export plant on Mexico’s Pacific Coast located next to its refined products terminal in Topolobampo.

Vista Pacifico would be connected to two existing pipelines and would source gas from the Permian basin in Texas and New Mexico for export to Asian markets, where LNG demand is growing fast.

As for customers interested in LNG, Bird said; “We are seeing a real uptick in our discussions both in Asia and Europe and…South America.”

“We have a competitive advantage, the ability to dispatch directly into Europe and Asia,” Bird said.

“Over the long term…we still see demand for LNG growing mid- to high single digits, which supports our long-term very bullish view on LNG development.”

In Europe, Bird said “there’s a tremendous amount of recognition… about the role for natural gas and specifically, LNG. And there’s certainly a new risk premium being assigned to pipeline gas.”

He was referring to delays in Russia sending pipeline gas to Europe in recent months, which helped cause prices in Europe and Asia to hit record highs in October.

Reuters by Scott DiSavino, November 8, 2021

Oil prices are through the roof and oil companies are raking it in. The oil industry has made a truly unbelievable turnaround after prices bottomed out last year during the early phases of the novel coronavirus pandemic and now some industry insiders are even speculating whether oil is on track to hit $100 a barrel. 

In early 2020, as Covid-19 rapidly spread around the globe, industry shut down and people were driven into their homes, causing demand for oil to plummet seemingly overnight. As OPEC+ entered talks to strategize their response, Saudi Arabia and Russia began a spat which developed into an all-out oil price war.

Soon, a global oil glut had flooded the market to such an extent that storage was at a premium and owning oil became a liability. This is how, on April 20, 2020 the West Texas Intermediate crude benchmark did the previously unthinkable and plunged into the negatives, ending the day at nearly $40 below zero a barrel. 

Now, at the time of writing, West Texas Intermediate is at $83.89 a barrel. Last week Saudi Arabia warned the world that global spare oil capacities are falling rapidly. So has the pandemic-fuelled oil crisis ended? On the contrary, oil prices have skyrocketed thanks to the newest phase of the Covid-19 crisis thanks to a ‘scarcity premium.’

Around the world, supply chains are still reeling and energy supply has been unable to keep up with demand as it bounces back to pre-pandemic levels. China, India, and the European Union are now all facing a very serious energy crunch heading into a very grim winter. 

So now that oil companies are rolling in the dough will they increase production to help out the world’s energy supply squeeze? Don’t count on it. “Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. confirmed this week that, for the most part, they’ll spend their windfall profits on share buybacks and dividends,” Bloomberg recently reported.

While capital expenditures will increase in 2022, the report continues, “the increases come off 2021’s exceptionally low base and within frameworks established before the recent surge in fossil-fuel prices.”

This is a huge change in behavior for the oil industry, which usually brings a “drill, baby, drill” mentality to even the smallest upticks in oil prices. The oil industry has been historically characterized by booms and busts as the oil sector reacts to high prices by flooding the market with oil, which then sinks those prices.

The oil industry then repents, curbs production, waits for oil prices to rise, and then starts the cycle all over again. Until now.

For the duration of the Covid-19 crisis, oil producers have shown uncharacteristic restraint and held tight to their pledged production cuts. And now that restraint will turn into a payoff for shareholders.

While this is bad news in the short term for countries suffering from an energy crunch, in the long run this move is good news for climate change mitigation.

Big Oil is more than aware that world leaders are getting more serious than ever about the clean energy transition, and the future of fossil fuels is far from certain. “We will not double down on fossil fuels,” Shell CEO Ben Van Beurden was quoted by Bloomberg. Supermajors might just stay the course on their production caps and focus on diversifying in the coming years.

OilPrice by Haley Zaremba, November 4, 2021

The Houston Ship Channel is home to petrochemical plants, power companies and heavy industries, all of which throw climate-harming emissions into the air.

In a process called “carbon capture and storage” (CCS), some industrial facilities capture this carbon dioxide before it leaves their plants, and then use it to develop products or store it underground.

Now Exxon Mobil has suggested turning the 50-mile-long channel into a CCS hub. The oil and gas giant is calling on industry and government to jointly raise $100 billion to create infrastructure to capture carbon dioxide at industrial plants, carry it away in pipelines and inject it deep under the floor of the Gulf of Mexico.

