ENB Pub Note: This article is an example of an article without one critical bit of information. There are not enough money or critical minerals to make this happen.
Crash and burn. That is the conclusion of the researchers at UK’s Rethink Energy. This article draws its main points from their recent report, “Russia’s war wakes sleeping renewables giants of post 2030 power,” with comments from me interspersed in between.
Rethink Energy is known for its aggressive predictions of the decline of the oil industry, the rise of renewables, and the imminent domination of electric vehicles on our roads. It has a proven track record, and analysis is based on a broad range of data sources.
“At present there are too many energy models which rely on the idea of ‘primary’ energy, and show a ludicrously high value of fossil fuels long into the future. Relying on forecasts from oil companies, or from the IEA or government quangos with vested interests in oil or old-world forecasters who’s customers are used to ‘inspecting and correcting’ their forecasts, will no longer do.”
They predict that the $4.6 trillion oil and gas exploration market will be “going away” faster than anyone is expecting. It will be replaced at an ever increasing speed by the renewable energy market.
Rethink Energy produces an “Annual Primary Electricity” model each year. It is now in it’s third edition. The analysis has led to the startling conclusion that: “The Oil industry has already peaked and will crash and burn very early in the 2030s. The fight for the countries which will replace the dominance of oil with renewables has already begun.”
Half of the oil produced is used by the road transport sector. Our lives have been built around the use of the internal combustion engine (ICE). We design our houses, roads, and cities to accommodate our cars, commercial vehicles, trucks, and buses. But as we are discovering – these vehicles no longer need to be ICE vehicles. They do not have to run on diesel, petrol, or any other form of refined oil. And they shouldn’t.
Many jurisdictions have already signed the death certificate of ICE by outlawing the sale of new ICE vehicles in the not too distant future. From the early 2030s, it will be illegal to sell new ICE cars in most of Europe and China and in many US states. EVs have been growing at 60% global adoption for many years. The last two years, the uptake is increasing at a rate approaching 100% growth.
“Once the demand for oil diminishes and zero emission vehicles (cars, trucks, buses and trains) scale up, the old oil empires will start to crumble and the post 2030 energy world will look very different from today’s polarized fossil fuel view. Energy giants like Saudi Arabia and Qatar will be replaced by countries like Australia and Chile, which will fully harness their colossal solar potential, while some desert countries, like Saudi, will fail to fully appreciate that its landscape could also be totally transformed by solar.”
RE identifies Egypt, Mauritania, Kazakhstan, and Oman as countries that may well benefit from the transition to renewables and potentially a future hydrogen economy.
Looking at the range of energy sources, RE predicts that coal usage for electricity generation will increase in the next three years as expensive natural gas is phased out. Natural gas is being used more for home heating and less and less for electricity generation due to shortages and price hikes, as the Russian–Ukraine war rages on.
We can’t underestimate the part that Russia is playing in reducing its own export earnings from gas. European governments don’t want to be fooled again and have ramped up their efforts to be free from gas imports.
Asia-Pacific however is expected to keep relying on fossil fuels with natural gas peaking in 2028 while Europe and the Americas are already decreasing consumption after huge efforts since the start of the war.”
RE believes that global oil has already peaked, but it expects global oil demand to hit another smaller peak around 2028. Electric vehicles will hasten the demise. Oil-rich states may attempt to keep oil prices high by limiting supply, but the crash and burn is inevitable.
Countries that have oil reserves but cannot produce it cheaply, like Mexico and Brazil, are in danger of “falling behind in the renewables race.” For years, they have depended on oil exports to fund their government agendas. Does further instability await them? RE thinks that, of the two, Brazil is in the better position, with Lula Da Silva promoting renewables and promising a transition to a sustainable Brazil.
President da Silva plans to reposition Petrobras, the partly state-owned Brazilian oil producer. He wants the company to focus on decarbonisation and invest its profits into renewables.
The Mexican government is trying to regain control of the energy sector from private companies. This has led to an undermining of efforts to expand renewable power generation. RE expects that a change in attitude may occur after the next election in 2024. “Mexican authorities are influencing the regulatory agencies to keep renewable firms out of the market, not allowing them to operate fairly.”
Countries such as Australia and Chile are set to benefit both from the transition to renewable energy and the hydrogen economy because of their vast amounts of solar irradiance and desert areas. RE points out that Western Australia alone “will represent a major resource for the country’s potential solar capacity of 730 GW by 2050 which could generate 2,000,000 GWh per year.”
Australian governments at both state and federal levels are encouraging the setting up of Renewable Energy Zones and encouraging investments. Recently, investments topped an aggregate $50 billion. Excess electricity generated is slated to be used in the emerging green hydrogen industry.
With such vast amounts of clean electricity excess, green hydrogen exports should be at the front of the Australian government’s mind. And recent investments summing up to just short of $50 billion in renewables projects on top of an expanding wind sector signify that this is indeed the case.
The post Oil Industry To Crash & Burn By Early 2030s appeared first on Energy News Beat.
Energy News Beat