Within the next few decades, we will see the oil majors facing a similar fate, unless they've transitioned to other energy tech.
New technology can seem impossibly expensive, but if it's on a consistent tech curve of decreasing costs, it's impossibly expensive one day and then the only option the next. There's a non-linear transition when the new tech becomes the cheaper one.
We are seeing electrical energy storage following that curve. In the right geographic locations solar and wind are far cheaper sources of energy than anything else. If hydrogen from renewable energy, or methanates hydrogen (ie natural gas made from renewable energy) becomes cheap, it will eliminate all oil extraction except for things like plastics. And without selling diesel and gasoline, will it be worth it to pull out the oil instead of synthesizing plastics?
The world is changing, and there are currently a ton of investments in natural resources that will never be extracted.
> Within the next few decades, we will see the oil majors facing a similar fate,
I'm wondering what is the consensus about this statement. AFAIK solar and wind may be cheap at the margin, in specific areas, when they are supported by coal/nuclear. But can we reasonably think they can replace fossil fuel at a large scale in a near future? I have little knowledge on this issue, but I heard reasonable experts [1,2] saying it was doubtful.
It's so weird to me that people read "Without Hot Air" and think that it is pessimistic about renewables. It's a perfect example of what I'm talking about here. It was written long ago. Read it again, and insert modern numbers, and the unbelievably expensive scenarios are starting to become the reasonable ones.
Add in other tech like HVDC, and as I said in my post, conversion of electrical energy into chemical energy storage in hydrogen or methane, and it all becomes quite feasible.
Why is coal dying over the past 5 years? Because huge government subsidies kick started fracking technology which ended up making US natural gas incredibly cheap, as the tech descended the cost curve.
Why are solar and wind the cheapest (non-dispatchable) electrons in much of the US? Because we are far enough along on the tech curve.
Why are solar+storage and wind+storage project bids for 2022 and 2023 coming in under the cost of combined cycle gas turbines? Because lithium ion batteries are transitioning to cheap from impossibly expensive, particularly as vehicle demand drives massive scale up in lithium ion battery production.
All that stuff in "without the hot air" that made it hard in the UK is coming within reach. And the UK is pretty much one of the worst possible situations for solar, one of the main legs of renewable tech, and it will still work out. Offshore deep sea wind is getting super cheap and it has much better intermittency properties, making it require even less daily storage . seasonal storage still would be great to minimize overprovisioning of generators, but how much we overprovision versus how much we store will just be a cost optimization between the relative prices.
One other thing, is that it's really really easy to get suckered into cost estimates for nuclear that are 3x lower than true costs. For example, in "Without the Hot Air" the Plan M has 45GW for £60B, based on the Finnish Olkiluoto plant:
This plant is a good example of a typical nuclear project. It was slated to be open in 2009, within the scope of HotAir's publication, but instead, it's now more than 10 years late, 3x over budget, and "expected" to open in 2020, but who knows how much that will get delayed.
The UK has tried to build a few more reactors, starting with Hinkley but also more planned. Hinkely is turning into a disaster, and for the further plans they can't even find any contractors that are willing to build nuclear anymore. It's failing from all sides, even when governments are eager to write checks.
This is endemic with all nuclear construction, and why nuclear will play nearly no role at all in mitigating climate change. Not because it's stopped by fear and public panic, but because those who try to build nuclear fail and cause massive financial losses.
If we could build nuclear like we have in the past, it wouldn't necessarily be much better. There's a survivor bias about the reactors that did get built, and for every success there's enough failure that discourages new attempts. I always hear France and South Korea cited as outliers, but South Korea's success is turning out to be a story of deception and corruption, and I've never had a chance to fully investigate France. Nuclear succeeds when the government needs to build nuclear weapons, and has massive government backing; when nuclear is on its own in the marketplace it doesn't do so well.
Meanwhile, the alternatives to nuclear are getting cheaper, faster to deploy, and can be scaled large or small. They will allow developing countries to deploy electricity without having to build massively expensive transmission grids, so it's likely that large parts of the world will leapfrog like they have with wireless cell phone technology.
and that is why I didn't go into O&G as a ChemE after graduating. The writing was on the wall with Iraq, Tesla, renewable installations, climate change, etc
New technology can seem impossibly expensive, but if it's on a consistent tech curve of decreasing costs, it's impossibly expensive one day and then the only option the next. There's a non-linear transition when the new tech becomes the cheaper one.
We are seeing electrical energy storage following that curve. In the right geographic locations solar and wind are far cheaper sources of energy than anything else. If hydrogen from renewable energy, or methanates hydrogen (ie natural gas made from renewable energy) becomes cheap, it will eliminate all oil extraction except for things like plastics. And without selling diesel and gasoline, will it be worth it to pull out the oil instead of synthesizing plastics?
The world is changing, and there are currently a ton of investments in natural resources that will never be extracted.