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Why More Coal, Oil, And Natural Gas Investments Are Needed

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“I think that, in the end, these hydrocarbons are a huge resource for humanity. And I don’t think we’ve got any good substitute. People think that all these hydrocarbons are going to be stranded and the whole world’s going to change. I think we’re going to use every drop of the hydrocarbons, sooner or later.” Berkshire Vice Chairman Charlie Munger

The “stranded asset” push against the need for more coal, oil, and natural gas investment is impractical and contradicts the advice of the Paris-based International Energy Agency, the energy adviser for the 35-member OECD.

That’s because fossil fuels still have no significant substitute. And simply put, the growing energy needs of a mostly undeveloped world are so immense that it’s certain that coal, oil, and gas will continue to play a foundational role in the world’s energy economy, “for as far as even the most advanced modeling systems can predict.”

Although growing in importance but still strictly sources of electricity, favored wind and solar don’t compete in the majority of the world’s energy economy, an ever-growing complex that expands as our global goal of more economic growth is met.

And their natural intermittency means that wind and solar power even on good days are only available 25-35% of the time. Unfortunately, the faculty of non-dispatachable energy systems like renewables displacing dispatchable sources like coal, oil, and gas is often overstated, and even more unfortunately an overstatement that usually comes from the 17% of the global population that thrive in the richest, most developed, and fossil fuel-reliant nations on Earth (i.e., OECD members).

Wind and solar don’t compete in the majority of the world’s massive energy complex.

Even in the International Energy Agency World Energy Model’s most recent (November 2016) and best case scenario for renewables (450 Scenario), coal, oil, and gas still supply nearly 60% of the world’s energy. To be clear: even assuming Herculean gains for renewables, fossil fuels remain irreplaceable.

Coal, oil, and gas will remain the world’s primary sources of energy under any foreseeable scenario.

This ongoing importance of coal, oil, and gas is why the International Energy Agency continues to warn us that more investment fossil fuel development is mandatory, especially since sunken prices in the past 30 months have been discouraging investments.

I documented this fact back in November, and in March the International Energy Agency followed suite: “IEA: Huge Oil Price Spike Inevitable.” Thanks to drastically sunken prices, “Global crude oil discoveries plunge to record low, and it’s gonna get worse.”

For example, as the world’s most vital fuel, we’re going to need all the oil investment that we can get. “Conservative estimates predict that we will need to offset 20 million barrels per day in combined demand growth and natural decline over the next five years,”.

Over the next 25 years, the International Energy Agency reports that $44 trillion in investment is required in the world’s energy supply, 60% of which will need to go to coal, oil, and gas. The Agency puts our energy reality bluntly: “failing to invest in any upstream assets could lead to major problems.”

And in any event, any demand reduction that we see in coal, oil, and gas would just help to lower their prices, thereby increasing their attractiveness for usage.

And we environmentalists that want the world’s poor to have the save privileged lives that we Westerners enjoy should be cheering more gas in particular, which importantly…actually gains market share in the 450 Scenario! To illustrate, the Carnegie Mellon Power Sector Carbon Index concludes that U.S. power producers have cut CO2 emissions intensity by 24% since 2005, with the researchers crediting more than half of the reduction to using more natural gas.

Massive increases in coal, oil, and gas investments are absolutely mandatory.

Source: Forbes

hellenicshippingnews.com



15 Comments on "Why More Coal, Oil, And Natural Gas Investments Are Needed"

  1. Sissyfuss on Sat, 13th May 2017 10:20 am 

    I of the we environmentalists am not cheering for the world’s poor to have the same privileged lifestyle of the Western world. I am cheering for the Western world to assume the third world lifestyles that might give the ecosphere an infinitesimal chance to survive.

  2. Davy on Sat, 13th May 2017 12:09 pm 

    Right Siss, this is about behavior and responsibility. In this case it is “NO” and “LESS” not “YES” and “MOAR”. Notice I didn’t put “more” and the reason is “moar” is the illness of affluence. One clarification is that if we do choose “no & less” it will bring down the existing status quo of modernism because of deflationary pressures. If we were to do this right and take it to the degree it must go to mitigate the destruction of our planetary system it will kill the global economy as we know it. This could conceivably be done in a graduated way, in cooperation, and all inclusive. It may or may not be fair but it would be decisive because once this path is taken there is no turning back. Industries and ways of life will be eliminated.