Joe Blommaert, President of Low Carbon Solutions at Exxon, says CCS is essential to meeting the goals of the Paris agreement while also meeting the growing energy needs of the world.

Exxon has raked in more than $20 billion annually in profits over the past decade, on average, and nearly $300 billion annually in revenues. Blommaert talked with The Associated Press about the $3 billion that Exxon plans to spend on the business through 2025, and how the project might take shape. The interview has been edited for length and clarity.

Q: Your vision for the Houston Ship Channel calls for a $100 billion investment from companies and government. That’s a lot of money. How do you envision it would be spent?

A: Obviously, the scale is unprecedented. When you look into the details, actually, it is many capture facilities and storage facilities, and actually this CCS is executed at scale already around the world. What is important in my mind is this collaboration of the whole industry, the whole of government and the whole of society. And it is actually addressing climate change, which technically is a very complicated issue. It needs all of the solutions, and it is not one or the other. And that’s why with the Houston Hub we were so pleased with the 10 companies willing to step forward to help make this a reality.

Q: How much is Exxon willing to invest?

A: We are, just like other companies, assessing those opportunities. We’re working through our project and definition, and we will certainly do our part. I will not quote a specific number. We are working through that, as you can imagine. But the key is that policy to attract public and private investment in supporting this is put in place. And that’s why we talk about the value of carbon, which is essential.

Q: Can you tell me what percentage of the Houston Ship Channel project costs Exxon would likely contribute?

A: I will not give you the percentage, it’s obviously too early. Actually a meeting is scheduled in the next few days to talk about how to get organized, do governance, and so on. And then each company is actually looking at its own capture project, if you will, and the specific details. So more to come on that.

Q: Was this plan created in response to investor concerns about climate change?

A: We started this CCS venture about three years ago and actually that is now included in my business. And so we brought that to a stage that we could start thinking about how to really bring that to scale.

This was actually already quite quite well progressed, culminating in the creation of a (carbon capture) business that is now 30 this year, and we already had a portfolio of ideas. It’s just the right time for us.

Q: If Exxon believes this is important, why not dramatically reduce oil and gas production and invest more in renewable energy?

A: I fully appreciate this perspective on the issue, and I would come back to what I said earlier in terms of meeting the goals of the Paris accord and meeting energy and product demands that modern life requires, particularly when you think about the growth of society, 2 billion more people by 2050.

That energy mix will change, but that will still require energy sources from fossil fuels. That’s why it is actually so important to have technologies like CCS so that you can meet the energy supplies that the world needs in a way that the emissions are being abated, and that you can do that at the lowest cost possible to society. And you can do that now.

We’re buying renewable power. We do that through our power purchase agreements. We believe our strength really comes to the forefront through the deployment of technologies like CCS, like hydrogen, like biofuels. And those are technologies that are being recognized by the Intergovernmental Panel on Climate Change and the International Energy Agency as technologies that society needs to meet modern life requirements.

SeattleTimes by Cathy Bussewitz, November 2, 2021

Chronic underinvestment in new oil supply since the 2015 crisis and the pressure on oil and gas companies to curb emissions and even “keep it in the ground” will likely lead to peak global oil production earlier than previously expected, analysts say. 

This would be a welcome development for green energy advocates, net-zero agendas, and the planet if it weren’t for one simple fact: oil demand is rebounding from the pandemic-driven slump and will set a new average annual record as soon as next year.  

The energy transition and the various government plans for net-zero emissions have prompted analysts to forecast that peak oil demand would occur earlier than expected just a few years ago.

However, as current investment trends in oil and gas stand, global oil supply could peak sooner than global oil demand, opening a supply gap that would lead to increased volatility on the oil market, with spikes in prices, and, potentially, structurally higher oil prices by the middle of this decade and beyond.

Supply Could Peak Before Demand

“On current trends, global oil supply is likely to peak even earlier than demand,” Morgan Stanley’s research department wrote in a note this week carried by Reuters.  

“The planet puts boundaries on the amount of carbon that can safely be emitted. Therefore, oil consumption needs to peak,” analysts at Morgan Stanley said.

The problem with the world is that oil consumption – wishful thinking, investor pressure, and all – is not peaking. Nor will it peak until the end of this decade at the earliest, according to most estimates. 

OPEC expects global oil demand to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to plateau until 2045, as per the cartel’s latest annual outlook. 

