1 00:00:00,120 --> 00:00:02,920 Speaker 1: Hi, I'm Dana Perkins and you're listening to Switch It 2 00:00:02,960 --> 00:00:05,960 Speaker 1: on the bn EF podcast. So BE an F recently 3 00:00:05,960 --> 00:00:09,559 Speaker 1: published our new Energy Outlook. It's an annual exercise where 4 00:00:09,560 --> 00:00:13,680 Speaker 1: we look at the future and possible scenarios for energy 5 00:00:13,680 --> 00:00:17,279 Speaker 1: and emissions out to the year twenty fifty. One of 6 00:00:17,320 --> 00:00:19,920 Speaker 1: the things this year's Outlook has shown is that we 7 00:00:20,000 --> 00:00:23,960 Speaker 1: may have brought forward a triple peak in emissions coal 8 00:00:24,160 --> 00:00:26,960 Speaker 1: and gas, and what if we've also brought forward a 9 00:00:27,040 --> 00:00:30,680 Speaker 1: peak in oil demand? And what if it's actually already 10 00:00:30,680 --> 00:00:34,280 Speaker 1: happened in nine Now that's sort of the nature of 11 00:00:34,280 --> 00:00:36,559 Speaker 1: a peak is that you don't know that it's happened 12 00:00:36,640 --> 00:00:39,360 Speaker 1: until you look back and you see that the peak 13 00:00:39,479 --> 00:00:42,280 Speaker 1: is there and you're on the other side. So that's 14 00:00:42,280 --> 00:00:44,479 Speaker 1: what we're going to talk about today, whether or not 15 00:00:44,640 --> 00:00:48,040 Speaker 1: this maybe already happened. Today, we're speaking with David Doherty 16 00:00:48,080 --> 00:00:50,760 Speaker 1: on the show. He's an oil demand analyst here at 17 00:00:50,800 --> 00:00:53,080 Speaker 1: b ANF and Mark Taylor and I talked to him 18 00:00:53,080 --> 00:00:56,560 Speaker 1: about whether we are or are not on the downhill 19 00:00:56,600 --> 00:01:00,040 Speaker 1: slide or oil demand. Per our usual disclaimer, BE and 20 00:01:00,120 --> 00:01:02,720 Speaker 1: the F does not provide investment of strategy advice, and 21 00:01:02,760 --> 00:01:05,200 Speaker 1: we have a full disclaimer at the end of the show. 22 00:01:05,360 --> 00:01:07,680 Speaker 1: If you want to read the full New Energy outlook, 23 00:01:07,760 --> 00:01:10,080 Speaker 1: you can find it at b enof Go, on the 24 00:01:10,080 --> 00:01:13,560 Speaker 1: Bloomberg terminal at b NF dot com, or on b 25 00:01:13,640 --> 00:01:23,839 Speaker 1: NF's mobile app. Now, let's talk to David about peak oil. David, 26 00:01:23,920 --> 00:01:26,399 Speaker 1: thanks for joining us, Thank you for having me. Always 27 00:01:26,400 --> 00:01:27,959 Speaker 1: good to have you on the show. So, David, you're 28 00:01:27,959 --> 00:01:31,560 Speaker 1: here today and you are an oil demand analyst, and 29 00:01:31,600 --> 00:01:33,399 Speaker 1: we're here to talk about peak oil. Now, I'm going 30 00:01:33,440 --> 00:01:35,760 Speaker 1: to rewind the clock to you know, version of me 31 00:01:35,840 --> 00:01:39,039 Speaker 1: and graduate school, young whipper snapper talking about peak oil. 32 00:01:39,480 --> 00:01:41,400 Speaker 1: And when I think of peak oil, I always think 33 00:01:41,440 --> 00:01:43,919 Speaker 1: of it as a supply side issue in US having 34 00:01:43,959 --> 00:01:48,000 Speaker 1: a difficult time actually extracting and becoming increasingly expensive and 35 00:01:48,040 --> 00:01:51,760 Speaker 1: therefore we're no longer able to get oil out to everybody. David, 36 00:01:52,120 --> 00:01:55,120 Speaker 1: what is peak oil from the demand side? Yeah, it's 37 00:01:55,120 --> 00:01:58,040 Speaker 1: a good question, and it's changed, I guess from when 38 00:01:58,080 --> 00:01:59,800 Speaker 1: you're talking about and from when I got into the 39 00:02:00,040 --> 00:02:04,680 Speaker 1: industry as well, and the US found shale technology, advanced 40 00:02:04,880 --> 00:02:08,160 Speaker 1: old fields could be developed more and supply was basically 41 00:02:08,160 --> 00:02:10,519 Speaker 1: not a concern anymore. There was enough to go around 42 00:02:10,680 --> 00:02:12,960 Speaker 1: and enough to meet all of this new demand. The 43 00:02:13,000 --> 00:02:15,919 Speaker 1: shift between then and now is a bunch of different things. 44 00:02:16,520 --> 00:02:20,440 Speaker 1: You know, efficiency gains, consciousness of the environment, and now 45 00:02:20,520 --> 00:02:23,799 Speaker 1: it's a focus on oil demand speaking, So when will 46 00:02:23,880 --> 00:02:28,360 Speaker 1: people want to or need to consume less oil that? 47 00:02:28,400 --> 00:02:31,160 Speaker 1: Obviously that impacts all the way down the value chain. 48 00:02:31,520 --> 00:02:32,880 Speaker 1: Do you need to take it out of the ground? 49 00:02:33,280 --> 00:02:35,880 Speaker 1: How do you consume that? What emissions go out into 50 00:02:35,880 --> 00:02:37,920 Speaker 1: the world, So totally different to the way we used 51 00:02:37,960 --> 00:02:40,280 Speaker 1: to think about it and saying is there enough for 52 00:02:40,360 --> 00:02:42,720 Speaker 1: us to be able to meet our needs versus do 53 00:02:42,800 --> 00:02:45,560 Speaker 1: we need this much to meet that amount to take 54 00:02:45,560 --> 00:02:47,760 Speaker 1: it out of the ground. So yeah, completely flipped first 55 00:02:47,760 --> 00:02:49,600 Speaker 1: is what we would sort of have spoken about this 56 00:02:49,639 --> 00:02:53,200 Speaker 1: time ten years ago. Is understanding peak important? Is it 57 00:02:53,240 --> 00:02:55,720 Speaker 1: anything more than an academic exercise or does it allow 58 00:02:55,760 --> 00:02:57,960 Speaker 1: you to do anything that you wouldn't do otherwise? The 59 00:02:58,000 --> 00:03:00,800 Speaker 1: answer is yes and no. Right, if you're taking this 60 00:03:00,840 --> 00:03:03,519 Speaker 1: stuff out of the ground or extracting it, you want 61 00:03:03,520 --> 00:03:06,639 Speaker 1: to know when or at what rate you're going to 62 00:03:06,720 --> 00:03:08,600 Speaker 1: need less of it or people are gonna want less 63 00:03:08,600 --> 00:03:11,760 Speaker 1: of it. So obviously, if you're an oil producer, you 64 00:03:11,800 --> 00:03:13,400 Speaker 1: want to know when people are going to want more 65 00:03:13,520 --> 00:03:16,119 Speaker 1: or less of your product, right, and when that occurs 66 00:03:16,520 --> 00:03:19,239 Speaker 1: in terms of environmentalists or people who are concerned about 67 00:03:19,280 --> 00:03:22,880 Speaker 1: emissions or global warming, oil isn't great obviously in that 68 00:03:22,919 --> 00:03:26,519 Speaker 1: sense for the environment. So the less that's consumed and 69 00:03:26,600 --> 00:03:28,359 Speaker 1: the less that's burned at the end of the day 70 00:03:28,360 --> 00:03:32,160 Speaker 1: and admits less is a good thing for the environment, right, 71 00:03:32,480 --> 00:03:36,119 Speaker 1: So yes, and know in those senses, when is kind 72 00:03:36,120 --> 00:03:39,240 Speaker 1: of the less important part. I would argue whether it's 73 00:03:39,240 --> 00:03:42,680 Speaker 1: twenty thirty, whether it's I think what we've sort of 74 00:03:42,680 --> 00:03:45,760 Speaker 1: discovered in the last little while, maybe two three years, 75 00:03:45,880 --> 00:03:48,520 Speaker 1: is that peak demand is in sight. And in many 76 00:03:48,600 --> 00:03:51,960 Speaker 1: cases people think peak demand may have even happened. We 77 00:03:52,000 --> 00:03:54,440 Speaker 1: saw at least in jewel terms, BP this year is 78 00:03:54,440 --> 00:03:57,640 Speaker 1: saying nineteen might have been the peak for oil demand. 