Fossil Fuel Investment Has Dropped By A Third Since 2015
By Paul Homewood
There was one chart I forgot to show from the IEA’s World Energy Outlook yesterday:
https://www.iea.org/reports/world-energy-outlook-2022
As we can see, investment in fossil fuels has fallen by a third since 2015 in terms of GDP. Part of this was due to the collapse in oil and gas prices in 2014, but undoubtedly the anti-fossil fuel agenda pursued across the West for climate reasons has had a major impact as well.
Either way, this is the real reason why prices have rocketed, not the invasion of Ukraine.
Further evidence can be found in Fig 1.3, which shows that investment has remained steady in countries without a Net Zero pledge:
The real concern is that we are only seeing the early signs of much worse to come. When the cuts in fossil fuel investment really start to bite and existing oil fields begin to dry up, there will be a catastrophic energy crisis. Shortages will be very real and prices will rise well above today’s levels, as demand stays high and we find that renewable energy simply cannot keep up with demand.
The IEA’s naively oversimplistic projections simply assume that building wind and solar farms will do the trick. But the world is a complex place and does not work like that.
The Russian invasion of Ukraine has given us a warning. We had better not ignore it.
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NOT A LOT OF PEOPLE KNOW THAT 
I wonder if the numbers were estimated by adding up investments by fossil fuel companies versus investments by alternate energy companies. Doing that could be deceptive because fossil fuel companies are also in the alternative energy business and a growing percentage of their capital investments are for alternative energy projects.
“The IEA’s naively oversimplistic projections simply assume that building wind and solar farms will do the trick. But the world is a complex place and does not work like that.”
The IEA (and others) apparently do not seem to understand that wind and solar farms don’t just pop up like mushrooms. Their delivery and installations require conventional transportation vehicles that run on the fossil fuels they are urging us to reduce to zero emissions by 2050. We cannot continue to make the transition to those renewables and electric transportation without reliable sources of oil. A little reality in this complex world would help.
Don’t forget the extortionate levels of TAX at point of sale.
Oil and gas upstream services have contracted 60-70% since 2014. My own small company finally succumbed this year, we entered creditor’s voluntary liquidation in August.
So from a £1 million a year profitable turnover employing 12 people, all graduates, some PhD & MSc to 5 years of breakeven pain and 50% staff losses, to closure after 20 years in business. Unemployed since last salary July to date.
Same everywhere in the upstream exploration part. Money only currently in development & production
Oil and gas has always been cyclical but this downturn has been artificially prolonged by the Government.
Yes, I have been through multiple boom/busts cycles in my career over the last 40 years or so. But agree this one is much longer because I think the oil companies are keeping their powder dry. The downturn following oil price collapse 2014 should have lasted to around 2017, but its not, its been extended with almost continuous cuts in the upstream service sector. Then the Covid reaction suppressed demand, so the issues of falling supply and growing demand was felt with a vengeance since November 2020.
Lots of geophysics jobs in offshore marine site survey for wind turbines. Or lectureships in climate etc. Or climate change NGO’s.
Consulting is picking up now, the UK licensing round has stirred some local interest but the fracking moratorium will shut it down indefinitely. Most of my work now the data is coming from Africa/Guyana/Surinam etc.
To add to this the total lack of investment in oil refineries (eg. the US has not built a large one since the 70s!). We will be buying refined products from e.g. Egypt and if we impose a carbon tax then imported gas and oil products will further sink our economies in the West.
The goal is first to destroy then control energy ….. the most important aspect of industrialization and Capitalism. Socialism = taking from those that earned it and redistributing to those that want it.
That was the strategic objective of Greens & enviros.
The greens and the enviros are not smart enough to have a strategic objective.
They just keep pushing at what is virtually an open door …..
Never underestimate their desire to screw-up society.
This has long been a concern. Good news is that Shell paid no windfall profits tax so far. That means it has reinvested its profits. Let’s hope for more production soon.