re: BP Slashes Dividend For First Time In Decade

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Two reasons: the first is that the momentum in the other direction may simply be too strong at that point to reverse. But the other is the phenomena you described in which it is now the oil and gas majors who are helping swing the pendulum in favor of clean energy because they feel as if they have no other choice.

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Correct. I think the generous view of the O&G move into "cleaner" energy is that, they want to become true "Energy Companies" that can integrate the emerging green tech, which is spotty and unreliable, with existing FF tech. If they can become the energy partner of choice, they get the best of both worlds. And when the day of reckoning comes, where a particular country elects a particular set of leaders who are hell bent on getting rid of O&G, they won't be able to cut the head off the monster, because they'll then lose all of their green technology. O&G majors want to be in bed deep...such that they become indispensable. That's why that balance sheet is so important. They can play that long game to ensure they'll still be around.

A quick scan of the internet (so it has to be accurate) seems to indicate that so called experts predict oil demand to peak in the next 10 years and natural gas demand to peak around 2040. The innovative O&G companies will new find markets and remain viable. History repeats itself in sometimes slightly different ways. Standard Oil went through this before when the electric light took the place of kerosene. They then focused their efforts on gasoline as cars became the norm. The large R&D oil companies are shifting their focus on other areas already.

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A quick scan of the internet (so it has to be accurate) seems to indicate that so called experts predict oil demand to peak in the next 10 years and natural gas demand to peak around 2040. The innovative O&G companies will new find markets and remain viable. History repeats itself in sometimes slightly different ways. Standard Oil went through this before when the electric light took the place of kerosene. They then focused their efforts on gasoline as cars became the norm. The large R&D oil companies are shifting their focus on other areas already.

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That's exactly right, but you'll have winners and losers in the process. And you'll have winners and losers at the employee level, too. One thing that amazes me is the tunnel-vision people in the industry have on these issues, particularly in politically reddish areas like Houston and South Louisiana. People in a particular industry should have an edge when it comes to recognizing tectonic shifts in the marketplace. For whatever reason, though, I've not seen many mid-level O&G types who are anything but bullish on fossil fuels.

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One thing that amazes me is the tunnel-vision people in the industry have on these issues, particularly in politically reddish areas like Houston and South Louisiana.

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It has nothing to do with political affiliation and more to do with the fact that most cities or regions will gladly whore themselves out for whatever they believe will bring in money to the political coffers (casinos, industry, events, etc). It will temporarily, but will result in a financial or quality of life ceiling that can never be broken. Different subject, of which I’m sure many will disagree with me on, but Louisiana has cities that epitomize that. Shreveport literally rolled the dice thinking people would flock to live there if they built casinos. New Orleans can’t figure out why people don’t want to move their to raise families. Oil and gas made Houston what it is. However, to avoid one day becoming Detroit, it needs to continue to diversify its economy. No city or region should put all their eggs in one basket.

Anyone younger than 40 that's in O&G, raises hand, is pretty bearish on the longterm career viability of the industry. Many like myself are looking to jump to another industry.

I don’t plan on jumping industries and I’m less than 40. I think the current environment is tough, but no one out there is paying what I’m getting now. Not without taking on some substantial risk (tech, start up).

I liked the prior conversation on long term prospects and the giants positioning themselves to be more integrated/wholesome energy providers. Kind of hedging you’re bets in some ways. I still strongly believe that there is still no solution for plastics, consumables, etc as a cheap and effective material. Same with energy density for the liquid products. People will shite when they finally realize how immersed O&G is one very day life (that isn’t just powering your car) and how expensive it will be to reduce consumption.

Sure, it’s easy to buy the Tesla now and scream renewables. But the whole damn car is made from O&G products and is powered from electricity likely from O&G as well. It’s laughable.

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When the requirement to be able to produce those goods becomes carbon neutrality

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Yeah, but what he is saying is that is not feasible. Pretty much all modern materials have some type of hydrocarbon based chemical. Too long of a discussion for money board, but unless we want to go back to using whale oil and animal fat for lubricants, only wood as fuel and materials, etc. O&G isn’t going away. It’s too cheap, plentiful, and too embedded in our lives. Probably 99.9% of people don’t realize how much every part of their lives involves hydrocarbon based items. Governments can mandate whatever, but as with everything that supposedly becomes the law of the land, there will be a huge list of exception industries that will continue to use O&G based products. The rules will penalize and favor particular industries and classes so money can be funneled to the political coffers. Meanwhile another civilization ending concern will arise so they can all declare the sky is falling once again for political gain.

And that wasn’t a rant. LOL

I really am trying to get your point and I thought I had it.

I understand regulations coming into play like carbon neutrality. Either the price of goods for those same items will be unacceptable (e.g., plastic Tesla now costs x4 what it used to in order to buy carbon credits or to manufacture with more expensive technology used to make plastic at lower carbon emissions). OR the alternative material will also cause the price of the Tesla to go up (E.g., all aluminum and/or wood vehicle). People will say WTF

If governments subsidize to push out major, private oil companies...well, money doesn’t grow on trees. That economic policy options are too vast for me to comprehend. Inefficiency can’t win out here. If it does, it will be at the expense of another government program and unsustainable longer term

ETA: all this goes away if new tech comes on board that can replace oil based products at a similar price point

The oil companies that survive this down turn and also have any RD in to effective energy supplies for the nikolas and teslas of the world will be king in the next 10 yrs.

The game changer will be business travel being reduced forever post covid. And if holographic technology ever happens, office space for meetings is done.

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I really am trying to get your point and I thought I had it.

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We may be talking past one another. No worries -- I'll try to clarify.

Whether or not you agree or disagree with the movement that's happening, we have two dynamics at play. The first is a social movement that's applying pressure to government, leading to many governments to slowly (but surely) ratchet up restrictions and requirements with respect to greenhouse gases. The second is a demand dynamic, where we use to think that the first world would continue their love of FF-based products, like plastics, and the emerging markets would eventually surpass the first world. That's simply not happening. There's a demand collapse afoot, mostly caused by COVID-19, but many of these companies have data that suggests it won't recover at the same level.

For both of those reasons, there's pressure for firms to adapt. All I'm saying is that the majors see the squeeze that will happen. They want to emerge on the other side of it, to preserve their "dirty" businesses, but integrate the clean tech to allow it to thrive on the other side. The smaller, private firms will pick up the profits in the near term, but once the globe makes the transition, they won't be able to compete.

You can disagree with the transition we're making, but it's happening. The technology is moving quicker than we ever imagined, the demand is collapsing faster than we thought, and the requirements are being enacted way sooner.