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https://oilprice.com/Energy/Crude-Oil/Can-Oil-Demand-Really-Peak-Within-5-Years.html
Quote
...while some skeptics argue that the world will need fossil fuels for decades to come, that misses the importance of hitting the peak. The real pain for the fossil fuel industry comes much sooner. Once the peak is hit, the troubles start to accelerate. Demand starts to fall, so fossil fuel companies face lower prices for their products, lower valuations and ultimately stranded assets. "We should then expect a major reallocation of capital, bankruptcy of companies that are unprepared, and sector restructuring as those who prepared for the shift take over the assets of those that did not," Carbon Tracker concluded.
Investors are not going to wait for the complete phase out of fossil fuels before they start to redeploy capital and shun fossil fuel investments; that shift occurs much sooner, arguably around the peak.
The U.S. coal industry is a perfect example of this dynamic. Coal miners have gone bankrupt, share prices are in the toilet, and yet coal still accounts for around a third of U.S. electricity. The disruption happened long before the phase out of coal (the U.S. will still be burning coal for years); it happened when demand really started to decline.
The same sort of disruption could start to hit oil and gas companies as soon as the 2020s.
By Nick Cunningham of Oilprice.com
Quote
...while some skeptics argue that the world will need fossil fuels for decades to come, that misses the importance of hitting the peak. The real pain for the fossil fuel industry comes much sooner. Once the peak is hit, the troubles start to accelerate. Demand starts to fall, so fossil fuel companies face lower prices for their products, lower valuations and ultimately stranded assets. "We should then expect a major reallocation of capital, bankruptcy of companies that are unprepared, and sector restructuring as those who prepared for the shift take over the assets of those that did not," Carbon Tracker concluded.
Investors are not going to wait for the complete phase out of fossil fuels before they start to redeploy capital and shun fossil fuel investments; that shift occurs much sooner, arguably around the peak.
The U.S. coal industry is a perfect example of this dynamic. Coal miners have gone bankrupt, share prices are in the toilet, and yet coal still accounts for around a third of U.S. electricity. The disruption happened long before the phase out of coal (the U.S. will still be burning coal for years); it happened when demand really started to decline.
The same sort of disruption could start to hit oil and gas companies as soon as the 2020s.
By Nick Cunningham of Oilprice.com