Big Oil confronts possibility of terminal demand decline

Yahoo – AFP, Julien MIVIELLE,  July 5, 2020

Is this the sunset of the oil industry? (AFP Photo/Paul Ratje)

Although crude prices have rebounded from coronavirus crisis lows, oil execs and experts are starting to ask if the industry has crossed the Rubicon of peak demand.

The plunge in the price of crude oil during the first wave of coronavirus lockdowns -- futures prices briefly turned negative -- was due to the drop in global demand as planes were parked on tarmacs and cars in garages.

The International Energy Agency (IEA) forecast that average daily oil demand will drop by eight million barrels per day this year, a decline of around eight percent from last year.

While the agency expects an unprecedented rebound of 5.7 million barrels per day next year, it still forecasts overall demand will be lower than in 2019 owing to ongoing uncertainty in the airline sector.

Some are questioning whether demand will ever get back to 2019 levels.

"I don't think we know how this is going to play out. I certainly don't know," BP's new chief executive Bernard Looney said in May.

The COVID-19 pandemic was in full swing then with most planes grounded and white-collar workers giving up the commute to work from home.

"Could it be peak oil? Possibly. I would not write that off," Looney told the Financial Times.

Summited?

The concept of peak oil has long generated speculation.

Mostly, it has been focused on peak production, with experts forecasting that prices would reach astronomical levels as recoverable oil in the ground runs out.

Owing to the coronavirus, in recent months the concept of peak demand for oil 

has come into vogue (AFP Photo/SCOTT HEPPELL)

But in recent months, the concept of peak demand has come into vogue, with the coronavirus landing an uppercut into fuel demand for the transportation sector followed by a knock-out punch from the transition to cleaner fuels.

Michael Bradshaw, professor at Warwick Business School, said environmental groups are already lobbying to prevent the Paris agreements becoming another casualty of the pandemic, stressing the need for a Green New Deal for the recovery.

"If they are successful, demand for oil might never return to the peak we saw prior to COVID-19," he said in comments to journalists.

The transport sector may never fully recover, Bradshaw posited.

"After the pandemic, we might have a different attitude to international air travel or physically going into work," he said.

'Science fiction'

Other experts say we haven't reached the tipping point yet, and might not for a while.

"Many people have said, including some CEOs of some major companies, with the lifestyle changes now to teleworking and others we may well see oil demand has peaked, and oil demand will go down," IEA executive director Fatih Birol said recently.

"I don't agree with that. Teleconferencing alone will not help us to reach our energy and climate goals, they can only make a small dent," Firol added while unveiling a recent IEA report.

IEA executive director Fatih Biron does not believe that lifestyle changes such as

teleworking will cause demand for oil to decline substantially (AFP Photo/Ye Aung THU)

Moez Ajmi at consulting and auditing firm E&Y dismissed as "science fiction" the idea that a definitive drop in oil demand could suddenly emerge.

He expects a slow recovery in demand even if the coronavirus leaves the global economy weakened.

That weakness would also likely slow adoption of greener fuels.

"It will take time for fossil fuels, which today still account for some 80 percent of primary global consumption to face real competition" from rival energy sources, he said.

Meanwhile, the oil industry could face financing challenges.

Bronwen Tucker, an analyst at Oil Change International, says the industry is now under pressure from investors.

After "a pretty big wave of restrictions on coal and some restrictions on oil and gas, the risks to oil and gas investment right now feel a lot more salient," she said.

The industry is already writing down the value of assets to face up to the new market reality of lower demand and prices.

Royal Dutch Shell said this past week that it will take a $22 billion charge as it re-evaluates the value of its business in light of the coronavirus.

Last month, rival BP reduced the worth of its assets by $17.5 billion.

"This process has further to run, and we expect further large impairments to occur across the sector," said Angus Rodger of specialist energy consultancy Wood Mackenzie.