79 00:03:57,720 --> 00:03:59,880 Speaker 1: Why are they saying that? They've got a bunch of reasons, 80 00:03:59,880 --> 00:04:02,720 Speaker 1: but hind it. One is we might not recover after COVID. 81 00:04:02,760 --> 00:04:04,839 Speaker 1: It's took such a hit this year. We've seen oil 82 00:04:04,880 --> 00:04:08,520 Speaker 1: deman this year go down almost ten percent, right, so 83 00:04:09,080 --> 00:04:11,920 Speaker 1: wiping out almost a decade of growth and gains. So, 84 00:04:12,680 --> 00:04:15,600 Speaker 1: you know, will we get back the levels? I mean, 85 00:04:15,640 --> 00:04:17,880 Speaker 1: it depends we're you know, working from home here at 86 00:04:17,880 --> 00:04:20,640 Speaker 1: Bloomberg and YEF, will we go back into the office, 87 00:04:20,720 --> 00:04:22,640 Speaker 1: will we drive a car if we go into the office, 88 00:04:22,680 --> 00:04:25,080 Speaker 1: depending on where we are, Will I fly to see 89 00:04:25,120 --> 00:04:27,600 Speaker 1: my family next time? Lots of different things, right, Just 90 00:04:27,640 --> 00:04:29,800 Speaker 1: the way that we live has changed, so they think 91 00:04:29,839 --> 00:04:32,719 Speaker 1: that might have caused the shift in some of their scenarios. 92 00:04:33,000 --> 00:04:35,359 Speaker 1: And even when we get back to gains or growing 93 00:04:35,400 --> 00:04:38,880 Speaker 1: again or quote unquote normality, what does that normality look like? 94 00:04:38,920 --> 00:04:40,680 Speaker 1: Are we still going to be flying as much? Is 95 00:04:40,680 --> 00:04:42,240 Speaker 1: it going to be as cheap to fly? Will there 96 00:04:42,240 --> 00:04:44,600 Speaker 1: even be an airline for us to fly with? You know, 97 00:04:44,800 --> 00:04:48,400 Speaker 1: those kind of questions totally structural changes will impact the 98 00:04:48,440 --> 00:04:51,440 Speaker 1: consumption profile of this product for sure. So David, we 99 00:04:51,480 --> 00:04:54,560 Speaker 1: could actually just retitle this podcast like ask the expert. 100 00:04:54,600 --> 00:04:57,599 Speaker 1: You're the expert here today, and you've read a bunch 101 00:04:57,640 --> 00:05:00,320 Speaker 1: of these different scenarios, and I want to know what 102 00:05:00,520 --> 00:05:02,000 Speaker 1: is your view? When do you think did the peak 103 00:05:02,040 --> 00:05:04,720 Speaker 1: already happen or is it outcoming? And you know, I 104 00:05:04,760 --> 00:05:06,880 Speaker 1: want to make sure I plan to have like give 105 00:05:06,920 --> 00:05:09,440 Speaker 1: it its momentous occasion, because if it's already happened, and 106 00:05:09,480 --> 00:05:11,240 Speaker 1: I totally missed it. I'm feeling a little bummed out 107 00:05:11,240 --> 00:05:12,960 Speaker 1: about that. When do you think this is going to happen? 108 00:05:13,360 --> 00:05:15,600 Speaker 1: We are calling a peak first, I mean expert I 109 00:05:15,640 --> 00:05:17,800 Speaker 1: think is a dangerous term. I think maybe energy or 110 00:05:17,800 --> 00:05:19,640 Speaker 1: an oil nerd is a good way to phrase it. 111 00:05:20,600 --> 00:05:23,159 Speaker 1: As the nerd. As the nerd, we look at this 112 00:05:23,240 --> 00:05:25,400 Speaker 1: every day, and this is kind of our bread and button, 113 00:05:25,400 --> 00:05:28,000 Speaker 1: and we look at all of the really detailed, boring 114 00:05:28,040 --> 00:05:30,720 Speaker 1: parts that in general people that want to pay attention to, like, 115 00:05:31,040 --> 00:05:33,560 Speaker 1: hen many cars are on the road, how will those 116 00:05:33,560 --> 00:05:37,000 Speaker 1: cars be driven? Will it be electric or gastine, etcetera, etcetera. 117 00:05:37,440 --> 00:05:41,360 Speaker 1: So we have been are calling a peak in five again. 118 00:05:41,839 --> 00:05:44,760 Speaker 1: I think the time range is kind of I don't 119 00:05:44,800 --> 00:05:50,120 Speaker 1: say irrelevant, but you're seeing three is kind of that 120 00:05:50,160 --> 00:05:52,840 Speaker 1: time period, depending on who you're talking to, of quote 121 00:05:52,920 --> 00:05:56,400 Speaker 1: unquote experts calling peak oil demand. And it really comes 122 00:05:56,400 --> 00:06:00,720 Speaker 1: down to when they see different technologies overtaking things like 123 00:06:00,920 --> 00:06:04,880 Speaker 1: internal combustion engine cars, how many people consume plastic wrapping 124 00:06:04,880 --> 00:06:09,040 Speaker 1: on their food, how quickly the population grows and GDP grows, 125 00:06:09,520 --> 00:06:12,680 Speaker 1: and so there's a few kind of underlying currents on it. 126 00:06:12,720 --> 00:06:15,520 Speaker 1: But the fact that the vast majority of forecasters now 127 00:06:15,560 --> 00:06:18,359 Speaker 1: see this happening even in that fairly wide period of 128 00:06:18,400 --> 00:06:20,880 Speaker 1: time is different too, if we're going to have this 129 00:06:20,960 --> 00:06:23,440 Speaker 1: chat even a year ago. So this came from an 130 00:06:23,480 --> 00:06:26,400 Speaker 1: exercise BNF does every year called the New Energy Outlook 131 00:06:26,480 --> 00:06:29,760 Speaker 1: or NEO. Can you explain a bit your methodology how 132 00:06:29,800 --> 00:06:31,920 Speaker 1: you got to peak? As you mentioned some of the 133 00:06:32,000 --> 00:06:34,240 Speaker 1: economic undercurrens there, but cow us did you did you 134 00:06:34,320 --> 00:06:36,560 Speaker 1: arrive at the conclusion of peak? The way that we 135 00:06:36,680 --> 00:06:40,039 Speaker 1: look at oil, we don't look at oil as a 136 00:06:40,080 --> 00:06:44,520 Speaker 1: whole market. We have separate sort of deep dives into aviation, 137 00:06:44,560 --> 00:06:48,159 Speaker 1: a different deep dive into cars, into ships, into plastics 138 00:06:48,160 --> 00:06:52,320 Speaker 1: and petrochemicals and power markets. And at the end we 139 00:06:52,440 --> 00:06:54,440 Speaker 1: all came together in our team and put them into 140 00:06:54,520 --> 00:06:56,280 Speaker 1: one piece. And it was sort of exciting for us 141 00:06:56,279 --> 00:06:59,320 Speaker 1: to see when all these numbers are added together, what 142 00:06:59,440 --> 00:07:02,280 Speaker 1: year did we called peak one? Because it's the number 143 00:07:02,320 --> 00:07:05,560 Speaker 1: everybody's going to talk about and we compare ourselves to others. 