Shell has announced it has reached peak oil production

[Teh_Lurv]

I did a thread search and I was surprised it appears no one has mentioned this yet:

On Thursday Shell announced that it has reached peak oil production in 2019 and expects production to gradually decline in the years ahead. For anyone unfamiliar with the term, peak oil is the point when the maximum rate of oil extraction from the Earth has been reached. Although new deposits and methods of extraction have found in the decades since the concept of peak oil was conceived, Shell's announcement is an admission that continued production growth is no longer economically feasible with global demand.

In a Thursday statement, the fossil fuel giant said its "oil production peaked in 2019," and that we can now expect it to decline gradually by 1 or 2% per year. Shell also said its total carbon emissions peaked in 2018 at 1.7 gigatonnes.

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Last Fall, the International Energy Agency predicted a "treacherous" path ahead for the industry. And in September, fellow energy giant BP said the world may have already reached peak oil. Shell's own CFO hinted at the announcement in May when she told investors the company has experienced "major demand destruction that we don't even know will come back," and soon after, Shell wrote down $22 billion on its balance sheets. But still, this is the first time it's made an outright announcement of this kind.

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Shell Says It Has Reached Peak Oil Production

Shell says oil is on its way out. In a Thursday statement, the fossil fuel giant said its “oil production peaked in 2019,” and that we can now expect it to decline gradually by 1 or 2% per year.

earther.gizmodo.com

But if you think this announcement will light a fire under Shell's ass to speed transition to renewable energy sources, well...

Although Shell says its oil production has peaked, its natural gas flows will keep its overall fossil fuel output flat. The company views liquefied natural gas, a fuel transported on ships, as an important business in which it is a world leader and as a transition fuel between petroleum and renewables.

Shell said Thursday that in the near term it planned to spend $8 billion on oil and gas development and $4 billion on its natural gas unit per year.

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Shell, in a Turning Point, Says Its Oil Production Has Peaked (Published 2021)

Europe’s largest oil and gas producer said oil production would gradually decline 1 or 2 percent annually, underscoring the company’s desire to shift to greener energy.

www.nytimes.com

Link to the Shell statement:

Shell accelerates drive for net-zero emissions with customer-first strategy | Shell Global

Shell today set out its strategy to accelerate its transformation into a provider of net-zero emissions energy products and services, powered by growth in its customer-facing businesses.

www.shell.com

 

[DekuBleep]

Did shell announce "peak oil"? Or did it only announce that "it's oil production has peaked"? because as far as I can tell there is a big difference.

As I understand it, "peak oil" is when the amount of barrels that can be produced in a day is less than the daily demand for oil.

 

[Metal Gear Miyamoto]

Micheal Rupert laughs from beyond the grave.

 

[ILikeFeet]

Shell begins (already begun) it's transition from Big Oil to Big Energy

 

[evrythngwastakn]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

 

[Deleted member 4090]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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Cornering a market is extraordinarily difficult and virtually impossible to predict. They have money, but they don't have the experience or the people or the blueprint on how to successfully do it.

 

[MopDog]

Shell of its former self.

 

[PoppaBK]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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Because they have the money to just buy out the successful companies when the time is right. Much less risk and a whole lot cheaper.

 

[Weiss]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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Why risk making lots of money in the future when you can keep doing something that makes you lots of money now, and you'll die before it has any consequence on the lives of you and anyone you care to think about?

 

[Nola]

Did shell announce "peak oil"? Or did it only announce that "it's oil production has peaked"? because as far as I can tell there is a big difference.

As I understand it, "peak oil" is when the amount of barrels that can be produced in a day is less than the daily demand for oil.

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Yeah from the sound of the article it seems like it is the latter.

 

[fick]

Did shell announce "peak oil"? Or did it only announce that "it's oil production has peaked"? because as far as I can tell there is a big difference.

As I understand it, "peak oil" is when the amount of barrels that can be produced in a day is less than the daily demand for oil.

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Peak oil is peak oil production. This is where theoretically oil skyrocket

 

[A Syrian Communist]

Well it'll be nice living on this planet in the time being.

 

[entremet]

Because they have the money to just buy out the successful companies when the time is right. Much less risk and a whole lot cheaper.

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Correct.

 

[ZeroMaverick]

And here's the thing: I've had real arguments with people about moving away from oil and how Biden will cause them all to lose their jobs. I'm not even in the oil industry, and I understand the limitations of fossil fuels.

