Claims that the end of petroleum use is near are heard regularly. Most assertions stem from enthusiastic environmentalists.
Unfortunately for them and for the global climate, oil and gas energy sources are going to be around for a long time even if corporations or governments meet the growing promises of net zero emissions in 10 or 20 years.
The global petroleum industry is too large and too important to many economies to quickly roll over and die.
According to statista.com the global petroleum industry comprises 3.8 per cent of global output or about $3.2 trillion in U.S. dollars.
Renewable energy — solar, wind, water power — are the only viable options for replacing petroleum energy sources. But these sources produce just under four per cent of world energy.
According to Statista, global renewable energy output in 2019 was $928 billion U.S. Although renewable energy output in 2020 is estimated at $1.5 billion, there needs to be growth at that rate for years to catch up to oil.
Can that rate of growth be sustainable that long without hiccups such as shortages of critical supplies? Likely not.
The politics of petroleum will continue to maintain the industry as critical simply to keep national treasuries in cash from industry tax and royalty revenues.
Petroleum exports are the number one earner of export currency in almost 30 countries.
In the Americas, petroleum is the top export for Canada, United States, Venezuela, Colombia and Peru.
Petroleum exports are number one in Russia, Norway, Finland, Kazakhstan, Albania, Greece, Poland, and Estonia.
That doesn’t include the Middle Eastern nations like Saudi Arabia.
In Africa, the top export is petroleum in Algeria, Libya, Egypt, Sudan, Ghana, Nigeria, Sierra Leone and Namibia.
Surprisingly, petroleum exports are number one in India.
Using virtually all petroleum for fuel, the global vehicle industry in 2019 built $1.8 trillion U.S. worth of product.
Vehicles are the number one export in Mexico, Sweden, United Kingdom, Spain, Portugal, Germany, Austria, Hungary, Romania, Morocco and Japan.
Electric vehicle production is growing 40 per cent a year, but will take many years to catch up to internal combustion engine vehicles. And there is the logistical issue of building the network of recharging stations needed for wider EV use.
The electric vehicle industry will cause upheaval in the automotive industry. These vehicles don't need the regular tune-ups and parts replacement as do internal combustion engines.
Electric vehicles themselves could be displaced once the technology of hydrogen fuelled vehicles becomes commercially viable.
Make no mistake. Petroleum will continue as a critical part of energy for a long time, but renewable energy will be the place to invest for growth by the next generation.
Ron Walter can be reached at [email protected]
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
