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Ambrose Evans-Pritchard’s Toys Thrown Out Of Pram!

November 9, 2016

By Paul Homewood 

 

h/t Patsy Lacey

 

image

http://www.telegraph.co.uk/business/2016/11/08/defiant-opec-bets-on-fossil-hegemony-deep-into-the-21st-century/ 

 

AEP throws his toys out of the pram!

 

From the Telegraph:

 

The Opec cartel is taking a brave bet that global oil demand will keep rising fast for another 25 years, convinced that fossil fuels will retain their overwhelming dominance over world energy deep into the 21st century.

The Gulf-led group has based its strategic planning on assumptions that the Paris climate accords that came into force last week will largely fail.

It brushes aside warnings that fast-moving technology for electric vehicles and power storage may soon transform the energy landscape beyond recognition.

The group’s 2016 World Oil Outlook released today estimates that crude demand will rise by a further 16.4m barrels per day (b/d) to over 109m b/d by 2040, driven by economic booms in China, India, and the emerging economies.

Opec will enjoy the lion’s share of the expanding market, boosting its output of oil and liquids by 12.6m b/d. Production from the rest of the world will peak within a decade and then go into gentle decline.

The long-range forecast shows the Middle East strengthening its position at the epicentre of the oil industry, as output from US shale and Russian fields reach a plateau, and high-cost drilling in the Arctic and ultra-deep waters disappoints. Oil prices will double to $92 in today’s money by 2040.

The outlook is a far cry from the bombshell warnings by Shell last week that global crude demand could peak within five years, chiefly due to vaulting gains in fuel efficiency and the switch to zero-emission vehicles.

There is already a move in the German parliament with cross-party support to prohibit sales of the petrol and diesel cars by 2030, a move that could set off an avalanche. Volkswagen, Mercedes, and BMW are already joining the race for the electric car market.

Opec says it welcomes the climate deal and will play a part in delivering its goals, but the report’s base case explicitly assumes that countries will not meet their pledges – or even come close – and that business will continue more or less as usual for the oil sector.

It estimates that fossil fuels will make up 77pc of total energy demand in 2040, with solar, wind, and geothermal accounting for a still risible 4.7pc.

Coal will lose some share due to the Paris climate push, but oil and gas together will retain a 52.7pc share, exactly the same as today.

The assumption that there will be no serious disruption to their business models is a high-risk gamble for the oil states. There is already a G20 Task Force studying in the global financial risks posed by the fossil industry.

Mark Carney, the Governor of the Bank England and chairman of Basel’s Financial Stability Board, has warned repeatedly that fossil energy companies are booking assets that can never be burned under the maximum ‘carbon budget’ of 1000 gigatonnes stipulated by the Paris deal.

In a recent speech he said the energy sector faces a "technology revolution" that threatens to sweep aside the old order, noting that three of the four largest coal companies had already gone bankrupt. He suggested that other fossil companies could face the same fate if they fail to adapt in time, potentially leading to a "Minsky moment" or full-blown financial crisis for the world.

   http://www.telegraph.co.uk/business/2016/11/08/defiant-opec-bets-on-fossil-hegemony-deep-into-the-21st-century/ 

 

Unfortunately, for AEP’s credibility, OPEC are only forecasting what BP did in their Energy Outlook earlier in the year.

 

image

https://notalotofpeopleknowthat.files.wordpress.com/2016/04/bp-energy-outlook-2016-1.pdf

 

Remember as well that their Base Case is based on the Paris commitments being met, and not, as AEP incorrectly claims, assumptions that the Paris climate accords that came into force last week will largely fail.  

 

Even the International Energy Agency, biased towards renewable energy as it is, is forecasting that demand increases to 103 mb/d.  

 

image

http://www.iea.org/publications/freepublications/publication/WEB_WorldEnergyOutlook2015ExecutiveSummaryEnglishFinal.pdf

 

 

And if oil prices remain low, demand could increase to 107 mb/d.

 

 image

 

Add in the strong growth in demand for natural gas, projected by BP, and the OPEC estimates look pretty realistic.

 

image

 

 

AEP talks about zero emission cars, and German Parliament moves to outlaw conventional cars. He forgets that the EU is increasingly becoming little more than an irrelevant sideshow in global terms.

As for Mark Carney, we are perhaps entitled to question just what he has predicted right since he took the reins at the Bank of England. Certainly his wildly pessimistic forecasts about Brexit, both before and after the referendum, eroded what little credibility he had left.

Which just about leaves him in the same position as good old Ambrose Evans-Pritchard!