144 00:07:05,600 --> 00:07:08,200 Speaker 1: So whether it came to counting cars on the road, 145 00:07:08,880 --> 00:07:11,920 Speaker 1: what powered those cars, counting airplanes and the sky ships 146 00:07:11,920 --> 00:07:16,440 Speaker 1: on the sea, um demand for plastics and packaging. We 147 00:07:16,480 --> 00:07:18,480 Speaker 1: went from the ground up for all of these pieces, 148 00:07:18,480 --> 00:07:21,400 Speaker 1: piece them altogether and got to this overall peak oil 149 00:07:21,640 --> 00:07:25,679 Speaker 1: demand story by five. And it is interesting to see 150 00:07:25,800 --> 00:07:28,560 Speaker 1: when you look at those individually, you don't think at 151 00:07:28,600 --> 00:07:30,880 Speaker 1: all about what this means for peak oil de man 152 00:07:31,000 --> 00:07:33,400 Speaker 1: as a whole. You're really looking at the sector as 153 00:07:33,440 --> 00:07:36,160 Speaker 1: a base. So you know, some do peak, some don't. 154 00:07:36,520 --> 00:07:40,160 Speaker 1: We think aviation, unless there's going to be something rapid 155 00:07:40,400 --> 00:07:44,400 Speaker 1: or a big technology change, probably won't peak in the 156 00:07:44,480 --> 00:07:47,640 Speaker 1: next thirty years or so, whereas where there are some 157 00:07:47,720 --> 00:07:51,760 Speaker 1: other sectors that have a solution already in place, maybe 158 00:07:51,840 --> 00:07:55,160 Speaker 1: not at scale just yet, Um, there's hope for peak there. 159 00:07:55,800 --> 00:07:58,080 Speaker 1: So when we look at them individually, we weren't really 160 00:07:58,160 --> 00:08:00,400 Speaker 1: thinking about a peak oil story when we roll them all, look, 161 00:08:00,440 --> 00:08:02,080 Speaker 1: but we've got that kind of exciting one veil of 162 00:08:04,160 --> 00:08:06,600 Speaker 1: that was it. So it's massively at bottom up exercise 163 00:08:06,640 --> 00:08:10,040 Speaker 1: with lots of nice inputs and data points that got 164 00:08:10,080 --> 00:08:13,600 Speaker 1: to this sort of over arch of peak oil demand story. 165 00:08:13,920 --> 00:08:16,400 Speaker 1: To your point about COVID, there are certain industries though 166 00:08:16,400 --> 00:08:19,240 Speaker 1: that maybe take quite some time to come back. So 167 00:08:19,360 --> 00:08:22,080 Speaker 1: you mentioned aviation just now, and I'm thinking about all 168 00:08:22,240 --> 00:08:24,720 Speaker 1: of the British Airways planes that have been retired and 169 00:08:24,760 --> 00:08:27,680 Speaker 1: the fact that they recently started selling off the I 170 00:08:27,680 --> 00:08:30,080 Speaker 1: guess the business class and the first class cutlery and 171 00:08:30,200 --> 00:08:33,320 Speaker 1: plates and bowls and things. But I mean, in all seriousness, 172 00:08:33,320 --> 00:08:35,560 Speaker 1: that's an entire fleet of planes that have been retired 173 00:08:35,600 --> 00:08:37,480 Speaker 1: because they're not in use at the moment. It's going 174 00:08:37,520 --> 00:08:39,439 Speaker 1: to take some time for that to come back. And 175 00:08:39,480 --> 00:08:41,360 Speaker 1: do you think that that gap, I mean, I know 176 00:08:41,400 --> 00:08:43,080 Speaker 1: we're here to talk about peak oil, but in not 177 00:08:43,160 --> 00:08:45,360 Speaker 1: aviation specifically, But do you think that that gap could 178 00:08:45,360 --> 00:08:50,000 Speaker 1: provide potentially a space for some of these industries that 179 00:08:50,120 --> 00:08:54,240 Speaker 1: are hard hit by COVID to actually re emerge differently? Yeah, 180 00:08:54,240 --> 00:08:56,360 Speaker 1: come back, greener, I guess is that kind of fingured 181 00:08:56,400 --> 00:09:01,600 Speaker 1: it into its a in stressed area for lots of 182 00:09:01,640 --> 00:09:04,720 Speaker 1: different sectors and lots of different bodies who regulate or 183 00:09:05,080 --> 00:09:07,560 Speaker 1: orchestrate what happens in these sectors. If we look at 184 00:09:07,600 --> 00:09:10,280 Speaker 1: the aviation sector as an example, you're seeing less and 185 00:09:10,360 --> 00:09:13,720 Speaker 1: less of us flying this year, about fifty less people 186 00:09:13,720 --> 00:09:16,040 Speaker 1: are flying versus last year, right, or less passengers, I 187 00:09:16,080 --> 00:09:19,280 Speaker 1: should say, So you don't need as many airplanes. The 188 00:09:19,360 --> 00:09:22,200 Speaker 1: older airplanes, like you said, are getting parked or taken 189 00:09:22,240 --> 00:09:25,280 Speaker 1: apart for pieces and what's left is basically the more 190 00:09:25,280 --> 00:09:27,480 Speaker 1: efficient ones. Right. An airline doesn't want to spend its 191 00:09:27,520 --> 00:09:29,080 Speaker 1: money on jet fuel, right, It wants to have a 192 00:09:29,080 --> 00:09:32,679 Speaker 1: really efficient airplane and get tickets in and fly people. 193 00:09:33,040 --> 00:09:36,160 Speaker 1: You can take the same logic and look at different 194 00:09:36,160 --> 00:09:38,959 Speaker 1: sectors the same way. Some it's beneficial for well this 195 00:09:39,160 --> 00:09:41,520 Speaker 1: it's not so. If you look at plastics, for example, 196 00:09:41,800 --> 00:09:43,839 Speaker 1: there's more demand this year for plastics. You're seeing a 197 00:09:43,840 --> 00:09:46,240 Speaker 1: lot of things. If we get a meal, now you 198 00:09:46,240 --> 00:09:48,720 Speaker 1: don't just get a knife and fork that's plastic, get 199 00:09:48,720 --> 00:09:51,280 Speaker 1: a plastic knife and fork that's wrapped in plastic. More 200 00:09:51,280 --> 00:09:55,079 Speaker 1: plastics and masks for example. And then you have cars 201 00:09:55,120 --> 00:09:57,800 Speaker 1: we saw this year, for example, passenger car sales pretty 202 00:09:57,840 --> 00:10:01,080 Speaker 1: much around the world have fallen and in some cases 203 00:10:01,120 --> 00:10:04,680 Speaker 1: collapse in sales. That means that the turnover of the fleet, 204 00:10:04,960 --> 00:10:08,120 Speaker 1: of the internal combustion engine fleet at least is slower. 