Thursday's Absurdity: The Coming ESG-Induced Energy Crisis is Inevitable
Rystad Energy reports that global oil and gas discoveries will hit their lowest point in 75 years during 2021.
The linked story at NGI notes that:
Total discovered volumes through November were calculated at 4.7 billion boe, according to an analysis by Rystad Energy. No major discoveries had been announced through the first three weeks of December, setting the industry on course for its “worst discoveries toll since 1946.”
By comparison, around 12.5 billion boe was unearthed around the globe in 2020, the consultancy noted.
This finding is the inevitable outcome of a massive under-investment in the finding of new oil and gas resources since 2015, a spending deficit which Rystad estimated earlier this year to have now accumulated to upwards of half a trillion dollars. That gargantuan amount of under-investment is not something that can be corrected in the near-term. By comparison, ExxonMobil plans for its entire annual capital budget from 2022-25 to come in at $20-25 billion per year.
The next inevitable outcome of this lack of investment needed to find new reserves to meet future global demands for oil and natural gas will be a major supply/demand trainwreck that will create a severe energy crisis sometime in the next few years. If the rising global demand trend continues in the coming years, that trainwreck will come no later than the 2023/2024 time frame.
If you think U.S. prices for gasoline or European costs of home heating and electricity are high today, just wait until you see where they are come 2025, after prices for oil and natural gas have tripled from current levels.
When that inevitable event comes about, you should all give a call to your favorite ESG investor group executives at firms like BlackRock, UBS, JP Morgan Chase and State Street and thank them for playing such a major role in creating the energy disaster you will all be living through.