 

 

 

FOOTNOTE

I recall our friend AEP writing a few weeks ago that as far as  his predictions of oblivion for fossil fuels went, all bets were off if Trump won the election.

Say no more!

32 Comments leave one →
  1. Ian Magness permalink
    November 9, 2016 8:16 pm

    Oh you absolute cynic!
    Don’t you understand that, as Carnage carefully explained a week or so ago, the only reason why we avoided total disaster was that HE sanctioned a 0.25% cut in interest rates after Brexit day (wow!) and he did a little bit more QE.
    God you are so ignorant!

    • Gerry, England permalink
      November 9, 2016 9:56 pm

      And then at the last MPC meeting had to own up that their forecasts had been out by miles. They couldn’t actually admit that the rate cut and QE were wrong or to return the rate back to 0.5% or better still 0.75%. All their weasel words said was that guidance on a further rate cut was no longer valid. Carney has got nothing right and has damaged the economy with cheap credit for too long. Rates should have been 1% by now to signal a return to normality 8 years after the crash – yes, 8 years now.

  2. November 9, 2016 8:20 pm

    Re the footnote, I recall that we said at the time that AEP should give up writing about energy, a subject of which he is totally ignorant.

    • Athelstan permalink
      November 10, 2016 3:19 pm

      Dear old Ambrose,

      I used to have a lot of time for him, then he changed his tune on just about everything, I do think he was nobbled, someone, a force, the Bilderbergers, Club Davos behind the scenes got to him and in a big way.

      Metaphorically waxing, I think the PTB, the corporate elite bought him out, I suppose he thought – why not, why not hop onto and travel first class on the gravy train?

      Now he gushes about things he knows not of and almost in a cut and paste mode – lifted straight from the advertising blurb, are very poorly judged and researched articles at that.

      However AEP, he does speak some sense and will surely be proven correct about the impending financial calamity the like of which will be to say the least quite sobering but an essential and necessary correction of the leviathan banking derivative debt overhang, it will be a restoration, a rebalancing of world financial markets, AEP’s prognostications – some in which I totally concur.

      But the constant propaganda about bird mincers and PV cells, BATTERIES-storage fantasies of electric cars etc – makes you wonder if AEP isn’t on some sort of retainer paid for by either Brussels Energy direktorate? Commissariat, Dong Energy, Soros, Elon Musk, Qatar Gulf sovereign funds – or a combination of all of the above.

  3. Joe Public permalink
    November 9, 2016 8:27 pm

    He threw his toys out of the pram just over a week ago; he deleted his Twitter a/c @ambroseEP

    https://twitter.com/ambroseep?lang=el

    • Gerry, England permalink
      November 9, 2016 8:40 pm

      Perhaps too many people tried to educate the dimwit via Twitter.

  4. tom0mason permalink
    November 9, 2016 8:55 pm

    As global cooling starts to slowly kick-in, this nitwit will be thanking all who had the foresight not to abandon (so called) ‘fossil’ fuels for the stupidity of ‘renewables’, and did not swallow all this ‘sustainability’ dross.

  5. rifleman1853 permalink
    November 9, 2016 9:13 pm

    AEP’s rant makes me wonder; is this idiot under the illusion that the sole use of oil is fuelling cars and other road vehicles? If so, I don’t think Phillip Bratby goes far enough; AEP should quit journalism altogether!

    Around 40-50% of the crude oil which goes into a refinery comes out as heavy fuel oils (used in power stations and ships), lubricating oils, waxes and bitumen – does AEP think that electric cars don’t need lubrication? Let alone all the lubricants used in commerce, industry and the home! Yes, there are such things as lubricants made from vegetable sources, and – in certain specialised instances, such as esters used as hydraulic fluid – they have limited uses. But anyone who has worked in the field of lubrication (I have) can tell you that esters are a pain in the butt, suffering from moisure absorption and organic degradation at the drop of a hat, as well as being seriously damaging to many modern plastics and rubbers. And cheap, they are NOT!

    Also, 10-15% of refinery output is paraffin / kerosene. Yes, kerosene central heating systems could be switched to other energy sources – but what about jet aircraft, which use kerosene?

    And 20-40% comes out as naptha, a very valuable and widely used chemical feedstock, used to make a variety of other products ranging from plastics to make-up to fertilisers.

    Does AEP think solar panels and windmills are going to replace all of them, too? Or maybe a better question would be “Is he capable of rational thought?”

    What a prize pillock!

    • November 9, 2016 9:47 pm

      Unfortunately the prize pillocks have been ruling the roost for far too long in terms of energy policy. If Trump can burst their bubble he’ll be doing everyone a favour whether they believe so or not.

