No. of Recommendations: 12
Exxon just came out with their global energy outlook. They believe global oil demand will remain flat at 100 MMBD at least until 2050 (26 years from now):
...
"-Hydrocarbons accounted for 85% of global energy during the Yom Kippur War (1973)."
"-Over the last 50 years, global primary energy consumption has more than doubled (1.6% CAGR)."
"- Hydrocarbons still make up 85% of global energy today"
(Slide 22)
https://enercomdenver.com/wp-content/uploads/2024/...
https://enercomdenver.com/company/liberty-energy/
Both Exxon and Liberty talking their book, but might help to explain Mr Buffett's thinking. Who knows, maybe they're right?
Flat demand doesn't sound like they are exagerating at all. World population will be going from about 8 billion now to 9.7 billion in 2050. Energy consumption typically grows about 2%/year. Per capita, it was 13 000 kWh in 1965, and it was 21 000 kWh in 2023, a 1% annual increase.
https://ourworldindata.org/grapher/per-capita-ener... And during that time, the population went from 3.3 billion to 8.0 billion, a 1.5% annual increase. Population growth has now slowed to about 0.9% a year; so 2% annual total energy growth seems like a fair estimate for the next few years.
Renewable energy accounts for about 15% of the total, with fossil fuels (oil, gas, coal) at about 82%; they were 85% 5 years ago. Renewables will undoubtedly continue to take market share, but so far, they have not been growing fast enough to actual reduce fossil fuel consumption. As an example, going from 85% 5 years ago to 82% now, with a total that is now 10% bigger, means that fossil fuel use has still been growing. For renewables to supply all of the 2% annual total energy growth, they would have to increase about 15% a year, and they have not been growing anywher near that fast; current projections are for 4% annual growth for the next five years:
https://www.statista.com/outlook/io/energy/renewab.... If that seems too low, it is because it is for TOTAL energy use; renewables have made more progress as a source for electricity, but electricity is only 20% of total energy use.
The big things that could lead to a significant reduction in fossil fuel use are a lot more nuclear power, cheap batteries, and fusion power. None of those are going to happen in scale for the next 25 years, so I don't think fossil fuel producers have anything to worry about.
DTB
