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Hi Pelle, yes that BP link has a wealth of numbers. I can't believe I'd never seen it before - I now have it bookmarked as a reference point.
You highlight a very good point on manufacture and consumption. Considering the degree to which say, UK manufacturing has been 'exported' to China, the resultant drops in energy consumption and oil in particular are very modest and not something to boast about.
Something that struck me about the BP stats is the variability from one year to the next - perhaps the regions are too small or measurements imprecise. Which leads me to focus on the non OECD and OECD totals. Non OECD averaged over 10 years accounts for 53% of total oil consumption and is growing at 3.2% p.a. The future will be largely influenced by policy but those numbers indicate to me the possibility of a surprise to the upside in near term (5 year) oil demand.
I understand 'district heating' is a big thing in your part of the world. It makes a lot of sense and I know the gree lobby here is pushing for it with government funded (tax payer) support. But Englishmen live in castles, and they are hard to connect.
Hello L7,
Thanks for BP link, that’s a lot numbers.
It looks like it’s very small changes in Nordic countries even if they the last years push for environment friendly car with 5-10k subsidy from government.
I also had one thought, this country oil consumption statistic.
I would assume if you buy a plastic thing manufactured in China. That consumption ends up in China?
Yday I spend on the pub, and I learned something new from guy who work in power plant. We use district heating here and they want to be fossil free 2025.
Currently they use gas,garbage,oil and will switch more to wood pellets over next years.
And the long term experiment they working on now is drilling couple 8000m holes and make fracking between them.
And then circulate water down there for heating. He said this drilling just recently become technical possible.
And is now being tested in Finland and Sweden.
Hi Frac, thanks for your insight.
Finland is one of those countries that has dropped off my radar. I used to be a frequent visitor to Helsinki at a time when Nokia was in it's heyday - the Apple of the time. Nokia's fall will have had a significant impact on the fortunes of the Capital Region, so I wouldn't be surprised if that greatly impacted the country's growth. But you rightly highlight the wider economy, and in a region towards the northern end of Scandinavia power and heat will constitute a larger share of the economy so adjustments in policy, as you describe, would be expected to have a greater impact on oil consumption, particularly if oil, rather than say coal was their 'dirty fuel'.
I'm unclear on your last point. When you refer to "Suzuki , Hyundai etc as a major growth area for their traditional output", do you mean traditional gas guzzlers as "traditional product" or have I missed the point entirely?
All,
Returning to the latest BP stats, and page 21 (oil) rather than the page I mistakenly referred too in my last post, page 20 (liquids), I see Sweden appears to be something of a standout -1.9% p.a. (2008-2018), but when I adjust it to (2009 - 2019) the average fall drops to -1.1% p.a. and if I wanted to use a stat to go with a specious article I could legitimately claim that oil consumption in Sweden has increased between 2015 and 2019.
"Lies, damned lies, and statistics"
Hi londoner7 , simple answer to your Finland message .... the country was in one of the longest periods of slow or no growth and officially only came out of a 50 month recession in 2017.......during this time their policy to increase lumber (that’s what Finland does)/ biomass generation for domestic electricity meant a decline in oil based generation .... incidentally Finland has been targeted by the likes of Suzuki , Hyundai etc as a major growth area for their traditional output
Hi Pelle, I'm responding to the link in your post 17:45. I tried your earlier links. Trump popped up in the first and the 2nd asked for a registration, which I don't do.
Pleased to see the full story in the link at 17.45, but hugely disappointed in the analysis. The relevance of the linkage between growth in EV and a non correlated increase in oil consumption is specious.
This extract includes the statistics which support the article:
"In 2005, there were 167 electric vehicles on Norway’s roads. By 2015, that number had exploded to just under 40,000. Yet according to the 2017 BP Statistical Review of World Energy, Norway’s oil consumption in 2015 was 6% higher than it was in 2005."
There are 5.5m vehicles registered in Norway. In 2015, according to this article, 0.7% of these vehicles were EV. An 'explosion' from 0.0027% in 2005. Incredibly, (yes, I'm being sarcastic) oil consumption increased by 0.58% p.a. over the same period.
Here's a longshot. The 99.3 of Norwegians, who were still driving driving gas guzzlers in 2015, had a bit more money in their pockets than they did in 2005, and splashed their cash on a four-by-four or two.
The story for me isn't why Norway oil consumption went up by 0.6% p.a. but why Finland oil consumption fell by 2.2% p.a. between 2005 and 2015. OECD oil consumption is only falling by 0.5% p.a. today, so that is the story!
Incidentally, the Finish number of -2.2% p.a. isn't supported by the latest BP stats (page 20) which shows -0.4% between 2008 and 2018. All year on year numbers are noisy so a 10 year average is a good metric.
https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-full-report.pdf
Incidentally, Norway is an outlier amongst northern European countries in having a growth in oil consumption 2008-2018, so the author has constructed a specious story tied to EVs. Congrats to him for making a buck, but the editor should be fired. Oh, it's social media. There isn't an editor to fire.
Caveat emptor!
Hello L7,
My point was that even such a EV penetration as Norway.
The effect on total oil consumption is small.