  6. Gerry, England permalink
    November 9, 2016 10:03 pm

    Toyota say they are going back to electric cars even though the Pious isn’t doing so well now (subsidy cut?). They are talking of a range of 180 miles. Now the problem with this is as bad as windmill output compared to capacity. I go touring on holiday and can sometimes do double that distance. But that may be a hot spell so the aircon is on. I am on motorways so getting a move on. How long will the battery last then? When the diesel needs topping up it is into the service area and out within 10 mins. Not with a battery so I will be forced to spend and hour there? That’s 80-90 miles off my day. And if everyone has an EV how are we all going to recharge? Welcome to the new f-nose how big motorway service area. 20 times? 30? 40? In peak time what is the throughput at the pumps? Sometimes the word ‘mental’ just doesn’t cover it.

    • Joe Public permalink
      November 10, 2016 12:04 am

      All pious Prius’s are hybrids & have got engines, so their ranges are ~400 miles

      https://www.toyota.co.uk/new-cars/index.json

      • Gerry, England permalink
        November 10, 2016 1:47 pm

        I know but having abandoned EVs they are now going back to them even though their hybrid is not rushing off the forecourts.

  7. It doesn't add up... permalink
    November 9, 2016 11:55 pm

    https://www.scientificamerican.com/article/no-plan-b-at-climate-talks-given-trump-win/

    Marrakesh, we have a problem…

    However, a withdrawal from the Agreement is not the only concern. The next president will dictate the success or failure of the Agreement in the United States. It will be nearly impossible for the United States to meet its INDCs if the next president rescinds the Administration’s climate efforts (as Mr. Trump has promised). The lack of sanctions or legally binding emission targets in the Agreement also means that the next president will not be bound to meet its pledged INDCs. Therefore, the success (or failure) of the Agreement and the U.S.’ ability to meet its INDCs depends in part on the outcome of the 2016 presidential election, the outcome of the CPP litigation, and Congress

    http://klgates.com/paris-agreement-to-enter-into-force-implications-for-enforcement-in-the-united-states-and-internationally-10-25-2016/

    It’s not just OPEC, is it?

  8. Bruce of Newcastle permalink
    November 10, 2016 12:18 am

    I always used to enjoy AEP’s articles but sadly in the last five years or so he has gone increasingly off the deep end especially regarding non-existent CAGW.

    So in case Ambrose is reading your blog Paul, I will remind him of the up to 23 trillion tonnes of coal under the North Sea.

    At the current annual global consumption of about 10 billion tonnes we can probably wait a millenium before anyone needs to look for more.

    Which century did he say fossil fuel hegemony would expire?

  9. Bruce of Newcastle permalink
    November 10, 2016 2:25 am

    While I’m on this stuff I am amused by this story today.

    Hurricane Energy spuds Lincoln well

    Aaand the newest onshore petrostate is…..Britain!

  10. John F. Hultquist permalink
    November 10, 2016 3:38 am

    Utopia is an imagined perfect place. This fellow, Ambrose Evans-Pritchard, seems to know where it is and how to get there.
    If he would spend time with a pencil, piece of paper, and a few minutes of simple arithmetic he could convince himself that his ideas are utopian, and will remain so.
    I’ll be happy to help for a fee.

  11. Ex-expat Colin permalink
    November 10, 2016 9:19 am

    O/T – Scots newspaper reports that an Aberdeenshire business owner has become POTUS..Who’d of thunk it?

    http://www.ellontimes.co.uk/news/aberdeenshire-business-owner-wins-presidential-election-1-4282745

    A friendly picture here, until some wind turbines came along.

  12. AlecM permalink
    November 10, 2016 10:28 am

    AEP is a good historian but like all economists, he is 50% of the time diametrically wrong.

    • AlecM permalink
      November 10, 2016 10:29 am

      PS did you not realise that every Economics’ graduate is supplies with a special coin to toss?

      • Russ Wood permalink
        November 10, 2016 1:09 pm

        I believe it was president Rooseveld who wanted a one-armed economist, who wouldn’t keep on saying “on the other hand…”.

      • Gerry, England permalink
        November 10, 2016 1:49 pm

        With 3 sides to hedge your bets.

  13. November 10, 2016 12:54 pm

    Well, “all bets are off”. I am one of the “deplorables” who campaigned for and voted for President-Elect Donald John Trump. Actually I was voting for the electors to the Electoral College. This is how the Founding Fathers kept smaller or less populous states from being overrun by, say: NYC, Chicago, Boston, LA……

    As I no longer have TV, I watched Trump’s acceptance speech on my laptop yesterday afternoon. The most poignant statement he made was: “I will not let you down.”

