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We are confronting another huge challenge and, like climate change, it has been encroaching for years. In concert with global warming, and in an unholy alliance, comes the decline of oil and gas.

For thousands of years slaves and cheap labour supported civilisation but, following the Industrial Revolution, humanity began to thrive on stored solar energy contained in coal, oil and gas. Used for transport, heat and cold, and materials too, notably concrete, metals, plastics and fertilisers, fossil fuels have increased human capacity a hundred fold and our standard of living, indeed our capacity to stay alive, now depends on them as we burn through 16 billion of tonnes a year, releasing double that weight of carbon dioxide into the atmosphere in the process.  But, although huge volumes remain in the ground the easy pickings are long gone. The new stuff is deeper in the earth, deeper under water, and in remoter, more formidable environments.

Still, this is not the whole story. This is not where the real challenge lies.

Over the last 50 years, as demand for oil and gas soared and supply routes multiplied, ever more sophisticated equipment was required for extraction, processing and transport all of which needed energy, and lots of it. As a consequence the Energy Return on Investment (EROI); the ratio of the amount of energy delivered from a resource to the amount used to obtain that resource, has fallen precipitously and is still falling.

The EROI, this is the challenge.

Of course there is no doubt, at least for most of us, that burning fossil fuels damages our environment. We face an existential threat to the world’s current climate balance on which 8 billion people relies.  So, while the net energy content from fossil fuels dwindles, we must find new cleaner sources which also require substantial amounts of energy to exploit and other things too such as uranium, graphite and rare metals, for magnets, batteries, and electronics.

Less net energy, scarce materials, resource nationalisation, high costs and inflation. It is a recipe for human hardship and, of course, resource wars. And what are we doing to counteract this perfect storm? In regards to EROI, not much at all.

The energy and transport industries are developing alternatives, experimenting with carbon capture and converting to electrified transport. But some organisations are making things worse, attempting to ‘stop oil’ and damage economies in countries most active in mitigating the problems. A reduction in the financial strength of commercial organisations and governments reduces their capacity to pay for new technology and infrastructure and other strategies to mitigate the effect of a changing climate.

 We should all feel free to persuade (or force) humans to use less energy for leisure activities but careless attempts to cut essential supplies through bans and boycotts can kill people more quickly and efficiently than climate change ever could.  Make no mistake ‘clean’ energy supplies are still insufficient to meet our needs. Only by retaining fossil fuels in controlled decline while expanding renewable and mitigation strategies can human death and destruction be, perhaps, avoided.

Falling EROI is happening. Climate change is happening. But surely we should also work to provide sufficient energy for all our 8 billion people. Like it or not, fossil fuels remain fundamental to the existence of our crowded human world.

A transition to cleaner energy

Over the years the owner of has written many articles and given numerous presentations on oil and gas supply, industry activity and the transition to cleaner energy.

The selection listed on the right of this page demonstrates how his and industry perceptions have changed in 3 decades, with proper analysis of ‘The Energy Shift’ first appearing in 2005.

In the 1980s and early 1990s his recurring themes were technology and growth. New frontiers of science and of geography were discussed, with investment only disrupted by volatile demand. Analyses were unfettered by global resource constraints or environmental concerns.

From the mid 1990s the focus moved to discussions of future oil supply and demand with clear recognition of the twin threats of dwindling cheap resources and environmental change. Forecasts were simple, tending to be pessimistic. Traditional exploration areas were declining in both number and potential whilst new technology appeared unable to make up for dwindling opportunity.

By 2005 these analyses had expanded to include more detailed scientific breakdowns of all conventional and unconventional oil supplies coupled with the implications of demand fluctuations, price issues, new technologies and climate change.

A future supply gap was identified and quantified while noting the urgent need for additions to fossil fuel types, such as from shales and oil sands, along with replacements from other energy sources.

In the longer term the trend for unconventional fossil fuels to become more valuable was recognised but with the awareness that they would be unable to fully offset decline of conventional oils for some time to come.

