Does anyone remember “Drill, baby, drill?” What with all the tumult over Donald Trump’s disastrous trade war, many have forgotten that energy production played a big role in his second inaugural address. He claimed that we were facing a “national energy emergency,” and that he would bring prices down and make America rich by releasing the “liquid gold under our feet.”
There was, in fact, no energy emergency. One thing you always find Trump and MAGA in general doing is assuming that the real world must look the way their prejudices say it should look. Squishy liberals who believe in rule of law were in charge last year, so America must have been in the grip of a terrifying crime wave — even though the homicide rate in 2024 was close to a 65-year low:
Similarly, the Biden administration was full of woke environmentalists who believe in the global warming hoax, so they must have crippled energy production — even though America in the Biden years was, for the first time in generations, producing more energy than it consumed:
When I wrote about this at the time, I suggested that Trump was suffering from MAGA brain,
the belief that the only way you can get results is by being tough and nasty, avoiding anything that might be considered woke. Thus, to achieve energy independence, we must put aside worries about pollution and climate change while blocking clean energy.
So administrations that care about climate change and the environment in general must be crippling the energy sector. Biden may have presided over record oil production and growing energy exports, but we’ll just say that we have an energy emergency anyway.
You can probably guess what’s coming next. There appears to be a real chance that America will lose its newly reacquired energy independence. And if it does, we know who will be responsible: Trump himself.
—
In 2024 fossil fuels dropped below 80% of global primary energy for the first time in modern history, and oil’s share dropped below 30% for the first time too.
Oil and gas companies have reacted rationally by exiting the battlefield of energy growth, whether renewables or fossil fuels, and giving cash to shareholders instead.
The future of energy is clearly being left to others: for oil and gas investors, caveat emptor.
The oil majors retreat from energy, leaving energy’s future growth to others
According to a new IEA report published this week – which we’ll review more below –
it reveals three tipping points in the modern energy era:
· fossil fuels dropped below 80% of global energy, for the first time
· oil fell under 30%, for the first time
· gasoline/diesel demand peaked
Fossil fuels’ share of global primary energy fell below 80% for the first time in modern history, a tipping point masked by growing energy demand.
Oil’s share of primary energy fell below 30% for the first time in modern history, down a third from its peak.
The demand for gasoline and diesel was negative – 2024 may be the year road transport fuel demand peaked– no more growth in this sector anymore.
Three milestones that show whilst the energy evolution is not perfect, it is happening nevertheless, and at pace.
Even as absolute energy demand still grew, it is telling that many oil majors such as BP, Exxon and Shell, who have recently noted their exit from renewables, are also withdrawing from core oil and gas production investments too.
Over 50% of their operating cashflow is now going to shareholders, not explorers or construction crews.
