OUR DEPENDENCY ON FOSSIL FUELS
TABLE OF CONTENTS:
Correlation between energy, population, carbon emissions and GDP
Electrification and digitalisation
The looming decline of oil production
What happens when we reduce our fossil fuel consumption
- Introduction
Fossil fuels have empowered machines to do the hard mechanical work for us, providing enormous comfort and a high standard of living in our daily lives that people 3 centuries ago could not even dream of. The number of machines and power stations using fossil fuels is now such that for every person in industrialied society, these machines do the work equivalent of 200 human muscles. Yes, we all have an average of 200 "human slaves" in the form of machines working for us, and that's why we have paid holidays, entertainment everywhere, plenty of food available and affordable at the supermarket, etc...
Fossil fuels are everywhere. Wherever you look at a man-made object, it would not exist without fossil fuels. The food we eat was grown with fertiliser made from gas, it was harvested by tractors made of steel made from gas and powered by diesel, it is transported by trucks made of steel and powered by diesel. Plastic is everywhere, at home, in every room, in the car, in our clothes, in every packaging, literally everywhere, and it is made from oil. Concrete, the main material for all buildings and construction, is made of cement made by heat coming from coal or gas. Our roads are made of asphalt, a derivative of oil. Every piece of infrastructure requires construction trucks, made from fossil fuels and powered by diesel, and any material such as steel, aluminium, copper, is mined, refined and transported thanks to fossil fuels. Every electronic device (literally every device these days) requires chips made from silicon that was heated by gas or coal and shipped around the world on container ships powered by oil. And like our entire supply chain for every good we have, it is transported by cargo ship, made from steel (again made from gas or coal), burning kerosene.
Put it simply: Fossil fuels are everywhere. Wherever you look at a man-made object, it would not exist without fossil fuel.
Figure 1A: Cumulative world energy consumption over the last 2 centuries
Energy is the capacity to perform work, or the ability to do physical or chemical transformations. When I look at this graph in Figure 1A, it is utterly ridiculous, irrational and blind to the reality of our super-energised civilisation to claim that we are going to deliberately reduce our consumption of fossil fuels in the future, or that we are going to decouple or decarbonise our economy, let alone one day become 'net zero'. Any solution to reduce fossil fuel consumption, whether we do it deliberately or by the force of nature through resource depletion, will reduce the amount of available machines working for us, thus reducing our economic growth and quality of life. No one is willing to drastically reduce their standard of living and comfort so a deliberate reduction in fossil fuels won't happen. One way or another, the use of fossil fuels somewhere in the world will find a way to provide quality of life somewhere else. Reducing fossil fuel use is a guaranteed recession and depression. A massive reduction of 30% or more in per capita fossil fuel consumption over the next few decades would be far more catastrophic for humanity and cause far more suffering than climate change will cause us, more drastic than the ageing demographics of the industrialised world, and more pressing than current total debt. No one and no economy can afford or withstand a massive reduction in per capita fossil fuel consumption.
- Correlation between energy consumption, population, carbon emissions and the economy
You can find lots of researches and statistics on the following statements, so I will just present the facts with a simple graph. Any study on the subject is easy to find online:
Energy consumption and population growth are linear, as shown by the dotted line in Figure 1 above.
World GDP and energy consumption are linear and almost perfectly correlated.
The same goes for world GDP and material consumption, which correlate perfectly 1:1.
World energy consumption and CO2 emissions are also linear. There are thousands of studies proving that burning fossil fuels and CO2 emissions have a direct relationship, an almost perfect correlation, and leads to global warming.
A good summary of these correlations is shown in Figure 1B below.
Figure 1B: Correlation between energy and material consumption,
population, temperature, carbon emissions and GDP
To put this in real numbers, this is how much our world has grown on average over the last 15 years:
1% increase in oil consumption per year, from 102 million barrels per day in 2022 to 103 million per day in 2023.
World GDP growth of around 3% per year, relatively stable since 2009 except for 2020 due to the Covid-19 crisis.
1% population growth per year, with just over 8 billion people now living on planet Earth.
1.5% more carbon emission per year, from 37.3 billion tonnes of CO2 emissions in 2022 to 37.8 billion tonnes in year 2023.
And that brings us to the unfortunate reality: To reduce our carbon emissions, we need to reduce our fossil fuels consumption or our population or our economic growth, and nobody is willing to accept that.
The other reality is that any reduction in one of these three figures, world GDP, world energy consumption, world population, will have a direct impact on the reduction of the other two. There is no reduction in energy consumption without a reduction in world GDP. There would have been no massive population growth without abundant energy from fossil fuels.
Figure 1C: Correlation between oil consumption and GDP
As shown in Figure 1C above, oil consumption is almost perfectly correlated (92% correlation rate) with a country's GDP. The more stuff you have to move around by truck, ship or car, the more economic activity there is. It is quite simple and undeniable. The reverse is also true: Any reduction in the amount of oil available to a given population means less logistics, less activity and less income growth.
Figure 1D: Energy consumed per person VS GDP per capita
Figure 1D above shows that there is also a direct correlation between the total energy used per person and GDP per capita, regardless of the country or the type of energy consumed. Keep in mind 80% of total energy consumed is from fossil fuels. When fossil fuel consumption inevitably falls, real GDP per person will fall and living standards will reduce. As nobody wants lower living standards, energy consumption per person will continue to grow, as it did the past 200 years. and as 80% to 85% of this energy comes from fossil fuels, we will not be able to eliminate or even stabilise their use. The trend will continue to rise, as will the environmental impact.
- Energy consumption
In Figure 2A below, you can see that the five most energy consuming sectors are:
- Transport, mainly cars and trucks, which consume oil,
- Industry, which uses a mix of all 3 fossil fuels and also electricity,
- Industrial applications (fertilisers, plastics, etc.) using oil and gas,
- Households, which consume mainly electricity and gas.
- Electricity generation, which is made primarily from coal and gas.
You can also see that 60% of the world's electricity is generated by burning fossil fuels, as of 2019.
Figure 2A: World energy consumption by sector in 2019
The light blue part of Figure 2A on electricity consumption is only 20% of the total energy consumed. 20% is a very small part of the total energy mix. Even within that 20% of electricity sources, 60% of the electricity itself is generated by burning fossil fuels, so the non-fossil fuel energy sources are ridiculously small in the grand scheme of things, at 8%. Everyone seems to be talking about renewable energy, but the big part of the problem is actually the unspoken part of the energy issue, which is non-electric sources of energy.
The key point here is that most of the energy source is not electric. For all non-electric usages, it is extremely costly and technically difficult to find alternatives to fossil fuel consumption that are economically viable and physically scalable.
Non-oil plastics are feasible, but at what price and in what quantities? Jet fuel can be synthetic (SAF), but how much can realistically be produced and will it be cost competitive to jet fuel? Will all trucks really be fully electric one day? What is the future fuel for cargo ships? There are many unknowns about the future.
If we look at electricity generation in the main consuming regions, as shown in Figure 2B below, even for the best of Europe, of the 48% 'renewable', only 17% is wind, 10% solar and 11% hydro, the rest being pumped hydro, batteries, river flow, biofuels and geothermal. Intermittent renewables such as solar and wind account for only 27% of electricity generation in Europe, or 6% of total energy consumption.
Figure 2B: Electricity generation in main consuming regions
Looking outside the electricity generation field, the share of fossil fuel consumption per sector is shown in detail in Figure 2C below.
Figure 2C: World fossil fuel consumption by sector in 2019
Let's look at each fossil fuel source in detail.
- Oil usage
The magnitude of the oil expension over the last century is impressive: The lights in today's cars, which consume 1% to 2% of the car's fuel, consume more than the world's entire oil production in 1900. Interestingly, most of the oil in 1900 was used to provide light through oil lamps. Only the lights in today's car fleet consume as much oil as the entire world oil consumption before the First World War. This gives you an order of magnitude of a factor of 100 of the growth in production, consumption and sheer economic size that humanity has experienced in the last 100 to 150 years thanks to the fossil fuel explosion.
Oil is mainly used for transport, so people tend to think that going electric is the answer. Well, maybe it is a solution for bicycles and cars, not so sure about the large scale feasibility for trucks delivering all the goods on our roads. In 2024, a diesel truck costs around $100,000, while an electric truck costs around $300,000. Even though driving an electric truck is two or three times cheaper per kilometre, there is not a single carrier willing to invest in electric trucks on a large scale at the moment. However, it could happen for trucks in the coming decade with technology improving, though likely not for container ships. Oil is definitely not going to be replaced in cargo ships, excavators and aeroplanes by a new fuel without massiv cost and volume impact. There is simply no other energy dense enough to power the massive vessels we are accustomed to in our civilisation.
