Andrew Simms: yes, numpty again

Simms seems entirely incapable of understanding basic economics or business:

Using optimistic assumptions, the company nevertheless sees a gap emerging by 2050 between \”business-as-usual-supply\” and \”business-as-usual-demand\”, a gap so large that it is equal to the size of the whole industry in the year 2000.

So oil prices will soar then, yes?

The Shell report spoke of \”volatile transition\”, and of economic outlooks that range from \”severe-yet-sharp\” to \”deeper-and-longer\” and the marvellously catchy, if dated, \”Depression 2.0\”.

With so much insight, it is remarkable then, that Shell, like BP, has reversed at speed out of renewable energy. Shell dropped investment in wind, solar and hydrogen energy in 2009, the same year BP closed the London HQ of BP Alternative Energy, along with its solar plants in the US and Spain.

Why \”remarkable\”? I would have said \”blindingly obvious\” myself.

The oil price is going to soar, the oil companies will be making money hand over fist and they\’ve no need to lose money on things like hydrogen and bloody windmills, have they?

Man\’s a loon.

7 comments on “Andrew Simms: yes, numpty again

  1. “Shell dropped investment in wind, solar and hydrogen energy in 2009..”: in its time it dropped nuclear too. Does it still do coal or was that too dropped?

  2. Well the price may be rising, but will profits?
    Their costs will go through the roof too (much harder to find oil and much more difficult to extract) and there’ll be less volume at that higher price (because there’s less of it).

    If you can get the renewables cracked (spot the large assumption), then you have diversified against the risk that you can’t keep costs under control even with those wildly rising prices. (Or even that any of that remaining profit goes to you because you haven’t got the remaining workable fields).

  3. Thing is, if oil prices rise to make current let alone future renewables cost competitive, then it would be silly to drop investment in renewables. If energy does get more expensive you’ll want to be in as many different sources of it as possible.

  4. …..If you can get the renewables cracked (spot the large assumption), then you have diversified against the risk that you can’t keep costs under control even with those wildly rising prices……

    What the oil companies realised after trying this strategy for many years is that renewables are only viable with subsidy, and will be so for many moons to come.

    What they have done, is divest of the general and invest in the specific. They are all still spending a lot of money on research into new generation biofuels. This is the area that
    a) fits their current business best
    b) will benefit most from rising oil prices

    Because oil is not used to generate electricity (with a few island nation exceptions, and mad Middle Eastern nations) rising oil prices will not make wind or solar energy feasible. They will potentially do so for biofuels (although their raw materials will no doubt rise in such a scenario)

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