    For you cornucopian optimist, don’t worry. The world is on a fatal course that will let you realize some of your optimism. We are fated to run a techno optimist course until it ends and end it will. It likely will be worse than the end could be by taking the road of humility and sobriety. As an individual you can take this road but society is incapable of it even in crisis. Normally in crisis there is change but no more because next time there is a crisis it will be too late. Game over and the change will be destructive and total.

  3. twocats on Sat, 13th May 2017 12:27 pm 

    sure we need more FF investments, but its not going to happen.

    Zombie Oil:

    either the global economy can be allowed to limp along while the oil economy continues on life support, or vice versa. can’t have both.

    the problem with global economy going on life support is obvious: people start losing pensions and 401ks, old americans can’t retire, and retired americans get angry and vote.

    the problem with oil economy remaining on life support is that any number of oil dependent countries and companies can and will continue to collapse. as long as it isn’t happening to my country or company then I suppose it doesn’t matter, so that is the preferred of the two.

    global economy is majorly due for a correction / recession, but that is the very event that will never be allowed to take place ever again so-help-them-Central-Bank Amen. so we will go with zombie-oil until the explorationlessness finally finally catches up in 2022, 12 years after the last gasp of 2010.

    https://www.iea.org/newsroom/news/2017/april/global-oil-discoveries-and-new-projects-fell-to-historic-lows-in-2016.html

  4. Kenz300 on Sat, 13th May 2017 1:14 pm 

    Forbes — the spokesman for the fossil fuel industry.

    More investment in fossil fuels means more stranded assets.

    Time to shift investments to the energy sources of the future.

  5. Apneaman on Sat, 13th May 2017 1:36 pm 

    That’s right, just that last big push for the remaining glucose is all that is needed to end every and all human “problems” permantly.

    Oceans ‘on verge of mass extinction event’, scientists warn

    http://www.scotsman.com/news/environment/oceans-on-verge-of-mass-extinction-event-scientists-warn-1-4444641

    Where have all the insects gone?

    While news focuses on elections or the economy, the bigger picture is that our world is being tragically and massively denuded of non-human forms of life

    https://www.theguardian.com/commentisfree/2017/may/13/where-insects-extinction-world-denuded-life

    It’s already a done deal, but the sooner the better, so go you little Cancer monkeys go!

  6. rockman on Sat, 13th May 2017 1:46 pm 

    Sissy – “I am cheering for the Western world to assume the third world lifestyles that might give the ecosphere an infinitesimal chance to survive”. So is it safe for us to assume you’ve already converted your lifestyle to “third world” standard? Or you waiting for the rest of us to do so before you do? LOL.

    Hmm, just thought of something: much of the third world has no access to the Internet. And yet here you are also using electricity that much of the third world has little to no access to. Are you borrowing your affluent first world neighbor’s computer? LOL.

  7. Anonymouse on Sat, 13th May 2017 2:37 pm 

    Ah, yes, one of rockiemans many tired oily cannards.

    -If you use any kind of electricity or anything at all derived from fossil-fuels, to criticize said fossil-fuels in any way, you are nothing more than a raging two-faced hypocrite.

    That one, is a favorite canard of amerikan fossil-fuel shills and their sycophants when they have nothing better to say, or their other equally vacuous deflections fail to work.

    For the record rockieman, I composed this message using a charcol stick written on a piece of hand crafted parchment. Then I attached it to a courier pigeons leg. The pigeon then flew to my affluent neighbors house. The neighbor removed the message, so the pigeon could peck it out on the keyboard and transmit it over the internet. Oh, wait a second, I cheated! The pigeon used a computer made from fossil fuels. Im just a hyprociate for taking a dim view of the uS fossil fuel cartel after all. Im going to hop into an SUV, drive to my deck thats 15 feet away, fire up my gas-o-leen powered BBQ, and cook a 48 ounce steak and only eat like 4 ounces of it and throw the rest away(the pigeons can have the rest).

