• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 mins Bad news for e-cars keeps coming
  • 4 mins How Far Have We Really Gotten With Alternative Energy
  • 13 days What fool thought this was a good idea...
  • 1 day The U.S. Is Determined to Revolutionize Its Microchip Industry
  • 11 days A question...
  • 16 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
Osama Rizvi

Osama Rizvi

Osama Rizvi is an Economic and Energy Analyst with a special focus on commodities, macroeconomy, geopolitics, and climate change. He has written for various print…

More Info

Premium Content

Fossil Fuels Will Continue To Dominate For Decades To Come


The stone age didn’t end due to a lack of stones, and the oil age will end long before the “world runs out of oil”. This quote, often attributed to Saudi Oil Minister Shiekh Yamani, highlights a vital and frequently misunderstood fact about the oil industry. Oil supplies are not going to run out, but oil will eventually be replaced by cheaper, cleaner, and more efficient energy sources. This misunderstanding has led many analysts to predict the death of the oil industry. The Paris Agreement has set a global goal to control climate change and reduce the temperature of the earth. That goal will not be achievable until the world shifts from fossil fuels to clean and renewable energy. These ambitious targets are sure to accelerate the global energy transition away from fossil fuels, but it remains unclear just how long that transition will take.

On his very first day in office, President Biden canceled the Keystone XL Pipeline. China has vowed to be carbon neutral by 2060 and recently launched the world’s largest carbon trading market. Meanwhile, both Japan and the European Union have promised to eliminate carbon emissions by 2050 and the European Union aims to be carbon neutral by 2050. The Biden administration has promised to set aside $2 trillion for decarbonization and plans to rejoin the Paris Agreement. All of these commitments are certainly impressive in theory, but in reality, they are going to run into two major problems. The first is achieving the adoption of renewable energy at an incredibly unrealistic speed, the second is ensuring that the system that we are transitioning to does what it needs to do. It is important to note that we do not currently have many of the technologies that we will need if we are to reduce carbon emissions by the levels set out in the Paris Climate Agreement.

In most energy transition plans, Carbon, Capture, and Storage (CCS) systems are one of the key technologies that will help curb CO2 emissions by capturing carbon from the environment and storing it in subsea facilities. However, as of 2020, only 26 facilities were working globally, capturing 40 million tons of carbon dioxide. Meanwhile, in 2019 the world emitted more than 35 billion tons of carbon. Closing that gap requires serious technological breakthroughs, which may be why Elon Musk is offering $100 million to the best carbon capture technology in his new competition.

Another challenge to this transition is the sheer size and influence of the oil and gas industry. The oil and gas industry has a gargantuan infrastructure, and an elaborate network of pipelines, wells, and other facilities. This is the infrastructure that our current energy grids are based upon. According to Czech-Canadian scientist and policy analyst Vaclav Smil, the U.S. would have to dedicate 25–50 percent of its landmass to solar, wind, and biofuels if it hopes to satiate U.S. energy consumption with renewables. Such a drastic change will come up against plenty of resistance from the oil and gas industry and will take significant time and investment.

The next big problem with the energy transition is the inherent limitations of renewable energy sources. One of these is power density, i.e. amount of power per unit volume, denominated as Watt per square mile (W/m2). The power density of an energy system running on fossil fuels is “two to three orders of magnitude” above that of a wind or hydro-generation system according to Smil. Closely related to this concept is the element of spatial constraints. Renewable energy systems, due to their low power density, require vast swathes of land. An MIT study predicts that 33,000 square kilometers of land would be required in order to power U.S. electricity demand with solar energy. Similarly, it would require using half of the UK landmass for wind turbines if the country were to use wind for all its energy needs.

Related Video: Why The Oil & Gas Rig Count Matters

While the ambitious pledges from various international bodies and governments would suggest the energy transition is near, the gap between theory and reality here is vast. Fossil fuels supplied 84 percent of global energy needs in 2020, which is a worrying number for those eager to reduce CO2 emissions. According to Climate Action Network., the EU will need to increase its use of renewables by 50 percent by 2030 and 100 percent by 2040 in order to adhere to the Paris Agreement’s climate goals.