 

[B'z-chan]

With the world switching to more renewable forms of energy away from Dino fuel. We should make sure that these companies aren't profiting anymore in the future. With the switch to a new net zero economy this is the perfect time to make such a stance. The unethical things these companies have done for decades has taken its toll on Earth and they should pay for their crimes.

 

[Nola]

Peak oil is peak oil production. This is where theoretically oil skyrocket

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Eh, if their sense of peak oil being reached is entirely demand side driven(maximum rate of production has been reached and predicted to never come back to that level) that's not necessarily true, if the drop in production were supply side driven because we literally reached the maximum amount of oil possible to produce, or produced at a certain break-even point, while demand remained steady, yeah, prices would sky rocket.

 

[Deleted member 34788]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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This is what shell is doing however, here in the uk it's is part of a growing number of energy suppliers that offer full renewable energy packages for electricity in your home. All my electric that we use in the house is from renewable sources, I signed up with shell for the year. That and its electrifying petrol stations across the uk. My local shell station has added 2 electric car chargers over the last 18 months. They plan to open up full electric car charge stations in the uk soon.

Can say for the us but here in the uk and Europe the switch to renewable energy sources for powering homes and the like is well underway.

 

[Deleted member 52442]

For anyone unfamiliar with the term, peak oil is the point when the maximum rate of oil extraction from the Earth has been reached.

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that sounds buck wild wtf

 

[Beignet]

And here's the thing: I've had real arguments with people about moving away from oil and how Biden will cause them all to lose their jobs. I'm not even in the oil industry, and I understand the limitations of fossil fuels.

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People who are trying to get into the oil industry at this point and expecting it to pan out well for them are just straight up idiots. Like, anyone can clearly see that it's a dying industry.

Well it'll be nice living on this planet in the time being.

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If you live in a developed first world country in North America, Western/Northern Europe, Australia/New Zealand, or East Asia then you'll be fine. It's those developing countries closer to the Equator that are gonna get fucked the hardest. The ensuing migrant crisis as they move towards the developed northern countries will result in the rise of reactionary fascist politicians so that'll be fun to look forward to.

 

[Culex]

We are no longer anywhere near "peak oil". Shale oil basically reinvented production, and if the tech ever improves, the oil sands in Canada are a direct reservoir competitor to SA.

 

[ZeroMaverick]

People who are trying to get into the oil industry at this point and expecting it to pan out well for them are just straight up idiots. Like, anyone can clearly see that it's a dying industry.

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That's what I've been trying to tell them

 

[Septy]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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Easier said than done.

 

[DekuBleep]

"major demand destruction that we don't even know will come back,"

Not sure why major demand destruction would cause prices to skyrocket when supply is still there...

 

[pants]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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The amount of money and power they hold is borderline inconceivable, and their business strategy is designed to do the tried and true thing as long as they can because it works and has always worked. (And if its not them, it will just be someone else.)

Even when the world (hopefully!) switches to healthier, sustainable energy alternatives these companies are still going to be pumping oil until someone comes in and forces them to stop.

 

[AnansiThePersona]

Damn they reached level cap

 

[Eegah]

I did a basic analysis on this when I was in grad school. I wrote a paper that predicted peak oil sometime around 2010. I remember thinking that this was too pessimistic, but it looks like I wasn't too far off. It will be really interesting to see what happens with energy prices over the next few years.

 

[fick]

Eh, if their sense of peak oil being reached is entirely demand side driven(maximum rate of production has been reached and predicted to never come back to that level) that's not necessarily true, if the drop in production were supply side driven because we literally reached the maximum amount of oil possible to produce, or produced at a certain break-even point, while demand remained steady, yeah, prices would sky rocket.

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Yeah, their wording is weird as hell. I've always read peak oil as a theoretical concept: the maximum output of oil. The thought was demand would continue to rise, while production plateaus, and prices increase.

Shell is basically saying, "we lost demand in 2020 and are shifting focus to natural gas", which isn't what peak oil is all about.

 

[Deleted member 4090]

Yeah, their wording is weird as hell. I've always read peak oil as a theoretical concept: the maximum output of oil. The thought was demand would continue to rise, while production plateaus, and prices increase.

Shell is basically saying, "we lost demand in 2020 and are shifting focus to natural gas", which isn't what peak oil is all about.

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But the increase in price and increase in production go hand in hand, as an increase in price justifies more expensive and less efficient extraction. That's always been one of the flaws in people predicting peak oil. If the price goes up companies will start extracting from more expensive oil sources.

