The growing “shareholder revolt” against Big Oil’s failure to deal with the likely result of the Paris Climate Agreement has been met by derision from oil company CEOs according to Jillian Ambrose at the Telegraph:
“The words of Exxon’s Mr [Rex] Tillerson may have seemed strident in the face of a shareholder rebellion, but the data backs up his defence: “Just saying ‘turn the taps off’ is not acceptable to humanity… The world is going to have to continue using fossil fuels, whether they like it or not.”
Tillerson has a point. So far there is no evidence of a decline in global demand for oil and gas. Indeed, despite herculean efforts to deploy renewables like wind, solar and biomass; these have only risen from 0.8% to 2.8% of the world’s energy consumption over the last decade. More importantly, rather than replacing coal, gas and oil, they have simply added to our energy consumption.
The elephant in the room here is transport. Despite the development of hydrogen, gas, electric and hybrid cars, these account for just four percent of the world’s vehicle fleet. And even if this were to expand, it is highly unlikely that we are going to see alternatives to oil-powered aeroplanes, ships, heavy trucks and heavy plant machinery anytime soon. A rapid deployment of renewables might wean us off coal and gas (but not if a large number of us switch from petroleum to electric cars) for electricity generation. But electricity accounts for just 20 percent of our total energy consumption; transport accounts for 40% and heating the other 40%.
Governments may well adopt at least some of the Paris Agreement measures. But for now at least, Big Oil is gambling that the world lacks the political will to severely cut the movement of goods and people (with all of the economic disruption that this would entail).