Some other analysts expect peak demand at some point in the late 2020s. 

Investment in new supply, however, is severely lagging global oil demand growth.

Demand is growing again after the 2020 COVID crisis and, contrary to some expectations from early 2020 that the world’s oil consumption would never return to pre-pandemic levels, demand is currently just a few months away from hitting and exceeding those levels. 

Supply Gap Is Looming In Just A Few Years

Supply, on the other hand, looks constrained beyond the OPEC+ deal horizon. 

New investment last year slumped to a decade-and-a-half low. Last year, global upstream investment sank to a 15-year low of $350 billion, according to estimates by Wood Mackenzie from earlier this year. 

Investment is not expected to materially pick up this year, either, despite $80 oil. That’s because supermajors stick to capital discipline and pledge net-zero emission targets, part of which some of them plan to reach by curbing investment and developments in non-core little-profitable new oil projects. 

U.S. shale, for its part, is not rushing this time to “drill themselves into oblivion,” as Harold Hamm said in 2017, as American producers look to finally reward shareholders after years of plowing cash flows into drilling and chasing production growth. 

Considering that oil demand will still grow, at least for a few more years, underinvestment in new supply would be a major problem in the medium and long term. 

Despite the energy transition, demand will not just vanish, and new supply will be needed for years to come to replace declining production and reserves. 

The oil industry will need massive investments over the next 25 years in order to meet demand, according to OPEC. The industry will need cumulative long-term upstream, midstream, and downstream oil-related investments of $11.8 trillion by 2045, OPEC says.

Patrick Pouyanné, chief executive at France’s TotalEnergies, said at the Energy Intelligence Forum this month that oil prices would “rocket to the roof” by 2030 if the industry were to stop investments in new supply, as some scenarios for net-zero by 2050 suggest. “If we stop investing in 2020, we leave all these resources in the ground … and then the price will rocket to the roof. And even in developed countries, it will be a big issue,” Pouyanné said. 

$100 Oil Is No Longer An Outrageous Prediction 

A triple-digit oil price is no longer an outrageous prediction as it would have been in early 2020.  

Francisco Blanch, global head of commodities and derivatives research at Bank of America, expects oil to hit $100 by September 2022, or even earlier if this winter is much colder than expected. 

Demand is coming back, while we have seen severe underinvestment in supply the last 18 months, Blanch told Bloomberg at the end of September.  

 “The underinvestment problem cannot be solved easily, and at the same time we have surging demand,” he said. 

“We are moving into a straightjacket for energy, we don’t want to use coal, we want to use less and less gas, we want to move away from oil,” Blanch told Bloomberg. 

While oil is unlikely to sit at triple digits for a sustained period of time, underinvestment has become “a multi-year problem” for the industry, Blanch noted. 

Even if oil doesn’t stay at $100 a barrel, a supply crunch down the road would nevertheless move the floor under oil prices higher and lead to unsustainable price spikes.

As much as climate activists want a stop to investment in new supply, the industry and the world cannot afford it because oil demand continues to grow.

Oilprice by Tsvetana Paraskova, November 1, 2021

One of South America’s poorest countries, Guyana, became a major holder of oil and gas reserves in 2015 when ExxonMobil found oil in its waters in what turned out to be a block with resources estimated at 10 billion oil-equivalent barrels and counting. 

Now Guyana wants to capitalize on the large oil and gas discoveries over the past half-decade to build up an economy powered by its own energy resources. 

The South American nation became a crude oil exporter in early 2020, thanks to Exxon’s huge discoveries offshore Guyana. Over the past two years, the U.S. supermajor and Hess Corp, its partner in the prolific Stabroek Block, have made a dozen more discoveries, while the Liza Phase 1 project is very profitable for the oil corporations and for Guyana. 

Liza Phase 1 and 2 developments break even at around $35 a barrel and $25 per barrel Brent, respectively, Hess says. Liza Phase 2 start-up is expected in the middle of 2022 via a floating, production, storage and offloading vessel (FPSO) designed to produce up to 220,000 barrels of oil per day (bpd). 

Guyana is looking beyond the oil export revenues from the Exxon-operated projects off its shores. It plans to have a natural gas pipeline built from the Liza 1 and Liza 2 developments to the shore for a gas-to-energy project to generate electricity and feed industries as it aims to capitalize on the huge oil and gas resources to develop its economy. 

