The COVID-19 Pandemic Throws Oil and Coal Industries in a Tailspin

(This post was published earlier this year on Medium. Sorry for the lack of content this year. Hopefully, 2021 will bring more exciting stories and analysis…) The ongoing COVID-19 pandemic has brought our global economy to a standstill, with fears of the worst recession since 1929. Over 26 millions have already lost their jobs in … Read more

The United States are entering a post-oil world

When Bloomberg writes that in the United States  Big Oil Is About to Lose Control of the Auto Industryyou know there is something going on, especially when they rely on solid BNEF study and data. 

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Oil prices are going down. Wait, what ?

This was my reaction when I saw oil prices drop recently to levels below $90. Not long ago they were indeed more around $110 than anything else. Lucky for us Thomas L Friedman from the New York Times brings some answers…

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Oil prices reach 114 USD a barrel

Oops, we did it again. Oil prices are again on the rise and reached recently $114 a barrel. This is their highest levels since 2008. Fears of current events in Iraq are explaining this. As Bloomberg noted : ” The international benchmark surged above $114 on June 13 for the first time in nine months … Read more

Is Peak Oil real ? Yes, and it is here

Is Peak Oil realWith shale oil and other extreme oil sources, many think peak oil is dead, or at least is not threatening our economies. But this couldn’t be more wrong. The historic average  oil prices are of $25. Current prices are above $110 a barrel.

Five years ago, they were less than half of that. As the Conversation notes, current high prices have a huge toll on our economies as we spend $9.5 billion globally on oil every single day, amounting to a staggering $3.5 TRILLION each year.

This addiction is hurting our economies each day more are the global demand keeps on increasing, fueled by developing and emerging nations.

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A primer on our current energy predicament

Wind turbines in a sunny fieldYears ago I was often reading The Oil Drum, a great website dedicated to oil and other energy issues. Years later, the website still provides great content and I am glad to have read one of their latest posts : Our Energy Predicament in Charts.

This post is an excellent introduction to energy issues for people who are not familiar with them and don’t grasp their importance in our lives. Cheap energy from coal and oil have enabled our civilization to become what it is nowadays.

As cheap oil reserves dwindle and as coal is just way too polluting to be used indefinitely. Low carbon, non polluting and cheap alternatives are being sought.

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Oil prices will just keep on increasing

Good bye cheap oil

Good bye cheap oilIt had been a long while I hadn’t blogged on oil prices. This came to me as last week I found two pieces of news showing how oil prices are just going up and up and how they will just keep on increasing in the next months and years.

First and foremost, according to PeakOil.com, US drivers are paying in 2013 higher gas prices than in 2012, which were higher than 2011, which themselves were also higher than in 2008, when oil prices reached their all time high of $147 a barrel.

Still to this website, the annual average for 2012 for Brent crude – one of the benchmarks for oil prices – was higher than in that fateful year of 2008.

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Oil prices : from a recession to another

To the prestigious International Energy Agency :” If oil averages USD 120 per barrel in 2012, the global oil import burden  is set to reach a record high of over USD 2 trillion, or USD 5.5 billion per day “

Their press release goes on : ” The current price levels are on average higher than the awful year of 2008, and as such have the capacity to tip the global economy back into recession

The solution is simple : we have to ween ourselves from oil as soon as possible. It’s not as if already knew it and not as if we lacked alternatives.

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Throwing money out of the window

In this economy, I am sure you are careful about how you spend your money and really think about how you will make ends meet this month or the next as the economy might head toward another recession as oil prices go up.

However, each time you are putting 50 euros in your gas tank, you are literally burning two-twenty euro notes as current cars’ internal combustion engines are 85 percent inefficient.

Similarly, if you live in an inefficient building, you may throw out of the roof or the windows up to 80 percent of your $1,000 or 1,000€ heating bill. Yes, that’s 800€ or $ right out of the windows.

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Could oil prices increase exponentionally ?

This is the question as we are breaking record high prices. To Reuters: ” Brent oil priced in euros hit a record high on Thursday on heightened tension between Iran and the West while U.S. stocks neared peaks not seen since 2008. “

” The rise in Brent, the benchmark for European crude and most international oil trades, poses a new headache for cash-strapped Europe, still reeling from a two-year-old sovereign debt crisis.”

When I wrote the post on the increasing prices of oil, I noticed that – despite my low level in advanced mathematics – the price curve looks like the beginning of an exponential.

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Chevron to pay $18 billion to Ecuador

To Reuters : ” An Ecuadorean appeals court on Tuesday upheld a ruling that Chevron Corp should pay $18 billion in damages to plaintiffs who accused the U.S. oil giant of polluting the Amazon jungle and damaging their health. “

” A judge ordered Chevron to pay $8.6 billion in environmental damages last February, but the amount was more than doubled to about $18 billion because Chevron failed to make a public apology as required by the original ruling. “

This brings further development to the story I ran in 2010 where I noted that during three decades Texaco operated hundreds of oil wells without taking any notice of environmental issues.

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