[Plantagenet]

Just to recap, one of the largest oil companies in the world just announced its oil production is in decline, not that nobody wants its product, not that it is buying up competitor's resources, but that its oil production has peaked:

Shell said its oil production has now peaked and will decline by up to 2% each year, with “traditional fuel” output expected to fall 55% by the end of this decade.

This ain't some boutique producer



Shell is making a really smart marketing move if you ask me. It is perfect timing with the demand collapse from the plague giving cover and Biden coming back strong against carbon. To use decarbonization as cover for what seems inevitable decline is ballsy, remember Beyond Petroleum and the freakout it created here? BP was as surprised by LTO as anyone, LOL. This is along the same lines except no between the lines interpretation is needed, you do have to read the lines though.
.
Shell website:
https://www.shell.com/media/news-and-me ... ategy.html

Some other stories:
https://www.ft.com/content/2aed103b-6d1 ... de2b928de9
https://apnews.com/article/shell-plans- ... 7847274395

Excellent post, Pops.

Shell and BP and Total are now officially downsizing their oil exploration efforts and trying to transmogrify their companies into somether other than oil companies.

Big banks are refusing to lend to oil companies for exploration and oil development.

The Biden administration is refusing issue new leases and drilling permits on federal lands.

The stars are all aligned for oil production to peak and the world to change into ECOTOPIA.....

Except.....for two things........

(1) State-owned oilcos in China, Russia and Saudi are going full out to produce more oil....

and

(2) Its easy for western governments and banks to refuse to support oil development when oil prices are low......but let oil prices to rise to some critical level....say $80-$100/bbl......and the public is going to start screaming for cheap gasoline for their giant pick-up trucks and political pressure will grow for MORE oil drilling and MORE leasing. Then we'll see how committed the Biden administration really is to cutting oil production. Will they stick to their policies restricting oil production, or will they flip flop and return to the "drill baby drill" policies of the Obama administration that led to a huge expansion in drilling and the TOS oil production GROWTH of the Obama years?


When oil prices go up will Biden stick to policies restricting oil production, or will he flip flop and return to the "drill baby drill" policies of the Obama administration?


Cheers!

[aadbrd]

let oil prices to rise to some critical level....say $80-$100/bbl.....

Wake me when that happens.

[Newfie]

First time poster, might as well start it with a good one.

https://www.nsenergybusiness.com/news/c ... net-zero/#

Shell have announced that they are now passed peak production and are anticipating a 55% decline in output by the end of the decade. Never expected it to be announced in such a blunt way, and yet, here we are.

Nova,

Welcome aboard. Hope you enjoy your stay.

[NovaVeles]

Well, he is talking about processes that have happened, and obviously in the past, they happened without regard to restrictions people thought in the day. The claimed peak oil in 1919 in the US, it certainly didn't stop cars from advancing beyond his 1913 example.

My beef with him tends to be his timing estimates, and banking on autonomous driving which doesn't appear to be popping up with the rapidity he assumes, and is needed, to make his overarching idea work.

Oh yeah his timing will be well off.

The Peak oil estimates in the 1910's was always going to miss the mark simply due to the lack of information, just like how Hubbard did with his, although he got much closer. Predictions of the future will be guide lines at best. This also leads into the issue that the 20th century was an era of monstrous abundance and growth per captia, this was the paradigm that all these theories and models were produced in - we don't have that same luxury this time around.

Which kind of partially works against me with the next argument.

When it comes to automation, a lot of folks in the field estimate it will be about another 25-30 years IF it is even possible to get to full autonomous. The problem is that, again, the economic model was applied to a technical field. Initial progress in the field did not continue at the initial pace as assumed. Low hanging fruit was gained via the use of machine learning but it is rapidly slowing in terms of gains. Essentially, since 1998, the year-over-year rate of performance improvement computer performance increase has been decreasing. We are now at the point were a 15% year over year increase is considered a big achievement.

This also comes back to the issue of Moores law. We are nearing the upper limits of what can be achieved with Silicon based computing, progress has slowed dramatically in the last decade and we are now bashing our heads up against what has been called 'Boltzmanns tyranny'. We can make slightly faster chips but it will decrease the overall life time and accuracy of these chips. Essentially quantum tunnelling of electrons means we can only go so small without introducing errors. The latest 5nm nodes being developed buts individual components at 13 silicon atoms wide. That is not much wiggle room for improvements - and this is the brain that will have to power full autonomous systems.

And don't get me started on quantum computers, they are not even in the same realm of what we are using today.

He lays out how these things follow an S-curve quite well. Did you catch that part?

Sorry it has been a few years since I saw the talk, I did not remember that part. S-curves are funny things, you cannot tell the pivot point until well after it has passed.

My own personal theory is that we are going into an inverted bell curve. Prices come down, platau around the 2020's and then increase as we have to use ever more costly materials to keep up demand.

