Host: Chris Nelder
Guest: Liam Denning | Energy Columnist | Bloomberg
Category: ⚡ Renewable Energy
Podcast’s Essential Bites:
[7:12] “We live in a world where fossil fuels have […] a near monopoly on most of our energy needs. And that's particularly apparent in things like road transportation, where oil is king. And I think it's in the nature […] if things really haven't changed for 100 years or so, any sign of that changing is worth headlines […]. The other side of the equation, though, is that if the incumbent system is enormous, and by any measure the incumbent energy system is enormous, then it's quite easy to look at any change and say, okay, that's noteworthy, but let's compare absolute raw numbers here. And from that perspective, it's quite easy to say, sure, we sold 6.5 million electric vehicles last year, but in the grand scheme of things, 1.2 billion passenger vehicles on the road around the world today, it's a drop in the ocean. That's a long way of saying, when you're in the middle of a transition, it's quite easy for both sides to portray themselves as either upsetting the applecart or keeping the applecart broadly stable.”
[10:51] “I don't think anyone serious denies that change is happening. You can see it physically, just in the very vehicles that are running down the streets these days. […] And I think the other thing that's become particularly apparent in the past year, for me, at least, amid the pandemic, and then amid this energy crunch that emerged over the winter, particularly in Europe, is the volatility that's involved. Part of the problem of a word like transition is that it implies a very smooth handing off, […] when of course, it doesn't work that way, particularly in a market like energy, which has to balance in real time or near time. And so you end up with all sorts of discontinuities that happen. The one that's getting a lot of press at the moment, is on the one hand, you have a growing kind of momentum towards shifting energy supply away from fossil fuels. But on the other, you have a desire for the incumbent industry to keep investing just enough so that we don't face energy shortages in the meantime. And that's obviously been a source of a lot of schadenfreude on the part of the oil and gas industry this winter, as they claim that victimization of the industry is leading to energy shortages. And it's also led to accusations that we aren't really addressing the demand side of the equation quickly enough to foster the energy transition that we need.”
[14:35] “The whole premise [from a recent press release] is that Exxon, along with other oil and gas companies, is some kind of neutral party. Society turns up and says we want oil and gas. And Exxon and the other oil and gas companies just take that signal and they provide it. It doesn't really work that way. Exxon, along with other oil and gas companies have been lobbying for decades to make sure that the need for oil and gas is maintained, even as we've become painfully aware of its inherent major flaw, which is its contribution to climate change. So I actually found it useful when Exxon announces [its scope one and two netzero ambitions], because I think it does draw attention to a glaring problem here. One is yes, as a society, we need to make collective decisions about how we incentivize alternatives to the use of oil, gas and coal. But I think it also draws attention to the fact that the industry has been playing an enormous part in blocking progress on that front.”
[18:11] “I think the oil industry’s position […] is kind of a double edged sword. I think at a very basic level, it's hard for any industry to talk publicly about its own mortality. You're not going to see the oil and gas industry take out full page ads saying, well, we've got a decade to go boys, let's live it up. You can't do that. I mean, it's just culturally, it sort of goes against what corporations do. But it has real world effects. It's very hard to recruit people, if you say to them, by the way, join us and in 10 to 15 years, you'll probably need a new career. And it also affects your ability to raise capital, sure, which the industry is already seeing.”
[27:16] “Oil demand could very well still be up around 100 million barrels a day in the 2030s if we don't decide at a societal level to get away from it. It's the power of incumbency. The fact is you can come out with whiz bang renewables technology, you can keep producing and designing ever better electric vehicles, the difficulty you have is that as a society, we don't incentivize those things in a comprehensive way. The value of those non-fossil technologies is the conservation value. The public goods that they provide in terms of mitigating the risk of climate change, we don't put a price on that in some ways. The fossil fuel industry we have is a product of the economic system we have, which has in general prized consumption, and production rather than conservation. The oil price is a function of supply and demand. It's not a function of supply and demand and the various externalities it produces. And we're clearly in a moment where there is more momentum towards addressing those issues and factoring the more into purchasing decisions. But we're not there yet.”
[29:31] “Having said all that, I do think there are certain things on the side of energy transition. One is clearly that the economics of renewables and batteries in particular have been getting better. Now we're seeing some near term fluctuations around supply chain issues. There are issues around access to critical minerals. I don't think those issues are particularly new to be honest. I mean we're swapping issues around access to critical hydrocarbons to issues around critical minerals. I suspect we'll be able to deal with them. If we've been able to deal with them for hydrocarbons, we can deal with them for critical minerals.”
Rating: ⚡⚡⚡⚡
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🕰️ 34 min | 🗓️ 02/02/2022
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