205 00:10:08,200 --> 00:10:10,760 Speaker 1: So you've got more inefficient cars left on the road. 206 00:10:10,960 --> 00:10:13,160 Speaker 1: You could argue the driving more or less. And in 207 00:10:13,240 --> 00:10:15,720 Speaker 1: some cases you've seen the sales that are recovering a 208 00:10:15,760 --> 00:10:18,160 Speaker 1: lot more of them being electric cars. So Europe is 209 00:10:18,200 --> 00:10:21,120 Speaker 1: a good example where they're incentivizing to get any car 210 00:10:21,160 --> 00:10:23,880 Speaker 1: sales going electric cars, and we're seeing big proportions of 211 00:10:23,920 --> 00:10:26,199 Speaker 1: all the new cars sold in Europe being electric. So yeah, 212 00:10:26,280 --> 00:10:28,360 Speaker 1: it's it's not as easy as story is saying, oh, 213 00:10:28,400 --> 00:10:31,400 Speaker 1: it's coming back greener, because every sector is very different, 214 00:10:31,800 --> 00:10:35,760 Speaker 1: but you are having pushes, particularly from some policymakers to 215 00:10:35,840 --> 00:10:38,480 Speaker 1: go towards that way. Last year, we had you on 216 00:10:38,480 --> 00:10:41,400 Speaker 1: the show talking about road fuels and the outlook for those, 217 00:10:41,400 --> 00:10:43,719 Speaker 1: and the conclusion was that they were going to keep 218 00:10:43,720 --> 00:10:46,760 Speaker 1: going up, right, because I think it was increased deliveries 219 00:10:47,440 --> 00:10:51,600 Speaker 1: and I think increased drivers or because number of drivers 220 00:10:51,600 --> 00:10:55,880 Speaker 1: in currently developing markets. Did your outlook change for road 221 00:10:55,920 --> 00:10:58,679 Speaker 1: fuels as a part of this neo exercise? And how 222 00:10:58,679 --> 00:11:00,840 Speaker 1: does that fit in with peak oil? It feels the 223 00:11:00,920 --> 00:11:04,319 Speaker 1: most important part of the oil consumption. Pie. It's about 224 00:11:04,400 --> 00:11:07,040 Speaker 1: it something like forty seven percent of all of the 225 00:11:07,080 --> 00:11:09,280 Speaker 1: oil consumed in the world. So when we spoke about 226 00:11:09,280 --> 00:11:12,120 Speaker 1: this last year, we saw the passenger consumption, so passenger 227 00:11:12,160 --> 00:11:14,439 Speaker 1: cars that me and you would drive, for example, demand 228 00:11:14,520 --> 00:11:17,160 Speaker 1: is likely to decline. We're seeing lots of electric vehicles, 229 00:11:17,280 --> 00:11:20,680 Speaker 1: lots of regulations about fuel economy, so that that goes down. 230 00:11:20,840 --> 00:11:25,040 Speaker 1: What we saw driving growth was truck's, commercial vehicles, things 231 00:11:25,120 --> 00:11:28,720 Speaker 1: like Amazon deliveries, and again COVID has impacted each of 232 00:11:28,760 --> 00:11:32,120 Speaker 1: these segments very differently. So in Europe we're working from home, 233 00:11:32,160 --> 00:11:35,920 Speaker 1: for example, the vast majority of commuters in Europe go 234 00:11:36,040 --> 00:11:38,200 Speaker 1: to work on things like the tube here in London 235 00:11:38,559 --> 00:11:41,120 Speaker 1: or the metro in Paris for example, So that doesn't 236 00:11:41,320 --> 00:11:44,360 Speaker 1: directly impact well, it does directly if you get a bus, 237 00:11:44,400 --> 00:11:46,760 Speaker 1: but it doesn't as have as big an impact on 238 00:11:46,880 --> 00:11:49,200 Speaker 1: road field consumption as if you were to take the 239 00:11:49,200 --> 00:11:51,360 Speaker 1: same example in the United States, where a lot of 240 00:11:51,400 --> 00:11:54,400 Speaker 1: people drive to and from work right over nine. So 241 00:11:54,600 --> 00:11:58,000 Speaker 1: the private or the passenger segment, I mean you're driving, 242 00:11:58,160 --> 00:12:00,720 Speaker 1: took a big hit this year in in the world 243 00:12:00,720 --> 00:12:03,800 Speaker 1: pretty much in terms of oil consumption. On the other side, though, 244 00:12:03,960 --> 00:12:08,160 Speaker 1: we've all been shopping online Ali Baba Amazon. My mom 245 00:12:08,200 --> 00:12:10,400 Speaker 1: now does her shopping and gets her stuff delivered to 246 00:12:10,440 --> 00:12:12,880 Speaker 1: her instead of her driving to the store to get it. 247 00:12:13,000 --> 00:12:14,880 Speaker 1: And now she's quite comfortable and that drives a lot 248 00:12:14,960 --> 00:12:16,840 Speaker 1: more than shoes to That means that there needs to 249 00:12:16,840 --> 00:12:18,840 Speaker 1: be a delivery driver to send that to her house. 250 00:12:18,960 --> 00:12:21,440 Speaker 1: So what we've seen is we've actually got support for 251 00:12:21,520 --> 00:12:24,520 Speaker 1: things like delivery vans that normally run off of diesel 252 00:12:25,160 --> 00:12:27,480 Speaker 1: driving to the house of somebody and delivering something, as 253 00:12:27,520 --> 00:12:30,040 Speaker 1: opposed to say the gasoline that was consumed in the 254 00:12:30,040 --> 00:12:32,439 Speaker 1: passenger car going to a store to get something. So 255 00:12:32,640 --> 00:12:36,120 Speaker 1: underlying all of this destruction, you're seeing a change in dynamics. 256 00:12:36,520 --> 00:12:38,760 Speaker 1: And this is really important if you're a refiner or 257 00:12:38,800 --> 00:12:41,840 Speaker 1: a fuels producer, right, you want to know what's doing well, 258 00:12:41,960 --> 00:12:44,600 Speaker 1: what's not doing so well. Jet fueled man is quite 259 00:12:44,600 --> 00:12:47,560 Speaker 1: obvious to go down. Gasoline is taking a hip. Diesel 260 00:12:47,600 --> 00:12:50,640 Speaker 1: is doing not so great, but much better than gasoline. Right. 261 00:12:50,679 --> 00:12:52,520 Speaker 1: This all impacts that these guys are going to run 262 00:12:52,520 --> 00:12:56,040 Speaker 1: their companies. So every sector COVID hit in a different way. 263 00:12:56,400 --> 00:13:00,200 Speaker 1: Passenger and road transport in general not left alone, but 264 00:13:00,360 --> 00:13:03,400 Speaker 1: under that sort of there's different dynamics of things that 265 00:13:03,440 --> 00:13:05,719 Speaker 1: have done really well out of it. So more deliveries 266 00:13:05,760 --> 00:13:08,560 Speaker 1: for sure, Mrs Doherty, if you're listening, you're not alone. 267 00:13:08,640 --> 00:13:11,079 Speaker 1: I haven't been to a grocery store in over six months. 268 00:13:11,800 --> 00:13:13,839 Speaker 1: I don't remember the last time I've been in the store. 269 00:13:13,880 --> 00:13:15,880 Speaker 1: I think, I think I feel sorry for the delivery 270 00:13:15,960 --> 00:13:18,160 Speaker 1: drivers who have to have a chat once they deliver 271 00:13:19,360 --> 00:13:21,679 Speaker 1: I was gonna say, my street is nothing but delivery 272 00:13:21,760 --> 00:13:24,280 Speaker 1: vans all day long. Yeah, I think we've all thought 273 00:13:24,600 --> 00:13:27,280 Speaker 1: it's a good idea and it is actually incredibly helpful. 