How governments and the cult of net zero wrecked the energy market
AUGUST 27, 2022
By Paul Homewood
I wonder why we do not see common sense like this from the Telegraph’s business reporters, such as the naive Ben Marlow?
Ten years ago, I flew to Texas to take a tour of the US’s most productive gas field. The Anglo-Australian mining giant, BHP Billiton, had spent $20 billion buying a slice of the Eagle Ford shale field and was trying to convince investors, via the media, that it had been a good idea.
BHP’s oil chief, Mike Yeager, a genteel, walrus-moustached Texan, hosted us on a flight over the woods and meadows of Eagle Ford in a helicopter, took us to see production wells, and introduced us to officials in a county (population 20,000) generating $71 million in gas tax revenues. BHP would spend a further $20 billion developing the field before eventually selling it to BP for just $10 billion. It had bought at the top.
This investment rollercoaster has been on my mind because it was the last time serious new money was put into oil and gas development. Since then, investment has fallen 60 per cent. With it, the stock of proven “reserves” – fossil fuels found and viable for extraction – has fallen more than 50 per cent.
Now the reckoning has come. With Russia cutting supply, prices are rocketing. Since January last year, US gas prices have risen nearly threefold. European gas is up sevenfold. Bills are following suit. Proximately, this is because of Putin. But the reason we are so exposed to the whims of a murderous dictator is under-investment.
https://notalotofpeopleknowthat.wordpress.com/2022/08/27/how-governments-and-the-cult-of-net-zero-wrecked-the-energy-market/