 

[Geeker]

Doesn't mean squat. Oil is produced by small shale focused companies and giant national oil companies. Majors such as shell are no longer competitive

 

[fick]

But the increase in price and increase in production go hand in hand, as an increase in price justifies more expensive and less efficient extraction. That's always been one of the flaws in people predicting peak oil. If the price goes up companies will start extracting from more expensive oil sources.

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It's a hypothetical concept. Of course they will try to increase oil production, but at a certain point, they're gonna tap everything, and assuming energy consumption continues to rise, there's gonna eventually be an issue. What you said doesn't contradict peak oil, it would only be delaying it.

 

[Xando]

This will be pretty interesting to watch.

Big european oil is trying to divest into green energy while big US oil is trying to prolong oil with "clean" oil and catching C02 from the air.

Wonder which will survive.

 

[Aegus]

Doubt. Offshore at least bigger and bigger production facilities are being designed and Brazil is charging ahead with more. Guyana is going to have multiple units soon as well. Construction of these things is ramping up again.

 

[Deleted member 5359]

They didn't announce peak oil.

 

[eonden]

Not surprised given Shell has been aggressively tried to move into green energy productioni n the last year. 2020 covid did a fuck ton of harm to the oil economy (given the consumption disruption) and the push from economies to kickstart the economy with green investments was the final stab to the viability of huge growth in the oil market.

Green renewable energy reached the tip point (in where the cost of new renewable energy is less than oil) in 2018-2019, and now it will just get worse and worse for oil.

Doubt. Offshore at least bigger and bigger production facilities are being designed and Brazil is charging ahead with more. Guyana is going to have multiple units soon as well. Construction of these things is ramping up again.

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A lot of offshore is going to be replaced with offshore air energy. For instance Shell is trying to leverage their knowledge on offshore infrastructure to enter that market.

We are no longer anywhere near "peak oil". Shale oil basically reinvented production, and if the tech ever improves, the oil sands in Canada are a direct reservoir competitor to SA.

Click to shrink...

Peak oil doesnt mean we are at the maximum possible production of oil, but rather that the demand for oil will not reach higher values than right now due to the pressure of other better energy recipients (both green energy and gas).

 

[jeelybeans]

I'm really concerned about places like Houston. Wish these companies and cities invested in being the energy hubs of the future :/

 

[CrunchyB]

Dutch airline KLM says operated first flight with synthetic kerosene

A commercial KLM airlines flight powered with synthetic fuel carried passengers from Amsterdam to Madrid last month in a world first, the Dutch government and the airline said on Monday.

www.reuters.com

Shell is also doing some experiments with synthetic kerosene, but it's still in its infancy. Seems to me like this is the only way to make sustainable aviation work so good for them.

 

[Transistor]

I'm really concerned about places like Houston. Wish these companies and cities invested in being the energy hubs of the future :/

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There are a lot of green energy companies growing in Houston, and the big oil production companies will transition to green energy eventually. The only companies that will really be at risk are midstream companies (companies that transport / store oil)

 

[Nola]

But the increase in price and increase in production go hand in hand, as an increase in price justifies more expensive and less efficient extraction. That's always been one of the flaws in people predicting peak oil. If the price goes up companies will start extracting from more expensive oil sources.

Click to shrink...

Just to clarify everything here.

As I understand it peak oil is a demand side driven concept and often confused with oil depletion, which is supply side driven.

Peak oil is simply the expected point where demand for oil reaches its historical peak, never to return.

Oil depletion is the concept of the supply of oil reaching its break even point and reserves and capacity beginning an irreversible decline due to a irreversible drop in overall supply.

I think both have the opportunity to deceive forecasters since maybe demand subverts expectations and jumps back up, or maybe we find a new huge supply of oil, but yeah, just so we're all on the same page.

 

[Teh_Lurv]

We are no longer anywhere near "peak oil". Shale oil basically reinvented production, and if the tech ever improves, the oil sands in Canada are a direct reservoir competitor to SA.

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The majority of Earth's oil is probably still untapped, however it's in places that are simply not cost effective to harness at current oil prices.

In any case, I asked mods to adjust the thread title as I don't want it to be misleading.

 

[Ogodei]

And here's the thing: I've had real arguments with people about moving away from oil and how Biden will cause them all to lose their jobs. I'm not even in the oil industry, and I understand the limitations of fossil fuels.

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Tell the trade unions that. I'm with you on this point, but the objection is coming from the workers, not just the companies.

 

[TarpitCarnivore]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

Click to shrink...

Timing a market is incredibly difficult and creating wide spread adoption is even harder. Look how much the cost of solar has come down and companies are still practically having to give them away.