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A decade after Deepwater, BP faces new existential challenges

“Afraid of Love” + “What’s Wrong Today”, Laguna Hills, California, US(2), Dec 9, 2018 (Kryon Channelling by Lee Carroll)

• Stagnation of the current US Politics: Compassioned (US) leaders will arise in the future
• Shortage of fresh/drinking water: Invention to make salt from salt water magnetic and remove it with water desalination process in high volumes
• Pollution on Earth: 1 - Stop killing the environment! / 2 - The rise of temperature on Earth is “temporary” and is part of the "regular" Watercycle.
• Replacement of current fossil energy source: Use of magnetics based (small/big) engines to produces electricity / free energy
• Plastic pollution in the oceans: Invention to remove the plastics gradually from the oceans

20TH KRYON SUMMER LIGHT CONFERENCE, US (7), June 2-4, 2017 (Kryon Channelling by Lee Carroll) (Text version "The State of the Earth")

"....  A mini ice age is coming. "Kryon, isn't that doom for the planet?"  Many have seen the artist's rendering of major earth cities under ice and all of the other things that go very well with science fiction movies. That's simply a painting of someone's doom scenario, not reality based in the history of the cycle. If you want to know what a mini ice age is like, just flash back in history and study what took place in about 1650. That was a mini ice age. Due to the change in the Gulf Stream (the ocean), the river Thames froze in London. Dear ones, it was cold, but it did not doom the planet. That's a mini ice age.

That's what you're facing, and I'll say it again. If you live in a cold climate, heed this advice: It's going to get colder. Get off the grid! Within the next 15 years, find a way of producing electricity independently or in smaller groups. This can be done neighborhood-wide or separately in homes. You're going to need this, dear ones, because the grid as it exists right now all over the world is not prepared for this coming cold, and the grid will fail. That's not doom and gloom, that's just practical, commonly known information. Your electricity infrastructure is delicate, too delicate. Prepare for a cold spell that may last for a couple of decades. That's all it is. Technology is racing forward to allow this. Don't let your politics get in the way of your survival. ..."

"...  This is controversial. The planet can't just "change the water". It does it instead with a "reboot of life in the ocean" using the water cycle. Watch for evidence of this as it occurs, and then remember this channel. This weather cycle is to refresh the life in the ocean so that everyone on the planet will have needed food from the ocean. Gaia does this by itself, has done it before, and it does it for a reason - so it will not stagnate.

Dear ones, indeed, you have put compromising things into the air and the water, but it has not caused this cycle. We have said for a very long time, stop killing the environment! The reason? It's going to kill you, not Gaia. Gaia is spectacularly resilient and will survive anything you do. However, it is you who may not survive if you continue polluting. All this is starting to change with your awareness, and you're starting to see this and move with it. But Humans are not causing the current weather shift. This will be known eventually.

What is happening has happened before, and it's almost like a reboot for the oceans and it carries a lot of dichotomous events. You're going to see reports of a dying ocean, but at the same time you're going to see unusual reports of too many fish and other sea life in places that were supposed to have a decline. You're going to see the life cycle of the ocean itself start to change and reboot.

The chief player in this renewal is a place you would not expect: Antarctica. I want you to watch for magic in Antarctica. It has always been the core of the refreshing of microbes and other kinds of life in your oceans and it's especially active during these mini ice ages. The process will cause currents under the sea to be filled with new life, delivering it to both hemispheres almost like an under-sea conveyor belt. ..."

"Recalibration of Free Choice"– Mar 3, 2012 (Kryon Channelling by Lee Caroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Loose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth, 4 - Alternate energy sources (Geothermal, Tidal (Paddle wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical) 8 – Wars will be over on Earth, Global Unity, … etc.) - (Text version)

“… 4 - Energy (again)

The natural resources of the planet are finite and will not support the continuation of what you've been doing. We've been saying this for a decade. Watch for increased science and increased funding for alternate ways of creating electricity (finally). Watch for the very companies who have the most to lose being the ones who fund it. It is the beginning of a full realization that a change of thinking is at hand. You can take things from Gaia that are energy, instead of physical resources. We speak yet; again about geothermal, about tidal, about wind. Again, we plead with you not to over-engineer this. For one of the things that Human Beings do in a technological age is to over-engineer simple things. Look at nuclear - the most over-engineered and expensive steam engine in existence!

