Quote:
Originally Posted by Mr.Coffee
I don’t have an issue with investing in renewables.
I don’t think you have this right. I think people have been calling “peak oil” since the ‘70’s or maybe even earlier. Oil is going to be around a long time. Same with gas and derivative products from those substances. There’s thousands of them. You also have developing countries that don’t give a #### about climate change and who’s standard of living is catching up to western places so I don’t think just based on the math you have the whole peak oil thing correct. Coal is still used in massive quantities, I think demand is like more than ever?
It would be a huge mistake to continue fumbling the ball on oil and gas. Especially when it’s such a huge geopolitical lever with the USA.
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Back in the '70s and '80s everyone thought we were going to run out of oil. It was all about when we would hit "peak oil supply" and then run out of reserves.
Now the conversation is about "peak oil demand", which implies that the supply will still be there but the market will be displaced by alternative technologies. As demand peaks and starts to decline, the profits will start to decline and the prices will drop as the cheapest suppliers will try to squeeze value out of the remaining market and essentially kill off the more expensive producers.
If the Oil Sands production stays profitable at $20/barrel, then things will get tighter and tighter as the prices go down but the market here will not crash. The moment that the Saudis or whoever pushes the price down to $15/barrel or $10/barrel then that is game over for Alberta.
Also, if you look at those developing countries, a lot of them are looking to leapfrog into electrification. With the new technology advancements and lowering cost of green technology it is becoming more and more reasonable for them to go green immediately and skip having to invest a bunch of money into legacy combustion technology just to have to invest a bunch more money to replace it all. A lot of the developing countries are in good locations for solar and wind which also makes it easier for them to go straight to those options instead of trying to stand up a coal plant or whatever. So while they might not care about the climate, they definitely care about effective spending of their money.
(In short, they are not stupid)
Fumbling the ball with oil and gas won't matter if the industry dies, but if we double and triple down on oil and gas and then the O&G industry crashes then the province would quickly become a "have not" province relying on equalization payments to come our way just to survive. Our priority should be diversification above all else.