EDMONTON, Alberta – Despite a record deal recently reached by OPEC+ to cut global oil production by at least 10%, WTI and Brent crude oil prices opened this morning only up $1 per barrel. This modest upside is largely because the agreed-upon 10% cut will still leave current production at 20 million b/d greater than global demand that has been decimated by the coronavirus pandemic.
This chaotic mismatch between supply and demand has left the world awash with crude oil, and we are quickly running out of places to put it. The head of the IEA is greatly concerned that the worst case scenario is only months away.
“We have a serious problem here. Global oil storage is currently at 85% capacity and our models predict that we’ll hit full capacity by the middle of June, despite the deal recently reached by OPEC+. What happens if we reach this limit? Nothing good. Negative oil prices comes to mind.” – Jackson Holeson, President, IEA.
Oil and gas industry think-tanks and analysts from around the world have been brainstorming ways to fix the demand-supply imbalance. Some regulatory bodies are pushing to build more storage facilities but the costs associated with this is prohibitive and space is limited. US President Donald Trump tweeted that he is working with the Governor of Arizona on ideas to possibly line the Grand Canyon pool liner, or possibly even tile it, “where we should be able to store 1 billion or possibly 2 billion barrels of oil.”
But a group of Calgary-based engineers is looking to attack this problem from a very different angle: to hyper-deplete the stockpiled oil inventory at the source.
“Coronavirus decimated demand – we can’t control that part of the equation. But what we can control is the supply, this glut of oil, that is sitting in massive tanks around the world just filling up as we speak. Oil burns, right, and in the process generates fire. So we’ve started a petition and with enough signatures we plan to lobby the EIA, IEA, and OECED to synchronize a record-breaking bonfire at midnight local time around the world.” – Shaner Butternuts, P.Eng., founder of Bonfire for Oil Prices
The group has a rather large following and continues to grow through social media. According to its Instagram bio, the group believes that we have the technology to make it happen. “The best part about this idea is that it supports physical distancing while providing free entertainment. We expect pretty much 75-85% of the world’s population to be able to enjoy the light and heat show from the comfort of their homes or yards, from pretty much every corner of the world,” Mr. Butternuts continued. “We even reached out to Elon Musk who says that he’ll support the endeavour by live-streaming the 24-hour event from one of his Space-XXX satellites, or even from the Tesla convertible that he has in orbit!”
Mr. Butternuts figures that the path of least effort would be to start the bonfires from the thief hatch atop each of the 1 million barrel storage tanks throughout the Gulf Coast, in Cushing, OK; Trieste, Italy; various locations in the UAE, Scotland, and of course in Hardisty, Alberta, just to name a few locations. Oxygen would have to be supplied to control the size of the burn. His team’s models predict that the 24-hour burn-off would have to consume at between 1100 million and 1600 million barrels that are currently stored, in order to bring supply back in balance with demand. Each area would be lit at midnight local time for a rolling, international bonfire of epic proportions.
Opponents to the idea, namely Green POS, claim that the CO2 footprint of burning over 1600 million barrels of oil within a 24-hour period would put the earth into a tailspin from which it simply could not recover. The organization did admit, however, that if it means there will be less crude oil on the planet post bonfire, then they are all for it.