This summer, the government of Guyana said it was looking for partners to invest in a $900-million gas-to-energy project for a natural gas pipeline from the Liza developments to the shore. The planned 225-kilometer (140 miles) pipeline from the Liza area to the Wales Development Zone (WDZ) is expected to feed a gas processing plant and a natural gas liquids (NGL) facility, capable of producing at least 4,000 barrels per day, including the fractionation of liquefied petroleum gas (LPG). A power plant with a total capacity to generate 300 megawatts (MW) of electricity and an industrial park that could use gas, steam and/or electricity are also part of the gas-to-energy project. 

ExxonMobil’s affiliate Esso Exploration and Production Guyana Limited (EEPGL) has guaranteed the government that a minimum of 50 million standard cubic feet of gas per day will be transported from the Liza projects via the pipeline by 2024. 

The power plant construction is slated to begin next year, while financing is still being lined up, Peter Ramsaroop, CEO at Guyana’s government agency GoInvest, told Bloomberg in an interview this week. 

“Guyana must have the gas and hydropower to be able to bring a competitive economy to the point where we can depend on our own energy to deliver our goods and services,” Ramsaroop told Bloomberg on the sidelines of the Dubai Expo. 

During the same event, Guyana’s President Irfaan Ali told potential investors: 

“Guyana needs to convert its abundant resources. We need you. We welcome you, and we urge you to remember the name Guyana and to keep the name Guyana in your plans for growth and development, both in country and by businesses and sectors.”

“We will continue to pursue oil production offshore, but onshore we will definitely intensify the decarbonisation of the economy,” Ali added. 

Exxon, for its part, “expects to make significant progress over the next few years in cooperation with the Government of Guyana to advance a gas-to-energy project,” the supermajor told Bloomberg in a statement. 

Guyana’s government bets on the project, which it expects to come on stream by late 2024, to more than halve its electricity costs, seen by the private sector as prohibitive to investment in the country, the South American nation says. 

The government expects the gas-to-energy project to revolutionize and significantly improve the ease of doing business in Guyana, it said in July. 

The gas from the recent massive oil discoveries could transform Guyana’s economic fortunes forever.

OilPrice by Tsvetana Paraskova, October 28, 2021

In a bid to make India Aatmanirbhar in the field of oil and natural gas, Prime Minister Narendra Modi on Wednesday invited global oil and gas giants and to explore opportunities to develop oil and gas set up in India.

He further pointed out the measures taken by his government to develop the sector, during his annual interaction with the experts and CEOs of top global companies working in the global oil and gas industry.

He furthered his desire to make India Aatmanirbhar or self-reliant in the field. The Indian government has been taking several measures to reduce the export & India’s dependence on the global market to fulfil its oil needs.

PM Modi invites global giants to make India ‘Aatmanirbhar’ in oil & gas sector 

Amid the continued rising prices of crude oil in the global market in the past year, the Indian government’s bid to become self-reliant has become all the more important.

PM Modi invites CEOs to partner with India in development of oil & gas sector in India. “Goal is to make India Aatmanirbhar in the sector. Focus has shifted from revenue to production maximization,” PM said during interaction with CEOs & experts of global oil & gas sector: PMO

Prime Minister Modi thoroughly discussed the oil and gas sector reforms implemented over the last 7 years, including those in exploratory and licensing strategy, a statement released by PIB said. The statement further added that PM also discussed gas marketing, policies on coal bed methane and coal gasification, and other reforms of the Indian Gas Exchange.

PM further added that such changes will continue with the goal of making India’s oil and gas sector ‘Aatmanirbhar.’ When it comes to exploration and production, Modi says the focus has switched from maximising “revenue” to maximising “production. PM Modi went on to say that India is filled with opportunities and optimism, creative ideas and innovation. 

The Prime Minister also mentioned the importance of improving crude oil storage facilities. He discussed the present and projected gas infrastructure development, including pipelines, city gas distribution, and LNG regasification terminals, in response to the country’s fast-expanding natural gas demand. He recalled how, since 2016, the comments made at these sessions have been extremely helpful in gaining a better knowledge of the difficulties faced by the oil and gas industry.