 

[Aegus]

A lot of offshore is going to be replaced with offshore air energy. For instance Shell is trying to leverage their knowledge on offshore infrastructure to enter that market.

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Shell doing that isn't going to stop NOCs wanting FPSOs and onshore facilties. My company is doing work in both sectors (developing floating turbines and FPSOs) and they are expecting 25 new FPSO contracts in the next 3 years to be on offer, but our wind stuff is long term end of the decade type stuff.

I'd like for renewables to take over tomorrow, but it's not going to happen.

 

[Nola]

There are a lot of green energy companies growing in Houston, and the big oil production companies will transition to green energy eventually. The only companies that will really be at risk are midstream companies (companies that transport / store oil)

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It's still going to be a rough transition for that area. Speaking as someone that has lived there and is familiar with the ends and outs from people I know and clients we've had.

You are probably going to see a complete draw down of the sort of mega project expansions and a much less frequent schedule of turnarounds and maintenance that is going to leave tens of thousands without steady work that rely on those projects and make up a good bulk of the labor force that is employed in that industry as contract workers through contracting companies, and you'll also just see a contraction of employment and wages generally.

Exxon for instance loves to push out older workers and hire fewer, cheaper younger workers that are then tasked with more responsibilities. I would expect that to accelerate as we go forward.

Houston's diversified enough that I think it will be ok overall, but it's impossible for me to see a 1 for 1 substitution occurring, simply because it's not like you can just turn a refinery into a solar panel factory or natural gas plant, it's doesn't work like that. If Shell and Exxon(lol probably not happening) move to cleaner energy, Im not sure how much happens in Houston, unfortunately

 

[Transistor]

It's still going to be a rough transition for that area. Speaking as someone that has lived there and is familiar with the ends and outs from people I know and clients we've had.

You are probably going to see a complete draw down of the sort of mega project expansions and a much less frequent schedule of turnarounds and maintenance that is going to leave tens of thousands without steady work that rely on those projects and make up a good bulk of the labor force that is employed in that industry as contract workers through contracting companies, and you'll also just see a contraction of employment and wages generally.

Exxon for instance loves to push out older workers and hire fewer, cheaper younger workers that are then tasked with more responsibilities. I would expect that to accelerate as we go forward.

Houston's diversified enough that I think it will be ok overall, but it's impossible for me to see a 1 for 1 substitution occurring, simply because it's not like you can just turn a refinery into a solar panel factory or natural gas plant, it's doesn't work like that. If Shell and Exxon(lol probably not happening) move to cleaner energy, Im not sure how much happens in Houston, unfortunately

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Oh, I agree completely. It definitely will be a rough transition. One of the reasons I left the ONG sector.

 

[Nola]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

Click to shrink...

The story goes in the 70's/80's the old guard was attempting to do this, but the younger up and coming executive generation largely pushed that idea out as they took over to chase the faster and easier dollar of just cornering their own market, which also led to a lot of the fuckery we see today with climate change propaganda and funding for things like the Heartland Institute.

Instead of diversification they doubled down and went all in on gaslighting the public.

 

[zswordsman]

The story goes in the 70's/80's the old guard was attempting to do this, but the younger up and coming executive generation largely pushed that idea out as they took over to chase the faster and easier dollar of just cornering their own market, which also led to a lot of the fuckery we see today with climate change propaganda and funding for things like the Heartland Institute.

Instead of diversification they doubled down and went all in on gaslighting the public.

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So up and coming boomers fucking over the world for years to come. Sounds about right.

 

[Eye for an Eye]

I've never understood why oil companies didn't/don't pivot huge into just being "energy companies" and make a disgusting amount of money cornering alternate fuel sources. They have the money, experience, and people to do it.

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Actually BP is transitioning to renewables.

Oil Giants Win Offshore Wind Leases in Britain (Published 2021)

BP and Total plan to spend billions of dollars developing the wind farms in an effort to aid their shift to renewable energy.

www.nytimes.com

And at least Trump's big deal of opening up the Alaskan preserves failed miserably for him. That was all brushed under the rug of the Capitol riots.

Major Oil Companies Take A Pass On Controversial Lease Sale In Arctic Refuge

After a three-year push by the Trump administration, almost no oil companies offered bids. Analysts point to controversy, low oil prices and an incoming administration that opposes drilling.

www.npr.org

 

[Nola]

So up and coming boomers fucking over the world for years to come. Sounds about right.

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Yeah, basically

 

[Jegriva]

We all know which kind of energy we should all use, in a perfect world without human mistakes and greedyness.

 

[Ether_Snake]

edit: ain't leaving this in the last post!