Elon Musk, CEO of Tesla, took to Twitter to share some thoughts on the current oil, gas and Russia situation. On Friday, he said that we need to immediately increase oil and gas production, while pointing out that extraordinary times call for extraordinary measures.
Obviously, this will negatively impact Tesla, but sustainable energy solutions simply can’t react instantly to offset Russia’s oil and gas exports.
— Elon Musk (@elonmusk) March 5, 2022
He added that this would negatively impact Tesla, but the reality is that right now, sustainable energy solutions cannot react quickly enough to offset Russian oil and gas exports.
However, it is worth noting that he did not say at all that let’s abandon sustainable energy solutions. We just need broad, quick solutions to the crisis. Elon Musk added in another tweet that a short-term increase in oil and gas production is critical. Without it, people all over the world will struggle. It is about having enough energy to power civilization.
A complete energy transition takes a long time. At the same time, short-term problems with the supply of fuel affect the entire population and require a responsible solution.
If the world had started the transition to sustainable energy (solar, wind, hydro, tidal, etc.) earlier and accelerated its progress faster, the world would not be dependent on oil-producing countries for their energy.
But nothing can be done to change the past… so… Tesla.$TSLA
— James Stephenson (@ICannot_Enough) March 5, 2022
Many countries, including the US, have imposed sanctions on Russia following its illegal invasion of Ukraine. These sanctions target banks, oligarchs and other financial institutions. Insider reports that many countries have refrained from imposing sanctions on the Russian energy sector, but oil and gas exports from Russia are declining anyway as international refineries and banks shut down their operations with Russia.
NPR reported that many oil companies were leaving. Shell, BP and Exxon cut ties with Russia. BP was the first to do so, announcing its plans to sell a 20% stake in Rosneft. BP Chairman Helge Lund said: “This military action represents a fundamental change.”
Shell and Exxon followed BP’s lead. Exxon, which has a long history of cooperation with Russia, shared its support for the people of Ukraine as they try to survive and protect their country.
“ExxonMobil supports the people of Ukraine in their quest to defend their freedom and determine their future as a nation. We condemn Russian military actions that violate the territorial integrity of Ukraine and endanger its people.”
In his State of the Union address, President Biden said the US would release 30 million barrels of oil from the Strategic Petroleum Reserve as part of a global effort to protect both consumers and businesses from rising fuel prices. In total, the US and 30 other countries are releasing 60 million barrels of oil from reserves around the world.
According to the US Energy Information Administration, Russia is the third largest oil producer in the world. Second only to the US and China. Russia occupies 11% of the world market share. However, as part of the economy, Russia is much more dependent on oil and gas than the US or China, which have a much more diversified and resilient economy.
Is growth in US oil production realistic in the short term?
However, it is important to recognize that a significant increase in oil and gas production at this stage means more drilling. Vox published a brilliant article discussing why drilling will not solve the problem of gas prices in America or the problem with Russia. The article examines four myths about the prices of oil and gas, which are spread by the Republicans. The first myth is that Biden killed oil production. The reality, as Vox points out, is that the Biden administration outpaced Trump in issuing drilling permits on public lands and waters during Biden’s first year in office (many leftists were upset about this). The Biden administration also set a record for the largest offshore rental sale in the Gulf of Mexico last year.
Another myth is that the oil and gas industry can ramp up production quickly to drive down prices. Compared to what Elon said about sustainable energy solutions reacting instantly, it would seem that the oil and gas industry can evolve faster than sustainable solutions. Maybe, maybe not.
Vox cited profit and loss reports that oil companies have held with their shareholders. According to these calls, these companies do not plan to produce much more. In 2020, oil demand collapsed due to the pandemic. Now the demand for oil and gas is relatively high, but not historically high. Pioneer CEO Scott Sheffield told Bloomberg TV that he doesn’t think the oil industry can grow anyway. He said,
“Whether it’s $150 oil, $200 oil, or $100 oil, we’re not going to change our growth plans. If the president wants us to grow, I just don’t think the industry can grow anyway.”
You can read the full Vox article here.
Last 2.5 cents
If the world had started the transition to sustainable energy (solar, wind, hydro, tidal, etc.) earlier and accelerated its progress faster, the world would not be dependent on oil-producing countries for their energy.
But nothing can be done to change the past… so… Tesla.$TSLA
— James Stephenson (@ICannot_Enough) March 5, 2022
This is a really difficult situation the world is in and I personally find it frightening that one person had the power to throw us all into this situation. This man is Putin. He made the choice to invade Ukraine and it’s really confusing that he can just go there and bomb people and he can’t be stopped.
Someone mentioned in another’s comments that I was wrong to accuse him of genocide, and although I didn’t use that term, I believe that killing people on a large scale is actually genocide. And that’s what he does. What else do you call the bombing of schools, apartment buildings, businesses, etc.? Vacation? The Ukrainian man was told that he just wants the Ukrainians to die and leave.
All these deaths are unnecessary and could have been avoided if Putin had simply left Ukraine alone.
We see again in this humanitarian and geopolitical crisis that we remain critically dependent on oil and gas for many things. Tesla is making huge strides, but not enough to replace the 650,000 barrels of oil a day we get from Russia. And the fact that Elon Musk came out and said this, knowing the implications it could have for Tesla, shows that he is looking at the bigger picture.
Appreciate the originality of CleanTechnica? Consider becoming a CleanTechnica Contributor, Supporter, Technician, or Ambassador – or Patreon Patron.
Advertising
Do you have a tip for CleanTechnica, want to advertise or suggest a guest for our CleanTech Talk podcast? Contact us here.