Industry leaders appreciate govt’s efforts to expand Oil & gas industry

The central government’s efforts to improve energy access, affordability, and security have been lauded by the industry leaders, who were attending the PM’s address. Industry leaders from around the world, including Rosneft CEO Igor Sechin, Saudi Aramco CEO Amin Nasser, BP CEO Bernard Looney, Reliance Industries CEO Mukesh Ambani, and Vedanta CEO Anil Agarwal, joined the discussion.

On the same, industry leaders appreciated PM’s effort and said, ”India is adapting fast to newer forms of clean energy technology, and can play a significant role in shaping global energy supply chains. They talked about ensuring sustainable and equitable energy transition, and also gave their inputs and suggestions about the further promotion of clean growth and sustainability,” the statement added. 

RepublicWorld by Aakansha Tandon, October 28, 2021

Trying to bounce back from Covid, the world has run headlong into an energy crisis. The last spike of this magnitude popped the 2008 bubble.

Crude oil is up 65% this year to $83 per barrel. Gasoline, above $3 per gallon in most of the country, is more costly than any time since 2014, with inventories at the lowest level in five years. 

Meanwhile natural gas, which provides more than 30% of all U.S. electricity and a lot of wintertime heating, has more than doubled this year to $5 per million Btu. 

Even coal is exploding, with China and India mining as fast as possible. The price of U.S. coal is up 400% this year to $270 per ton. 

The situation is considerably worse in Europe, where electricity prices have quintupled and natgas prices have surged to $30/mm Btu—the energy equivalent of paying $180 for a barrel of oil. 

All this is feeding into the inflation loop, pushing up the prices for energy-intensive metals like nickel, steel, silicon. Fertilizer, mostly made from natural gas, has ramped past 2008 record highs to nearly $1,000 a ton, obliterating the $300 to $450/ton range of the past few years. China announced this week it would halt fertilizer exports. Copper, perhaps the most vital raw material in building out a wind and solar industry, is near a record at $4.50 per pound. 

We’ll have to deal with inflation after surviving the challenge of not freezing to death this winter. “Only some form of government intervention that mandates large-scale power cuts and rationing to certain sectors can curb gas demand and temper gas prices materially this winter,” wrote Amrita Sen of Energy Aspects last week. 

Whom can we blame for this mess? A combination of factors. It starts with central banks persisting with artificially low interest rates and a flood of cheap money despite record levels of consumer spending and a 30% surge in Chinese exports—all of which is straining against pandemic-constricted supply chains. Add to that Russia not flowing nearly as much gas into Europe as expected (perhaps as a passive-aggressive tactic to force approval of Nord Stream 2).

But the roots go deeper. The ESG and carbon divestment craze has so demonized fossil fuels (and nuclear power) that institutional investors and governments have cut them out of portfolios entirely, and have instead been flowing capital to more socially acceptable low-carbon alternatives. Blackrock announced last year it would no longer finance fossil fuel development (though it still owns a lot). Wall Street gurus like Jim Cramer have called the oil industry “uninvestable” and “a perma-short.”

But the problem is, renewable energy hasn’t proven sufficiently scalable to pick up the slack. In July, according to the U.S. Energy Information Administration, renewable energy sources (excluding hydropower) provided just under 10% of total electricity generation (gas was 42%). 

Has it gone too far too fast? Germans now regret shuttering their fleet of nuclear power plants over the past decade, while some Dutch are second-guessing closing down Europe’s biggest gas field at Groningen. Meanwhile, North Sea gas drilling has slowed, and onshore fracking has been banned in the U.K. 

Economist Ed Yardeni summed it up as well as anyone in a research note this week: “Renewables aren’t ready for prime time. So instead of a smooth transition, the rush to eliminate fossil fuels is causing their prices to soar and disrupting the overall supply of energy.” 

It’s hard to blame Big Oil. Accustomed to being demonized, the industry has been falling over itself to shrink oil production and reinvest in renewables even if it means lower margins. Add to that the existential crisis of the 2020 pandemic lockdowns, which temporarily pushed the price of oil below zero because companies ran out of storage tanks to put fuel that no one was using. Forbes contributors last year had a field day debunking predictions from the anticarbon crowd that 2020 would be the year of “peak oil demand.” Perhaps it’s more evident now that for all their growth, renewables aren’t yet scalable replacements for fossil fuels. 