    We are so used to being jerked around. I expect it from the Democrats, but over the last 8 years it has been infuriating to watch members of my own party do it. If anyone wants to know why Donald John Trump will be the 45th President of the United States, this is it. We want the establishment swamp drained and the alligators sent packing.

    Tuesday, November 8, 2016 was the United States’ second BREXIT.

    • November 10, 2016 10:40 pm

      Think that he was the right choice for the USA in many regards, energy, trade, Russia, China and middle-east all very gone wrong under Obama. Can only get better!

  14. Green Sand permalink
    November 10, 2016 2:28 pm

    I wonder if AEP is long Vestas?

    “Vestas shares tumble after Trump election raises fears for US green energy”

    https://www.ft.com/content/9f53249c-ec00-331a-80c1-fb4e2510ec43

    • Athelstan permalink
      November 10, 2016 5:14 pm

      I dunno about long but someone certainly got ‘im by the shorts.

  15. Tom O permalink
    November 10, 2016 3:39 pm

    So German car makers are “racing for the electric car market?” Has it ever occurred to anyone that “rare earth metals” were called that because they were, well, sort of rare? And all current batteries, control circuits, and you name it electrical seem to require them? Do they seriously believe that the manufacturer of these devices can be sustained at a level that will allow all of Europe to be on electric powered cars in 20 years? Sort of like all of humanity will be able to be supplied by wind and solar power? It seems the expectation would have to be that there is going to be a lot fewer humans in 20 years for that to be so.

    • Bruce of Newcastle permalink
      November 10, 2016 9:42 pm

      Tom – Actually they aren’t really rare, or no more so that other metals like copper and lead. There’s more than enough easily mineable neodymium to build as many wretched wind turbines as anyone could possibly want.

      For a start the biggest known REE deposit on Earth is already a mine: Olympic Dam. It has about 80 million tonnes of REE contained in it, but they don’t bother extracting any because it isn’t worth their while – they just recover the copper, gold and uranium.

      I admit likewise I was wrong about lithium. I thought there wasn’t enough available for what the EV producers want. But once the miners actually started looking for the stuff it turns out there’re vast amounts of easily accessible spodumene ore. Seek and ye will find!

    • catweazle666 permalink
      November 11, 2016 12:23 am

      “Rare earth” metals are so-called because due to their atomic structure they are relatively difficult to refine, the extraction and separation require copious quantities of fairly nasty reagents and produce large quantities of toxic waste..

      They have a complete outer electron shell and increase atomic number entails adding an to an incomplete inner shell.

      https://en.wikipedia.org/wiki/Rare_earth_element

  16. Stonyground permalink
    November 10, 2016 7:15 pm

    I’m sure we are all familiar with the oft repeated lie that all climate change sceptics are in the pay of big oil and are simply spreading disinformation. The fact is, fossil fuel interests have no need to resort to such measures because they know that they are the only game in town for the foreseeable future. Of course, great reductions in CO2 emissions could have been achieved by switching electricity generation over to nuclear but nobody wants that do they?

  17. Gerry, England permalink
    November 10, 2016 8:24 pm

    Sadly it would seem despite a new PM our government are as deluded as ever about our energy supply as Barker (or should that be barking) talked about phasing out ‘unabated’ coal power stations. Yep, new one on me. I think we would know them as ‘normal’ as opposed to those that don’t exist using carbon capture. But somehow they think the UK is ripe for energy investment. Well, subsidised investment maybe. Nobody is offering to build anything between now and the mythical completion of Hinckley.

  18. Gamecock permalink
    November 11, 2016 4:38 pm

    Evans-Pritchard warning OPEC. Like Professor Dent’s warning:

    Dr. No: Sit down. (Dent obeys) Why have you disobeyed my strictest rule and come in daylight?
    Dent: I had to. Bond came to see me this morning.
    Dr. No: Yes I know. I gave orders that he should be killed. Why is he still alive?
    Dent: Our attempts failed.
    Dr. No: Your attempts failed. I do not like failure. You are not going to fail me again, Professor.
    Dent: No. I came to warn you.
    Dr. No: Warn me?
    Dent: Tell you. Bond has discovered those rock samples of Strangways came from Crab Key. He’s not a fool. He’s sure to come out here.
    Dr. No: I hope not. If he does, I shall hold you responsible. I make myself clear?
    Dent: Yes, quite clear.

    =============================

    ‘Dr. No: Warn me?’

    One of the best movie lines ever. AEP warning OPEC. How rich.

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