Good luck to decarbonize the biggest diesel engine in the world transporting up to 25.000 containers:
A container ship powered by heavy fuel oil (HFO)
Even for cars switching from petrol to electric, studies have shown that on the current electricity grid, you need to drive at least 80,000 km to be carbon positive compared to ICE cars, due to the large material footprint of EVs. Unless there are no more petrol cars on the road worldwide (second hand petrol cars will last at least another 10 years) and we drive EVs well over 100,000 km, the carbon emission gains are not really that significant, if any.
Remember that any carbon emissions are a proxy for fossil fuel consumption. You need huge trucks to dig the raw materials for the batteries out of the ground, huge furnaces and chemical reactions to refine those materials, transport them on cargo ships around the world to get your final EV product.
We are not going to get rid of oil that fast, if ever. Any alternative solution using hydrogen, ethanol or ammonia is simply 3 to 6 times more expensive, much less efficient, not commercially proven and not feasible at scale for the total needs of the industry. In 1 litre of diesel you have the equivalent of 80 hours of adult labour (human muscles, legs and arms) working non-stop. Would you rather pay 1.50€ for a liter of diesel or 80 hours of labour at 20€/hour? This is why oil is so widely used in the world, it is insanely cheap for the work done and value added.
I think there is actually a master plan by world leaders: If oil is going to run out first, before gas and coal, then our first priority should be to displace oil consumption and replace it with gas. Coal would be less preferable because it emits twice as much carbon per unit of energy as gas, and also gas burns cleaner, whereas coal releases other particles and molecules into the air that are bad for smog and health. Since oil is mainly consumed for transport, it makes sense to replace ICE vehicles (cars, trucks and buses) with EVs, which consume electricity based on coal, gas, nuclear and renewables but not on oil, and which are mainly manufactured using coal and gas for processing their raw material.
By switching from ICE to EVs, the coming oil supply crunch will be mitigated by lower oil demand. I believe this is the real reason for the government's push for EVs, not carbon emissions. Otherwise, the public narrative would have focused on the material and energy intensive side of EV manufacturing to push the public perception down and keep ICE as the means of transport.
- Gas and coal usage
Coal and natural gas are mainly used to generate electricity and in industry to heat furnaces and smelters to high temperatures for material processing and chemical reactions. The world has enough coal to last for the next 200 years and enough natural gas to last until at least 2150 at current rates of consumption. The most immediate threat of depletion is oil. Coal and oil, being solid and liquid, were the energy sources that were traded and exchanged around the world. Natural gas, being gaseous, has historically been a local source of energy, consumed in the country where it is produced or its neighbours via gas pipelines. But with advanced technology, LNG, which is 600 times denser than gas in gaseous form, is now transported by ship around the world, so there are no real major geographical restrictions on which country has access to which of the three fossil fuels. The only restrictions are geopolitical and economic.
Here is probably the most misunderstood reality of electrification and the energy "transition": Electricity cannot produce heat above 500°C on an industrial scale. Only fossil fuel combustion can produce the temperatures between 600°C and 2000°C needed to process all the minerals and materials of our civilisation.
An electrical resistance can go up to 1800°C, but only locally. It would take an enormous amount of electricity to heat an entire industrial-sized furnace to 1500°C. It is a bit like a firelighter, yes you get a flame that reaches 1500°C, but it is designed to burn cigarettes. You cannot heat a huge furnace 5 metres in diameter with firelighters, it is a matter of size and energy density.
Good luck decarbonising energy-intensive industries
Electricity is fine for boiling water to 100°C and heating your kitchen oven to 300°C, but it is inadequate for making plastics, fertilisers, concrete, steel, aluminium, silicon and many other materials. Electricity cannot make the raw materials needed for buildings, roads, bridges, cars, trucks or excavators, container ships or planes.
That's why electricity accounts for only 20% of our total energy consumption, the rest being fossil fuels. We are absolutely dependent on fossil fuels for all our raw materials. We have to burn gas or coal to make a solar panel, a wind turbine, a hydroelectric dam, a battery or a nuclear power station. There is simply no escape.
All industrial fossil fuel alternatives such as hydrogen, ammonia, ethanol, eFuels or SAF are not commercially and technically proven at scale, are not economically viable if produced from low carbon sources, and cannot be scaled up to the levels needed to replace fossil fuels due to their lower energy density.
Another misconception I find fascinating is the assumption that the electrification of things and the growth of 'renewable' energy will reduce our consumption of fossil fuels. In fact, the opposite is true. Let's look at the world's top gas and coal producers in Figures 3A and 3B below.
Figure 3A: Major gas producers since WW2
Figure 3B: Major coal producers since WW2Here are some trends that I find fascinating in these 2 charts:
- Today, China consumes more coal than the entire world did 30 years ago. This is an incredible rise, mainly due to China being the factory of the world for most of the rest of the world's fossil fuel-intensive industrial activities. Even if the rest of the world were to stop burning coal overnight, it would only halve global coal consumption, a fact that is largely overlooked by the Western world in its attempts to impose net-zero regulations on its own soil, when the actual problem is that fossil fuel-burning activities have largely been outsourced to China. This is hypocritical bragging by the West about being ahead of the class in decarbonisation, when in reality the dirty work has been done by someone else, polluting somewhere else, but not taken into account in our own shining statistics. The West is simply importing carbon emissions in the form of coal burnt in China via imported final products.
- If we consider only the rest of the world outside of China, coal consumption has remained mostly flat over the last 30 years, hovering around 70 exajoules. While some regions, such as Europe and the USA, have replaced coal with other energy sources, some countries, such as India, Russia and Australia, have increased their consumption. Almost all countries have increased their gas consumption over the last 30 years, apart from Europe. The internet, the digitalisation of society, EVs, renewable energy, the complexity of all the technical systems around us has led to an increase in demand for gas and coal. Even in the last 15 years, with the heralding of the solar and wind revolution, coal and gas production has increased significantly, showing that solar and wind do not replace coal and gas, but simply add to the mix for additional total energy.
- Europe has limited oil and gas supply, mainly from the north sea, and its production is declining since 2005, leaving the continent fully dependent on import. has been turning away from local coal production since the 1990, which is not so coincidentally the start of budget deficits and the start of deindustrialisation.
- In the USA, after the 2008 financial crisis, there has been a boom in oil and gas production from fracking and shale basins, which has led to huge economic growth in the US, and more recently to a re-shoring and re-industrialisation, while exporting more oil and gas to the rest of the world. The US is a net energy positive, unlike Europe. The only reason the US is cutting back on coal is because it is increasing its use of gas enormously.
- China's economic boom since 2000 has only been made possible by huge coal consumption. Not only has coal consumption increased for power generation, but it has also grown exponentially because of industry. China is building an average of 1 coal-fired power station every week over the last 20 years! All the refining and processing of metals and chemicals that other countries (like Europe) do not want on their soil has simply been outsourced to China over the years. China is the "factory of the world", doing all the polluting and dirty work that responsible countries like Europe hypocritically refuse to do on their own soil. Copper, raw materials for batteries, steel, silicon for solar panels and chips, carbon fibre for windmill blades, ... the vast majority of these energy-intensive industries are made in China. The whole "sovereign nation" and "energy independent" narrative is a total lie and a propaganda, because we are becoming more and more dependent on China.
While some regions, such as the Middle East, North America, South America and Russia, are blessed with large hydrocarbon reserves and are net exporters, other countries are largely reliant on the import of fossil fuels. Figure 3C below shows the countries with the highest share of fossil fuel imports in red. These countries depend on the surplus and trade willingness of other exporting countries and will therefore be the first to suffer when geopolitical conflicts arise, foreign currency reserves diminish, fossil fuel prices surge, or overall resources run out one day. Europe and Asia are particularly at risk.
Figure 3C: Countries most dependent on fossil fuel imports
- Europe
Let's look at the case of Europe, an advanced economy, an industrialised continent with few natural resources and high climate ambitions.
Looking at Figure 4A above, one might at first glance say congratulations to Europe: We are increasing our quality of life while reducing our use of fossil fuels. But this graph hides some important facts:
- Europe has been de-industrialising since 2000, particularly towards China. Much of the energy-intensive industrial activity and chemical processing has been outsourced outside Europe, so local consumption of fossil fuels has fallen significantly since 2005, but the carbon footprint of Europeans has actually increased over time. In essence, the consumption of fossil fuels takes place elsewhere and the final product is imported into Europe.
