The the age of oil nearing its end?

Nafeez Ahmed at Motherboard/VICE seems to think so:

The oil industry is on the cusp of a process of almost total decimation that will begin over the next 30 years, and continue through to the next century. That’s the stark implication of a new forecast by a team of energy analysts led by a former US government energy advisor, seen exclusively by Motherboard.

2020, the forecast suggests, will go down in history as the final point-of-no-return for the global oil industry—a date to which we will look back and remember how the production of oil, as well as other fossil fuels like gas and coal, underwent a slow, but inexorable and largely irreversible decline.  

Along the way, some 80 percent of the industry as we know it is going to be wiped out.

Ouch. 

Have I mentioned yet that I'm an Alberta boy? More specifically, I'm from Calgary... you know, the city where Canada's oil industry head offices are. For me, and for a lot of people I know, just reading a headline like, "The End of the Oil Age Is Upon Us," is going to be painful.

Being painful, though, doesn't prevent it from being true. Alberta-produced bitumen was trading for less than zero dollars just a few months ago. The writing has been on the wall for years now, for anyone who was able to read.

The problem isn't peak oil, either, which was the problem that people were afraid we'd end up facing not that long ago. The problem is that people just don't want to burn oil for energy anymore; the reality of global climate change appears to have finally sunk in worldwide, and the shift away from fossil fuels and towards cleaner alternatives was already well underway before the pandemic hit.

That pandemic, of course, has only accelerated the changes. To quote Motherboard's piece:

In the view of [Randy Willoughby, a professor of political science at San Diego University, and Vicente Lopez-Ibor Mayor, previously founding Chairman of Europe’s largest solar energy company Lightsource BP], this is not an oil scarcity crisis, but a demand crisis. They write: “Perhaps we were the first to notice that, even before COVID-19, the year 2019 would be the last ever to register daily production of oil closer to 100 million barrels. Indeed, before the coronavirus landed in Italy, the size of the oil market had already started its permanent slippery downward slide towards an uncertain future.” 

In this analysis, oil demand was seen to peak at the end of 2019 and early 2020. “I thought we had a glitch in our forecasting model,” explained Villamizar. “But all the revisions pointed to a similar result.”

Oil industry proponents and analysts have been trying to ignore similar forecasts for a long time. Here in Alberta, our Conservative provincial government has committed to wasting essentially as many taxpayer dollars as it takes to prop up the energy sector, hoping that it will not only recover but return to the glory days of a decade ago, when royalties from $140/barrel oil prices were papering over the cracks of decades of poor governance and mismanagement by those same Conservatives.

Those glory days appear to be gone for good; and for smaller producers like Canada, the outlook may be especially grim. Again, quoting Motherboard:

While the oil industry as such will not simply collapse, these experts believe it is now entering a protracted period of terminal decline over the next three decades. What emerges as a consequence will be a very different type of industry. 

“We forecast a long-term Darwinian transformation in the future oil sector,” write Villamizar, Willoughby, and Mayor. “The new market structure rising from the old oil reality will be dominated by an oil troika made up of US, Saudi Arabia, and Russia.”  

Only 20 percent of industry players will survive by 2050, they forecast. And the oil market will be “one-third smaller than today.”

[...]

These projected declines in global oil production by a third, and in global oil exports by nearly half—within the next 30 years—comprises a colossal collapse by any standard.

So, bad news for the economy where I live, but good news for global climate, right? Well... about that...

But it is too early to rejoice that the coming decimation of the oil industry will happen sufficiently fast to save us from dangerous climate change.  

Villamizar, Willoughby, and Mayor point out that “this future lower level of oil supply is still much higher than what the Paris Agreement on climate mitigation expects to be produced to maintain the world’s average temperature above no higher than 2 degree Celsius from the level registered during the Industrial Revolution."

Basically, we're looking at a lose-lose scenario, with enormous economic pain for smaller oil producers, followed by enormous economic pain for the entire planet as global climate change makes our way of live essentially untenable. Oh, and for those hoping to at least make some near-term gains? Maybe think again.

“The era of cheap and abundant energy is long gone. Money supply and debt have grown faster than the real economy. Debt saturation and paralysis is now a very real risk, requiring a global scale reset.” 

In other words, yet another Wall-Street-only recovery may not even be in the cards.

As I said, anyone able to read has been reading this writing on this wall for a long time now. But it's one thing to know that this was going to happen one day, eventually, and a whole 'nother thing to be told in stark terms that it's basically already happened, without you having noticed the change. But that's what it means to pass a tipping point; the graph on either side of that inflection don't look all that different from each other, but the graph on the far side of the tipping point only goes downwards.

Welcome to the end of the world as we knew it. Now let's start working at making the new world better than the old one.