Reports from the fossil fuel industry project an increase in demand for oil, gas, and coal, but how accurate is their data?
Big energy has known about climate change for decades, but in the past ten years they have made a concerted effort to dissuade the public from perceiving it as a credible issue. At the root of their argument is the constant demand for fossil fuels worldwide, which they project will only grow in the next century.
According to a report from the Toronto Star, however, this may not be the case. G7 countries have all made a collective pledge to end the use of fossil fuels by the end of the century, but shareholders of oil companies continue to project huge growth in the future. What gives?
According to a report from the London-based group Carbon Tracker Initiative, shareholders shouldn’t be so confident in the projections of oil companies. Given current developments in renewable energy technologies like solar and wind power, and an increasing political momentum toward addressing and finding innovative ways to deal with climate change, oil companies appear to be looking ahead in the wrong direction.
10 oil companies issued a joint statement that promised they would “collectively strengthen our actions and investments to help lower the current global emissions trajectory.” The companies that signed the statement include BP, Shell, Statoil, and Saudi Aramco.
Looking at the numbers, however, the Carbon Tracker Initiative found that the growth scenarios published by large energy companies project the demand for oil, natural gas and coal to grow up to 50 percent by 2040. They estimate that fossil fuels will make up roughly 75 percent of the world’s energy demand, a scenario they say would make it impossible to cut emissions to the levels currently in the sights of major national governments.
The discrepancies in the numbers can be found in the methods for statistical analysis in both reports. The fossil fuel industry picks favorable data on global population, GDP growth, and the prevalence of technology to paint the rosiest outlook for their growth over the coming decades.
The International Energy Agency, for example, projects global GDP growth by 2040 to be 3.4 percent, while the OECD projects it will only be 3.1 percent. The UN believes that the global population will exceed 9 billion by 2040, but recent research accounting for climate and sociological factors estimates that the world will only see 8.3 billion people by that year.
GDP growth and population are the two main indicators of energy demand projections. People with higher earnings are likely to spend their money on energy of some form sooner or later, and the number of people on the Earth determines how this growth is distributed. Energy demand rises as GDP growth and the population rise, and vice versa.
The fossil fuel industry is also making a concerted effort to discourage the development of energy technologies that require no combustible fuel. Their projections use data collected by the IEA, which have been inaccurate since 2000. The agency’s projection for global solar energy capacity in 2024 was reached in 2015, and solar capacity today is more than triple what the IEA originally projected for this year.
Despite the discouraging reports from big energy, people around the world are responding to the call for cleaner energy, and technology costs are falling at a breakneck rate.