- The peak in 2005 is also the peak of oil and gas production in Norway, Europe's main source of fossil fuels. So there is a direct link.
- Coal consumption has been falling since about 1990, mainly due to the boom in nuclear power, especially in France. This is one of the good trends in Europe.
- Since the financial crisis in 2008, the purchasing power of an average or low-income European has actually stagnated or slightly declined, which is absolutely linked to the overall decline in energy consumption. Less energy consumption means less overall activity. What has saved Europe in the last 15 years are actually 2 things:
1. The GDP growth in Europe since 2008 has actually come from government debt. In order to get the 1% to 2% growth we have had over the last 15 years, governments and the ECB have had to print money via bonds and pump it into the system to keep it afloat, with the debt-to-GDP ratio increasing by about 3% to 5% per year. Most of the growth has come from printing fiat money. Europe has been in a physical recession since the 2008 financial crisis: The number of tonnes of goods transported by lorries peaked in 2007 and is slowly declining. The same is true for new residential construction in m2.
2. Also a reality, Europe has started to de-industrialise since 2008, especially the energy consuming industries. Put simply: Instead of making a product in Europe that consumes a lot of energy, we have been buying finished products and raw materials from abroad and importing them into Europe, keeping mostly only the low energy consuming and less polluting industries. That's why Europe's energy consumption is falling while, for example, China's is rising. That's also why the carbon footprint of Europeans is rather constant and not decreasing: We are simply consuming energy elsewhere than on European soil.
This is the hypocrisy of Europe: We claim to be proud of our declining fossil fuel consumption and carbon emissions on the continent, we want to be looked up to by other regions of the world as a role model, as a blueprint for 'transition', but in fact our achievements and success are only possible because somewhere else in the world (i.e. China) they are burning fossil fuels and emitting CO2 for the European end use of the products. If China wanted to decarbonise, it would have to outsource its pollution to Vietnam or Indonesia. There is no magic in this world, only marketing and advertising make-up. As can be seen in Figure 4B below, all the gains in CO₂ emissions in Europe and the USA were only possible because China made up for them with a tremendous increase, much more than the savings of Europe and USA combined. In effect, Europe and the USA have simply relocated their CO₂ emissions to China (and more recently, India), but their carbon footprint actually kept growing when imports of finished goods from these countries are factored in.
Figure 4B: Evolution of CO₂ emissions in the five highest value regions
You can see from Figure 4B above and figure 4C below that the vast majority of fossil fuel consumption today comes from China, which is the factory of the world, exporting goods all over the globe, and the US, a rich country with lots of resources of its own and a high material footprint and standard of living, then followed by India, mainly because of its large population, then Russia because of its abundance of cheap natural resources.
Figure 4C: Fossil fuel consumption per country in 2023
Figure 4D: European gas suppliers
Following the war in Ukraine in 2022, Europe has transitioned from relying on cheap, abundant Russian pipeline gas to using polluting and expensive American LNG. The European dependency on gas from Norway and Russia for industry, home heating and electricity production has been replaced by a dependency on gas from the Norway and the USA. See Figure 4E below. Although gas pipelines are a binding dependency between one supplying and one consumer country, they procure cheap, abundant energy. LNG, on the other hand, is a global commodity market in which any country can supply any other, but the final gas product is two to three times more expensive due to the liquefaction, transportation and regasification processes involved.
Figure 4E: European gas pipeline and LNG suppliers
With electricity demand is expected to grow over the next decade, Europe will need more natural gas, and its main source, Norway, has plateaued and is slowly declining, while LNG imports are typically 2 to 3 times more expensive than direct pipeline, putting Europe's competitiveness at an increasing disadvantage. All this points to a further deindustrialisation of Europe as the world becomes more multipolar and deglobalised, which does not bode well for Europe's future.
Another cause for concern in Europe is its lack of energy security and high level of dependency on imports for its domestic energy supply. Europe consumes 40 EJ of fossil fuel energy per year, primarily in the form of oil and gas. However, Europe only produces 6 EJ of fossil fuels itself, meaning that the remaining 34 EJ must be imported, primarily from the USA and the Middle East. If geopolitical tensions rise in the coming decades or natural resources decline, limiting exports, then supply shortages would arise, and Europe would be the region most at risk of energy insufficiency due to its 85% reliance on imported hydrocarbons.
- Electrification and digitalisation
If the digitalisation of our world with data centres, EVs, solar panels, windmills and batteries would lead to a reduction in coal and gas consumption and therefore CO2 emissions, we would see the results today, after about 20 years of investment and deployment of these technologies. But the reality is the opposite: Over the last 20 years, we have dramatically increased the use of coal and gas. To expect a sudden magical turnaround in the coming decades is foolish and against basic science. The fact that the end consumer only sees the nice shiny solar panel that doesn't emit toxic fumes, or that the end consumer sees EVs that don't emit fumes from the exhaust pipe, gives us the impression that these technologies are clean. It is all a big lie. With electrification, we are simply polluting at the manufacturing level, not the operational level, and we are polluting elsewhere. But we pollute the same and consume fossil fuels the same.
1 kg of oil contains around 50 times more energy than 1 kg of batteries. Even when you consider that fossil fuel engines lose 70% of their energy through thermal dissipation, compared to 10% loss for electric batteries, a kg of oil still contains 15 times more mechanical usable energy than an electric battery. While batteries are well suited to cars, stationary energy storage systems, household appliances and small devices, they cannot compete with oil for high-distance transport or massive powerful consumption, as required by aircraft, container ships and industrial furnaces.
Then there is the low cost of extracting and refining oil (per unit of energy) compared to the increasing cost of producing and distributing electricity 24/7 from "renewable sources" only. Not to mention that 60–80% of world electricity production still comes from burning fossil fuels today, meaning that even if all ouf final energy usage was only electricity, the narrative of carbon-free and climate-neutral electrification is far from reality.
Electrification is only possible through the use of fossil fuels. An electric vehicle (EV) contains 200 kg of plastic made from crude oil. EV batteries weigh 400 kg and require a significant amount of energy and industrial heat (from gas or coal) to manufacture. In order to charge an EV, electricity is required, and 98% of the world's electricity grids are at least 50% powered by gas or coal. Connecting a data centre to a home requires either a copper wire cable or an optical fibre cable. Copper production requires coal or gas, and optical fibre is made of silica sand, which is melted in a coal- or gas-powered furnace. Solar panels are made of silicon wafers. All silicon wafers are made by burning coal. Wind turbines require rare earths and specific minerals and metals, all of which are processed using coal or gas. Even the tower of the wind turbine is made of concrete, steel and cement, all of which are produced by burning coal or gas. There is no escaping fossil fuels.
Many people believe that we will electrify everything and generate electricity from carbon-free sources. In reality, however, electricity accounts for only about 25% of final energy usage. If we were to electrify everything, including steel, concrete and chemical processes, we would need four times more electricity production and distribution.
Let me get this straight: We will not quadruple the number of high-voltage lines; we simply do not have the money or manpower for such a huge undertaking. We will not quadruple the number of nuclear power stations in France or coal-fired or gas-fired power stations in Europe. We will not find four times more suitable locations for hydropower in the mountains. We will not produce four times more copper to make the electrical wires. We won't make all cars electric or build all the charging stations needed for a 100% electric vehicle fleet. We will not produce four times the amount of all the diverse materials needed for an electrical grid, such as transformers, turbines, steel and batteries. The electricity grid will not grow fourfold over the next 50 years. If it grows by 50% by 2050, that would be a great achievement. However, electrifying everything while maintaining our current consumption levels and way of life is totally unrealistic.
Imagine if all our electricity was carbon-free overnight. In this imaginary world, 100% of the world's electricity would be produced without emitting carbon. Figure 4F shows that at least 60% of the problem would still involves burning fossil fuels, which are not impacted by electricity. This includes steel, cement, petrochemicals such as plastics and synthetic cloth, as well as buildings and construction, for which there are no alternatives to fossil fuels. Add to that the fact that transport trucks, cargo ships, aircraft and excavators also run on fossil fuels, and you realise that electricity accounts for only 25% of our total energy consumption. Turning home heating system, passenger cars and light industries to 100% electricity from carbon-free sources would only tackle 25% of the problem, leaving the remaining 75% unaddressed and without any technical or physical solutions. The idea of a fully electric world is a fairy tale for the ignorant that sounds good but does nothing to reduce our civilisational and societal reliance on fossil fuels.
