There are a lot of good lessons to learn from the George C. Scott version of ‘A Christmas Carol’, not the least of which is: a life spent accumulating wealth without leaving the world a better place ends up with 3 spirits creeping you out on Christmas Eve.  Here’s what they would have said this year.

Christmas past: oil and gas has been a cyclical industry, on the verge of death many times but always coming back on the back of technology (deeper, denser, cheaper, frac’er) and price.  

Christmas present: this time, it’s different. In my view, technology advancement is at the end.  Sure, can some technologies reduce 5% of cost or improve recoveries 5% (remember, EOR was the new life in 2005 before shale, when we were declining). I think we are at the end of the road for “new resource accessed by new tech”. From here on in, NA will always be the marginal bbl and that will change the discussion in 2020.

Christmas future: declines in US oil production, retiring of coal plants and the realization that renewables have lots of downsides too (lithium mines, erosion of turbine blades, proximity to centers of use needs transmissions) will make fossil fuels part of the solution and less of the problem as the debate turns to efficiency and consumption, not supply. 

#hottakeoftheday