It’s Not Crazy to Dream of a World Without Fossil Fuels

Several dozen academics, diplomats, and energy researchers gathered earlier this year in Berlin to embark on a fascinating thought experiment. They began with the assumption that a worldwide transition from fossil fuels to renewables is all but inevitable—a future that is not guaranteed, but hardly implausible either, despite the current domination of oil and gas. Then they imagined what that future would look like, not just in terms of the energy economy but in terms of society as a whole. Oil, coal and gas have shaped and structured our political and economic system for well over a century. If the fossil fuel empire were to collapse, participants wondered, what would follow?

It’s tempting to dismiss this scenario as wishful thinking. The fossil fuel industry is currently worth nearly $5 trillion. Its political influence in the Trump era is climbing to unprecedented highs. But the global supremacy of oil, coal, and gas may actually be shakier than it appears. The International Energy Agency not long ago calculated that two-thirds of the power added to the planet’s energy grid in 2016 was from renewables. And David Sandalow, a former Obama administration official who was at the Berlin meeting and co-authored a report on its findings, told me that energy modelers consistently misjudge the growth of renewables: “I find it amazing how much some of the forecasts have been wrong.”

Even small changes in the global energy supply can wreak havoc on the fossil fuel business model. Oil prices crashed from $115 to $30 a barrel in 2015 because of a relatively modest drop in worldwide demand. Further drops in oil demand triggered by electric vehicles could have “very significant implications in places like the Canadian oil sands,” where many projects require an oil price of $80 just to break even, explained Sandalow, who’s now the inaugural fellow at Columbia University’s Center on Global Energy Policy. Low oil prices have already caused companies like Chevron, ConocoPhillips, Shell, Statoil, and BP to sell off their oil sands investments. Read more…