Your current ideas of capturing energy from tidal and wave motion don't have to be technical marvels. Think paddle wheel on a pier with waves, which will create energy in both directions [waves coming and going] tied to a generator that can power dozens of neighborhoods, not full cities. Think simple and decentralize the idea of utilities. The same goes for wind and geothermal. Think of utilities for groups of homes in a cluster. You won't have a grid failure if there is no grid. This is the way of the future, and you'll be more inclined to have it sooner than later if you do this, and it won't cost as much…

Water

We've told you that one of the greatest natural resources of the planet, which is going to shift and change and be mysterious to you, is fresh water. It's going to be the next gold, dear ones. So, we have also given you some hints and examples and again we plead: Even before the potentials of running out of it, learn how to desalinate water in real time without heat. It's there, it's doable, and some already have it in the lab. This will create inexpensive fresh water for the planet. 

There is a change of attitude that is starting to occur. Slowly you're starting to see it and the only thing getting in the way of it are those companies with the big money who currently have the old system. That's starting to change as well. For the big money always wants to invest in what it knows is coming next, but it wants to create what is coming next within the framework of what it has "on the shelf." What is on the shelf is oil, coal, dams, and non-renewable resource usage. It hasn't changed much in the last 100 years, has it? Now you will see a change of free choice. You're going to see decisions made in the boardrooms that would have curled the toes of those two generations ago. Now "the worst thing they could do" might become "the best thing they could do." That, dear ones, is a change of free choice concept. When the thinkers of tomorrow see options that were never options before, that is a shift. That was number four.”

THE RELATIONSHIP TO GAIA - April 2010 (Kryon channelled by Lee Carroll)

New Mini Ice Age

"The weather you have today, and all the alarming attributes of it, is a scenario of what was scheduled to happen on Earth anyway. I review again that the weather changes you are seeing prophesied by myself, 21 years ago, are not a surprise. The changes are not caused by the pollutants you put in the air. You call it global warming and that's a nice phrase, and perhaps that will get you to put less pollutants in the air – a very good thing. But what you are seeing in the weather shift today was not caused by Humans putting things into the air. It would have happened anyway in about 300 years."

"We've called this process the water cycle, since it's all about water, not about air. The water is the predominant attribute of Gaia and of the weather cycle you're seeing. More predominant is the temperature of it. The cycle is ice to water and water to ice, and has been repeated on this planet over and over and over. It is not new. It is not exceptional. It is not frightening. But it's a cycle that modern humanity has not seen before, and it's a long cycle that is beyond the life span of a Human Being. Therefore, it tends to be overlooked or not seen at all !"

"In the days of the Lemurians, the water level of the Pacific Ocean was almost 400 feet lower, and that's only 50,000 years ago. [Kryon invites science to check this out – the water level at that time.] That was a water cycle working, and the reason it was lower was due to so much of the water being stored as ice. Today you're going through another water cycle that will eventually lead to cooling. The last one was in the 1400s."

"Science sees that at about 1650. As mentioned, they are so slow there is no remembrance that a Human has of them except in past writings and in the rings of the trees. The time span of the changes is so great that environmental record keeping does not exist in the form that it does today. But you can still look at the rings of the trees and at the striations of the rocks and can generally figure out that a few hundred years ago, you had a mini-ice age. Now you're going to have another one." 

MPs angry as Shell distances itself from NAM earthquake claims

DutchNews, January 29, 2018

A gas drilling site. Photo: Graham Dockery

There has been furious reaction after energy giant Shell distanced itself from possible claims for earthquake damages in Groningen province made against its subsidiary gas production company NAM. 

MPs are calling for an emergency debate to discuss the issue, the Financieele Dagblad reported on Monday. 

In addition, farmers in the earthquake-damaged province of Groningen are planning a demonstration Monday evening in Delfzijl, local paper Dagblad van het Noorden said. Farmers claim subsidence harms their crops and threatens their manure stores. 

Moreover, many claim NAM does not have the money to settle the escalating claims which are certain to reach billions of euros. 

