How long to wean the world off fossil fuels? | RenewEconomy

How long to wean the world off fossil fuels?

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It is hard to imagine a day when fossil fuels will be used sparingly. But with carbon now officially a liability, and renewables moving mainstream, chances are humanity can kick the habit much faster than previously thought possible.

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In 1973, scientists discovered that the continued use of ozone depleting gases such as CFCs were a major environmental threat to Earth’s protective shield against ultra-violet light. An international treaty, the Montreal Protocols, was passed in 1987 phasing out the harmful chemicals.

At the time, a senior chemist at DuPont, among the major manufacturers of CFCs, warned that there was no practical substitute for CFCs and predicted that the phase out would be virtually impossible and/or enormously expensive. It was neither.


CFCs, used in refrigeration, of course, are no match for carbon in fossil fuels. But the experience of phasing them out entirely and quickly from the global supply chain in record time is often mentioned as an example of how global cooperation can avert climate catastrophes.

Since every country on Earth signed the Paris Agreement in Dec 2015 and 175 countries reaffirmed their intention to abide by their voluntary pledges to reduce greenhouse gas emissions at the United Nations in New York City on 22 April 2016, can carbon emissions be next? And more important, how long would it take? How much would it cost?Screen Shot 2016-05-23 at 1.33.03 PM

The costs, of course, are not trivial. But that misses the point. The important question is not how much it costs to reduce carbon emissions before it is too late, but rather, what would be the cost if humanity does not act in time to avert climate change? How much would be the cost of inaction? Most experts who have looked into the matter are convinced that the cost of delay or inaction could far exceed the cost of action, as painful as it may be.

For those readers who may think that this – namely a gradual transition away from carbon-heavy fuels followed by other strategies to arrive at a steady-state where anthropogenic carbon emissions are absorbed by Earth’s natural carbon capture and storage mechanisms – is a ridiculous and/or impractical question to entertain, there are hopeful signs that such a transition is in fact already underway in a few places, and increasingly considered elsewhere.

The most stunning sign of change was announced in late April 2016 when Bloomberg and other news media reported that Saudi Arabia, the world’s biggest oil exporter, is creating a $2 trillion sovereign wealth fund – the biggest in the world – to wean Saudi’s economy away from over-reliance on oil by 2030.

While it is premature to make any predictions on how successful the Saudi venture may turn out to be and how fast, the sheer fact that Saudis are even thinking – let alone publicly talking – about such a transition speaks volumes.

Saudi Arabia transitioning away from oil? It is the equivalent of Kodak announcing – three decades ago and at the peak of its success selling photographic film – that it would phase out of the business. Of course, many say that is exactly what Kodak should have done while it still could, instead of opting for a slow but irreversible death.

Saudis, of course, are not the only ones thinking beyond oil. Also in April 2016, the French oil major Total said that it wants to be among top three global solar companies in 20 years. In making the announcement, the company’s CEO Patrick Pouyanné said Total would create a new business division to focus on gas, renewable energy and power, stating that the move will “strengthen its position as a global energy leader.”

And shortly thereafter, Total bought Saft Goupe SA, a French energy storage company, for €950 million ($1.1 billion). Total appears to be thinking beyond oil, remember BP’s cute slogan?Screen Shot 2016-05-23 at 1.33.07 PM

At first glance, what Total is trying to do may sound like a great idea. But not everyone agrees that big oil and gas companies will necessarily make great renewable companies, even if they try.

There are two schools of thought on what major oil and gas companies can or should do over the long term.

  • The first is to gradually move away from over-reliance on fossil fuels by getting into new and more sustainable forms of energy – presumably renewables as Total is attempting to do; or
  •  To gradually cut back on oil and gas exploration, transportation, refining and marketing as alternatives for fossil fuels emerge and reduce their market share over time.

As explained by Jeroen van der Veer, ex-CEO of Shell in May, “The second school (of thought) says the mission of oil and gas companies is to produce oil and gas, and if this mission ends, then the companies end too. Then you pay out the dividend to the shareholders and stop.”

Jeroen van der Veer belongs to the first. He said, “The energy transition presents great opportunities for oil and gas companies to develop new forms of energy and gradually move away from fossil fuels.”