274 00:13:27,320 --> 00:13:30,040 Speaker 1: But yeah, that impacts how we drive our own personal cars. Right, 275 00:13:30,080 --> 00:13:33,160 Speaker 1: So different dynamics and the oil, the oil pie underlying 276 00:13:33,200 --> 00:13:38,120 Speaker 1: all that. Now for a very short break, stay with us, So, David, 277 00:13:38,240 --> 00:13:40,480 Speaker 1: surely this is something that the oil and gas industry 278 00:13:40,520 --> 00:13:44,360 Speaker 1: is watching extremely closely themselves. So what is the reaction 279 00:13:44,400 --> 00:13:46,439 Speaker 1: from that side and what did their forecasts say? Do 280 00:13:46,520 --> 00:13:49,839 Speaker 1: they differ? Yeah, there's a huge variety of forecasts out 281 00:13:49,840 --> 00:13:52,880 Speaker 1: there in terms of oil consumption, different scenarios around it. 282 00:13:52,960 --> 00:13:54,640 Speaker 1: What are the drivers? What does it mean for our 283 00:13:54,679 --> 00:13:57,480 Speaker 1: business model? Are we going to completely change our business model? 284 00:13:57,720 --> 00:14:00,760 Speaker 1: And it really really varies, honestly. You've got some people 285 00:14:01,000 --> 00:14:04,839 Speaker 1: like BP and Hotel who are looking at declining oil 286 00:14:04,840 --> 00:14:07,839 Speaker 1: demand from about twenty thirty onwards, and then you've got 287 00:14:07,880 --> 00:14:11,560 Speaker 1: others like OPEC, for example, who see it getting slower 288 00:14:11,559 --> 00:14:15,800 Speaker 1: in terms of growth but still growing out for example, 289 00:14:16,000 --> 00:14:18,560 Speaker 1: So two different stories. If you were to look at 290 00:14:18,559 --> 00:14:20,640 Speaker 1: those forecasts, what does it mean for an oil and 291 00:14:20,680 --> 00:14:22,760 Speaker 1: gas company? I mean in theory. This is their bread 292 00:14:22,760 --> 00:14:26,160 Speaker 1: and butter. We're seeing different approaches. Some are turning into 293 00:14:26,640 --> 00:14:29,400 Speaker 1: energy molecule sellers, if that makes sense, as opposed to 294 00:14:29,480 --> 00:14:31,480 Speaker 1: oil and gas producers. So I want to sell you 295 00:14:31,480 --> 00:14:33,920 Speaker 1: a jewel of energy that could be electric for your car, 296 00:14:34,040 --> 00:14:36,680 Speaker 1: that could be you know, anything for your home, gas, 297 00:14:36,960 --> 00:14:39,760 Speaker 1: you name a biofuel, their few we got you, and 298 00:14:39,800 --> 00:14:42,720 Speaker 1: you've others here sticking to oil and gas. So massive 299 00:14:42,720 --> 00:14:46,040 Speaker 1: different forecasts out there and big variations in terms of 300 00:14:46,080 --> 00:14:48,760 Speaker 1: approach and how they'll respond to this. Either way, there 301 00:14:48,760 --> 00:14:51,040 Speaker 1: will be a requirement for oil we think in the 302 00:14:51,080 --> 00:14:53,400 Speaker 1: next thirty or forty years, and and how that comes 303 00:14:53,400 --> 00:14:55,560 Speaker 1: out of the ground and who produces it, you know, 304 00:14:55,600 --> 00:14:57,600 Speaker 1: it remains to be seen. But we have seen this 305 00:14:57,680 --> 00:15:00,360 Speaker 1: year and it's interesting that has been the year for it. 306 00:15:00,440 --> 00:15:03,160 Speaker 1: Given the massive disruption to demand and the hit for 307 00:15:03,200 --> 00:15:05,840 Speaker 1: the oil sector, we've seen a lot of strategies changing. 308 00:15:06,000 --> 00:15:08,840 Speaker 1: You know, the European oil majors, for example, have really 309 00:15:08,880 --> 00:15:12,280 Speaker 1: shifted towards this big energy business model where we'll send 310 00:15:12,400 --> 00:15:14,520 Speaker 1: we'll sell you anything from hydrogen to bios us to 311 00:15:14,960 --> 00:15:19,400 Speaker 1: you know, electricity and more renewable focused energy supply. And 312 00:15:19,680 --> 00:15:22,760 Speaker 1: we've seen others like national oil companies who don't normally 313 00:15:22,800 --> 00:15:26,120 Speaker 1: outline strategies stick towards the oil and gas side of things, 314 00:15:26,240 --> 00:15:28,720 Speaker 1: and even some of the US oil majors sticking towards it. 315 00:15:28,880 --> 00:15:31,640 Speaker 1: But without question, this disruption to the man and this 316 00:15:31,800 --> 00:15:34,160 Speaker 1: peak story, it hits the bottom line for an oil 317 00:15:34,160 --> 00:15:37,640 Speaker 1: and gas company. I mean, we've seen in over seventy 318 00:15:37,640 --> 00:15:41,120 Speaker 1: billion dollars of right downs at the five big oil 319 00:15:41,160 --> 00:15:44,520 Speaker 1: majors already. That compares to like thirty billion dollars in 320 00:15:44,920 --> 00:15:48,280 Speaker 1: fourteen during the previous oil price crash, so really really 321 00:15:48,360 --> 00:15:50,520 Speaker 1: large numbers here. It is a bit of a reality 322 00:15:50,600 --> 00:15:53,200 Speaker 1: check for their business model. They know this, and it's 323 00:15:53,280 --> 00:15:55,400 Speaker 1: it's not news to an oil and gas company who 324 00:15:55,400 --> 00:15:57,640 Speaker 1: are looking at this, But we have seen that this 325 00:15:57,760 --> 00:16:01,720 Speaker 1: big demand shifts in mentality or maybe acceptance might be 326 00:16:01,720 --> 00:16:03,800 Speaker 1: a better way to phrase it. You know, ultimately is 327 00:16:03,840 --> 00:16:06,200 Speaker 1: going to impact the oil price long term, and that 328 00:16:06,280 --> 00:16:08,400 Speaker 1: changes what oil barrel you're going to go for in 329 00:16:08,440 --> 00:16:09,760 Speaker 1: the future, and what when you're going to try to 330 00:16:09,760 --> 00:16:11,680 Speaker 1: get out of the ground, and how can I make 331 00:16:11,720 --> 00:16:15,120 Speaker 1: an oil barrel more appealing in the future while keeping 332 00:16:15,160 --> 00:16:17,640 Speaker 1: it cheap and keeping its emissions as low as possible. 