When somebody tells you that the oil age is soon to end, and that renewables will dominate in the near future, remind them that wind, solar, biofuel and geothermal energy combined account for only 3.2% of the world’s energy production today. And with a similar increase in 2017 as in 2016 (14%), this will rise to only 3.6% in 2017.
In their latest review of world energy, BP states that global primary energy consumption increased by roughly 1% in 2016. This is comparable to 2014 and 2015, but somewhat lower than the 10-year average of 1.8% a year. Approximately 30% of the increase was covered by renewables, while oil accounted for around 50% of the rise.
Renewable energy was again the fastest growing energy source, according to the BP Statistical Review of World Energy 2017. Remarkably, China continued to dominate renewables growth, contributing over 40% to global growth.
However, oil provided the largest contribution to growth measured in oil equivalents, the reason supposedly being low oil prices boosting demand. Moreover, following the decline in the use of coal over the past few years, with 33% of the market oil remains the world’s preferred energy carrier. Coal has only 28% of the market, while gas has 24%. In other words, fossil fuels combined have the lion’s share at 85%.
Like it or not, there is a long way to go before renewables will dominate and fossil fuels become outdated.
How to Replace Oil?
With a continued resistance to the use of coal in many countries (coal production fell 8.8% in the US in 2016), there is also a question of how these huge volumes are going to be replaced. In addition, we continue to increase our energy consumption by approximately 1% every year. In a world flush with oil, at the moment renewables are not likely to grow fast enough to replace coal.
This is substantiated by the fact that in 2016 global coal consumption fell by 53 million tonnes of oil equivalents (389 MMboe), while the 14% growth in renewables meant an increase of similar magnitude. In other words, if coal consumption is going to fall in a similar way over the next few years, an enormous increase in wind and solar capacity, far beyond what is theoretically achievable, will be required to replace it. We may therefore end up with oil and gas replacing coal. Renewables will only partly cover the increase in energy demand.
Oil and gas are here to stay.