The row was triggered on Saturday when Trouw said Shell was backing away from possible earthquake damages claims made again NAM, an assertion based on Shell Nederland’s annual report published in June 2017. 

In the report, Shell withdrew a clause regarding its responsibility for NAM. The clause is legally required to make companies responsible for debts of subsidiaries which do not publish their own annual reports. 

Experts told the paper this means Shell is probably not responsible for the escalating costs for earthquake damage by NAM in the northern province. NAM Is jointly owned by Shell and ExxonMobil. 

Provisions 

NAM published an annual report for the first time in 2017. In that report, the company said it had earmarked €3.4bn for provisions on its balance sheet – a small portion of this, 15% or €495m, is reserved for claims made against the company for earthquake damage. 

This, experts say, is likely to be well below the total needed. 

So far most of the damage caused to property in Groningen is paid for directly or indirectly by taxpayers, broadcaster NOS said earlier in January. The state has put €750m into damage compensation and preventing further subsidence, while NAM has invested €422m, the broadcaster said, quoting economic affairs ministry figures. 

Last week, NAM was ordered by judges in Leeuwarden to immediately start compensating home owners in Groningen for the loss of value caused by the earthquakes, rather than to wait until their houses are sold. 

NAM’s first annual report also revealed that Shell and ExxonMobil split €496m in dividend payments in 2016. This is the first time that it was made clear just how much the two oil giants earn from gas production in the Netherlands.

Oil majors gushing in cash despite cheap crude

Yahoo – AFP, August 3, 2017

Oil majors are no longer getting burned by low oil prices (AFP Photo/Robyn BECK)

Paris (AFP) - The prospect of crude remaining near the current $50 level is no longer a doomsday scenario for the world's oil majors whose latest earnings announcements show that cost-cutting lets them turn a profit even at these price levels.

BP, Chevron, ExxonMobil, Shell and Total have all published results in recent days, showing they pocketed $23 billion in net profit in the first half fo the year.

Either they increased their earnings or at least returned to profit compared with the same period last year.

With the exception of ExxonMobil they all benefitted from an increase in output from the same period last year, but more importantly they all profited from a rebound in crude prices as OPEC members and Russia agreed to limit production.

The price of the international benchmark Brent crude averaged $51.7 per barrel in the first half of this year, up considerably from $39.8 during the same period last year.

While the profits are still less than half of what the firms turned in during the same period three years ago when Brent was trading at over $100 per barrel, they show that the major firms can survive profitably if crude prices stay at current levels, a scenario many now foresee.

"It is a tough environment and it could remain that way for some time," said BP's chief executive Bob Dudley earlier this week.

"But we are building a business that is resilient to these changing conditions," he said.

After crude prices began their descent in 2014 the oil majors reacted quickly: cutting costs, selling off assets judged non-strategic and focusing on the projects they considered the most profitable.

"Big Oils are showing strong ability to adapt to lower oil prices through cost cutting," said analysts at US investment bank Goldman Sachs in a recent report.

Even if the oil majors have adapted to low prices for the moment, developing new 

resources affordably could pose a challenge say analysts (AFP Photo/SPENCER PLATT)

By one measure, free cash flow -- or the amount of funds a firm has left over after investments needed to maintain or expand their assets -- they may even be better off.

Goldman Sachs analysts said European oil majors had a higher cash flow in the first half of this year than in the first half of 2014, when crude prices were more than double of what they are today.

Lower, forever

"Recent results are good news and average production costs have fallen by 40 percent since 2014," said David Elmes, and energy specialist and professor at Warwick Business School.

"The important part of recent results is how firms are back to generating enough cash to cover such costs" like investment and high dividend payments that have kept many long-term investors on board, he told AFP.

While cheap oil was initially viewed as a phase that would soon pass relatively quickly as global demand continued to climb upwards, a shift has occurred and many now see lower prices as here to stay for a while.

Shell's chief Ben van Beurden said the firm is now working with a "lower forever mindset".

He said that Shell still believes there is a better than 50-50 chance that crude prices will trend higher in the coming years, but wasn't going to base its business decisions on that.

