The time has come,’ the Walrus said,

      To talk of many things:

Of shoes — and ships — and sealing-wax —

      Of cabbages — and kings —

And why the sea is boiling hot —

      And whether pigs have wings.’

This week is a continuation of last weeks post about the end of the fossil fuel industry.  This week is specifically focused on oil.  The article upon which I am basing my comments is from Bloomberg Green.  There’s so much in it that I strongly urge you to read the whole thing if you have a real interest in understanding where we are and where we are going…quickly.  It’s quite dramatic but essentially reiterates what I have been telling you forever…

For example, about stranded assets.  The write downs that I warned were coming are not only here but accelerating. I said it would be in the trillions of dollars and we’re rapidly headed in that direction already!


“The value of oil assets was written down by more than $500 billion, according to data collected by research firm Evaluate Energy. The outlook never recovered.

In the first half of 2020, when oil demand suddenly vanished in the pandemic, the industry wrote down a fresh $170 billion. For U.S. companies, it was the equivalent of 18% of proven reserves. That’s money wiped from the books because companies no longer believed in the value of their oil deposits.

The 2020 write-downs are exceeded only by the second half of 2015, the peak of the last crisis. And there’s more to come. Exxon on Monday logged record charges of as much as $20 billion.

For the five Western supermajors, the 2020 write-downs have already exceeded the last crisis, by far.”


“More than $170B wiped from company balance sheets–with more to come

Note: Data includes public disclosures from more than 400 oil and gas companies.

Most oil forecasts—at least the business-as-usual scenarios—estimate that even if oil demand peaks, it will continue to play a defining role in energy markets for the foreseeable future. Markets for petrochemicals will continue to grow, and both aviation and shipping will be relatively untouched.

Don’t be so sure. The same market pressures being applied to road transport and moving into other industries. Alternatives to petrochemicals are under development. Small electric planes and hybrid aircraft for longer distance are moving out of the prototype stage. It’s only a matter of time before tanker ships start running on hydrogen.

Once a technology reaches scale and price parity, conditions can change dramatically. That happened with coal, which was expected to dominate for decades—until cheaper natural gas and renewable energy came along. U.S. coal demand peaked in 2008. Nine years later Peabody Energy, the world’s largest coal producer, was bankrupt.”


“British oil giant BP Plc in September made an extraordinary call: Humanity’s thirst for oil may never again return to prior levels. That would make 2019 the high-water mark in oil history…

Covid-19 has accelerated long-term trends that are transforming where our energy comes from. Some of those changes will be permanent.”


You’ve most likely already heard about this but here’s about the loss of value of oil assets…


“For investors, one thing is clear: the oil patch has lost its shimmer. Exxon, which was the most valuable company in the world as recently as 2013, was removed from the Dow Jones Industrial Average index this year. It’s now vying to remain above the market value of NextEra Energy Inc., a Florida-based mega-utility focused on wind and solar, which briefly overtook it in October.”


I’ve been reporting on how the rapidly dropping cost of batteries is going to make electric cars/trucks (EVs) more than cost competitive with internal combustion energy vehicles (ICEs) and how fast that would happen.  Well…


“Batteries are a technology, not a fuel, which means the more that are produced, the cheaper they are to make. In fact, every time the global supply of batteries doubles, the cost drops by about 18%, according to data tracked by BNEF. Historically, EVs have been more expensive to build than gasoline cars. That’s changing.

The past year saw the first companies reaching the Holy Grail in battery packs: a cost of $100 per kilowatt hour. That’s the point that analysts have long believed will bring the cost of building electric cars in line with similar gasoline-fueled vehicles. After that, EVs will only get cheaper.

Volkswagen, the biggest automaker by cars sold, confirmed that its batteries had reached the $100 threshold for its 2020 ID.3 sedan and upcoming ID.4 compact SUV. China’s CATL, the world’s biggest battery supplier, also claimed $100 battery nirvana as it struck deals across the auto industry.

Not to be outdone, Tesla hosted an elaborate “battery day” event in September. The audience watched from a parking lot full of Teslas as CEO Elon Musk showed off plans to manufacture battery cells, a first for any automaker, and to reduce battery costs 56% by 2023. Even if Musk’s estimates are a few years too optimistic—as they sometimes are—it would still put Tesla years ahead of mainstream industry forecasts.”


And lastly, 


“Solar power is now the cheapest form of new energy capacity in most of the world, which means that as power markets grow to meet the new demand from EVs, oil is being largely displaced by power from the sun.”


It’s easy for this news to get lost in all the other noise that is dominating the headlines these days what with the election, covid and social justice being so overwhelming.  But stay awake to this other enormous shift going on in our society and lives that may be flying a bit under the radar.  



Bloomberg Green

Peak Oil Is Suddenly Upon Us

Tom Randall and Hayley Warren

December 1, 2020

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