Energy and Investment: A Conundrum

A conundrum? When you cannot reconcile two apparent realities that you know to be true. Yes indeed, energy investment is a conundrum. On the one hand, we all want to invest in a positive and sustainable future, consistent with renewable energy and a reversal of climate change that will harm us irrevocably if left unchecked. On the other hand, we cannot see a global energy industry in the next decade or more which is not dependent on finite fossil fuels, consumption of which has been so heavily responsible for global warming. How can we reconcile these two mutually exclusive truths?

This article is an attempt to explain how this might be possible, although we must start by showing how very difficult it will be.

Energy Generation: Current Status

First, we must be clear as to the current global energy mix. For all the positive statements emerging from COP26, our world is still overwhelmingly using fossil fuels to meet its energy needs. This applies to all sectors, nearly all nations, and is increasing rather than declining.

We can see here how Oil, Coal and Gas account for the vast majority – over 84% – of global energy consumption, and are still on a growth trajectory. Other than small dips in the recession of the early 80s and the financial crash in 2008, this growth has been unbroken since the 1960s. During this time period of less than 60 years, the volumes of fossil fuels consumed have more than trebled, from 40,000 TWh to over 130,000 TWh. Even coal, which we have almost phased out in the UK, has continued to grow globally.

Energy Associated Carbon Emissions

The consequences of this dependence on fossil fuels for energy generation is graphically illustrated by the breakdown of emissions by sector, where we can see that energy is accountable for almost three quarters (73.2%) of the greenhouse gases causing global warming.

Read the full article here.