"We do not want to have the mindset that higher oil prices are around the corner to help us out," he said.

For the moment, the oil majors have shelved costly projects like extracting crude from Canadian tar sands or tapping certain Arctic fields.

However in the future they will have to face replacing their reserves at a profitable cost, something which may prove difficult in the medium term.

"The amount of affordable oil and gas big oil can access is limited," said Elmes. "Much is in the control of national oil companies keen and able to develop it themselves."

And when it comes to exploiting shale reserves in the United States, Elmes said that the smaller companies have shown themselves to be able to better control costs.

Rockefeller descendants speak out against company to which they owe their prosperity

CBS News, December 2, 2016

Only on “CBS This Morning,” members of the Rockefeller family are giving their first TV interviews about a public falling out with ExxonMobil. The energy giant is one of the successors to Standard Oil, founded by John D. Rockefeller. But some of his descendants are now criticizing ExxonMobil’s record on climate change. 

According to Forbes, the Rockefellers are the 23rd richest family in the U.S. with a fortune of $11 billion, reports CBS News correspondent Don Dahler. Today, much of that wealth goes toward philanthropy through organizations like the Rockefeller Brothers Fund and the Rockefeller Family Fund, both of which backed reports that suggest ExxonMobil knew more than it was letting on about the threat of global warming.

“If the board of ExxonMobil is not answering your calls, this is your opportunity. What would you say directly to them?” Dahler asked David Kaiser, president of the Rockefeller Family Fund.

David Kaiser, president of the Rockefeller Family Fund, and Valerie
Rockefeller Wayne, trustee and chair of Rockefeller Brothers Fund CBS NEWS

“If I was talking to the board of ExxonMobil, I would say that right now, their company seems to be morally bankrupt,” Kaiser said.

Fifth-generation descendants of John D. Rockefeller are speaking out against the company to which they owe their prosperity. Kaiser is the grandson of former Chase bank chairman David Rockefeller. Valerie Rockefeller Wayne is the daughter of former Sen. Jay Rockefeller.

“Because the source of the family wealth is fossil fuels, we feel an enormous moral responsibility for our children, for everyone -- to move forward,” Wayne said.

They’re doing that by looking back.

The charities they run funded investigations that appeared in the Los Angeles Times and InsideClimate News. The reports suggest “Exxon had been at the forefront of climate change research” since the late 1970s and knew the burning of fossil fuels “would warm the planet and could eventually endanger humanity,” even while the company downplayed the science in a series of newspaper ads and television interviews.

“This is complicated. Don’t believe statements that say it’s clear that things are warming. It’s not clear,” Frank Sprow told CBS News in a 2000 interview while he was ExxonMobil vice president.

Exxon Mobil accuses the Rockefellers of conspiring against the corporation.

In a phone call with CBS News, a company official described it as a “coordinated campaign ... to vilify the company.” A spokesman initially sent us a statement saying the reports were “funded and then promoted by activists,” claiming they’re “not credible and have been widely discredited.” The company later retracted that statement, telling us they “don’t have a comment.”

“The company has taken the unusual step of publicly criticizing you and the family funds, calling you conspirators. This has gotten personal,” Dahler said to Kaiser.

“Well, you know it’s really very silly. … For something to count as a conspiracy it can’t just have been done in concert with other people, it also has to be illegal and we haven’t done anything illegal,” Kaiser responded.

Kaiser said a large majority of the family supports their efforts. But not everyone is on board.

“These family funds do not speak on behalf of all 200 family members,” said Ariana Rockefeller, Kaiser’s cousin.

Rockefeller insists all sides should be working together on solutions for climate change.

“I don’t think denouncing a family legacy is the best way to go about doing this,” she said.

Ariana Rockefeller CBS NEWS

Still, Kaiser and Wayne said it’s important to learn what the company has done to clear up the debate over what to do next.

“What we would hope from Exxon is that they would admit what they’ve done -- these decades of denial -- and continue what they’ve started in a very small way to do now, which is to look at alternatives and we really hope they become an industry leader,” Wayne said. “They can set the tone for the industry in doing more, but the truth has to come out.”

