Home Letters Melinda Janki’s response leaves more questions than answers (Part 2)
In order to rationalise this view, a reasonable question to ask is: What would happen to the world and to the life of people if all of the oil companies were to cease oil production forthwith? To lend context to this notion, let’s examine an overview of the global energy transition agenda and its potential impact on the future of the global oil and gas industry.
The global transportation sector is one of the main drivers of demand for crude over the next 30–50 years, and at least 40% of the world’s energy needs would have to be supplied by oil and gas by 2050. Hereunder stated are some interesting facts:
Global Stock of Commercial Aircraft
• Global commercial aircraft fleet stood at 29,000 in 2020
• Estimated to grow by 4% annually to reach 39,000 by 2028
• Annual production is 1000
• It takes 5-6 years on average to build an aircraft, in some cases 10 years
• To replace all the aircraft in the world, it will take 29,000/1000 = 29 years to build and replace, plus 10 years to develop electric planes. Total number of years to replace all the aircraft globally to electric will be approximately 39 years.
Global Stock of cars
• As at 2020, this figure is some 1.2 billion cars globally, of which 7.2 million are electric cars (6% of global cars are electric)
• Global average rate of production for electric cars is 2.1 million; which means it will take
571 years to replace all the cars in the world to electric cars.
Global stock of Trucks/ commercial vehicles
• As at 2020, an estimated 425 million, of which 27.2 million, or 6.4%, are electric commercial vehicles
• The annual average production rate of electric commercial vehicles is 6000; at which rate it will take 70,833 years to replace all the commercial vehicles in the world to electric at the current rate of production.
Global stock of Ships
• As at 2019, total world fleet of ships stood at 95,402
• It takes about 18 months to build a ship
• Ship orders per year is about 1000
• Therefore, it will take 95 years to replace the global stock of ships to greener ships, at the current rate of production
Global Energy Transformation 2050
• Oil and gas are still forecast to meet more than 50% of the world’s energy needs by the end of 2040
• Renewable energy needs to be scaled up at least six times faster for the world to achieve the goals set out in the Paris Agreement, according to the International Renewable Energy Agency (IRENA, 2018).
The global transportation sector is one of the main drivers of global demand for crude oil products. If the world, therefore, stops extracting crude oil, and indeed leave all the fossil fuel in the ground tomorrow – then it will take 39 years to replace the global stock of commercial aircraft to electric aircraft; 500+ years to replace all the cars in the world; 70,833 years to replace all commercial vehicles, both light and heavy, which include trucks; or increase global output by
142,000% to bring down the number of years to 50; and 95 years to replace all the ships in the world at the current rate of production.
By 2050, renewable energy can make up 60% of the world’s final energy consumption, provided that renewable energy investments are scaled up by at least six times (IRENA, 2018). Consequently, if the world economy fails to scale up renewables and other alternative sources of energy by six times, it will take more than 100 years for the world economy to transition to at least 60-70% alternative sources of energy, and over the next 100 years to fully transition to
100% clean/alternative sources of energy.
I end by asking this question again: What is the international transparency advocate’s true modus operandi?
Financial & Economic Analyst