333 00:16:17,920 --> 00:16:20,160 Speaker 1: It just maybe kind of wonder I guess which companies 334 00:16:20,160 --> 00:16:22,440 Speaker 1: are going for the power model, but also which ones 335 00:16:22,480 --> 00:16:24,480 Speaker 1: are going all in on oil. Like we talked a 336 00:16:24,520 --> 00:16:26,160 Speaker 1: couple of weeks ago on the pod about I think 337 00:16:26,160 --> 00:16:28,880 Speaker 1: it's occidental who's going in all in on oil, but 338 00:16:29,280 --> 00:16:33,000 Speaker 1: they're also banking on ccs, you know, at least in 339 00:16:33,120 --> 00:16:35,320 Speaker 1: name I don't know, or c c US whatever you 340 00:16:35,320 --> 00:16:37,880 Speaker 1: wanna call it. Do you see that as common or 341 00:16:38,120 --> 00:16:40,680 Speaker 1: or other companies taking this on all? Are they kind 342 00:16:40,680 --> 00:16:43,520 Speaker 1: of alone in this? No, it's not, it's not uncommon 343 00:16:43,640 --> 00:16:46,360 Speaker 1: at all. You're seeing a real split at least in 344 00:16:46,400 --> 00:16:50,160 Speaker 1: the integrated oil companies or the listed Western oil companies 345 00:16:50,200 --> 00:16:53,200 Speaker 1: I suppose. And again, if you look at in Europe, 346 00:16:53,240 --> 00:16:56,200 Speaker 1: you're seeing the likes of BP, Shell and Hotel setting 347 00:16:56,280 --> 00:17:01,840 Speaker 1: quite aggressive missions reduction targets, normally by far away and 348 00:17:01,880 --> 00:17:04,160 Speaker 1: a lot of it's sort of phrased in a way 349 00:17:04,200 --> 00:17:06,760 Speaker 1: that will actually allow them produced to produce more oil 350 00:17:06,800 --> 00:17:08,879 Speaker 1: and gas if they wanted to throw me like energy 351 00:17:08,880 --> 00:17:11,520 Speaker 1: intensity based. But you are seeing others who are really 352 00:17:11,560 --> 00:17:14,480 Speaker 1: focusing on the oil and gas story. It's not necessarily 353 00:17:14,520 --> 00:17:16,960 Speaker 1: a bad approach because the way the oil comes out 354 00:17:16,960 --> 00:17:19,159 Speaker 1: of the ground. It doesn't just keep flowing forever. You know, 355 00:17:19,200 --> 00:17:22,880 Speaker 1: you've got oil wells and current fields that deplete over time. 356 00:17:23,000 --> 00:17:24,639 Speaker 1: So if you were to look at all of the 357 00:17:24,640 --> 00:17:27,159 Speaker 1: oil that's being extracted today and then look at the 358 00:17:27,240 --> 00:17:31,119 Speaker 1: same supply in twenty you're going to have less than 359 00:17:31,119 --> 00:17:33,280 Speaker 1: a third of that still coming out of the ground, right, 360 00:17:33,520 --> 00:17:36,280 Speaker 1: so you need to replace it. And you're seeing places 361 00:17:36,359 --> 00:17:41,240 Speaker 1: are companies like Conico and Occidental still focusing on extracting oil. 362 00:17:41,480 --> 00:17:43,600 Speaker 1: How they do it, you know, it varies. It could 363 00:17:43,600 --> 00:17:45,560 Speaker 1: be a shale play, it could be offshore place, but 364 00:17:45,640 --> 00:17:48,639 Speaker 1: in general they're shifting towards getting at least the carbon 365 00:17:48,720 --> 00:17:52,040 Speaker 1: profile of their barrel lower, so that every barrel that 366 00:17:52,080 --> 00:17:55,800 Speaker 1: they extract has a better carbon emissions profile than the 367 00:17:55,800 --> 00:17:58,400 Speaker 1: one that they had extracted. You know, in the previous year. 368 00:17:58,640 --> 00:18:00,520 Speaker 1: Some of them have set targets, some of them are 369 00:18:00,560 --> 00:18:03,720 Speaker 1: relying on new technologies. Actually they're all relying on new 370 00:18:03,720 --> 00:18:06,960 Speaker 1: technologies that haven't really been tested or put into scale 371 00:18:07,000 --> 00:18:09,679 Speaker 1: just yet. But at least they're shifting towards that that 372 00:18:09,960 --> 00:18:12,320 Speaker 1: model of things, And you're even seeing it with some 373 00:18:12,359 --> 00:18:14,840 Speaker 1: of the oil majors who want to become a big 374 00:18:14,960 --> 00:18:18,360 Speaker 1: energy supplier and shift away from oil and gas hotel 375 00:18:18,480 --> 00:18:21,440 Speaker 1: for example. They'll still continue to take oil and gas 376 00:18:21,440 --> 00:18:24,840 Speaker 1: out of the ground, but they're focusing on the cleaner 377 00:18:24,880 --> 00:18:28,560 Speaker 1: barrel or the higher return cleaner barrel in future. So 378 00:18:28,600 --> 00:18:30,640 Speaker 1: they're not saying no to oil and gas. They're saying, 379 00:18:30,640 --> 00:18:33,240 Speaker 1: we're gonna go for the less carbon intensive and the 380 00:18:33,320 --> 00:18:36,600 Speaker 1: less risky. Big projects like Arctic drilling and things like 381 00:18:36,640 --> 00:18:39,119 Speaker 1: that have kind of fallen by the waistside now because 382 00:18:39,119 --> 00:18:41,840 Speaker 1: oil prices are just much lower they can't justify that 383 00:18:41,920 --> 00:18:45,520 Speaker 1: big project. But some more simplified like North African extraction 384 00:18:45,560 --> 00:18:48,520 Speaker 1: projects for example, are still getting attention from these oil 385 00:18:48,520 --> 00:18:50,680 Speaker 1: and gas companies, even the ones that want to shift 386 00:18:50,680 --> 00:18:54,439 Speaker 1: towards a utility or renewables power supplier kind of company. 387 00:18:54,480 --> 00:18:57,640 Speaker 1: So yeah, there's totally different approaches, and some are better 388 00:18:57,680 --> 00:19:00,240 Speaker 1: than others at least in indicating how they're going to 389 00:19:00,320 --> 00:19:04,880 Speaker 1: go and extracted in at least a sustainable way. But ultimately, 390 00:19:04,920 --> 00:19:08,360 Speaker 1: you're going to need new supply of oil. Even if 391 00:19:08,440 --> 00:19:12,240 Speaker 1: demand really comes off a cliff and falls to something 392 00:19:12,280 --> 00:19:15,680 Speaker 1: like million pars per day, you're still going to need 393 00:19:15,840 --> 00:19:18,040 Speaker 1: new supply to come and meet that. So there's still 394 00:19:18,040 --> 00:19:20,440 Speaker 1: a business there, and we're gonna see oil being a 395 00:19:20,520 --> 00:19:22,480 Speaker 1: handling used for quite a while. Right. It's still the 396 00:19:22,760 --> 00:19:25,439 Speaker 1: entry level jewel to get people out of poverty and 397 00:19:25,480 --> 00:19:27,840 Speaker 1: supply them most things like wheels that they can drive, 398 00:19:27,960 --> 00:19:30,240 Speaker 1: right and cooking a while, et cetera. So, yeah, there's 399 00:19:30,280 --> 00:19:31,680 Speaker 1: a lot of good in oil. I guess you've just 400 00:19:31,720 --> 00:19:33,720 Speaker 1: got to think about how it can be extracted in 401 00:19:33,720 --> 00:19:36,320 Speaker 1: a sustainable way and where there is an alternative. I 402 00:19:36,359 --> 00:19:39,879 Speaker 1: think that's where we're seeing investment and interest being put into. 403 00:19:40,320 --> 00:19:43,200 Speaker 1: So that brings us really well to the regional dynamics. 