In the last few years, the energy transition has moved from being a wished-for hypothetical to becoming a large-scale global trend. As this happens, it shakes up our understanding of the future. Some analysts are tempted, already, to define our situation as “
You misinterpret the data.
What you are seeing is a massive government-subsidized and mandated investments in Green energy and wide-spread government constraints on investment in fossil fuels. This is not evidence of an energy transition.
You need to focus on outputs, not inputs.
The reality is that green energy is not replacing fossil fuel usage. It is in addition to widespread usage of fossil fuels.
This analysis, with an obvious green left wing angle, obfuscates or perhaps deliberately deceives by stating that wind and solar are getting cheaper and remains silent about how govt subsidies are creating this unsustainable inversion. After global investment of over $5 trillion, wind and solar have only taken over 3-4% of energy production with fossil still supplying 80% of world energy needs. An astute observer grounded in reality will recognize that this amount of continued investment is unsustainable and fossil fuels will play a huge role well beyond 2050 and into the 22nd century. With the world already close if not at 1.5c temp rise, with no apprent disaster in sight, political will for further wasted low EROI supply will diminish significantly.
I think we should be careful how we use the term ‘investment’ as applied to fossil fuel versus renewables. Renewable energy infrastructure is a genuine investment, harvesting an ongoing source of ‘free energy’ and providing long term future income following initial construction. Fossil fuel ‘investment’ is really just continued drilling and pumping, or coal mine extension, into new reserves. In some places the energy return/energy used ratio no longer makes economic sense at global price levels, so it cannot be considered a long term source of income.
What is the basis for considering Russia's role in providing hydrocarbons and gas to the world markets on a reducing trend? Especially with the deals in Iraq and Iran, etc. With Russia winning the war in Ukraine and the west and especially US humiliated, why the scenario of reduced Russian influence has traction? And with KSA and China establishing a swap line for rials/renembi?
You don't include time constraints in your otherwise good analysis. There is a precipitous result if we damage our planet beyond human needs . It appears the fossil fuel makers and big burners say it's too late ; so they say let's changeover slowly, and hope for a geo-engineered solution. Certainly , we are doomed as specie ,if we move at current speed.
This is encouraging: Indonesia, currently a major user of coal, is making major investments in renewables, at least $20 billion by 2030. The article also mentions a previously-announced $15 billion plan from Vietnam.
Thanks as always, Adam. I learned from this piece. That said: you pass over the U.S. electoral politics with "The green wing of the Biden administration justifies this as a political necessity." But that's the whole ballgame! The Dems have pushed decarbonization to the electoral breaking point. Your top-down analysis of the political sway of concentrated fossil fuel players doesn't matter if voters themselves are the core support for cheap gasoline at the pump and cheap natural gas powering the grid overnight.
Steven Chu, former Secretary of Energy, recently suggested what kids should say to parents about climate change, and notably his comments toe the line of a post-growth economy (cued):
I have learned to take the IEA "estimates" with a grain of salt as they are based on what for the most part are "heroic" assumptions. Reality is that there are many obstacles in the way of solar and wind farms, as hoped for as they might be, from acquiring land to permitting, to construction and supply lines, and financing - not to mention politics which may the biggest obstacle of all. And my list doesn't include the changes and expansion the Grid must undergo, which is formidable. Bottom line we need to have REALISTIC plans that address all of these obstacles. I have yet to see anyone lay out a global plan as to HOW the energy transition will be accomplished, who does what, and at what COST. Maybe you have the answer but I am not optimistic that COP 28 will accomplish this - though I am sure they will set some inspiring goals.
The energy transition ignores the science and maths of energy.
Very interesting information, thank you!
The analysis is fundamentally well done except that it does not take into account the near zero interest rates in the 2010-2021 timeframe. Many businesses (from food to football) seem to have grandiose plans that were hatched when 10 year Tbills were under 2%. Those days will never return.
Thanks for this! 🙏🏽
You write, “The future of America’s oil industry no longer encapsulate the global energy transition problem. To think in those terms is an anachronistic hangover of the 1980s and 1990s. But it does matter.”
What are you trying to say here?
I open this up to anyone who thinks that they can prove that solar and wind replace coal and other fossil fuels. Prove it:
The latest in a series of adverts from BP on various British media claims that they have increased the proportion of their investment in renewable energy from 3% in 2019 to 30% in 2023. Describing their policy as 'and not or', continued investment in North Sea Oil is portrayed as 'Backing Britain'! Is the renewables investment claim credible? Is BPs approach really significantly different from the 'marking time' strategy you show to be more widespread among the big companies? If so, what is the explanation/back story?