Conference Presentation, Panel
Energy Plays in a Carbon-Constrained World
- Climate change agreements are predicted to fail again in Poland, while the transition to electric vehicles without first resolving the demise of coal in Asia is expected to empirically increase carbon emissions.
- Renewable energy production in China faces 13-14% curtailment due to surplus and transmission limits, yet the industry aims to achieve the competitiveness and scale the oil and gas sector took 100 years to reach within ten years without subsidies.
- Global battery production is forecast to shift such that 80% of capacity resides in Asia by 2025, with 64% located in China, while European automotive manufacturers risk losing scale and competitiveness to China unless demand is stimulated.
- If long-lead oil investment stops today, production is projected to fall to half of current levels by 2030 and only 20% by 2040, risking billions of people falling into a brutal existence with lower life expectancies if EV transitions are managed poorly regarding cost and reliability.
- Energy markets are expected to remain highly cyclical and volatile, with U.S. sanctions on Iran potentially removing 1.5 million barrels and triggering a crisis due to thin spare capacity, while OPEC producers may cut output to protect economic interests despite political risks.
- A return to coal and sky-high prices could occur if the energy industry is starved of capital, and the U.S. administration is anticipated to maintain aggressive policies for two years.
- Venezuelan sovereign debt restructuring is expected to be enormously difficult and dwarf the Greek case, while low oil prices may cause significant economic costs for strategic nations and persist for a prolonged period.
- The NOPEC bill, if passed, would declare OPEC an illegal cartel subject to antitrust legislation, and Saudi Arabia and other OPEC producers may cut production to protect self-interest despite potential negative responses from President Trump.
- European policy failures to support the automotive industry could cause jobs to migrate to China, and a crisis of unemployed automotive workers could arise within 10 to 15 years without smart storage and efficient renewable use.
- Technology is viewed as the necessary bridge to address the dual challenge of climate change and energy demand, with carbon capture technologies expected to be piloted in Europe and billions invested in R&D by 2025 to find cost-competitive solutions.
- ExxonMobil targets the production of 10,000 barrels a day of algae-based biofuels by 2025, and future renewable reliability is anticipated to be solved by hydrogen engines, power-to-gas solutions, and smart storage.
- Without addressing the lack of reliable backup for renewables, the industry risks remaining unreliable and costing consumers significantly more, while the recovery of Venezuela remains a major sovereign debt challenge.