Oil Is Dead. Long Live Oil

The early months of 2020 were a heady time for fossil fuel-hating climate worriers. Never mind that a new disease, that would go on to kill millions, was sweeping the planet. Never mind that huge swathes of humanity were effectively suffering house arrest. The roads were quiet. Emissions were falling. And oil was dead.

On 1st April 2020 the Guardian was ecstatic, crowing: “Analysts say the coronavirus and a savage price war means the oil and gas sector will never be the same again”. That was the sub-heading to an articlei that, in fairness, did contemplate the possibility that the oil industry might bounce back after the end of the pandemic, but it very much looked forward to it not doing so.

Whatever happens, the industry will never be the same again after the double whammy of the pandemic and price war. “The companies that emerge from the crisis will not be the ones that went into it,” said Carbon Tracker’s Bond. “We will see write-downs, restructuring and radical change.”

Less than three weeks later and the excitement was almost palpable. This time the headline to an articleii in the Guardian (on 20th April 2020) was “Oil prices dip below zero as producers forced to pay to dispose of excess”. Wow. Oil had become a liability! Better still:

Historically weak oil markets are likely to bring lower prices for drivers at service station forecourts, but the price collapse will also hurt pension savings which are often invested in major oil companies through funds which track equity markets. The oil price crisis has already wiped billions from the market value of the largest oil companies, many of which will not be able to pay dividends if the market rout drags on.

Fast Forward Seventeen Months

As I write this, in the evening of the last day in September 2021, Brent Crude is priced at $78.39 a barrel. Demand for oil has bounced bank with a vengeance, we have a shortage and queues at petrol stations, and the online headline in the Guardian this evening is rather different, the latest articleiii being headlined “Nearly half of UK’s independent petrol stations still lack fuel – Petrol Retailers Association say fuel is being bought faster than it is getting restocked”.

The story continues to be one of people being desperate to get their hands on fuel:

The Petrol Retailers Association said drivers were continuing to buy fuel faster than it could be restocked, despite the insistence from chief secretary to the Treasury, Simon Clarke, that the situation was “back under control”.

Things are also getting fraught:

The PRA chief executive, Gordon Balmer, said motorists were subjecting staff at forecourts to unacceptable levels of abuse and violence.

Imagine how motorists will react when they’ve all been forced to switch to electric cars, the wind isn’t blowing, the sun isn’t shining, and the French are playing hard ball about supplies via the interconnector. Politicians (of all parties), you have been warned.

Reality Hits Home

It should be fairly obvious by now that people, especially having spent months locked down, don’t want to be subject to ongoing restrictions any more. They want to be able to fly to sunny climes for their holidays. They want to fill up the fuel tanks in their cars and drive where they like. They don’t want empty shelves in shops. If they didn’t mind doing without we wouldn’t see examples of panic buying time and time again. And one Guardian journalist has come clean and accepted that the only way he and his fellow climate worriers can achieve their aims is by reducing economic activity.

On 29th September 2021 George Monbiot’s articleiv appeared in the Guardian under the heading “Green growth’ doesn’t exist – less of everything is the only way to avert catastrophe”.

Having written “Saving the Planet by Trashing it”valmost six months ago, in which I pointed out that for many eco-worriors “…[a]ny environmental degradation is acceptable, even welcome, it seems, if it’s “renewable”. The end justifies the means…” I find it rather refreshing to read these words in the Guardian:

When we box up this predicament, our efforts to solve one aspect of the crisis exacerbate another. For example, if we were to build sufficient direct air capture machines to make a major difference to atmospheric carbon concentrations, this would demand a massive new wave of mining and processing for the steel and concrete. The impact of such construction pulses travels around the world. To take just one component, the mining of sand to make concrete is trashing hundreds of precious habitats. It’s especially devastating to rivers, whose sand is highly sought in construction. Rivers are already being hit by drought, the disappearance of mountain ice and snow, our extraction of water, and pollution from farming, sewage and industry. Sand dredging, on top of these assaults, could be a final, fatal blow.

Or look at the materials required for the electronics revolution that will, apparently, save us from climate breakdown. Already, mining and processing the minerals required for magnets and batteries is laying waste to habitats and causing new pollution crises. Now, as Jonathan Watts’s terrifying article in the Guardian this week shows, companies are using the climate crisis as justification for extracting minerals from the deep ocean floor, long before we have any idea of what the impacts might be.

…Everywhere, governments seek to ramp up the economic load, talking of “unleashing our potential” and “supercharging our economy”. Boris Johnson insists that “a global recovery from the pandemic must be rooted in green growth”. But there is no such thing as green growth. Growth is wiping the green from the Earth.

We have no hope of emerging from this full-spectrum crisis unless we dramatically reduce economic activity. Wealth must be distributed – a constrained world cannot afford the rich – but it must also be reduced. Sustaining our life-support systems means doing less of almost everything. But this notion – that should be central to a new, environmental ethics – is secular blasphemy.

Now, George and I have had our differencesvi, but on this occasion I feel he has identified a very real truth. There is no such thing as green growth. Green jobs are pie in the sky too. Pretty much every attempt to replace fossil fuels with “renewables” or to create some sci-fi “carbon capture” scheme, are both expensive and environmentally damaging.

The choice facing humanity is not the choice that will be offered us at COP26, between “climate chaos” or a “green revolution”. No, it’s a choice between continued use of fossil fuels and a dramatic reduction in our standard of living. Given the choice between CO2 emissions, and the environmental devastation caused by attempts to reduce CO2 emissions, I go with the environmentally-friendly life-enhancing choice every time, and I suspect so would most people when the choice is put to them in those terms. Does anyone really think those abusive panic-buying petrol forecourt gas-guzzling drivers want us to do less of almost everything? Does anyone really think people will be happy to pay more for the fuel for their motor vehicles, for the fuel for their homes, to be told they must travel less, possess less, and accept empty supermarket shelves and less choice?

No, although George’s essential premise is right, if it’s put to the people as he puts it, the “green revolution” will be stopped dead in its tracks. Oil isn’t dead after all. Long live oil.

Footnotes

i https://www.theguardian.com/environment/2020/apr/01/the-fossil-fuel-industry-is-broken-will-a-cleaner-climate-be-the-result

iihttps://www.theguardian.com/world/2020/apr/20/oil-prices-sink-to-20-year-low-as-un-sounds-alarm-on-to-covid-19-relief-fund

iii https://www.theguardian.com/business/2021/sep/30/half-uk-independent-petrol-stations-out-of-fuel

ivhttps://www.theguardian.com/commentisfree/2021/sep/29/green-growth-economic-activity-environment

v https://cliscep.com/2021/04/11/saving-the-planet-by-trashing-it/

vi https://cliscep.com/2021/07/08/losing-the-plot/

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September 30, 2021 at 02:13PM

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