Figure 4F: Electrification does not address a significant part of the challenge
Far from helping to reduce overall energy consumption, AI will exacerbate this trend. AI is a huge computing power based on a huge amount of data. While AI will certainly bring productivity gains by reducing the time it takes a human to complete a task, the energy savings from this time reduction will always be far less than the huge amount of energy needed to manufacture the AI chips and to run and cool the data centres.
With the expected growth in demand for AI, data centre electricity consumption is expected to increase fivefold over the next 15 years. In other words, we expect data centres to consume as much energy in 2040, mainly due to AI, as the total electricity consumed in the US in 2023. This statement should raise red flags because of the impact on grid distribution and the need for new cable lines, and also because around 40% of US electricity is currently generated by natural gas and 20% by coal.
In the end, AI is a net energy negative, an energy-hungry monster to be added to the list of machines that facilitate human life. AI is just another big machine doing our work for us. Another machine that consumes a lot of energy. AI will certainly help the economy and grow our standard of living, but it will exacerbate the energy problem.
- Oil refinery
No one uses crude oil directly. It has to be refined into end products such as petrol or diesel before it can be used by machines. Crude oil is distilled in oil refineries, which process the raw crude oil into different end products. From 3 barrels of crude oil, the oil industry produces about 2 barrels of gasoline and 1 barrel of diesel.
The misconception is that we can turn all the crude oil into a single end product. For example, if diesel is no longer needed because we all drive electric cars, then we could simply stop converting crude oil into diesel and instead convert it into something else, such as an industrial petroleum product like plastic or asphalt. This is not entirely true. You get all the final petroleum products from a barrel of oil during distillation. You cannot choose just one of them. See below in Figure 5A how an oil refinery distillation tower works. The chemical composition of each barrel of oil varies depending on the source. All oil barrels produce all types of output, but in different quantities. For example, some heavy oil, such as that found in Venezuela, might generate more asphalt as an end product, while shell oil (tight light oil) in the USA might generate more petroleum gas. However, it is not possible to produce only diesel from a barrel of oil.
Figure 5A: Fractional distillation of crude oil
Crude oil enters a furnace, is heated and flows into a distillation tower. The lightest products - natural gas liquids and gasoline - rise and separate first. Further down are the heavier products such as kerosene, diesel and fuel oil.
Refineries don't work like a restaurant where you can order the diesel and skip the gasoline. They produce a certain mix of products, whether you want them all or not. There's some wiggle room around the edges: Refiners can switch some gasoline to diesel. But the volumes are limited, it's not a game changer.
Even if all the world's passenger cars were electric overnight, we would still need diesel for trucks and excavators, heavy fuel oil for cargo ships, naphtha for petrochemicals products, paraffin for aircraft jet fuel and bitumen for our roads. We would still need all the other products derived from a barrel of oil for which there are no alternatives to crude oil. Most people think of oil as the fuel they put in their cars, but oil has many applications. The same applies to natural gas, which is used to produce final products such as ammonia, hydrogen and urea fertilisers. Replacing one usage of oil does not constitute finding a replacement for all fossil fuels.
There is a reason why we use gasoline for cars, jet fuel for aircraft, diesel for trucks, industrial fuel oil for heating, kerosene for ships, asphalt for roads and lubricants made from hydrocarbons. The reason is: We use the entire barrel of oil that comes out of the refinery; there is no waste of energy-containing hydrocarbon. The economy is optimised by finding the right balance of different uses, so that the entire contents of the barrel — what comes out at each temperature and each density level — are consumed as final products.
This raises the question of what would happen if demand for one of the output products, such as gasoline for cars, were to reduce considerably due to electric cars becoming more widely available, while demand for jet fuel were to increase because more people were flying? The answer is that gasoline would become very cheap and abundant, and the market and the economy would rebalance itself to find an application for the oversupply of gasoline, like for exemple to be burnt to turn a turbine to produce electricity, benefiting from the cheap price as an arbitrage against natural gas. In the long term, things will balance out and we will always find a use for all the final products via price arbitrage. Hydrocarbons will always be valuable and will always find an application.
Many believe that electric vehicles will reduce demand for petrol, cut oil production and solve climate change. It's not that simple. Oil production won't disappear just because EVs are on the rise.
Even if demand for petrol falls, refineries can't just stop making it. Crude oil refining produces a mix of outputs: Gasoline, diesel, jet fuel, kerosene and heavier oils, all linked together. It's not practical to cut back on one product, such as gasoline, without affecting the others. Refining doesn't work that way.
The world runs on petroleum products, whether people like it or not. Ships, trains and trucks keep the world moving, and the raw materials for solar panels, wind turbines and electric cars depend on the mining, manufacturing and distribution of refined products. The idea that the world can simply do without oil is pure fantasy.
We are dependent on oil in our society, there is no alternative. One problem is that burning fossil fuels releases carbon dioxide into the atmosphere, which contributes to global warming and climate change. The other problem is that the earth's inventory of oil is finite. There will come a time, whether it is in 10 years or in 100 years, when oil reserves will be depleted and oil production will not be able to keep up with oil demand, leading to a societal crisis and the collapse of our civilisation. Let's have a look at this fantastic question people have asked for a century: When will we run out of oil ?
- The looming decline of oil production
When we will run out of oil is a tough question to answer because it depends on new discoveries and new extraction technologies, it depends on oil price and future slowdown in consumption due to electrification of things and sustitution of oil by gas and coal.
What is certain is that we've already used up a lot of the world's easily accessible oil, which is why oil was plentiful and cheap after the Second World War. Between 1946 and 1973, the price of a barrel of oil remained below $35 in inflation-adjusted terms, compared with $70 a barrel today, a price necessary to cover the cost of extraction. Most of the world's historic oil fields have already peaked and are in decline, as shown in chart 6A below.
Figure 6A: World oil production per region over the last 60 years
Many conventional oil producing countries have now passed their peak production, as shown in Figure 6A above. However, as one production site declines, another comes online to provide the necessary output to balance global supply and demand.
With so many countries in declining production, we are now even more dependent on Saudi Arabia, Russia, and tight (shale) oil from the US and LNG products from the US and Qatar. And in the future we are likely to be dependent on new sources such as under the melting permafrost in Siberia, the Artic, Alaska, Venezuela maybe, and deep water off the coast of Brazil, Guyana, the Gulf of Mexico, Iran, Iraq. As you can see, we do have plenty of sources of oil left, but those sources are either in politicaly instable countries, difficult to access, environmentally unfriendly to extract or technologically complex and expensive. For those countries in the coming decades, the cost of extracting oil will be significantly higher than the cheap abundant oil we had in the decades after WW2.
The easiest and cheapest form of oil to extract is crude or conventional oil, the production of which reached a global plateau in 2006 and has been flat or slightly declining since then. US Shale oil (tight oil) has been the only source of growth in oil production since 2008, as shown in Figure 6B below, but it is more complex and expensive to extract, so the price of oil has risen to around $70 per barrel. Shale oil reserves are much more limited than crude oil. Shale oil needs constant new drilling well and new investments. Once the Texas shale oil runs out, the remaining source of growth for our global consumption will have to come from other unconventional and expensive sources, such as the Canadian oil sands and shale oil, Argentinian shale oil, deep water in the Artic or from Venezuela, Russia, Iran or Iraq. This will undoubtly change the face of the geopolitical landscape.
Figure 6B: World oil production per type of oil source over the last century
The most important end products of oil are diesel, gasoline and kerosene (and to a lesser extent, jet fuel), which are used to power cars, trucks, tractors, excavators and ships. Other applications, albeit at much lower volumes, include plastics, fibres for clothing, bitumen and lubricants, among others. Only conventional crude oil, condensate and tight oil (also known as shale oil) can produce diesel and gasoline for use as fuel in transportation, while natural gas liquids (NGL) produce the other non-transportation fuel products. Crude oil and condensate are base hydrocarbons used to produce diesel for transportation and for use in heavy machinery, such as tractors, excavators, and cargo ships.
Since around 2000, the issue we have been facing is that conventional oil production (crude and condensate) has plateaued or decreased over the last 25 years as conventional oil reserves have been depleted rapidly. Only tight oil production has grown significantly, and only in the USA. As can be seen in Figure 6C below, the only production growth over the last 25 years has come from shale oil (in red) and natural gas liquids (NGL, in light green). However, NGLs do not turn into diesel, gasoline or kerosene. Figure 6D shows that oil production has remained largely unchanged worldwide over the past 25 years, except for the growth of tight oil in the USA since 2010 — our only current source of growing diesel production.
