Suncor Energy Inc. T.SU

Back To Earth: Reality of the Energy Transition

[MigraineCall]

A great review on exactly where we are at, and the reality of the daunting scale of change we are embarking on and the mountain we have before us in the energy transition by Anas Alhajji.

https://anasalhajjieoa.substack.com/p/back-to-earth-reality-of-the-energy?utm_campaign=post&utm_medium=web

Back To Earth: Reality of the Energy Transition

Bullish for oil and gas 

ANAS ALHAJJI

EOA’S MAIN TAKEAWAYS

1. Data indicates that future demand for oil and gas is UNDERESTIMATED, while demand destruction is HYPED.

2. Global energy demand is increasing, making decarbonization more difficult to achieve, and the process of replacing fossil fuels slower.

3. Despite massive spending on renewables in the last two decades, fossil fuels remain the dominant source of energy in the world, even in Europe.

4. Coal remains the dominant source of electricity in India and China.

5. Oil is rarely used in power generation in the OECD, China, and India. Doubling or tripling solar and wind energy sources will have a very limited impact on oil demand.  However, the failure of renewable energy, and consequent power shortages, will have a significant impact on oil demand.

6. As LNG prices reached a record high in 2022, oil use in power generation increased.  The level of substitution among various energy sources last year was unprecedented.

   INTRODUCTION

   Global energy demand will continue to grow until the global population declines and urbanization ends.  But we all know this will take a very long time. To meet the growing demand for energy, we need ALL energy sources, ALL technologies that improve energy efficiency, and all kinds of transportation technologies (even those who do NOT believe in climate change know that pollution in big cities is a serious problem and something needs to be done about emissions).  While we need renewable energy, especially solar and wind, and green hydrogen, we also need fossil fuels.

   We support all energy sources, various technologies, and “alternative” vehicles, including EVs, but we are against hype and wishy-washy energy policies.

   TotalEnergies CEO Patrick Pouyanne, summed up these issues in an interview with CNBC last week, saying:

    

   • "Today, our society requires oil and gas … Why we are together, it is 80% of fossil fuels. There is no way to think that overnight we can just eliminate all that and rely only on 10% of low-carbon energy. It will take decades to build a new system,"

   • "If we don't invest enough, the [oil] price will not be $75 per barrel, it will be $150 or $200 and all consumers will be super unhappy and our life will be a nightmare,"

   • "So … producing with strict new standards demonstrating that we can produce oil and gas in a very smart way with lower emissions. At the same, we invest in the new low-carbon energy, and we do it in a large way."

   • -          "So, let's keep this balanced. It's difficult. I know the scientists told us you should forget [fossil fuels] — but life is like it is. We must make that transition at the pace which can be accepted by the society. That's also one condition of the success."