Why Is the Oil Industry Still Thriving?
Why Is the Oil Industry Still Thriving?
Splinter is your home for news and opinions that challenge power in our political and economic system that's becoming more unhinged each and every day.
Insufficiently ruinous Eco terrorism
Soon
If you ever want to feel disgusted head over to Google Earth and check out Midland, Texas. Every square you see is an oil pad.
Where is Captain Planet when we need him?
All must be sacrificed to the parasite class's cult of Big Number Always Goes Up.
… money
Because you can fool some of the people all of the time, and all of the people some of the time ... and they've been at it for a very long time.
They don't need to invest in new production any more, so that capital investment money is now pure profit.
Sadly, they are in fact investing in new production.
Andres Malm suggests in his book "Fossil Capital" that part of the reason that fossil fuels (stocks of energy) are so profitable is that you can pick and choose when to extract and then again when to release the energy stored in them, which will always be more profitable than, for instance, wind and solar (flows of energy) because you can manipulate production to prevent over supply, and choose when to release energy instead of waiting for the energy to be available in the flow. The higher capability to profit means that they will remain more profitable than renewables long after any other sort of calculation other than "profitability" would favor the renewables (cost to produce, damage to the environment, ability to satisfy energy demand).
We see a bunch of things happening. First of all the West attacked and keeps attacking Russias oil production and exports with sanctions, due to Russias invasion of Ukraine. That means we actually have one of the biggest oil producers and exporters being taken out of the game. Something similar happened with Venezuela and Iran previously. So we actually see declines, just not choose by the countries themself, but mainly by the US, to keep out competition. At the same time 2023 oil consumption is 1.7% above 2019 oil consumption. The pandemic had a massiv effect on the industry and a lot of production is being restarted. However we also see EVs starting to have an impact. There are also a lot of other pushes mainly by net oil importers to reduce oil consumption. This seems to start to actually hurt the industry.
If I had to guess, we probably see the next reduction in oil production in the Middle East. Not due to the governments wanting to produce less oil, but due to a war in the region.