Figure 6C: Oil growth per hydrocarbon source type since 2000
Figure 6D: Oil production per country since 2000
If overall diesel production cannot keep up with the increasing demand, regions that net import diesel, such as Europe, will suffer the most. Therefore, it makes absolute sense for Europe to switch to electric transportation in order to reduce their dependency on diesel imports and to prepare for a decline in world production of crude and condensate.
Take a look at the history of US oil production in Figure 6E below. All sources except offshore and shale oil are in sharp decline. Offshore is increasingly difficult to access and very expensive to extract. Mastering the technology of shale oil extraction was the main reason for the economic boom and prosperity from 2009 to 2019 worldwide and especially in the USA.
Figure 6E: US oil production history, split in source type
I am not saying that we will suddenly run out of oil. History has shown that technology and progress have enabled us to extract reserves that were thought to be infeasible, uneconomical or inaccessible. My point is that the only remaining sources of oil will become increasingly difficult and expensive to extract. If the price of extracting that oil is, say, $130, then we will have a $150 barrel because we absolutely need oil to run the system, whatever the price. And it will lead to hardship, to a loss of purchasing power and quality of life. This might happen in 30 years or 80 years, but it will happen eventually.
Also, there is a lag of years between the high price that triggers investment and the actual oil production that results from that investment, leading to periods of price and demand volatility. Shale oil fields tend to peak early and then decline faster than conventional oil fields.
- What happens when we reduce our fossil fuel consumption
There has been a recent example of a reduction in fossil fuel consumption: In 2020, we saw a sudden 5% drop in fossil fuel consumption due to the Covid-19 lockdown policy around the world.
The good news was that carbon emissions also fell by 5% this year, as expected by the correlation. But the bad news is what has happened to the global economy to compensate for that missing 5% of growth that our economy needs to survive and operate:
A massive 15% to 20% increase in debt to GDP over 2 years in all developed countries and 20% real inflation over 2 years. This was the price we had to pay to keep our societies going and to smooth out the effects of the lockdowns. We have accumulated more future problems and spread the pain of the lockdown over the following 3 years for immediate remediation.
Now imagine that in order to keep our planet below +2°C we need this kind of event every year. We need a 5% reducton in fossil fuels consumption and carbon emissions every years. How do you think the economic and political system will react if we are deprived of 3% to 5% of fossil fuels every year? The system would definitely crash with all the desastrous consequences.
The tragic reality is that if we reduce our consumption of fossil fuels, whether by choice or by force of nature, the consequences for the population would be far more dramatic and immediate than if we continued with business as usual. Reducing fossil fuel consumption would cause the population to suffer far more than continuing to burn fossil fuels as we do now. Burning fossil fuels is the best of all the alternatives we have, the future of the planet be damned. We will pay the price later, after 2050, with the slow destruction of our environment, but for now, for the next 20 years, the best thing for human comfort, for a good lifestyle, for a high standard of living, is to continue to burn fossil fuels, to take on more debt every year, which is a claim on future energy, to continue to grow our economy to satisfy the financial system, to continue to give luxury privileges through the social system, and to continue to pollute the planet far from our eyes and our perception, so that nobody notices. This is the tragic reality in which we live in this world.
All the oil, gas and coal that we are consuming at an ever-increasing rate each year is a limited and non-renewable amount available beneath the earth's surface, a finite stock. Sooner or later there will be no more fossil fuels to burn. If we look at human energy consumption on a larger scale, the years 1800 to 2200 will look like a blip in the history of Homo sapiens, as shown in Figure 7A below.
The question of when it will happen is irrelevant, because it won't be a sudden fall off a cliff, but rather a gradual and slow price increase over decades, followed by the adaptation of our societies from oil to gas, then from gas to coal, so that we postpone the physical shortage of all energy sources. The real question is what happens to our fossil fuel based civilisation when we run out of fossil fuels?
Figure 7A: The carbon pulse
The world will inevitably experience a contraction in terms of the total amount of energy available in the coming decades or by the end of the century. For net importers of energy, this contraction will be felt first and hardest. There are three options for dealing with the reduction in available energy:
1. Energy efficiency: producing or getting a given good or service by consuming less energy. This is the preferred option for consumers, industry and politicians because it does not involve restrictions or suffering.
2. Sufficiency or sobriety, which involves deliberately going without a service or giving up a good in order to avoid consuming energy in the first place, such as choosing to cycle instead of driving. This involves living with a minimalist approach and practising conscious consumerism to save more.
3. Poverty is the same as sufficiency, only it is imposed on you because you cannot afford the good or service and have not made that choice yourself.
The reality of the past 200 years has shown that energy efficiency has always led to the rebound effect and increased total consumption, so it does not work at a global level. Efficiency does not reduce our total energy or fossil fuel consumption, it increases it. This leaves us with sufficiency or poverty as the only remaining paths for the end of the century.
Sufficiency can only work if the top 10% of the population give up the most so that the bottom 50% do not feel excluded from an unfair society and revolt. The most privileged people must make the greatest effort. Unfortunately, however, the top 10% or 3% of the wealthiest people will not deliberately give up their access to energy and wealth because doing so would mean giving up their social status, comfort, social networks, how others view and treat them, and their self-esteem. Also, sufficiency/sobriety is not just fewer private jets, yachts and billionaires' parties; it is also less overall consumption, fewer industries, less tax collection and therefore less spending on healthcare, pensions, public infrastructure and education. Sufficiency would slow down the entire economy, shrink social welfare benefits even further, and make a country unable to service its debt, causing widespread anger over reduced basic public services such as road maintenance or public pensions. 90% of people would simply not accept a prolonged period of economic decline due to sufficiency/sobriety.
Sufficiency and sobriety will not happen on a large scale, which means that poverty is the only option in a world with dwindling fossil fuel resources in the second half of the century. Regions blessed with hydrocarbons and net exporters, such as the USA and Russia, will be able to maintain political and economic stability for longer, while net importers, such as Europe and south-east Asia, will suffer first and most.
- Peak oil
Some people say that oil reserves are dwindling fast and that oil production could fall off a cliff in the coming decades because we are running out of oil. Let's debunk this myth.
As shown in Figure 8A below, the number of new discoveries of conventional oil has been dwindling since 1960. Conventional oil refers to cheap, easily accessible and abundant oil wells: If you dig a deep enough hole, the liquid hydrocarbon will burst out under its own pressure.
Figure 8A: Conventional oil discoveries since 1960
Clearly, most of the abundant, easily accessible sources of conventional oil have been already drilled and are being consumed fast, with only a few new rigs or growing production in Central America and the Middle East. However, the lack of new conventional oil discoveries does not mean that there will be no oil sources in the future this century. We will have oil sources, but they will be in remote places that are difficult to access and require unconventional extraction methods. This means that the price of a barrel of oil will have to be substantially higher for a longer period of time in order for those other hydrocarbon resources to be economically viable.
Some say that because the production rate of each oil well declines over time, and more rapidly with unconventional oil such as shale oil in the US, we will soon run out of oil. Others say that basically only price is a constraint, but technically we could drill in many places and have unlimited oil and gas for the next 2 centuries. The reality is probably somewhere in the middle: declining wells are replaced by new ones, new technologies allow access to previously uneconomic geological locations. Yes, oil and gas will become scarcer and more expensive by the end of the century, but no shortage is imminent in the coming decades. As long as there is a demand for petroleum products or for burning hydrocarbons, we will continue to dig for fossil fuels.
In 2005-2010, oil prices rose because although we had discovered shale oil several decades ago, in 2005 the technology, especially the fracking and horizontal drilling technologies, was not mature enough to make these deposits viable. But technology improved and US production boomed after 2010 due to better fracking technology, as shown in Figure 8A above. Human ingenuity and technological progress will make today's unviable deposits viable in the future, increasing future oil reserves even without new discoveries.
For information, a resource is the total amount of molecules or materials in the ground, it is a geological deposit size. A reserve is a fraction of a resource, it is what we have already discovered and proven to be recoverable at current prices and technologies. If the price of oil were to rise from $60 to a steady $100, the total reserves would immediately increase because we know that there are oil formations that are recoverable at $80, for example, which makes them not economically viable at $60 today, but potentially viable in a world at $100 a barrel.