I already have. Two EVs in the garage. And his claim of lack of moving parts, lack of maintenance, etc etc, were spot on. I've got no interest in the autonomous driving part yet, my most recent EV is a first step into only battery land, and I want nothing to do with the autonomous part. Yet. Let others be the first adopters, I'll buy used and on the cheap after the bugs are worked out.

EV's are really neat like that. Also lack of parts is wonderful. We are essentially side stepping the 'Carnot heat engine' problem.

Personally, I have never driven a car and probably never will. My solution to these issue is a lot more extreme but it is my choice for myself alone.

He also claimed world peak oil around 2020, or the early 2020's. And he said nothing about eroei, because it is a crock of nonsense in the resource extraction world. Its proponents have certainly proven that beyond a shadow of a doubt right here on this very website.

There is some merit to EROEI as an ecosystem perspective, why lions don't eat hunt for mice etc. But I would not expect it to be something that would ever be discussed in the extraction world. These things will manifest themselves as economic problems due to physical problems and will be treated as economics issues. I expect to go to the grave with people still thinking that, doesn't really bother me however.

[Pops]

Shell's reserves have been falling



But demand for its products has been steady

[AdamB]

The Peak oil estimates in the 1910's was always going to miss the mark simply due to the lack of information, just like how Hubbard did with his, although he got much closer.

And the same effect applies today. Because economic conditions are critical to future projections, and there are no facts in the future, all answers are nothing but a single path within a cloud of probability.

When it comes to automation, a lot of folks in the field estimate it will be about another 25-30 years IF it is even possible to get to full autonomous.

Well, this depends on "how autonomous is autonomous enough", right?

It works right now. And kills some folks. Even with improved autonomous, when your car decides you need to be killed in order to save the family of 5 you are about to run over...well...who WANTS that kind of perfect autonomous? And yet humans make these kinds of life and death decisions everyday. And then we throw them in jail or praise them as heroes, depending on how their instant decision plays out in life.

He lays out how these things follow an S-curve quite well. Did you catch that part?

Sorry it has been a few years since I saw the talk, I did not remember that part. S-curves are funny things, you cannot tell the pivot point until well after it has passed.

He has quite an interesting angle on how less S-like these curves are getting, in terms of their temporal component. The modern world is just speeding stuff up in this regard.

I already have. Two EVs in the garage. And his claim of lack of moving parts, lack of maintenance, etc etc, were spot on. I've got no interest in the autonomous driving part yet, my most recent EV is a first step into only battery land, and I want nothing to do with the autonomous part. Yet. Let others be the first adopters, I'll buy used and on the cheap after the bugs are worked out.

Personally, I have never driven a car and probably never will. My solution to these issue is a lot more extreme but it is my choice for myself alone.

I would have skipped cars as well and stuck with only motorcycles as I did in college and during my early professional life, but family arrives and whatnot, and bolting a child seat to the back of a racetrack capable 2 wheeler just isn't very practical.

[aadbrd]

Another article tying Shell together with GM, Biden, etc... No mention of geologic depletion as a factor.

https://theweek.com/articles/966323/oil-finally-way-

[aadbrd]

More Shell news:

https://insideevs.com/news/487881/shell ... ally-2025/

[JuanP]

How much oil has Shell discovered in the last 20 years? How much has it extracted? How much have their reserves grown? What would change that?

Oil discoveries have been insignificant for a very long time; continuing to pour money into searching for oil that can't be found makes no economic sense. Pretending that demand is peaking and you have developed an environmental conscience to justify reducing that waste of money makes a lot of sense to me.

Believing in Peak Oil Demand is like believing in fairies!

[AdamB]

Believing in Peak Oil Demand is like believing in fairies!

Those silly people at CSIS, WoodMac, Rystad, DNL-GV!!!! They sure must be stupid!!!!

Maybe the problem is that they have more than houseplants to talk to, and they got some crazy ideas from data and analysis and stuff?

[JuanP]

Believing in Peak Oil Demand is like believing in fairies!

Those silly people at CSIS, WoodMac, Rystad, DNL-GV!!!! They sure must be stupid!!!!

Maybe the problem is that they have more than houseplants to talk to, and they got some crazy ideas from data and analysis and stuff?

They are neither silly nor stupid; you need to have above average intelligence to get a job like that. What they are is corrupt!

[aadbrd]

What they are is corrupt!

Prove it.

[AdamB]

Believing in Peak Oil Demand is like believing in fairies!

Those silly people at CSIS, WoodMac, Rystad, DNL-GV!!!! They sure must be stupid!!!!

Maybe the problem is that they have more than houseplants to talk to, and they got some crazy ideas from data and analysis and stuff?

They are neither silly nor stupid; you need to have above average intelligence to get a job like that. What they are is corrupt!

Do you know any of these organizations analysts, or their malfeasance, that you can share with us? Folks claiming things they don't like are a lie are a dime a dozen around here, but not liking someone's point doesn't make it a lie.