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Showing posts from April, 2020

How to create a resilient Oil & Gas industry

Use Less As part of the current crisis, oil usage is down, and storage around the world is filling up, to the point that oil has traded at negative prices.  As a reaction, many Republican lawmakers want to bailout the oil industry, by providing free access to storage or no-collateral loans.  While it would make sense to ensure oil doesn't get dumped in the ocean, the right way to do that is by producing less oil. These proposals from the Republicans undermine the motivation for the industry to do so.  Workers are important, but they have the same access to unemployment as the other 25 million Americans who are out of work.
What this crisis should illustrate is something that has been illustrated many times before, the oil industry is a fragile thing.  In the past this fragility has been demonstrated by massive spikes in prices and fears of shortage, in this case it's the inverse.  Why the fragility?  The simplest explanation is, we use too much.  
In a world where oil consump…