- The Choice
Oil and Gas... Politics and Business
I started in the oil industry in 2012, at the time, there were around 80 vessels which did prospecting and surveying for oil and gas, 3 years later, the oil price wars hit, the number of vessels in operation dropped down to about 20. By 2020, the price was barely recovering and covid hit. All operations stopped across all companies. Yet from 2012 until 2020 global oil and gas consumption gradually increased.
In my industry, we say that in times of oil and gas hardship, prospecting was the first to go. Who looks for new oil when prices are at rock bottom. Yet, relatively little action has happend since 2015 in terms of prospecting and surveying. It led me to follow the oil and gas economy closely as I knew my career depended on prices staying relatively high. Covid was the final nail in the coffin, although I was offered work in the industry elsewhere, I declined as the terms and conditions had dropped substantially.
Whether it's the pandemics, wars or net zero, politicians rarely do things out of the goodness of their hearts. The Tories seen an opportunity in 2020 to make a quick and easy multi billion pound windfall for themselves and took it through a billion pound fear campaign which brainwashed the population to thinking that we were all gonna die unless they followed government instructions. You can read about the spending on media here: https://inews.co.uk/news/politics/boris-johnson-government-spends-1bn-advertising-campaigns-1785241?ito=social_itw_theipaper&utm_medium=Social&utm_source=Twitter#Echobox=1660027232
In 2003 warlords Blair and Bush decided to invade Iraq despite prior information informing them that Iraq had no weapons of mass destruction. The US seized control of the countries oil assets and used these to pay for rebuilding and maintaining security.
2015 presented an oil price war between the US and OPEC countries (Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela). The rise of US shale meant that the US moved from an oil importer to exporter. In an attempt to flush out the competition, OPEC refused to reduce the production of oil and gas which led to prices plumeting. This continued all the way through until 2019. Estimates are that it costs shale producers need an average price of $35 per barrel, by comparison it's around 50 in the UK.
The UK has seen a huge shift towards net zero, billions ploughed into renewables, now the US is getting in on the action with their recently announced Inflation Reduction Act which will see billions of dollars pumped into renewable energy. If you didn't know, it's the same oil and gas companies which are building these offshore wind farms. So the money will still be going to the same companies in a net zero world. You have Shell (Dutch Energy Giants) building off the North East coast of Scotland. You have ENI (Italian) and Equinor (Norwegian) building the largest wind farm in the world on the Dogger Bank off the East Coast of England. BP will be heavily involved in the US wind farms.
My guess is that we are moving away from oil and gas for two reasonings. Firstly, the politicians hold investments in the energy producers who are having their billion pound wind farms subsidised by tax payers money. Secondly is the political aspect of ensuring that the middle east and Russia no longer gains from exporting to Europe and the US. Nothing to do with saving the planet. If they cared about saving the planet, they would have done this a long time ago... But they didn't because they were reaping the large rewards from the oil and gas industry.
If government want to push towards net zero, whether it's to make a few quid for themseleves or punish certain countries, this must be done at a pace which is sustainable to the well being of the general population. It must not be forced upon us by politicians who are looking to make a fast buck. In my mind technology speaks for itself, if the technology is good, people will go for it. Over the last decade, cars have become far more efficient, the combustion engine emits far less emissions today than it did 20 years ago. Measures like banning the combustion engine by 2030 and shutting our own sources of oil and gas before we're fully ready for the transition is only going to cause suffering. In terms of moving away from oil and gas to punish certain countries, it's like cutting off our nose in spite of our face. Many will suffer for very little gain. Russia and the Arabs have plenty of other countries who will happily purchase cheap oil and gas from them.
Title Photo Credit: Bob Moran