404 00:19:43,240 --> 00:19:46,240 Speaker 1: And so for these peaks happening at different points in 405 00:19:46,320 --> 00:19:49,720 Speaker 1: different places, and what are the regional dynamics around peak 406 00:19:49,760 --> 00:19:52,480 Speaker 1: oil demand. It's a really interesting story even in how 407 00:19:52,520 --> 00:19:55,000 Speaker 1: oil and gas companies approach their targets and where they 408 00:19:55,000 --> 00:19:57,879 Speaker 1: want to sell into. You're seeing different strategies been put 409 00:19:57,960 --> 00:20:01,560 Speaker 1: in place Southeast Asia and a Arica or for example, 410 00:20:01,680 --> 00:20:05,000 Speaker 1: growth stories where there's new population coming into wealth, or 411 00:20:05,040 --> 00:20:08,200 Speaker 1: where people for example, don't own a car, get access 412 00:20:08,240 --> 00:20:09,960 Speaker 1: to a car, and when it drives that car, they 413 00:20:10,000 --> 00:20:12,760 Speaker 1: don't care if the car is gasoline, diesel, or electric. 414 00:20:12,880 --> 00:20:14,439 Speaker 1: They need a set of wheels and they want to 415 00:20:14,440 --> 00:20:16,800 Speaker 1: get around, right, it's mobility for them. First step is 416 00:20:16,800 --> 00:20:20,520 Speaker 1: getting moving. And then you've got other regions like Europe 417 00:20:20,600 --> 00:20:23,879 Speaker 1: for example, that have quite specifically said we want to 418 00:20:23,880 --> 00:20:26,679 Speaker 1: be net zero by X year. China came out a 419 00:20:26,680 --> 00:20:30,119 Speaker 1: few weeks ago said the same. For you are seeing 420 00:20:30,119 --> 00:20:33,879 Speaker 1: shifts towards this amongst policy makers. That obviously has an 421 00:20:33,880 --> 00:20:38,600 Speaker 1: impact on where oil consumption happens and how it develops 422 00:20:38,600 --> 00:20:41,840 Speaker 1: in future. And I think you'll probably see a clearer 423 00:20:41,880 --> 00:20:44,439 Speaker 1: path or a direction coming from the US now that 424 00:20:44,480 --> 00:20:48,200 Speaker 1: there will be a new president in place come So yeah, 425 00:20:48,359 --> 00:20:51,280 Speaker 1: it's a different story in all different regions of the world, 426 00:20:51,560 --> 00:20:54,720 Speaker 1: and that really has impacted how the oil companies based 427 00:20:54,720 --> 00:20:59,000 Speaker 1: on those regions have reacted so total. For example, they 428 00:20:59,000 --> 00:21:03,160 Speaker 1: have a net zero to target for European oil sales 429 00:21:03,200 --> 00:21:06,200 Speaker 1: on the product, which they don't have for other parts 430 00:21:06,240 --> 00:21:08,600 Speaker 1: of the world. That's kind of a talent sign to me. 431 00:21:08,960 --> 00:21:12,919 Speaker 1: We've already got places that road fuel consumption has peaked 432 00:21:13,160 --> 00:21:16,280 Speaker 1: and is in decline in Europe for example. So yeah, 433 00:21:16,359 --> 00:21:19,160 Speaker 1: the story is completely different and moving at different paces. 434 00:21:19,600 --> 00:21:22,280 Speaker 1: Some are going to see different parts grow, some are 435 00:21:22,280 --> 00:21:25,120 Speaker 1: going to see parts slow, even in places like Europe, 436 00:21:25,119 --> 00:21:26,840 Speaker 1: where it's probably going to be the first place to 437 00:21:26,880 --> 00:21:29,919 Speaker 1: peek and decline, you're going to see things like aviation 438 00:21:30,000 --> 00:21:33,720 Speaker 1: fuel continue to grow. So the story is different by sector, 439 00:21:33,720 --> 00:21:36,960 Speaker 1: by reagion, by fuel type, but it's fast moving and 440 00:21:36,960 --> 00:21:38,960 Speaker 1: it changes, you know, as soon as the regulation comes 441 00:21:38,960 --> 00:21:42,639 Speaker 1: into play or policy. We're seeing these things tipped quite quickly. 442 00:21:42,680 --> 00:21:45,080 Speaker 1: So while we wouldn't have had this chat a year 443 00:21:45,080 --> 00:21:47,480 Speaker 1: ago or two years ago and said these same things, 444 00:21:48,000 --> 00:21:49,880 Speaker 1: you know, a year makes a massive difference when we're 445 00:21:49,880 --> 00:21:53,080 Speaker 1: seeing these big pushes and long term comeback greener, I 446 00:21:53,080 --> 00:21:55,879 Speaker 1: guess after this COVID, So the takeaway to me seems 447 00:21:55,880 --> 00:21:59,200 Speaker 1: to be okay, come back greener for one, but also 448 00:21:59,560 --> 00:22:01,399 Speaker 1: that necess are they looking at the peak but everything 449 00:22:02,240 --> 00:22:05,080 Speaker 1: besides the peak? You know, the things that contribute to 450 00:22:05,480 --> 00:22:07,879 Speaker 1: reduction in oil demand are the things that you actually 451 00:22:08,240 --> 00:22:10,600 Speaker 1: need to be we've you know, humans actually need to 452 00:22:10,600 --> 00:22:13,920 Speaker 1: be looking at to understand peak. Is that fair? Yeah? 453 00:22:13,960 --> 00:22:16,320 Speaker 1: I think that's fair. Substitution is a big part of 454 00:22:16,480 --> 00:22:20,680 Speaker 1: what drive system when that number we think happens comes 455 00:22:21,000 --> 00:22:23,240 Speaker 1: or if it doesn't come, I mean, whether we drive 456 00:22:24,000 --> 00:22:28,119 Speaker 1: use plastics, reduce the plastics. Yeah, Okay, and so that 457 00:22:28,200 --> 00:22:31,080 Speaker 1: kind of leads me to, are there any sectors or 458 00:22:31,240 --> 00:22:34,240 Speaker 1: questions in your analysis either this year in NEO that 459 00:22:34,359 --> 00:22:36,640 Speaker 1: we're kind of gaps or that you hope to fill 460 00:22:36,720 --> 00:22:40,240 Speaker 1: next year? Is to get more detail on I mean, 461 00:22:40,280 --> 00:22:42,760 Speaker 1: every year we try to build down new technologies and 462 00:22:42,800 --> 00:22:46,600 Speaker 1: see what might change or fundamentally destruct the oil market. 463 00:22:46,800 --> 00:22:50,520 Speaker 1: A good example, I guess this year is the aviation sector. 464 00:22:50,600 --> 00:22:52,840 Speaker 1: We saw earlier in this year, for example, air Boss 465 00:22:52,880 --> 00:22:57,119 Speaker 1: saying that they're going to introduce a hydrogen powered aircraft 466 00:22:57,480 --> 00:23:00,720 Speaker 1: for commercial use in the second half of the twenty thirties. 