This means that oil reserves are actually increasing over time, not decreasing. That's because technological improvements and slow price increases extend the total recoverable oil reserves. Technology advances faster than depletion, so that over time, new discoveries and total reserves go up while cost of extraction of a barrel go down. To give you a rough estimate, the total amount of oil consumed in human history to date is about the same as today's oil reserves. So we are not going to run out of oil any time soon. It will come eventually, but not in this century. There are nearly 2 trillion barrels of proven oil reserves worldwide, with about the same amount in technically recoverable conventional crude oil resources. See Figure 8B below.
Figure 8B: Total oil reserves
At current rates of consumption, existing reserves could last almost 60 years without new discoveries. That's 60 years of oil which is safe at today's prices - plus another 70 years that's probably there but may need a higher price to become viable. Add to that another 80 years of tight and heavy oil, and perhaps a century of NGLs (natural gas liquids). Even with a sceptical view, it's hard to argue that there isn't enough oil to get us to the cliff edge that civilisation is heading for, whether in 5 years or 50 years.
Worldwide, with total reserves of 6 trillion barrels of oil equivalent, that's about 200 years of current consumption, so we won't run out this century. Reserve additions occur in cycles and total oil reserves vary with time, with deeper analysis of existing known reserves, with new discoveries and advances in technology, and with the price of oil, which converts resources into reserves. Over time, total reserves have fluctuated steadily upwards, not downwards. Reserves are constantly changing, moving up, not fixed, and depletion isn't as simple as many believe.
Figure 8C: Evolution of oil reserves
Take the US for example. The US started 2022 with 44.4 billion barrels of crude oil reserves. It produced 4.37 billion barrels of crude during the calendar year, but ended 2022 with 48.3 billion barrels of reserves. US reserves actually increased by 4 billion barrels. These data are not surprising, as the US has been producing about a tenth of proven reserves for more than a century. The correlation is striking, as shown in figure 8D below. The more a country produces oil and gas, the more it reduces its unit costs and improves its technology, and the more of its known resources turns into reserves: A resource that is now recoverable and economically viable using the latest technologies.
Figure 8D: US oil reserves against yeary production
Yes, peak oil and gas will happen eventually. Finite resources eventually run out. But it won't happen any time soon, certainly not in the next few decades, and quite possibly not in this century. And when oil becomes rare and expensive, then natural gas will take over, more abundant, and engines will be switched, and we will carry on our consumption of fossil fuels until both oil and cas are depleted, which can take us another 200 years. Climate change, the economic challenges of rising debt and a declining working population are more immediate and critical threats than peak oil.
The world's top four oil producers are the United States, Saudi Arabia, Russia and Canada. As of the end of 2023, Saudi Arabia had proven reserves of around 66 years of current production. The USA have reserves to last around 15 years at current production levels, Russia around 20 years, and Canada around 81 years. Other countries with significant proven oil reserves include Venezuela, Iraq, Iran, Kuwait and the UAE, as shown on figure 8E below.
Figure 8E: Countries with the largest proven oil reserves
Russia, Iran, Qatar and the USA have the largest natural gas reserves in the world. The USA had reserves to last around 18 years at current production levels, Russia around 80 years, Iran around 137 years and Qatar around 141 years, as shown on figure 8F below.
Figure 8F: Countries with the largest proven natural gas reserves
What has changed and will continue to change in the coming decades is geopolitics: who has the bigger reserves and who produces the most has more leverage to dictate its agenda in political negotiations. The biggest producers are completely altering the geopolitics of the world. The Middle East still has the largest total reserves of oil and gas combined, followed by Russia, the US and Canada.
Saudi Arabia, Canada, Iran, Iraq, Venezuela, Kuwait and The UAE have the largest proven oil reserves, as shown in Figure 20 above. To put the figure in perspective, Saudi Arabia or the US currently produce about 3 to 5 billion barrels per year, and total world consumption is about 36 billion barrels per year. So you can see that these countries could easily produce for another 50 years at current rates.
Then you have the potential of shale oil in Argentina, the known shale oil in Florida and California that we are not exploring because of politics and urban areas, and the offshore oil in the Gulf of Mexico. If the price of oil goes up and stays up for a few years, the US will undoubtedly consider drilling there too. Russia and the Arctic have untapped potential. Venezuela has the biggest reserve, but has reduced its production due to embargo and mismanagement over the last few decades, but the large reserves are still there, and if we ran out of oil one day, I bet someone (USA?) would come and dig the oil out of Venezuela.
The real question is not when peak oil will come, but when cheap oil will go away. In Saudi Arabia, the cost of production is about $15 to $20 per barrel. By simply drilling a well not too deep into the ground, the oil bursts out of the ground under pressure and can be extracted with little effort. This is cheap, abundant oil that we have enjoyed for a century. Eventually, this cheap traditional oil will run out and the only oil left will be the shale oil from fracking, which costs about $40-60 to produce, requires sand, chemicals and fresh water as inputs, and requires gas flaring and waste water treatment, making this shale oil more difficult and expensive to extract. We will have offshore oil from the deep sea, which is also expensive. The other options will be sand oil from Canada, which is energy inefficient. We may have oil from the Arctic, which is difficult to extract because of the cold weather. And we will have natural gas, which can be liquefied. These are all good options, technically feasible and in operation today, but if these were the only options we had, when traditional crude oil runs out in about 50 years, oil would be harder to find and much more expensive.
In a way, the fact that oil is still very abundant and cheap makes it all the more addictive. Why would humanity abandon an energy dense, easily transported and stored source of energy? Oil is so great at powering our civilisation, so cheap and easy to transport and trade, and so abundant that it makes people addicted and dependent on this great source of energy. We have not found a comparable replacement for oil, apart from natural gas (less dense and less convenient to transport because it is a gas) and coal (less dense, more polluting but cheap and extremely abundant). Uranium is ultra dense, but the nuclear supply chain, the cost and time to build nuclear plants, and the dependence on the electricity grid make it only convenient in rich developed countries. There is really no alternative to oil other than gas and coal. The scale of oil, and to a lesser extent gas, makes it irreplaceable. Oil and gas, if it did not emit carbon dioxide when burned, causing climate change, it would truly be a gift from God.
The question of peak oil, or rather peak cheap oil, is more of a distraction. It depends on how we define 'oil' and whether we include gas products. It is not key to the future of humanity. What matters much more than oil reserves and oil prices is oil efficiency and debt. In 1970, all the world's oil came from easily accessible, abundant, shallow, pressurised locations of conventional oil fields. Consequently, it required very little effort or energy to extract oil; only 1 barrel of oil was needed as input energy to extract around 40 barrels of oil. This ratio is known as the EROI (Energy Return on energy Invested) and quantifies how easy and efficient it is to extract oil from the Earth. Understand this ratio of 40 as follows: When 40 barrels of oil were extracted in 1970, only one barrel was spent on oil extraction itself, with the remaining 39 barrels going into the economy to produce goods and services. Nowadays, conventional sources are declining fast, while growing productive sources include deep-sea offshore, shale oil via fracking and oil sands, which are low-efficiency sources.
Figure 8G below shows that the oil EROI has fallen from 40 in 1970 to around 5 today and is expected to decline further to around 3.2 in 2035 and around 2 by 2050. An EROI of 5 today means that, for every 120 barrels of oil consumed, 20 barrels are spent on extraction and 100 barrels remain available to the rest of the economy. For comparison, if the size of the economy were the same, getting 100 barrels of usable oil in 1970 would require extracting 102.5 barrels; today, however, getting the same 100 barrels of usable oil requires extracting 120 barrels. This equates to an 18% tax or loss, simply because today's sources are less efficient or less energy dense. If the size of the economy remains the same in 2050 as today, we will need to extract 150 barrels of oil to get 100 barrels of usable energy for the economy, another 25% increase in oil consumption just to maintain the same economy. This is one of the reasons why oil consumption is not expected to decline too much or too quickly, if at all, even if final oil demand declines, simply because oil sources are far less efficient and less energy-dense than they were 50 or 80 years ago. For information, the total energy consumed between 1970 and 2025 has grown by +150%.
