Good morning, here's what the Oilman has for you today:

• Oil Industry Needs $12 Trillion in Fresh Investment

• Texas Turns to Gas, Coal To Keep Lights On

• Upcoming Oil and Gas Events

• Tweet of the Day

Oil Industry Needs $12 Trillion in Fresh Investment

No one ever said energy security comes cheap, and the head of OPEC is no exception.

Haithal al Ghais just said that the global oil industry needs investments worth $12 trillion to prevent a spike in prices.

Like that’s going to happen.

Taking your eyes off the ball has a cost

There’s been so much focus on emission cutting in the past three years a lot of people just forgot about energy security.

Europe was reminded how important this is last year, but it didn’t really learn its lesson.

So now OPEC’s sec-gen is reminding us all again: you can’t have energy security without energy.

And you can’t have affordable energy without spending money on exploration.

If you don’t spend the money, you get more expensive energy.

The irony is that lenders are turning their backs on oil and gas explorers.

Because funding new oil and gas exploration is politically incorrect these days.

It seems not one among these lenders cares how much oil will cost in five years as a result of these decisions.

The answer is “A lot”.

Higher for longer

“By underinvesting, we are actually endangering energy security… Without this [investment], I think there are serious possibilities that prices, the volatility, will be increasing as demand grows,” Al Ghais told CNN this week.

Some radical transition fans might argue demand is not going to grow, but the fact is, it is.

Demand for oil has been climbing for decades, regardless of the transition push.

It’s been climbing despite rising EV sales and all that wind and solar.

It’s been climbing despite rising prices.

Oil demand is going nowhere.

Energy security, on the other hand, might not be on the cards if we keep fixating on emissions.

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Texas Turns to Gas, Coal To Keep Lights On

Texas, the nation’s largest wind and solar generator, has turned to gas and coal to avoid blackouts this winter.

In anticipation of harsh weather, ERCOT has asked the operators of gas and coal plants to restart their mothballed facilities.

Transition talk is very good, but blackouts are no fun

In the summer, some media argued that it was solar and wind that saved Texas from blackouts.

Maybe they did.

But in the winter, it won’t be wind and solar that will keep the lights on.

They don’t work as effectively in winter when there’s less sunshine and less wind.

ERCOT has estimated there’s a 20% risk of a grid emergency this winter.

There’s also a 14% risk of blackouts.

That’s a bit too much for comfort.

So ERCOT is betting on certainty.

It’s looking to add 3 GW of capacity to the grid before winter comes.

And it won’t add them in wind and solar.

It might be a tougher job than it looks

Some of the capacity will come from mothballed coal and gas plants.

Some may come from new ones that are in the process of construction.

However, ERCOT has discovered that some potential additions are dead and buried.

“We literally can't get enough of these zombie power plants. These are literally dead power plants that they are trying to bring back to life,” one energy consultant said.

For the sake of the much larger population of Texas, we should hope the resurrection works.

Upcoming Oil & Gas Events

• October 8-10: New Mexico Oil & Gas Association Annual Meeting, Santa Fe, NM

• October 12: Arkansas Independent Producers & Royalty Owners Association Annual Meeting, Little Rock, AR

• October 12: Indiana Oil & Gas Association Annual Meeting, New Harmony, IN

• October 12: Oklahoma Oil and Gas Expo, Bennet Event Center, Oklahoma City, OK

• October 16: Fall Classic Golf Tournament, Ratliff Ranch Gold Links, Odessa, TX

Around the Global Patch

🇺🇳 UN's green fund secures $9.3 billion for climate action.
🇮🇩 Eni's major gas discovery in Indonesia.
🇷🇺 Russia's heating season fuel oil price regulation.

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