Opinions, of course, vary on merits of big oil getting into renewables. At least one industry insider this editor contacted, who requested anonymity, is not convinced. He said, “My personal opinion is that oil companies destroy value when they get into businesses they do not know. There are plenty of companies chasing renewable opportunities and the capital markets are happy to send capital their way. If the oil companies do not have opportunities in their (own) businesses, they should return the capital to the shareholders.”Screen Shot 2016-05-23 at 1.33.09 PM

Perhaps he knows better. Several prior attempts by oil companies to get into renewable business did not turn out to be great success stories. Perhaps oil companies should stick to their knitting, and when that business dries up, it is time to turn off the lights.

On the other hand, if demand for their main products, namely oil and gas, are not going to grow as they did historically, what else can they do to remain viable and profitable over time. That must be on the minds of many within the industry who see renewables, and especially energy storage, as an opportunity for growth.

Drive-in theatres, for example, were a rage in suburban America in the 50s and 60s. Few survive. Air conditioned multiplexes have replaced traditional movie theatres with changing habits – and technology offers viewers the option to download and watch what they wish on mobile devices on demand.

In this context, the global coal mining industry, plagued by a persistent supply glut and plunging prices, is also thinking about its future, or if it in fact has one. They are not, so far as this editor is aware, diversifying into renewables – and will probably not be good at it even if they tried.

The reality is that after 175 countries signed the agreement at the United Nations in New York City on Earth Day – 22 April 2016 – carbon has officially turned into a serious liability.Screen Shot 2016-05-23 at 1.33.13 PM

No one knows how much of a liability it is or may turn out to be – since there is no agreed price on it yet – but it is a liability nevertheless. The more of a company’s assets or investments that are tied to carbon-heavy fossil fuels, the more the liability and the risk exposure. And like money in the bank accumulating interest, the exposure to carbon liability will gradually get worse. It is not going away.

Which explains why academics and scholars are beginning to address the time it may take for the transition away from fossil fuels – serious. And the answers some of these scholars suggest are simply hard to believe.

Professor Benjamin Sovacool of University of Sussex in Brighton UK, for example, believes that humanity can kick the fossil fuel habit much faster than others think may be possible, or desirable. One need not agree with such predictions, yet there is no denying that the question is now being seriously asked, and in respectable circles.

That is not all. A growing number of countries are now looking into scenarios where fossil fuel use will be restricted or virtually banned over time. As was reported in May, Denmark has been discussing plans to move its entire economy away from fossil fuels by 2050 – although successive governments have expressed different levels of affinity to such a mandate or date.

Likewise, Norway is pushing its transport sector toward electricity. In April 2016, Austria said it was considering a ban on new petrol cars by end of decade – that would be an important milestone if it in fact materializes.Screen Shot 2016-05-23 at 1.33.20 PM

Fossil fuels and carbon that is emitted when they are combusted, of course, are pervasive in everything humans do, every day. It is hard to imagine a day when they will be used sparingly. Professor Sovacool’s suggestion that they may be phased out rather quickly challenges the conventional wisdom.

Yet carbon is now officially a liability, it poses a risk – and as time goes on, both will grow. And alternatives, renewables plus far more judicious use of energy to minimize its carbon impacts, are moving mainstream. There is no escaping these facts even if there is disagreement on the speed of the transition.

This article was originally published in the EEnergyInformer June 2016 Newsletter. Reproduced here with permission

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  1. Ian 4 years ago

    Where is “the article on page 9”??

  2. john 4 years ago

    For those who have forward thinking governance not very long for those with backward thinking governance longer, at which time they will have missed the boat.

  3. Julian Bohan 4 years ago

    Hurry up, multinationals.

    Meanwhile, please note that Slovenia is not using to promote solar energy or sell solar panels. is not owned by a Slovenian.

  4. Ron Horgan 4 years ago

    Australia could solve the problems of unemployment and energy simultaneously by rapidly developing our world class renewable solar resource.
    The only reason that we don’t is the ” conservative” corrupt, backward looking LCP government which is controlled by anti Australian vested interests.
    Do we want stagnation, unemployment, and coal, or jobs and clean air?
    Roll on the election when Turnbull, the hollow man, will be replaced win or lose.
    LCP win Turnbull is replaced by Abbott clone.
    A vote for Turnbull is a vote wasted.

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