And rest of the world have no chance follow Norway
https://www.google.se/amp/s/www.forbes.com/v/s/www.forbes.com/sites/rrapier/2017/07/12/norways-oil-consumption-rises-despite-42-electric-vehicle-share/amp/%3famp_js_v=0.1&usqp=mq331AQFKAGwASA%253D#ampf=
https://www.energyvoice.com/otherenergy/205807/diesel-sales-down-95-in-norway-as-evs-gain-momentum/
Hello L7,
Good to hear you get out of cabin sometimes:-)
I am going to pub now so I will try come back to you tomorrow.
You can google on Norway EV cars oil consumption. Something like that.
There was an article 1-2 years ago.
Wish you all nice weekend
Hi Pelle,
I get the argument for oil in terms of new additional supply required even if demand falls, although I expect demand to recover and grow once the impact of the pandemic passes, but perhaps not at the earlier pace of c1MM bopd. Non OECD countries were in decline, but this was more than made up by growth in non OECD countries (I'm referring back to the EIA monthly report.)
The point of my post was to highlight how the worlds reaction to Covid could translate to a world united reaction to Climate Change, and if everyone agrees to throw money at it, an energy transition could occur very quickly. The largest use of oil is in US transportation. This is the key market. The bull case is that as the middle class ranks swell in places like India and Africa, a similar transportation demand will develop. But I've been hearing this story for a long time.
I'd seen the resource limitation on electric power before, and it is an excellent point - I have Copper and Nickel in my portfolio, but does Hydrogen power have similar resource limitations? I don't know.
Two points you make confuse me. You say, "Not even Norway managed decrease oil demand with a Tesla in every house.
Here in south Sweden it’s electric shortage so this summer they had to re-start oil power plant."
If every house in Norway has a Tesla, what is holding up oil demand?
I'm surprised Sweden burns oil for power generation. I thought only the Middle East used oil as a main stream fuel for power generation. Why not use gas?
That said, I know that a poorly specified UK plan for emergency power supply in high demand periods - when the it's cold and the wind isn't blowing - resulted in a large number of diesel powered plants being awarded stand-by contracts, because they could get up to speed within 5-20 minutes. I guess the national grid authorities don't trust the weather forecasts beyond 5 minutes. Does Sweden employ the same weather forecasters?
It's been a beautiful day in Scotland, so I have been out of the cabin. I rely on a 'look out of the window' forecast. Always reliable for a 45 minute walk around the loch. Perhaps I should offer my services to the National Grid.
L7, think you got cabin fever:-)
Even if they would achieve turn around the trend of fossil fuel demand increase 1% per year to a decrease for let’s say 1%.
Supply can easy loose more then this.
SEB estimated demand in 2022 will be about 1,3% higher then 2019.
So trend is not broken in my view.
I also read somewhere that during these 3 years, world population grown 250m.
Oil is spinning most things in world and not easy replace even if countries like ours have goal to replace it by 2050.
They don’t have a solution.
Not even Norway managed decrease oil demand with a Tesla in every house.
Here in south Sweden it’s electric shortage so this summer they had to re-start oil power plant.
I think all kind of energy and resources will be needed in future to keep up with demand and it will be tight.
Unless the plan is to sit home and grow your own vegetables:-)
Art Berman posted this link the other day.
https://www.greencarcongress.com/2019/06/20190624-uk.html
The FT has an interesting piece on the impact of a Biden presidency, mainly related to his pledge to ban drilling on federal land. Hard to see how a ban wouldn’t reduce US oil production and increase oil imports, which I guess would tend to increase oil prices. Would the pledge take effect in year one or year four? Makes a difference.
But the pledge would also accelerate the move from the internal combustion engine to electric. Currently, cost is a significant deterrent to the transition to electric. One hurdle is the price differential between comparable units, another is the decision to replace what might be a perfectly functioning gas guzzler.
In recessionary times, which I see as unavoidable in the near to medium term, consumers tend to hang on to their old stuff for longer.
But I think one lesson from the handling of the current pandemic, is the relative safety in numbers across nations when it comes to throwing money at the problem. If the UK faced the pandemic alone there is no way that the markets would tolerate their level of expenditure.
It makes me wonder that if the world collectively believed that a solution to climate change was in their hands, and that solution included a dramatic reduction in the use of fossil fuels, then the money would become available to facilitate that transition. The US and China are hold outs against an accord on climate change. Under pressure from their populations they are now at least playing lip service to an accord. If their support were wholehearted a transition could be accelerated.
Another outcome is that ‘hostilities’ between China and the West in general increase to a level that makes climate change a secondary consideration (I’m very suspicious of China’s actions). There were concerns about China within the US long before Trump. I’m watching ‘House of Cards’, which long predates the Trump presidency and China is a key theme. At times I wonder if the series has been a script for the Trump presidency! I’ll bet he is a fan.
If you’re a forever Enquest holder, then watch those climate change summits. Me, I’m looking to an exit from the sector at the next oil price spike. Goldman Sachs has promised to whisper in my ear at the right moment. I just hope I’m invested in the oil company that gets its timing right – most will not.