US an Oil Concern?
I just want to come right out and say it; oil is a dying industry.
Here is the article which triggered this.
And here is my problem with it. Oil was once in such high demand that the only thing which determined a countries success was how much they could pump. The US couldn't take Canadian oil contracts because the US couldn't supply it fast enough to meet the demands.
THAT is how drastically the tables have turned. Every major oil producing country is now able to produce more than they need and we're now to the point of competing on taxes and pricing.
Now, this wouldn't be as surprising if this were brought about by the US or other countries producing ever increasing amounts of oil. But it isn't. Global demand is simply declining. In fact, most countries are producing less than they were in the not so distant past. Many operations have shut. And they are still producing more than they need domestically.
I remember when Ireland had their referendum on separating from the UK. Their economic plan basically revolved around oil. Then, like 2 months after the referendum failed... oil shot through the floor. And while things are getting better, the situation still hasn't returned to those pre-referendum levels.
My point at the time is the same as it is now. STOP PUTTING ALL YOUR EGGS IN ONE BASKET. Oil WILL NOT save you!
I'm not saying governments shouldn't do anything. Or that people in those jobs should just accept their livelihood is gone. Governments need to take measures to ensure we ease out this as smoothly as possible, but not even the government can control all of the variables. So, if you're in the field... well, you really should be seeing the need for a career change as a very real possibility. If you have no plan B, you may very well be unemployed in the not so distant future.
It isn't going to happen because I'm saying this. Or because I want it to happen (though I do). It is going to happen, because it is going to FU**ING happen.
Besides the US, China is the second largest consumer of oil right now. This is a big deal because China is not a huge oil producing nation. And China is leading in solar and many other renewables. They are committed very strongly to reducing their dependence on oil. Japan is another one in the top 5. The EU as a whole would be second. All of these places are fiercely committed to reducing their dependence on oil. Some, for very selfish reasons; China for instance likely doesn't like being so heavily dependent on outside nations, and if they can become the primary source of the next energy revolution, they can further improve their global economic standing. Much of the EU on the other hand is largely seeming motivated to curb global warming. Though, undoubtedly, even they have financial motivations.
Whatever the reasons, if you combine the EU, China and Japan alone, that accounts for well in excess of 25% of the global consumption of oil. That is bonkers. Combine that with the fact that even countries like the US and Canada are shrinking in their demand as people seek ever more efficient cars and solutions to other things.
It'll be a long time before Canada and US effectively cut their dependency on oil. But, the market is contracting and will continue to do so. When those other 3 large areas cut their dependency on oil it will rock that industry.
When the market contracts, the prices will go up. This will drive consumers to demand yet more efficient vehicles or EVs. Which will drive the demand down more. Which will drive the cost up more. We're at the beginning of that cycle now.
The signs are clear though. Governments spent years driving up the cost of gasoline through taxation both domestically and through tariffs because it didn't matter. They were going to get paid. Something stupid like 1/3 or more of the cost of gas here in Ontario is taxes. The demand for gas and other petroleum products was so high that governments can tax it at 4-5x the rate of anything else, and for YEARS the demand continued to grow.
Demand is SOOOOOO bad now, that governments like ours in Canada who once had no concerns are racing to the bottom in a number of areas just to entice other nations to continue to buy their crude and refined products.
If you think there is anything you can do long term to protect this industry you're out of your mind.
And when you consider the environmental and health impacts you almost have to wonder if it ever made sense. I mean, sure, financially it made a ton of sense to the workers. These companies couldn't charge enough to stem the outward flow and this resulted in an industry which could afford to pay low education workers INSANE amounts of money.
I'm still in shock and awe of those with just a high school education or less who bitch and moan that they might not be able to find work paying comparably again once this industry dies. If it sounds too good to be true, it probably is. You were being paid more than you were worth. It sucks. But it is another reason why the industry is tanking. Especially in North America. With demand drying up, oil companies either need to scale back or focus on areas where the same can be achieved for less.
I don't want anyone to lose their jobs. But it is a fact of life. It happens. And, ignoring clear signs that it is going to happen... is no one's fault but those who choose to ignore them despite the impact it will have on them.