New York and Massachusetts have announced fraud investigations to determine if ExxonMobil misled the public about its research on climate change. Exxon has launched a vigorous defense, suing the attorneys general of both states in federal court alleging a “conspiracy” with what it claims are “politically motivated investigations.”

ExxonMobil now acknowledges the risk of climate change and reports spending billions of dollars to find ways to lower greenhouse gas emissions.

Peter O’Neill, head of the Rockefeller family and great-great-grandson of John D

Rockefeller, along with Neva Rockefeller Goodwin (second from the right_,

great-granddaughter of John D. Rockefeller, and Stephen B Heintz, president of

the Rockefeller Brothers Fund. Photograph: Brendan McDermid/Reuters

Related Articles:

Heirs to Rockefeller oil fortune divest from fossil fuels over climate change

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Warren Buffett Ready to Increase Renewable Energy Investment to $30 Billion

One of the wealthiest men in the U.S., Warren Buffett said Monday

that he would double his renewable energy investments. Video

screenshot: Georgetown University/YouTube

Saudi Arabia proposes economic reforms

Saudi Arabia reveals plans to be powered entirely by renewable energy
UAE channels oil money into alternative energy

#Saudi Deputy Crown Prince: #SaudiVision2030 would’ve been implemented regardless of oil prices.His interview here https://t.co/nFwxI0tsAr

— Al Arabiya English (@AlArabiya_Eng) April 25, 2016

Shell confirms 10,000 job losses as profits plunge

ING, ABN Amro urged to pull out of controversial US pipeline project

ING, Rabobank urged to come clean over investments in Russian coal


"Recalibration of Free Choice"– Mar 3, 2012 (Kryon Channelling by Lee Caroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Loose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth, 4 - Alternate energy sources (Geothermal, Tidal (Paddle wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical) 8 – Wars will be over on Earth, Global Unity, … etc.) - (Text version)

“… 4 - Energy (again)

The natural resources of the planet are finite and will not support the continuation of what you've been doing. We've been saying this for a decade. Watch for increased science and increased funding for alternate ways of creating electricity (finally). Watch for the very companies who have the most to lose being the ones who fund it. It is the beginning of a full realization that a change of thinking is at hand. You can take things from Gaia that are energy, instead of physical resources. We speak yet; again about geothermal, about tidal, about wind. Again, we plead with you not to over-engineer this. For one of the things that Human Beings do in a technological age is to over-engineer simple things. Look at nuclear - the most over-engineered and expensive steam engine in existence!

Your current ideas of capturing energy from tidal and wave motion don't have to be technical marvels. Think paddle wheel on a pier with waves, which will create energy in both directions [waves coming and going] tied to a generator that can power dozens of neighborhoods, not full cities. Think simple and decentralize the idea of utilities. The same goes for wind and geothermal. Think of utilities for groups of homes in a cluster. You won't have a grid failure if there is no grid. This is the way of the future, and you'll be more inclined to have it sooner than later if you do this, and it won't cost as much…

Water

We've told you that one of the greatest natural resources of the planet, which is going to shift and change and be mysterious to you, is fresh water. It's going to be the next gold, dear ones. So, we have also given you some hints and examples and again we plead: Even before the potentials of running out of it, learn how to desalinate water in real time without heat. It's there, it's doable, and some already have it in the lab. This will create inexpensive fresh water for the planet. 

There is a change of attitude that is starting to occur. Slowly you're starting to see it and the only thing getting in the way of it are those companies with the big money who currently have the old system. That's starting to change as well. For the big money always wants to invest in what it knows is coming next, but it wants to create what is coming next within the framework of what it has "on the shelf." What is on the shelf is oil, coal, dams, and non-renewable resource usage. It hasn't changed much in the last 100 years, has it? Now you will see a change of free choice. You're going to see decisions made in the boardrooms that would have curled the toes of those two generations ago. Now "the worst thing they could do" might become "the best thing they could do." That, dear ones, is a change of free choice concept. When the thinkers of tomorrow see options that were never options before, that is a shift. That was number four.”