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Charlotte Howard (The Economist, Demand for Oil)

Feb 13, 2019|

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

The financial exchange. Is Cole a brutal England and also now in West Palm Beach, Florida. Check out our website at financial exchange showed Doug come and find the station closest to you. This is the financial exchange radio network. Joining us now is promises Charlotte Howard from the economist to talk about where oil demand is going in the future and whether or not there any risks. Facing big energy companies. Charl thanks for joining us today. Adding some sorrow what when we talked about oil production in general can you give us a sense of kind of where it stands today in and how much production is expected to grow. Over the next five to ten years. There's a lot of volatility. We in the market a week in week out it's not that. Ticker at last are the number of people award in a hundred dollar barrel. That it ballot or ballot oil and then not go out and crash. But in the long term. Demand because the population growth around the world and at the right thing and particularly in Asia companies expect demand for oil should be at bat. Now in terms of where what that means it means you're gonna see a whole bunch more investment flowing into the energy sector how how much money you're companies planning on investing going forward in order to produce new oil reserves are in order to get them out of the grounding us. Though oil company always need to get in bad parent an additional production because they're expecting rittner that are depleted over time. But you need some of the big companies and that led by ExxonMobil and any increased action now. ExxonMobil and take action by a oil and gas I got when he backed by eight relative to its funny and now we're at it when he at a Kabul and the reason they're doing that it because they see. On demand rising along perfect and they think that because of their technology. And that level of integration that you'd companies like ExxonMobil have the it'll be cricket or I'll have more efficiently. There. Charlotte and what when we look at this one of the questions that I have is in the last. Five or six years you started to see. A number of different investment funds from sovereign controlled funds to be an individual mutual funds. Moving towards no more carbon neutral platforms how does that affect. The amount of capital that flows into energy companies going forward and is something that these companies are guiding might be a risk for them in the future. There there are the buried by come. And I hole you do eat big impact Britain's national Baptist becoming more concerned about climate change. And wanting companies big and keep at it it's not for their rent. That there would eat pork and addict regulations that would it and it's like that price of oil at all. By unit but they're really variation though. In Europe. Our particular has been more aggressive in responding. Green inventors. They are prepared Arquette and lowering their passion their partner. But that really across the board even though there are a lot of the talk about it. Additional benefit big war more concerned about that and indeed the number of shareholder resolutions. I'm I'm related shareholder resolution for pat companies doubled. There. It's national that it earned not at all abandoning oil companies so there have been an announcement that at Edmonton. But at a ball shareholding at the top twenty it is that it actually an oil company actually increase its current court. Are there any energy companies in particular and I don't necessarily don't know any specific names but are there any particular that are really focusing on. You know hey if you do start to see more investors. Mentioning climate change as a reason to get out of oil companies or any of these oil companies saying hey we need to start making significant investments in renewables or anything like that. So again the European companies have been more aggressive in terms. Investing in wind and solar you'd buy them. Use it depends if the utility. And ExxonMobil would say that it is also investing in areas where it has. A technological advantage so there are bad they can't. Carbon capture secret streets and it hurts and it out there will be without you which it would really help. But the European champion and a bit more credit than about moving it. Renewable. That are available out there pillar at the nevertheless if you look at past the big companies. That the entity in the UK about what it back there. Across the biggest ask companies. And they estimated that at about one point 3% at capex capital expenditures and what it means what that broke our back. What about carpet aspect belt but to their normal that so. It took some companies are higher than that not lower back into it all is not moving aggressively market. Gergen Charl thanks for the time today in double catch up with the soon. Charlotte Howard from the economist talking about oil demand going forward. The the going back to your issue as it relates to alternative energy. The where we down like 2% 3%. Are we talking US worldwide you us meet take a lock. And not including Hydro because Hydro I. You know. And I don't wanna include tiger now I just wanna include wind and so. Though renewables excluding Hydro bouquet and and really I'll excluded just as tiger's been about 7% for the last two decades now has a really moved. Excluding Hydro and renewable which make up geothermal solar wind. Wood and author. Not make up about 10% actually of US production and the biggest piece rate that's risen law. It has you've we've gone. In. If you go back to 2000 it was only about 2% at that point so it's up to ten now. The biggest shift though has been the proliferation of Nat gas which in the last twenty years has gone from 16% of our power to 32%. What's lost or gone from 51 down to 30%. Senate residual yelling yeah yeah all you read about now is coal fired plants when it actually believe it up from 2016 between seventy and actually went up point 1% but that's likely just a little bit of a fluctuation there. Even though went up point one it was still net use here gross usage was going down at that it's gonna continue to decline. I think so it is no longer cost effective. It's it's not cost effective now and nobody wants their backyard don't.