Here is the article which triggered this.
And here is my problem with it. Oil was once in such high demand that the only thing which determined a countries success was how much they could pump. The US couldn't take Canadian oil contracts because the US couldn't supply it fast enough to meet the demands.
THAT is how drastically the tables have turned. Every major oil producing country is now able to produce more than they need and we're now to the point of competing on taxes and pricing.
Now, this wouldn't be as surprising if this were brought about by the US or other countries producing ever increasing amounts of oil. But it isn't. Global demand is simply declining. In fact, most countries are producing less than they were in the not so distant past. Many operations have shut. And they are still producing more than they need domestically.
I remember when Ireland had their referendum on separating from the UK. Their economic plan basically revolved around oil. Then, like 2 months after the referendum failed... oil shot through the floor. And while things are getting better, the situation still hasn't returned to those pre-referendum levels.
My point at the time is the same as it is now. STOP PUTTING ALL YOUR EGGS IN ONE BASKET. Oil WILL NOT save you!
I'm not saying governments shouldn't do anything. Or that people in those jobs should just accept their livelihood is gone. Governments need to take measures to ensure we ease out this as smoothly as possible, but not even the government can control all of the variables. So, if you're in the field... well, you really should be seeing the need for a career change as a very real possibility. If you have no plan B, you may very well be unemployed in the not so distant future.
It isn't going to happen because I'm saying this. Or because I want it to happen (though I do). It is going to happen, because it is going to FU**ING happen.
Besides the US, China is the second largest consumer of oil right now. This is a big deal because China is not a huge oil producing nation. And China is leading in solar and many other renewables. They are committed very strongly to reducing their dependence on oil. Japan is another one in the top 5. The EU as a whole would be second. All of these places are fiercely committed to reducing their dependence on oil. Some, for very selfish reasons; China for instance likely doesn't like being so heavily dependent on outside nations, and if they can become the primary source of the next energy revolution, they can further improve their global economic standing. Much of the EU on the other hand is largely seeming motivated to curb global warming. Though, undoubtedly, even they have financial motivations.
Whatever the reasons, if you combine the EU, China and Japan alone, that accounts for well in excess of 25% of the global consumption of oil. That is bonkers. Combine that with the fact that even countries like the US and Canada are shrinking in their demand as people seek ever more efficient cars and solutions to other things.
It'll be a long time before Canada and US effectively cut their dependency on oil. But, the market is contracting and will continue to do so. When those other 3 large areas cut their dependency on oil it will rock that industry.
When the market contracts, the prices will go up. This will drive consumers to demand yet more efficient vehicles or EVs. Which will drive the demand down more. Which will drive the cost up more. We're at the beginning of that cycle now.
The signs are clear though. Governments spent years driving up the cost of gasoline through taxation both domestically and through tariffs because it didn't matter. They were going to get paid. Something stupid like 1/3 or more of the cost of gas here in Ontario is taxes. The demand for gas and other petroleum products was so high that governments can tax it at 4-5x the rate of anything else, and for YEARS the demand continued to grow.
Demand is SOOOOOO bad now, that governments like ours in Canada who once had no concerns are racing to the bottom in a number of areas just to entice other nations to continue to buy their crude and refined products.
If you think there is anything you can do long term to protect this industry you're out of your mind.
And when you consider the environmental and health impacts you almost have to wonder if it ever made sense. I mean, sure, financially it made a ton of sense to the workers. These companies couldn't charge enough to stem the outward flow and this resulted in an industry which could afford to pay low education workers INSANE amounts of money.
I'm still in shock and awe of those with just a high school education or less who bitch and moan that they might not be able to find work paying comparably again once this industry dies. If it sounds too good to be true, it probably is. You were being paid more than you were worth. It sucks. But it is another reason why the industry is tanking. Especially in North America. With demand drying up, oil companies either need to scale back or focus on areas where the same can be achieved for less.
I don't want anyone to lose their jobs. But it is a fact of life. It happens. And, ignoring clear signs that it is going to happen... is no one's fault but those who choose to ignore them despite the impact it will have on them.
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