Moreover, the balance would be disturbed by increased public activism against fossil fuels based on their damaging environmental effects. The sense of an impending ‘energy transition’ was sign-posted recognising that fossil fuels will be needed for years to come as humanity depends on them for survival. Much of this was still ignored by most of the large oil and gas companies.

The owner expected “rapidly rising prices after 2010 accompanied by painful conservation.” He commented that “predictions that oil demand will increase to 120 mn b/d by 2020 [by the EIA] are futile and damaging to policy makers.” Articles were built around how the industry could and should deal with change, especially by developing new energy sources.

Drilling and spending levels were also examined, allied to forecasts of cost escalation. The relative importance of new geographic frontiers (such as deep waters) and technological frontiers (such as horizontal drilling) once again became central to the analysis of future supply.

After a deep recession in 2008, the world appeared resigned to volatile prices even though alternatives were being exploited, including large volumes of oil (and gas) from tight (usually shale) reservoirs.

To add to this, demand was fluctuating during price peaks and a future of price volatility was expected - and still is. By late 2014 the world was entering a deep oil price trough with activity in high cost environments collapsing, even as service costs plummeted.

The ‘Energy Shift’ (forecast by the owner in 2016 in many early articles and commercial reports) had begun.

At the end of 2016, OPEC and a number of other countries including Russia, alarmed by persistent lower oil prices, began to establish new rules to attempt to restrict output once again, albeit aware that oil shales in the USA were waiting in the wings to fill up any shortfalls.

Such a scenario continued until the 2020 pandemic when demand and price plummeted and then, post the pandemic, the Ukraine invasion by Russia led to a dramatic price increase. Some sort of stability was achieved in 2023.

In this environment repeated waves of price peaks and troughs are inevitable. In the future resources will be shared amongst growing, affluent populations living under the dual threat of resource wars and environmental (and other) disaster.

*To control forecasts and constrain data sets, Globalshift has introduced the concept of the ‘Energy Shift’ to replace the term peak oil, once used to describe oil use growing to a peak and then declining.

The ‘Energy Shift’ obviates the use of other terms by some commentators such as peak supply and peak demand. These are simplistic ideas adopted in the mistaken belief that eventual decline in fossil fuel use will only be controlled by a single trigger.

Nevertheless, of course, as part of the Energy Shift, peak oil (including peak demand) will be in existence when oil discovery and extraction costs (Capex and Opex) exceed the value (the amount most of us are willing to pay) of the refined product.

Technological Drive for Marginal Field Development

Petromin Asia

Jul 1986

Lessons from the rush to Yemen

Asian Oil and Gas

Feb 1993

Remote Control: The cost of modern communications

Asian Oil and Gas

Jun 1993

The Consulting Business: How both sides can win

Asian Oil and Gas

Oct 1993

Upstream Technology Special Report: Part 1

Petroleum Argus

Jul 1999

Upstream Technology Special Report: Part 2

Petroleum Argus

Aug 1999

Oil Energy Security in the Asia-Pacific Region

Petromin Asia

Apr 2002

Energy Security in Europe Petroleum Review

Aug 2002

US oil supply vulnerability

Offshore Magazine

Aug 2002

When Will Oil Supplies Peak

Scandinavian Oil and Gas Aug 2004

Putting paid to unrealistic demand predictions

Petroleum Review

Oct 2005

Resource Depletion: Modeling and forecasting oil production

Modeling Transitions

May 2006

Spending surge for drilling

Petroleum Review

May 2006

The cash activity conundrum

Asian Oil and Gas

Jan 2007

Filling the oil supply gap

Petroleum Review

Feb 2007

Who gets what in offshore drilling: Part 1

Drilling Contractor

Jul 2007

Who gets what in offshore drilling: Part 2

Drilling Contractor

Nov 2007

Escalating offshore expenditure expected

Offshore Magazine

May 2008

Deep water can maintain oil production: But for how long?

Scandinavian Oil and Gas

Jun 2008

Declines are happening but they should be short-lived

Scandinavian Oil and Gas

Nov 2009

Forecasting oil and gas supply and activity

The Oil Age

Jan 2015

Selected articles

The Website

The Energy Shift

Climate Change

The Tagline

The Novels

The Terms