It has been predicted that the global demand for fossil fuels will peak by just 2023, posing a serious risk to financial markets across the world, because trillions of dollars’ worth of oil, coal and gases could be left entirely worthless. However, this projection is being considered as much more bullish than estimates made by oil and gas watchdogs, which expect global demand to peak in the 2030s.
A new energy strategist at Carbon Tracker recently said “fossil fuel demand has been growing for 200 years but is about to enter a decline. Entire sectors will struggle to make this transition.” The company which popularised the notion of a carbon bubble, where fossil fuels lose their financial value in the switch to a lower carbon economy have said that the findings spell a disruptive path ahead for energy firms.
Countries Are at Risk
The governor of The Bank of England has already got alarm bells ringing by warning that markets face a huge financial hit from the transition. Countries like Saudi Arabia and Venezuela are at the most risk because of how overwhelmingly dependant on oil revenues and fossil fuel demand they are. However, oil and gas firms have dismissed the idea that their assets are at risk because their reserves do not stay underground for a very long time. BP said earlier on this year that it pumps its entire hydrocarbon reserves every 13 years. But, others are merely dismissing the idea that a peak is coming up, with ExxonMobile, project the complete opposite and are expecting growth all the way to 2040 as the world continues to rely on fuel for shipping and aviation.