Figure 8G: declining oil EROI and rising world debt
As can be seen in Figure 8G above, the oil EROI has fallen over the years, while global debt has risen rapidly. Debt represents future revenue, and therefore future economic activity and future energy consumption. When the EROI of oil production falls but future demand for energy rises, two things will happen: Firstly, oil consumption will be replaced by gas and coal consumption as these become relatively cheaper. This idea correlates with the general electrification of things, as gas and coal are still the main sources of electricity production and will definitly remain so. Secondly, the total world debt, currently standing at $325 trillion, will be devalued and debased via inflation. There is no other way to meet the $325 trillion of future energy demand at the current value of the dollar and the current price of oil. Currencies will have to lose a lot of their purchasing power in order to service all the world's debt. $60 of debt today can buy a barrel of petrol, but if you still have $60 of debt in 2050, chances are you will only be able to buy a fifth of a barrel of oil, as money will have lost a lot of its purchasing power by then. Growing the physical economy will not be possible, especially given the shrinking active population over the next 5 decades. The only way out is to debase the currency via devaluation and inflation in order to inflate the debt away.
Natural gas is the only viable alternative to oil in the future. Although gas is less convenient to transport and store because it is gaseous rather than liquid, it can power powerful engines and burns more cleanly, releasing around half the CO₂ emissions of a petrol engine for the same mechanical output, as well as fewer other toxic particles. Since the 1960s, gas has been traded worldwide via LNG (liquefied natural gas), and the liquefaction and regasification technology is now well understood around the world. LNG has experienced exponential growth since the 2000s. Gas reserves are also vastly more abundant than oil reserves, with estimates of around 200 years' worth of gas at current consumption rates, compared to around 70 years' worth of oil. Gas burning is also more responsive to fluctuating demand because it has much less inertia. While a gas flame can be extinguished in seconds, a coal furnace would take minutes and would not shut down completely.
Figure 8H: Coal production
As shown in Figure 8H above, the world's biggest coal consumers, China, India and Indonesia, are all densely populated countries with a large, heavy industrial and manufacturing base. They are not blessed with natural gas resources, nor are they rich enough to import LNG. It is important to keep in mind that roughly half of the coal is used to produce electricity and the other half to heat furnaces for industrial applications. Both electricity and furnaces produce goods that are not only consumed locally, but also exported to the rest of the world. This means that other countries importing the final products produced by China, India and Indonesia contribute indirectly to the large coal consumption footprint. China is the world's factory and only a fraction of its coal consumption is used for domestic consumption. Consider silicon wafers for solar panels, chip manufacturing, steel production and all the other raw materials made in China and used by the rest of the world. Electric cars are also exported, which indirectly benefits and contributes to the large coal consumption.
Coal reserves are abundant on every continent and in multiple countries. These reserves are sufficient to support our current civilisation at current consumption rate for about three centuries. Coal reserves are the least of our concerns. Even if we run out of cheap oil and gas by 2100, coal resources will still be in the ground and we will dig them out if necessary. Overall, we will not run out of fossil fuels. Fossil fuels are here to stay. The relative price of each commodity and our technological preferences will dictate which fuel source we consume in the future. However, we won't run out of fossil fuels anytime soon. The only reason to try to reduce our consumption is climate change, because nothing can stop fossil fuels from a price, yield or reserve standpoint.
Figure 9A below shows that our consumption of fossil fuels has steadily grown since 1960, regardless of political events, wars, conflicts, climate change, new technology, climate summits, investments or subsidies. If the use of fossil fuels has grown constantly over the last 70 years, why would it suddenly decrease dramatically now? What miracle would need to happen?
Figure 9A: World consumption of fossil fuels since 1965
Now, compare the past data shown in Figure 9A with the future forecasts shown in Figures 9B and 9C below. Figure 9B is a forecast from OPEC, a pro-oil cartel which obviously does not discard fossil fuels entirely by 2050. The share of fossil fuels in the global energy mix is estimated to decrease from 80% today to around 67% by 2050. This seems very realistic to me, given that we have seen a very slow decline from 85% to 80% over the last 40 years. This would accelerate the slow trend of low-carbon electrical sources contributing to the total energy mix. Figure 9C is based on projections for future fossil fuel consumption by the International Energy Agency (IEA), a pro-renewable organisation that does not consider the inconvenience and limitation at scale of intermittent sources.
Figure 9B: OPEC projections of fossil fuels consumption until 2050
Figure 9C: IEA projections of fossil fuels consumption until 2050
As you can see on figure 9C above, fossil fuel consumption overall is not expected to increase or decrease significantly until 2050. If coal consumption decreases (to be seen), natural gas consumption is expected to increase. Oil consumption will not decline suddenly, as some had anticipated. Interestingly, although the share of renewable sources is expected to grow, we still anticipate that, in 2050, about 2.5 times more energy will come from fossil fuels than from 'renewable' sources. Renewable sources are simply being added to the mix, rather than replacing our fossil fuel consumption, as the total amount of energy consumed worldwide is expected to continue rising.
How realistic is it to predict a rapid decline in coal consumption? After all, coal is a cheap and widely available resource in most countries that already have the necessary infrastructure and generation capacity for both electricity production and industrial applications. An anticipated rapid decline of coal remains to be demonstrated, given that the global population is set to continue rising until around 2060, with developing countries firmly set on emulating the Western lifestyle.
The IEA assumes a decline in coal consumption driven by the rapid deployment of solar and wind energy. This remains to be be demonstrated, as the large-scale installation of solar and wind energy has not reduced total coal consumption between 2015 and 2025. Coal is an abundant, cheap and locally available resource in many countries. When developing countries need to expand their heavy industry or electrical grid, they usually turn to coal as the most economical option.
Oil and gas are not projected to grow dramatically, nor are they expected to decline significantly. I have serious doubts about the gas projections. With so much intermittent energy on the grid, only gas turbines can cover the intermittency and maintain stable grid frequency. I can also see a world where oil is becoming scarce, more difficult to extract and unavailable to some countries due to geopolitical disputes. Gas could replace oil as an energy source and power cargo ships, aircraft, trucks and industrial processes. The USA is now the world's largest gas producer, and its LNG exports are expected to double between 2024 and 2030. This will lead to a glut of gas in the coming decade, making it a cheap alternative to oil. Also, once on an LNG ship, gas can be sold as a commodity to any region worldwide. In contrast, crude oil needs to go to a refinery, but not all refineries are set up to refine all kinds of crude oil. This makes crude oil suppliers and refiners long-term partners, binding them to long-term contracts. LNG, however, can be sold to any region with an LNG terminal.
How will the world produce the AI data centres, the machines for the semiconductors, the cement for the buildings, the chemicals, the steel and the fertilisers for agriculture? How will the world produce electricity when intermittent renewables are not producing? If coal is set to decline, natural gas must ramp up to take over. There is no other way to heat an industrial furnace or produce electricity in the winter at dinnertime.
I predict that coal consumption will increase slightly until 2050, driven by India, China, Indonesia and sub-Saharan Africa. Meanwhile, oil consumption will decrease slightly due to the deployment of electric transportation. Furthermore, I predict that natural gas consumption will increase significantly as demand for electricity rises and continuous stable power becomes necessary.
The anticipated decline in the use of oil for road transport over the next few decades will be offset by increased use of oil as a feedstock in the petrochemical sector and increased use of gas for industry and electricity generation. Rising prosperity in low- and middle-income countries will boost the consumption of plastics, textiles and other oil-based materials, and many of these countries' electrical grids are not suitable for the mass deployment of electric vehicles, despite what many of us claim or hope.
In the past, peak oil was a reasonable and understandable fear, but the term 'peak oil' actually meant 'peak conventional oil' and many conventional oil sites were declining in production. In fact, we passed the peak of conventional oil production around 2012, but this decline was offset by increased shale oil production. Now, people who fear peak oil are likely to be correct in thinking that we will reach the peak of global oil consumption within the next decade or two. However, this will not be a significant issue as consumption will shift from oil to natural gas and natural gas liquids. Globally, we have many decades ahead of us before we reach "peak oil and gas combined" due to abundant oil and gas reserves in the world. Fear of running out of a specific oil or gas product is misguided because demand will always adapt: engines will be modified, consumption habits will change, and we will continue to consume fossil fuels at an increasing per capita rate. The reserves are abundant enough to last at least another century or two, and coal can also power our civilisation for at least another century or two as a last-resort solution. We simply will not run out of fossil fuels.
If countries were to buy the cheapest energy regardless of geopolitical, environmental or ideological factors, energy prices for consumers would remain virtually unchanged over the decades or even decrease with technological progress. Oil and gas companies are at the forefront of technological innovation and are constantly improving their efficiency. This makes them very deflationary for energy prices. Oil currently costs $70 per barrel. Adjusted for inflation, that's equivalent to $35 in 2005, when it used to cost $40 per barrel. In real terms, oil is cheaper today than it was 20 years ago. Gas is virtually free in the US. French nuclear power costs next to nothing at the power plant. The Nord Stream gas pipeline from Russia to Germany, extremely cheap and abundant and paid for in euros, has boosted the German industry and made Germany very competitive, even with high labour costs. Energy prices are one of the few things that should not increase in the future, even through inflation. However, governments prioritise more than just price; they also prioritise CO2 emissions and don't buy from all suppliers for political reasons. That's what makes energy expensive.