“Now faced with traditional sources of capital gone, the majors are backing off because of political pressure. They’re all trying to win a popularity contest,” says John Goff, the billionaire chairman of Contango Oil & Gas, which is in the process of merging with Independence Energy (spun out of private equity giant KKR). As a result of the trepidation, “there is massive underinvestment in the industry. We are hundreds of billions behind,” says Goff. He’s investing via publicly traded Contango, which made a number of acquisitions in the past two years, and is in the process of merging with Independence Oil & Gas, a catch-all for oil assets spun out of private equity giant KKR, which is no longer pursuing fresh oil deals. 

Contango expects to grow both via M&A and the drill bit. Says Goff, “The single biggest risk on the planet is the lack of sufficient energy for everybody.” 

Don’t expect OPEC to rush into vast new investments. In the wake of the pandemic, the group had to cooperate to hold back millions of barrels per day that would have flooded the market. At the beginning of the year OPEC said its supply cushion stood at around 9 million barrels per day. It’s been adding back supplies at a recent pace of 400,000 bpd per month into the face of even stronger demand growth. From 93 million bpd early this year, global oil demand has rebounded to 98 million bpd. The U.S. Energy Information Administration thinks demand could hit a record 100.9 million bpd by the end of 2022, but it’s unclear where all that will come from. Already Nigeria and Angola are having a hard time opening their spigots wider. By the end of next year the only excess capacity left could be with the Saudis, Kuwait and UAE. Analysts at Bernstein Research note this week, “It is hard to see what will stop the inevitable rise of oil prices to greater than $100/bbl outside of demand destruction.”

Could America’s frackers come to the rescue? Don’t count on it. Though the U.S. rigcount has recovered somewhat, domestic oil production is around 11.3 million bpd, down from 12.9 million pre-Covid. Companies have embraced the “live within cash flow” mantra. And the industry does not trust President Joe Biden, considering that he has promised an end to new drilling in America and his first acts in office included canceling pipelines and halting oil leases. Rather than encourage America’s independent oil producers, the administration has begged OPEC for more oil, while threatening to halt U.S. oil exports. Meanwhile, the latest negotiations in Washington, D.C., over a potential $2 billion spending bill involves a new law that would enact a domestic carbon tax. 

Frackers do not like these risks. There are pockets of resistance. So many banks have stopped lending to oil companies that in June Texas Gov. Greg Abbott signed a bill into law that bans state investment in companies that cut ties with the oil industry. So any bank that won’t do business with oil drillers will face a boycott. Another Texas bill would bar any municipality from prohibiting new residential gas hookups—as has become de rigeur in California. 

Those American oil companies that have survived the past two years don’t even need the banks or other traditional pools of capital as long as they stay disciplined, says a managing director at a smaller private equity firm that still invests in oil companies. “They’re restricting supply because they are desperate to be profitable. Shareholders are demanding free cash and shareholder democracy.” 

The evolution of the U.S. oil company is likely to look something like Civitas Resources, the new name for the public company that will emerge from the pending combination of Bonanza Creek Energy, Extraction Oil & Gas and Crestone Peak Resources—to form a dominant consolidator in the Denver-Julesburg basin oilfields of Colorado. Civitas Chairman Ben Dell, an activist investor who founded Kimmeridge Energy, says their objective is to build an oil company that could fit into an ESG portfolio. He says that Civitas is dedicated to making a net-zero product by acquiring carbon offsets. Dell says that the nature of fossil fuel providers will change when companies can target a carbon price that incentivizes them to generate valuable carbon credits for doing work like stopping leaks and plugging old wells. And he’s big on the prospects for “nature-based carbon solutions,” like trees.

Patience is not a virtue extolled by Greta Thunberg nor featured on the agenda for the upcoming COP26 UN climate conference in Glasgow, but Dell emphasizes that we’re at the point in the energy transition where the only real options are patience in reducing emissions while using gas as a bridge fuel, or an abrupt turn toward de-growth that would slash emissions but necessitate economic collapse and poor people freezing to death. “If you phase out the on-demand delivery system, that raises the price and the volatility. That’s a regressive tax. The low-income consumer gets hit with that,” says Dell. “We have to be thoughtful about how we transition. It’s going to require a massive amount of investment, and half a century.” 

Pray for breakthroughs in nuclear fusion, and keep in mind that the last time an energy bubble of this magnitude popped (in 2008) it helped usher in the Great Recession.

Forbes by Christopher Helman, October 28, 2021