    Remember kids, never use any kind of energy or anything derived from fossil fuels, period to criticize the amerikan for-profit oil cartel. Otherwise rockieman will transmit scorn and derision over the interwebs at you.

  8. Cloggie on Sat, 13th May 2017 3:03 pm 

    Forbes loves globalist statistics. If you really put yourself to it this is also possible:

    Denmark: 40% from wind, 50% in 2020
    Germany: 26% from wind/solar in 2014

    http://www.ecowatch.com/5-countries-leading-the-way-toward-100-renewable-energy-1881999459.html

  9. rockman on Sat, 13th May 2017 3:53 pm 

    A – “If you use any kind of electricity or anything at all derived from fossil-fuels, to criticize said fossil-fuels in any way, you are nothing more than a raging two-faced hypocrite.” A tad harsh but well said. Personally I try not to be as hard on the consumers as you. Most have strived hard to make their lives and those of their loved ones better. Those fossil fuel burners (and direct producers of most of the world’s GHG) are just victims of their own success.

  10. Anonymouse on Sat, 13th May 2017 4:54 pm 

    Beyond the gap between rich and poor, the environmental destruction caused by corporate consumption and production dwarf those of individuals. Roughly two-thirds of greenhouse gas emissions since the beginning of the industrial age have come from just 90 major companies, according to researchers writing in the journal Climatic Change.

    The corporate elite decide how and where electricity is produced, not consumers. And even though a recent study shows broad support for more public transportation, particularly among the young and lower-income people, our car culture is ruthlessly defended and promoted by the auto and oil industries, even now.

    Despite these facts, the “all Americans(aka consumers) are to blame” approach was used to explain the second Iraq war. Supposedly, our addiction to oil, suburban homes and SUVs caused the U.S. invasion–George W. Bush sent in U.S. troops so American consumers could have more oil. The consumerist logic was that if we just rode bikes or at least used fuel-efficient cars, war would eventually stop.

    But the end goal for U.S. imperialism in Iraq was to use oil as an economic and political wedge against its main competitors on an international scale, including Japan, India and China. At the time of Iraq war, the U.S. got about 13 percent of its oil from the Middle East. Since then, the U.S. energy boom has led the Obama administration toward rebuilding the U.S. economy on the basis of cheap fracked natural gas and shale oil–and clearly, the U.S. is no less prone to going to war.

    https://socialistworker.org/2014/09/09/whose-consumption-is-to-blame

    The second last paragraph is key. To that, Ill add my own comment.

    The corporate elite (also) decide how and where fossil-fuel is produced and delivered, and most all its derived products as well, and not consumers.

    This is of course, an accurate description of what is actually happening in our world. It also files directly in face of rockermans recent favorite canard that ‘consumers’ decide what products and services corporations(oil specifically) produce and market. In reality, and not the fantasy island world rockerman inhabits, its corporate elites decide what technologies and products THEY can be bothered to produce.

  11. Sissyfuss on Sat, 13th May 2017 5:54 pm 

    Rock, I don’t breed, I don’t consume beyond necessitys, I rewilded my acreage. I live as an anchorite, don’t do happy motoring, and support my step kids as best as I can. I cannot be perfect but I can do a hell of a lot less damage to our natural world. That’s the best I got. Sorry but I ain’t going loincloth for you. It’s Michigan dammit.

  12. Davy on Sat, 13th May 2017 6:57 pm 

    had to look that one up “anchorite”

  13. St.Roy on Sun, 14th May 2017 1:00 pm 

    The elites will most certainly orchestrate a die-off of 90+% of humanity in order to save the remaining FFs for the continued perpetuation of their current standard of living

  14. St.Roy on Sun, 14th May 2017 1:08 pm 

    Alternatively, abrupt climate change will likely destroy the habit that supports all vertibrate life on the planet by 2030.

  15. Davy on Sun, 14th May 2017 1:42 pm 

    Sure St Roy and I gues technology along with under 1Bil people combined with fossil fuels means survival. Get. a grip man when the die down comes complexity will be gone. The elites are screwed too.

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