- Conclusions
We tend to believe only what we see. People believe that all the energy in the world is the electricity we use at home to run our appliances and turn on the lights, the energy we use to heat our buildings and the energy we use to fuel our cars. That's all the energy we need, some believe.
The reality is that this is only 5% of all the energy we use. Energy is mainly used for concrete, steel, fertiliser, agriculture, cargo container transport, aircraft, industrial heating applications such as silicon manufacturing, chemical processes, peak electrical power generation, etc.
People have a bias and assume that only what they see is reality. They believe that if you could get electricity for your home from a solar panel on your roof, and if all your cars were electric cars powered by electricity from wind turbines, we would be net zero and not need any fossil fuels. This is ridiculous. People are stupid or just ignorant or unwilling to learn the realities, the facts, the order of magnitude of fossil fuel consumption.
If you only consider operations, a wind turbine is carbon-free and an electric vehicle (EV) does not emit carbon while driving. However, this narrow view of operations is incomplete; we must consider the full ecosystem and product lifespan. What about manufacturing the product or the product's supply chain? What about the infrastructure, roads and electrical grid?
Wind turbines require gas and coal to produce the concrete and steel for the tower, as well as the metals and rare earth elements for the turbine engine. They also require plastic (oil) for the blades made of carbon fibre reinforced plastic (CFRP), and oil to transport all the parts to the site. An EV needs bitumen to build the roads, oil to make the tyres and plastic interiors, and coal and gas to make the steel, semiconductors and copper. The electricity used to recharge the car comes from sources that emit or have emitted carbon in the process of building the power plant.
In short, we are a fossil fuel-based civilisation and all our activities depend on fossil fuel consumption. 80% of the energy we consume comes from fossil fuels, and this rate has barely changed over the last 50 years. Despite new technology, the rise of renewables and greater efficiency, we will remain a fossil fuel-based civilisation for decades to come until we find a better alternative to meet human needs.
Our very comfortable modern industrial civilisation is powered by oil and gas everywhere, from extraction to processing to production, assembly or transport. Everything you see around you that is man-made is only possible because of oil and gas. Your mobile phone, your clothes, your coffee machine, the house you live in, the shower you take, none of it would be possible without fossil fuels.
Oil and gas are energy dense, available 24/7 whenever humans need energy, and this energy source is the foundation of our civilisation and all the great lifestyles we experience on a daily basis. Any attempt to eliminate or reduce our use of fossil fuels will unfortunately have a major impact on our economy, our standard of living, our daily work and our social welfare system. And since no one really wants to voluntarily lower their standards, wealth and comfort, fossil fuels will still be used in the end. We may wish it were different, that we could maintain our current lifestyle based on 'renewable' energy, we wish we could have a comfortable life without the side effects of fossil fuels, but unfortunately the reality of physics and thermodynamics says otherwise.
Figure 10A: Fossil fuels against renewable energy
Our dependency on fossil fuels leads to the unfortunate reality that if a country has oil under its ground but chooses not to extract it for climate reasons, there is another country in the same position that will extract the oil to make a profit from it. And if a country has access to refined oil but chooses not to consume it for climate reasons, there is another country in the same position that will consume the available refined oil on the market. This is typical of game theory, and this is the reality.
Some countries and some cultures are at a very different stage than Europe, climate change is not their top priority. Their first priority is to grow their economy and to make their poor population richer with a better standard of living. That's why all the "just stop oil" activism is useless and ineffective.
There are the oil and gas producers, usually perceived as the bad guys, the devils, the scapegoats, the destroyers of the planet. But oil and gas companies supply energy to steel manufacturers. That steel is bought by the bus or train manufacturer. And that bus or train manufacturer sells a transport service to the end consumer, the passenger: you. Yes, you reading this. So who is ultimately to blame for all the negativity? Is it the oil & gas producer, the bus manufacturer or the passenger in the bus asking for the transport service? It is very easy to point the finger at the oil & gas company or the 'dirty' steel industry because they have exempted us, the consumers, from our responsibility, but we are the ones who drive the demand for petroleum products. In a way, a train manufacturer is as bad as the biggest oil and gas company in the world. Both are part of the supply chain driven by human consumption, our desire for a more comfortable life with a better standard of living. There is nothing wrong with this human desire, and there is nothing wrong with the oil and gas companies: They make our lives fantastic, only to destroy our ecosystem in the process. Until we find a viable alternative energy source, oil and gas are here to stay.
Ammonia (to make fertiliser for food production), cement (for concrete), steel, plastics, semiconductors (to a much lower scale in volume): These 5 pillars of our civilisation have no substitute or replacement, and they cannot be made with electricity, they absolutely require fossil fuels to be made. To imagine a net-zero world is simply to ignore the physics and reality of the backbone of our civilisation.
As long as fossil fuels are available, accessible and economically extractable, we will consume them. Fighting against it has proven futile. we will continue to burn fossil fuels at least until the end of the century.
This means that climate change will continue and get worse. Any effort to limit global warming is futile, it is simply a waste of time, money, human labour and resources. The money we spend today pretending to save the world would be better spent adapting to the inevitable future: How to adapt our society to inevitable climate change: Prepare for water scarcity, anticipate mass climate migration, change agricultural practices, food choices, prepare for forest fires, heat waves, tornadoes, etc.
Critics will say that climate change and the status quo on fossil fuels are the fault of billionaires, politics, lobbyists and an unwillingness to change. I take a more rational approach, considering physics and economics to be the only two reasons that truly matter worldwide in the long term. Fossil fuels have the best physical and economic attributes, which is why we keep using them and continuously increasing our carbon emissions. People love conspiracy theories and hate the rich and powerful people, but our dependency on fossil fuels is simple: it is based on the solid fundamentals of physics and economics.
A barrel of crude oil contains the energy equivalent of about four-and-a-half years of human work (legs and arms muscles). In 2023, the world used 84 billion barrels of oil equivalent from coal, natural gas and oil. At four-and-a-half years of work per barrel, that means that society has 378 billion fossil energy slaves working for us all the time. For every human on earth, there are the equivalent of 50 humans working in the form of fossil fuel powered machines.
When you consider that you are being charged $4 per gallon at the pump, or €2 per litre, this means that you are getting the equivalent of a fossil fuel slave for $2 per month. If someone can work for you full time for $2 a month, and there is a virtually unlimited supply of these virtual workers, what do you do? You employ as many of them as you can to do everything in life.
A burger costs you $5 to $15, a cup of coffee $2 to $5, a virtual man working for you for 1 month only $2. Fossil fuels are far too cheap to do without, far too cheap given the externalities they create, far too cheap to be replaced by any other form of energy.
No other energy source can remotely compete. It is delusional to imagine that humans will voluntarily trade fossil fuel prosperity for a much poorer renewable energy world.
Total global per capita energy demand is likely to continue to rise slightly in the coming decades: Less developed countries will strive for a better Western standard of living, increasing their GDP/capita and thus their energy per capita. Our poor health, need for medication, disease and obesity will continue to increase due to processed foods, microplastics, water, soil and air pollution. Our population will keep ageing, meaning less personal physical labour and more machine assisted labour. Our working population will or is shrinking, which means more machines and AI to do the work for humans. More digitisation and connectivity of things, which requires data centres and energy... There are many reasons why total energy demand per capita will increase in the coming decades.
Powerful, abundant, dense, dispatchable and cheap sources of energy will always find their way to a final consumer, and those are fossil fuel sources. Renewable energy will continue to grow tremendously, but will remain a tiny part of the total energy consumption at 10% to 20%, even by 2040. Total world consumption of fossil fuels will at least maintain its rate or increase slightly, as it is the best form of energy for human applications.
We should not have discovered fossil fuels. Yes, it has given us a convenient and comfortable life for the last 2 centuries, but it will be the reason for our demise and the coming mass extinction of humanity and some other living spieces.
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- THE LAST DECADE -
December 2025
Why we are all doomed and there is nothing we can do about it.
Why do we have so few kids, and what are the consequences for society.
The uncomfortable and inconvenient truth about the soon coming end of prosperity in our industrial civilisation.
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