467 00:23:00,920 --> 00:23:03,240 Speaker 1: We don't understand enough about that just yet to see 468 00:23:03,280 --> 00:23:06,720 Speaker 1: what disruption that could cause. But as new technologies come 469 00:23:06,720 --> 00:23:09,080 Speaker 1: into the mix and start to be you know, taken 470 00:23:09,119 --> 00:23:12,000 Speaker 1: more seriously, we have to think about how that is 471 00:23:12,000 --> 00:23:14,160 Speaker 1: going to impact the oil market. And those things can 472 00:23:14,359 --> 00:23:15,920 Speaker 1: you know, they come at a tipping point and then 473 00:23:15,960 --> 00:23:18,560 Speaker 1: go quite quickly. If you look five or six years 474 00:23:18,600 --> 00:23:21,439 Speaker 1: ago at a forecast for the road field sector, there 475 00:23:21,440 --> 00:23:24,800 Speaker 1: will not be that many electric vehicles baked into that forecast, 476 00:23:25,160 --> 00:23:28,600 Speaker 1: and that's changed significantly regardless of who forecasts. So things 477 00:23:28,640 --> 00:23:32,000 Speaker 1: like this happened quite quickly. Might be if we see 478 00:23:32,040 --> 00:23:36,639 Speaker 1: that actually electric vehicles or hydrogen trucks become cheaper, quicker, faster, 479 00:23:36,800 --> 00:23:40,399 Speaker 1: and get rolled out quicker. Likewise, that peak and beyond 480 00:23:40,440 --> 00:23:42,280 Speaker 1: where we see a decline, it might be a much 481 00:23:42,320 --> 00:23:45,280 Speaker 1: faster decline if the you know, the aircraft fleet is 482 00:23:45,560 --> 00:23:48,919 Speaker 1: ran on hydrogen, or if all the plastic is recycled 483 00:23:48,960 --> 00:23:52,439 Speaker 1: and the circular economy policies take a grip and change 484 00:23:52,440 --> 00:23:55,560 Speaker 1: that sector completely. So yeah, there's a bunch of things 485 00:23:55,560 --> 00:23:57,760 Speaker 1: that can be done that it will completely change this outlook. 486 00:23:57,880 --> 00:23:59,680 Speaker 1: Each year. We're going to add into it, of course, 487 00:23:59,720 --> 00:24:02,520 Speaker 1: and I do things better and more granularity to get 488 00:24:02,520 --> 00:24:04,920 Speaker 1: a better understanding of them. But it just takes one 489 00:24:05,240 --> 00:24:08,680 Speaker 1: or two technology changes to really shift how quickly this 490 00:24:08,760 --> 00:24:13,280 Speaker 1: thing goes from a story into maybe a story. But 491 00:24:13,359 --> 00:24:15,960 Speaker 1: I think that there's more that can happen to bring 492 00:24:16,000 --> 00:24:18,920 Speaker 1: it closer to us in time then would likely happen 493 00:24:19,000 --> 00:24:21,040 Speaker 1: for to move further out of time. So what I 494 00:24:21,040 --> 00:24:23,280 Speaker 1: mean is more likely that it will happen quicker and 495 00:24:23,359 --> 00:24:27,600 Speaker 1: peak versus being pushed back and further out into the future. 496 00:24:27,800 --> 00:24:29,720 Speaker 1: It can happen faster. I guess that's all you're saying. 497 00:24:29,920 --> 00:24:32,000 Speaker 1: I think, so, yeah, yeah, I think so you get 498 00:24:32,040 --> 00:24:35,840 Speaker 1: a policy, push a subsidy something like that, and you 499 00:24:35,880 --> 00:24:38,440 Speaker 1: never know, Like the trucking fleet in Europe could switch 500 00:24:38,440 --> 00:24:40,440 Speaker 1: away from diesel quite quickly if it was pushed to 501 00:24:40,480 --> 00:24:43,360 Speaker 1: do so. That's big, that's a big amount of barrels. 502 00:24:43,440 --> 00:24:46,040 Speaker 1: So yeah, it can happen pretty quickly. I still always 503 00:24:46,040 --> 00:24:49,640 Speaker 1: think about how quickly mobile phones have changed the way 504 00:24:49,680 --> 00:24:51,919 Speaker 1: that we all live. I think someone said that, like 505 00:24:51,960 --> 00:24:54,520 Speaker 1: technology feels like it's happening really slowly, but actually it 506 00:24:54,560 --> 00:24:59,840 Speaker 1: happens extraordinarily fast. I mean, the key thing for anything 507 00:25:00,200 --> 00:25:02,880 Speaker 1: is that the substitute needs to do the exact same 508 00:25:02,880 --> 00:25:05,280 Speaker 1: thing as the thing that it's replacing. We've seen already 509 00:25:05,280 --> 00:25:07,920 Speaker 1: with electric vehicles that people talking about, you know, range 510 00:25:07,920 --> 00:25:11,560 Speaker 1: anxiety for example, has gone away really quickly. So if 511 00:25:11,600 --> 00:25:13,639 Speaker 1: you could get truck drivers on board and say, do 512 00:25:13,640 --> 00:25:16,600 Speaker 1: you know, actually this hydrogen powers my truck and I 513 00:25:16,680 --> 00:25:18,320 Speaker 1: can drive it the same way as I used to 514 00:25:18,400 --> 00:25:21,600 Speaker 1: drive my diesel, whether their shipped towards it. When the 515 00:25:21,640 --> 00:25:25,240 Speaker 1: cost makes sense, if I'm flying somewhere on vacation and 516 00:25:25,320 --> 00:25:27,840 Speaker 1: it's an electric or a hydrogen aircraft, and I don't 517 00:25:27,880 --> 00:25:30,399 Speaker 1: have to pay four times the ticket price and it's 518 00:25:30,440 --> 00:25:33,200 Speaker 1: pretty much the same. You know, I'm gonna fly on 519 00:25:33,280 --> 00:25:36,800 Speaker 1: that airplane, but it has to be a perfect replacement. 520 00:25:36,920 --> 00:25:40,040 Speaker 1: I guess you know everybody has had that Soviet paper 521 00:25:40,160 --> 00:25:42,840 Speaker 1: or cardboard straw with their drink, and nobody loves that. 522 00:25:42,840 --> 00:25:45,520 Speaker 1: That's not a direct replacement for a plastic straw, right, 523 00:25:45,600 --> 00:25:49,080 Speaker 1: It ruins your drink. So it's all about what the 524 00:25:49,080 --> 00:25:54,360 Speaker 1: replacement can do to mimic and directly replace the thing 525 00:25:54,440 --> 00:25:57,200 Speaker 1: that is getting rid of O shifting. So between now 526 00:25:57,400 --> 00:26:00,560 Speaker 1: and hopefully you will still be doing this podcast at 527 00:26:00,560 --> 00:26:03,399 Speaker 1: that point, let's make sure that we don't miss the 528 00:26:03,480 --> 00:26:06,400 Speaker 1: peak if it hasn't already happened. If we find that 529 00:26:06,400 --> 00:26:07,920 Speaker 1: that day has come, we'll have you back on the 530 00:26:07,960 --> 00:26:10,280 Speaker 1: show and we'll talk about it then. Thanks, Dana, I 531 00:26:10,359 --> 00:26:13,520 Speaker 1: take that as an open in fine. Thanks, guys enjoyed. 532 00:26:21,800 --> 00:26:24,399 Speaker 1: Today's episode of Switched On was edited by Rex Warner 533 00:26:24,520 --> 00:26:26,680 Speaker 1: of Gray Stoak Media. Bloomberg an e F is a 534 00:26:26,720 --> 00:26:29,560 Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This 535 00:26:29,640 --> 00:26:32,200 Speaker 1: recording does not constitute, nor it should it be construed 536 00:26:32,240 --> 00:26:35,960 Speaker 1: as investment advice, investment recommendations, or a recommendation as to 537 00:26:36,200 --> 00:26:38,760 Speaker 1: an investment or other strategy. Bloomberguin e F should not 538 00:26:38,840 --> 00:26:41,480 Speaker 1: be considered as information sufficient upon which to base an 539 00:26:41,560 --> 00:26:45,080 Speaker 1: investment decision. Neither Bloomberg Finance LP nor any of its 540 00:26:45,080 --> 00:26:48,520 Speaker 1: affiliates makes any representation or warranty as to the accuracy 541 00:26:48,640 --> 00:26:51,320 Speaker 1: or completeness of the information contained in this recording, and 542 00:26:51,400 --> 00:26:54,040 Speaker 1: any liability as a result of this recording that expressly 543 00:26:54,080 --> 00:26:54,520 Speaker 1: disclosed