Source: Our World In Data

But it isn’t all doom and gloom for energy transition proponents. The focus on Environmental, Social, and Governance (ESG) investing is influencing how private companies act. BlackRock, the largest asset manager on earth with over $7 trillion under management, has stressed that companies need to take climate change seriously. These moves in the private sector could significantly accelerate the energy transition.

While optimism has helped to galvanize support for a global energy transition, a degree of realism is necessary as well. It will likely be decades before a full global energy transition can take place, and in the meantime, the most effective way to reduce emissions would be to control consumption. This is a process that faces financial, technological, and social hurdles, and predicting how long it will take is a near-impossible task. The energy transition may have begun, but there is a very long way to go before fossil fuel dominance is truly challenged.


By Osama Rizvi for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Alan Dr on March 18 2021 said:
    In all these future predictions about energy use and technology there seems to be every time a complete unawares about the imminent reduction of the population in most areas of the planet. Because of political and economic reasons we are supposed to believe that all markets and economies will keep growing way into the next century. This is a general accepted truth that is far from reality. Unlike what many experts want to make you believe the world population will not keep growing into the next century. We are approaching a situation where there is only population growth in sub sharan Africa, the Middle East and a few countries in Asia namely Pakistan, Indonesia and the Philippines. All other parts of the world are already at a replacement rate fertility or below that. China for example is at the start of a serious population collapse and is expected to be half in population size at the end of the century. So it is a 100% certain that with population decline comes also a decline in the use of energy and fossil fuels in most parts of the world. The fossil fuel system has to be not only replaced this century but the system itself will be reduced in size at the same time.
  • Kris Poole on March 19 2021 said:
    @Osama Rizvi,

    I just want to thank you for this article. This is the FIRST article for a long time, that is worthy to be posted on professional site like OilPrice. A lot of authors on this site simply should not be writing here, because they belong to the global climate alarmists camp. You Sir, delivered short but very intelligent write up, based on logic and facts, not emotions. Thank you again.
  • Mamdouh Salameh on March 19 2021 said:
    Fossil fuels are here to stay. Anyone thinking otherwise is either deluding himself or daydreaming. The following observations will underscore my statement.

    1- Oil and natural gas will continue to be the fulcrum of the global economy and the core business of the global oil industry well into the future.
    2- There can neither be a post-oil era nor a peak oil demand either. With a growing global economy and a rising world population, the demand for oil and natural gas will continue to grow in absolute terms but the growth rates could decelerate very slightly with the advent of EVs.
    3- The notions of animminent global energy transition and zero emissions are illusions. Energy transition wouldn’t succeed without huge contributions from natural gas and nuclear energy. Those who talk about net zero emissions by 2050 are deluding themselves.
    4- The best contribution the global oil industry can offer to climate change and battling global emissions is to reduce carbon emissions from fossil fuels and not the actual use of fossil fuels. This means the industry will continue to reduce emissions from its production of oil and gas rather than embarking on a meaningless greenwashing of itself.
    5- EVs will never prevail over ICEs throughout the 21st century and far beyond. Furthermore, there will be a need for trillions of dollars of investment to expand the global electricity generation capacity in order to accommodate the extra electricity needed to recharge the supposedly millions of EVs. How could such expansion be sourced: nuclear, solar or hydrocarbons?

    The often quoted statement attributed to the late Saudi oil minister Sheikh Ahmad Zaki Yamani that “the Stone Age came to an end not for lack of stone and the Oil Age will end long before we run out of oil” is not strictly accurate. The Stone Age has never ended. It is still with us to this very minute in the form of the stones we continue to use to build houses, bridges and monuments. What has ended is only an aspect of the Stone Age, namely tool-making from stone, which has been substituted for practicability by bronze and metal tool making with the advent of metalworking, namely, smelting of Bronze and Iron.

    The same logic applies to oil. It is very doubtful that an alternative as versatile and practicable as oil, particularly in transport, could totally replace oil in the next 100 years and beyond. What will change is some aspects of the multi-uses of oil in electricity generation and water desalination which will eventually be mostly powered by solar energy. However, oil will continue to be used extensively in the global petrochemical industry and other industries and outlets from pharmaceuticals to plastics, aviation and computers to agriculture and overwhelmingly in transport. Oil will continue to reign supreme throughout the 21st century and far beyond.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News